AMERICAS SILVER CORPORATION
|
(Translation of registrant’s name into English)
|
145 King Street West, Suite 2870
Toronto, Ontario, Canada
M5H 1J8
|
(Address of principal executive offices)
|
Form 20-F
|
☐
|
Form 40-F
|
x
|
|
Note:
Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
|
|
Note:
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
|
|
AMERICAS SILVER CORPORATION
|
Date: November 5, 2018
|
/s/ Peter McRae
Peter McRae
Chief Legal Officer and Senior Vice President Corporate Affairs
|
|
September 30,
|
December 31,
|
||||||
As at
|
2018
|
2017
|
||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
3,111
|
$
|
9,325
|
||||
Trade and other receivables (Note 5)
|
5,646
|
6,631
|
||||||
Inventories (Note 6)
|
8,250
|
9,366
|
||||||
Prepaid expenses
|
1,774
|
869
|
||||||
Forward contracts (Note 16)
|
263
|
-
|
||||||
|
19,044
|
26,191
|
||||||
Non-current assets
|
||||||||
Restricted cash
|
709
|
335
|
||||||
Property, plant and equipment (Note 7)
|
106,048
|
100,301
|
||||||
Total assets
|
$
|
125,801
|
$
|
126,827
|
||||
|
||||||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Trade and other payables
|
$
|
10,410
|
$
|
10,393
|
||||
Pre-payment facility (Note 9)
|
5,355
|
4,000
|
||||||
|
15,765
|
14,393
|
||||||
Non-current liabilities
|
||||||||
Other long-term liabilities
|
735
|
564
|
||||||
Pre-payment facility (Note 9)
|
6,875
|
11,000
|
||||||
Post-employment benefit obligations
|
8,631
|
8,618
|
||||||
Decommissioning provision
|
3,850
|
3,948
|
||||||
Deferred tax liabilities (Note 15)
|
236
|
246
|
||||||
Total liabilities
|
36,092
|
38,769
|
||||||
|
||||||||
Equity
|
||||||||
Share capital (Note 10)
|
212,498
|
207,012
|
||||||
Equity reserve
|
34,629
|
34,760
|
||||||
Foreign currency translation reserve
|
6,458
|
6,284
|
||||||
Deficit
|
(163,876
|
)
|
(159,998
|
)
|
||||
Total equity
|
89,709
|
88,058
|
||||||
|
||||||||
Total liabilities and equity
|
$
|
125,801
|
$
|
126,827
|
|
For the three-month period ended
|
For the nine-month period ended
|
||||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Revenue
(Note 12)
|
$
|
11,734
|
$
|
9,814
|
$
|
49,468
|
$
|
42,234
|
||||||||
|
||||||||||||||||
Cost of sales (Note 13)
|
(12,809
|
)
|
(7,694
|
)
|
(37,943
|
)
|
(30,357
|
)
|
||||||||
Depletion and amortization (Note 7)
|
(2,443
|
)
|
(1,715
|
)
|
(7,044
|
)
|
(5,795
|
)
|
||||||||
Care, maintenance and restructuring costs
|
(129
|
)
|
(136
|
)
|
(990
|
)
|
(589
|
)
|
||||||||
Corporate general and administrative expenses (Note 14)
|
(1,659
|
)
|
(1,515
|
)
|
(5,227
|
)
|
(4,777
|
)
|
||||||||
Exploration costs
|
(539
|
)
|
(1,307
|
)
|
(2,528
|
)
|
(1,915
|
)
|
||||||||
Accretion on decommissioning provision
|
(48
|
)
|
(45
|
)
|
(144
|
)
|
(134
|
)
|
||||||||
Interest and financing income (expense)
|
(234
|
)
|
19
|
(746
|
)
|
(594
|
)
|
|||||||||
Foreign exchange loss
|
(87
|
)
|
(181
|
)
|
(271
|
)
|
(72
|
)
|
||||||||
Gain on disposal of assets (Note 7)
|
15
|
-
|
870
|
-
|
||||||||||||
Gain on forward contracts (Note 16)
|
254
|
-
|
857
|
-
|
||||||||||||
Gain (loss) on investment in equity instruments
|
-
|
(3
|
)
|
-
|
8
|
|||||||||||
Write-down of equipment (Note 7)
|
(65
|
)
|
-
|
(65
|
)
|
-
|
||||||||||
Contingency on value added taxes (Note 18)
|
-
|
-
|
(125
|
)
|
-
|
|||||||||||
Loss before income taxes
|
(6,010
|
)
|
(2,763
|
)
|
(3,888
|
)
|
(1,991
|
)
|
||||||||
Income tax recovery (expense) (Note 15)
|
219
|
(9
|
)
|
10
|
(116
|
)
|
||||||||||
Net loss
|
(5,791
|
)
|
(2,772
|
)
|
(3,878
|
)
|
(2,107
|
)
|
||||||||
|
||||||||||||||||
Other comprehensive income (loss)
|
||||||||||||||||
Items that may be reclassified subsequently
|
||||||||||||||||
to net income
|
||||||||||||||||
Foreign currency translation reserve
|
3
|
(49
|
)
|
174
|
(259
|
)
|
||||||||||
Change in fair value of investment in equity instruments
|
-
|
(38
|
)
|
-
|
(182
|
)
|
||||||||||
Other comprehensive income (loss)
|
3
|
(87
|
)
|
174
|
(441
|
)
|
||||||||||
Comprehensive loss
|
$
|
(5,788
|
)
|
$
|
(2,859
|
)
|
$
|
(3,704
|
)
|
$
|
(2,548
|
)
|
||||
|
||||||||||||||||
Loss per share
|
||||||||||||||||
Basic and diluted
|
(0.13
|
)
|
(0.07
|
)
|
(0.09
|
)
|
(0.05
|
)
|
||||||||
|
||||||||||||||||
Weighted average number of common shares
|
||||||||||||||||
outstanding
|
||||||||||||||||
Basic and diluted (Note 11)
|
43,019,794
|
40,137,013
|
42,424,147
|
39,862,124
|
|
Foreign
|
Change in
|
||||||||||||||||||||||||||
|
currency
|
fair value of
|
||||||||||||||||||||||||||
|
Share capital
|
Equity
|
translation
|
investment in
|
Total
|
|||||||||||||||||||||||
|
Shares (000s)
|
Amount
|
reserve
|
reserve
|
equity instruments
|
Deficit
|
equity
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance at January 1, 2018
|
41,497
|
$
|
207,012
|
$
|
34,760
|
$
|
6,284
|
$
|
-
|
$
|
(159,998
|
)
|
$
|
88,058
|
||||||||||||||
Net loss for the period
|
-
|
-
|
-
|
-
|
-
|
(3,878
|
)
|
(3,878
|
)
|
|||||||||||||||||||
Other comprehensive income for the period
|
-
|
-
|
-
|
174
|
-
|
-
|
174
|
|||||||||||||||||||||
Share-based payments
|
-
|
-
|
1,777
|
-
|
-
|
-
|
1,777
|
|||||||||||||||||||||
Proceeds from exercise of options and warrants
|
1,598
|
5,486
|
(1,908
|
)
|
-
|
-
|
-
|
3,578
|
||||||||||||||||||||
Balance at September 30, 2018
|
43,095
|
$
|
212,498
|
$
|
34,629
|
$
|
6,458
|
$
|
-
|
$
|
(163,876
|
)
|
$
|
89,709
|
||||||||||||||
|
||||||||||||||||||||||||||||
Balance at January 1, 2017
|
39,540
|
$
|
202,191
|
$
|
34,400
|
$
|
6,454
|
$
|
237
|
$
|
(156,138
|
)
|
$
|
87,144
|
||||||||||||||
Net loss for the period
|
-
|
-
|
-
|
-
|
-
|
(2,107
|
)
|
(2,107
|
)
|
|||||||||||||||||||
Other comprehensive loss for the period
|
-
|
-
|
-
|
(259
|
)
|
(182
|
)
|
-
|
(441
|
)
|
||||||||||||||||||
Share-based payments
|
-
|
-
|
1,241
|
-
|
-
|
-
|
1,241
|
|||||||||||||||||||||
Proceeds from exercise of options and warrants
