The Most Important Chart Of This Century And What Will Take The World By Surprise March 24, 2019
Central banks have been totally detrimental to the world economy. They serve no constructive purpose whatsoever. As a matter of fact, they are a menace to the world and actually make things a lot worse than they would be if the laws of nature would rule. The natural rhythm of ebb and flow would regulate markets effortlessly without the need for artificial interference by central banks. If demand for credit is too high, the law of supply and demand would restrict the supply by interest rates going up. And if there was no demand for credit, loans would be cheap with rates going down.
GOLD the reason for its popularity is its rarity - Gold is a finite commodity - There is only so much of the golden metal available, and it can’t be manufactured.
Some experts, including Goldcorp’s chairman, Ian Telfer, are predicting that the amount of future gold to be mined is already on the decline. The fact that gold mining is on the decline is nothing new. That has happened before. What is worrying some investors is that the world may be running out of physical gold.
Well we got it in time, ex....the futures LT; long term trend normal moves since >500yrs cycles > 7yrs up and 7yrs down > if not manipulated and if manipulated > it fly much higher or fall off the cliff -
Worldwide Major Central Banks are Accumulating Their Gold Holdings Gary Wagner Gary Wagner Friday March 22, 2019 18:20
Note, bottom line.... There is an old adage that you buy when the big boys buy, and sell when the big boys sell. If this adage holds any weight we could be looking for gold pricing to continue to rise in value.
Americas Silver Announces Creation of a Precious Metal Growth Company TORONTO Americas Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas Silver” or the “Company”) is pleased to announce the closing of the acquisition of Pershing Gold Corporation (“Pershing”), originally announced on September 28, 2018 (the “Transaction”), and a financing package to fully-fund the development of the Relief Canyon Project (the “Project”).
The Committee on Foreign Investment in the United States (CFIUS) completed its review of the Transaction allowing the parties to proceed to closing Board of Director (“Board”) approval to commence constructing expanded mining and heap leaching facilities at the Relief Canyon Project Concurrent financing signed with Sandstorm Gold Ltd. (“Sandstorm”) for gross proceeds of approximately US$42.5 million to completely fund restarting mining and heap leaching at the Project The conversion of the C$5.5 million convertible debentures (issued in October 2018) into common shares of the Company by Mr. Pierre Lassonde and Trinity Capital Partners Corporation (“Trinity Capital”) Sale of option on San Felipe zinc/silver/lead deposit to Premier Gold for US$10.8 million Mr. Stephen Alfers appointed to the Board of Americas Silver "The closing of the Pershing acquisition is a landmark event for Americas Silver shareholders,” said Darren Blasutti, President & CEO of Americas Silver. “The Company can immediately begin construction at Relief Canyon now that the Transaction has closed, and we have secured financing and Board approval. With Sandstorm as our financing partner, we have raised the necessary capital to fund the Project through to sustainable cash flow while adding an important strategic partner as the Company’s largest shareholder. The addition of Mr. Pierre Lassonde as a significant shareholder further strengthens and enhances confidence in the Project and the management of the Company.”
Mr. Blasutti continued, “The high-return Relief Canyon Project is anticipated to add substantial precious metal production and cash flow growth for the Company in 2020 and beyond. The gold production from the Project is expected to catalyze a re-rating of the share price and increase the liquidity of the Company’s shares as a larger, precious metal-focused company with operations focused in North America.”
Pershing Gold Transaction
The Company received notice on April 1, 2019 that CFIUS had completed its review and determined that there are no unresolved national security concerns with respect to the Transaction, satisfying the final outstanding condition to closing the Transaction following approval by the shareholders of both Americas Silver and Pershing as previously announced on January 9, 2019 (as well as other certain customary requirements). Effective immediately, Mr. Stephen Alfers, the former CEO & President of Pershing, has been appointed to the Americas Silver Board. Mr. Alfers has a distinguished thirty-year career and is nationally and internationally recognized for his expertise in natural resource development, privatization of state-owned enterprises and foreign investment. Mr. Alfers has extensive experience in private and public corporate finance, mergers and acquisitions, complex international business transactions and governmental affairs.
