TORONTO--(BUSINESS WIRE)--Americas Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas Silver” or the “Company”) today reported consolidated financial and operational results for the third quarter of 2017.
This earnings release should be read in conjunction with the Company’s Third Quarter Production and Cost Update, Management’s Discussion and Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on the Americas Silver Corporation SEDAR profile at www.sedar.com, on its EDGAR profile at www.sec.gov, and are also available on the Company’s website at www.americassilvercorp.com. All figures are in U.S. dollars unless otherwise noted.
Third Quarter Highlights
- Revenues of $9.8 million in Q3, 2017, excluding $3.8 million of El Cajón and San Rafael pre-production revenues capitalized to development costs, compared with revenues of $16.8 million in Q3, 2016.
- Cash flow generated from operating activities1 in the first three quarters of 2017 of $5.9 million, compared to cash generated from operating activities of approximately $5.2 million for the first three quarters of 2016.
- A net loss of ($2.8) million or ($0.07) cents per share in Q3, 2017, compared with a net income of $1.0 million or $0.03 cents per share in Q3, 2016.
- The Company expects San Rafael to be the sole source of the mill feed by the end of the week of November 13, 2017 with commercial production expected before the end of the fourth quarter. The project remains fully funded and initial capital is expected to be less than $17 million, lower than the original April 2016 Pre-feasibility Study estimate of $21 million.
- Previously announced, consolidated silver production for the quarter of approximately 565,000 silver ounces and 1.1 million silver equivalent2 ounces, representing a decrease of 5% and an increase of 1%, respectively, compared to Q3, 2016.
- Consolidated cash costs3 for the quarter were approximately $12.61 per silver ounce, an increase of 26% year-over-year, while consolidated all-in sustaining costs3 were approximately $15.92 per silver ounce, an increase of 24% year-over-year. Including the El Cajón pre-production by-product revenues net of direct mining, smelting and refining costs, cash costs and all-in sustaining costs would have been $11.77 and $14.18 per silver ounce, respectively.
- Guidance for 2017 remains at 2.0 - 2.5 million ounces of silver production and silver equivalent production of 5.0 - 5.5 million ounces with projected cash costs at the high end of the $4.00 - $5.00 per silver ounce and all-in sustaining cash costs of $9.00 - $10.00 per silver ounce ranges depending on the timing of the declaration of commercial production at San Rafael.
- Cash balance at September 30, 2017 of $8.7 million with net working capital of approximately $14.9 million.
“This event marks an exciting moment in the history of the Company,” said Americas Silver Corporation President and CEO Darren Blasutti. “With San Rafael going into full production this week, coupled with ten-year historic prices for zinc and lead, we expect to drive significant earnings and cash flow for our shareholders starting in Q1, 2018 and over the life of the mine.”
Consolidated Production and Operating Costs
| Consolidated Production and Cost Details | ||
| Q3 2017 | Q3 2016 | |
| Total ore processed (tonnes milled) | 174,677 | 166,770 |
| Silver produced (ounces) | 564,833 | 596,855 |
| Zinc produced (pounds) | 1,433,961 | 2,183,814 |
| Lead produced (pounds) | 5,369,482 | 7,991,507 |
| Copper produced (pounds) | 507,285 | 326,639 |
| Silver equivalent produced (ounces) | 1,107,874 | 1,107,110 |
| Silver recovery (percent) | 90.9 | 89.7 |
| Silver grade (grams per tonne) | 111 | 124 |
| Silver sold (ounces) | 542,298 | 601,845 |
| Zinc sold (pounds) | 1,258,532 | 2,142,465 |
| Lead sold (pounds) | 5,224,322 | 7,976,671 |
| Copper sold (pounds) | 460,227 | 337,306 |
| Cost of sales ($ per silver equivalent ounce)1 | $9.17 | $10.25 |
| Silver cash cost ($ per silver ounce) 1 | $12.61 | $10.00 |
| All-in sustaining cost ($ per silver ounce) 1 | $15.92 | $12.86 |
1 Cost of sales per silver equivalent ounce, cash costs per silver ounce, and all-in sustaining costs per silver ounce in Q3, 2017 excludes contributions of 160,128 silver ounces and 238,919 silver equivalent ounces from El Cajón during its commissioning period, and excludes pre-production of 5,146 silver ounces and 30,161 silver equivalent ounces minded from San Rafael during its commissioning period. Pre-production revenue (net of cost of sales) from El Cajón and San Rafael are capitalized as an offset to development costs.
Net loss of ($2.8) million was recorded for the quarter, compared to a net income of $1.0 million for the third quarter of 2016. The Company also generated cash from operating activities before non-cash working capital items of $5.9 million in the first three quarters of 2017 compared to $5.2 million in the first three quarters of 2016. The decrease in net income is primarily attributable to lower net revenue on timing of concentrate sales, lower silver, zinc and lead production, share-based compensation, higher marketing expenses to support the U.S. listing, and higher exploration costs at Zone 120. This decrease was partially offset by lower cost of sales, higher base metal prices, and lower interest and financing expenses. Production for the quarter dropped due to lower grades at Nuestra Señora compared to the prior year due to the wind-down of operations in Q3 and Q4, 2017 and underperformance at the Galena Complex in the quarter.
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, down 6% over the previous quarter and up 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 the 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.
Further information concerning the consolidated and individual mine operations is included in the Company’s third quarter Condensed Interim Consolidated Financial Statements for the nine months ended September 30, 2017 and Management’s Discussion and Analysis for the three and nine months ended September 30, 2017.
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 Mine Complex in Idaho, USA. The Company has acquired an option on the San Felipe development project in Sonora, Mexico.
