Form 6-K Americas Gold & Silver For: May 17

May 17, 2021 7:01 AM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
  
 
For the month of May 2021
 
 
Commission File Number 001-37982
 
 
AMERICAS GOLD AND SILVER CORPORATION
(Translation of registrant’s name into English)
 
145 King Street West, Suite 2870
Toronto, Ontario, Canada
M5H 1J8
(Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F
 
Form 20-F
   ☐
Form 40-F
   ☒
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):   ☐
 
 
Note:  Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    ☐ 
 
 
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

INCORPORATION BY REFERENCE

Exhibits 99.1 and 99.2 to this Form 6-K of Americas Gold and Silver Corporation (the “Company”) are hereby incorporated by reference into the Registration Statement on Form F-10 (File No. 333-240504) of the Company, as amended or supplemented.

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
AMERICAS GOLD AND SILVER CORPORATION
 
Date:   May 16, 2021
__/s/ Peter McRae__________
Peter McRae
Chief Legal Officer and Senior Vice President Corporate
Affairs



INDEX TO EXHIBITS


99.1            Quarterly Financial Statements



Exhibit 99.1







AMERICAS GOLD AND SILVER CORPORATION

Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)







Americas Gold and Silver Corporation
Condensed interim consolidated statements of financial position
(In thousands of U.S. dollars, unaudited)




 
 
March 31,
   
December 31,
 
As at
 
2021
   
2020
 
Assets
           
Current assets
           
Cash and cash equivalents
 
$
4,075
   
$
4,705
 
Trade and other receivables (Note 5)
   
5,458
     
5,102
 
Inventories (Note 6)
   
16,529
     
8,069
 
Prepaid expenses
   
1,617
     
2,200
 
 
 
$
27,679
   
$
20,076
 
Non-current assets
               
Restricted cash
   
4,077
     
4,082
 
Inventories (Note 6)
   
1,339
     
1,339
 
Property, plant and equipment (Note 7)
   
173,902
     
259,319
 
Total assets
 
$
206,997
   
$
284,816
 
 
               
Liabilities
               
Current liabilities
               
Trade and other payables
 
$
17,829
   
$
21,131
 
Deferred revenue (Note 8)
   
4,051
     
3,972
 
Derivative instruments (Note 9)
   
-
     
4,568
 
Loan payable
   
2,377
     
5,564
 
Glencore pre-payment facility
   
2,112
     
2,862
 
Government loan
   
1,515
     
947
 
 
   
27,884
     
39,044
 
Non-current liabilities
               
Other long-term liabilities
   
3,582
     
4,619
 
Deferred revenue (Note 8)
   
18,393
     
19,350
 
Convertible debenture (Note 9)
   
-
     
9,953
 
Promissory note
   
5,000
     
5,000
 
Government loan
   
2,984
     
3,552
 
Post-employment benefit obligations
   
7,915
     
13,398
 
Decommissioning provision
   
7,594
     
8,279
 
Deferred tax liabilities (Note 16)
   
456
     
459
 
Total liabilities
   
73,808
     
103,654
 
 
               
Equity
               
Share capital (Note 10)
   
388,956
     
350,707
 
Equity reserve
   
43,234
     
42,378
 
Foreign currency translation reserve
   
7,043
     
6,842
 
Deficit
   
(318,667
)
   
(230,253
)
Attributable to shareholders of the Company
   
120,566
     
169,674
 
Non-controlling interests (Note 12)
   
12,623
     
11,488
 
Total equity
 
$
133,189
   
$
181,162
 
 
               
Total liabilities and equity
 
$
206,997
   
$
284,816
 

Going concern (Note 2), Contingencies (Note 19), Subsequent events (Note 20)

The accompanying notes are an integral part of the condensed interim consolidated financial statements.


Page |1

Americas Gold and Silver Corporation
Condensed interim consolidated statements of loss and comprehensive loss
(In thousands of U.S. dollars, except share and per share amounts, unaudited)


 
 
For the three-month period ended
 
 
 
March 31,
   
March 31,
 
 
 
2021
   
2020
 
 
           
Revenue (Note 13)
 
$
10,186
   
$
7,265
 
 
               
Cost of sales (Note 14)
   
(37,484
)
   
(9,835
)
Depletion and amortization (Note 7)
   
(3,925
)
   
(2,315
)
Care and maintenance costs
   
(2,133
)
   
(945
)
Corporate general and administrative (Note 15)
   
(2,119
)
   
(1,908
)
Transaction costs
   
-
     
(23
)
Exploration costs
   
(1,508
)
   
(1,400
)
Accretion on decommissioning provision
   
(43
)
   
(59
)
Interest and financing expense
   
(726
)
   
(92
)
Foreign exchange gain (loss)
   
(221
)
   
743
 
Impairment to property, plant and equipment (Note 7)
   
(55,623
)
   
-
 
Gain on derivative instruments (Note 9 and 17)
   
1,819
     
3,998
 
Loss before income taxes
   
(91,777
)
   
(4,571
)
Income tax recovery (expense) (Note 16)
   
(23
)
   
426
 
Net loss
 
$
(91,800
)
 
$
(4,145
)
 
               
Attributable to:
               
Shareholders of the Company
 
$
(91,127
)
 
$
(2,480
)
Non-controlling interests
   
(673
)
   
(1,665
)
Net loss
 
$
(91,800
)
 
$
(4,145
)
 
               
Other comprehensive loss
               
Items that will not be reclassified to net loss
               
Remeasurement of post-employment benefit obligations
 
$
4,521
   
$
(3,142
)
Items that may be reclassified subsequently to net loss
               
Foreign currency translation reserve
   
201
     
171
 
Other comprehensive income (loss)
   
4,722
     
(2,971
)
Comprehensive loss
 
$
(87,078
)
 
$
(7,116
)
 
               
Attributable to:
               
Shareholders of the Company
 
$
(88,213
)
 
$
(4,194
)
Non-controlling interests
   
1,135
     
(2,922
)
Comprehensive loss
 
$
(87,078
)
 
$
(7,116
)
 
               
Loss per share attributable to shareholders of the Company
               
Basic and diluted
   
(0.72
)
   
(0.03
)
 
               
Weighted average number of common shares
               
outstanding
               
Basic and diluted (Note 11)
   
127,270,944
     
87,819,387
 

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

Page |2


Americas Gold and Silver Corporation
Condensed interim consolidated statements of changes in equity
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, except share amounts in thousands of units, unaudited)


 
 
Share capital
         

         
Attributable
   

       
 
 
Common
   
Preferred
   

   
Foreign
currency
         
to shareholders
   
Non-
   

 
 
 
Shares
   
Amount
   
Shares
   
Amount
   
Equity
reserve
   
translation
reserve
   
Deficit
   
of the Company
   
controlling
interests
   
Total
equity
 
 
                                                           
Balance at January 1, 2021
   
117,975
   
$
350,707
     
-
   
$
-
   
$
42,378
   
$
6,842
   
$
(230,253
)
 
$
169,674
   
$
11,488
   
$
181,162
 
Net loss for the period
   
-
     
-
     
-
     
-
     
-
     
-
     
(91,127
)
   
(91,127
)
   
(673
)
   
(91,800
)
Other comprehensive income for the period
   
-
     
-
     
-
     
-
     
-
     
201
     
2,713
     
2,914
     
1,808
     
4,722
 
January bought deal public offering
   
10,253
     
25,024
     
-
     
-
     
-
     
-
     
-
     
25,024
     
-
     
25,024
 
Conversion of convertible debenture
   
4,673
     
12,844
     
-
     
-
     
-
     
-
     
-
     
12,844
     
-
     
12,844
 
Common shares issued
   
100
     
275
     
-
     
-
     
-
     
-
     
-
     
275
     
-
     
275
 
Share-based payments
   
-
     
-
     
-
     
-
     
886
     
-
     
-
     
886
     
-
     
886
 
Exercise of options
   
40
     
106
     
-
     
-
     
(30
)
   
-
     
-
     
76
     
-
     
76
 
Balance at March 31, 2021
   
133,041
   
$
388,956
     
-
   
$
-
   
$
43,234
   
$
7,043
   
$
(318,667
)
 
$
120,566
   
$
12,623
   
$
133,189
 
 
                                                                               
Balance at January 1, 2020
   
86,607
   
$
284,512
     
104
   
$
161
   
$
38,061
   
$
6,695
   
$
(203,138
)
 
$
126,291
   
$
12,722
   
$
139,013
 
Net loss for the period
   
-
     
-
     
-
     
-
     
-
     
-
     
(2,480
)
   
(2,480
)
   
(1,665
)
   
(4,145
)
Other comprehensive income (loss) for the period
   
-
     
-
     
-
     
-
     
-
     
171
     
(3,142
)
   
(2,971
)
   
-
     
(2,971
)
Contribution from non-controlling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
3,091
     