Under the terms of the Transaction, holders of Pershing common shares (“Pershing Shares”) received 0.715 common shares of Americas Silver (“Americas Silver Shares”) for each Pershing Share (the “Exchange Ratio”). Holders of Pershing preferred shares elected to receive either (i) new non-voting preferred shares of Americas Silver, adjusted in respect of conversion ratio and number based on the Exchange Ratio, or (ii) Americas Silver Shares based on the Exchange Ratio. Americas Silver now owns 100% of the outstanding Pershing shares with Pershing becoming a wholly-owned subsidiary of the Company. On closing of the Transaction, Americas Silver issued an aggregate of 24,849,270 Americas Silver common shares and 3,678,135 preferred shares to former Pershing shareholders on an undiluted basis.
Pershing will cease trading on NASDAQ, the Frankfurt Stock Exchange and the TSX on or about April 3, 2019. Americas Silver will continue to trade on the TSX under the symbol “USA”, on the NYSE American under the symbol “USAS” and on the Frankfurt Stock Exchange under the symbol “SZ71.”
Full details of the Transaction and certain other matters are set out in the management information circular dated December 12, 2018 (the "Information Circular"). A copy of the Information Circular filed by Americas Silver in connection with the Transaction can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Pershing shareholders who have questions are advised to contact Computershare Investor Services Inc., the depository for the Transaction at 800-274-1088 or web.queries@computershare.com.
Relief Canyon Construction Commencement
In connection with the Transaction closing, the Company’s Board gave approval to commence construction of the expanded mining and heap leaching facilities at the Project. The capital cost to develop the Project to initial gold pour is estimated to be approximately US$28-30 million with up to an additional US$8 million in working capital (primarily for pre-commercial production operating costs) required prior to the Project sustaining positive cash flow. The Company expects to achieve first gold pour from the Project in late Q4, 2019 or early Q1, 2020.
Relief Canyon is located approximately 95 miles northeast of Reno in Pershing County, Nevada. The Project includes three historic open-pit mines and a state-of-the-art, fully permitted and constructed heap-leach processing facility. The Company’s landholdings in and around Relief Canyon cover over 11,700 hectares. This land package provides the Company with the opportunity to expand the Relief Canyon Mine deposit and to explore and make new discoveries close to existing processing infrastructure.
Based on the Feasibility Study filed by Pershing on July 11, 2018, Relief Canyon is expected to have an average life of mine production of approximately 91,000 oz of gold per year over a 5.6 year mine life with an all-in sustaining cost of $801/oz Au. The Project includes gold proven and probable reserves of 635,0001 ounces, a measured and indicated resource of 789,000 ounces, and inferred resources of 45,000 ounces.
During the period prior to closing, the combined Company’s management worked diligently to further optimize the Project, including the advancement of Phase II permitting to expand the mine and heap leach facilities. On February 13, 2019, Pershing received notice from the U.S. Bureau of Land Management (“BLM”) that the Relief Canyon Phase II application was deemed technically complete. On March 14, 2019, Pershing provided BLM with an Environmental Assessment describing the impacts associated with the Phase II expansion. The BLM will prepare an Environmental Impact Study (“EIS”) that the Company expects will take approximately 12 months to complete once the BLM selects a third-party consultant to prepare the EIS and publishes a Notice of Intent in the Federal Register announcing the agency’s decision to prepare the EIS.
Concurrent Sandstorm Financing and Partnership Highlights
Concurrent with the closing and the Board’s construction commencement decision, the Company has entered into financing agreements with Sandstorm to primarily fund the construction of the Project and associated working capital. Under the terms of the US$42.5 million financing package, the Company has secured:
a US$25 million Precious Metal Delivery and Purchase Agreement; a US$10 million Convertible Debenture; and a US$7.5 million equity placement. “We are pleased to be partnering with Americas Silver, a rising mid-tier, precious metals producer in supporting the development of Relief Canyon, a gold heap leach project in a prospective area with exploration upside,” said Nolan Watson, President and CEO of Sandstorm. “Americas Silver has assembled an excellent operational team to build and operate Relief Canyon.”
