Americas Gold and Silver Corp. [USA-TSX; USAS-NYSE American] on Monday February 18 announced the first gold pour at its Relief Canyon Mine in Nevada and said it has completed initial construction within the estimated budget of $28 million to $30 million.
The Relief Canyon Mine is located at the southern edge of the Pershing Gold and Silver trend, along the Humbolt Range, approximately 95 miles northeast of Reno. The project consists of an open pit mine and heap leach processing facility. Americas landholdings cover approximately 25,000 acres that include the Relief Canyon Mine asset and lands surrounding the mine in all directions.
“This land package provides the company with the opportunity to expand the Relief Canyon deposit and to explore and make new discoveries on nearby lands,” the company said.
On Monday, the company said the Relief Canyon ramp-up is proceeding well with approximately 200,000 tonnes stacked on the leach pad. The mine is now running 24 hours per day and will enable the operator to reach design capacity of 14,500 tonnes per day.
Americas said its precious metals production is expected to significantly increase over the next two years as production ramps up at Relief Canyon, coupled with an anticipated increase in silver production from the Cosala Operations in Sinaloa, Mexico, starting in the second half of 2020.
The company’s gold equivalent production is expected to increase from approximately 14,000 ounces in 2019 to a range of 60,000 to 70,000 ounces in 2020 and 90,000 to 110,000 ounces in 2021. This marks more than a 300% and 500% increase, respectively, in gold equivalent production compared with 2019.
“Our two-year outlook demonstrates that 2020 will be a transformational year for the company with further significant increases expected in 2021,” said Americas President Darren Blasutti. “Relief Canyon will provide considerable exposure to gold and increase the company’s forecasted consolidated revenue to approximately 70% from precious metals based on current prices,” he said.
The two-year outlook does not include production from the Galena Complex in Idaho, following the announcement of the recapitalization plan for 2020.
The company said silver production from the Cosala Operations increased by 28% to 572,036 ounces in 2019 from 448,150 ounces in 2018. However, the company said cash costs and all-in sustaining costs were negatively impacted by lower zinc and lead prices as well as increased concentrate treatment charges.
Recapitalization of the 60%-owned Galena Complex began in mid-October 2019 with the focus over the next 18 months on mine development, new equipment purchases and exploration to define and expand silver resources. As a result, the company has suspended disclosure of certain operating metrics such as production, cash cost and all-in-sustaining cost for the Galena Complex.
On Monday, America’s share price eased 4.5% or 18 cents to $3.85 on volume of 1.1 million. The shares are currently trading in a 52-week range of $1.97 and $5.20.