3,091
 
At-the-market offering
   
7,926
     
12,424
     
-
     
-
     
-
     
-
     
-
     
12,424
     
-
     
12,424
 
Share-based payments
   
-
     
-
     
-
     
-
     
851
     
-
     
-
     
851
     
-
     
851
 
Conversion of preferred shares
   
104
     
161
     
(104
)
   
(161
)
   
-
     
-
     
-
     
-
     
-
     
-
 
Balance at March 31, 2020
   
94,637
   
$
297,097
     
-
   
$
-
   
$
38,912
   
$
6,866
   
$
(208,760
)
 
$
134,115
   
$
14,148
   
$
148,263
 

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

Page |3


Americas Gold and Silver Corporation
Condensed interim consolidated statements of cash flows
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unaudited)


 
 
March 31,
   
March 31,
 
 
 
2021
   
2020
 
Cash flow generated from (used in)
           
 
           
Operating activities
           
Net loss for the period
 
$
(91,800
)
 
$
(4,145
)
Adjustments for the following items:
               
Depletion and amortization
   
3,925
     
2,315
 
Income tax expense (recovery)
   
23
     
(426
)
Accretion and decommissioning costs
   
43
     
59
 
Share-based payments
   
886
     
756
 
Provision on other long-term liabilities
   
13
     
25
 
Deferred costs on convertible debenture
   
47
     
5
 
Deferred revenue
   
(1,032
)
   
5,000
 
Interest and financing expense
   
387
     
-
 
Cash received from bond on decommissioning costs
   
-
     
(3
)
Net charges on post-employment benefit obligations
   
(962
)
   
(75
)
Inventory write-downs
   
27,379
     
673
 
Impairment to property, plant and equipment
   
55,623
     
-
 
Gain on derivative instruments
   
(1,724
)
   
(3,445
)
 
   
(7,192
)
   
739
 
Changes in non-cash working capital items:
               
Trade and other receivables
   
(356
)
   
3,068
 
Inventories
   
(6,573
)
   
-
 
Prepaid expenses
   
583
     
440
 
Trade and other payables
   
(2,775
)
   
(2,763
)
Net cash generated from (used in) operating activities
   
(16,313
)
   
1,484
 
 
               
Investing activities
               
Expenditures on property, plant and equipment
   
(3,157
)
   
(4,668
)
Development costs on Relief Canyon Mine
   
(1,432
)
   
(14,885
)
Net cash used in investing activities
   
(4,589
)
   
(19,553
)
 
               
Financing activities
               
Repayments to Glencore pre-payment facility
   
(750
)
   
(929
)
Lease payments
   
(819
)
   
(747
)
At-the-market offering
   
-
     
12,814
 
January bought deal public offering
   
25,024
     
-
 
Loan payable
   
(3,466
)
   
-
 
Proceeds from exercise of options
   
76
     
-
 
Contribution from non-controlling interests
   
-
     
3,091
 
Net cash generated from financing activities
   
20,065
     
14,229
 
 
               
Effect of foreign exchange rate changes on cash
   
207
     
201
 
Decrease in cash and cash equivalents
   
(630
)
   
(3,639
)
Cash and cash equivalents, beginning of period
   
4,705
     
19,998
 
Cash and cash equivalents, end of period
 
$
4,075
   
$
16,359
 
 
               
Cash and cash equivalents consist of:
               
Cash
 
$
4,075
   
$
16,359
 
Term deposits
   
-
     
-
 
 
 
$
4,075
   
$
16,359
 
 
               
Interest paid during the period
 
$
341
   
$
426
 

The accompanying notes are an integral part of the condensed interim consolidated financial statements.
Page |4


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


1.  Corporate information
 
Americas Gold and Silver Corporation (the “Company") was incorporated under the Canada Business Corporations Act on May 12, 1998 and conducts mining exploration, development and production in the Americas. The address of the Company’s registered office is 145 King Street West, Suite 2870, Toronto, Ontario, Canada, M5H 1J8. The Company’s common shares are listed on the Toronto Stock Exchange under the symbol “USA” and on the New York Stock Exchange American under the symbol “USAS”.

The condensed interim consolidated financial statements of the Company for the three months ended March 31, 2021 were approved and authorized for issue by the Board of Directors of the Company on May 16, 2021.

The Company has been closely monitoring developments in the COVID-19 outbreak declared as a global pandemic on March 11, 2020. Preventive measures to ensure the safety of the Company’s workforce and local communities have been implemented and there have been no outbreaks of COVID-19 at any of the Company’s operations to date. All of the Company’s mining and corporate operations continue to operate with the exception of mining operations in Cosalá halted by an illegal blockade. The Company continues to manage and respond to COVID-19 to mitigate and minimize potential impacts of this global pandemic, in addition to other uncertainties, such as the price of commodities, gold production from the Relief Canyon Mine, and illegal blockade at the Cosalá Operations.
 
2.  Basis of presentation and going concern
 
These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) which the Canadian Accounting Standards Board has approved for incorporation into Part 1 of the Handbook of Chartered Professional Accountants of Canada applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. These condensed interim consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Company’s annual consolidated financial statements as at and for the year ended December 31, 2020. In particular, the Company’s significant accounting policies were summarized in Note 3 of the consolidated financial statements for the year ended December 31, 2020, and further updated in Note 3 of these financial statements, and have been consistently applied in the preparation of these condensed interim consolidated financial statements.

These unaudited condensed interim consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due for the foreseeable future. The Company had a working capital deficit of $0.2 million, including cash and cash equivalents of $4.1 million as at March 31, 2021. During the three-month period ended March 31, 2021, the Company reported a net loss of $91.8 million, consisting of inventory write-downs, and an impairment to property, plant, and equipment of $27.4 million and $55.6 million, respectively. At March 31, 2021, the Company does not have sufficient liquidity on hand to fund its operations for the next twelve months and will require further financing to meet its financial obligations and execute on its business plans at its mining operations.

The Company is progressing the Relief Canyon Mine to full production after declaring commercial production on January 11, 2021, however operational performance has been inconsistent since that time. Differences observed between the modelled (planned) and mined (actual) ore tonnage and carbonaceous material identified in the early phases of the mine plan resulted in significantly lower than previously expected cash flows and gold production at the Relief Canyon Mine. The Company is also attempting to resolve the illegal blockade at the Cosalá Operations that was announced on February 3, 2020.

Continuance as a going concern is dependent upon a company’s ability to achieve profitable operations, obtain adequate equity or debt financing, or, alternatively, dispose of its non-core properties on an advantageous basis, among other things. During 2020 and early 2021, the Company was successful in raising funds through equity offerings, debt arrangements, a convertible debenture, and registered a shelf prospectus in January 2021. The Company announced a $12.5 million CAD convertible debenture on April 29, 2021 (see Note 20) and intends to commence an at-the-market equity offering on the New York Stock Exchange American in May 2021 for gross proceeds of up to $50 million to fund the Company’s planned operations, and believes it will be able to raise additional financing as needed. While it has been successful in the past in obtaining financing for its operations, there is no assurance that it will be able to obtain adequate financing in the future. The ability to raise additional financing, to achieve sustaining production levels at the Relief Canyon Mine, and restart production at the Cosalá Operations in the near term, allowing the Company to generate sufficient operating cash flows, are significant judgments in these consolidated financial statements.
Page |5


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


As a result, several material uncertainties cast significant doubt upon the going concern assumption, including gold  production and related positive cash flows at the Relief Canyon Mine, timing of the restart of mining at the Cosalá Operations, and ability to raise additional funds as necessary to fund these operations and meet obligations as they come due.

These unaudited condensed interim consolidated financial statements do not reflect any adjustments to carrying values of assets and liabilities and the reported expenses and condensed interim consolidated statement of financial position classification that would be necessary should the Company be unable to continue as a going concern.  Such adjustments could be material.
 
3.  Changes in accounting policies and recent accounting pronouncements
 
The following are future changes in accounting policies not yet effective as at March 31, 2021:

(i)            Property, plant and equipment

Amendments to IAS 16 - Property, Plant and Equipment – Proceeds before Intended Use - The standard is amended to prohibit deducting from the cost of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, the Company recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss. The amendments to IAS 16 are effective for annual periods beginning on or after January 1, 2022, with early adoption permitted. The amendments apply retrospectively only to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. The Company is assessing the impact of the amendments on the consolidated financial statements and will not be adopting the amendments early.

The following are new accounting policies, in addition to the significant accounting policies summarized in Note 3 of the consolidated financial statements for the year ended December 31, 2020, adopted effective January 11, 2021 upon commercial production declaration of the Relief Canyon Mine:

(i)            Revenue recognition

The Company recognizes revenue when control of finished gold and silver, shipped in doré form, has transferred to the customer. The sale price is fixed on the date of sale primarily based on the gold and silver spot price in the London spot market.

(ii)            Inventories

Finished goods, in-circuit work in progress, and ore on leach pads are valued at the lower of cost and estimated net realizable value. Cost for in-circuit work in progress and ore on leach pads includes all direct costs incurred in production including direct labour and materials, freight, depreciation and amortization and directly attributable overhead costs determined on a first in, first out method. Net realizable value is calculated as the estimated price at the time of sale based on prevailing and future metal prices less estimated future production costs to convert inventories into saleable form.
 
