Canadian silver miners Americas Silver and Excellon Resources have reported strong operational improvements during the first quarter ended March 31, as both companies navigate the dithering silver price environment and focus internally to streamline operations and drive down costs.
Toronto-based Americas Silver reported on Wednesday that it has swung to a profit of $500 000 for the first quarter, compared with a net loss of $200 000 in the comparable quarter of 2017, as higher silver output and markedly lower costs boosted the bottom line.
Revenues increased 34% year-on-year to $20.4-million, compared with revenues of $15.2-million a year ago.
Consolidated silver output for the quarter totalled 1.6-million silver equivalent ounces, an increase of 46% when compared with the first quarter of 2017, including about 400 000 oz of silver.
The company, which owns and operates the Cosalá operations, in Sinaloa, Mexico, and the Galena Mine Complex, in Idaho, maintained its full-year production guidance at 1.6-million to 2-million ounces of silver, or 7.2-million to 8-million ounces of silver equivalent.
The San Rafael mine continued to ramp up its mining rate and milling rate throughout the quarter while advancing development into the higher-grade Main Zone with the expectation of reaching a milling rate of 1 700 t/d in the second half of the year.
Mexico’s highest-grade silver producer Excellon Resources also on Thursday reported first-quarter financial results, reporting a net loss of $1.2-million, or $0.01 a share, compared with the net loss of $800 000, or $0.01 a share, a year earlier.
Net revenues increased by 73% to $5.9-million, owing to an 88% increase in silver-equivalent of 406 995 payable ounces.
The company said a lower realised silver price of $16.49/oz in the period weighed on net revenues, but was offset by higher base metal prices and improved treatment and refining charges under the 2017 offtake sales agreements, which carried over into the first quarter.
Consolidated silver output for the first quarter was about 397 035 oz, which represents a decrease of 24% year-on-year. Silver equivalent output was about 1.6-million ounces, an increase of 46% year-on-year.
During the period, the company said it continued to process historical stockpiles and sump material, with minimal associated mining costs. These stockpiles are blended with mined ore to improve recoveries (in the case of high-grade lead and/or zinc ore) and payability, as well as being cash flow generative. The cost of processing these stockpiles totals less than $50/t, with a net smelter return value of about $135/t, assuming 350 g/t silver-equivalent grade and a silver price of $16.50/oz.
The cost of sales, including depletion and amortisation increased by 15% year-on-year owing to a $700 000 increase in amortisation of capital costs associated with the mine optimisations completed in 2017.
Production cost per tonne improved by 38% to $210/t in the period, mainly owing to a 58% increase in tonnes milled. These costs are expected to continue to improve during 2018 as production rates increase, along with increased pump efficiency and decreased electricity costs in Mexico.
During the quarter, Excellon focused on installing ground supports at the Platosa mine, and driving ramp development. Operations have now transitioned to a more productive cut-and-fill mining method, accessing the Rodilla, Pierna and 623 mantos. As ramps 730 and 725 have now been driven below active working levels, a growing dry mineral inventory of about 50 000 t is available to support increased production rates in the current and third quarters, the company advised. Excellon expects productivity to continue to improve at Platosa, as development continues to access lower levels of the high-grade mantos.
The company expects to file an updated mineral resource estimate and technical report in the coming weeks, along with an updated 2018 production guidance.