Americas Silver Corporation (TSX: USA) (NYSE American: USAS)
(“Americas Silver” or the “Company”) is pleased to announce
production and operating cost results for fiscal 2017, 2018
production and cost guidance, and results from recent follow-up
exploration drilling completed on its 100%-owned Zone 120 deposit.
The Zone 120 deposit is part of the Cosalá Operations property in
Sinaloa, Mexico and located adjacent to the San Rafael Mine. The
Company declared commercial production at the San Rafael Mine as of
December 19, 2017.
Consolidated 2017 Results and 2018
Guidance
- Guidance for 2018 is 1.6 - 2.0 million
silver ounces and 7.2 - 8.0 million silver equivalent ounces at
cash costs of negative $10.00 to negative $5.00 per silver ounce
and all-in sustaining costs of negative $1.00 to $4.00 per silver
ounce. The Company assumed $17.00 per ounce silver, $1.35 per pound
zinc, $1.05 per pound lead, and an exchange rate of 18.5 Mexican
pesos to US dollar for these guidance estimates.
- The Company drilled seven holes at the
Zone 120 deposit in the fourth quarter of 2017 following the
success of the spring 2017 drill program. Drill highlights include:
- Hole SR-415, containing 23.4
meters grading 259 g/t silver, 0.40 g/t gold and 0.5% copper (345
g/t silver equivalent) and 7.2 meters grading 335 g/t
silver, 0.23 g/t gold and 0.55% copper (413 g/t silver
equivalent);
- Hole SR-402, containing 16.9 meters
grading 138 g/t silver, 0.23 g/t gold and 0.43% copper (204 g/t
silver equivalent); and
- Hole SR-409, containing 2.0 meters
grading 920 g/t silver, 0.40 g/t gold and 2.36% copper (1,218 g/t
silver equivalent)
- The Board has approved a $4.0 million
exploration program for the Cosalá Operations property, with the
majority to be spent on expansion and in-filling drilling of the
Zone 120 deposit.
- Consolidated silver and silver
equivalent production1 for 2017 of approximately 2.1 million silver
ounces and 4.7 million silver equivalent ounces, respectively,
resulting in a 14% decrease in silver production and 4% increase in
silver equivalent production compared to 2016.
- Consolidated cash costs2 and all-in
sustaining costs2 for 2017 of $9.37 per silver ounce and $13.12 per
silver ounce, respectively, resulting in a 6% decrease in cash
costs and 3% increase in all-in sustaining costs compared to
2016.
- The Company had a cash balance of $9.3
million as at December 31, 2017.
“This year will be transformative for Americas Silver with the
San Rafael Mine and mill ramping up to full capacity by the middle
of the year,” said Americas Silver President and CEO Darren
Blasutti. “We are expecting record free cash flow, earnings, and
silver equivalent production for the Company as we become one of
the lowest all-in sustaining cost producers in the silver
industry.”
Mr. Blasutti continued, “Building on the exciting 2017 drilling
success at Zone 120, we are well into a 12,000-meter drill program
in the first half of 2018. San Rafael’s free cash flow will allow
us to develop the potential high-grade, silver-copper targets at
Zone 120-El Cajón without equity dilution to our shareholders.”
Consolidated 2017 Results and 2018
Guidance
Consolidated silver production for 2017 was
approximately 2,060,000 ounces, which represents a decrease of 14%
compared to 2016. Silver equivalent production was approximately
4,746,000 ounces, an increase of 4% compared to 2016. Consolidated
cash costs improved by 6% to $9.37 per silver ounce compared to
2016. In addition, zinc and copper production increased 11% and 10%
year-over-year, respectively, as a result of strong production from
the Cosalá Operations.