Further Details of Sandstorm Financing
Precious Metals Delivery and Purchase Agreement
Americas Silver and Sandstorm have entered into a Metals Delivery and Purchase Agreement (the “Purchase Agreement”), pursuant to which Sandstorm has committed to fund aggregate advances of US$25 million for the construction and development of the Project against future fixed and variable deliveries of refined gold and silver. The fixed deliveries will consist of 32,022 ounces of refined gold over a period of 66 months that will commence between 12 to 18 months from the date of the Purchase Agreement (subject to extension in certain circumstances), depending on the timing of the first gold pour. Beginning 60 months after the commencement of the fixed delivery period, variable deliveries will commence requiring Americas Silver to sell and deliver refined gold and silver equivalent to 4% of the production from the Project. For the variable deliveries, Sandstorm will pay the Company a cash price of between 30% and 65% of the market price of gold and silver sold and delivered depending on the area mined. No cash price is payable by Sandstorm for the fixed deliveries. Americas Silver may elect to reduce the variable delivery amount under the Purchase Agreement from 4% to 2% of production by delivering the metal repurchase price (initially 4,000 ounces of refined gold, increasing at a rate of 10% compounded annually).
The US$25 million advance is conditional upon, among other things, commencement of construction of the Project and the associated development plan and operational contracts.
Americas Silver and its subsidiaries, Pershing and Gold Acquisition Corp. (“GAC”) (the direct owner of the Project) have provided security, in the form of first ranking pledges of the shares of Pershing and GAC, guarantees from Pershing and GAC, and a first ranking security interest over all of the property and assets of GAC (other than assets which do not relate to the Project), for the performance of the obligations under the Purchase Agreement.
Equity Investment
As part of the financing package, Sandstorm has entered into a subscription agreement to purchase US$7.5 million of Americas Silver Shares based on 5-day volume weighted average price of Americas Silver shares. The private placement is subject to standard conditions precedent, including, but not limited to, the approval of the Toronto Stock Exchange and the NYSE American.
Royalty on Surrounding Property
As part of the financing package, Pershing and two of its subsidiaries have granted a royalty over certain properties owned by these entities in the area surrounding the Relief Canyon Project to a wholly-owned subsidiary of Sandstorm. Royalty rates vary between 1.4% and 2.8% of net smelter returns (“NSR”) depending on existing royalty obligations on the various claims. In the event the buy-down right described above is exercised, the royalty obligations on all claims will be reduced to 1% NSR.
Sandstorm Convertible Debenture
Americas Silver issued a convertible debenture (the “Sandstrom Convertible Debenture”) to Sandstorm, in an amount of up to US$10 million in aggregate. The Sandstorm Convertible Debenture bears interest at a rate of 6.0% per annum, has a maturity date of April 3, 2023 and is repayable by the Company at its option, prior to maturity. The principal amount outstanding under the Sandstorm Convertible Debenture is convertible at any time at Sandstorm’s option, into common shares of Americas Silver at a conversion price of US$2.14 per share, being a 35% premium to the 5-day volume weighted average price of an Americas Silver Share at the time of issuance, subject to typical anti-dilution provisions. The obligations of the Company under the Sandstorm Convertible Debenture are secured by pledges of the shares of Pershing and GAC. The Company intends to fully draw upon the Convertible Debenture on closing of the Transaction.
Conversion of Outstanding June 2019 Debentures
The Company previously issued C$5.5 million of convertible debentures to Pierre Lassonde and Trinity Capital in October 2018 in connection with the Transaction (the “Debentures”). The parties have agreed to convert all the Debentures into common shares of the Company in accordance with the terms of the agreement. The net proceeds of the Debentures were used by Americas Silver to fund a US$4.0 million short term secured first lien convertible loan to Pershing Gold in connection with the Acquisition in order to address Pershing’s near-term working capital requirements.
Sale of San Felipe Option to Premier Gold
The Company has agreed to sell its option on the San Felipe zinc/silver/lead project in Sonora, Mexico (“San Felipe”) to a subsidiary of Premier Gold Mines Limited (“Premier”) for US$10.8 million. The payment schedule from Premier consists of an initial US$7 million payable on the closing of the transaction with the remaining US$3.8 million payable over two milestones equally triggered by (i) commencing construction at San Felipe; and (ii) commercial production. Under the terms of the agreement, Premier would assume the obligations of Americas Silver under the option with Minera Hochschild Mexico S.A. de C.V. (“Hochschild” or the “Optionor”). Premier owns the Mercedes mine near the San Felipe project with a 2,000 tonne per day operating mill.
The proceeds of the sale would allow the Company to fully recover its investment in San Felipe. In addition, the funds add balance sheet strength and better position the Company to execute on its near-term growth and optimization strategies. The sale is subject to certain standard conditions, including the consent of the Optionor.
