Americas Gold and Silver Reports Q2-2024 Results
TORONTO--(BUSINESS WIRE)--August 15, 2024--
Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS) ("Americas" or the "Company"), a growing North American precious metals producer, reports consolidated financial and operational results for the quarter ended June 30, 2024.
This earnings release should be read in conjunction with the Company's Management's Discussion and Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on the Americas Gold and Silver Corporation SEDAR+ profile at www.sedarplus.ca, and on its EDGAR profile at www.sec.gov, and which are also available on the Company's website at www.americas-gold.com. All figures are in U.S. dollars unless otherwise noted.
Highlights
-- Consolidated revenue increased to $31.6 million for Q2-2024 or 62%
compared to $19.5 million for Q1-2024 due to higher realized commodity
prices and increased silver production at the Galena Complex, offset
slightly by lower silver production from the Cosalá Operations.
-- Positive earnings before interest, taxes, depreciation and amortization
("EBITDA") and net income from combined Cosalá and Galena operations
of $11.1 million[1] and $4.4 million, respectively, compared with
negative EBITDA from those combined operations of $1.5 million and a net
loss of $6.3 million in Q1-2024.
-- Decrease in consolidated net loss to $4.0 million or $0.02 per share
for Q2-2024 (Q1-2024 consolidated net loss of $16.2 million or $0.08 per
share), primarily due to higher net revenue from higher silver and zinc
prices.
-- As previously reported, Q2-2024 consolidated attributable silver
production of 0.51 million ounces. The Company also produced 8.9 million
pounds of zinc and 4.4 million attributable pounds of lead during
Q2-2024. Significant reduction of consolidated attributable cash costs to
$12.42/oz silver produced[1] and all-in sustaining costs ("AISC") to
$19.58/oz silver produced[1] in Q2-2024, representing decreases of
approximately 40% and 35%, respectively, compared with Q1-2024.
-- Galena Complex quarterly production was the highest on record since
2013 with silver production of approximately 560,000 ounces on a 100%
basis as the operation benefitted from production from mining areas in
the Upper Country Lead Zone between 2400 and 2800 levels and a strong
quarter from the 52-198 Silver Hanging Wall Vein.
-- On August 14, 2024, the Company signed a $15 million secured Credit and
Offtake Agreement for the capital requirements of the Board-approved
EC120 Project at its Cosalá Operations with the goal of solely
producing higher-grade silver-copper concentrates in Q3-2025.
-- The Company commenced negotiations with current convertible debenture
holders and potential new investors to extend the term of the existing
facilities.
"Q2-2024 was a strong quarter for the Company and an initial demonstration of what our operating assets can deliver as we transition to over 80% silver revenue over the next year," stated Americas President and CEO Darren Blasutti. "With the stronger commodity prices, the Company was able to significantly improve both its EBITDA and cash flow from operations. I expect continued improvement as the Company advances its development projects at both the Galena Complex and the Cosalá Operations. I am excited to partner with a world-class metal trader such as Trafigura on advancing the EC120 Project which will begin to contribute higher-grade silver-copper production through development over 2025, coinciding well with the recent increases in silver and copper prices."
Consolidated Production
Consolidated attributable silver production in Q2-2024 was approximately 506,000 ounces. Quarterly silver production in Q2-2024 remained on a steady upward trend and is expected to continue with increased working faces at the Galena Complex as well as the exploitation of EC120 Project at the Cosalá Operations. The EC120 Project has already started contributing to production with small amounts of development ore and will continue to ramp up through to achieving commercial production in Q3-2025. The Company also produced 8.9 million pounds of zinc and 4.4 million attributable pounds of lead during Q2-2024. The Company's goal is to generate more than 80% of its revenue from silver production by the end of 2025 which would be among the silver industry leaders in percentage revenue from silver.
Consolidated attributable cash costs and all-in sustaining costs for Q2-2024 were $12.42 per silver ounce and $19.58 per silver ounce, respectively. Galena Complex cash costs per silver ounce benefitted from the significant increase in silver production on a largely fixed cost base at the Galena Complex. Cash costs per silver ounce at the Cosalá Operations were reduced because of increased by-product credits from the increased zinc production and prices.
