Each one in plain English, with the numbers worked through for a shareholder.
5 May 2020capital raising announcement● NeutralMajor
The company agreed a bought-deal offering of 8,930,000 common shares at C$2.80 for about C$25M gross, with an over-allotment option of 15%, closing around May 13 2020. Strategic investors led by Pierre Lassonde and Eric Sprott said they intend to take C$8.75M of it. Proceeds go to working capital and general purposes, including bringing Relief Canyon into commercial production; existing holders are diluted by the new shares.
What it means for a shareholder
8.9m new shares at C$2.80 to raise about C$25.0m. That's 9.3% dilution: every existing holder's slice gets 9.3% smaller. If you held C$1,000 of shares (357 at the issue price), your slice goes from 0.000412% to 0.000374% of the company. To keep it you'd need 37 more shares - about C$104 at the issue price.
This 6-K files the at-the-market offering agreement dated Feb 18 2020 with H.C. Wainwright (lead) and Roth Capital, and the same-day Relief Canyon first-gold news release, as exhibits. The agreement is the legal document behind the up to US$15.0M share sale program announced in the release, drawing on the existing Canadian shelf prospectus and U.S. Form F-10.
The same-day news release confirms Relief Canyon's first gold pour, with about 200,000 tonnes stacked on the leach pad and commercial production expected before the end of Q2 2020. It also says the Cosalá Operations are hit by an illegal blockade, which the company says prevents it from negotiating while it talks with state and federal authorities, and it announces a new VP of Corporate Development, Stefan Axell (ex-Franco-Nevada). It also announces a new at-the-market share program of up to US$15.0M through H.C. Wainwright and ROTH, running to July 28, 2021, which could dilute existing shareholders if used.
Relief Canyon, the Nevada gold mine acquired in the 2019 Pershing merger, poured its first gold, with initial construction finished within the US$28-30M budget and commercial production expected before the end of Q2 2020 (this is later than the 'late Q4 2019 or early Q1 2020' first pour the company had earlier guided; the filing does not comment on the delay). The company guides 2020 gold-equivalent output of 60,000-70,000 oz (about 14,000 oz in 2019) and 90,000-110,000 oz in 2021, excluding Galena, which is under an 18-month recapitalization; the Cosalá figures assume 11 months of production and depend on resolving a blockade that has forced mining and processing to be suspended. Cash was US$20.0M at Dec 31 2019, and Galena 2020 capex is US$13-15M, of which Americas' share is US$2-4M.
The company (now named Americas Gold and Silver) agreed a joint venture at the Galena Complex with Eric Sprott, expected to be 60/40 Americas/Sprott. Effective October 1, 2019 Sprott commits up to US$20M in the first year to earn 40%, and Americas adds US$5M in 2020. Americas will keep running day-to-day operations, so Galena goes from 100%-owned to a shared asset in return for funding to modernize it.
26 July 2019capital raising announcement● NeutralMajor
The company closed a US$10M private placement with Eric Sprott, issuing 3,955,454 common shares at C$3.30 each. After this there are 82,487,633 common shares and 3,678,135 preferred shares outstanding, so existing holders are diluted. The company now describes Relief Canyon as fully funded and in construction.
What it means for a shareholder
4.0m new shares at C$3.30 to raise about C$10.0m. That's 8.4% dilution: every existing holder's slice gets 8.4% smaller. If you held C$1,000 of shares (303 at the issue price), your slice goes from 0.000698% to 0.00064% of the company. To keep it you'd need 28 more shares - about C$92 at the issue price.
This acquisition report confirms the Pershing Gold merger closed April 3, 2019: the company issued 24,849,270 common shares and 3,678,135 new non-voting preferred shares to former Pershing holders. The Lassonde/Trinity C$5.5M convertible loan was converted into 2,763,518 common shares. On the same day it signed a US$42.5M Sandstorm Gold financing (US$25M metals delivery agreement, US$10M 6% convertible debenture due April 3, 2023, C$10M equity placement) to fund Relief Canyon construction, with first gold pour expected late Q4 2019 or early Q1 2020 and capital cost of US$28-30M plus up to US$8M working capital. This resolves the Pershing closing and Relief Canyon financing threads.
The company released an internally prepared pre-feasibility study for combining its El Cajón and Zone 120 silver-copper deposits near Cosalá, Mexico. It shows a probable reserve of 2.9 million tonnes (14.5M oz silver, 26.5M lb copper), a 5-year mine life, about US$17M initial capital and pre-tax NPV(5%) of about US$43M. No production decision has been made, though the company says permits are in place; this builds on the Zone 120 drilling begun in 2018.
