EXHIBIT 99.1

AMERICAS GOLD AND SILVER CORPORATION

Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)

Americas Gold and Silver Corporation

(In thousands of U.S. dollars, unless otherwise stated)

December 31, 2023 and 2022

CONTENTS

	Page
Management’s Responsibility for Financial Reporting	2
Independent Auditor’s Report	3
Consolidated Statements of Financial Position	5
Consolidated Statements of Loss and Comprehensive Loss	6
Consolidated Statements of Changes in Equity	7
Consolidated Statements of Cash Flows	8
Notes to the Consolidated Financial Statements	9–38

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MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements have been prepared by management and are in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board as outlined in Part I of the Chartered Professional Accountants Canada Handbook.  Other information contained in this document has also been prepared by management and is consistent with the data contained in the consolidated financial statements.  A system of internal control has been developed and is maintained by management to provide reasonable assurance that assets are safeguarded and financial information is accurate and reliable.

The Board of Directors approves the financial statements and ensures that management discharges its financial reporting responsibilities. The Board’s review is accomplished principally through the audit committee, which is composed of non-executive directors.  The audit committee meets periodically with management and the auditors to review financial reporting and control matters.

The consolidated financial statements have been audited by PricewaterhouseCoopers LLP and their report outlines the scope of their examination and gives their opinion on the consolidated financial statements.

(Signed) Darren Blasutti	(Signed) Warren Varga
President & Chief Executive Officer	Chief Financial Officer

Toronto, Ontario, Canada

March 28, 2024

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Americas Gold and Silver Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Americas Gold and Silver Corporation and its subsidiaries (together, the Company) as of December 31, 2023 and 2022, and the related consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 2 to the consolidated financial statements, the Company has reported net losses from operations, and has stated that a material uncertainty exists that may cast substantial doubt on the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

PricewaterhouseCoopers LLP

PwC Tower, 18 York Street, Suite 2500, Toronto, Ontario, Canada M5J 0B2

T: +1 416 863 1133, F: +1 416 365 8215

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

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Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Chartered Professional Accountants, Licensed Public Accountants

Toronto, Canada

March 28, 2024

We have served as the Company’s auditor since 2015.

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Americas Gold and Silver Corporation

Consolidated statements of financial position

(In thousands of U.S. dollars)

	December 31,			December 31,
As at	2023			2022
Assets
Current assets
Cash and cash equivalents	$	2,061		$	1,964
Trade and other receivables (Note 6)		9,486			11,552
Inventories (Note 7)		8,657			8,835
Prepaid expenses		2,832			3,030
	$	23,036		$	25,381
Non-current assets
Restricted cash		4,351			4,139
Property, plant and equipment (Note 8)		153,101			161,299
Total assets	$	180,488		$	190,819
Liabilities
Current liabilities
Trade and other payables	$	22,960		$	27,060
Metals contract liability (Note 9)		12,512			11,324
Derivative instruments (Note 10)		1,230			991
Convertible debenture (Note 10)		15,384			-
Shares pending issuance from retraction (Note 10)		436			-
Pre-payment facility (Note 11)		2,250			-
Promissory notes (Note 12)		4,275			2,500
Royalty payable (Note 14)		2,160			-
Government loan (Note 13)		-			222
		61,207			42,097
Non-current liabilities
Other long-term liabilities		1,610			1,815
Metals contract liability (Note 9)		24,325			19,665
Convertible debenture (Note 10)		-			9,621
Royalty payable (Note 14)		1,787			-
Post-employment benefit obligations (Note 15)		6,537			6,969
Decommissioning provision (Note 16)		12,193			11,715
Deferred tax liabilities (Note 23)		629			348
Total liabilities		108,288			92,230
Equity
Share capital (Note 17)		455,548			449,374
Equity reserve		52,936			50,905
Foreign currency translation reserve		8,325			9,797
Deficit		(463,391	)		(428,849	)
Attributable to shareholders of the Company		53,418			81,227
Non-controlling interests (Note 19)		18,782			17,362
Total equity	$	72,200		$	98,589
Total liabilities and equity	$	180,488		$	190,819