Capital Structure Update
Subsequent to the Transaction closing, the Sandstorm equity placement, and the conversion of the Debentures, the Company is expected to have approximately 77,789,466 basic common shares and 3,678,135 non-voting preferred shares outstanding on a pro-forma basis.
Conference Call
The Company will hold a conference call to discuss the Relief Canyon construction commencement and Sandstorm financing details on April 4, 2019 at 8:30am EDT. A new investor presentation will be available on the Company’s website prior to the call. The call-in details are as follows:
Americas Silver is a precious metal mining company focused on growth from its existing asset base and execution of targeted accretive acquisitions. It owns and operates the Cosalá Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA. The Company is building the fully funded Relief Canyon Project, near Reno, Nevada and expects first gold pour in the fourth quarter of 2019. For further information, please see SEDAR or americassilvercorp.com.
Cautionary Statement on Forward-Looking Information:
This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, Americas Silver’s expectations, intentions, plans, assumptions and beliefs with respect to, among other things, Americas Silver’s financing efforts; construction, production, and development plans at the Relief Canyon Project and performance expectations for the Project and impact on Americas Silver’s financial performance; and the estimated construction timeline and costs for the Relief Canyon Project; the estimated timeline for environmental approvals for the second phase of the Relief Canyon Project; and the impact of the Transaction on the liquidity of the Company’s shares. Often, but not always, forward-looking information can be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “potential’, “estimate”, “may”, “assume” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions, or statements about future events or performance. Forward-looking information is based on the opinions and estimates of Americas Silver as of the date such information is provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of Americas Silver to be materially different from those expressed or implied by such forward-looking information. With respect to the Sandstorm financing, risks and uncertainties include the ability of the Company and its subsidiaries to fulfill the conditions to drawing the available funds under the Purchase Agreement and Convertible Debenture and the potential for, and consequences of, default thereunder. With respect to the business of Americas Silver, these risks and uncertainties include interpretations or reinterpretations of geologic information; unfavorable exploration results; inability to obtain permits required for future exploration, development or production; general economic conditions and conditions affecting the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; fluctuating mineral and commodity prices; the ability to obtain necessary future financing on acceptable terms or at all; the ability to develop, complete construction and operate the Relief Canyon Project; and risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctuations and energy prices), ground conditions and other factors limiting mine access, failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration and production activities, possible variations in ore grade or recovery rates, permitting timelines, capital and construction expenditures, reclamation activities, labor relations, social and political developments and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Readers are cautioned not to place undue reliance on such information. Additional information regarding the factors that may cause actual results to differ materially from this forward-looking information is available in Pershing Gold’s filings with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2017 and the Proxy Statement of Pershing Gold dated November 29, 2018, and in Americas Silver’s filings with the Canadian Securities Administrators on SEDAR and with the SEC, including the management information circular of Americas Silver dated December 4, 2018. Americas Silver does not undertake any obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. Americas Silver does not give any assurance (1) that Americas Silver will achieve its expectations, or (2) concerning the result or timing thereof. All subsequent written and oral forward-looking information concerning Americas Silver, the Transaction, the Sandstorm financing package, the combined Company or other matters attributable to Americas Silver or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.
1 For notes related to mineral reserves please refer to the company’s website at www.americassilvercorp.com.
AMERICAS SILVER CORPORATION ANNOUNCES US$10 MILLION INVESTMENT BY ERIC SPROTT TORONTO, ONTARIO - July 19, 2019 -
Americas Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas Silver” or the “Company”) is pleased to announce that Eric Sprott has agreed to purchase 3,955,454 common shares of the Company - for a total investment of approximately US$10 million in a non-brokered private placement the (“Private Placement”).
The Company also announces today that the agreement to sell the Company’s option on the San Felipe project in Sonora, Mexico (“San Felipe”) to a subsidiary of Premier Gold Mines Limited (“Premier”) has been terminated in accordance with its terms.
“We are very excited to have Eric Sprott materially increase his ownership to above 8% and continue to support the Company as a major shareholder,” said Darren Blasutti, President & CEO of Americas Silver. “We are also pleased to have retained the significant upside in the San Felipe silver-zinc project for our shareholders.”
