Paul Huet, CEO and Chairman of Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS), joined me for a comprehensive overview of their producing Galena Complex, located in Idaho, USA; and the Cosalá Operations, located in Sinaloa, Mexico. We got into their plans for growth in both areas operationally and through exploration, the ability to add in antimony, copper, and gold credits to their primary silver production, new investments in equipment at site, and new members of the management team and board.
News was announced on October 9th, (and closed in December) of 2024, that the Company acquired 100% ownership at the Galena Complex, in a transaction with Sprott and a new Paul Huet-led management team was put in place, further strengthening its position as a leading silver producer. Sprott is now the largest shareholder in the company, holding a ~20% interest.
We started off unpacking how this was a key transformation for the company giving it the full torque to higher silver prices, now that it has 100% ownership at Galena. The company has many ongoing initiatives to ramp up production here investing in a fleet of new mobile equipment, an upcoming project to upgrade the hoist at the No. 3 shaft in Q4, the move to Long Hole Stoping as a mining method, the capacity at their 2 mills to accept larger amounts of throughput as mining expands, and the incorporation of new management and operational personnel. On May 15th the Company also announced promising results from recent metallurgical testing, confirming high recoveries of antimony alongside strong silver and copper recoveries from ore currently being processed. Until recently the company was not getting paid for antimony or copper, but that will be changing based on a new off-take agreement recently signed.
This transitioned the conversation over to the news out on June 3rd, which announced the arrangement of a US$100 million of senior secured debt facility to be provided by a third party to be used primarily to fund growth and development capital spending at the Galena Complex. The US$100 million Term Loan Facility consists of three tranches: a term loan with proceeds of US$50 million that will be advanced at closing, and two additional tranches of US$25 million. In tandem with this news, Americas Gold and Silver also announced it had entered into an offtake agreement with Ocean Partners USA Inc. for treatment of up to 100% of the concentrates from the Company’s Galena Complex at Teck Resources Limited’s Trail Operations in Trail British Columbia, one of the world’s largest fully-integrated zinc, lead and critical metals complexes. Paul outlined how this will allow the Company to both aggressively pursue their aforementioned capital development spending at the Galena Complex and further strengthen their balance sheet.
Next we shifted down to the Cosalá Operations in Mexico, with the operating San Rafael and El Cajon mines, which has been critical to getting the company through tougher markets over the years. The Company is investing in exploration to extend the San Rafael mine, and importantly tunneling over into a new area of the El Cajon mine called the EC120 mine, which will now see increased silver production in the years to come. This brought up the point that this company is one of the few North American silver-focused producers with the objective of over 80% of its revenue generated from silver by the end of 2025.
We wrapped up reviewing a number of other key management and board members backgrounds, many of which having been part of the successful turn-around and expansion of Klondex Mines and Karora Resource before they were taken over by senior producers. We also touched upon the new financial strength of their balance sheet, the influx of strong institutional support, and the key catalysts on tap for the balance of this year and moving into next year.
If you have any questions for Paul regarding Americas Gold and Silver, then please email those to me at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of Americas Gold and Silver at the time of this recording, and may choose to buy or sell shares at any time.
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