Page |6

Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


4.  Significant accounting judgments and estimates
 
 The preparation of the condensed interim consolidated financial statements in conformity with IFRS requires management to make judgments and estimates that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.
 
In preparing these condensed interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Company’s annual consolidated financial statements as at and for the year ended December 31, 2020, in addition to the significant judgments mentioned in Note 2.
 
5.  Trade and other receivables
 
 
 
March 31,
   
December 31,
 
 
 
2021
   
2020
 
 
           
Trade receivables
 
$
2,812
   
$
2,761
 
Value added taxes receivable
   
2,100
     
1,916
 
Other receivables
   
546
     
425
 
 
 
$
5,458
   
$
5,102
 
 
6.  Inventories
 
 
 
March 31,
   
December 31,
 
 
 
2021
   
2020
 
 
           
Concentrates
 
$
2,145
   
$
2,327
 
Finished goods
   
193
     
-
 
In-circuit work in progress
   
377
     
-
 
Ore on leach pads
   
6,850
     
-
 
Current ore stockpiles
   
1,803
     
607
 
Spare parts and supplies
   
5,161
     
5,135
 
 
   
16,529
     
8,069
 
Long-term ore stockpiles
   
1,339
     
1,339
 
 
 
$
17,868
   
$
9,408
 

Effective January 11, 2021, the Relief Canyon Mine declared commercial production resulting in the transfer of $29.3 million from non-producing properties to inventories based on expected recoverable ounces of gold from the leaching process. Subsequently, during the three-month period ended March 31, 2021, the Company recorded a $4.4 million write-down to net realizable value of inventories based on quarter-end spot prices, and lowered the expected gold recoveries of its existing ore on leach pads due to identification of carbonaceous material resulting in an inventory write-down of $23.0 million.

The amount of inventories recognized in cost of sales was $37.5 million during the three-month period ended March 31, 2021 (2020: $9.8 million), including concentrates, ore on leach pads, and ore stockpiles write-down to net realizable value of $27.4 million (2020: $0.7 million), and spare parts and supplies write-down to net realizable value of nil (2020: nil).
Page |7

Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


7.  Property, plant and equipment

 
                         
Corporate
       
 
 
Mining
   
Non-producing
   
Plant and
   
Right-of-use
   
office
       
 
 
interests
   
properties
   
equipment
   
lease assets
   
equipment
   
Total
 
 
                                   
Cost
                                   
Balance at January 1, 2020
 
$
121,121
   
$
57,344
   
$
89,062
   
$
7,701
   
$
122
   
$
275,350
 
Asset additions
   
7,238
     
51,007
     
15,969
     
2,211
     
118
     
76,543
 
Change in decommissioning provision
   
370
     
(10
)
   
-
     
-
     
-
     
360
 
Balance at December 31, 2020
   
128,729
     
108,341
     
105,031
     
9,912
     
240
     
352,253
 
Asset additions
   
1,850
     
924
     
1,280
     
69
     
3
     
4,126
 
Change in decommissioning provision
   
(729
)
   
-
     
-
     
-
     
-
     
(729
)
Reclassification
   
67,558
     
(96,824
)
   
-
     
-
     
-
     
(29,266
)
Balance at March 31, 2021
 
$
197,408
   
$
12,441
   
$
106,311
   
$
9,981
   
$
243
   
$
326,384
 
 
                                               
Accumulated depreciation
                                               
   and depletion
                                               
Balance at January 1, 2020
 
$
50,215
   
$
-
   
$
34,379
   
$
305
   
$
62
   
$
84,961
 
Depreciation/depletion for the period
   
4,145
     
-
     
3,510
     
291
     
27
     
7,973
 
Balance at December 31, 2020
   
54,360
     
-
     
37,889
     
596
     
89
     
92,934
 
Depreciation/depletion for the period
   
1,248
     
-
     
2,213
     
453
     
11
     
3,925
 
Impairment for the period
   
41,245
     
-
     
10,665
     
3,713
     
-
     
55,623
 
Balance at March 31, 2021
 
$
96,853
   
$
-
   
$
50,767
   
$
4,762
   
$
100
   
$
152,482
 
 
                                               
Carrying value
                                               
   at December 31, 2020
 
$
74,369
   
$
108,341
   
$
67,142
   
$
9,316
   
$
151
   
$
259,319
 
   at March 31, 2021
 
$
100,555
   
$
12,441
   
$
55,544
   
$
5,219
   
$
143
   
$
173,902
 

Effective January 11, 2021, the Relief Canyon Mine declared commercial production which the Company defined as operating at an average of 60% targeted capacity within its mining feasibility study. As a result, the Company transferred from non-producing properties $29.3 million and $67.6 million in net book value to inventories and mining interests, respectively.

Non-current assets are tested for impairment or impairment reversals when events or changes in circumstances suggest that the carrying amount may not be recoverable. Impairment indicators were identified during the three-month period ended March 31, 2021 from gold production of the Relief Canyon Mine due to differences observed between the modelled (planned) and mined (actual) ore tonnage and carbonaceous material identified in the early phases of the mine plan. The Company assessed the recoverability of the carrying amount of the cash-generating unit and an impairment to the $121.8 million carrying value of the Relief Canyon Mine was identified. The Company recorded an impairment loss of $55.6 million which is allocated against mineral interests of $41.2 million, plant and equipment of $10.7 million, and right-of-use lease assets of $3.7 million relating to the Relief Canyon Mine as at March 31, 2021. The $66.2 million recoverable amount of the Relief Canyon Mine’s net assets was determined based on the after-tax discounted cash flows expected to be derived from this property’s fair-market value less estimated costs to sell. The after-tax discounted cash flows were determined based on an updated life-of-mine cash flow projection which incorporate management’s best estimates of commodity prices, future capital requirements and production costs along with geological assumptions and judgments made in estimating the size, grade and recovery of the ore bodies. The carrying amounts of mineral interests, plant and equipment, and right-of-use lease assets from the Relief Canyon Mine after impairments is approximately $26.2 million, $31.3 million, and $5.0 million, respectively, as at March 31, 2021.

Fair value models are considered to be Level 3 within the fair value hierarchy. Key assumptions used in Relief Canyon Mine’s fair value model as at March 31, 2021 include estimation of production profile and reserves from its life-of-mine plan, operating and capital costs to extract the reserves, discount rate of 6-8% based on the Company’s weighted average cost of capital, gold price from $1,860 per ounce in 2021 down to $1,608 per ounce in 2025 and beyond based on observable market data including spot price and industry analyst consensus, and mine life of up to 5 years. An increase and decrease in discount rate of 1% would impact the recoverable amount by estimates of approximately $2.3 million decrease and $2.4 million increase, respectively, an increase and decrease in gold recovery rate of 1% would impact the recoverable amount by estimates of approximately $4.7 million increase and $4.7 million decrease, respectively, and an increase and decrease in long-term gold price of $100 per ounce would impact the recoverable amount by estimates of approximately $16.6 million increase and $17.3 million decrease, respectively. This impairment was assessed on the extrapolation of limited data from the initial phases of mining onto the remaining mining phases with additional leaching test work and the re-assaying of historic exploration pulps ongoing. As additional information becomes available, further impairment tests for the cash-generating unit may be required, possibly on a quarterly basis. If a subsequent impairment test indicated further changes in the expected cash flows, gold production, and commodity prices, it could result in a material recovery or impairment to the carrying amount.
Page |8


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


The Company also performed an impairment assessment for the Cosalá Operations given the continued illegal blockade and concluded no impairment charge was necessary.

On March 2, 2017, the Company entered into an option acquisition agreement with Impulsora Minera Santacruz S.A. de C.V., a wholly-owned subsidiary of Santacruz Silver Mining Ltd., to acquire an existing option with Minera Hochschild Mexico S.A. de C.V. (“Hochschild”) for the right to acquire a 100% interest of the San Felipe property located in Sonora, Mexico. As at December 31, 2018, the property purchase option was reclassified as an asset held-for-sale as its carrying amount will be recovered principally through sale. A write-down of $3.7 million was recorded for the year ended December 31, 2018 to measure the asset held-for-sale at the lower of its carrying amount of $10.6 million and fair value less estimated costs to sell of $6.9 million. The Company made three of the remaining eight contractual quarterly option payments of $0.75 million to Hochschild during the year ended December 31, 2019. As at December 31, 2019, the property purchase option was reclassified to property, plant and equipment as its carrying amount of $9.3 million will be recovered principally through continuing use. On October 8, 2020, the Company settled its remaining contractual option payments with Hochschild through issuance of the Company’s common shares to acquire the 100% interest of the San Felipe property (see Note 10). As at March 31, 2021, the carrying amount of the San Felipe property was $12.4 million included in non-producing properties.