The Private Placement is expected to close in due course and is subject to the satisfaction of certain conditions, including receipt of all applicable regulatory approvals, including the approval of the Toronto Stock Exchange and the NYSE American. The common shares to be issued under the Private Placement will have a hold period of four months and one day from the closing date in accordance with applicable Canadian securities laws. Medalist Capital Ltd. acted as an advisor on the Private Placement.
About Americas Silver Corporation
Americas Silver is a precious metal mining company focused on growth from its existing asset base and execution of targeted accretive acquisitions. It owns and operates the Cosalá Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA. The Company expects to begin producing gold in the fourth quarter of 2019 at its fully funded, Relief Canyon Project, in Nevada, USA which is currently in construction. For further information, please see SEDAR or americassilvercorp.com.
For more information: Darren Blasutti President and CEO Americas Silver Corporation 416-848-9503
AMERICAS SILVER CORPORATION CLOSES US$10M PRIVATE PLACEMENT WITH MR. ERIC SPROTT TORONTO, ONTARIO - July 26, 2019 -
Americas Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas Silver” or the “Company”) is pleased to announce the closing of its non-brokered private placement with Mr. Eric Sprott, announced in the news release dated July 19, 2019. The Company raised gross proceeds of US$10 Million through the issuance of 3,955,454 common shares priced at CDN$3.30 per share.
As at July 26, 2019, there are 82,487,633 common shares and 3,678,135 preferred shares with 5,928,500 options and 5,087,014 warrants of the Company issued and outstanding.
About Americas Silver Corporation
Americas Silver is a precious metal mining company focused on growth from its existing asset base and execution of targeted accretive acquisitions. It owns and operates the Cosalá Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA. The Company expects to begin producing gold in the fourth quarter of 2019 at its fully funded, Relief Canyon Project, in Nevada, USA which is currently in construction. The Company also holds an option on the San Felipe development project in Sonora, Mexico. For further information, please see SEDAR or
Cautionary Statement on Forward-Looking Information:
This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, Americas Silver’s expectations, intentions, plans, assumptions and beliefs with respect to, among other things, the Company’s construction, production, and development plans at the Relief Canyon Project and performance expectations for the Relief Canyon Project and impact on Americas Silver’s financial performance; and the estimated construction timeline and costs for the Relief Canyon Project. Often, but not always, forward-looking information can be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “potential’, “estimate”, “may”, “assume” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions, or statements about future events or performance.
Forward-looking information is based on the opinions and estimates of Americas Silver as of the date such information is provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking information. With respect to the business of Americas Silver, these risks and uncertainties include the ability to develop, complete construction and operate the Relief Canyon Project; permitting timelines, capital and construction expenditures, reclamation activities, labor relations, social and political developments and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Readers are cautioned not to place undue reliance on such information. Additional information regarding the factors that may cause actual results to differ materially from this forward-looking information is available in Americas Silver’s filings with the Canadian Securities Administrators on SEDAR and with the SEC, this information, except as required by law. Americas Silver does not give any assurance (1) that Americas Silver will achieve its expectations, or (2) concerning the result or timing thereof.
For more information: Darren Blasutti President and CEO Americas Silver Corporation 416-848-9503
Americas Gold and Silver Provides a Relief Canyon Construction Update and Reports Third Quarter Production Results T.USA | Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas” or the “Company”), a growing North American precious metals producer, provides a construction update on the Relief Canyon gold mine in Nevada. The Company also reports Q3, 2019 production and operating cost results on a consolidated and individual basis for its Cosalá Operations in Mexico and Galena Complex in Idaho. All figures are in U.S. dollars.
