America's Gold & Silver: Scaling Production in a High-Price Silver Market

• Galena No. 3 shaft upgrade completed 2 months ahead of schedule, increasing hoisting capacity from 42 to 120 tonnes/hour and boosting production
• Production scale-up targets 5 million ounces of silver annually at Galena, up from historical 1.4-1.5 million ounces, with infrastructure to exceed this target
• Only producing antimony mine in the United States, positioned to capitalize on $2B+ government investment in domestic antimony production
• Strong silver leverage at $47/oz with high-grade operations (400-450 g/t currently, targeting 650-700 g/t) among top 5 globally
• Multiple revenue streams including silver, copper, gold, lead, and antimony with renegotiated contracts capturing full value of byproducts

Introduction

The silver market's recent surge above $40 per ounce has reignited investor interest in North American precious metals producers, particularly those with operational leverage to higher prices and expansion potential. Americas Gold & Silver Corporation (TSX: USA, NYSE: USAS) stands at an inflection point, having completed critical infrastructure upgrades at its flagship Galena Complex in Idaho while simultaneously emerging as a strategic antimony producer amid heightened US government focus on critical mineral security.

The company's transformation under new management in 2024 comes at an opportune moment. With silver prices trading approximately $17-18 above the company's initial budget assumptions of $25 per ounce, previously uneconomic zones are becoming highly profitable. This dramatic shift in economics, combined with the only producing antimony mine in the United States and a clear path to production expansion, presents a compelling investment narrative for those seeking exposure to both precious and critical minerals.

Interview with Executive VP of Corporate Development, Oliver Turner

The Galena Complex: Engineering Excellence Drives Production Growth

The heart of Americas Gold & Silver's investment case lies in the Galena Complex in Idaho's prolific Silver Valley. The recent completion of the Number 3 shaft upgrade, achieved two months ahead of schedule, represents more than routine maintenance - it's a fundamental transformation of the mine's production capacity.

"We've replaced the hoist motor on top of the number three shaft with a 2,250 horsepower motor. It's about a 500 horsepower increase over the 1,750 horsepower motor that was there before," explains Oliver Turner, Executive Vice President of Corporate Development.

"This allows us to increase production and we've had some record days in terms of hoisting."

The technical improvements translate directly to bottom-line impact. The upgrade increases hoisting capacity from 42 tonnes per hour to a projected 118-120 tonnes per hour once both phases complete. Daily ore production capacity will rise from the current 300-350 tonnes to over 900 tonnes, while total material movement (including waste) will reach 1,600-1,700 tonnes initially, expanding to 1,900 tonnes upon full completion.

Critically, this infrastructure investment provides redundancy through a backup hoist motor system, de-risking operations while enabling deeper mine development. The company operates at the 5,600-foot level currently, with significant resource potential at depth where neighboring mines like Lucky Friday have demonstrated grade improvements.

Strategic Antimony Position: America's Only Producer

Perhaps no aspect of Americas Gold & Silver's portfolio carries more strategic significance than its antimony production. As geopolitical tensions heighten and supply chain vulnerabilities become national security priorities, the Galena mine's position as the sole producing antimony mine in the United States takes on outsized importance.

The numbers tell a compelling story. Since 2001, when US antimony production ceased and China dominated global supply, Galena has produced over 20 million pounds of antimony without specifically targeting antimony-bearing ore. Recent test work confirms 99% recovery rates from tetrahedrite ore, matching or exceeding historical performance from when the mine supplied US customers for decades before globalization shifted production overseas.

The US government's renewed focus on antimony security has driven massive investments in the sector. Perpetua Resources received $2 billion from the Export-Import Bank for its Idaho antimony project, while US Antimony secured a $245 million Department of Defense contract for antimony ingot purchases. These developments highlight the strategic premium being placed on domestic antimony supply, yet Americas Gold & Silver remains the only current producer.

"People want to be pushing these projects forward," Turner notes. "What about existing production and what about expanding production in the US? That's exactly what Galena provides."

