Unlocking the "Free Metal" Thesis: Americas Gold & Silver’s Operational Turnaround

• Americas Gold & Silver is targeting 3.2–3.6 million ounces of consolidated silver production in 2026 across its Idaho and Mexican operations.
• The No. 3 Shaft modernization increased targeted hoisting capacity to 1,350 short tons per day, while mechanized long-hole stoping boosted panel productivity by 300%.
• A 51%-owned joint venture (JV) with US Antimony Corporation targets commercial commissioning of a domestic Galena processing hub in the second quarter of 2027.
• The company eliminated approximately US$76 million in legacy variable-rate metal obligations and roughly US$28 million in annual debt service, resulting in approximately 3.3% equity dilution.
• The company ended the second quarter of 2026 with US$88.9 million in cash, fully funding its US$90 to US$120 million 2026 capital guidance.

Strategic Convergence: Macro Tailwinds, Proven Leadership, and De-Risked Capital

Global silver supply deficits of 150 million to 200 million ounces per year intersect with the United States critical mineral onshoring policies to establish a strategic valuation premium for domestic primary production. Americas Gold & Silver Corporation (TSX: USA | NYSE American: USAS) represents a leveraged vehicle positioned at the center of this convergence, combining a major Idaho silver-lead-copper-antimony system with cash-flow-positive Mexican operations. The company is actively scaling throughput across these core assets, targeting consolidated silver production of 3.2 million to 3.6 million ounces in 2026.

Management, led by Chief Executive Officer Paul Andre Huet and Chief Operating Officer Mike Doolin, is applying a bulk-mechanization model to its underground assets to replicate previous successful turnarounds. This executive team previously engineered the C$ 740 million acquisition of Klondex Mines by Hecla Mining in 2018 and the C$ 2.1 billion merger of Karora Resources with Westgold Resources in 2024. By transitioning from labor-intensive mining methods to high-efficiency operations, management is targeting a systematic reduction in consolidated unit operating costs.

During the second quarter of 2026, the company's investment thesis was simplified by removing approximately US$ 76 million in legacy variable metal obligations from the balance sheet. This capital restructuring eliminates mark-to-market accounting adjustments, allowing the full economic impact of rising silver and antimony prices to flow directly to equity holders. Backed by a cash balance of US$ 88.9 million as of June 30, 2026, Americas Gold & Silver is fully funded to execute its 2026 consolidated capital guidance of US$ 90 million to US$ 120 million.

Operational Turnaround at the Galena Complex

The primary physical bottleneck at the Galena Complex was the hoisting capacity of the No. 3 Shaft, which historically limited underground ore movement to roughly 42 short tons per hour. To expand hoisting rates by approximately 150%, the company completed a two-phase modernization program at the No. 3 Shaft in July 2026, investing approximately US$1.1 million during Phase 2 to install a 2,250-horsepower hoist motor, a redundant spare motor, and a new high-speed braking system. With both phases fully commissioned, the shaft is targeting a hoisting capacity of 1,350 short tons per day, representing a 50% increase over the historical baseline.

To utilize this expanded hoisting headroom, the company is transitioning underground mining from conventional underhand cut-and-fill mining to mechanized long-hole stoping. Mechanized long-hole stoping utilizes remote-operated underground drill rigs, supported by newly installed underground fiber-optic networks that enable real-time tracking and semi-autonomous operations. Across 13 active panels, this transition has achieved a 300% increase in productivity, from 50 tons per shift to 200 tons per shift, and has accelerated stope cycle times twelvefold, from 12 months to 1 month.

The operational improvements are targeting a final mining mix of 70% long-hole stoping and 30% cut-and-fill by the second half of 2027, supported by a new paste backfill plant that accelerates backfill cycle times by 250%.

Chairman and Chief Executive Officer of Americas Gold & Silver, Paul Andre Huet, reflected on these physical achievements:

"These results were achieved despite temporary impacts from the extension of the 14-day planned shutdown period during the quarter for the Phase 2 shaft upgrade and a minor electrical fire at Galena, demonstrating the resilience and commitment of our workforce. I remain deeply proud of the safety culture that continues to define our operations, and of the team's ability to execute through challenges while maintaining focus on long-term value creation."

Geopolitics of Antimony & the Joint Venture

While silver is the primary revenue driver for Americas Gold & Silver, accounting for approximately 80% of revenue as of early 2026, the company’s antimony exposure offers a powerful, geopolitically charged strategic advantage. Antimony is a critical mineral essential for national defense, military applications, and advanced energy storage systems, yet global supply chains are heavily dominated by foreign adversaries. The US has historically had negligible domestic antimony production, leaving it highly vulnerable to supply disruptions.

To bypass reliance on foreign smelting and capture downstream refining margins on-site, the company formed a 51%-owned joint venture (JV) with US Antimony Corporation. Under the terms of the agreement, the joint venture will construct a fully integrated domestic antimony processing hub at the Galena site. Americas Gold & Silver’s flagship Galena Complex in Idaho is the largest active antimony operation in the US, having produced approximately 561,000 pounds of antimony in 2025.

This JV is targeting commercial commissioning in the second quarter of 2027 to leach antimony from Galena's silver-copper-antimony concentrate and produce a finished flake metal product on-site. This domestic refining mechanism eliminates historical third-party smelter deductions and transportation penalties, allowing the company to monetize its byproduct antimony at pure spot-market flake prices. By processing this material domestically rather than exporting raw concentrate, the company will capture downstream refining margins that previously accrued to third-party smelters.

Balance Sheet Simplification & Silver Price Leverage

To remove earnings volatility and restore direct equity exposure to silver spot prices, the company executed a financial restructuring during the second quarter of 2026, settling approximately US$ 76 million in variable silver and gold debt obligations. The company terminated its remaining 592,000-ounce silver delivery obligation to Eric Sprott in exchange for 7,956,696 common shares at an implied value of US$ 5.57 per share.

The company settled its remaining 8,861-ounce gold delivery obligation to an affiliate of Royal Gold by delivering 5,000 ounces of gold and issuing 2,652,532 common shares at US$7.0 million, using in-the-money price-protection hedges. This de-risking transaction required approximately 3.3% total equity dilution while eliminating more than US$28 million in annual debt-servicing requirements, allowing unencumbered free cash flow to accumulate directly on the balance sheet.

Americas Gold & Silver ended the second quarter of 2026 with a cash balance of US$ 88.9 million and working capital of US$ 48.6 million, which fully funds its 2026 capital guidance of US$ 90 million to US$ 120 million without requiring additional equity dilution. 

Huet added:

"Our team delivered another quarter of meaningful progress, underscored by strong revenue growth and continued operational momentum across both Galena and Cosalá. Consolidated net revenue rose 71% year-over-year to $46 million for the second quarter, and we generated $114 million in the first half alone, nearly matching our full-year 2025 revenue in just six months."

Industry Outlook

Global silver deficits of 240 million ounces, driven by solar and AI hardware growth and inelastic supply, intersect with US critical mineral mandates targeting over 80% foreign control of antimony, creating a strong pricing backdrop for domestic primary producers. Americas Gold & Silver currently trades at 0.75x Net Asset Value (NAV), compared to its peer average of 1.17x, representing a 35% discount and offering clear rerating potential as the company works toward its 2026 production target of 3.2 to 3.6 million ounces of silver.

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