Americas Gold on track for commercial production
Americas Gold and Silver Corp. [USA-TSX; USAS-NYSE American] on Wednesday October 14 released an update on the continued ramp-up of its Relief Canyon Mine in Nevada. The company said it remains on target to reach the commercial production stage by the fourth quarter of 2020.
The announcement comes after Americas Gold recently raised $39.4 million from a bought deal financing involving the sale of 10.2 million common shares at $3.86 per share.
On Wednesday, the shares were up 7.4% or 26 cents to $3.76 on volume of 500,888 and trade in a 52-week range of $5.12 and $1.39.
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.
In a previous update, the company said commercial production at Relief Canyon was delayed until the fourth quarter of this year due to “various start-up challenges, including equipment issues with the radial stacker, inconsistent operating practises and variable solution application rates.
On Wednesday, the company said it expects the large radial stacker to be back at the site in early November, a move that will increase daily production from approximately 8,000 tonnes per day to the targeted 16,000 tonnes per day.
It said the failure of the large radial stacker was due to a steel quality issue and not operator error or a manufacturer defect. The increased stacking rate will allow the operation to accelerate the amount of material placed on the leach pad, increase the area under leach and increase daily gold production.
“The pregnant solution grade as consistently increased since August, which has further boosted our confidence of declaring commercial production in Q4-2020,” said Americas President and CEO Darren Blasutti. “With the increased pregnant solution grade and stacking rate, we expect the Relief Canyon Mine to start generating meaningful sustainable free cash flow,” he said.
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 100%-owned Cosala Operations in Sinaloa, Mexico.
Silver production from the Cosala Operations increased by 28% to 572,036 ounces in 2019 from 448,150 ounces in 2018. The company has said it expects silver production from the Cosala Operations to increase to 2.5-3.0 million ounces annually starting in 2022.