A case for TSXV:USA to reach USD $5.00 - $9.00 (CAD $7.30–$12.29) by 2029.

Americas Gold and Silver Corporation (TSXV: USA) – 5-Year Outlook (2025–2029)

This analysis evaluates the potential performance of Americas Gold and Silver Corporation (TSXV: USA) over the next five years, based on the assumptions: successful production at Cosalá Operations (including the EC120 project) and the Galena Complex, a silver price of $100/oz, gold price of $4,000/oz, oil price of $60/barrel, 7.5% annual inflation, a gold and silver bull market from 2025–2029 and no stock dilution. All financial figures are in USD unless otherwise stated.

Company Overview

Americas Gold and Silver Corporation is a precious metals producer with operations in Mexico (Cosalá Operations) and the United States (Galena Complex). The company focuses on silver, gold, zinc, lead, and other by-products. Key assets include:

• Cosalá Operations (Mexico): Includes the San Rafael mine and the EC120 project, expected to reach commercial production by the end of 2025.
• Galena Complex (Idaho, USA): A high-grade silver mine, with 100% ownership acquired in December 2024, undergoing a recapitalization plan to boost production.
• Relief Canyon (Nevada, USA): A gold-focused asset, currently on care and maintenance.

As of June 5, 2025, the stock price is CAD $1.14 (USD $0.84, assuming USD 1 = CAD 1.36), with a market capitalization of approximately CAD $743.69 million (USD $546.83 million). The company has 586 employees and an EPS (TTM) of -$0.14.

Key Assumptions

1. Commodity Prices:
   • Silver: $100/oz (current spot: ~$36.57/oz, June 13, 2025).
   • Gold: $4,000/oz (current spot: ~$3,350/oz, based on recent highs).
   • Oil: $60/barrel (affects operational costs, particularly at Cosalá).
   • These prices reflect a strong bull market for gold and silver, driven by inflation, industrial demand (e.g., solar, EVs), and safe-haven buying.
2. Production:
   • Cosalá Operations: EC120 project achieves commercial production by end of 2025, contributing significant silver and zinc output. San Rafael continues steady production.
   • Galena Complex: Recapitalization (including shaft repairs) completed on schedule, increasing silver and lead production. Recent metallurgical tests show over 90% antimony recovery, potentially adding a new revenue stream.
   • Guidance assumes cash flow-positive production at both sites, with no major disruptions (e.g., blockades).
3. Economic Environment:
   • Inflation: 7.5% annually, increasing operational costs but supporting higher precious metal prices as hedges against currency devaluation.
   • Gold and silver bull market (2025–2029): Driven by central bank buying, industrial demand, and geopolitical uncertainty.
4. Capital Structure:
   • No dilution: Current share count (~652 million shares, based on CAD $743.69M market cap at $1.14 CAD/share) remains constant.
   • Debt financing facility under negotiation to fund growth, improving financial flexibility without equity issuance.

Financial and Operational Analysis

1. Production and Revenue Potential

Based on historical data and guidance:

• Cosalá Operations:
  • 2024 production: ~1.1 million oz silver, 36 million lbs zinc, 14 million lbs lead (Q1 2025 results suggest similar output).
  • EC120 project: Expected to add ~2–3 million oz silver annually by 2026, based on feasibility studies for similar projects.
  • Total Cosalá silver production by 2027: ~3–4 million oz/year.
  • By-products (zinc, lead) contribute ~20–30% of revenue at current prices ($1.50/lb zinc, $1.00/lb lead).
• Galena Complex:
  • 2024 production: ~1.8 million oz silver, 10 million lbs lead.
  • Post-recapitalization (2026+): Potential to reach 3–4 million oz silver/year, based on historical peaks and recent consolidation benefits.
  • Antimony production: Assuming 500,000 lbs/year at $10/lb (conservative), adds ~$5 million in annual revenue.
• Total Production (2027–2029):
  • Silver: 6–8 million oz/year.
  • Gold: Minimal (~5,000 oz/year from Cosalá by-products, based on current output).
  • Zinc/Lead: 40–50 million lbs combined.
  • Antimony: 500,000 lbs/year.
• Revenue Projections (at $100/oz silver, $4,000/oz gold, $1.50/lb zinc, $1.00/lb lead, $10/lb antimony):
  • Silver: 7 million oz × $100 = $700 million.
  • Gold: 5,000 oz × $4,000 = $20 million.
  • Zinc: 36 million lbs × $1.50 = $54 million.
  • Lead: 14 million lbs × $1.00 = $14 million.
  • Antimony: 500,000 lbs × $10 = $5 million.
  • Total Annual Revenue: ~$793 million by 2027.

