Americas Gold and Silver to Significantly Increase Output
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Americas Gold and Silver to Significantly Increase Output

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Paloma Duran By Paloma Duran | Journalist and Industry Analyst - Mon, 04/25/2022 - 15:22

Americas Gold and Silver announced its operating results for 1Q22, as well as its production outlook for the rest of the year. The company said it expects its annual production to increase significantly in the coming months, especially as it will begin developing high-grade silver zones at its Mexican flagship project.

During 1Q22, Americas produced 300,000oz of silver and 1.27Moz of silver equivalent, representing an increase of 45 percent and 80 percent respectively compared to 4Q21. The company announced that it expects to increase its production in 2H22, when it will begin to unlock the value of high-grade silver zones in Sinaloa.

After the lifting of the blockade at Cosalá, Americas announced that initial production would be concentrated in the Main Zone, which has high-grade zinc areas and was fully developed prior to the blockade to maximize short-term free cash flow. However, the company said that its main growth opportunities lie in developing the Upper Zone, which has silver grades five to six times higher than the Main Zone. These new areas are expected to significantly increase Americas’ silver production to more than 2.5Moz of silver per year.

Americas explained that it faced  challenges after resuming operations at Cosalá, such as the five days in which it was unable to produce anything. However, the company highlighted it was able to deliver a strong 1Q22 production of 127,000oz of silver, 3.9 million pounds of lead and 9.6 million pounds of zinc. In addition, the company said it expects its Cosalá Operations to have an annual production of between 0.7 and 0.9Moz of silver, from 36 to 40 million pounds of zinc and between 13 and 15 million pounds of lead.

“The company had a strong start to 2022 and we expect that trend to continue as silver production ramps up at both our Cosalá Operations in Sinaloa and the Galena Complex in Idaho during the rest of the year,” said Darren Blasutti, CEO and President, Americas Gold and Silver. In addition, Blasutti explained that the operations will also benefit from the current high market prices of silver, zinc and lead. Therefore, the increased production and high metal prices are expected to generate a strong cash flow in the coming months.

Why Were Cosalá’s Operations Suspended?

From Jan. 2020 to Sept. 2021, the company’s operations were blocked by union members, who argued that the mine was too dangerous to work at. However, Americas emphasized that these claims were based on false accusations and that the real objective of the group was to dishonestly obtain collective agreements and other benefits.

After months of negotiations between the government, the union and the company, Americas restarted operations on Sept. 13, 2021. The company stressed that a key factor for the effective and permanent opening of the mine will be the government’s continued support.

Photo by:   Americas Gold and Silver

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