Going concern (Note 2), Contingencies (Note 28), Subsequent events (Note 29)

APPROVED BY THE BOARD

(Signed) Brad Kipp	(Signed) Gordon Pridham
Director	Director

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

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Americas Gold and Silver Corporation

Consolidated statements of loss and comprehensive loss

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, except share and per share amounts)

	2023			2022
Revenue (Note 20)	$	89,562		$	85,016
Cost of sales (Note 21)		(75,060	)		(72,092	)
Depletion and amortization (Note 8)		(20,849	)		(21,340	)
Care and maintenance costs		(3,842	)		(4,500	)
Corporate general and administrative (Note 22)		(8,606	)		(9,380	)
Exploration costs		(3,432	)		(3,784	)
Accretion on decommissioning provision		(587	)		(427	)
Interest and financing expense		(8,189	)		(1,798	)
Foreign exchange gain (loss)		404			(3,558	)
Gain on disposal of assets		402			-
Impairment to property, plant and equipment (Note 8)		(6,000	)		(13,440	)
Loss on metals contract liability (Note 9)		(3,396	)		(657	)
Other gain on derivatives (Note 10)		120			214
Fair value loss on royalty payable (Note 14)		(760	)		-
Gain on government loan forgiveness (Note 13)		-			4,277
Loss before income taxes		(40,233	)		(41,469	)
Income tax recovery (expense) (Note 23)		2,060			(3,718	)
Net loss	$	(38,173	)	$	(45,187	)
Attributable to:
Shareholders of the Company	$	(34,958	)	$	(43,104	)
Non-controlling interests (Note 19)		(3,215	)		(2,083	)
Net loss	$	(38,173	)	$	(45,187	)
Other comprehensive income
Items that will not be reclassified to net loss
Remeasurement of post-employment benefit obligations	$	878		$	4,650
Deferred income taxes		(184	)		(977	)
Items that may be reclassified subsequently to net loss
Foreign currency translation reserve		(1,472	)		2,964
Other comprehensive income		(778	)		6,637
Comprehensive loss	$	(38,951	)	$	(38,550	)
Attributable to:
Shareholders of the Company	$	(36,014	)	$	(37,936	)
Non-controlling interests (Note 19)		(2,937	)		(614	)
Comprehensive loss	$	(38,951	)	$	(38,550	)
Loss per share attributable to shareholders of the Company
Basic and diluted		(0.16	)		(0.23	)
Weighted average number of common shares
outstanding
Basic and diluted (Note 18)		212,701,865			184,416,034

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

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Americas Gold and Silver Corporation

Consolidated statements of changes in equity

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, except share amounts in thousands of units)

	Share capital   Common							Foreign currency						Attributable to shareholders			Non-
	Shares		Amount		Equity  reserve			translation   reserve			Deficit			of the Company			controlling  interests			Total           equity
Balance at January 1, 2023		204,456	$	449,374	$	50,905		$	9,797		$	(428,849	)	$	81,227		$	17,362		$	98,589
Net loss for the year		-		-		-			-			(34,958	)		(34,958	)		(3,215	)		(38,173	)
Other comprehensive income (loss) for the year		-		-		-			(1,472	)		416			(1,056	)		278			(778	)
Contribution from non-controlling interests (Note 19)		-		-		-			-			-			-			4,357			4,357
At-the-market offering (Note 17)		4,548		2,310		-			-			-			2,310			-			2,310
Private placements (Note 17)		2,234		768		-			-			-			768			-			768
Common shares issued		679		350		-			-			-			350			-			350
Warrants issued		-		-		522			-			-			522			-			522
Retraction of convertible debenture (Note 10)		6,773		2,746		(248	)		-			-			2,498			-			2,498
Amendment of convertible debenture (Note 10)		-		-		(272	)		-			-			(272	)		-			(272	)
Share-based payments		-		-		2,029			-			-			2,029			-			2,029
Balance at December 31, 2023		218,690	$	455,548	$	52,936		$	8,325		$	(463,391	)	$	53,418		$	18,782		$	72,200
Balance at January 1, 2022		165,145	$	423,098	$	51,088		$	6,833		$	(387,949	)	$	93,070		$	10,765		$	103,835
Net loss for the year		-		-		-			-			(43,104	)		(43,104	)		(2,083	)		(45,187	)
Other comprehensive income for the year		-		-		-			2,964			2,204			5,168			1,469			6,637
Contribution from non-controlling interests (Note 19)		-		-		-			-			-			-			7,211			7,211
At-the-market offering (Note 17)		12,213		10,080		-			-			-			10,080			-			10,080
Sandstorm private placements (Note 17)		15,200		9,816		-			-			-			9,816			-			9,816
Retraction of convertible debenture (Note 10)		11,242		6,073		(815	)		-			-			5,258			-			5,258
Amendment of convertible debenture (Note 10)		656		307		(2,114	)		-			-			(1,807	)		-			(1,807	)
Share-based payments		-		-		2,746			-			-			2,746			-			2,746
Balance at December 31, 2022		204,456	$	449,374	$	50,905		$	9,797		$	(428,849	)	$	81,227		$	17,362		$	98,589

