News
2016
- Consolidated production met 2015 guidance for production and all-in sustaining costs[1] of 2.65 million silver ounces and 4.87 million silver equivalent[2] ounces at a by-product cash cost of $12.75 per ounce[3] and an all-in sustaining cost of $17.16 per ounce3 for the year, including fourth quarter production of approximately 600,000 silver ounces and 1.20 million silver equivalent ounces at a by-product cash cost of $14.38 per ounce and an all-in sustaining cost of $18.45 per ounce.
- Revenues of $53.5 million and a net loss of ($19.4) million or ($0.06) cents per share compared to a net loss of ($78.7) million and ($0.39) cents per share for the year ended December 31, 2014, including fourth quarter revenues of $11.4 million and a net loss of ($7.3) million or ($0.02) cents per share compared to a net loss of ($73.5) million or ($0.35) cents per share for the three months ended December 31, 2014. The decrease in net loss is primarily attributable to lower impairment of mining interests and reductions in depletion and amortization, and income tax expense, partially offset by lower net revenue on commodity sales.
- Consolidated guidance for 2016 is 2.5 - 3.0 million silver ounces and 5.0 - 5.6 million silver equivalent ounces at cash costs of $9.00 - $10.00 per ounce and all-in sustaining costs of $11.75 - $12.75 per ounce[4].
- The Company’s mineral reserve and resource estimate was updated as of December 31, 2015. Mineral reserves increased 40% from 22.0 million ounces of silver to 31.0 million ounces, primarily as a result of a maiden reserve estimate for the San Rafael property.
- Today, the Company is announcing the pre-feasibility study results on its zinc-silver-lead San Rafael property, part of the Cosalá Operations. The project is expected to produce approximately 5.5 million ounces of silver, 250 million pounds of zinc and 100 million pounds of lead over an initial 5.5 year mine life at negative all-in sustaining costs per silver ounce.
- Cash and cash equivalents of $1.3 million at December 31, 2015 with net working capital of approximately $5.5 million.
In 2015, the Company produced 2.65 million silver ounces and 4.87 million silver equivalent ounces, meeting guidance. Silver all-in sustaining costs of $17.16 per ounce also met guidance, while by-product cash costs of $12.75 per ounce exceeded guidance slightly by 2%. Lead production rose year-over-year from 15.4 million pounds in 2014 to 22.9 million pounds in 2015, an increase of 48% offsetting lower than expected base metal prices. Please see Table 1 below for details on fourth quarter results.
| Table 1 | ||||||
| Consolidated Production Highlights | ||||||
| Q4 2015 | Q4 2014 | Change | YTD 2015 | YTD 2014 | Change | |
| Processed Ore (tonnes milled) | 167,398 | 173,023 | -3% | 657,617 | 681,109 | -3% |
| Silver Production (ounces) | 599,677 | 647,043 | -7% | 2,652,026 | 2,799,404 | -5% |
| Silver Equivalent Production (ounces) | 1,200,583 | 1,106,074 | 9% | 4,866,145 | 4,367,649 | 11% |
| Grade (grams per tonne) | 126 | 130 | -3% | 141 | 142 | -1% |
| Cash Costs ($ per silver ounce) | $14.38 | $14.32 | 0% | $12.75 | $13.83 | -8% |
| All-in Sustaining Costs ($/Ag oz) | $18.45 | $23.05 | -20% | $17.16 | $21.15 | -19% |
| Zinc (pounds) | 3,075,468 | 3,329,584 | -8% | 11,647,962 | 12,625,526 | -8% |
| Lead (pounds) | 7,067,802 | 5,185,966 | 36% | 22,905,826 | 15,442,648 | 48% |
| Copper (pounds) | 321,616 | 419,108 | -23% | 2,054,896 | 1,777,137 | 16% |
| Realized Silver Price ($ per ounce) | $14.70 | $16.29 | -10% | $15.60 | $18.98 | -18% |
| Realized Zinc Price ($ per pound) | $0.72 | $0.99 | -27% | $0.87 | $0.97 | -10% |
| Realized Lead Price ($ per pound) | $0.78 | $0.90 | -14% | $0.80 | $0.94 | -15% |
| Realized Copper Price ($ per pound) | $2.21 | $2.92 | -24% | $2.54 | $3.06 | -17% |
The Company recorded a net loss of ($19.4) million for the year ended 2015, compared to a net loss of ($78.7) million for the year ended 2014. The decrease in net loss is primarily attributable to lower impairment of mining interests, and reductions in depletion and amortization, and income tax expenses, partially offset by lower net revenue on commodity sales. For fourth quarter financial highlights, please see the Company’s Management Discussion and Analysis which is available on www.sedar.com and on the Company’s website at www.americassilvercorp.com.