Third Quarter Highlights
Consolidated silver production of approximately 1.3 million silver equivalent1 ounces and 300,000 silver ounces, representing a decrease of 7% and 5%, respectively, compared to Q3, 2018. Consolidated cash costs2 were approximately $12.83 per silver ounce and consolidated all-in sustaining costs (“AISC”) were approximately $23.01 per silver ounce, both representing an increase year-over-year and from the prior quarter. These increased costs were primarily the result of lower realized by-product prices and expected lower production at the Galena Complex in preparation for the re-capitalization plan. The Relief Canyon mine development continues on budget and on time for first gold pour before the end of the year. Construction continues at a rapid pace and the Company remains fully funded to bring the Relief Canyon Mine into commercial production by the end of Q1, 2020. Milled tonnage at the Cosalá Operations increased by 14% year-over-year resulting in production of approximately 1.0 million silver equivalent ounces, including approximately 129,000 silver ounces. Cash costs were approximately negative ($10.82) per silver ounce representing an increase of 41% when compared to prior quarter, and AISC were approximately negative ($1.49) per silver ounce, an 87% increase when compared to the prior quarter, largely due to lower by-product metal prices and higher treatment and refining charges. On September 9, 2019, Americas announced a strategic joint venture agreement (the “Agreement”) with Mr. Eric Sprott to recapitalize the mining operations at the Galena Complex, effective October 1, 2019. The goal of the Agreement is to position the Galena Complex to significantly grow reserves and resources, and increase production while reducing operating costs at the mine over the next two years. Gold equivalent reserves (including silver reserves) increased approximately 250% and increased by 90% on a per share basis year-over-year, including an additional 653,000 gold ounces and 11.5 million silver ounces, respectively. “The third quarter was a busy and successful period for the Company. The Cosalá Operations continued its strong operational performance generating free cash flow, Relief Canyon construction significantly advanced toward first gold production this year and the Company increased its precious metal reserves by approximately 250% year over year,” said Americas President and CEO Darren Blasutti. “Furthermore, our creative transaction to joint venture the Galena Complex with Eric Sprott allowed us to couple Galena’s significant silver leverage with the necessary capital to grow silver reserves, increase silver production and reduce operating costs into a rising silver market over the next two years for the benefit of our shareholders.”
Relief Canyon Update
Re-development of the Relief Canyon open pit is advancing to support a smooth ramp-up in material movement. Efforts have focussed on pioneering of the ultimate high wall and initial waste movement from the pit area. Construction continues at a rapid pace as the Company prepares to pour gold before the end of the year. Leach pad construction is approximately 90% complete with approximately 3,000,000 square feet of liner now installed. Overliner crushing is complete and placement of the material is advancing with the liner deployment. The primary crusher has been set on its concrete pad and installation is progressing in parallel with that of the crushed ore reclaim tunnel and overland conveyor. All grasshopper conveyors have been delivered.
Initial ore placement is targeted for mid-November with solution application to begin shortly thereafter. The ADR plant is receiving its final upgrades including the installation of new mercury abatement equipment and a revamped electrowinning area. First gold pour is expected prior to year end with commercial production anticipated by the end of Q1, 2020.
Further information on the Relief Canyon development will be made available periodically on the Company’s website as construction progresses at www.americas-gold.com.
Strategic Joint Venture with Mr. Eric Sprott at the Galena Complex
Due to low silver prices and limited funding available from the capital markets for silver operational improvements since 2012, Americas has spent minimal funds at the Galena Complex to replace worn equipment, update aging infrastructure, complete stope development, and exploration drilling. In 2017 and 2018, the Company focused available capital on developing the San Rafael mine in Mexico which has become a significant free cash flow generating asset. Americas is currently allocating all of its available capital to re-start the Relief Canyon mine in Nevada, which is scheduled to begin producing gold in late Q4, 2019.
As a result, the Company announced a strategic joint venture agreement with Mr. Eric Sprott on September 9, 2019 to recapitalize the mining operations at the Galena Complex. The goal of the joint venture is to position the Galena Complex to significantly grow reserves and resources, increase production and reduce operating costs at the mine over the next two years. The strategic 60/40 joint venture will allow Americas to advance development, modernize infrastructure, purchase new mining equipment and target exploration potential away from current operating areas. Effective October 1, 2019, Mr. Sprott initially invested US$15 million to fund capital improvements and committed another $5M to fund operations for the first year to earn a 40% interest in the Galena Complex. Americas will invest an additional US$5 million to fund further capital improvements in late 2020. After the first year of operations under the Agreement, the parties will revert to their percentage ownership interests to fund capital projects and operations as required. Oversight of the joint venture will consist of two nominees from Americas and one nominee from Mr. Sprott. Americas will continue to manage the day-to-day operations so long as it retains an interest in the joint venture. Further guidance on the capital projects, operational funding and timing will be provided in the new year after the approval of annual budgets by the Oversight Committee. Americas intends to suspend further disclosure of certain operational metrics such as production, cash cost, and AISC for the Galena Complex until the recapitalization plan is substantially completed, estimated to be by the end of fiscal 2021.