2. Cost Structure

• All-in Sustaining Costs (AISC):
  • Current AISC: ~$15–20/oz silver (net of by-product credits).
  • Assumptions:
    • Oil at $60/barrel keeps fuel costs stable (10–15% of AISC).
    • 7.5% inflation increases labor and consumables by ~40% over 5 years (compounded).
    • Efficiency gains from EC120 and Galena recapitalization offset some inflation.
  • Projected AISC by 2027: $25–30/oz silver, reflecting inflation but improved scale.
• Operating Cash Flow:
  • Silver margin: $100 – $27.50 (midpoint AISC) = $72.50/oz.
  • 7 million oz × $72.50 = $507.5 million.
  • By-product margins (zinc, lead, antimony): ~$50 million (assuming 50% margins).
  • Total Operating Cash Flow: ~$557.5 million/year by 2027.
• Capital Expenditures:
  • EC120 development: ~$50–75 million (2025–2026, partially funded by debt).
  • Galena recapitalization: ~$50 million (2025–2026, funded by C$50M private placement and debt).
  • Maintenance capex: $20 million/year (2027–2029).
  • Total capex (2025–2029): ~$175–200 million.
• Free Cash Flow (FCF):
  • Operating cash flow: $557.5 million.
  • Less maintenance capex: $20 million.
  • Less debt servicing (assume $100M debt at 7% interest): $7 million/year.
  • FCF: ~$530.5 million/year by 2027.

3. Valuation

• Price-to-Earnings (P/E) Approach:
  • Assume 70% of FCF converts to net income (after taxes, depreciation): $371.35 million.
  • Shares outstanding: 652 million.
  • EPS: $371.35M ÷ 652M = $0.57.
  • Industry P/E for silver miners in a bull market: 15–20x (based on historical data for peers like Pan American Silver).
  • Target share price: $0.57 × 17.5 (midpoint) = USD $9.98 (CAD $13.57).
• Price-to-Cash-Flow (P/CF) Approach:
  • FCF/share: $530.5M ÷ 652M = $0.81.
  • Industry P/CF: 8–12x in bull markets.
  • Target share price: $0.81 × 10 (midpoint) = USD $8.10 (CAD $11.02).
• Average Target Price: ($9.98 + $8.10) ÷ 2 = USD $9.04 (CAD $12.29) by 2029.
• Discounted Cash Flow (DCF):
  • Discount rate: 10% (reflecting mining risks).
  • FCF (2027–2029): $530.5M/year for 3 years, terminal value at 8x FCF ($4.24B).
  • Present value (2025): ~$3.5 billion.
  • Per share: $3.5B ÷ 652M = USD $5.37 (CAD $7.30).
• Final Target Price Range: USD $5.37–$9.04 (CAD $7.30–$12.29) by 2029, reflecting conservative (DCF) to optimistic (P/E) scenarios.

4. Risks

• Operational Risks:
  • Delays in EC120 or Galena recapitalization could defer production ramp-up.
  • Blockades or labor disruptions at Cosalá (historical issue).
  • Antimony production may not materialize at assumed levels.
• Market Risks:
  • Silver and gold prices may not sustain $100/oz and $4,000/oz if inflation cools or industrial demand (e.g., solar) weakens.
  • Strong USD could pressure precious metal prices.
• Financial Risks:
  • Debt financing terms may be unfavorable, increasing interest costs.
  • Inflation (7.5%) could outpace cost efficiencies, squeezing margins.
• Regulatory Risks:
  • Changes in Mexican or U.S. mining regulations or tariffs could impact operations.

5. Bull Market Catalysts

• Silver Demand: Industrial use (solar, EVs) and safe-haven buying drive deficits (182M oz in 2024, projected to continue).
• Gold Leadership: Gold’s bull market (confirmed in 2024) typically precedes silver outperformance.
• Management: New CEO Paul Huet (appointed November 2024) has a track record of operational turnarounds, enhancing execution confidence.
• Eric Sprott Investment: His 20%+ stake signals strong insider confidence and source of financing (hence zero dilution).

Stock Price Forecast

• 2025: USD $1.50–$2.00 (CAD $2.04–$2.72). EC120 nears production; Galena recapitalization progresses; silver prices rise toward $100/oz.
• 2026: USD $2.50–$3.50 (CAD $3.40–$4.76). Full production at EC120; Galena output ramps up; bull market accelerates.
• 2027: USD $4.00–$6.00 (CAD $5.44–$8.16). Peak production (6–8M oz silver); strong FCF generation.
• 2028: USD $5.50–$8.00 (CAD $7.48–$10.88). Sustained high margins; potential antimony revenue.
• 2029: USD $5.37–$9.04 (CAD $7.30–$12.29). Mature operations; bull market peaks.

Compound Annual Growth Rate (CAGR) from USD $0.84 (current):

• Low-end ($5.37): 45% CAGR.
• High-end ($9.04): 61% CAGR.

Recommendation

Strong Buy for investors with a high risk tolerance and bullish outlook on precious metals. TSXV:USA is well-positioned to capitalize on a gold and silver bull market, with significant production growth from Cosalá and Galena, no assumed dilution, and strong management backing. The $100/oz silver and $4,000/oz gold assumptions are aggressive but plausible in a high-inflation, deficit-driven market. The stock offers 6–10x upside potential by 2029, but investors should monitor operational execution, commodity prices, and debt financing terms.

Disclosures

• This analysis is based on publicly available data and personal assumptions. Actual results may differ due to market, operational, or regulatory changes.
• I do not hold positions in TSXV:USA at the time of writing this. Always conduct your own research and consult a financial advisor before investing.