The US foreign-investment review (CFIUS) of the Pershing Gold deal finished with no unresolved national security concerns, and the companies expect to close on or about April 3, 2019, subject to customary closing matters. This clears the main regulatory hurdle that had been delayed by the government shutdown.
Shareholders of both Americas Silver and Pershing Gold approved the business combination on January 9, 2019, including creating a new class of non-voting preferred shares at Americas Silver. Closing still depends on review by the US Committee on Foreign Investment (CFIUS), whose deadlines are paused by the partial US government shutdown. The company says it has a short list of potential financiers for Relief Canyon and intends to announce financing plans by the end of Q1 2019, assuming the deal closes.
A routine transfer-agent notice (Computershare) set a special meeting of Americas Silver shareholders for January 9, 2019 in Toronto, with a record date of November 30, 2018. The notice itself does not state the meeting's purpose; it is presumably the vote on the Pershing Gold combination (inference).
Americas Silver agreed to acquire Pershing Gold, which owns the Relief Canyon gold project in Nevada, by share exchange: 0.715 Americas Silver shares per Pershing share (implied US$1.69 per Pershing share). After closing, existing Americas Silver and Pershing shareholders would own about 64% and 36% respectively, so current shareholders would be diluted, which contrasts with the earlier stated aim of growth without equity dilution. To support this, Pierre Lassonde and Trinity Capital Partners lent Americas Silver C$5.5M (1.25% per month interest, secured, convertible), which funds a US$4M secured bridge loan to Pershing (16% interest, 9-month term). Closing is expected in Q1 2019, subject to shareholder, TSX and NYSE American approvals.
The company reported new drill results from Zone 120 at Cosalá and from the 366 FW zone and 164-168 vein system at Galena. At Zone 120 it has drilled over 12,000 meters of the planned program, and remaining results are expected in late Q2 2018; evaluation of development scenarios will start after an updated mid-year resource estimate. At Galena, the company says the 4900 Level results are expected to deliver benefits in early 2019. This continues the exploration threads from the 2018 plan.
The company released an updated resource estimate for San Felipe, the Sonora, Mexico property it holds an option on. Indicated resources are 4.7 million tonnes with 560 million pounds of zinc, 256 million pounds of lead and 9.1 million ounces of silver, with contained zinc up 258% and silver up 236% versus the 2014 estimate prepared for the prior option holder Santacruz. Inferred resources fell 52%. The company says it will keep evaluating San Felipe before making the final option payments by year-end (US$0.5M due Apr 1, US$1M Jul 1, US$6M by Dec 31, 2018), which it expects to pay from cash on hand.
2017 silver output was about 2.1 million ounces (down 14% from 2016), below the company's silver-equivalent guidance of 5.0-5.5 million at 4.7 million ounces, which the company attributed to weaker Galena Complex output and a later San Rafael start. For 2018 it guides to 1.6-2.0 million silver ounces and 7.2-8.0 million silver-equivalent ounces, with negative cash costs, and the board approved a $4 million exploration program focused on Zone 120, with cash at year-end of $9.3 million.
San Rafael mine at the Cosalá Operations declared commercial production on December 19, 2017, which the company says was built on time and on budget for about US$17 million from internal resources. This follows through on the development project discussed earlier in 2017. Separately, the company agreed with Hochschild to push back the remaining US$8 million San Felipe payments: US$500,000 on Jan 1 and Apr 1, 2018, US$1 million on Jul 1, 2018, and US$6 million by Dec 31, 2018, to be paid from operating cash.
The company reported 2017 drilling results: a new silver-lead vein (366 FW) at the Galena Complex in Idaho, and at Cosalá in Mexico, drilling that confirmed the San Rafael Main Zone model and indicated Zone 120 silver-copper mineralization extends about 350 meters further southeast. First ore from San Rafael is expected at the end of Q3, and results from the pending Zone 120 assays and the Los Manueles drilling are due by the end of Q2 and in June respectively.
Americas Silver bought an option on the San Felipe silver-zinc-lead property in Sonora, Mexico, which gives it the right to acquire 100% for a total of $15 million cash. It paid $7 million up front from cash on hand (covering $2 million to Hochschild, $4,250,025 to Santacruz's lender JMET, and $749,975 to Santacruz), and the remaining $8 million is due to Hochschild by December 15, 2017. The company says it expects to fund this without diluting shareholders.