|
1,264
|
2,359
|
(749
|
)
|
-
|
-
|
-
|
1,610
|
||||||||||||||||||||
Balance at September 30, 2017
|
40,804
|
$
|
204,550
|
$
|
34,892
|
$
|
6,195
|
$
|
55
|
$
|
(158,245
|
)
|
$
|
87,447
|
|
September 30,
|
September 30,
|
||||||
|
2018
|
2017
|
||||||
Cash flow generated from (used in)
|
||||||||
|
||||||||
Operating activities
|
||||||||
Net loss for the period
|
$
|
(3,878
|
)
|
$
|
(2,107
|
)
|
||
Adjustments for the following items:
|
||||||||
Depletion and amortization
|
7,044
|
5,795
|
||||||
Deferred income tax expense (recovery)
|
(10
|
)
|
116
|
|||||
Accretion and decommissioning costs
|
12
|
134
|
||||||
Share-based payments
|
1,675
|
1,568
|
||||||
Unrealized loss on non-current assets
|
2
|
22
|
||||||
Provision on other long-term liabilities
|
21
|
163
|
||||||
Deferred costs on credit facilities
|
-
|
173
|
||||||
Net charges on post-employment benefit obligations
|
13
|
76
|
||||||
Gain on forward contracts
|
(183
|
)
|
-
|
|||||
Gain on investment in equity instruments
|
-
|
(8
|
)
|
|||||
Write-down of equipment
|
65
|
|||||||
Contingency on value added taxes
|
125
|
-
|
||||||
|
4,886
|
5,932
|
||||||
Changes in non-cash working capital items:
|
||||||||
Trade and other receivables
|
985
|
(5,108
|
)
|
|||||
Inventories
|
1,116
|
(1,229
|
)
|
|||||
Prepaid expenses
|
(905
|
)
|
94
|
|||||
Forward contracts
|
(80
|
)
|
-
|
|||||
Trade and other payables
|
(152
|
)
|
79
|
|||||
Net cash generated from (used in) operating activities
|
5,850
|
(232
|
)
|
|||||
|
||||||||
Investing activities
|
||||||||
Expenditures on property, plant and equipment
|
(10,670
|
)
|
(5,532
|
)
|
||||
Net development costs on San Rafael
|
-
|
(11,482
|
)
|
|||||
Net development costs on El Cajón
|
-
|
460
|
||||||
Purchase of San Felipe property option
|
(2,000
|
)
|
(7,108
|
)
|
||||
Bond on decommissioning costs
|
(370
|
)
|
-
|
|||||
Net cash used in investing activities
|
(13,040
|
)
|
(23,662
|
)
|
||||
|
||||||||
Financing activities
|
||||||||
Financing from (repayments to) pre-payment facility
|
(2,770
|
)
|
15,000
|
|||||
Repayments to credit facilities
|
-
|
(8,005
|
)
|
|||||
Sale of investment in equity instruments
|
-
|
163
|
||||||
Proceeds from exercise of options and warrants
|
3,578
|
1,610
|
||||||
Net cash generated from financing activities
|
808
|
8,768
|
||||||
|
||||||||
Effect of foreign exchange rate changes on cash
|
168
|
(206
|
)
|
|||||
Decrease in cash and cash equivalents
|
(6,214
|
)
|
(15,332
|
)
|
||||
Cash and cash equivalents, beginning of period
|
9,325
|
24,055
|
||||||
Cash and cash equivalents, end of period
|
$
|
3,111
|
$
|
8,723
|
||||
|
||||||||
Cash and cash equivalents consist of:
|
||||||||
Cash
|
$
|
3,111
|
$
|
8,723
|
||||
Term deposits
|
-
|
-
|
||||||
|
$
|
3,111
|
$
|
8,723
|
||||
|
||||||||
Interest paid during the period
|
$
|
757
|
$
|
925
|
·
|
Identify the enforceable contract with the customer
|
·
|
Identify the separate performance obligations in the contract from transferring the distinct good or service
|
·
|
Determine the transaction price for consideration of transferring the good or service
|
·
|
Allocate the transaction price to the separate performance obligations identified
|
·
|
Recognize revenue when each separate performance obligation is satisfied
|
|
September 30,
|
December 31,
|
||||||
|
2018
|
2017
|
||||||
|
||||||||
Trade receivables
|
$
|
3,711
|
$
|
3,779
|
||||
Value added taxes receivable
|
1,746
|
2,751
|
||||||
Other receivables
|
189
|
101
|
||||||
|
$
|
5,646
|
$
|
6,631
|
|
September 30,
|
December 31,
|
||||||
|
2018
|
2017
|
||||||
|
||||||||
Concentrates
|
$
|
1,230
|
$
|
1,391
|
||||
Ore stockpiles
|
1,436
|
2,877
|
||||||
Spare parts and supplies
|
5,584
|
5,098
|
||||||
|
$
|
8,250
|
$
|
9,366
|
|
Mining
|
Non-producing
|
Plant and
|
Corporate office
|
||||||||||||||||
|
interests
|
properties
|
equipment
|
equipment
|
Total
|
|||||||||||||||
Cost
|
||||||||||||||||||||
Balance at January 1, 2017
|
$
|
67,571
|
$
|
77,390
|
$
|
40,013
|
$
|
81
|
$
|
185,055
|
||||||||||
Asset additions
|
5,233
|
5,526
|
8,795
|
3
|
19,557
|
|||||||||||||||
Property purchase option acquired
|
-
|
7,108
|
-
|
-
|
7,108
|
|||||||||||||||
Change in decommissioning provision
|
(37
|
)
|
38
|
-
|
-
|
1
|
||||||||||||||
Reclassification
|
31,595
|
(31,595
|
)
|
-
|
-
|
-
|
||||||||||||||
Balance at December 31, 2017
|
104,362
|
58,467
|
48,808
|
84
|
211,721
|
|||||||||||||||
Asset additions
|
6,489
|
-
|
4,467
|
10
|
10,966
|
|||||||||||||||
Property purchase option acquired
|
-
|
2,000
|
-
|
-
|
2,000
|
|||||||||||||||
Change in decommissioning provision
|
(110
|
)
|
-
|
-
|
-
|
(110
|
)
|
|||||||||||||
Balance at September 30, 2018
|
$
|
110,741
|
$
|
60,467
|
$
|
53,275
|
$
|
94
|
$
|
224,577
|
||||||||||
|
||||||||||||||||||||
Accumulated depreciation and depletion
|
||||||||||||||||||||
Balance at January 1, 2017
|
$
|
31,410
|
$
|
50,502
|
$
|
22,566
|
$
|
29
|
$
|
104,507
|
||||||||||
Depreciation/depletion for the year
|
3,438
|
-
|
3,261
|
10
|
6,709
|
|||||||||||||||
Write-down of equipment
|
-
|
-
|
204
|
-
|
204
|
|||||||||||||||
Balance at December 31, 2017
|
34,848
|
50,502
|
26,031
|
39
|
111,420
|
|||||||||||||||
Depreciation/depletion for the period
|
4,439
|
-
|
2,599
|
6
|
7,044
|
|||||||||||||||
Write-down of equipment
|
-
|
-
|
65
|
-
|
65
|
|||||||||||||||
Balance at September 30, 2018
|
$
|
39,287
|
$
|
50,502
|
$
|
28,695
|
$
|
45
|
$
|
118,529
|
||||||||||
|
||||||||||||||||||||
Carrying value
|
||||||||||||||||||||
at December 31, 2017
|
$
|
69,514
|
$
|
7,965
|
$
|
22,777
|
$
|
45
|
$
|
100,301
|
||||||||||
at September 30, 2018
|
$
|
71,454
|
$
|
9,965
|
$
|
24,580
|
$
|
49
|
$
|
106,048
|
|
September 30,
|
December 31,
|
||||||
|
2018
|
2017
|
||||||
|
||||||||
Issued
|
||||||||
43,094,657 (2017: 41,496,950) common shares
|
$
|
212,498
|
$
|
207,012
|
|