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

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Americas Gold and Silver Corporation

Consolidated statements of cash flows

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars)

	2023			2022
Cash flow generated from (used in)
Operating activities
Net loss for the year	$	(38,173	)	$	(45,187	)
Adjustments for the following items:
Depletion and amortization		20,849			21,340
Income tax expense (recovery)		(2,060	)		3,718
Accretion and decommissioning costs		587			427
Share-based payments		2,029			2,746
Non-cash expenses from common shares and warrants issued		872			-
Provision on other long-term liabilities		94			-
Interest and financing expense (income)		3,773			(1,023	)
Net charges on post-employment benefit obligations		446			753
Inventory write-downs		1,725			8,459
Impairment to property, plant and equipment		6,000			13,440
Gain on disposal of assets		(402	)		-
Loss on metals contract liability		3,396			657
Other gain on derivatives		(120	)		(214	)
Fair value loss on royalty payable		760			-
Gain on government loan forgiveness		-			(4,277	)
		(224	)		839
Trade and other receivables		2,066			(3,344	)
Inventories		(3,267	)		(2,663	)
Prepaid expenses		198			(604	)
Trade and other payables		214			4,593
Net cash used in operating activities		(1,013	)		(1,179	)
Investing activities
Expenditures on property, plant and equipment		(19,941	)		(19,602	)
Proceeds from disposal of assets		1,808			-
Net cash used in investing activities		(18,133	)		(19,602	)
Financing activities
Glencore pre-payment facility		-
Pre-payment facilities		2,250			(1,451	)
Lease payments		(2,681	)		(3,392	)
Promissory notes, net		1,775			(2,500	)
At-the-market offerings		2,310			10,080
Private placements		768			9,816
Financing from convertible debenture		7,479			5,109
Metals contract liability, net		1,101			(7,436	)
Royalty agreement, net		3,187			-
Government loan		(222	)		-
Contribution from non-controlling interests		4,357			7,211
Net cash generated from financing activities		20,324			17,437
Effect of foreign exchange rate changes on cash		(1,081	)		2,408
Decrease in cash and cash equivalents		97			(936	)
Cash and cash equivalents, beginning of year		1,964			2,900
Cash and cash equivalents, end of year	$	2,061		$	1,964
Cash and cash equivalents consist of:
Cash	$	2,061		$	1,964
Interest paid during the year	$	2,291		$	2,629

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

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

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 consolidated financial statements of the Company for the year ended December 31, 2023 were approved and authorized for issue by the Board of Directors of the Company on March 28, 2024.