Financial Metrics & Margin Expansion

The convergence of higher metal prices, increased production capacity, and valuable byproduct credits creates multiple pathways to margin expansion. With silver prices at $30+ per ounce versus the company's $25 budget assumption, every dollar increase in silver price drops directly to the bottom line for existing production.

The mine currently produces at grades of 400-450 grams per tonne silver, placing it among the world's top five highest-grade silver mines. Historical production reached 650-700 g/t in 2002, and current drilling targets similar high-grade zones. The 34 and 149 veins have shown spectacular intercepts of 24 kilograms and 1 kilogram per tonne respectively, though these represent exploration upside rather than current reserves.

Byproduct credits from lead, copper, gold, and increasingly antimony provide natural margin protection. The renegotiated offtake agreement ensures payment for all metals produced, including antimony beginning January 1, improving realized prices across the board. With no current mill constraints - 1,200 tonnes per day capacity versus current throughput - production increases flow directly through to revenue without major capital requirements.

Competitive Positioning in the Silver Valley

Americas Gold & Silver's position in Idaho's Silver Valley provides distinct competitive advantages. The region's mining heritage spans over a century, providing skilled workforce availability, established infrastructure, and regulatory familiarity with mining operations. Neighboring operations like Hecla Mining's Lucky Friday demonstrate the district's longevity and depth potential.

The company's dual-country operation strategy provides diversification, with the Cosalá mine in Mexico contributing steady cash flow while Galena undergoes expansion. Cosalá's transition to the EC120 zone positions it as a 2-2.5 million ounce annual producer for 70+ years, providing financial stability during Galena's investment phase.

Resource endowment remains a key differentiator, with over 170 million ounces in combined resources at Galena alone. This provides decades of mine life at expanded production rates and multiple options for growth beyond the initial 5 million ounce annual target. The resource base's high-grade nature contrasts favorably with many competitors operating lower-grade, higher-volume operations.

Mining Method Innovation: The Long-Hole Stoping Advantage

The reintroduction of long-hole stoping at Galena represents a critical operational advancement. This mining method, successfully proven at the company's previous operations, enables higher production rates with improved safety and lower costs compared to traditional cut-and-fill methods.

Development of the second and third long-hole stopes indicates rapid implementation progress. The company's plan envisions three stopes blasting, five in development, with continuous cycling to maintain steady production flow. This systematic approach contrasts with the more selective, lower-volume methods previously employed.

The paste backfill plant, scheduled for construction in the first half of 2025, represents the final piece of the long-hole stoping puzzle. This technology enables sequential stope extraction by providing ground support, unlocking the full production potential of the method. Once operational in the second half of 2025, production rates should accelerate significantly.

Risks & Challenges

Despite compelling opportunities, investors must consider several risk factors. Execution risk remains paramount as the company scales production through a complex expansion program. While Phase 1 of the shaft upgrade completed successfully, Phase 2 implementation and paste plant construction represent critical milestones.

Metal price volatility could impact profitability, though current prices provide substantial cushion above budget assumptions. A silver price decline below $25 per ounce would pressure margins, though byproduct credits provide some protection. Antimony market development remains uncertain despite government interest, with actual contract materialization and pricing yet to be determined.

Operational risks include typical mining challenges: ground conditions, equipment availability, and workforce recruitment in a competitive labor market. The deeper mining plan introduces additional technical complexity, though neighboring operations provide proven analogues. Environmental and regulatory requirements in both the US and Mexico could impact timelines or costs.