September 30,
|
December 31,
|
||||||||||||||
|
2018
|
2017
|
||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||
|
average
|
average
|
||||||||||||||
|
exercise
|
exercise
|
||||||||||||||
|
Number
|
price
|
Number
|
price
|
||||||||||||
|
(thousands)
|
CAD
|
(thousands)
|
CAD
|
||||||||||||
|
||||||||||||||||
Balance, beginning of period
|
2,316
|
$
|
3.06
|
1,771
|
$
|
4.64
|
||||||||||
Granted
|
1,395
|
4.61
|
1,058
|
3.86
|
||||||||||||
Exercised
|
(471
|
)
|
2.29
|
(261
|
)
|
3.22
|
||||||||||
Expired
|
(120
|
)
|
5.14
|
(252
|
)
|
17.31
|
||||||||||
Balance, end of period
|
3,120
|
$
|
3.79
|
2,316
|
$
|
3.06
|
|
Weighted
|
|||||||||||||||||||
|
average
|
Weighted
|
Weighted
|
|||||||||||||||||
|
remaining
|
average
|
average
|
|||||||||||||||||
Exercise
|
contractual
|
exercise
|
exercise
|
|||||||||||||||||
price
|
life
|
Outstanding
|
price
|
Exercisable
|
price
|
|||||||||||||||
CAD
|
(years)
|
(thousands)
|
CAD
|
(thousands)
|
CAD
|
|||||||||||||||
|
||||||||||||||||||||
2.00 to 3.00
|
0.40
|
691
|
$
|
2.04
|
691
|
$
|
2.04
|
|||||||||||||
3.01 to 4.00
|
1.32
|
1,025
|
3.85
|
683
|
3.85
|
|||||||||||||||
4.01 to 5.00
|
2.26
|
1,364
|
4.58
|
462
|
4.58
|
|||||||||||||||
5.01 to 6.00
|
2.32
|
40
|
5.55
|
13
|
5.55
|
|||||||||||||||
|
3,120
|
$
|
3.79
|
1,849
|
$
|
3.37
|
|
Three-month
|
Three-month
|
Nine-month
|
Nine-month
|
||||||||||||
|
period ended
|
period ended
|
period ended
|
period ended
|
||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Expected share price volatility
(1)
|
-
|
81
|
%
|
59
|
%
|
83
|
%
|
|||||||||
Risk free interest rate
|
-
|
1.30
|
%
|
1.74
|
%
|
0.87
|
%
|
|||||||||
Expected life
|
-
|
3 years
|
3 years
|
3 years
|
||||||||||||
Expected forfeiture rate
|
-
|
3.67
|
%
|
3.36
|
%
|
4.18
|
%
|
|||||||||
Expected dividend yield
|
-
|
0
|
%
|
0
|
%
|
0
|
%
|
|||||||||
|
||||||||||||||||
Share-based payments included in cost of sales
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Share-based payments included in general and
|
||||||||||||||||
administrative expenses
|
334
|
278
|
1,711
|
1,241
|
||||||||||||
Total share-based payments
|
$
|
334
|
$
|
278
|
$
|
1,711
|
$
|
1,241
|
(1)
|
Expected volatility has been based on historical volatility of the Company’s publicly traded shares.
|
Number of
|
Exercise
|
Issuance
|
Expiry
|
warrants
|
price (CAD)
|
date
|
date
|
799,065
|
4.68
|
Jul 2016
|
Jun 14, 2021
|
1,447,426
|
4.68
|
Jun 2016
|
Jun 9, 2021
|
1,537,355
|
1.20
|
Feb 2016
|
Feb 10, 2019
|
307,777
|
1.20
|
Nov 2015
|
Nov 10, 2018
|
4,091,623
|
|
|
|
|
Three-month
|
Three-month
|
Nine-month
|
Nine-month
|
||||||||||||
|
period ended
|
period ended
|
period ended
|
period ended
|
||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Basic weighted average number of shares
|
43,019,794
|
40,137,013
|
42,424,147
|
39,862,124
|
||||||||||||
Effect of dilutive stock options and warrants
|
-
|
-
|
-
|
-
|
||||||||||||
Diluted weighted average number of shares
|
43,019,794
|
40,137,013
|
42,424,147
|
39,862,124
|
|
Three-month
|
Three-month
|
Nine-month
|
Nine-month
|
||||||||||||
|
period ended
|
period ended
|
period ended
|
period ended
|
||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Silver
|
||||||||||||||||
Provisional sales revenue
|
$
|
4,563
|
$
|
5,813
|
$
|
16,501
|
$
|
23,986
|
||||||||
Derivative pricing adjustments
|
(298
|
)
|
151
|
(343
|
)
|
1,466
|
||||||||||
|
4,265
|
5,964
|
16,158
|
25,452
|
||||||||||||
Zinc
|
||||||||||||||||
Provisional sales revenue
|
$
|
8,941
|
$
|
1,406
|
$
|
32,104
|
$
|
7,655
|
||||||||
Derivative pricing adjustments
|
(2,494
|
)
|
330
|
(2,726
|
)
|
544
|
||||||||||
|
6,447
|
1,736
|
29,378
|
8,199
|
||||||||||||
Lead
|
||||||||||||||||
Provisional sales revenue
|
$
|
6,785
|
$
|
5,475
|
$
|
22,641
|
$
|
18,461
|
||||||||
Derivative pricing adjustments
|
(489
|
)
|
213
|
(440
|
)
|
312
|
||||||||||
|
6,296
|
5,688
|
22,201
|
18,773
|
||||||||||||
Other by-products
|
||||||||||||||||
Provisional sales revenue
|
$
|
133
|
$
|
300
|
$
|
360
|
$
|
1,927
|
||||||||
Derivative pricing adjustments
|
(12
|
)
|
1
|
3
|
2
|
|||||||||||
|
121
|
301
|
363
|
1,929
|
||||||||||||
|
||||||||||||||||
Gross revenue
|
$
|
17,129
|
$
|
13,689
|
$
|
68,100
|
$
|
54,353
|
||||||||
Treatment and selling costs
|
(5,395
|
)
|
(3,875
|
)
|
(18,632
|
)
|
(12,119
|
)
|
||||||||
|
$
|
11,734
|
$
|
9,814
|
$
|
49,468
|
$
|
42,234
|
|
Three-month
|
Three-month
|
Nine-month
|
Nine-month
|
||||||||||||
|
period ended
|
period ended
|
period ended
|
period ended
|
||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Salaries and employee benefits
|
$
|
6,119
|
$
|
5,277
|
$
|
17,599
|
$
|
16,544
|
||||||||
Raw materials and consumables
|
4,754
|
2,560
|
14,034
|
10,105
|
||||||||||||
Utilities
|
1,237
|
772
|
3,246
|
3,006
|
||||||||||||
Other costs
|
447
|
343
|
1,948
|
1,931
|
||||||||||||
Changes in inventories
|
252
|
(1,258
|
)
|
1,116
|
(1,229
|
)
|
||||||||||
|
$
|
12,809
|
$
|
7,694
|
$
|
37,943
|
$
|
30,357
|
|
Three-month
|
Three-month
|
Nine-month
|
Nine-month
|
||||||||||||
|
period ended
|
period ended
|
period ended
|
period ended
|
||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Salaries and employee benefits
|
$
|
446
|
$
|
423
|
$
|
1,333
|
$
|
1,306
|
||||||||
Directors’ fees
|
95
|
72
|
241
|
196
|
||||||||||||
Share-based payments
|
271
|
521
|
1,609
|
1,568
|
||||||||||||
Professional fees
|
479
|
102
|
851
|
511
|
||||||||||||
Office and general
|
368
|
397
|
1,193
|
1,196
|
||||||||||||
|
$
|
1,659
|
$
|
1,515
|
$
|
5,227
|
$
|
4,777
|
|
September 30,
|
December 31,
|
||||||
|
2018
|
2017
|
||||||
|
||||||||
Property, plant and equipment
|
$
|
837
|
$
|
900
|
||||
Other
|
25
|
-
|
||||||
Total deferred tax liabilities
|
862
|
900
|
||||||
|
||||||||
Alternative minimum tax credits
|
626
|
626
|
||||||
Other
|
-
|
28
|
||||||
Total deferred tax assets