Galena Complex
The Galena Complex produced approximately 560,000 ounces of silver on a 100% basis in Q2-2024 compared to approximately 311,000 ounces of silver in Q1-2024 (an 80% increase in silver production), and 3.0 million pounds of lead in Q2-2024, compared to 1.9 million pounds of lead in Q1-2024 (a 60% increase in lead production).
The Galena Complex benefitted from the recent horizontal development work in the Upper Country Lead Zone between the 2400 and 2800 Levels which allowed the operation to access additional working areas which is expected to continue to benefit the operation in subsequent quarters and a strong contribution from the 52-198 Silver Hanging Wall Vein. Development work on the 3700 Level is expected to be completed in Q3-2024 and is expected to contribute to high-grade silver production thereafter.
Cash costs decreased to $14.78 per ounce silver in Q2-2024 from $27.14 per ounce silver in Q1-2024 due to increased silver production, and AISC also decreased to $21.93 per ounce silver in Q2-2024 from $40.96 per silver ounce in Q1-2024. Cash costs and all-in sustaining costs per silver ounce at the Galena Complex are anticipated to decrease with the projected increase in production from the 3700 Level and the completion of the Galena Hoist project as the benefits of economies of scale on the existing cost base are realized.
Cosalá Operations
The Cosalá Operations decreased silver production in Q2-2024 by 43% to approximately 170,000 ounces of silver compared to approximately 297,000 ounces of silver in Q1-2024. The Company focused on mining higher grade zinc and lower grade silver areas of the San Rafael Main and Upper Zones to maximize its revenue and cash flow generation by taking advantage of the Q2-2024 increase in zinc prices. Production of zinc increased to 8.9 million pounds of zinc while lead production decrease slightly to 2.6 million pounds of lead in Q2-2024, compared to 8.0 million pounds of zinc, and 2.8 million pounds of lead in Q1-2024. Cash costs per silver ounce decreased during the quarter to $7.75 per ounce from $16.44 per ounce in Q1-2024 due primarily to increased zinc prices, which is treated as a by-product credit.
With the current higher silver and copper price, the Company decided to expedite the development of its 100%-owned EC120 Project at the Cosalá Operations. Initial access to the Zone 120 deposit occurred in Q3-2023 accessed from the San Rafael Upper Zone development with initial pre-production from development ore from the area between the San Rafael Upper Zone and Zone 120. The Company expects to realize an increase in silver production in the near term due the higher-grade silver areas in the Upper Zone and EC120 development ore. In addition, the Company continues mining and processing silver-zinc ore from the San Rafael Main and Upper Zones and is expecting to benefit from the increase in zinc prices experienced to date in the second quarter.
On August 14, 2024, the Company signed a $15 million secured Credit and Offtake Agreement for the capital requirements to provide financing for the initial capital requirements at the EC120 Project. The Company expects to complete the required development and preparations to achieve commercial production of higher-grade silver-copper concentrates from the Project in Q3-2025. The Company has been and will continue to process Zone 120 and El Cajon development ore to produce high grade silver-copper concentrates through the pre-production development period. The 2019 Preliminary Feasibility Study for the EC120 Project forecasted average annual metal production of 2.5 million ounces of silver and 4.5 million pounds of copper with a total of over 12 million ounces of silver and 23.0 million pounds of copper over the five years of the project.
Relief Canyon
With the recent significant rise in gold prices, the Company continues to research possible solutions to increase recoveries at the project including the possibility of improvements through a Carbon-In-Leach ("CIL") plant. The Company is commissioning an external study with an international engineering consultant to complete the necessary work. A CIL plant may demonstrate a path to higher gold recoveries for the deposit with the potential for improved economics and overall profitability.
About Americas Gold and Silver Corporation
Americas Gold and Silver Corporation is a high-growth precious metals mining company with multiple assets in North America. The Company owns and operates the Cosalá Operations in Sinaloa, Mexico, manages the 60%-owned Galena Complex in Idaho, USA, and is re-evaluating the Relief Canyon mine in Nevada, USA. The Company also owns the San Felipe development project in Sonora, Mexico. For further information, please see SEDAR+ or www.americas-gold.com.
Technical Information and Qualified Persons
(MORE TO FOLLOW) Dow Jones Newswires
August 15, 2024 16:45 ET (20:45 GMT)
Comments