Table 1 2017 Consolidated Production
Highlights 2017
2016 Change Processed Ore
(tonnes milled) 690,498 671,616
3% Silver Production (ounces)
2,056,017 2,389,808 -14% Silver
Equivalent Production (ounces) 4,746,387
4,579,373 4% Silver Grade (grams per
tonne) 104 126
-18% Cost of Sales ($ per silver equiv. ounce)1
$10.19 $10.08 1% Cash Costs ($
per silver ounce)1 $9.37 $10.00
-6% All-in Sustaining Costs ($ per silver ounce)1
$13.12 $12.71 3%
Zinc Production (pounds) 11,623,138
10,488,773 11% Lead Production (pounds)
25,392,619 29,067,673
-13% Copper Production (pounds) 1,167,401
1,058,250 10%
1 Cost of sales per silver equivalent ounce,
cash costs per silver ounce, and all-in sustaining costs per silver
ounce for 2017 excludes pre-production of 50,490 silver ounces and
435,323 silver equivalent ounces mined from San Rafael during its
commissioning period, and excludes pre-production of 245,391 silver
ounces and 360,530 silver equivalent ounces mined from El Cajón
during its commissioning period. Pre-production revenue and cost of
sales from San Rafael and El Cajón are capitalized as an offset to
development costs.
The Company produced 2.1 million silver ounces
and 4.7 million silver equivalent ounces which are within the 2.0 -
2.5 million silver ounces and slightly below the 5.0 - 5.5 million
silver equivalent ounces 2017 guidance estimates. The shortfall to
silver equivalent guidance was due to lower than expected tonnage
and grade from the Galena Complex as both silver and lead
production were below expectations. In addition, guidance to the
market was estimated on the San Rafael Mine declaring commercial
production early in the fourth quarter of 2017 instead of later in
the quarter. As a result, silver equivalent production was lower
than expected due to delay in by-product metal production expected
from the high concentration of zinc and lead in the Lower Zone of
the San Rafael Mine.
Table 2
Consolidated Results and
Guidance
2017 Actual
2018 Guidance* Silver Production (ounces)
2.1M oz. 1.6 - 2.0M oz. Silver Equivalent
Production (ounces) 4.7M oz. 7.2
- 8.0M oz. Cost of Sales ($ per silver equiv. ounce)
$10.19/oz. $7.00 - $8.00/oz. Cash Costs ($ per
silver ounce) $9.37/oz. $(10.00)
- $(5.00)/oz. All-in Sustaining Costs ($ per silver ounce)
$13.12/oz. $(1.00) - $4.00/oz.
* The Company assumed $17.00 per ounce silver,
$1.35 per pound zinc, $1.05 per pound lead, and an exchange rate of
18.5 Mexican pesos to US dollar for these guidance estimates
The Company declared commercial production at its San Rafael
Mine in December 2017. The mine was constructed for approximately
$17 million, 25% lower than the initial pre-feasibility estimate.
Mine production, mill throughput and metal recoveries are expected
to ramp-up to internal targets through the first half of 2018.
Capital development is expected to be highest in the first quarter
of 2018 as development into the deepest levels of the Main Zone
progress and the remainder of the mine’s capital development and
equipment purchases are finalized. The Company is expected to
invest a consolidated $18-19 million in its operating mines in
2018.
Silver production is expected to be lower in the first 18 months
of the mine’s production due to mine sequencing within San Rafael.
The initial development in the San Rafael ore body was into the
area closest to the portal where the silver grade is approximately
half of the reserve silver grade. The Main and the Upper Zones of
the ore body are estimated to have higher silver grades. Silver
equivalent production is expected to increase significantly, and
cash costs and all-in sustaining costs are expected to decrease due
to the significant increase in lead and zinc projected to be
produced from the San Rafael mine. At current spot prices, the mine
is expected to generate significant free cash flow in 2018 and with
further growth in 2019 as capital requirements decrease and the
silver grade improves.
Zone 120 Exploration
Results
The Company is pleased to release results from
its ongoing drill program on the Zone 120 deposit. Exploration
drilling resumed at the Cosalá Operations property in 2017 for the
first time since 2014. Starting in April, an initial 4,000-meter
diamond drill program at Zone 120 will commence focused on
upgrading the existing resource3 as well as expanding the footprint
of mineralization to the southeast. Following up on the success of
step-out Hole SR-396, the Company drilled 3,260 meters in seven
holes to further test continuity, concentration, and extent of the
silver-copper mineralization.