|
626
|
654
|
||||||
Net deferred tax liabilities
|
$
|
236
|
$
|
246
|
|
September 30, 2018
|
|||||||||||||||||||
|
Less than
|
Over 5
|
||||||||||||||||||
|
Total
|
1 year
|
2-3 years
|
4-5 years
|
years
|
|||||||||||||||
|
||||||||||||||||||||
Trade and other payables
|
$
|
10,410
|
$
|
10,410
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Pre-payment facility
|
12,230
|
5,355
|
6,875
|
-
|
-
|
|||||||||||||||
Interest on pre-payment facility
|
1,019
|
694
|
325
|
-
|
-
|
|||||||||||||||
Operating leases
|
1,179
|
274
|
535
|
370
|
-
|
|||||||||||||||
Other long-term liabilities
|
735
|
-
|
245
|
-
|
490
|
|||||||||||||||
|
$
|
25,573
|
$
|
16,733
|
$
|
7,980
|
$
|
370
|
$
|
490
|
(1)
|
Interest rate risk
|
(2)
|
Currency risk
|
|
As at September 30, 2018
|
|||||||
|
CAD
|
MXP
|
||||||
|
||||||||
Cash and cash equivalents
|
$
|
206
|
$
|
133
|
||||
Trade and other receivables
|
39
|
1,871
|
||||||
Trade and other payables
|
1,004
|
4,506
|
|
CAD/USD
|
MXP/USD
|
||||||
|
Exchange rate
|
Exchange rate
|
||||||
|
+/- 10%
|
|
+/- 10%
|
|
||||
|
||||||||
Approximate impact on:
|
||||||||
Net income
|
$
|
523
|
$
|
1,331
|
||||
Other comprehensive income
|
39
|
(57
|
)
|
(3)
|
Price risk
|
·
|
Cash and cash equivalents: The fair value of cash equivalents is valued using quoted market prices in active markets. The Company’s cash equivalents consist of money market accounts held at financial institutions which have original maturities of less than 90 days.
|
·
|
Trade and other receivables: The fair value of trade receivables from silver sales contracts that contain provisional pricing terms is determined using the appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As such, there is an embedded derivative feature within trade receivables.
|
·
|
Embedded derivatives: Revenues from the sale of metals produced since the commencement of commercial production are based on provisional prices at the time of shipment. Variations between the price recorded at the time of sale and the actual final price received from the customer are caused by changes in market prices for metals sold and result in an embedded derivative in revenues and accounts receivable.
|
·
|
Derivatives: The Company uses derivative and non-derivative instruments to manage financial risks, including commodity and foreign exchange risks. The use of derivative contracts is governed by documented risk management policies and approved limits. The Company does not use derivatives for speculative purposes. The fair value of the Company’s derivative instruments is based on quoted market prices for similar instruments and at market prices at the valuation date.
|
·
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
·
|
Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value foreign exchange and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means.
|
·
|
Level 3 inputs are unobservable (supported by little or no market activity).
|
|
September 30,
|
December 31,
|
||||||
|
2018
|
2017
|
||||||
|
||||||||
Level 1
|
||||||||
Cash and cash equivalents
|
$
|
3,111
|
$
|
9,325
|
||||
Restricted cash
|
709
|
335
|
||||||
|
||||||||
Level 2
|
||||||||
Trade and other receivables
|
5,646
|
6,631
|
||||||
Forward contracts
|
263
|
-
|
||||||
Pre-payment facility
|
12,230
|
15,000
|
|
As at September 30, 2018
|
As at December 31, 2017
|
||||||||||||||||||||||||||||||
|
Mexican Operations
|
U.S. Operations
|
Corporate and Other
|
Total
|
Mexican Operations
|
U.S. Operations
|
Corporate and Other
|
Total
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Cash and cash equivalents
|
$
|
2,789
|
$
|
31
|
$
|
291
|
$
|
3,111
|
$
|
5,963
|
$
|
1,791
|
$
|
1,571
|
$
|
9,325
|
||||||||||||||||
Trade and other receivables
|
4,262
|
1,345
|
39
|
5,646
|
4,901
|
1,711
|
19
|
6,631
|
||||||||||||||||||||||||
Inventories
|
5,583
|
2,667
|
-
|
8,250
|
6,301
|
3,065
|
-
|
9,366
|
||||||||||||||||||||||||
Prepaid expenses
|
558
|
920
|
296
|
1,774
|
346
|
305
|
218
|
869
|
||||||||||||||||||||||||
Forward contracts
|
263
|
-
|
-
|
263
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Restricted cash
|
168
|
541
|
-
|
709
|
160
|
171
|
4
|
335
|
||||||||||||||||||||||||
Property, plant and equipment
|
63,163
|
42,836
|
49
|
106,048
|
59,686
|
40,570
|
45
|
100,301
|
||||||||||||||||||||||||
Total assets
|
$
|
76,786
|
$
|
48,340
|
$
|
675
|
$
|
125,801
|
$
|
77,357
|
$
|
47,613
|
$
|
1,857
|
$
|
126,827
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Trade and other payables
|
$
|
5,684
|
$
|
3,370
|
$
|
1,356
|
$
|
10,410
|
$
|
5,893
|
$
|
2,608
|
$
|
1,892
|
$
|
10,393
|
||||||||||||||||
Other long-term liabilities
|
-
|
673
|
62
|
735
|
-
|
469
|
95
|
564
|
||||||||||||||||||||||||
Pre-payment facility
|
12,230
|
-
|
-
|
12,230
|
15,000
|
-
|
-
|
15,000
|
||||||||||||||||||||||||
Post-employment benefit obligations
|
-
|
8,631
|
-
|
8,631
|
-
|
8,618
|
-
|
8,618
|
||||||||||||||||||||||||
Decommissioning provision
|
1,956
|
1,894
|
-
|
3,850
|
1,904
|
2,044
|
-
|
3,948
|
||||||||||||||||||||||||
Deferred tax liabilities (assets)
|
862
|
(626
|
)
|
-
|
236
|
872
|
(626
|
)
|
-
|
246
|
||||||||||||||||||||||
Total liabilities
|
$
|
20,732
|
$
|
13,942
|
$
|
1,418
|
$
|
36,092
|
$
|
23,669
|
$
|
13,113
|
$
|
1,987
|
$
|
38,769
|
|
Three-month period ended September 30, 2018
|
Three-month period ended September 30, 2017
|
||||||||||||||||||||||||||||||
|
Mexican Operations
|
U.S. Operations
|
Corporate and Other
|
Total
|
Mexican Operations
|
U.S. Operations
|
Corporate and Other
|
Total
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Revenue
|
$
|
6,303
|
$
|
5,431
|
$
|
-
|
$
|
11,734
|
$
|
2,650
|
$
|
7,164
|
$
|
-
|
$
|
9,814
|
||||||||||||||||
Cost of sales
|
(6,085
|
)
|
(6,724
|
)
|
-
|
(12,809
|
)
|
(343
|
)
|
(7,351
|
)
|
-
|
(7,694
|
)
|
||||||||||||||||||
Depletion and amortization
