Oct 31, 2017
Americas Silver Corporation Provides Third Quarter Production and Cost Update
TORONTO, ONTARIO-October 31, 2017-Americas Silver Corporation (TSX: USA) (NYSE American: USAS) ("Americas Silver" or the "Company") today announced consolidated production and operating cost results for the third quarter of 2017 and individually for its Cosalá Operations and Galena Complex. All figures are in U.S. dollars unless otherwise indicated.
Third Quarter Highlights
1 Silver equivalent production throughout this press release was calculated based on silver, zinc, lead and copper realized prices during each respective period.
"The Cosalá team has done an effective job at managing the development and operations of three different mines and a successful drill program during 2017," said Americas Silver President and CEO Darren Blasutti. "We expect this strong performance to continue through to the end of 2017 and into 2018 with San Rafael coming into production on time and on budget in the next couple of weeks. We made a prudent decision to process El Cajón ore in the third quarter that increased costs in order to free up working capital that otherwise would have been inaccessible for years."
Consolidated Third Quarter Production Details
Consolidated silver production for the third quarter of 2017 was 564,833 silver ounces which represents an increase of 1% over the previous quarter and a decrease of 5% year-over-year. Silver equivalent production was approximately 1.1 million ounces, a decrease of 6% over the previous quarter and an increase of 1% year-over-year. The decrease in silver and silver equivalent production is primarily due to lower tonnage and grade at the Galena Complex, partially offset by continuing strong production from the Nuestra Señora and El Cajón mines as the Cosalá Operations prepares to commence commercial production from San Rafael later in the quarter.
Consolidated cash costs increased 75% to $12.61 per silver ounce compared to the previous quarter and 26% year-over-year. All-in sustaining costs increased 50% to $15.92 per silver ounce compared to the previous quarter and 24% year-over-year. The increase in cash costs and all-in sustaining costs was primarily due to lower tonnage and grade at the Galena Complex as the mine progressed through lower grade areas of the mine while catching up on development in higher grade areas and the processing of El Cajón ore in the quarter. The impact of this beneficial work will be realized starting in the fourth quarter.
Approximately 69,000 tonnes of ore from the El Cajón mine was milled in Q3, 2017 as the stockpiled El Cajón silver-copper ore could not be processed with either silver-zinc-lead Nuestra Señora or San Rafael ore. The material yielded concentrates containing approximately 160,000 ounces of silver and 462,000 pounds of copper. By processing this ore before the San Rafael production start-up, approximately $3.4 million of pre-production revenue was realized that would have stayed on the stockpile until the end of the San Rafael mine life. The criteria necessary to declare sustainable commercial production of this transitional ore were determined not to have been met. As a result, the by-product revenues and pre-production costs were omitted from the consolidated cash costs and all-in sustaining cost costs calculation. If El Cajón pre-production revenues and costs were included, the adjusted consolidated cash costs would have been approximately $11.75 per silver ounce and all-in sustaining costs would have been approximately $14.18 per silver ounce for the quarter.
Cosalá Operations Production Details
The Cosalá Operations produced 277,752 ounces of silver during the third quarter of 2017 and 528,823 ounces of silver equivalent inclusive of El Cajón and pre-production material from San Rafael. Excluding the El Cajón and San Rafael material, the Cosalá Operations produced 112,478 ounces of silver during the third quarter of 2017 and 259,743 ounces of silver equivalent during the same period at cost of sales of $1.32 per silver equivalent ounce, cash costs and all-in sustaining costs of $3.16 per silver ounce. While silver production increased 15% compared to the previous quarter and 14% year-over-year, silver equivalent production decreased 6% compared to the previous quarter as a result of lower by-product production of zinc and lead from Nuestra Señora partially offset by increased copper production. Cash costs and all-in sustaining costs improved year-over-year by 68% and 73%, respectively, as Nuestra Señora ore was produced with lower operating costs and minimal development work.
The Company provided an exploration update for its Cosalá properties on August 24, 2017. The Company expects to complete up to 12 additional holes in Q4, 2017 to further define the geological controls and extent of mineralization in and around the known Zone 120 resource. Further exploration drilling is being proposed for 2018. Results from the ongoing 2017 drilling are expected to be released in early 2018.
San Rafael Update
Galena Complex Production Details
About Americas Silver Corporation
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 and development plans (including the successful completion of the San Rafael project), 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.
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