ESG

Americas Gold shares sink after pulling guidance

Shares in Americas Gold and Silver fell as much as 8% Monday after it suspended its 2020 production guidance, blaming the COVID-19 pandemic for a slower-than-planned ramp-up of its Relief Canyon mine.

Americas Gold and Silver says the Relief Canyon ramp-up is progressing despite some COVID-19-related headaches

Americas Gold and Silver says the Relief Canyon ramp-up is progressing despite some COVID-19-related headaches

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The Toronto-headquartered company said the ramp-up had been impacted by inability to get key management and consultants to site to troubleshoot common start-up challenges.

Americas Gold maintained its 2021 production guidance of 90,000-110,000oz of gold-equivalent. It previously guided for 2020 production of 60,000-70,000oz gold-equivalent at AISC of US$900-$1,100/oz.

"All aspects of the Relief Canyon mine are starting to perform near design capacity following some initial teething pains common to commissioning a new operation," said CEO Darren Blasutti.

"These start-up challenges took slightly longer to remediate due to travel and operational restrictions caused by the COVID-19 pandemic. However, Relief Canyon is now well on its way to a successful ramp-up."

Mined Relief Canyon ore was reconciling well with the block model, the company reported, with lower development grades expected to give way to increasing head grades towards the end of the year and through 2021.

Following the first gold pour in February, solution flow rates to the leach pad increased at a slower rate than expected. The company is confident measures taken in the past five weeks, including improved agglomeration and stacking practices, will allow the operation to continue its ramp-up to feasibility study targets. Solution and grade are now on track to meet expectations and any placed ounces will be recovered through the leach cycle.

Americas Gold shares (USA:TSX) are down nearly 20% on 12 months ago, and almost 30% year to date. Shares have ranged between $1.39-$5.19. At Monday's C$2.70 close, the company has a market capitalisation of C$274.8 million (US$195 million).

 

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