Americas Gold and Silver

October 9, 2024

Americas Gold and Silver Corporation Announces Upsize of Previously Announced Private Placement of Subscription Receipts to C$45 Million

TORONTO, ONTARIO - October 9, 2024 - Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas” or the “Company”) refers to its previous news release in which it announced, among other things, a binding agreement (the “Definitive Agreement”) with an affiliate of Eric Sprott (“Sprott”) and Paul Andre Huet under which Americas will acquire the remaining 40% interest in the Galena Complex (“Galena”) in Idaho, USA to consolidate the current Galena joint venture (the “Acquisition”). The Company also announced that it entered into an agreement to complete a bought deal private placement financing of subscription receipts of the Company (the “Subscription Receipts”) to raise gross proceeds of C$40 million at an issue price of C$0.40 per Subscription Receipt (the “Issue Price”) (the “Concurrent Financing”).

The Company is pleased to announce that it has entered into an amending agreement with Cormark Securities Inc. and TD Securities Inc., as joint bookrunners on behalf of a syndicate of underwriters (collectively, the “Underwriters”) to upsize the Concurrent Financing. In connection with the upsized offering, the Company will issue an additional 12,500,000 Subscription Receipts for a total of 112,500,000 Subscription Receipts at the Issue Price for aggregate gross proceeds to the Company of C$45 million. Americas has also granted the Underwriters an option to purchase up to an additional 12,500,000 Subscription Receipts at the Issue Price for additional gross proceeds of up to C$5 million (the “Option”) which will be exercisable, in whole or in part, at any time prior to closing of the Concurrent Financing. If the Option is exercised in full, the total gross proceeds of the Concurrent Financing will be C$50 million.

Each Subscription Receipt shall entitle the holder thereof to receive, upon satisfaction or waiver of the Escrow Release Conditions (as defined below), without payment of additional consideration, one common share in the capital of Americas (each, an “Americas Share”), subject to adjustments and in accordance with the terms and conditions of a subscription receipt agreement to be entered into upon closing of the Concurrent Financing (the “Subscription Receipt Agreement”). For the purposes of the Concurrent Financing and pursuant to the Subscription Receipt Agreement, the escrow release conditions include: (a) the satisfaction or waiver of all conditions precedent to the completion of the Acquisition in accordance with the Definitive Agreement, other than the issuance of the share consideration and the cash consideration; and (b) the receipt of all required board, shareholder, regulatory and exchange approvals in connection with the Concurrent Financing and Acquisition (the “Escrow Release Conditions”).

The gross proceeds from the sale of the Subscription Receipts, less certain expenses and fees of the Underwriters, will be deposited and held in escrow pending the satisfaction or waiver of the Escrow Release Conditions by the Company’s escrow agent, as subscription receipt and escrow agent under the Subscription Receipt Agreement.

If a Termination Event (as defined below) occurs, the escrowed proceeds of the Concurrent Financing will be returned on a pro rata basis to the holders of Subscription Receipts, together with the interest earned thereon, and the Subscription Receipts will be cancelled and have no further force and effect, all in accordance with the terms of the Subscription Receipt Agreement. For the purposes of the Concurrent Financing and pursuant to the Subscription Receipt Agreement, a “Termination Event” includes: (a) the Escrow Release Conditions having not been satisfied or waived prior to 5:00 p.m. (Toronto time) on February 27, 2025; and (b) the termination of the Definitive Agreement in accordance with its terms. The Concurrent Financing is currently expected to close on or about October 30, 2024, and is subject to TSX, NYSE American and other necessary regulatory approvals. Following completion of the Acquisition, the net proceeds from the Concurrent Financing are expected to be used for growth initiatives at the Galena Complex, the payment of the cash consideration to Sprott, the repayment of certain of the Company’s existing indebtedness, the payment of transaction expenses and for working capital and general corporate purposes.

