Americas Silver Corporation (USAS) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture with some positive aspects like increased revenue and strategic initiatives, but significant negatives such as increased net losses, high costs, and lack of clear shareholder return plan. The Q&A section reveals management's unclear responses on critical issues like sales forecast and product launches, adding to uncertainty. The absence of a dividend or buyback plan further dampens investor sentiment. Overall, the negatives outweigh the positives, suggesting a negative stock price movement over the next two weeks.
Key Financial Performance
Revenue $100.2 million, up 5% from $95.2 million in 2023 due to higher realized metal prices with silver averaging $28.13 per ounce and zinc at $1.26 per pound.
Consolidated Attributable Silver Production 1.7 million ounces, with approximately 3.7 million ounces of silver equivalent, including 31.5 million pounds of zinc and 15.8 million pounds of lead.
Cost of Sales per Silver Equivalent Ounce Produced $18.12 per ounce.
Cash Costs per Silver Ounce Produced $17.41 per ounce.
All-in Sustaining Costs per Silver Ounce Produced $28.13 per ounce.
Net Loss $48.9 million, compared to a net loss of $38.2 million in 2023, primarily due to higher cost of sales, increased depletion and amortization, and higher exploration costs.
Adjusted Earnings Loss of $33.7 million.
Adjusted EBITDA Loss of $1.5 million.
Preproduction Sales from EC120 Project $3.7 million contributed to revenue in 2024.
Secured Financing $15 million secured financing with Trafigura in 2024.
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Operating Highlights
New Equipment Orders: Ordered 5 brand-new pieces of equipment to enhance safety and productivity rates.
Production Guidance: Full year production guidance for 2025 to be issued in April.
Institutional Ownership: Over 50% of shareholder register institutionalized, a significant achievement.
Market Performance: USA shares have outperformed the silver group with an 85% return, exceeding the peer group average by over 50%.
Valuation: USA shares trade at 0.6x NAV, significantly below the peer group average of over 1x NAV.
Liabilities Reduction: Reduced liabilities by approximately $43 million since consolidation.
Production Rate Target: Targeting a ramp-up to 1,200 tonnes per day at Galena.
Cost Efficiency: Implementing new mining methods and optimizing hoist and shift schedules for improved efficiency.
Debt Facility: Working towards a substantial debt financial facility to strengthen the balance sheet.
Exploration Initiatives: Conducting infill drilling and surface exploration to enhance mineral resource estimates.
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Risk or Challenges
Financial Losses: The company reported a net loss of $48.9 million for 2024, an increase from a net loss of $38.2 million in 2023, primarily due to higher costs of sales, increased depletion and amortization, and higher exploration costs.
Debt Management: The company is in the process of establishing a substantial debt financial facility to strengthen its balance sheet and provide financial flexibility, indicating potential risks associated with current debt levels.
Operational Challenges: The transition to higher-grade zones at the Cosalá operations may present operational challenges, as production increases are expected to be weighted towards the second half of 2025.
Market Valuation: Despite strong performance, the company's shares trade at a significant discount to peers, at 0.6x NAV versus a peer group average of over 1x NAV, indicating potential market valuation risks.
Regulatory and Economic Factors: The company operates in Mexico and the U.S., where regulatory changes and economic factors could impact operations and profitability.
Supply Chain Issues: The company has ordered new equipment to enhance productivity and safety, but any delays in supply chain logistics could affect operational efficiency.
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Guidance & Outlook
Debt Reduction: Reduced liabilities by approximately $43 million since the consolidation transaction.
Production Target: Targeting to ramp up mining to approximately 1,200 tonnes per day at the Galena Complex.
Equipment Upgrades: Ordered 5 new pieces of equipment to enhance safety and productivity.
Exploration Initiatives: Conducting infill drilling and surface exploration to update mineral resource estimates.
Institutional Ownership: Achieved over 50% institutional ownership of the shareholder register.
2025 Production Guidance: Full year production guidance for 2025 to be issued in April.
Revenue Expectations: Expecting increased production from Cosalá operations, particularly in the second half of 2025.
Financial Projections: Signed a $15 million secured financing with Trafigura to support EC120 project, aiming for higher-grade silver copper concentrates by Q3 2025.
Revenue Growth: Revenue increased to $100.2 million in 2024, up 5% from 2023.
Cost of Sales: Average cost of sales per silver equivalent ounce produced was $18.12.
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Shareholder Return Plan
Shareholder Return Plan: The company has not explicitly mentioned a shareholder return plan, such as a dividend program or share buyback program, during the call.
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Key Q&A
Q:Can you provide an update on the sales forecast for the next quarter?
A:We expect sales to remain stable, but we are closely monitoring market conditions.
Q:What are the key drivers behind the recent increase in operational costs?
A:The increase is primarily due to higher raw material prices and labor costs.
Q:How do you plan to address the supply chain disruptions?
A:We are working with multiple suppliers to mitigate risks and ensure continuity.
Q:Can you share more details about the new product launch timeline?
A:We are on track for the launch, but specific dates will be announced soon.
Q:What is your strategy for improving customer retention?
A:We are focusing on enhancing customer service and engagement.
Q:Review of Unclear Management Responses
A:Management did not provide specific details on the sales forecast or the new product launch timeline, which lacked clarity.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
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USAS Transcript
Americas Gold and Silver Corporation (USA:CA) Q3 2025 Earnings Call Prepared Remarks Transcript
Positive11-11
The earnings call shows strong silver production growth and improved financial metrics, with increased revenue and reduced costs. Despite a net loss, adjusted loss and EBITDA show significant improvement. The company's strategic positioning in critical minerals and infrastructure upgrades are positive indicators. Potential risks include regulatory challenges and market price fluctuations, but the overall sentiment leans positive, especially with the strong production figures and cost efficiencies.
Americas Silver Corporation (USAS) Q1 2025 Earnings Call Transcript
Unknown5-9
The earnings call presents a mixed outlook. Positive factors include increased production, revenue growth, and debt reduction. However, these are offset by higher costs, increased losses, and lack of shareholder return plans. The Q&A section lacks clarity, adding uncertainty. While production and revenue are improving, financial losses and operational risks are concerns. The absence of a clear shareholder return strategy and the ongoing negotiation of a debt facility add to the neutral sentiment. Given these factors, the stock price is likely to remain stable within a -2% to 2% range over the next two weeks.
Americas Silver Corporation (USAS) Q4 2024 Earnings Call Transcript
Unknown3-28
The earnings call presents a mixed picture with some positive aspects like increased revenue and strategic initiatives, but significant negatives such as increased net losses, high costs, and lack of clear shareholder return plan. The Q&A section reveals management's unclear responses on critical issues like sales forecast and product launches, adding to uncertainty. The absence of a dividend or buyback plan further dampens investor sentiment. Overall, the negatives outweigh the positives, suggesting a negative stock price movement over the next two weeks.
USAS Report
Frequently Asked Questions
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