The company said the Relief Canyon ramp up was proceeding well with about 200,000 tonnes of ore stacked on the leach pad. The mine was running 24-hours a day, which will enable the operation to reach design capacity of 14,500 tonnes per day.
"Our two-year outlook demonstrates that 2020 will be a transformational year for the company with further significant increases expected in 2021. Relief Canyon will provide considerable exposure to gold and increase the company's forecasted consolidated revenue to about 70% from precious metals based on current prices," said president and CEO Darren Blasutti.
Providing guidance for the next two years, Americas Gold and Silver said it expected its precious metals production to increase significantly as Relief Canyon hit steady state production and silver production increased from its Cosalá operation in Mexico from the second half of 2020.
It expects its gold-equivalent production to increase from about 14,000 ounces in 2019 to 60,000-70,000oz in 2020 and 90,000-110,000oz in 2021.
All-in sustaining costs (net of by-product zinc and lead credits) for 2020 are expected to range between $900-1,100/oz gold-equivalent.
The Relief Canyon ore crushing and stacking circuit is performing as expected and the ADR plant is fully functional. Waste stripping is ahead of plan with mining activities focussed on the North and Lightbulb areas of the pit. Commercial production is expected before the end of the second quarter.
At Cosalá, production increased 28% in 2019 to 572,036oz silver from 448,150oz in 2018, although costs were negatively impacted by lower zinc and lead prices as well as increased concentrate treatment charges.
Silver production in 2020 is forecast to be between 800,000-900,000oz as mining moves into higher grade zones in the Upper Zone of the San Rafael mine, and growing to 1-1.5Moz in 2021.
The company's two-year outlook does not include production from the Galena Complex where a recapitalisation began in October 2019. Over the next 18 months, there will be a focus on mine development, new equipment purchases and exploration to define and expand silver resources. This has resulted in the company suspending disclosure of operating metrics such as production and cash cost for the Galena Complex until the recapitalisation plan is substantially completed, estimated to be by the end of 2021.
Estimated capital expenditures in 2020 at Galena will be $13-15 million of which Americas share is estimated to be $2-4 million. This will focus on exploration to define new silver resources, purchase of mine equipment and underground development.
Shares in Americas Gold and Silver are trading at C$4.03, valuing the company at $348 million.