|
(1,587
|
)
|
(855
|
)
|
(1
|
)
|
(2,443
|
)
|
(707
|
)
|
(1,005
|
)
|
(3
|
)
|
(1,715
|
)
|
||||||||||||||||
Care, maintenance and restructuring costs
|
(8
|
)
|
(121
|
)
|
-
|
(129
|
)
|
-
|
(136
|
)
|
-
|
(136
|
)
|
|||||||||||||||||||
Corporate general and administrative expenses
|
-
|
-
|
(1,659
|
)
|
(1,659
|
)
|
-
|
-
|
(1,515
|
)
|
(1,515
|
)
|
||||||||||||||||||||
Exploration costs
|
(462
|
)
|
(77
|
)
|
-
|
(539
|
)
|
(1,180
|
)
|
(127
|
)
|
-
|
(1,307
|
)
|
||||||||||||||||||
Accretion on decommissioning provision
|
(37
|
)
|
(11
|
)
|
-
|
(48
|
)
|
(35
|
)
|
(10
|
)
|
-
|
(45
|
)
|
||||||||||||||||||
Interest and financing income (expense)
|
(234
|
)
|
-
|
-
|
(234
|
)
|
21
|
-
|
(2
|
)
|
19
|
|||||||||||||||||||||
Foreign exchange gain (loss)
|
(88
|
)
|
-
|
1
|
(87
|
)
|
(187
|
)
|
-
|
6
|
(181
|
)
|
||||||||||||||||||||
Gain on disposal of assets
|
15
|
-
|
-
|
15
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Gain on forward contracts
|
256
|
-
|
(2
|
)
|
254
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Loss on investment in equity instruments
|
-
|
-
|
-
|
-
|
-
|
-
|
(3
|
)
|
(3
|
)
|
||||||||||||||||||||||
Write-down of equipment
|
-
|
(65
|
)
|
-
|
(65
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Income (loss) before income taxes
|
(1,927
|
)
|
(2,422
|
)
|
(1,661
|
)
|
(6,010
|
)
|
219
|
(1,465
|
)
|
(1,517
|
)
|
(2,763
|
)
|
|||||||||||||||||
Income tax recovery (expense)
|
219
|
-
|
-
|
219
|
(9
|
)
|
-
|
-
|
(9
|
)
|
||||||||||||||||||||||
Net income (loss) for the period
|
$
|
(1,708
|
)
|
$
|
(2,422
|
)
|
$
|
(1,661
|
)
|
$
|
(5,791
|
)
|
$
|
210
|
$
|
(1,465
|
)
|
$
|
(1,517
|
)
|
$
|
(2,772
|
)
|
|
Nine-month period ended September 30, 2018
|
Nine-month period ended September 30, 2017
|
||||||||||||||||||||||||||||||
|
Mexican Operations
|
U.S. Operations
|
Corporate and Other
|
Total
|
Mexican Operations
|
U.S. Operations
|
Corporate and Other
|
Total
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Revenue
|
$
|
28,986
|
$
|
20,482
|
$
|
-
|
$
|
49,468
|
$
|
16,975
|
$
|
25,259
|
$
|
-
|
$
|
42,234
|
||||||||||||||||
Cost of sales
|
(17,278
|
)
|
(20,665
|
)
|
-
|
(37,943
|
)
|
(7,576
|
)
|
(22,781
|
)
|
-
|
(30,357
|
)
|
||||||||||||||||||
Depletion and amortization
|
(4,533
|
)
|
(2,505
|
)
|
(6
|
)
|
(7,044
|
)
|
(2,862
|
)
|
(2,925
|
)
|
(8
|
)
|
(5,795
|
)
|
||||||||||||||||
Care, maintenance and restructuring costs
|
(30
|
)
|
(960
|
)
|
-
|
(990
|
)
|
(60
|
)
|
(362
|
)
|
(167
|
)
|
(589
|
)
|
|||||||||||||||||
Corporate general and administrative expenses
|
-
|
-
|
(5,227
|
)
|
(5,227
|
)
|
-
|
-
|
(4,777
|
)
|
(4,777
|
)
|
||||||||||||||||||||
Exploration costs
|
(2,362
|
)
|
(166
|
)
|
-
|
(2,528
|
)
|
(1,615
|
)
|
(300
|
)
|
-
|
(1,915
|
)
|
||||||||||||||||||
Accretion on decommissioning provision
|
(110
|
)
|
(34
|
)
|
-
|
(144
|
)
|
(103
|
)
|
(31
|
)
|
-
|
(134
|
)
|
||||||||||||||||||
Interest and financing income (expense)
|
(746
|
)
|
-
|
-
|
(746
|
)
|
94
|
-
|
(688
|
)
|
(594
|
)
|
||||||||||||||||||||
Foreign exchange gain (loss)
|
(281
|
)
|
-
|
10
|
(271
|
)
|
(161
|
)
|
-
|
89
|
(72
|
)
|
||||||||||||||||||||
Gain on disposal of assets
|
870
|
-
|
-
|
870
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Gain on forward contracts
|
319
|
165
|
373
|
857
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Gain on investment in equity instruments
|
-
|
-
|
-
|
-
|
-
|
-
|
8
|
8
|
||||||||||||||||||||||||
Write-down of equipment
|
-
|
(65
|
)
|
-
|
(65
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Contingency on value added taxes
|
(125
|
)
|
-
|
-
|
(125
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Income (loss) before income taxes
|
4,710
|
(3,748
|
)
|
(4,850
|
)
|
(3,888
|
)
|
4,692
|
(1,140
|
)
|
(5,543
|
)
|
(1,991
|
)
|
||||||||||||||||||
Income tax recovery (expense)
|
10
|
-
|
-
|
10
|
(116
|
)
|
-
|
-
|
(116
|
)
|
||||||||||||||||||||||
Net income (loss) for the period
|
$
|
4,720
|
$
|
(3,748
|
)
|
$
|
(4,850
|
)
|
$
|
(3,878
|
)
|
$
|
4,576
|
$
|
(1,140
|
)
|
$
|
(5,543
|
)
|
$
|
(2,107
|
)
|
Forward-Looking Statements
|
1
|
Management’s Discussion and Analysis
|
2
|
Overview
|
2
|
Recent Developments and Operational Discussion
|
3
|
Results of Operations
|
9
|
Summary of Quarterly Results
|
11
|
Liquidity
|
12
|
Capital Resources
|
13
|
Off-Balance Sheet Arrangements
|
13
|
Transactions with Related Parties
|
13
|
Risk Factors
|
13
|
Accounting Standards and Pronouncements
|
14
|
Financial Instruments
|
14
|
Capital Structure
|
14
|
Controls and Procedures
|
14
|
Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce
|
15
|
·
|
Production of 1.4 million consolidated silver equivalent ounces, an increase of 27% year-over-year, including 0.3 million silver ounces.
|
·
|
Revenue of $11.7 million and net loss of $5.8 million for the quarter or ($0.13) per share, an increase in revenue of 20% and an increase in net loss of 109% compared to Q3-2017, including $3.3 million of negative provisional pricing adjustments.
|
·
|
Consolidated zinc production of 7.9 million pounds and lead production of 7.5 million pounds, increases of 451% and 40%, respectively.
|
·
|
Realized prices on sales of silver, zinc and lead decreased by 11%, 22%, and 18%, respectively, during the quarter compared to the first half of 2018, and were also lower when compared to Q3-2017.
|
·
|
Cost of sales of $9.08/oz. equivalent silver, by-product cash cost of $4.95/oz. silver, and all-in sustaining cost of $15.94/oz. silver for the quarter, representing year-over-year decreases of 1% and 61%, and an increase of 1%, respectively. Cost of sales of $8.46/oz. equivalent silver, by-product cash cost of negative ($1.31/oz.) silver, and all-in sustaining cost of $9.03/oz. silver for the first nine months of 2018, representing year-over-year decreases of 16%, 114%, and 31%, respectively.