| Table 2 | |||||||||
| Proven and Probable Mineral Reserves† | |||||||||
| December 31, 2015 | |||||||||
| Grade | Contained Metal | ||||||||
| Tonnes | Silver | Copper | Lead | Zinc | Silver | Copper | Lead | Zinc | |
| 000s | g/t | % | % | % | koz | Mlbs | Mlbs | Mlbs | |
| Cosalá Operations | |||||||||
| Total Cosalá P&P | 3,822 | 108 | 0.03 | 1.64 | 3.86 | 13,310 | 2.5 | 137.8 | 325.3 |
| Galena Complex | |||||||||
| Total Galena P&P | 1.402 | 395 | 0.21 | 5.13 | -- | 17,806 | 6.4 | 158.6 | -- |
| TOTAL P&P | 5,224 | 185 | 0.08 | 2.57 | 2.82 | 31,116 | 9 | 296.5 | 325.3 |
† 2015 reserves were calculated using assumed metal prices of $16.00 per ounce of silver, $2.40 per pound of copper, $0.85 per pound of lead and $0.85 per pound of zinc. Reserve calculations incorporate current and/or expected mine plans and cost levels at each property. Totals may not add or multiply accurately due to rounding.
| Table 3 | |||||||||
| Measured & Indicated Mineral Resources (exclusive of Reserves) ‡ | |||||||||
| Grade | Contained Metal | ||||||||
| Tonnes | Silver | Copper | Lead | Zinc | Silver | Copper | Lead | Zinc | |
| 000s | g/t | % | % | % | koz | Mlbs | Mlbs | Mlbs | |
| Cosalá Operations | |||||||||
| Total Cosalá M&I | 8,772 | 90 | 0.12 | 0.68 | 1.53 | 25,441 | 22.9 | 131.6 | 296.1 |
| Galena Complex | |||||||||
| Total Galena M&I | 2,628 | 292 | 0.25 | 3.25 | -- | 24,670 | 14.4 | 188.3 | -- |
| TOTAL M&I | 11,401 | 137 | 0.15 | 1.27 | 1.18 | 50,111 | 37.3 | 319.9 | 296.1 |
| Table 4 | |||||||||
| Inferred Mineral Resources ‡ | |||||||||
| December 31, 2015 | |||||||||
| Grade | Contained Metal | ||||||||
| Tonnes | Silver | Copper | Lead | Zinc | Silver | Copper | Lead | Zinc | |
| 000s | g/t | % | % | % | koz | Mlbs | Mlbs | Mlbs | |
| Cosalá Operations | |||||||||
| Total Cosalá Inferred | 3,070 | 104 | 0.19 | 0.97 | 1.35 | 10,303 | 12.6 | 65.9 | 91.2 |
| Galena Complex | |||||||||
| Total Galena Inferred | 2,539 | 202 | 0.15 | 3.71 | -- | 16,468 | 8.4 | 207.8 | -- |
| TOTAL INFERRED | 5,610 | 148 | 0.17 | 2.21 | 0.74 | 26,771 | 21 | 273.6 | 91.2 |
‡ For calculating equivalent grade, metal price assumptions are $16.00/oz Ag, $2.40/lb Cu, $0.85/lb Pb and $0.85/lb Zn.
Cosalá Mineral Resources for Nuestra Señora are based on a 90g/t Ag Equivalent cut off while San Rafael and Zone 120 are based on a 2.5% Zn Equivalent cut off.
Galena Mineral Resources are based on a cut off of 310g/t Ag Equivalent for vein-style mineralization and 100g/t Ag for disseminated mineralization.
Mineral Resources are reported exclusive of Mineral Reserves and as such the Mineral Resources do not have demonstrated economic viability.
Totals may not add or multiply accurately due to rounding.