As a result of the 40% divestment and lower silver production from the Galena Mine, the Company will be unable to make full year silver production guidance but is expected to make the lower end of silver equivalent production and cash cost ranges.
Consolidated Third Quarter Production Details
Consolidated silver production for the third quarter of 2019 was approximately 300,000 ounces and silver equivalent production was approximately 1.3 million ounces, a decrease of 13% and 20% year-over-year respectively. Consolidated cash costs increased 55% to $12.83 per silver ounce and AISC increased 42% to $23.01 per silver ounce, compared to the previous quarter. Consolidated zinc production increased by 28% year-over-year, while consolidated lead production decreased slightly by 7% compared to the previous quarter due to low throughput and grades at the Galena Complex.
Table 1
Consolidated Production Highlights
Q3 2019
Q3 2018
Change
Q2 2019
Change
Processed Ore (tonnes milled)
180,582
170,379
6%
186,310
-3%
Silver Production (ounces)
299,421
323,497
-7%
345,695
-13%
Silver Equivalent Production (ounces) 1
1,338,568
1,410,909
-5%
1,683,358
-20%
Silver Grade (grams per tonne)
69
77
-11%
76
-9%
Cost of Sales ($ per equiv. ounce silver)1
$11.06
$9.08
22%
$8.75
26%
Cash Costs ($ per ounce silver)2
$12.83
$4.95
159%
$8.28
55%
All-in Sustaining Costs ($ per ounce silver)2
$23.01
$15.94
44%
$16.15
42%
Zinc Production (pounds)
10,103,688
7,906,601
28%
11,150,174
-9%
Lead Production (pounds)
6,766,804
7,536,660
-10%
7,237,607
-7%
Cosalá Operations Production Details
The Cosalá Operations produced 128,779 ounces of silver during the third quarter of 2019 and 1.0 million ounces of silver equivalent during the same period at cash costs of negative ($10.82) per silver ounce and AISC of negative ($1.49) per silver ounce. Silver production increased by 26% while silver equivalent production increased by 13% over the prior year. Cash costs and AISC decreased by 41% and 87%, respectively, compared to Q2, 2019, due to lower base metal prices despite significant increases in zinc and lead production year-over-year.
Table 2
Cosalá Operations Highlights
Q3 2019
Q3 2018
Change
Q2 2019
Change
Processed Ore (tonnes milled)
151,248
132,902
14%
156,998
-4%
Silver Production (ounces)
128,779
102,521
26%
145,410
-11%
Silver Equivalent Production (ounces) 1
1,003,318
888,342
13%
1,300,009
-23%
Silver Grade (grams per tonne)
46
44
5%
49
-6%
Cost of Sales ($ per equiv. ounce silver)1
$8.07
$6.85
18%
$5.51
47%
Cash Costs ($ per ounce silver) 2
-$10.82
-$22.42
-52%
-$18.27
-41%
All-in Sustaining Costs ($ per ounce silver)2
-$1.49
-$0.67
121%
-$11.66
-87%
Zinc Production (pounds)
10,103,688
7,906,601
28%
11,150,174
-9%
Lead Production (pounds)
3,717,980
2,815,885
32%
4,052,559
-8%
Strong results were driven at San Rafael by sustained improvements in grade, mill throughput and metal recovery as mining and milling operations generally expanded in Q3, 2019 compared to Q3, 2018. Ore production from the Main Zone benefited from additional working headings providing greater operational flexibility.
Silver and lead grades in Q3, 2019 were lower compared to Q2, 2019 with steady zinc grades. Lower tons were produced in Q3, 2019 as a result of normal weather-related power outage during the rainy season.
Development of the incline ramp toward the Upper Zone is now over 85% complete. Access to the area will occur prior to the end of the year leading to significantly increased silver grades by Q4, 2020.
Galena Complex Production Details
The Galena Complex produced 170,642 ounces of silver during Q3, 2019 and 335,250 ounces of silver equivalent at cash costs of $30.68 per silver ounce and AISC of $41.50 per silver ounce. Silver and silver equivalent production decreased by 15% and 13%, respectively, compared to the prior quarter. Cash costs represented an increase of 11% and AISC, an increase of 14% due to the noted lower production and lower lead prices during the quarter. Performance was hampered by poor mobile equipment availability and the ongoing need to advance development for future benefit.