The amount of borrowing costs capitalized as property, plant and equipment was $0.1 million during the three-month period ended March 31, 2021 (2020: $0.7 million).

8.  Deferred revenue

On April 3, 2019, the Company entered into a $25 million precious metals delivery and purchase agreement (the “Purchase Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”) for the construction and development of the Relief Canyon Mine. The Purchase Agreement consists of a combination of fixed and variable deliveries from the Relief Canyon Mine. The Purchase Agreement has a repurchase option for the Company exercisable at any time to reduce the variable deliveries to Sandstorm from 4% to 2% by delivering 4,000 ounces of gold plus additional ounces of gold compounded annually at 10%. On initial recognition and as at March 31, 2021, the fair value of the repurchase option was nil.

The Company recorded the advances received on precious metals delivery, net of transaction costs, as deferred revenue and will recognize the amounts in revenue as performance obligations to metals delivery are satisfied over the term of the metals delivery and purchase agreements. The advances received on precious metals delivery is expected to reduce to nil through deliveries of the Company’s own production to Sandstorm. The Company determined the amortization of deferred revenue on a per unit basis to be equal to the expected total deliveries of gold ounces over the term of the precious metals delivery and purchase agreements.

Interest expense of $0.1 million was capitalized as borrowing costs to property, plant and equipment during the three-month period ended March 31, 2021 (2020: $0.5 million) in connection with the accretion of a significant financing component determined from the advances received on precious metals delivery.

The following are components of deferred revenue as at March 31, 2021:

Advances received
 
$
25,000
 
Recognition of revenue
   
(3,782
)
Deferred revenue
   
21,218
 
Deferred transaction costs
   
(390
)
Accretion on significant financing component
   
1,616
 
Net deferred revenue
   
22,444
 
Less: current portion
   
(4,051
)
Non-current portion
 
$
18,393
 

Page |9


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)

9.  Convertible debenture
 
On April 3, 2019, the Company issued a $10 million convertible debenture (the “Convertible Debenture”) to Sandstorm due April 3, 2023 with interest payable at 6% per annum and repayable at the Company’s option prior to maturity. The funds available under the Convertible Debenture included the principal amount of the $3 million unsecured, promissory note previously issued to Sandstorm by the Company.

The Convertible Debenture may be converted into common shares of the Company at Sandstorm’s option at a conversion price of $2.14 and may be prepaid at the Company’s option at any time prior to the maturity date. The Company recorded a net derivative liability of nil on initial recognition based on the estimated fair value of the conversion and prepayment option and recognized a gain of $1.8 million in the consolidated statements of loss and comprehensive loss for the three-month period ended March 31, 2021 (2020: $4.0 million gain) as a result of the change in the estimated fair value of the conversion and prepayment option.

The initial fair value of the principal portion of the Convertible Debenture was determined using a market interest rate for an equivalent non-convertible instrument at the issue date. The principal portion is subsequently recognized on an amortized cost basis until extinguished on conversion or maturity. The remainder of the proceeds are allocated to the conversion option.

Interest expense of nil was capitalized as borrowing costs to property, plant and equipment for the three-month period ended March 31, 2021 (2020: $0.1 million) in connection with the Convertible Debenture.

On February 1, 2021, Sandstorm converted $5 million of the principal amount of the Company’s $10 million outstanding Convertible Debenture into an aggregate of 2,336,448 common shares at a conversion price of $2.14. On March 3, 2021, Sandstorm converted the remaining $5 million of the principal amount of the outstanding Convertible Debenture into an aggregate of 2,336,448 common shares at the same conversion price.
 
10.  Share capital
 
On April 16, 2020, the Company closed an at-the-market offering agreement (the “February 2020 ATM Agreement”) for gross proceeds of $15.0 million through issuance of 9,014,953 common shares. As part of the February 2020 ATM Agreement, approximately $0.7 million in transaction costs were incurred and offset against share capital.

On May 13, 2020, the Company completed a bought deal public offering of 10,269,500 common shares at a price of $2.80 CAD per common share for aggregate gross proceeds of approximately $20.4 million or $28.75 million CAD, which included the exercise by the underwriters, in full, of the over-allotment option granted by the Company to the underwriters. As part of the bought deal public offering, approximately $1.3 million in transaction costs were incurred and offset against share capital, and 1,000,000 warrants for approximately $0.2 million were issued to the Company’s advisor and offset against share capital where each warrant is exercisable for one common share at an exercise price of $3.50 CAD for a period of two years starting July 9, 2020.

On September 4, 2020, the Company completed a bought deal public offering of 10,204,510 common shares at a price of $3.86 CAD per common share for aggregate gross proceeds of approximately $29.8 million or $39.39 million CAD, which included the partial exercise by the underwriters of the over-allotment option granted by the Company to the underwriters. As part of the bought deal public offering, approximately $1.7 million in transaction costs were incurred and offset against share capital.

On July 9, 2020, the Company completed the outstanding option acquisition agreement to acquire a 100% interest of the San Felipe property with Hochschild where the Company agreed to issue to Hochschild 1,687,401 of the Company’s common shares with a value equal to the outstanding payment of $3.75 million plus VAT using the 5-day volume-weighted average price on the Toronto Stock Exchange as of the date of the parties’ agreement, subject to adjustment in certain circumstances. On October 8, 2020, the Company issued the 1,687,401 common shares to Hochschild.

On January 29, 2021, the Company completed a bought deal public offering of 10,253,128 common shares at a price of $3.31 CAD per common share for aggregate gross proceeds of approximately $26.7 million or $33.94 million CAD, which included the partial exercise by the underwriters of the over-allotment option granted by the Company to the underwriters. As part of the bought deal public offering, approximately $1.6 million in transaction costs were incurred and offset against share capital.
Page |10


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


a.   Authorized

Authorized share capital consists of an unlimited number of common and preferred shares.

 
 
March 31,
   
December 31,
 
 
 
2021
   
2020
 
 
           
Issued
           
133,041,451 (2020: 117,975,579) common shares
 
$
388,956
   
$
350,707
 
Nil (2020: Nil) preferred shares
   
-
     
-
 
 
 
$
388,956
   
$
350,707
 

Each non-voting preferred share is convertible, at the holder’s option, without payment of any additional consideration by the holder thereof, initially on a one-to-one basis into common shares, subject to adjustment, and in accordance with the terms of the non-voting preferred shares.

b.   Stock option plan

The number of shares reserved for issuance under the Company’s stock option plan is limited to 10% of the number of common shares which are issued and outstanding on the date of a particular grant of options. Under the plan, the Board of Directors determines the term of a stock option to a maximum of 10 years, the period of time during which the options may vest and become exercisable as well as the option exercise price which shall not be less than the closing price of the Company’s share on the Toronto Stock Exchange on the date immediately preceding the date of grant. The Compensation Committee determines and makes recommendations to the Board of Directors as to the recipients of, and nature and size of, share-based compensation awards in compliance with applicable securities law, stock exchange and other regulatory requirements.

A summary of changes in the Company’s outstanding stock options is presented below:

 
       
March 31,
         
December 31,
 
 
       
2021
         
2020
 
 
       
Weighted
         
Weighted
 
 
       
average
         
average
 
 
       
exercise
         
exercise
 
 
 
Number
   
price
   
Number
   
price
 
 
 
(thousands)
   
CAD
   
(thousands)
   
CAD
 
 
                       
Balance, beginning of period
   
10,659
   
$
3.45
     
8,021
   
$
3.29
 
Granted
   
-
     
-
     
3,710
     
3.85
 
Exercised
   
(40
)
   
2.39
     
(73
)
   
2.60
 
Expired
   
(170
)
   
4.43
     
(999
)
   
3.75
 
Balance, end of period
   
10,449
   
$
3.44
     
10,659
   
$
3.45
 

Page |11


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


The following table summarizes information on stock options outstanding and exercisable as at March 31, 2021:

 
 
Weighted
                         
 
 
average
         
Weighted
         
Weighted
 
 
 
remaining
         
average
         
average
 
 Exercise
 
contractual
         
exercise
         
exercise
 
 price
 
life
   
Outstanding
   
price
   
Exercisable
   
price
 
 CAD
 
(years)
   
(thousands)
   
CAD
   
(thousands)
   
CAD
 
 
                             
 $2.00 to $3.00
   
1.02
     
3,112
   
$
2.39
     
2,012
   
$
2.39
 
 $3.01 to $4.00
   
3.08
     
6,072
     
3.73
     
2,807
     
3.68
 
 $4.01 to $5.00
   
0.12
     
1,265
     
4.58
     
1,265
     
4.58
 
 
           
10,449
   
$
3.44
     
6,084
   
$
3.44
 

c.   Share-based payments

There were no stock options granted by the Company during the three-month periods ended March 31, 2021 and 2020. The Company uses the Black-Scholes Option Pricing Model to estimate fair value.