|
·
|
San Rafael achieved its goal of sustaining a milling rate of over 1,700 tonnes per operating day.
|
·
|
The Galena Complex resumed normal operations in mid-July following hoist repairs completed late in Q2-2018.
|
·
|
Updated mineral reserves and resource with an effective date of June 30, 2018 are highlighted by a consolidated silver inventory containing 26 million ounces of proven and probable reserves, 70 million ounces of measured and indicated resources, and 28 million ounces of inferred resources.
|
·
|
The Company entered into a definitive agreement with Pershing Gold Corporation to complete a business combination.
|
·
|
The Company had a cash balance of $3.1 million and working capital balance of $3.3 million as at September 30, 2018.
|
|
Q3-2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Revenues ($ M)
|
$
|
11.8
|
$
|
9.8
|
$
|
49.5
|
$
|
42.2
|
||||||||
Silver Produced (oz)
|
323,497
|
564,833
|
1,022,243
|
1,646,472
|
||||||||||||
Zinc Produced (lbs)
|
7,906,601
|
1,433,961
|
23,995,780
|
6,727,468
|
||||||||||||
Lead Produced (lbs)
|
7,536,660
|
5,369,482
|
21,377,937
|
17,965,262
|
||||||||||||
Copper Produced (lbs)
|
-
|
507,285
|
-
|
1,088,860
|
||||||||||||
Total Silver Equivalent Produced (oz)
1
|
1,410,909
|
1,107,873
|
4,486,790
|
3,387,946
|
||||||||||||
Cost of Sales/Ag Eq Oz Produced ($/oz)
3
|
$
|
9.08
|
$
|
9.17
|
$
|
8.46
|
$
|
10.13
|
||||||||
Cash Cost/Ag Oz Produced ($/oz)
2,3
|
$
|
4.95
|
$
|
12.61
|
$
|
(1.31
|
)
|
$
|
9.64
|
|||||||
All-In Sustaining Cost/Ag Oz Produced ($/oz)
2,3
|
$
|
15.94
|
$
|
15.92
|
$
|
9.03
|
$
|
13.06
|
||||||||
Net Loss ($ M)
|
$
|
(5.8
|
)
|
$
|
(2.8
|
)
|
$
|
(3.9
|
)
|
$
|
(2.1
|
)
|
||||
Comprehensive Loss ($ M)
|
$
|
(5.8
|
)
|
$
|
(2.9
|
)
|
$
|
(3.7
|
)
|
$
|
(2.5
|
)
|
1 |
Throughout this MD&A, silver equivalent production was calculated based on average silver, zinc, lead and copper realized prices during each respective period.
|
2 |
Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A.
|
3 |
Calculation excludes pre-production of 160,128 silver ounces and 238,919 silver equivalent ounces mined
in Q3-2017 and
245,391 silver ounces and 360,530 silver equivalent ounces mined
in YTD-2017
from El
Cajón
during its commissioning period, and 5,146 silver ounces and 30,161 silver equivalent ounces mined in Q3-2017 and YTD-2017 from San Rafael during its commissioning period. Pre-production revenue and cost of sales from El
Cajón and San Rafael are capitalized as an offset to development costs
.
|
|
Q3-2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Tonnes Milled
|
132,902
|
134,273
|
394,895
|
397,628
|
||||||||||||
Silver Grade (g/t)
|
44
|
74
|
43
|
70
|
||||||||||||
Zinc Grade (%)1
|
3.44
|
1.39
|
3.50
|
1.34
|
||||||||||||
Lead Grade (%)1
|
1.36
|
0.73
|
1.38
|
0.66
|
||||||||||||
Copper Grade (%)1
|
-
|
0.22
|
-
|
0.18
|
||||||||||||
Silver Recovery (%)
|
54.2
|
87.0
|
50.8
|
86.3
|
||||||||||||
Zinc Recovery (%)
|
78.4
|
71.8
|
78.8
|
79.7
|
||||||||||||
Lead Recovery (%)
|
70.7
|
76.1
|
70.6
|
78.3
|
||||||||||||
Copper Recovery (%)
|
-
|
81.2
|
-
|
70.6
|
||||||||||||
Silver Produced (oz)
|
102,521
|
277,752
|
276,134
|
770,571
|
||||||||||||
Zinc Produced (lbs)
|
7,906,601
|
1,433,961
|
23,995,780
|
6,727,468
|
||||||||||||
Lead Produced (lbs)
|
2,815,885
|
793,058
|
8,477,686
|
3,268,780
|
||||||||||||
Copper Produced (lbs)
|
-
|
507,285
|
-
|
1,088,860
|
||||||||||||
Total Silver Equivalent Produced (oz)
|
888,342
|
528,823
|
2,877,669
|
1,626,696
|
||||||||||||
Silver Sold (oz)
|
99,940
|
259,764
|
275,086
|
754,073
|
||||||||||||
Zinc Sold (lbs)
|
7,813,957
|
1,258,532
|
23,578,424
|
6,506,030
|
||||||||||||
Lead Sold (lbs)
|
2,722,329
|
669,281
|
8,467,496
|
3,135,551
|
||||||||||||
Copper Sold (lbs)
|
-
|
460,227
|
-
|
1,049,841
|
||||||||||||
Realized Silver Price ($/oz)
|
$
|
14.89
|
$
|
16.88
|
$
|
15.98
|
$
|
17.19
|
||||||||
Realized Zinc Price ($/lb)
|
$
|
1.14
|
$
|
1.33
|
$
|
1.37
|
$
|
1.24
|
||||||||
Realized Lead Price ($/lb)
|
$
|
0.95
|
$
|
1.05
|
$
|
1.07
|
$
|
1.02
|
||||||||
Realized Copper Price ($/lb)
|
-
|
$
|
2.92
|
-
|
$
|
2.76
|
||||||||||
Cost of Sales/Ag Eq Oz Produced ($/oz)3
|
$
|
6.85
|
$
|
1.32
|
$
|
6.00
|
$
|
6.13
|
||||||||
Cash Cost/Ag Oz Produced ($/oz)2,3
|
$
|
(22.42
|
)
|
$
|
3.16
|
$
|
(45.95
|
)
|
$
|
(0.09
|
)
|
|||||
All-In Sustaining Cost/Ag Oz Produced ($/oz)2,3
|
$
|
(0.67
|
)
|
$
|
3.16
|
$
|
(24.89
|
)
|
$
|
(0.07
|
)
|
1 |
Zinc and lead grades only refer to grades from silver-zinc-lead-copper and silver-zinc-lead ores, and copper grades only refer to grades from silver-zinc-lead-copper and silver-copper ores.
|
2 |
Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A.
|
3 |
Calculation excludes pre-production of 160,128 silver ounces and 238,919 silver equivalent ounces mined
in Q3-2017 and
245,391 silver ounces and 360,530 silver equivalent ounces mined
in YTD-2017
from El
Cajón
during its commissioning period, and 5,146 silver ounces and 30,161 silver equivalent ounces mined in Q3-2017 and YTD-2017 from San Rafael during its commissioning period. Pre-production revenue and cost of sales from El
Cajón and San Rafael are capitalized as an offset to development costs
.
