Published: May 1, 2019 |

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Americas Silver Corporation has closed on the acquisition of Pershing Gold Corporation and a financing package to fully-fund the development of the Relief Canyon Project.

“The closing of the Pershing acquisition is a landmark event for Americas Silver shareholders. The company can immediately begin construction at Relief Canyon now that the transaction has closed, and we have secured financing and board approval,” said Darren Blasutti, president and CEO of Americas Silver.

“With Sandstorm as our financing partner, we have raised the necessary capital to fund the project through to sustainable cash flow while adding an important strategic partner as the company’s largest shareholder. The addition of Pierre Lassonde as a significant shareholder further strengthens and enhances confidence in the project and the management of the company,” added Blasutti.

“The high-return Relief Canyon Project is anticipated to add substantial precious metal production and cash flow growth for the company in 2020 and beyond. The gold production from the project is expected to catalyze a re-rating of the share price and increase the liquidity of the company’s shares as a larger, precious metal-focused company with operations focused in North America,” concluded Blasutti.

RELIEF CANYON CONSTRUCTION COMMENCEMENT

In connection with the transaction closing, the company’s board gave approval to commence construction of the expanded mining and heap leaching facilities at the project. The capital cost to develop the project to initial gold pour is estimated to be approximately US$28-30 million with up to an additional US$8 million in working capital (primarily for pre-commercial production operating costs) required prior to the project sustaining positive cash flow. The company expects to achieve first gold pour from the project in late Q4, 2019 or early Q1, 2020.

Relief Canyon is located approximately 95 miles northeast of Reno in Pershing County, Nevada. The project includes three historic open-pit mines and a state-of-the-art, fully permitted and constructed heap-leach processing facility. The company’s landholdings in and around Relief Canyon cover over 11,700 hectares. This land package provides the company with the opportunity to expand the Relief Canyon Mine deposit and to explore and make new discoveries close to existing processing infrastructure.

Based on the feasibility study filed by Pershing on July 11, 2018, Relief Canyon is expected to have an average life of mine production of approximately 91,000 oz of gold per year over a 5.6 year mine life with an all-in sustaining cost of $801/oz Au. The project includes gold proven and probable reserves of 635,000 1 ounces, a measured and indicated resource of 789,000 ounces, and inferred resources of 45,000 ounces.

During the period prior to closing, the combined company’s management worked diligently to further optimize the project, including the advancement of Phase II permitting to expand the mine and heap leach facilities. On February 13, 2019, Pershing received notice from the U.S. Bureau of Land Management (BLM) that the Relief Canyon Phase II application was deemed technically complete. On March 14, 2019, Pershing provided BLM with an environmental assessment describing the impacts associated with the Phase II expansion. The BLM will prepare an environmental impact study (EIS) that the company expects will take approximately 12 months to complete once the BLM selects a third-party consultant to prepare the EIS and publishes a notice of intent in the Federal Register announcing the agency’s decision to prepare the EIS.

SALE OF SAN FELIPE OPTION TO PREMIER GOLD

The company has agreed to sell its option on the San Felipe zinc/silver/lead project in Sonora, Mexico to a subsidiary of Premier Gold Mines Limited for US$10.8 million. The payment schedule from Premier consists of an initial US$7 million payable on the closing of the transaction with the remaining US$3.8 million payable over two milestones equally triggered by (i) commencing construction at San Felipe; and (ii) commercial production. Under the terms of the agreement, Premier would assume the obligations of Americas Silver under the option with Minera Hochschild Mexico S.A. de C.V. Premier owns the Mercedes mine near the San Felipe project with a 2,000 tonne per day operating mill.

The proceeds of the sale would allow the company to fully recover its investment in San Felipe. In addition, the funds add balance sheet strength and better position the company to execute on its near-term growth and optimization strategies. The sale is subject to certain standard conditions, including the consent of the optionor.

About Americas Silver Corporation
Americas Silver is a precious metal mining company focused on growth from its existing asset base and execution of targeted accretive acquisitions. It owns and operates the Cosalá Operations in Sinaloa, Mexico and the Galena Complex in Idaho. The company is building the fully funded Relief Canyon Project, near Reno, Nevada and expects first gold pour in the fourth quarter of 2019.

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