   
March 31,
   
March 31,
 
   
2021
   
2020
 
             
Share-based payments included in cost of sales
 
$
-
   
$
-
 
Share-based payments included in general and
               
   administrative expenses
   
806
     
699
 
Total share-based payments
 
$
806
   
$
699
 

d.   Warrants

The warrants that are issued and outstanding as at March 31, 2021 are as follows:

Number of
 Exercise
 Issuance
 Expiry
 warrants
 price (CAD)
 date
 date
                                       1,447,426
                                                4.68
 Jun 2016
 Jun 9, 2021
                                          799,065
                                                4.68
 Jul 2016
 Jun 14, 2021
                                       1,074,999
                                                3.12
 Oct 2018
 Oct 1, 2023
                                            15,889
                                              11.32
 Apr 2019
 May 6, 2022
                                          389,771
                                                2.40
 May 2019
 May 13, 2022
                                       1,241,200
                                                2.40
 May 2019
 May 29, 2022
                                          118,664
                                                3.37
 Jul 2019
 Jul 25, 2022
                                          177,506
                                                4.45
 Oct 2019
 Oct 30, 2022
                                       1,000,000
                                                3.50
 Jul 2020
 Jul 9, 2022
                                       6,264,520
 
 
 

e.   Restricted Share Units:

The Company has a Restricted Share Unit Plan under which eligible directors, officers and key employees of the Company are entitled to receive awards of restricted share units. Each restricted share unit is equivalent in value to the fair market value of a common share of the Company on the date of grant with the value of each cash settled award charged to compensation expense over the period of vesting. At each reporting date, the compensation expense and associated liability (which is included in trade and other long-term liabilities in the consolidated statement of financial position) are adjusted to reflect changes in market value. As at March 31, 2021, 122,466 (December 31, 2020: 276,762) restricted share units are outstanding at an aggregate value of $0.3 million (December 31, 2020: $0.9 million).

Page |12

Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


f.   Deferred Share Units:

The Company has a Deferred Share Unit Plan under which eligible directors of the Company receive awards of deferred share units on a quarterly basis as payment for 20% to 100% of their director fees earned. Deferred share units are settled in either cash or common shares at the Company’s discretion when the director leaves the Company’s Board of Directors. The Company recognizes a cost in director fees and a corresponding increase in equity reserve upon issuance of deferred share units. As at March 31, 2021, 566,529 (December 31, 2020: 519,803) deferred share units are issued and outstanding.

11.  Weighted average basic and diluted number of common shares outstanding
 
 
 
Three-month
   
Three-month
 
 
 
period ended
   
period ended
 
 
 
March 31,
   
March 31,
 
 
 
2021
   
2020
 
 
           
Basic weighted average number of shares
   
127,270,944
     
87,819,387
 
Effect of dilutive stock options and warrants
   
-
     
-
 
Diluted weighted average number of shares
   
127,270,944
     
87,819,387
 

Diluted weighted average number of common shares for the three-month period ended March 31, 2021 excludes nil anti-dilutive preferred shares (2020: nil), 10,448,957 anti-dilutive stock options (2020: 7,182,290) and 6,264,520 anti-dilutive warrants (2020: 5,264,520).
 
12.  Non-controlling interests
 
The Company entered into a joint venture agreement with Mr. Eric Sprott effective October 1, 2019 for 40% non-controlling interest of the Company’s Galena Complex with initial contribution of $15 million to fund capital improvements and operations. Mr. Eric Sprott committed to contributing additional funds to support the ongoing operations alongside the Company in proportion of their respective ownership up to $5 million for the first year of operations with the Company contributing any potential excess as necessary. After the first year, contributions revert to the proportional percentage of ownership interests to fund capital projects and operations.

The Company recognized non-controlling interests of $14.3 million equal to the proportionate non-controlling interests’ carrying amount of the Galena Complex at initial recognition classified as a separate component of equity. Subsequent contributions and proportionate share changes in equity are recognized to the carrying amount of the non-controlling interests.
 
13.  Revenue
 
The following is a disaggregation of revenue categorized by commodities sold for the three-month periods ended March 31, 2021 and 2020:
Page |13

Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


 
 
March 31,
   
March 31,
 
 
 
2021
   
2020
 
 
           
Gold
           
Sales revenue
 
$
1,031
   
$
-
 
Derivative pricing adjustments
   
-
     
-
 
 
   
1,031
     
-
 
Silver
               
Sales revenue
 
$
6,787
   
$
4,518
 
Derivative pricing adjustments
   
189
     
(85
)
 
   
6,976
     
4,433
 
Zinc
               
Sales revenue
 
$
-
   
$
3,077
 
Derivative pricing adjustments
   
55
     
(1,317
)
 
   
55
     
1,760
 
Lead
               
Sales revenue
 
$
4,705
   
$
4,446
 
Derivative pricing adjustments
   
7
     
(147
)
 
   
4,712
     
4,299
 
Other by-products
               
Sales revenue
 
$
83
   
$
15
 
Derivative pricing adjustments
   
(46
)
   
36
 
 
   
37
     
51
 
 
               
Total sales revenue
 
$
12,606
   
$
12,056
 
Total derivative pricing adjustments
   
205
     
(1,513
)
Gross revenue
 
$
12,811
   
$
10,543
 
Treatment and selling costs
   
(2,625
)
   
(3,278
)
 
 
$
10,186
   
$
7,265
 

Derivative pricing adjustments represent subsequent variations in revenue recognized as an embedded derivative from contracts with customers and are accounted for as financial instruments (see Note 17). Revenue from contracts with customers is recognized net of treatment and selling costs if payment of those amounts is enforced at the time of sale.
 
14.  Cost of sales
 
Cost of sales is costs that directly relate to production at the mine operating segments and excludes depletion and amortization. The following are components of cost of sales for the three-month periods ended March 31, 2021 and 2020:

 
 
March 31,
   
March 31,
 
 
 
2021
   
2020
 
 
           
Salaries and employee benefits
 
$
5,581
   
$
5,402
 
Contract services on site
   
5,629
     
-
 
Raw materials and consumables
   
2,912
     
2,647
 
Utilities
   
855
     
943
 
Other costs
   
1,701
     
170
 
Changes in inventories
   
(6,573
)
   
-
 
Inventory write-downs
   
27,379
     
673
 
 
 
$
37,484
   
$
9,835
 
Page |14


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)

15.  Corporate general and administrative expenses

Corporate general and administrative expenses are costs incurred at corporate and other segments that do not directly relate to production. The following are components of corporate general and administrative expenses for the three-month periods ended March 31, 2021 and 2020:

 
 
March 31,
   
March 31,
 
 
 
2021
   
2020
 
 
           
Salaries and employee benefits
 
$
518
   
$
617
 
Directors’ fees
   
79
     
84
 
Share-based payments
   
682
     
604
 
Professional fees
   
477
     
126
 
Office and general
   
363
     
477
 
 
 
$
2,119
   
$
1,908
 

The Company recognized a reduction of approximately $0.1 million during the three-month period ended March 31, 2021 related to wage subsidies received through the Canada Emergency Wage Subsidy during the COVID-19 pandemic.

16.  Income taxes

Income tax expense is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual rate used for the three-month period ended March 31, 2021 was 26.5% and for the year ended December 31, 2020 was 26.5%.

The Company’s net deferred tax liability relates to the Mexican mining royalty and arises principally from the following:

   
March 31,
   
December 31,
 
   
2021
   
2020
 
             
Property, plant and equipment
 
$
850
   
$
850
 
Provisions and reserves
   
(394
)
   
(391
)
Net deferred tax liabilities
 
$
456
   
$
459
 

The inventory write-downs and impairments described in Note 6 and 7 will result in certain non-capital losses and timing differences which have not been recorded given uncertainty of recoverability in future periods.
 
17.  Financial risk management
 
a.   Financial risk factors

The Company’s risk exposures and the impact on its financial instruments are summarized below:

(i)            Credit Risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to cash and cash equivalents and trade and other receivables. The credit risk on cash and cash equivalents is limited because the Company invests its cash in deposits with well-capitalized financial institutions with strong credit ratings in Canada and the United States. Under current concentrate offtake agreements, risk on trade receivables related to concentrate sales is managed by receiving payments for 85% to 100% of the estimated value of the concentrate within one month following the time of shipment.

As of March 31, 2021, the Company’s exposure to credit risk with respect to trade receivables amounts to $2.8 million (December 31, 2020: $2.8 million). The Company believes credit risk is not significant and there was no significant change to the Company’s allowance for expected credit losses as at March 31, 2021 and December 31, 2020.

Page |15



Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


(ii)            Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they arise. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company’s liquidity requirements are met through a variety of sources, including cash, cash generated from operations, credit facilities and debt and equity capital markets. The Company’s trade payables have contractual maturities of less than 30 days and are subject to normal trade terms. See Note 2 for discussion of the Company’s basis of presentation and going concern.

