Americas Silver Corporation (USA.TO) (NYSE “MKT”: USAS) (“Americas Silver” or the “Company”) today reported fourth quarter and year-end financial and operational results for 2016 and an update on the San Rafael Project (“San Rafael”).

This earnings release should be read in conjunction with the Company’s MD&A, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on SEDAR at www.sedar.com and are also available on the Company’s website at www.americassilvercorp.com. All figures are in U.S. dollars unless otherwise noted.

Year-end and Fourth Quarter Highlights

• Consolidated results met 2016 guidance for cash costs1 and all-in sustaining costs1with approximately 2.4 million silver ounces and 4.7 million silver equivalent ounces2 at cost of sales of $9.86 per silver equivalent ounce, by-product cash costs of $10.00 per silver ounce and all-in sustaining costs of $12.71 per silver ounce for the year.
• Fourth quarter production was approximately 565,000 silver ounces and 1.1 million silver equivalent ounces at cost of sales of $10.47 per silver equivalent ounce, by-product cash costs of $8.91 per silver ounce, and all-in sustaining costs of $11.57 per silver ounce.
• Consolidated operating cash flow generated was $5.4 million in fiscal 2016 compared to ($5.7 million) in fiscal 2015, an increase of $11.1 million or 195%.
• Revenues of $58.9 million and net loss of ($5.2) million or ($0.15) cents per share for the year compared to revenues of $53.5 million and net loss of ($19.4) million and ($0.68) cents per share for the year ended December 31, 2015.
• Consolidated guidance3 for 2017 is 2.0 – 2.5 million silver ounces and 5.5 – 6.0 million silver equivalent ounces at cost of sales of $8.00 – $10.00 per silver equivalent ounce, by-product cash costs of $4.00 – $5.00 per ounce, and all-in sustaining cash costs of $9.00 – $10.00 per ounce.
• The fully-funded San Rafael Project continues to progress on time and budget for commercial production in late Q3, 2017 following its formal construction commencement in October 2016. San Rafael is expected to be the Company’s key cash flow generator for 2018 and beyond, targeted to produce free cash flow of approximately $30 million annually at current spot prices with an unlevered IRR of +100%.
• Cash and cash equivalents were $24.1 million at December 31, 2016 with net working capital of approximately $20.1 million. A low interest rate $15.0 million concentrate pre-payment facility was entered in January 2017 after year end with a subsidiary of Glencore PLC (“Glencore”) to fund a portion of the development costs for San Rafael.

“The Company had a stronger year in 2016, generating increased cash flow in the second half of the year due to higher silver and base metal prices, and our ongoing focus on cost management,” said Darren Blasutti, President and CEO. “We expect to continue to create positive operating cash flow until the San Rafael Project begins commercial production, which is expected to increase the Company’s revenue and cash flow while significantly decreasing operating costs in late 2017 and beyond. San Rafael, coupled with our acquisition of the San Felipe Project and strategic partnership with Glencore, will drive accretive future growth for our shareholders

Consolidated Production and Operating Costs

A net loss of ($5.2) million was recorded for the year ended 2016, compared with a net loss of ($19.4) million for the year ended 2016. The decrease in net loss is primarily attributable to increased lead by-product sales, higher realized silver and base metal prices, and lower cost of sales, among other cost reductions, partially offset by higher interest and financing expense. Further information is available in the Company’s Management’s Discussion and Analysis for the year ended December 31, 2016.

Consolidated silver production for 2016 totalled 2,389,808 silver ounces which represents a decrease of 10% compared to 2015. Silver equivalent production totalled approximately 4.7 million ounces, a decrease of 4% year-over-year, while lead production increased by 27% year-over-year. Silver, zinc and copper production was down year-over-year primarily due to the suspension of production at the Nuestra Señora mine due to ground movements in Q2, 2016 offset by higher lead production at Galena during the year. Realized silver, zinc, and lead prices increased year-over-year by 10%, 10%, and 7%, respectively, while copper fell year-over-year by 13%. Consolidated cost of sales improved 9% to $9.86 per silver equivalent ounce year-over-year as a result of planned workforce reductions. Consolidated cash costs improved 22% to $10.00 per silver ounce year-over-year as a result of systematic cost controls in labour and supplies costs, and all-in sustaining costs improved 26% to $12.71 per silver ounce year-over-year as a result of capital and exploration spending reductions.

Further information concerning the consolidated and individual mine operations is included in the Company’s Consolidated Financial Statements for the year ended December 31, 2016 and Management’s Discussion and Analysis for the same period.

San Rafael Update

San Rafael is a fully permitted, brownfield development that will utilize certain existing infrastructure at the Cosalá Operations. The Pre-Feasibility Study initial capital cost estimate has been reduced to approximately $18 million through improvements in mine design, improved foreign exchange rates, and refurbishment of existing equipment from the Nuestra Señora mine. The San Rafael Pre-Feasibility Study shows average annual production of 1.0 million ounces of silver, 50 million pounds of zinc, and 20 million pounds of lead over a 6-year initial mine life at negative all-in sustaining costs based on current reserves.

Since publishing of the Pre-Feasibility Study in H1-2016, metal prices have increased significantly. Current prices may allow the San Rafael to extend its mine life by lowering the cut-off grade and converting additional resources to economical ore4. The Company is executing an exploration program at San Rafael’s Zone 120 area with a goal of upgrading the existing resource and testing the southeast extension of known mineralization. This drilling has strong potential to extend the mine life of San Rafael beyond that defined in the Pre-Feasibility Study. The Company will be updating its shareholders on this program and other exploration programs at its operations throughout the year as the results become available.

Original Article: http://finance.yahoo.com/news/americas-silver-corporation-reports-fourth-204400599.html