|
|
Q3-2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Tonnes Milled
|
37,477
|
40,404
|
103,672
|
123,969
|
||||||||||||
Silver Grade (g/t)
|
195
|
233
|
236
|
231
|
||||||||||||
Lead Grade (%)
|
6.26
|
5.68
|
6.17
|
5.91
|
||||||||||||
Silver Recovery (%)
|
93.9
|
94.9
|
94.9
|
95.0
|
||||||||||||
Lead Recovery (%)
|
91.3
|
90.5
|
91.5
|
90.9
|
||||||||||||
Silver Produced (oz)
|
220,976
|
287,081
|
746,109
|
875,901
|
||||||||||||
Lead Produced (lbs)
|
4,720,775
|
4,576,424
|
12,900,251
|
14,696,482
|
||||||||||||
Total Silver Equivalent Produced (oz)
|
522,567
|
579,051
|
1,609,121
|
1,761,250
|
||||||||||||
Silver Sold (oz)
|
209,732
|
282,534
|
750,906
|
891,531
|
||||||||||||
Lead Sold (lbs)
|
4,471,878
|
4,555,041
|
12,974,781
|
14,933,766
|
||||||||||||
Realized Silver Price ($/oz)
|
$
|
14.66
|
$
|
16.89
|
$
|
16.12
|
$
|
17.18
|
||||||||
Realized Lead Price ($/lb)
|
$
|
0.94
|
$
|
1.08
|
$
|
1.07
|
$
|
1.04
|
||||||||
Cost of Sales/Ag Eq Oz Produced ($/oz)
|
$
|
12.87
|
$
|
12.69
|
$
|
12.84
|
$
|
12.93
|
||||||||
Cash Cost/Ag Oz Produced ($/oz)1
|
$
|
17.65
|
$
|
16.31
|
$
|
15.21
|
$
|
15.42
|
||||||||
All-In Sustaining Cost/Ag Oz Produced ($/oz)1
|
$
|
23.65
|
$
|
20.92
|
$
|
21.59
|
$
|
20.85
|
1 |
Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A.
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
|||||||||||||||||||||||||
|
2018
|
2018
|
2018
|
2017
|
2017
|
2017
|
2017
|
2016
|
||||||||||||||||||||||||
Revenues ($ M)
|
$
|
11.8
|
$
|
17.3
|
$
|
20.4
|
$
|
12.1
|
$
|
9.8
|
$
|
17.2
|
$
|
15.2
|
$
|
14.4
|
||||||||||||||||
Net Income (Loss) ($ M)
|
(5.8
|
)
|
1.4
|
0.5
|
(1.4
|
)
|
(2.8
|
)
|
0.9
|
(0.2
|
)
|
(2.4
|
)
|
|||||||||||||||||||
Comprehensive Income (Loss) ($ M)
|
(5.8
|
)
|
1.3
|
0.8
|
(1.8
|
)
|
(2.9
|
)
|
0.8
|
(0.5
|
)
|
(1.0
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Silver Produced (oz)
|
323,497
|
301,711
|
397,035
|
409,545
|
564,833
|
557,892
|
523,747
|
564,475
|
||||||||||||||||||||||||
Zinc Produced (lbs)
|
7,906,601
|
8,756,201
|
7,332,978
|
4,895,670
|
1,433,961
|
2,904,374
|
2,389,133
|
2,671,391
|
||||||||||||||||||||||||
Lead Produced (lbs)
|
7,536,660
|
6,216,592
|
7,624,685
|
7,427,357
|
5,369,482
|
6,435,048
|
6,160,732
|
7,277,346
|
||||||||||||||||||||||||
Copper Produced (lbs)
|
-
|
-
|
-
|
78,541
|
507,285
|
273,475
|
308,100
|
260,018
|
||||||||||||||||||||||||
Cost of Sales/Ag Eq Oz Produced ($/oz)
|
$
|
9.08
|
$
|
8.20
|
$
|
8.14
|
$
|
10.16
|
$
|
9.17
|
$
|
11.00
|
$
|
9.93
|
$
|
9.91
|
||||||||||||||||
Cash Cost/Ag Oz Produced ($/oz)
1
|
$
|
4.95
|
$
|
(6.15
|
)
|
$
|
(2.73
|
)
|
$
|
8.75
|
$
|
12.61
|
$
|
7.21
|
$
|
9.89
|
$
|
8.91
|
||||||||||||||
All-In Sustaining Cost/Ag Oz Produced ($/oz)
1
|
$
|
15.94
|
$
|
5.40
|
$
|
6.17
|
$
|
14.20
|
$
|
15.92
|
$
|
10.65
|
$
|
13.37
|
$
|
11.57
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Current Assets (qtr. end) ($ M)
|
$
|
19.0
|
$
|
25.8
|
$
|
25.8
|
$
|
26.2
|
$
|
27.0
|
$
|
29.9
|
$
|
36.0
|
$
|
36.6
|
||||||||||||||||
Current Liabilities (qtr. end) ($ M)
|
15.8
|
13.7
|
14.9
|
14.4
|
12.1
|
11.6
|
11.1
|
16.5
|
||||||||||||||||||||||||
Working Capital (qtr. end) ($ M)
|
3.2
|
12.1
|
10.9
|
11.8
|
14.9
|
18.3
|
24.9
|
20.1
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total Assets (qtr. end) ($ M)
|
$
|
125.8
|
$
|
130.5
|
$
|
128.8
|
$
|
126.8
|
$
|
126.1
|
$
|
127.7
|
$
|
127.1
|
$
|
117.3
|
||||||||||||||||
Total Liabilities (qtr. end) ($ M)
|
36.1
|
35.6
|
38.3
|
38.8
|
38.6
|
38.6
|
39.1
|
30.1
|
||||||||||||||||||||||||
Total Equity (qtr. end) ($ M)
|
89.7
|
94.9
|
90.5
|
88.0
|
87.5
|
89.1
|
88.0
|
87.2
|
1 |
Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A.
|
Opening cash balance as at December 31, 2017
|
$
|
9.3
|
||
Cash generated from operations
|
4.9
|
|||
Expenditures on property, plant and equipment
|
(10.6
|
)
|
||
Purchase of San Felipe property option
|
(2.0
|
)
|
||
Repayments to pre-payment facility
|
(2.8
|
)
|
||
Bond on decommissioning costs
|
(0.4
|
)
|
||
Proceeds from exercise of options and warrants
|
3.6
|
|||
Decrease in trade and other receivables
|
1.0
|
|||
Change in inventories
|
1.1
|
|||
Increase in prepaid expenses
|
(0.9
|
)
|
||
Decrease in trade and other payables
|
(0.1
|
)
|
||
Closing cash balance as at September 30, 2018
|
$
|
3.1
|
|
Less than
|
Over 5
|
||||||||||||||||||
|
Total
|
1 year
|
2-3 years
|
4-5 years
|
years
|
|||||||||||||||
Trade and other payables
|
$
|
10,410
|
$
|
10,410
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Pre-payment facility
|
12,230
|
5,355
|
6,875
|
-
|
-
|
|||||||||||||||
Interest on pre-payment facility
|
1,019
|
694
|
325
|
-
|
-
|
|||||||||||||||
Operating leases
|
1,179
|
274
|
535
|
370
|
-
|
|||||||||||||||
Other long-term liabilities
|
735
|
-
|
245
|
-
|
490
|
|||||||||||||||
Total
|
$
|
25,573
|
$
|
16,733
|
$
|
7,980
|
$
|
370
|
$
|
490
|
Reconciliation of Consolidated Cash Cost per Ounce
|
||||||||||||||||
|
Q3 2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Cost of sales ('000)
|
$
|
12,809
|
$
|
7,694
|
$
|
37,943
|
$
|
30,357
|
||||||||
Non-cash costs ('000)1
|
(18
|
)
|
1,715
|
(274
|
)
|
907
|
||||||||||
Direct mining costs ('000)
|
$
|
12,791
|
$
|
9,409
|
$
|
37,669
|
$
|
31,264
|
||||||||
Smelting, refining and royalty expenses ('000)
|
3,161
|
2,342
|
9,589
|
7,169
|
||||||||||||
Less by-product credits ('000)
|
(14,350
|
)
|
(6,714
|
)
|
(48,597
|
)
|
(24,977
|
)
|
||||||||
Total cash costs ('000)
|
$
|
1,602
|
$
|
5,037
|
$
|
(1,339
|
)
|
$
|
13,456
|
|||||||
Divided by silver produced (oz)2
|
323,497
|
399,559
|
1,022,243
|
1,395,935
|
||||||||||||
Silver cash costs ($/oz)
|
$
|
4.95
|
$
|
12.61
|
$
|
(1.31
|
)
|
$
|
9.64
|
Reconciliation of Cosalá Operations Cash Cost per Ounce
|
||||||||||||||||
|
Q3 2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Cost of sales ('000)
|
$
|
6,085
|
$
|
343
|
$
|
17,278
|
$
|
7,576
|
||||||||
Non-cash costs ('000)1
|
(341
|
)
|
1,798
|
(398
|
)
|
1,437
|
||||||||||