The following table presents the contractual maturities of the Company’s financial liabilities on an undiscounted basis:

 
 
March 31, 2021
 
 
       
Less than
               
Over 5
 
 
 
Total
   
1 year
   
2-3 years
   
4-5 years
   
years
 
 
                             
Trade and other payables
 
$
17,829
   
$
17,829
   
$
-
   
$
-
   
$
-
 
Glencore pre-payment facility
   
2,112
     
2,112
     
-
     
-
     
-
 
Promissory note
   
5,000
     
-
     
5,000
     
-
     
-
 
Interest on promissory note
   
525
     
452
     
73
     
-
     
-
 
Government loan
   
4,499
     
1,515
     
2,984
     
-
     
-
 
Loan payable
   
2,650
     
2,650
     
-
     
-
     
-
 
Projected pension contributions
   
5,203
     
1,237
     
2,033
     
1,608
     
325
 
Decommissioning provision
   
9,905
     
-
     
-
     
-
     
9,905
 
Other long-term liabilities
   
3,582
     
-
     
3,021
     
19
     
542
 
 
 
$
51,305
   
$
25,795
   
$
13,111
   
$
1,627
   
$
10,772
 

Minimum lease payments in respect to lease liabilities are included in trade and other payables and other long-term liabilities as follows:

 
 
March 31, 2021
 
 
       
Less than
               
Over 5
 
 
 
Total
   
1 year
   
2-3 years
   
4-5 years
   
years
 
 
                             
Trade and other payables
 
$
2,733
   
$
2,733
   
$
-
   
$
-
   
$
-
 
Other long-term liabilities
   
3,040
     
-
     
3,021
     
19
     
-
 
 
 
$
5,773
   
$
2,733
   
$
3,021
   
$
19
   
$
-
 

The following table summarizes the continuity of the Company’s total lease liabilities discounted using an incremental borrowing ranging from 5% to 12% applied during the period:

 
 
March 31,
   
December 31,
 
 
 
2021
   
2020
 
 
           
Lease liabilities, beginning of period
 
$
6,377
   
$
7,025
 
Additions
   
67
     
1,962
 
Lease principal payments
   
(667
)
   
(2,594
)
Lease interest payments
   
(152
)
   
(759
)
Accretion on lease liabilities
   
148
     
743
 
Lease liabilities, end of period
 
$
5,773
   
$
6,377
 

Page |16


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


(iii)            Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price risk.

(1)
Interest rate risk

The Company is subject to the interest rate risk of U.S. LIBOR rate plus 5% per annum from the existing Cosalá Operations’ pre-payment facility. Interest rates of other financial instruments are fixed.

(2)
Currency risk

As at March 31, 2021, the Company is exposed to foreign currency risk through financial assets and liabilities denominated in CAD and MXN:

Financial instruments that may impact the Company’s net loss or other comprehensive loss due to currency fluctuations include CAD and MXN denominated assets and liabilities which are included in the following table:

 
 
As at March 31, 2021
 
 
 
CAD
   
MXN
 
 
           
Cash and cash equivalents
 
$
402
   
$
124
 
Trade and other receivables
   
65
     
2,565
 
Trade and other payables
   
2,535
     
4,885
 


As at March 31, 2021, the CAD/USD and MXN/USD exchange rates were 1.26 and 20.60, respectively. The sensitivity of the Company’s net loss and comprehensive loss due to changes in the exchange rates
for the three-month period ended March 31, 2021 is included in the following table:


 
 
CAD/USD
   
MXN/USD
 
 
 
Exchange rate
   
Exchange rate
 
 
   
+/- 10
%
   
+/- 10
%
 
               
Approximate impact on:
               
Net loss
 
$
214
   
$
199
 
Other comprehensive loss
   
(31
)
   
11
 

The Company may, from time to time, employ derivative financial instruments to manage exposure to fluctuations in foreign currency exchange rates.

As at March 31, 2021 and December 31, 2020, the Company does not have any non-hedge foreign exchange forward contracts outstanding. During the three-month period ended March 31, 2021, the Company did not settle any non-hedge foreign exchange forward contracts (2020: settled non-hedge foreign exchange forward contracts to buy 26.0 million MXN and recorded a realized gain of nil through profit and loss).

(3)
Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments in the market. As at March 31, 2021, the Company had certain amounts related to the sales of concentrates that have only been provisionally priced. A ±10% fluctuation in silver, zinc, lead, and gold prices would affect trade receivables by approximately $0.2 million (December 31, 2020: $0.3 million).

Page |17


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)


As at March 31, 2021 and December 31, 2020, the Company does not have any non-hedge commodity forward contracts outstanding. During the three-month period ended March 31, 2021, the Company did not settle any non-hedge commodity forward contracts (2020: settled non-hedge commodity forward contracts for approximately 1.6 million and 3.3 million pounds of zinc and lead, respectively, and recorded a realized gain of nil through profit and loss).

Net amount of gain or loss on derivative instruments from non-hedge foreign exchange and commodity forward contracts recognized through profit or loss during the three-month period ended March 31, 2021 was nil (2020: nil). Total amount of gain or loss on derivative instruments including those recognized through profit or loss from the Company’s Convertible Debenture during the three-month period ended March 31, 2021 was a gain of $1.8 million (2020: gain of $4.0 million).

b.   Fair values

The fair value of cash, restricted cash, trade and other payables, and other long-term liabilities approximate their carrying amounts. The methods and assumptions used in estimating the fair value of other financial assets and liabilities are as follows:

Cash and cash equivalents: The fair value of cash equivalents is valued using quoted market prices in active markets. The Company’s cash equivalents consist of money market accounts held at financial institutions which have original maturities of less than 90 days.
Trade and other receivables: The fair value of trade receivables from silver sales contracts that contain provisional pricing terms is determined using the appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As such, there is an embedded derivative feature within trade receivables.
Convertible debenture, promissory note, and loan payable:  The principal portion of the convertible debenture, promissory note, and loan payable are carried at amortized cost.
Embedded derivatives: Revenues from the sale of metals produced from silver sales contracts since the commencement of commercial production are based on provisional prices at the time of shipment. Variations between the price recorded at the time of sale and the actual final price received from the customer are caused by changes in market prices for metals sold and result in an embedded derivative in revenues and accounts receivable.
Derivatives: The Company uses derivative and non-derivative instruments to manage financial risks, including commodity, interest rate, and foreign exchange risks. The use of derivative contracts is governed by documented risk management policies and approved limits. The Company does not use derivatives for speculative purposes. The fair value of the Company’s derivative instruments is based on quoted market prices for similar instruments and at market prices at the valuation date.

The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means.
Level 3 inputs are unobservable (supported by little or no market activity).

Page |18



Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)



 
 
March 31,
   
December 31,
 
 
 
2021
   
2020
 
 
           
Level 1
           
   Cash and cash equivalents
 
$
4,075
   
$
4,705
 
   Restricted cash
   
4,077
     
4,082
 
 
               
Level 2
               
   Trade and other receivables
   
5,458
     
5,102
 
   Derivative instruments
   
-
     
4,568
 
   Loan payable
   
2,377
     
5,564
 
   Glencore pre-payment facility
   
2,112
     
2,862
 
   Convertible debenture
   
-
     
9,953
 
   Promissory note
   
5,000
     
5,000
 
   Government loan
   
4,499
     
4,499
 
 
18.  Segmented and geographic information, and major customers
 
a.   Segmented information
The Company’s operations comprise of four reporting segments engaged in acquisition, exploration, development and exploration of mineral resource properties in Mexico and the United States. Management has determined the operating segments based on the reports reviewed by the chief operating decision makers that are used to make strategic decisions.

b.   Geographic information
All revenues from sales of concentrates for the three-month periods ended March 31, 2021 and 2020 were earned in Mexico and the United States. The following segmented information is presented as at March 31, 2021 and December 31, 2020, and for the three-month periods ended March 31, 2021 and 2020. The Cosalá Operations segment operates in Mexico while the Galena Complex and Relief Canyon segments operate in the United States.

