Americas Gold and Silver Corp (USAS): A High-Conviction Play in the Silver Surge

The silver market is undergoing a transformation driven by industrial demand, green energy transitions, and inflationary pressures. Amid this backdrop, Americas Gold and Silver Corp (USAS) stands out as a high-conviction opportunity for investors willing to navigate near-term volatility. While the company reported a $48.9 million net loss in 2024, its operational turnaround, strategic financing, and alignment with rising silver demand position it as a compelling long-term play.

Operational Turnaround: From Decline to Growth

Americas Gold and Silver's two core assets—the Galena Complex in Idaho and the Cosalá Operations in Mexico—are central to its revival. In Q2 2025, the company achieved a 36% year-over-year increase in consolidated silver production (689,000 ounces), driven by infrastructure upgrades at Galena and progress on the EC120 Project at Cosalá.

At Galena, the company is addressing long-standing bottlenecks. A $100 million senior secured term loan, with the first $50 million tranche received in June 2025, is funding critical upgrades, including a new hoist motor for the #3 shaft and advanced metallurgical testwork achieving 90% antimony recovery. This positions the company to become the sole U.S. antimony producer, unlocking a new revenue stream from a strategic by-product used in flame retardants and batteries.

Meanwhile, the EC120 Project at Cosalá is transitioning to commercial production. Pre-sales of high-grade silver-copper concentrate contributed $8.3 million in Q2 2025 revenue, with full production expected by late 2025. The project's potential to deliver 211,000 ounces of silver in Q2 alone underscores its scalability.

Strategic Financing: Fueling Growth Without Dilution

A key differentiator for USAS is its disciplined approach to capital. The company secured a $15 million Credit and Offtake Agreement with Trafigura in August 2024, ensuring liquidity for the EC120 Project. Additionally, a $100 million term loan facility with SAF Group provides flexibility to fund Galena's expansion without diluting shareholders.

These moves have already strengthened the balance sheet: liabilities were reduced by $35 million since consolidating Galena, and working capital improved from a $28.7 million deficit in Q4 2024 to a $10.4 million surplus in Q2 2025. The company's ability to secure non-dilutive financing while advancing high-grade projects is rare in the junior mining sector.

Rising Silver Demand: A Tailwind for USAS

Silver's role in renewable energy (solar panels, electric vehicles) and electronics is accelerating demand. With global silver prices averaging $34.22/ounce in Q2 2025 (up from $25.50 in 2023), USAS is well-positioned to capitalize on higher realized prices. The company's focus on silver-copper-antimony polymetallic production further insulates it from price volatility in single commodities.

Moreover, USAS's recent multi-metal offtake agreement with Ocean Partners ensures processing of Galena's concentrates at Teck's Trail Operations, enhancing by-product recovery and reducing operational risks. This strategic partnership is critical for scaling production and optimizing margins.

Near-Term Challenges and Long-Term Potential

Despite progress, USAS faces near-term hurdles. Cash costs per silver equivalent ounce rose to $26.64 in Q2 2025, driven by lower zinc/lead production and higher capital expenditures. The company also reported a $15.1 million net loss for the quarter, reflecting non-recurring expenses and transition costs. However, these are temporary setbacks in a multi-year turnaround.

The EC120 Project's ramp-up, Galena's shaft upgrades, and antimony monetization are expected to drive sustained production growth starting in 2026. With $61.7 million in cash reserves and a debt facility in place, USAS has the liquidity to navigate this phase.

Investment Thesis: A High-Risk, High-Reward Play

For investors with a 3–5 year horizon, USAS offers a compelling risk/reward profile. The company's operational execution, strategic financing, and alignment with secular silver demand justify a long-term position. While near-term losses and volatility are likely, the path to profitability is clear:

1. Galena's revitalization will unlock higher-grade ore and by-product value.
2. EC120's commercial production will boost silver output and margins.
3. Antimony monetization adds a unique revenue stream with limited competition.

However, investors should monitor commodity price fluctuations and exploration drilling results at Galena's 034 vein (which returned 983 g/t silver over 3.4 meters). A successful delineation phase could justify a re-rating of the asset.

Conclusion: Positioning for the Silver Surge

Americas Gold and Silver Corp is not a short-term trade—it's a high-conviction bet on the future of silver. By executing its operational turnaround and leveraging strategic partnerships, USAS is poised to transform from a cash-burner into a growth-driven producer. For those willing to ride through the near-term noise, the rewards could be substantial as the company emerges as a key player in the global silver supply chain.

Investment Advice: Buy USAS for long-term growth, with a stop-loss at $1.20/share to mitigate downside risk. Revisit the position in early 2026 for potential profit-taking if production targets are met.