The Investment Thesis for Americas Gold & Silver

• The company is positioned for a near-term production inflection with 2026 set as the cash flow inflection year following 2024-2025 infrastructure investments, as production ramps from 1.4-1.5 million to 5 million ounces of silver annually
• Americas Gold & Silver's unique position as America's only antimony producer provides strategic value and potential government partnership opportunities that are not currently reflected in the company's valuation
• The existing mill capacity and recently completed shaft upgrades eliminate major capital requirements for initial expansion phases, significantly improving return on invested capital for shareholders
• The company's 170+ million ounce resource base at top-five global silver grades provides decades of profitable production potential with substantial exploration upside from ongoing drilling programs
• Multiple near-term catalysts including Q1 2025 production updates, antimony circuit development announcements, and paste plant commissioning provide clear re-rating opportunities for the stock
• The multi-metal, multi-asset portfolio with Mexican operations generating cash to support Idaho expansion reduces single-point failure risk and provides operational diversification
• Investors should monitor Q4 2024 and Q1 2025 production reports for expansion progress confirmation and consider accumulation on any silver price-related weakness given the company's significant operational leverage

Americas Gold & Silver represents a compelling turnaround story at an optimal moment in the commodity cycle. The combination of completed infrastructure upgrades, rising silver prices, and strategic antimony positioning creates multiple pathways to value creation. With production set to expand from current levels to 5 million ounces annually, operational leverage to silver prices exceeding budget by $17-18 per ounce, and unique exposure to critical mineral security themes through antimony production, the company offers differentiated exposure within the precious metals sector. The 2024-2025 investment phase positions 2026 as a pivotal year for cash flow generation, while near-term catalysts including quarterly production updates and antimony development announcements provide potential re-rating opportunities. Investors seeking silver exposure with strategic mineral optionality and clear production growth trajectory should closely monitor execution progress through upcoming quarterly reports.

Macro Thematic Analysis: Critical Minerals Meet Precious Metals

The convergence of precious metals strength and critical mineral security concerns creates a unique investment environment favoring producers with dual exposure. Silver's industrial applications in solar panels and electronics position it as both a monetary and energy transition metal, while antimony's designation as critical for defense applications adds geopolitical significance.

Americas Gold & Silver sits at this intersection, offering traditional precious metals exposure enhanced by strategic mineral production. The US government's shift from reliance on Chinese antimony supply to domestic sourcing represents a multi-decade trend that could transform previously marginal deposits into strategic assets. With $2+ billion in government funding flowing to antimony projects and the Department of Defense directly contracting for supply, the sector mirrors the successful government-supported development of domestic lithium and rare earth supply chains.

"The US government wants to buy this product. People want to be pushing these projects forward... What about existing production and what about expanding production in the US? That's exactly what Galena provides," Turner emphasizes, capturing the strategic opportunity.

This positions Americas Gold & Silver not just as a silver producer, but as a critical component of North American mineral security - a theme likely to persist regardless of political changes, given bipartisan support for supply chain reshoring. The company's ability to deliver immediate production while competitors remain in development phases provides first-mover advantages in capturing government support and premium pricing for domestic antimony supply.

TL;DR

America's Gold and Silver is rapidly transforming into a leading North American silver producer through operational excellence at its flagship Galena Complex in Idaho and Cosalá Operations in Mexico. The company completed Phase One of its critical No. 3 shaft upgrade two months ahead of schedule, increasing hoisting capacity and immediately improving production efficiency. With 100% ownership of Galena secured in December 2024 following a transaction with Eric Sprott (now the largest shareholder at approximately 20%), the company is fully funded through $50 million in equity and $100 million in debt to scale production from current levels to a target of 5 million ounces of silver annually. As the only producing antimony mine in the United States, America's Gold and Silver is uniquely positioned to capitalize on over $2 billion in government investment flowing into domestic antimony supply chains, while simultaneously benefiting from silver trading at $47 per ounce. The company operates high-grade deposits (400-450 g/t currently, with recent intercepts up to 24.9 kg/t silver and 16.9% copper) ranking among the world's top five silver operations, with renegotiated offtake agreements capturing full value from multiple revenue streams including silver, copper, lead, gold, and antimony. Management expects 2026 to mark a significant cash flow inflection point as paste fill plant commissioning in H2 2025 enables full implementation of the more productive long-hole stoping method across multiple panels.

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