 
 
As at March 31, 2021
   
As at December 31, 2020
 
 
 
Cosalá Operations
   
Galena Complex
   
Relief Canyon
   
Corporate and Other
   
Total
   
Cosalá Operations
   
Galena Complex
   
Relief Canyon
   
Corporate and Other
   
Total
 
 
                                                           
Cash and cash equivalents
 
$
137
   
$
1,442
   
$
1,545
   
$
951
   
$
4,075
   
$
133
   
$
1,257
   
$
52
   
$
3,263
   
$
4,705
 
Trade and other receivables
   
2,565
     
2,828
     
-
     
65
     
5,458
     
2,297
     
2,769
     
-
     
36
     
5,102
 
Inventories
   
6,346
     
2,782
     
8,740
     
-
     
17,868
     
6,346
     
3,062
     
-
     
-
     
9,408
 
Prepaid expenses
   
297
     
432
     
655
     
233
     
1,617
     
428
     
832
     
650
     
290
     
2,200
 
Restricted cash
   
133
     
53
     
3,891
     
-
     
4,077
     
137
     
53
     
3,892
     
-
     
4,082
 
Property, plant and equipment
   
56,800
     
54,192
     
62,539
     
371
     
173,902
     
58,029
     
53,701
     
147,183
     
406
     
259,319
 
Total assets
 
$
66,278
   
$
61,729
   
$
77,370
   
$
1,620
   
$
206,997
   
$
67,370
   
$
61,674
   
$
151,777
   
$
3,995
   
$
284,816
 
 
                                                                               
Trade and other payables
 
$
5,838
   
$
4,126
   
$
4,709
   
$
3,156
   
$
17,829
   
$
6,627
   
$
5,096
   
$
6,152
   
$
3,256
   
$
21,131
 
Derivative instruments
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
4,568
     
4,568
 
Loan payable
   
-
     
-
     
-
     
2,377
     
2,377
     
-
     
-
     
-
     
5,564
     
5,564
 
Glencore pre-payment facility
   
2,112
     
-
     
-
     
-
     
2,112
     
2,862
     
-
     
-
     
-
     
2,862
 
Other long-term liabilities
   
-
     
542
     
2,917
     
123
     
3,582
     
-
     
529
     
3,557
     
533
     
4,619
 
Deferred revenue
   
-
     
-
     
-
     
22,444
     
22,444
     
-
     
-
     
-
     
23,322
     
23,322
 
Convertible debenture
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
9,953
     
9,953
 
Promissory note
   
-
     
-
     
-
     
5,000
     
5,000
     
-
     
-
     
-
     
5,000
     
5,000
 
Government loan
   
-
     
4,499
     
-
     
-
     
4,499
     
-
     
4,499
     
-
     
-
     
4,499
 
Post-employment benefit obligations
   
-
     
7,915
     
-
     
-
     
7,915
     
-
     
13,398
     
-
     
-
     
13,398
 
Decommissioning provision
   
1,825
     
2,225
     
3,544
     
-
     
7,594
     
2,130
     
2,365
     
3,784
     
-
     
8,279
 
Deferred tax liabilities
   
456
     
-
     
-
     
-
     
456
     
459
     
-
     
-
     
-
     
459
 
Total liabilities
 
$
10,231
   
$
19,307
   
$
11,170
   
$
33,100
   
$
73,808
   
$
12,078
   
$
25,887
   
$
13,493
   
$
52,196
   
$
103,654
 

Page |19


Americas Gold and Silver Corporation
Notes to the condensed interim consolidated financial statements
For the three-month periods ended March 31, 2021 and 2020
(In thousands of U.S. dollars, unless otherwise stated, unaudited)





   
Three-month period ended March 31, 2021
   
Three-month period ended March 31, 2020
 
   
Cosalá Operations
   
Galena Complex
   
Relief Canyon
   
Corporate and Other
   
Total
   
Cosalá Operations
   
Galena Complex
   
Relief Canyon
   
Corporate and Other
   
Total
 
                                                             
Revenue
 
$
40
   
$
8,981
   
$
1,165
   
$
-
   
$
10,186
   
$
1,390
   
$
5,875
   
$
-
   
$
-
   
$
7,265
 
Cost of sales
   
-
     
(7,490
)
   
(29,994
)
   
-
     
(37,484
)
   
(2,217
)
   
(7,618
)
   
-
     
-
     
(9,835
)
Depletion and amortization
   
(318
)
   
(1,560
)
   
(2,007
)
   
(40
)
   
(3,925
)
   
(966
)
   
(1,260
)
   
(57
)
   
(32
)
   
(2,315
)
Care and maintenance costs
   
(1,994
)
   
(139
)
   
-
     
-
     
(2,133
)
   
(817
)
   
(128
)
   
-
     
-
     
(945
)
Corporate general and administrative
   
-
     
-
     
-
     
(2,119
)
   
(2,119
)
   
-
     
-
     
-
     
(1,908
)
   
(1,908
)
Transaction costs
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(23
)
   
(23
)
Exploration costs
   
-
     
(1,334
)
   
(174
)
   
-
     
(1,508
)
   
(384
)
   
(896
)
   
(120
)
   
-
     
(1,400
)
Accretion on decommissioning provision
   
(29
)
   
(5
)
   
(9
)
   
-
     
(43
)
   
(32
)
   
(9
)
   
(18
)
   
-
     
(59
)
Interest and financing expense
   
(41
)
   
-
     
(610
)
   
(75
)
   
(726
)
   
(82
)
   
-
     
-
     
(10
)
   
(92
)
Foreign exchange gain (loss)
   
95
     
-
     
-
     
(316
)
   
(221
)
   
743
     
-
     
-
     
-
     
743
 
Impairment to property, plant and equipment
   
-
     
-
     
(55,623
)
   
-
     
(55,623
)
   
-
     
-
     
-
     
-
     
-
 
Gain on derivative instruments
   
-
     
-
     
-
     
1,819
     
1,819
     
-
     
-
     
-
     
3,998
     
3,998
 
Income (loss) before income taxes
   
(2,247
)
   
(1,547
)
   
(87,252
)
   
(731
)
   
(91,777
)
   
(2,365
)
   
(4,036
)
   
(195
)
   
2,025
     
(4,571
)
Income tax recovery (expense)
   
(23
)
   
-
     
-
     
-
     
(23
)
   
426
     
-
     
-
     
-
     
426
 
Net income (loss) for the period
 
$
(2,270
)
 
$
(1,547
)
 
$
(87,252
)
 
$
(731
)
 
$
(91,800
)
 
$
(1,939
)
 
$
(4,036
)
 
$
(195
)
 
$
2,025
   
$
(4,145
)

c.   Major customers

The Company sold concentrates and finished goods to two major customers during the three-month period ended March 31, 2021 (2020: one customer) accounting for 89% and 10% (2020: 100%) of revenues.
 
19.  Contingencies
 
Due to the size, complexity and nature of the Company’s operations, various legal and tax matters arise in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.

In November 2010, the Company received a reassessment from the Mexican tax authorities related to its Mexican subsidiary, Minera Cosalá, for the year ended December 31, 2007. The tax authorities disallowed the deduction of transactions with certain suppliers for an amount of approximately $9.6 million (MXN 196.8 million), of which $4.1 million (MXN 84.4 million) would be applied against available tax losses. The Company appealed this reassessment and the Mexican tax authorities subsequently reversed $4.6 million (MXN 94.6 million) of their original reassessment. The remaining $5.0 million (MXN 102.2 million) consists of $4.1 million (MXN 84.4 million) related to transactions with certain suppliers and $0.9 million (MXN 17.8 million) of value added taxes thereon. The Company appealed the remaining reassessment with the Mexican Tax Court in December 2011. The Company may be required to post a bond of approximately $0.9 million (MXN 17.8 million) to secure the value added tax portion of the reassessment. The deductions of $4.1 million (MXN 84.4 million), if denied, would be offset by available tax losses. The Company accrued $1.0 million (MXN 19.9 million) in the consolidated financial statements as at December 31, 2018 as a probable obligation for the disallowance of value added taxes related to the Mexican tax reassessment. As at March 31, 2021, the accrued liability of the probable obligation was $1.0 million (December 31, 2020: $1.0 million).
 
20.  Subsequent events
 
On April 29, 2021, the Company issued a $12.5 million CAD convertible debenture to Royal Capital Management Corp. due April 28, 2024 with interest payable at 8% per annum, repayable at the Company’s option prior to maturity subject to payment of a redemption premium, and convertible into common shares of the Company at the holder’s option at a conversion price of $3.35 CAD.



Page |20
Exhibit 99.2














AMERICAS GOLD AND SILVER CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED MARCH 31, 2021
DATED MAY 16, 2021







Americas Gold and Silver Corporation
Management’s Discussion and Analysis
Table of Contents






Forward-Looking Statements
1
Management’s Discussion and Analysis
2
Overview
3
Recent Developments and Operational Discussion
4
Results of Operations
11
Summary of Quarterly Results
12
Liquidity
13
Capital Resources
15
Off-Balance Sheet Arrangements
15
Transactions with Related Parties
15
Risk Factors
16
Accounting Standards and Pronouncements
19
Financial Instruments
19
Capital Structure
20
Controls and Procedures
20
Technical Information
21
Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce
21

Unless otherwise indicated, in this Management Discussion and Analysis all reference to “dollar” or the use of the symbol “$” are to the United States of America dollar and all references to “C$” are to the Canadian dollar. Additionally, percentage changes in this Management’s Discussion and Analysis are based on dollar amounts before rounding.


Americas Gold and Silver Corporation
Management’s Discussion & Analysis
For the three months ended March 31, 2021


Forward-Looking Statements

Statements contained in this Management’s Discussion and Analysis (“MD&A”) of Americas Gold and Silver Corporation (the “Company” or “Americas Gold and Silver”) that are not current or historical factual statements may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian and United States securities laws ("forward-looking statements"). These forward-looking statements are presented for the purpose of assisting the Company's securityholders and prospective investors in understanding management's views regarding those future outcomes and may not be appropriate for other purposes. When used in this MD&A, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", "expect", and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. All such forward-looking statements are subject to important risks, uncertainties and assumptions. These statements are forward-looking because they are based on current expectations, estimates and assumptions. It is important to know that: (i) unless otherwise indicated, forward-looking statements in this MD&A describe expectations as at the date hereof; (ii) actual results and events could differ materially from those expressed or implied.