Direct mining costs ('000)
|
$
|
5,744
|
$
|
2,141
|
$
|
16,880
|
$
|
9,013
|
||||||||
Smelting, refining and royalty expenses ('000)
|
2,061
|
373
|
6,234
|
1,784
|
||||||||||||
Less by-product credits ('000)
|
(10,104
|
)
|
(2,159
|
)
|
(35,803
|
)
|
(10,846
|
)
|
||||||||
Total cash costs ('000)
|
$
|
(2,299
|
)
|
$
|
355
|
$
|
(12,689
|
)
|
$
|
(49
|
)
|
|||||
Divided by silver produced (oz)2
|
102,521
|
112,478
|
276,134
|
520,034
|
||||||||||||
Silver cash costs ($/oz)
|
$
|
(22.42
|
)
|
$
|
3.16
|
$
|
(45.95
|
)
|
$
|
(0.09
|
)
|
Reconciliation of Galena Complex Cash Cost per Ounce
|
||||||||||||||||
|
Q3 2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Cost of sales ('000)
|
$
|
6,724
|
$
|
7,351
|
$
|
20,665
|
$
|
22,781
|
||||||||
Non-cash costs ('000)1
|
323
|
(83
|
)
|
124
|
(530
|
)
|
||||||||||
Direct mining costs ('000)
|
$
|
7,047
|
$
|
7,268
|
$
|
20,789
|
$
|
22,251
|
||||||||
Smelting, refining and royalty expenses ('000)
|
1,100
|
1,969
|
3,355
|
5,385
|
||||||||||||
Less by-product credits ('000)
|
(4,246
|
)
|
(4,555
|
)
|
(12,794
|
)
|
(14,131
|
)
|
||||||||
Total cash costs ('000)
|
$
|
3,901
|
$
|
4,682
|
$
|
11,350
|
$
|
13,505
|
||||||||
Divided by silver produced (oz)
|
220,976
|
287,081
|
746,109
|
875,901
|
||||||||||||
Silver cash costs ($/oz)
|
$
|
17.65
|
$
|
16.31
|
$
|
15.21
|
$
|
15.42
|
Reconciliation of Consolidated All-In Sustaining Cost per Ounce
|
||||||||||||||||
|
||||||||||||||||
|
Q3 2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Total cash costs ('000)
|
$
|
1,602
|
$
|
5,037
|
$
|
(1,339
|
)
|
$
|
13,456
|
|||||||
Capital expenditures ('000)
|
3,466
|
1,199
|
10,395
|
4,597
|
||||||||||||
Exploration costs ('000)
|
89
|
126
|
179
|
172
|
||||||||||||
Total all-in sustaining costs ('000)
|
$
|
5,157
|
$
|
6,362
|
$
|
9,235
|
$
|
18,225
|
||||||||
Divided by silver produced (oz)2
|
323,497
|
399,559
|
1,022,243
|
1,395,935
|
||||||||||||
Silver all-in sustaining costs ($/oz)
|
$
|
15.94
|
$
|
15.92
|
$
|
9.03
|
$
|
13.06
|
Reconciliation of Cosalá Operations All-In Sustaining Cost per Ounce
|
||||||||||||||||
|
Q3 2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Total cash costs ('000)
|
$
|
(2,299
|
)
|
$
|
355
|
$
|
(12,689
|
)
|
$
|
(49
|
)
|
|||||
Capital expenditures ('000)
|
2,217
|
-
|
5,802
|
14
|
||||||||||||
Exploration costs ('000)
|
13
|
-
|
13
|
-
|
||||||||||||
Total all-in sustaining costs ('000)
|
$
|
(69
|
)
|
$
|
355
|
$
|
(6,874
|
)
|
$
|
(35
|
)
|
|||||
Divided by silver produced (oz)2
|
102,521
|
112,478
|
276,134
|
520,034
|
||||||||||||
Silver all-in sustaining costs ($/oz)
|
$
|
(0.67
|
)
|
$
|
3.16
|
$
|
(24.89
|
)
|
$
|
(0.07
|
)
|
Reconciliation of Galena Complex All-In Sustaining Cost per Ounce
|
||||||||||||||||
|
Q3 2018
|
Q3-2017
|
YTD-2018
|
YTD-2017
|
||||||||||||
Total cash costs ('000)
|
$
|
3,901
|
$
|
4,682
|
$
|
11,350
|
$
|
13,505
|
||||||||
Capital expenditures ('000)
|
1,249
|
1,199
|
4,593
|
4,583
|
||||||||||||
Exploration costs ('000)
|
76
|
126
|
166
|
172
|
||||||||||||
Total all-in sustaining costs ('000)
|
$
|
5,226
|
$
|
6,007
|
$
|
16,109
|
$
|
18,260
|
||||||||
Divided by silver produced (oz)
|
220,976
|
287,081
|
746,109
|
875,901
|
||||||||||||
Silver all-in sustaining costs ($/oz)
|
$
|
23.65
|
$
|
20.92
|
$
|
21.59
|
$
|
20.85
|
1 |
Non-cash costs consist of non-cash related charges to cost of sales including inventory movements and write-downs to net realizable value of concentrates, ore stockpiles, and spare parts and supplies.
|
2 |
Calculation excludes pre-production of 160,128 silver ounces and 238,919 silver equivalent ounces mined
in Q3-2017 and
245,391 silver ounces and 360,530 silver equivalent ounces mined
in YTD-2017
from El
Cajón
during its commissioning period, and 5,146 silver ounces and 30,161 silver equivalent ounces mined in Q3-2017 and YTD-2017 from San Rafael during its commissioning period. Pre-production revenue and cost of sales from El
Cajón and San Rafael are capitalized as an offset to development costs
.
|
1.
|
Review:
I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Americas Silver Corporation
(the “issuer”) for the interim period ended September 30, 2018.
|
2.
|
No misrepresentations:
Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation:
Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility:
The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109
Certification of Disclosure in Issuers’ Annual and Interim Filings,
for the issuer.
|
5.
|
Design:
Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework:
The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Committee of Sponsoring Organizations framework.
|
5.2
|
ICFR – material weakness relating to design:
N/A
|
5.3
|
Limitation on scope of design:
N/A
|
6.
|
Reporting changes in ICFR:
The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2018
and ended on September 30, 2018
that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
“Darren Blasutti”
|
|
Darren Blasutti
|
|
President & Chief Executive Officer
|
1.
|
Review:
I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Americas Silver Corporation
(the “issuer”) for the interim period ended September 30, 2018.
|
2.
|
No misrepresentations:
Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation:
Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility:
The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109
Certification of Disclosure in Issuers’ Annual and Interim Filings,
for the issuer.
|
5.
|
Design:
Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework:
The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Committee of Sponsoring Organizations framework.
|
5.2
|
ICFR – material weakness relating to design:
N/A
|
5.3
|
Limitation on scope of design:
N/A
|
6.
|
Reporting changes in ICFR:
The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2018
and ended on September 30, 2018
that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
“Warren Varga”
|
|
Warren Varga
|
|
Chief Financial Officer
|
|