Americas Gold & Silver (TSX:USA) - Doubles Galena Hoisting as Mexico Drilling Widens the Upside

Matt (0:00)

Okay, hey guys, we're joined today by Paul, this guy, to get a catch up on what America's Gold & Silver has been up to. We were here this time last year with them. A lot has changed.

Welcome, guys. How are you?

Paul Andre Huet (0:14)

Thanks very much, Matt. It's great to see you. It has changed a lot in the year. We're happy to be here. It's been an exciting journey for the last year. In fact, we just had an analyst site visit. And for those of you who don't know us, we're America's Gold & Silver. We've got assets in Idaho, and we've got assets in COSLA in Mexico. And we're growing those assets into a larger production by applying a lot of infrastructure and spending a lot of money on capital in many ways. Exploration, upgrading the older infrastructure.

More recently, we've just had a site visit with about seven analysts. And it was nice to demonstrate some of the upgrades we've had.

We've been spending money at the mine so that we can break record after record.

And the reality is, this year we have broken more records. And I'll just talk about a couple of them. First and foremost, in the shaft, when we inherited this mine 18 months ago, we had a shaft that was constrained to about 650 tons a day. The mill was running two days a week. That's what we inherited. Today, after phase one, phase two, spending about $7 million of capital, that shaft can consistently hoist up and down safely over 1400 tons a day. That's a big step up. Those are big changes in a mine to make it a lot more efficient. Because we all remember that in 2002, our mine, that mine in Idaho, actually achieved 5 million ounces of silver at a run rate around 600 tons a day. So when we start looking at what we have, the future, some of the infrastructure, people underestimate some of the important things on muck flow, for example.

In order for us to change the mining method that we've been talking about, we've been talking about this for a year now. A year to change the mining method. We've just done our 19th stope and we're carving them out surgically. We're removing those as if we were surgically removing them. If you came underground and those, the analysts who came underground got to witness that it's about a meter wide, we're about 3.3 feet wide. We couldn't have done any better with jack legs. If we would have had jack legs, there's no way we could have been any narrower. So that avoids the dilution. The question people ask all the time, well, the moment you start injecting this new mining method, you're converting it from something that's been there a hundred years, fragmentation the size of a fist. So meaning the rock breaks about this big. When you start drilling and blasting with long hole, you inject new different scenarios. So we might have oversized rock. We need to make sure we have the infrastructure along the rail, so that when we're tramming down the track and dumping into a loading pocket, we have to have grizzlies. We didn't have any rock breakers there. Like a year ago, there's a picture of us. It was kind of a comical thing, but it was a reality. We had a miner with a double jack. And those who don't know a double jack, it's a sled jammer. We had a miner on a grizzly breaking rocks by hand. Today you come to Galena and what you see is a much more modern mine with new equipment, with rock breakers throughout, five new grizzlies. What it allows us to do is it allows us to load our cars in about 25 seconds. We were using a scoop tram to side load dump every car.

Every tram, every car that would come in, we'd come in with a bucket, load it with a scoop. Now the train drives underneath a chute. That chute opens up, 20 seconds, the car is filled. It fills the next car. We don't need that scoop. We don't need the operator. The train is gone.

All these efficiencies with the shaft, improving the grizzlies, putting in the rock breakers, putting in the long haul, those are our future. Our mine is going to be 70% long haul. The 5Moz that was accomplished, that's certainly step one. We're really looking forward to what we can accomplish in the future with all of the add-ins.

Matt (4:10)

Well, I'm interested in this because, look, you can inherit what you inherited and you've come up with a much more efficient mine plan for sure. But you set yourself some targets. You're breaking your own records, I get it, but you set yourself some, with three issues of your guidance for this year, first half, was that as strong as it could have been, should have been, and is it a case of playing catch up with these efficiencies which you're implementing now?