Americas Gold arranges $6.5 million offering
Americas Gold and Silver Corp. [USA-TSX, USAS-NYSE American] has arranged to raise $6.5 million from a private placement offering of 21.5 million units priced at 30 cents per unit.
Americas Gold and Silver is a growing precious metals mining company with multiple assets in North America. The company owns and operates the Cosala Operations in Sinaloa, Mexico, manages the 60%-owned Galena Complex in Idaho, and is re-evaluating the Relief Canyon mine in Nevada. The company also owns the San Felipe development project in Sonora, Mexico.
In 2023, the company reported attributable silver production of 2.04 million ounces, marking an increase of 55% from 1.31 million ounces in 2022. That included 944,000 ounces of silver and 9.1 million pounds of lead from the Galena Complex. In 2023, the Cosala Operations produced 1.1 million ounces of silver, 11.5 million pounds of lead and 34.1 million pounds of zinc.
However, despite strong production in the fourth quarter of 2023, the company was 7.0% below its silver guidance for 2023. This was because additional silver production was expected from the Galena Complex at the end of the fourth quarter of 2023, that was delayed by sand-fill issues. This delayed silver production was delivered to the mill in early January, 2023, which will have a positive impact on production in the first quarter of 2024, the company has said.
“Not only is attributable silver production expected to grow significantly again in 2024, but the Galena Complex exploration team continues to generate impressive exploration results, which the company is confident will yield near-term mining targets,’’ said Americas CEO Darren Blasutti.
Meanwhile, under the terms of the offering, each unit will consist of one common share purchase warrant. Each warrant will entitle the holder to purchase one common share for an exercise price of 40 cents per warrant share for 36 months after the closing date, which is scheduled for March 27, 2024.
The company said net proceeds from the sale of the units will be used for capital requirements at the Cosala operations and Galena complex in order to transition to additional copper-silver ore production and for general and administrative purposes.
On Wednesday, Americas Gold shares eased 9.5% or $0.03 to 28.5 cents on volume of 716,030. The shares are currently trading in a 52-week range of 80 cents and 27.5 cents.
The company said it is making significant progress with interested metal traders to provide concentrate prepayment financing for the capital requirements at its 100%-owned El Cajon and Zone 120 silver-copper project at the Cosala Operations. The company previously said it expects to close on this financing in the first quarter of 2024, with the goal of producing higher-grade silver-copper concentrates by the end of 2024.
Following the successful drilling campaign at the Caladay Lead Zone from the eastern extent of the 4900 Level, the Galena Complex exploration team has successfully defined exciting new veins and extended known mineralization from drilling platforms on 4600L, 4300L, and 5200L, the company has said.
It said new reportable, high-grade silver intercepts continue to highlight the exploration potential at the Galena Complex and the results are expected to add mineable resources with additional infill drilling that could add to 2024 silver production totals.