Table 3
Q4 2017 Zone 120 Selected Drill
Results
Hole From (m) To
(m) Width (m)* Ag
(g/t) Au (g/t) Cu %
AgEg (g/t)** SR-402
including
371.3
389.2
406.1
406.1
34.8
16.9
91
138
0.15
0.23
0.29
0.43
136
204
SR-409 228.0 230.0 2.0
920 0.40 2.36
1,218 SR-410 163.6 174.3
10.7 97 0.16 0.24
136 SR-415
including
257.0
268.3
276.3
279.0
280.4
269.4
277.5
280.4
23.4
1.1
1.2
1.4
259
1,460
839
623
0.40
2.61
0.61
0.59
0.50
2.55
1.13
1.35
345
1,940
1,012
820
SR-415 291.1 305.9 14.8
75 0.25 0.16
111 SR-415 416.2 426.3
10.1 120 0.08 0.13
141
* True width varies from 85-92% of interval.**
The AqEq was calculated using $18/oz Ag, $1300/oz Au and $3.00/lb
Cu.
The Company also drilled three holes between El Cajón and Zone
120 to test for mineralization in the corridor separating two known
resources with similar host rocks, mineralogical characteristics
and structural controls, All three holes encountered short
intervals of significant silver and copper values and have provided
important structural and lithological information which will be
valuable in targeting extensions and the potential connection in
the one kilometer distance between El Cajón and Zone 120.
Detailed exploration results from the 2017 drill program and
2018 targets can be found on the Company’s website and investor
presentation at www.americassilvercorp.com.
The Company is moving forward with a $4 million, 20,000-meter
exploration program focused on the Zone 120 deposit and its
regional land position. Approximately 14,000 meters of the drilling
will be focused on Zone 120 and the corridor between Zone 120 and
El Cajón. The drilling is expected to be completed by mid-second
quarter 2018 with results to be released late in Q2, 2018 for
inclusion in the Company’s mid-year resource update. Funding for
the program is expected to be provided from internally-generated,
operating cash flow from the Company’s San Rafael Mine.
Drill core samples are prepared at the Company’s secure facility
in Cosalá, Sinaloa. Assaying was done by ALS Chemex Labs in
Hermosillo, Mexico. The Company has a QA/QC program supervised by a
Qualified Person.
About Americas Silver
CorporationAmericas Silver is a silver mining company
focused on growth in precious metals from its existing asset base
and execution of targeted accretive acquisitions. It owns and
operates the Cosalá Operations in Sinaloa, Mexico and the Galena
Mine Complex in Idaho, USA. The Company has acquired an option on
the San Felipe development project in Sonora, Mexico.
Daren Dell, Chief Operating Officer and a Qualified Person under
Canadian Securities Administrators guidelines, has approved the
applicable contents of this news release. 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, the Company’s
expectations intentions, plans, assumptions and beliefs with
respect to, among other things, the realization of operational,
exploration and development plans, the Cosalá Operations and Galena
Complex as well as the Company’s financing efforts. Often, but not
always, forward‐looking information can be identified by
forward‐looking words such as “anticipate”, “believe”, “expect”,
“goal”, “plan”, “intend”, “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 the Company 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 the
Company to be materially different from those expressed or implied
by such forward looking information. This includes the ability to
develop and operate the Cosalá and Galena properties, risks
associated with the mining industry such as economic factors
(including future commodity prices, currency fluctuations and
energy prices), ground conditions and factors 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 expenditures,
reclamation activities, 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. By its nature,
forward-looking information involves numerous assumptions, inherent
risks and uncertainties, both general and specific that contribute
to the possibility that the predictions, forecasts, and projections
of various future events will not occur. The Company undertakes no
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.
1 Silver equivalent production for fiscal 2017 throughout this
press release was calculated based on silver, zinc, lead and copper
realized prices during each respective period, unless otherwise
indicated.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 2016 year-end and quarterly MD&A.
The performance measures for the quarter and year ended December
31, 2017 are preliminary throughout this press release subject to
refinement from the Company’s year-end financial results to be
released on or before March 2, 2018.3 December 31, 2016 estimate
reported at Measured and Indicated resources of 1.8 million tonnes
grading 128g/t Ag and 0.35% Cu (7.3Moz Ag and 13.7Mlbs Cu
contained).
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180129005409/en/
Americas Silver CorporationDarren Blasutti,
416‐848‐9503President and CEO
Americas Gold and Silver (TSX:USA)
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