Specific forward-looking statements in this MD&A include, but are not limited to: any objectives, expectations, intentions, plans, results, levels of activity, goals or achievements; estimates of mineral reserves and resources; the realization of mineral reserve estimates; the impairment of mining interests and non-producing properties; the timing for achieving ramp-up to full operations at Relief Canyon; the timing and amount of estimated future production, production guidance, costs of production, capital expenditures, costs and timing of development; the timing of receipt of the Record of Decision for the Phase 2 environmental impact statement at Relief Canyon; the expected timing and/or results of the conclusions of the data compilation and analysis being conducted in respect of the Relief Canyon operations; the Company’s ability to improve the operational and financial performance of its assets; the success of exploration and development activities; statements regarding the Galena Recapitalization Plan, including with respect to underground development improvements, equipment procurement and the exploration drilling program and expected results thereof; material uncertainties that may impact the Company’s liquidity in the short term; the effects of COVID-19; the Company’s review of pension valuation; changes in accounting policies not yet in effect; permitting timelines; government regulation of mining operations; environmental risks; labour relations, employee recruitment and retention and pension funding; the timing and possible outcomes of pending disputes or litigation; negotiations or regulatory investigations; exchange rate fluctuations; cyclical or seasonal aspects of our business; our dividend policy; capital expenditures; Americas Gold and Silver's ability to operate the Relief Canyon mine; the potential for resolution of the illegal blockade at the Company's Cosalá Operations and the resumption of mining and processing operations thereat, including expected production levels; the level of support from the Mexican government with respect to the long-term stability of Company's Cosalá Operations, and its ability to maintain such support in the near- and long-term; the ability of the Company to target higher-grade silver ores at the Cosalá Operations; statements relating to the future financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of Americas Gold and Silver; the suspension of certain operating metrics such as cash costs and all-in sustaining costs for the Galena Complex; the liquidity of the common shares; and other events or conditions that may occur in the future. Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors beyond the Company's ability to control or predict that may cause the actual results, performance or achievements of the Company, or developments in the Company's business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements.

Some of the risks and other factors (some of which are beyond Americas Gold and Silver's control) that could cause results to differ materially from those expressed in the forward-looking statements and information contained in this MD&A include, but are not limited to: risks associated with market fluctuations in commodity prices; risks related to changing global economic conditions, which may affect the Company's results of operations and financial condition including the market reaction to the COVID-19 pandemic; actual and potential risks and uncertainties relating to the ultimate geographic spread of COVID-19, the severity of the disease and the duration of the COVID-19 pandemic and issues relating to its resurgence and/or the emergence of new strains of COVID-19, including potential material adverse effects on the Company’s business, operations and financial performance; actions that have been and may be taken by governmental authorities to contain COVID-19 or to treat its impact on the Company’s business; the actual and potential negative impacts of COVID-19 on the global economy and financial markets; the Company is dependent on the success of the Cosalá Operations, the Galena Complex and the Relief Canyon mine, which are exposed to operational risks and other risks, including certain development and exploration related risks, as applicable; risks related to mineral reserves and mineral resources, development and production and the Company's ability to sustain or increase present production; risks related to global financial and economic conditions; risks related to government regulation and environmental compliance; risks related to mining property claims and titles, and surface rights and access; risks related to labour relations, disputes and/or disruptions, employee recruitment and retention and pension funding; some of the Company's material properties are located in Mexico and are subject to changes in political and economic conditions and regulations in that country; risks related to the Company's relationship with the communities where it operates; risks related to actions by certain non-governmental organizations; substantially all of the Company's assets are located outside of Canada, which could impact the enforcement of civil liabilities obtained in Canadian and U.S. courts; risks related to currency fluctuations that may adversely affect the financial condition of the Company; the Company may need additional capital in the future and may be unable to obtain it or to obtain it on favourable terms; risks associated with the Company's outstanding debt and its ability to make scheduled payments of interest and principal thereon; the Company may engage in hedging activities; risks associated with the Company's business objectives; risks relating to mining and exploration activities and future mining operations; operational risks and hazards inherent in the mining industry; risks related to competition in the mining industry; risks relating to negative operating cash flows; risks relating to the possibility that the Company’s working capital requirements may be higher than anticipated and/or its revenue may be lower than anticipated over relevant periods; and risks relating to climate change and the legislation governing it.
Page|1

Americas Gold and Silver Corporation
Management’s Discussion & Analysis
For the three months ended March 31, 2021

The list above is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Investors and others should carefully consider these and other factors and not place undue reliance on the forward-looking statements. The forward-looking statements contained in this MD&A represent the Company's views only as of the date such statements were made. Forward-looking statements contained in this MD&A are based on management's plans, estimates, projections, beliefs and opinions as at the time such statements were made and the assumptions related to these plans, estimates, projections, beliefs and opinions may change. Although forward-looking statements contained in this MD&A are based on what management considers to be reasonable assumptions based on information currently available to it, there can be no assurances that actual events, performance or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. Some of the important risks and uncertainties that could affect forward-looking statements are described further in the MD&A. The Company cannot guarantee future results, levels of activity, performance or achievements, should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, the actual results or developments may differ materially from those contemplated by the forward-looking statements. The Company does not undertake to update any forward-looking statements, even if new information becomes available, as a result of future events or for any other reason, except to the extent required by applicable securities laws.

Management’s Discussion and Analysis

This MD&A of the results of operations, liquidity and capital resources of Americas Gold and Silver constitutes management’s review of the Company’s financial and operating performance for the three months ended March 31, 2021, including the Company’s financial condition and future prospects. Except as otherwise noted, this discussion is dated May 16, 2021 and should be read in conjunction with the Company’s unaudited condensed interim consolidated financial statements and the notes thereto for the three months ended March 31, 2021 and 2020. The unaudited condensed interim consolidated financial statements for the three months ended March 31, 2021 and 2020 are prepared in accordance with International Accounting Standards (“IAS”) 34 under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The Company prepared its latest financial statements in U.S. dollars and all amounts in this MD&A are expressed in U.S. dollars, unless otherwise stated. These documents along with additional information relating to the Company are available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov, and on the Company’s website at www.americas-gold.com. The content of the Company’s website and information accessible through the website do not form part of this MD&A.

Page|2

Americas Gold and Silver Corporation
Management’s Discussion & Analysis
For the three months ended March 31, 2021

In this report, the management of the Company presents operating highlights for the three months ended March 31, 2021 (“Q1-2021”) compared to the three months ended March 31, 2020 (“Q1-2020”) as well as comments on plans for the future. Throughout this MD&A, references to gold equivalent ounces produced are based on gold and silver production at average gold spot prices and average silver realized prices during each respective period, and references to silver equivalent ounces produced are based on all metals production at average gold spot prices, and average silver, zinc, and lead realized prices during each respective period, except as otherwise noted.

This MD&A contains statements about the Company’s future or expected financial condition, results of operations and business. See page 1 of this MD&A for more information on forward-looking statements.

Overview

The Company is a precious metals producer advancing the Relief Canyon gold mine (“Relief Canyon”) to full production in Nevada, USA. It also has two existing operations in the world's leading silver regions: the Cosalá Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA.

In Nevada, USA, the Company operates the 100%-owned, Relief Canyon mine located in Pershing County. The mine poured its first gold in February 2020 and declared commercial production in January 2021. The past-producing mine includes three historic open-pit mines, a newly constructed crusher, ore conveyor system, leach pads, and a refurbished heap-leach processing facility. The landholdings at Relief Canyon and the surrounding area cover over 11,700 hectares, providing the Company the potential to expand the Relief Canyon deposit and to explore for new discoveries close to existing processing infrastructure.

In Idaho, USA, the Company operates the 60%-owned producing Galena Complex (40%-owned by Mr. Eric Sprott (“Sprott”)) whose primary assets are the operating Galena mine, the Coeur mine, and the contiguous Caladay development project in the Coeur d’Alene Mining District of the northern Idaho Silver Valley. The Galena Complex has recorded production of over 230 million ounces of silver along with associated by-product metals of copper and lead over a production history of more than sixty years. The Company entered into a joint venture agreement with Sprott effective October 1, 2019 for a 40% non-controlling interest of the Galena Complex with an initial contribution of $15 million to fund capital improvements and operations. The goal of the joint venture agreement was to position the Galena Complex to significantly grow resources, increase production, and reduce operating costs at the mine over the next two years (the “Recapitalization Plan” or “Plan”). The Company has suspended disclosure of certain operating metrics such as cash costs, and all-in sustaining costs for the Galena Complex until the Recapitalization Plan is substantially completed.