The Mineral Resource estimate for the Cosalá Operations is based on block models prepared by independent mineral resource consultants. The Nuestra Señora Mineral Reserve and Resource estimate was prepared by Company personnel under the supervision of James Stonehouse, a Qualified Person for the purposes of NI 43-101. The San Rafael Mineral Reserve and Resource estimate was prepared by Thomas L. Dyer, P.E., Edwin R. Peralta, P.E., Paul Tietz, C. P. G. and Randy Powell, Q.P.M. who are all independent consultants and Qualified Persons.
The Mineral Resource estimate for the Galena Complex was prepared using a combination of block modelling and the accumulation method. A review of the database and methodologies was completed by independent mineral resource consultants and Qualified Persons for the purposes NI 43-101 engaged by the Company during 2012. The estimates were updated by Company personnel under the supervision of Dan Hussey and Jim Atkinson, both of whom are Qualified Persons for the purposes of NI 43-101. The Mineral Reserves was prepared by Company personnel under the supervision of Dan Hussey, a Qualified Person for the purposes of NI 43-101.
Varying cut-off grades have been used depending on the mine, methods of extraction and type of ore contained in the reserves. Mineral resource metal grades and material densities have been estimated using industry-standard methods appropriate for each mineral project with support of various commercially available mining software packages. The Company’s normal data verification procedures have been employed in connection with the calculations. Verification procedures include industry standard quality control practices. Sampling, analytical and test data underlying the stated mineral resources and reserves have been verified by employees of the Company under the supervision of Qualified Persons, for purposes of 43-101 and/or independent Qualified Persons. Additional details regarding Mineral Reserve and Mineral Resource estimation, classification, reporting parameters, key assumptions and associated risks for each of the Company’s mineral properties are provided in the respective NI 43-101 Technical Reports which are available at www.sedar.com.
San Rafael Pre-Feasibility Study Update
On March 30, 2016, the Company announced a maiden reserve at the San Rafael property based on the results of its updated pre-feasibility study. A summary of the study is available in the Annual Information Form for the year-ended December 31, 2015. San Rafael is part of the Cosalá Operations. It is a zinc-silver-lead deposit located approximately 8km north of the Los Braceros process plant. Mine Development Associates was initially commissioned in Q2, 2015 to complete a pre-feasibility study on the property but completion was delayed due to metal price volatility in the second half of that year. As market conditions stabilized and covered, the Company decided to restart work in Q1, 2016. The study considers an underground operation focused on the Main Zone with processing at the existing Los Braceros facility to produce silver-bearing zinc and lead concentrates.
The project is expected to produce 5.5 million ounces of silver, 254 million pounds of zinc and 97 million pounds of lead over an initial reserve life of 5.5 years with a pre-tax net present value of $24.7 million at a 5% discount rate and a pre-tax IRR of 27%. The life of mine all-in sustaining costs of the project are expected to be negative 19 cents per pound of silver produced. San Rafael offers attractive economic upside through conversion of the existing resource to reserve, as well as resource addition from exploration once underground access has been established.
Permits are in place to allow commencement of mine development, subject to approval by the Board of Directors and project financing. Following an eleven month development period, the existing Los Braceros processing plant will begin treating San Rafael ore to produce silver-bearing zinc and lead concentrates. At month 20, a mill expansion will increase throughput by 30% to 1,800 tonnes per day to coincide with the ramp up in mine production Full details of the Prefeasibility Study will be disclosed through a Technical Report to be issued by April 30, 2016.
About Americas Silver Corporation
Americas 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 Complex in Idaho, USA.
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 San Rafael prefeasibility study, estimates of mineral reserves and resources, realization of mineral reserve estimates, 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), failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration 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.
For more information:
Darren Blasutti
President and CEO
416-848-9503
[1] All-in sustaining cost unless otherwise noted comprised of silver mining industry cash cost plus all development, capital expenditures, exploration spending and mine general and administrative costs.
[2] Silver equivalent production for 2015 throughout this press release is based on prices of $17 per ounce silver; $0.95 per pound zinc; $0.90 per pound lead and $2.90 per pound copper.
[3] 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 2015 year-end and quarterly MD&A.
[4] Silver equivalent figures and silver cost guidance for 2016 are based on $14.50 per ounce silver, $0.80 per pound lead, $0.75 per pound zinc and $2.00 per pound copper.