Table 3
Galena Complex Highlights
Q3 2019
Q3 2018
Change
Q2 2019
Change
Processed Ore (tonnes milled)
29,334
37,477
-22%
29,312
0%
Silver Production (ounces)
170,642
220,976
-23%
200,285
-15%
Silver Equivalent Production (ounces) 1
335,250
522,567
-36%
383,349
-13%
Silver Grade (grams per tonne)
187
195
-4%
220
-15%
Cost of Sales ($ per equiv. ounce silver) 1
$19.98
$12.87
55%
$19.75
1%
Cash Costs ($ per ounce silver) 2
$30.68
$17.65
74%
$27.55
11%
All-in Sustaining Costs ($ per ounce silver) 2
$41.50
$23.65
75%
$36.35
14%
Lead Production (pounds)
3,048,824
4,720,775
-35%
3,185,048
-4%
About Americas Gold and Silver Corporation
Americas Gold and Silver is a high-growth, low-cost, precious metals mining company with multiple assets in North America. The Company expects to begin producing gold in the fourth quarter of 2019 at its fully funded Relief Canyon Project in Nevada, USA, which is currently in construction. It owns and operates the Cosalá Operations in Sinaloa, Mexico and manages the 60%-owned Galena Complex in Idaho, USA. The Company also holds an option on the San Felipe development project in Sonora, Mexico. For further information, please see SEDAR or www.americas-gold.com
Cautionary Statement on Forward-Looking Information:
This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, Americas expectations, intentions, plans, assumptions and beliefs with respect to, among other things, the Company’s financing efforts and the expected results from the Agreement and the joint venture; future development plans at the Galena Complex; exploration, production and cost performance at the Cosalá Operations and the Galena Complex; construction, production, development plans and performance expectations at the Relief Canyon Mine, including the anticipated timing of production. Often, but not always, forward-looking information can be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “potential’, “estimate”, “may”, “assume” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions, or statements about future events or performance. Forward-looking information is based on the opinions and estimates of Americas as of the date such information is provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of Americas to be materially different from those expressed or implied by such forward-looking information. With respect to the business of Americas, these risks and uncertainties include interpretations or reinterpretations of geologic information; unfavorable exploration results; inability to obtain permits required for future exploration, development or production; general economic conditions and conditions affecting the mining industry; the uncertainty of regulatory requirements and approvals; fluctuating mineral and commodity prices; the ability to obtain necessary future financing on acceptable terms or at all; the ability to develop, complete construction and operate the Relief Canyon Mine; the ability of the joint venture to further fund, improve and operate the Galena Complex, and risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctuations and energy prices), ground conditions and other factors limiting mine access, failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration and production activities, possible variations in ore grade or recovery rates, permitting timelines, capital and construction expenditures, reclamation activities, labor relations, social and political developments and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Readers are cautioned not to place undue reliance on such information. Additional information regarding the factors that may cause actual results to differ materially from this forward-looking information is available in Americas filings with the Canadian Securities Administrators on SEDAR and with the SEC. Americas does not undertake any obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. Americas does not give any assurance (1) that Americas will achieve its expectations, or (2) concerning the result or timing thereof. All subsequent written and oral forward-looking information concerning Americas are expressly qualified in their entirety by the cautionary statements above.
Cautionary Note to U.S. Investors:
The terms “proven and probable silver reserve”, “silver resource”, “measured silver resource”, “indicated silver resource”, and “inferred silver resource” used in the press release are mining terms used in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum Standards. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
While the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource”, and “inferred mineral resource” are recognized and required by Canadian regulations, they are not defined terms under standards in the United States and normally are not permitted to be used in reports and registration statements filed with the Securities & Exchange Commission (“SEC”). Moreover, the definitions of proven and probable reserves used in NI 43-101 differ from the definitions in the United States Securities and Exchange Commission's Industry Guide 7. As such, information contained in the Company's disclosure concerning descriptions of mineralization, reserves and resources under Canadian standards may not be comparable to similar information made public by U.S companies in SEC filings. With respect to “inferred mineral resource” there is a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves.
1 Silver equivalent production throughout this press release was calculated based on silver, zinc, and lead realized prices during each respective period.
2 Cash cost per ounce and all-in sustaining cost per ounce are non-IFRS performance measures with no standardized definition. For further information and detailed reconciliations, please refer to the Company’s 2018 year-end and quarterly MD&A.
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