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Americas down on $92 million net loss, challenges at Relief Canyon in Q1

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(Kitco News) - Americas Gold and Silver (TSX: USA) (NYSE American: USAS) reported today a revenue of $10.2 million and a net loss of $91.8 million for Q1-2021 or a loss of ($0.72) per share, which includes an impairment charge of $55.6 million and an inventory write-down of $23.0 million related to Relief Canyon. Adjusted net loss was $13.2 million prior to these one-time adjustments or ($0.10) per share.

The company said that the ramp-up at the Relief Canyon mine in Nevada has been a challenge and continues to be challenging as documented since the company first poured gold in February 2020.

According to the statement, during the first phase of mining (Phase 1 of 5) at Relief Canyon, several adverse impacts affected the operation including the onset of the COVID-19 pandemic and the failure of the company’s radial stacker. Phase 2 mining, which commenced in late Q4-2020/early Q1-2021, has demonstrated a more structurally complex area than initially interpreted, caused by additional faults and folds.

As a result of these challenges, the company said it began two small run-of-mine test pads in Q1-2021 to evaluate the possibility of simplifying the flowsheet by by-passing the crushing and conveying circuits. The company expects this change will improve overall project economics going forward.

The company added that the illegal blockade at the Cosalá Operations, which has been in place since February 2020, is nearing a resolution and the company is confident that the operations will restart this quarter.

The company’s shares were 17% down this morning.

Americas Gold and Silver is a precious metals mining company with multiple assets in North America. The company owns and operates the Relief Canyon mine in Nevada, USA, the Cosalá Operations in Sinaloa, Mexico and manages the 60%-owned Galena Complex in Idaho, USA. The company also owns the San Felipe development project in Sonora, Mexico.

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