The Subscription Receipts will be offered by way of: (a) private placement in each of the provinces of Canada pursuant to applicable prospectus exemptions under applicable Canadian securities laws; (b) in the United States or to, or for the account or benefit of U.S. persons, by way of private placement pursuant to the exemptions from registration provided for under Rule 506(b) and/or Section 4(a)(2) of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”); and (c) in jurisdictions outside of Canada and the United States as are agreed to by Americas and the Underwriters on a private placement or equivalent basis.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States, Canada or in any other jurisdiction where such offer, solicitation or sale is unlawful. The securities have not been and will not be registered under the U.S. Securities Act, or under any securities laws of any state of the United States, and may not be offered or sold, directly or indirectly, or delivered within the United States or to, or for the account or benefit of, a U.S. person or person in the United States, except in certain transactions exempt from the registration requirements of the U.S. Securities Act and any applicable securities laws of any state of the United States. “United States” and “U.S. person” are as defined in Regulation S under the U.S. Securities Act.

https://americas-gold.com/news-releases/2024/...iption-receipts-to-c/
 

October 9, 2024

Americas Gold and Silver to Consolidate the Galena Complex in Transaction with Eric Sprott; Paul Andre Huet to be Appointed Chairman and Chief Executive Officer

TORONTO, ONTARIO - October 9, 2024 - Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas” or the “Company”) is pleased to announce that it has entered into a binding agreement (the "Definitive Agreement”) with an affiliate of Eric Sprott (“Sprott”) and Paul Andre Huet under which Americas will acquire the remaining 40% interest in the Galena Complex (“Galena”) in Idaho, USA to consolidate the current Galena joint venture (the “Acquisition”).

Upon the closing of the Acquisition, Paul Andre Huet will be appointed Chairman and Chief Executive Officer of the Company. Darren Blasutti will remain as President.

The Company also announces that it has entered into an agreement to complete a bought deal private placement financing of subscription receipts of the Company (the “Subscription Receipts”) to raise gross proceeds of approximately C$40 million at an issue price of C$0.40 per Subscription Receipt (the “Concurrent Financing”).

The Company is also in advanced discussions with numerous lenders with respect to a debt financing to restructure Americas balance sheet and is in the process of evaluating indicative terms received. It is anticipated that the Company will enter into exclusive negotiations in the near-term with the intention of replacing existing debt facilities.

Key Transaction Highlights:

   Consolidation of Galena: Galena is located within the prolific Silver Valley in Idaho and is one of the largest underground, high-grade, operating silver mines in North America, having produced over 240 million ounces of silver with peak production in excess of five million ounces of silver per annum in the early 2000s. Consolidation of the joint venture will streamline operational and financial decision making, providing for a focused vision at Galena centered around optimizing and expanding the operation through the utilization of existing infrastructure. Galena 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 success both underground and potentially at surface where limited exploration drilling has been completed.
   Improved balance sheet: Proceeds from the Concurrent Financing and anticipated debt refinancing are expected to be utilized to deleverage the Company’s balance sheet, replace higher cost debt instruments, improve the Company’s overall cost of capital, cover transaction expenses, and importantly, advance a fully-funded plan to optimize and expand the Galena mining operations.
   Expanded leadership: Paul Andre Huet will be appointed Chief Executive Officer and Chairman of the Company following the close of the Acquisition. Mr. Huet has a proven track record, particularly in optimizing underground mines, and was most recently Chair and Chief Executive Officer of Karora Resources Inc. (“Karora”) prior to its business combination with Westgold Resources Limited, which valued Karora at over A$1.3 billion. Prior to Karora, he transformed Klondex Mines Ltd. (“Klondex”) from a single asset producer with no milling infrastructure to a multi-mine, multi-mill producer which was eventually sold to Hecla Mining Company for over C$600 million.
   Enhanced leverage to silver: With the recently announced project funding for the EC120 Project at the Cosalá Operations in Mexico and the consolidation of Galena, the Company’s production, operating margins and near-term growth potential are expected to steadily increase. Americas anticipates that approximately 80% of its revenue will be generated from silver starting in the second half of 2025, providing investors with an attractive North American-focused silver investment vehicle with leading exposure to silver.
   Eric Sprott to become cornerstone investor: Eric Sprott will become the largest shareholder of the Company, continuing his long-term support and endorsement of the substantial value potential of Galena. Eric Sprott was a cornerstone investor in Karora during the successful turnaround of operations by Mr. Huet through to the eventual sale of the Company.
   Attractive value proposition: Future execution related to the operational improvement and expansion at Galena as well as the development of EC120 at the Cosalá Operations are expected to enhance the value proposition of the Company and support a future re-rating of its shares.

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https://americas-gold.com/news-releases/2024/...-to-be-appointed-ceo/
 

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https://americas-gold.com/

 

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