North American precious metals producer Americas Gold and Silver expects its 2022 production to be at the upper-end of its guidance of 4.8-million to 5.2-million silver-equivalent ounces and says its production will rise to between 7-million and 7.4-million ounces in 2024.
“The company anticipates a strong finish to the year in the fourth quarter with silver-equivalent production to meet or exceed the upper-end of the guidance range,” president and CEO Darren Blasutti said on Thursday.
Announcing third-quarter production results, Americas reported consolidated attributable production of 331 000 oz of silver and 1.34-million silver-equivalent ounces. Silver production increased by 92% year-on-year and increased 11% quarter-on-quarter.
Silver production is expected to increase further in the fourth quarter, as output ramps up into the higher silver grade Upper Zone of the San Rafael deposit at the Cosala Operations and the Galena Complex exploits higher silver grade stopes.
“The completion of the Galena hoist is expected to add operational flexibility and significantly increase production at the Galena Complex moving forward. As a result, the company increased its convertible debt subsequent to quarter-end to ensure that the Galena hoist project remains fully funded and on schedule,” said Blasutti.
Americas has increased the estimated capital cost of the Galena hoist project by $2.2-million to $8.9-million, with about half of the increase owing to higher installation costs. Despite the inflationary pressures at the hoist project, overall capital at the Galena complex is expected to be within 6% of the original budget of $20-million for 2022.
The company amended its existing RoyCap Convertible Debenture by increasing the principal balance by C$7-million to a total outstanding principal of C$19-million subsequent to quarter end. In addition, the parties agreed to amend the interest rate to a fixed rate of 9.5% a year, the conversion price to C$1.00 a share, and retraction option terms.
Commissioning of the Galena hoist will start in December.