Dec 22 2017
Americas Silver Corporation ("Americas Silver" or the "Company") is pleased to announce that the San Rafael mine ("San Rafael"), at the Company's Cosalá Operations in Sinaloa, Mexico, has successfully completed its pre-production phase and declared commercial production as of December 19, 2017.
Mine production at San Rafael is currently averaging approximately 1,200 tonnes per day and increasing as additional ore headings continue to be established. The Company's Los Braceros mill began processing San Rafael ore on November 19, 2017 and has steadily increased throughput and recoveries. It has averaged approximately 1,400 tonnes per day through the pre-production period with silver, zinc and lead recoveries within 5% of Company expectations and continues to improve. An accumulated pre-production stockpile of approximately 23,000 tonnes is available to supplement mill feed as necessary. The mine is initially targeting 1,500 tonnes per day of throughput in early Q1 2018 and expects to test the limits of the existing design capacity of the mill in the second half of 2018.
The San Rafael Mine is expected to drive significant earnings and cash flow at current metals prices for the Company's shareholders starting in Q1, 2018 and over the life of the mine. It is projected to provide a substantial reduction in the consolidated cash costs and all-in sustaining costs. The mine was developed on-time and on budget for approximately US$17 million from internally-generated and existing resources. The Company expects to provide consolidated guidance for fiscal 2018 to the market in late January 2018.
"We are pleased at achieving this significant milestone for the Company," said Daren Dell, Americas Silver's Chief Operating Officer. "This mine will be the cornerstone of our Mexican operations and provide cash flow for further drilling and development of our Zone 120 resource, as well as future exploration on our greater land position in the Cosalá district without equity dilution. I would like to thank the entire staff of the Cosalá Operations who successfully brought the San Rafael mine into production while sustaining operations without significant interruption at the Company's Nuestra Senora mine."
San Felipe Property Update
The Company has agreed to terms with Minera Hochschild Mexico S.A. de C.V. ("Hochschild") to amend the timing of payments under its option agreement on the San Felipe project. The San Felipe silver‐zinc‐lead project (the "Property") is located 130 km northeast of Hermosillo City, Sonora State in Mexico. As announced in a release dated March 2, 2017 the Company purchased an option granting it the right to acquire a 100% interest in the Property for total consideration of US$15 million in cash (plus applicable VAT), payable in two staged payments. The initial payment of US$7 million was made in March and the remaining US$8 million is to be made as follows: US$500,000 on each of January 1, 2018 and April 1, 2018 respectively; US$1,000,000 on July 1, 2018; and balance of US$6,000,000 on or before December 31, 2018. The Company expects to make any remaining payments with cash on hand from its operations.