Americas Gold and Silver (TSX: USA) produced 800,458 ounces of silver in the third quarter, its highest quarterly total to date. A sharp rise in costs at the Galena Complex, however, left the company with a net loss and all-in sustaining costs well above its full year guidance.
Revenue for the three months ended September 30 rose to US$51.4 million from US$46.0 million in the second quarter. The company still posted a net loss of US$5.6 million, slightly wider than the US$5.0 million loss a quarter earlier, as income tax expense of US$5.4 million cut into earnings. The adjusted net loss was US$4.9 million, or US$0.02 per share, compared with an adjusted loss of US$0.9 million in the second quarter.
Adjusted EBITDA fell to US$9.3 million from US$12.0 million.
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Cash and equivalents dropped to US$63.3 million from US$88.9 million at the end of June. The company puts available liquidity at US$113 million. That figure includes a further US$50 million it can draw from its US$100 million term loan facility once certain conditions are met.
Silver output rose 20% from the 665,000 ounces produced in the second quarter. Cosalá contributed 415,879 ounces, up from 337,000 ounces, as higher grades at EC120 more than offset fewer tonnes mined. Galena added 384,579 ounces. Silver equivalent production reached 936,870 ounces, alongside 918,000 pounds of copper, 965,000 pounds of lead and 101,000 pounds of antimony.
The two operations moved in opposite directions on costs. At Cosalá, all-in sustaining costs fell to US$25.21 per ounce of silver sold and cash costs to US$14.51.
“Commercial production at EC120 has transformed Cosalá into a high-margin operation,” said Paul Andre Huet, chairman and CEO.
At Galena, cash costs were US$44.31 per ounce and AISC was US$60.07, nearly matching the realized silver price of US$60.54. The company said the increase came mainly from contractor spending on upgrade projects running at the same time.
Consolidated AISC rose to US$42.94 per ounce from US$40.63 in the second quarter, and cash costs rose to US$29.66 from US$25.68.
These results put pressure on the full year outlook. AISC of US$39.16 per ounce through 9 months is already above the US$30 to US$35 guidance range, yet management still expects to finish at the high end of that range. Silver production of 2.3 million ounces so far puts the company on track for the low end of its 3.2 million to 3.6 million ounce forecast. Reaching even that low end will take roughly 900,000 ounces in the fourth quarter, which would be another quarterly high.
Americas Gold & Silver last traded at $3.98 on the TSX.
