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Americas Gold and Silver (TSX: USA) (NYSE American: USAS) has consolidated ownership of the Galena complex in Idaho after agreeing to buy the remaining 40% interest from an affiliate of Canadian mining investor Eric Sprott.
As consideration, Americas Gold will issue 170 million common shares to Sprott and pay $10 million cash. It will also issue 10 million shares priced at C$0.40 each for a total of C$4 million to certain vendors involved in the transaction.
The precious metals miner has also arranged a private placement at the same issue price to raise gross proceeds of C$40 million, and is in talks for further debt financing to improve its balance sheet as it looks to optimize and expand the Galena complex.
Following the transactions, existing Americas Gold shareholders will own approximately 53% of the company and Sprott will own 22%. The financing participants will own 19%, while management and directors will own the remaining 6%.
As part of the Galena acquisition, the company will also appoint former Karora Resources executive Paul Andre Huet as chairman and CEO to lead the next phase of its growth.
The Galena complex is located in Idaho’s Silver Valley, a district famous for producing silver, lead, zinc and copper from well-known operations such as the Bunker Hill, Sunshine and Lucky Friday mines. The company’s claim holdings cover nearly 90 sq. km. and hosts three active shafts and two process facilities, one of which is producing silver concentrates.
Americas Gold acquired the project in 2014, and five years later entered a joint venture with the Sprott entity, with the company holding a 60% interest and acting as operator.
The Galena complex is currently undergoing a recapitalization plan designed to modernize its infrastructure, acquire new mining equipment and develop additional stopes for better operational flexibility.
A consolidated ownership of Galena, says Americas Gold, would provide for a focused vision centered around optimizing and expanding the operation through the utilization of existing infrastructure. “The complex is expected to be a long-term cornerstone asset supported by a robust reserve and resource base, excess mill capacity, and opportunity to grow through future exploration,” the company stated in a news release.
Galena represents one of the largest underground silver mines in North America, having produced over 240 million oz. of the precious metal for more than half a century. It reached peak production in the early 2000s, producing in excess of 5 million oz. of silver per annum.
Americas Gold’s other main asset, the 100% owned Cosalá operations, consists of the San Rafael mine, which is currently in full production, and the EC120 deposit, which has an estimated probable reserve of 2.9 million tonnes with a grade of 157 g/t silver containing 14.5 million oz.
With the recent funding for its Cosalá operations in Mexico, the company says its production, operating margins and near-term growth potential are all expected to steadily increase.
Investors would also gain higher exposure to silver, which has rallied nearly 30% this year, as approximately 80% of its revenue is expected to be generated from the metal starting in the second half of 2025.
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