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Americas Gold and Silver Buys Remaining 40% Stake in Galena Complex
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Americas Gold and Silver (USAS - Free Report) has closed the acquisition of the remaining 40% interest in the Galena Complex in Idaho from an affiliate of Eric Sprott. This move will help USAS to capitalize on the solid demand prospects for silver.
Shareholders of Sprott affiliates received around 170 million common shares of USAS. Americas Gold and Silver also paid $10 million in cash. It will provide monthly silver deliveries of 18,500 ounces for 36 months starting in January 2026 to an affiliate of Sprott.
USAS has also arranged a private placement to raise gross proceeds of C$40 million ($28 million). Out of this, $10 million was used to pay for the transactions. The company plans to restructure its existing debt obligations.
Americas Gold and Silver’s Portfolio to Benefit From the Deal
The Galena Complex is located in Idaho’s prolific Silver Valley, a district known for producing silver, lead, zinc and copper from well-known operations such as the Bunker Hill, Sunshine and Lucky Friday mines. The complex was acquired by USAS through the business combination with U.S. Silver & Gold Inc. in 2014. In late 2019, Americas Gold and Silver formed a joint venture with Eric Sprott, holding 40% interest in the property.
In addition to Galena, Americas Gold and Silver owns and operates Cosalá Operations in Sinaloa, Mexico, and is re-evaluating the Relief Canyon mine in Nevada, USA. The company also owns the San Felipe development project in Sonora, Mexico.
The Galena Complex produced approximately 323,000 ounces of silver in the third quarter of 2024, down 7% year over year. It produced 2.6 million pounds of lead, a 15% decline from the year-ago quarter.
Tonnage and silver production both decreased primarily due to a focus on development during the quarter. This included work on the 55-179 decline to develop deeper higher-grade production stopes, which will drive long-term production goals, as well as equipment issues and changes to mining sequence and design. Tonnage was also negatively impacted by the buildup of waste rock caused by continued hoisting limitations due to the delay in repairs to the Galena shaft.
The completion of the hoist project at the Galena Complex is expected to boost production in 2025.
The investment comes at an opportune time. Silver prices have been up 24.6% so far this year. Global industrial demand for silver is expected to rise 7% and surpass 700 million ounces in 2024 for the first time on record. Global silver demand is expected to rise 1% year over year to 1.21 billion ounces while supply is expected to dip 1%. This suggests a fourth consecutive year of deficit for the silver market, which is likely to bolster prices.
USAS Stock’s Price Performance
Shares of USAS have gained 75.2% in the past year against the industry's 21.7% decline.
Image Source: Zacks Investment Research
America Gold and Silver’s Zacks Rank & Stocks to Consider
Americas Gold and Silver currently carries a Zacks Rank #3 (Hold).
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.1%. The Zacks Consensus Estimate for CRS’ fiscal 2025 earnings indicates 42% year-over-year growth. Its shares have gained 138% in the last year.
New Gold has an average trailing four-quarter earnings surprise of 37.50%. The Zacks Consensus Estimate for NGD’s 2024 earnings indicates 17% growth from the prior year. Its shares have gained 65% in the past year.
The Zacks Consensus Estimate for DD’s current-year earnings indicates a year-over-year rise of 11.5%. DD has an average earnings surprise of 12.9%. The company's shares have gained 2.3% in the past year.
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Americas Gold and Silver Buys Remaining 40% Stake in Galena Complex
Americas Gold and Silver (USAS - Free Report) has closed the acquisition of the remaining 40% interest in the Galena Complex in Idaho from an affiliate of Eric Sprott. This move will help USAS to capitalize on the solid demand prospects for silver.
Shareholders of Sprott affiliates received around 170 million common shares of USAS. Americas Gold and Silver also paid $10 million in cash. It will provide monthly silver deliveries of 18,500 ounces for 36 months starting in January 2026 to an affiliate of Sprott.
USAS has also arranged a private placement to raise gross proceeds of C$40 million ($28 million). Out of this, $10 million was used to pay for the transactions. The company plans to restructure its existing debt obligations.
Americas Gold and Silver’s Portfolio to Benefit From the Deal
The Galena Complex is located in Idaho’s prolific Silver Valley, a district known for producing silver, lead, zinc and copper from well-known operations such as the Bunker Hill, Sunshine and Lucky Friday mines. The complex was acquired by USAS through the business combination with U.S. Silver & Gold Inc. in 2014. In late 2019, Americas Gold and Silver formed a joint venture with Eric Sprott, holding 40% interest in the property.
In addition to Galena, Americas Gold and Silver owns and operates Cosalá Operations in Sinaloa, Mexico, and is re-evaluating the Relief Canyon mine in Nevada, USA. The company also owns the San Felipe development project in Sonora, Mexico.
The Galena Complex produced approximately 323,000 ounces of silver in the third quarter of 2024, down 7% year over year. It produced 2.6 million pounds of lead, a 15% decline from the year-ago quarter.
Tonnage and silver production both decreased primarily due to a focus on development during the quarter. This included work on the 55-179 decline to develop deeper higher-grade production stopes, which will drive long-term production goals, as well as equipment issues and changes to mining sequence and design. Tonnage was also negatively impacted by the buildup of waste rock caused by continued hoisting limitations due to the delay in repairs to the Galena shaft.
The completion of the hoist project at the Galena Complex is expected to boost production in 2025.
The investment comes at an opportune time. Silver prices have been up 24.6% so far this year. Global industrial demand for silver is expected to rise 7% and surpass 700 million ounces in 2024 for the first time on record. Global silver demand is expected to rise 1% year over year to 1.21 billion ounces while supply is expected to dip 1%. This suggests a fourth consecutive year of deficit for the silver market, which is likely to bolster prices.
USAS Stock’s Price Performance
Shares of USAS have gained 75.2% in the past year against the industry's 21.7% decline.
America Gold and Silver’s Zacks Rank & Stocks to Consider
Americas Gold and Silver currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , New Gold (NGD - Free Report) and DuPont de Nemours, Inc. (DD - Free Report) . CRS currently sports a Zacks Rank #1 (Strong Buy) and NGD and DD carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.1%. The Zacks Consensus Estimate for CRS’ fiscal 2025 earnings indicates 42% year-over-year growth. Its shares have gained 138% in the last year.
New Gold has an average trailing four-quarter earnings surprise of 37.50%. The Zacks Consensus Estimate for NGD’s 2024 earnings indicates 17% growth from the prior year. Its shares have gained 65% in the past year.
The Zacks Consensus Estimate for DD’s current-year earnings indicates a year-over-year rise of 11.5%. DD has an average earnings surprise of 12.9%. The company's shares have gained 2.3% in the past year.