TORONTO - Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS), a mining company with a portfolio of assets in North America, announced today that it will acquire the remaining 40% interest in the Galena Complex in Idaho, consolidating its ownership. The transaction involves a binding agreement with affiliates of Eric Sprott and Paul Andre Huet, who will become Chairman and CEO of the company post-acquisition. Concurrently, Americas has arranged a private placement financing deal to raise approximately C$40 million.
The Galena Complex is one of North America's largest high-grade, underground silver mines, with a history of producing over 240 million ounces of silver. The consolidation aims to optimize and potentially expand operations by utilizing existing infrastructure. The transaction is also expected to improve Americas' balance sheet, with the financing proceeds intended for debt restructuring, covering transaction expenses, and advancing the Galena mining operations.
Paul Andre Huet, with a successful history in mining operations, is poised to lead Americas following the acquisition closure. Eric Sprott will become the largest shareholder, endorsing the company's growth potential.
The terms of the definitive agreement include a payment of 170 million Americas common shares and US$10 million in cash to Sprott's owners. Additionally, Americas will provide monthly silver deliveries to Sprott's owners for 36 months starting January 2026.
Americas also plans a non-brokered private placement to raise up to C$4 million for bridge financing purposes, which is not conditional on the other transactions. The acquisition and financing deals require approval from Americas' shareholders, with a meeting expected in December 2024, and regulatory approvals, including from the Toronto Stock Exchange and NYSE American Exchange.
Upon completion, existing Americas shareholders will own approximately 53% of the company, with Eric Sprott holding about 22%, participants in the concurrent financing about 19%, and management and directors around 6%.
The acquisition is anticipated to close before the end of the year, enhancing the company's leadership and governance with new members from Karora's senior executive team and Board of Directors.
The announcement is based on a press release statement and is intended for distribution in the United States.
InvestingPro Insights
Americas Gold and Silver Corporation's strategic move to acquire the remaining 40% interest in the Galena Complex aligns with several key financial indicators. According to InvestingPro data, the company's revenue growth has been robust, with a 10.65% increase over the last twelve months as of Q2 2024, and an even stronger 13.76% growth in the most recent quarter. This growth trajectory suggests that the consolidation of the Galena Complex could further boost the company's revenue streams.
The company's financial health is also reflected in its profitability over the last twelve months, as highlighted by one of the InvestingPro Tips. This profitability, combined with the company's impressive gross profit margin of 100% for the last twelve months ending Q2 2024, indicates strong operational efficiency that could be further enhanced through the full ownership of the Galena Complex.
Another notable InvestingPro Tip reveals that Americas Gold and Silver is trading near its 52-week high, with the price at 98.76% of its 52-week peak. This market performance, along with a substantial year-to-date price total return of 21.09%, suggests investor confidence in the company's strategic direction and growth potential.
For investors seeking more comprehensive insights, InvestingPro offers additional tips and detailed metrics to further evaluate Americas Gold and Silver's financial position and market performance.
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