Americas Silver mining in Mexico and Idaho

Underground mining at the San Rafael silver-zinc-lead mine in east-central Sinaloa State, Mexico. Americas Silver declared commercial production as of December 19, 2017 at 1,200 tonnes per day. Photo courtesy Americas Silver Corp.

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By Leonard Melman

Underground mining at the San Rafael silver-zinc-lead mine in east-central Sinaloa State, Mexico. Americas Silver declared commercial production as of December 19, 2017 at 1,200 tonnes per day. Photo courtesy Americas Silver Corp.

Americas Silver Corporation [USA-TSX; USAS-NYSE AMERICAN] is a junior mining company with two important project areas; the Cosalá District operation in Sinaloa State, Mexico and the Galena Complex in Idaho, USA.  The current operating portfolio is the result of their 2015 business combination with U.S. Silver & Gold Inc. and Scorpio Mining Corporation.

Americas Silver is led by a knowledgeable and experienced team including Darren Blasutti, President and CEO; Darren Dell, COO; Warren Varga, CFO; Peter McRae CLO, Corporate Affairs and Shawn Wilson, VP, Technical Services.

The company’s focus in Sinaloa is the transition away from previous operations and advancing development and production at the San Rafael Mine, which recently entered commercial production on time and 25% under the original pre-feasibility study estimate.

San Rafael is located in the east-central portion of Sinaloa along the western edge of the Sierra Madre Occidental, an extensive tertiary volcanic province covering approximately 800,000 km2. The Cosalá operations area can be accessed by paved and dirt roads from the city of Cosalá, a community of about 17,000 where personnel and mining supplies are readily available.

Mineralization in the Cosalá District is related to grandioritic or granitic intrusions into Cretaceous sedimentary rocks that overlie older basement terranes.

Prior to achieving commercial production at the San Rafael Mine, the company’s primary operations in Sinaloa were the Nuestra Senora Mine, an underground silver-zinc-lead-copper mine, and the El Cajon Mine, both which utilized the Los Braceros Mill processing facility. Both operations served as a temporary source of mill feed during the last half of 2017 while the San Rafael Mine was being brought fully on-stream. The San Rafael Mine is now the primary source of mill feed for its recently modified Los Braceros Mill and is slated to generate significant low cost production and free cash flow in the years to come.

Adjacent to the San Rafael mine is the zone 120 silver-copper skarn which the Company spent nearly $2 million on drilling in 2017 and plans on an additional $3 million to step out and infill in 2018. The Company believes it will be the next mine in its portfolio.

USA’s Galena Mine is located in northern Idaho’s famed Silver Valley, a region which has seen silver, copper and lead mining since the late 19th century. The mine sits outside the town of Wallace, a few miles west of the Montana border.

A particular feature of the Galena Mine is the depth of its four shafts, with the deepest descending almost 6,000 feet. Development has taken place on 13 levels. Silver-copper ore is processed at the 800 ton-per-day Galena mill while silver-lead ore is sent to the 500 ton-per-day Coeur mill. In addition, the company also owns an idle 300 ton-per day circuit which is able to process either ore and can be utilized should the company decide to expand production.

Extensive drilling and other exploration programs conducted by Americas Silver and previous owners of San Rafael and Galena have enabled the company to file an NI 43-101 compliant reserve and resource estimate.

Calculations for San Rafael include proven reserves of 1.585 million tonnes grading 110 grams per tonne (g/t) silver; 1.83% lead; and 4.15% zinc, containing 5.623 million oz. silver, 63.9 million lbs. lead and 145.0 million lbs. zinc.  Probable reserves amount to 2.156 million tonnes grading 93 g/t silver; 1.59% lead; and 4.05% zinc, containing 6.47 million oz. silver, 75.7 million lbs. lead and 192.6 million lbs. zinc.

Galena’s reserves have been divided into two categories, silver-copper and silver-lead.  Proven silver-copper reserves amount to 162,000 tonnes grading 506 g/t silver and 0.44% copper, containing 2.635 million oz. silver and 1.6 million lbs. copper. Probable reserves amount to 237,000 tonnes grading 584 g/t silver and 0.42% copper, containing 4.453 million oz. silver and 2.2 million lbs. copper.

Proven silver-lead reserves amount to 443,000 tonnes grading 268 g/t silver and 8.35% lead containing 3.817 million oz. silver and 81.5 million lbs. lead. Probable reserves amount to 512 tonnes grading 273 g/t silver and 8.48% lead containing 4.491 million oz. silver and 95.6 million lbs. lead.

The company estimates annual production at San Rafael of 1.0 million oz. silver, 50 million lbs. zinc and 20 million lbs lead over an initial six-year mine life.  At Galena, the mine life is presently estimated to be over 10 years, with a gradual shift away from silver-copper ore toward silver-lead ore to reduce costs and increase profitability.

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