Commercial gold production expected by Q4 at Nevada's Relief Canyon

LOVELOCK, Nev. — Americas Gold & Silver Corporation plans to reach “commercial” gold production before the end of 2020 at Relief Canyon Mine, as higher-grade ore and a more efficient heap leach system have accelerated the operation, officials said.

While the “first gold” at the mine located northeast of Lovelock in rural Northern Nevada was poured in February 2020, the Canadian-based company has not revealed how many ounces of gold have been produced so far this year.

As usual, according to a Sept. 10 press release from the company, Americas President and CEO Darren Blasutti told investors this month he’s pleased with the mine’s progress so far.

“The Company is thrilled to report that the new section of the leach pad is operating according to plan,” Blasutti said in the release. “Leach solution grade has bumped up nicely which bodes well for continued increases in gold production and a strong finish to the year. We remain committed to declaring commercial production before the end of the year.”

On Aug. 4, mine contractor Ledcor began stacking higher grade ore from lower levels of the pit on a new heap leach pad.

Instead of trucks, a new conveyance system carries ore downhill from the open pits and ore crusher to the leach pad and ore stacker. A cyanide solution carries microscopic particles of gold from the leach pad to the processing plant and refinery below.

“Based on a month of operating data, the Company is pleased to report that the leach solution grade from the pad has significantly increased and modelled leach recovery is trending toward feasibility levels,” the company says.

More than 200,000 tons of ore have been stockpiled near a temporary leach pad ore stacker that can only handle 8,000 tons of ore per day. A new radial stacker will handle 16,000 tons per day, but that machine is out of commission right now, according to the company.

Meanwhile, miners are stripping unwanted or “waste” material from the open pits. As well as the price of gold, open pit mine feasibility depends in part on the “stripping ratio,” which is the number of tons of unwanted dirt and rock removed for each ton of high-grade gold ore.

“With the reduced stacking rate, the Company is taking the opportunity to prioritize waste stripping as the operation currently has a large run of mine ore stockpile of over 200,000 tons,” according to the press release. “With the increased waste stripping, the Company will have added operational flexibility to optimize production moving forward.”

In a March 2020 financial statement, the company estimated its all-in sustaining cost to produce an ounce of gold was about $900 to $1,100 for 2020 and about $850 to $1,050 in 2021. It predicted gold production of about 90,000 to 110,000 ounces of gold in 2021 at Relief Canyon.

So far in September, volatile gold prices have been fluctuating between $1,930 and $1,970 per ounce. On Aug. 5, the gold price hit $2,038 per ounce, according to Gold Price History.

In an earlier statement, Americas Gold & Silver Corporation said $1.9 million was budgeted for exploration drilling in 2020. The company says it now controls approximately 30,000 acres of land, and only about 20 percent of that area has been explored for underground layers of high-grade ore.

In an SNN Network interview during this month’s Precious Metals Summit 2020, Blasutti explained why Relief Canyon is considered a “value catalyst” for his company’s investors.

“The biggest catalyst is Relief Canyon Mine getting to commercial production in the fourth quarter and then getting to full production in the early first quarter,” he said. “If you’re going to produce roughly 80,000 ounces (of gold) a year at $800 an ounce, all in sustaining costs, and gold is at $1,900 or $2,000 per ounce, that’s going to create a tremendous amount of cash flow.”