After equipment and COVID delays, Nevada's Relief Canyon achieves commercial gold production

LOVELOCK, Nev. — Americas Gold & Silver Corporation kicked off the new year with welcome news for Pershing County.

After months of delays due to COVID-19 and failure of essential equipment, commercial gold production was finally reached this month at the Relief Canyon Mine northeast of Lovelock, officials announced Jan. 11.

“I am pleased to announce that Relief Canyon has achieved commercial production following a challenging 2020,” Americas Gold & Silver President & CEO Darren Blasutti said in a statement. “The Relief Canyon team worked hard to overcome the common teething pains in commissioning a new operation, the impact of the COVID-19 pandemic and the failure of our large radial stacker. I look forward to a successful 2021.”

Last summer, company officials predicted the mine would reach commercial gold production before the end of 2020.

According to the Jan. 11 update, the pandemic delayed arrival of key personnel, and the radial stacker breakdown reduced the rate of ore placement on the heap leach pad where minute particles of gold are extracted from tons of ore.

After the stacker was restored to full operation in December, the required stacking rate was achieved, which was “the final item required to declare commercial production," according to the company.

Andrea Totino, in charge of Investor Relations for Americas Gold, provided more detail about the daily heap leach stacking rate required for commercial gold production at Relief Canyon Mine.

The mine is “ramping up” to full production that’s anticipated in the middle of May 2021.

“To declare commercial production, the operation has to demonstrate that we are able to mine, crush and stack 75 percent of the installed capacity of 16,000 tons (of ore) per day for a defined period of time,” Totino explained.

She added that the increased daily ore stacking rate allows the operation “to accelerate the amount of material placed on the leach pad, increase the area under leach, increase daily gold production and enable the company to declare commercial production.”

The company’s “first gold” at the mine was poured in February 2020.

Corporate officials will not say how much gold has been produced since the Canadian company bought the mine in 2019.

As of Jan. 22, gold prices were hovering around $1,860 per ounce according to www.goldprice.org.

Americas Gold & Silver Corporation officials have estimated the “all in sustaining cost” to produce gold at Relief Canyon Mine at approximately $800 per ounce.

According to the Americas Gold website, Relief Canyon Mine has gold reserves of about 635,000 ounces and total M&I (measured and inferred) resources of about 800,000 ounces.

“Relief Canyon provides growth in precious metals, introducing gold into our asset base, with the potential to produce between 80,000 and 90,000 ounces of gold annually once the project is brought into production,” the company website tells shareholders.

The mine has continued to extract and stockpile ore despite the pandemic but the anticipated commercial production milestone that was expected late last year was delayed until this year.

“Ramp-up has been slower than anticipated due to an inability to get key management and consultants to the site to troubleshoot common start up challenges,” the company explained.

Phase I of the operation, already permitted, requires backfilling of the existing pit to avoid pit lake formation.

Phase II, if permitted, would allow expansion of the pit with no backfilling required resulting in the formation of a permanent pit lake after the mine closes. Mine officials claim the lake will not be contaminated but will be permanently fenced for public safety.