2. Basis of presentation and going concern

The Company prepares its consolidated financial statements on a going concern basis in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) (the “IFRS Accounting Standards”) and IFRS Interpretations Committee (“IFRIC”) which the Canadian Accounting Standards Board has approved for incorporation into Part I of the Chartered Professional Accountants Canada Handbook. These consolidated financial statements have been prepared under the historical cost method, except for certain financial instruments measured at fair value. In preparing these financial statements, management has considered all available information about the future, which is at least, but not limited to, twelve months from year-end. Significant accounting judgments and estimates used by management in the preparation of these consolidated financial statements are presented in Note 4.

These 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 $38.2 million, including cash and cash equivalents of $2.1 million as at December 31, 2023. During the year ended December 31, 2023, the Company reported a net loss of $38.2 million, including impairment to property, plant and equipment of $6.0 million, increase in cost of sales of $3.0 million compared to the year ended December 31, 2022, plus interest and financing expense of $8.2 million and a loss on metals contract liability of $3.4 million. At December 31, 2023, 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.

Cash flow during the year was impacted by various maintenance shutdowns of the Cosalá Operations and Galena Complex for total of approximately 30 days and 5 days, respectively, capital costs for the Galena hoist project, and lower U.S. dollar to Mexican peso exchange rate, in addition to fluctuations in commodity prices compared to the prior year ended December 31, 2022 and inflationary pressures on certain operating and capital costs.

Continuance as a going concern is dependent upon the 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. Since 2020 to 2023, the Company was successful in raising funds through equity offerings, debt arrangements, convertible debentures, royalty sales, and registered shelf prospectuses. 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 cash flow positive production at the Cosalá Operations and Galena Complex, allowing the Company to generate sufficient operating cash flows, are significant judgments in these consolidated financial statements.

As a result, several material uncertainties cast substantial doubt upon the going concern assumption, including cash flow positive production at the Cosalá Operations and Galena Complex, and ability to raise additional funds as necessary to fund these operations and meet obligations as they come due.

These consolidated financial statements do not reflect any adjustments to carrying values of assets and liabilities and the reported expenses and 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.

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

3. Summary of material accounting policies

The material accounting policies used in the preparation of these consolidated financial statements are as follows:

a. Consolidation

These consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (its subsidiaries, including special purpose entities). Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Where the Company’s interest in a subsidiary is less than 100%, the Company recognizes non-controlling interests. All intercompany transactions and balances, income and expenses have been eliminated.

The Company applies the acquisition method to account for business combinations. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Company elects on an acquisition-by-acquisition basis whether to measure non-controlling interest at its fair value, or at its proportionate share of the recognized amount of identifiable net assets. Acquisition-related costs are expensed as incurred. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is negative, a bargain purchase gain is recognized immediately in profit or loss.

b. Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components.  Determination of operating segments are based on the reports reviewed by the chief operating decision makers that are used to make strategic decisions about resources to be allocated to the segment and performance assessment, and for which discrete financial information is available.  Unallocated items not directly attributable to a segment comprise mainly of corporate assets and head office expenses.

c.   Presentation currency and functional currency

The Company’s presentation currency is the U.S. dollar (“USD”). The functional currency of the Company’s Canadian subsidiaries is the Canadian dollar (“CAD”), and the functional currency of its U.S. and Mexican subsidiaries is the USD. The consolidated financial statements of the Company are translated into the presentation currency. Assets and liabilities have been translated using the exchange rate at period end, and income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions (the average rate for the period). All resulting exchange differences are recorded in the foreign currency translation reserve.

d.   Foreign currency translations

Transactions in foreign currencies are translated into the entities’ functional currency at the exchange rate at the date of the transactions. Monetary assets and liabilities of the Company’s operations denominated in a currency other than the functional currency are translated at the rate in effect at the statement of financial position date, and non-monetary items at historic exchange rates at each transaction date. Revenue and expense items are translated at average exchange rates of the reporting period. Gains and losses on translation are charged to the statements of loss and comprehensive loss.

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

e.   Revenue recognition

The Company applies the following five-step approach in recognizing revenue from contracts with customers:

· Identify the enforceable contract with the customer.

· Identify the separate performance obligations in the contract from transferring the distinct good or service.

· Determine the transaction price for consideration of transferring the good or service.

· Allocate the transaction price to the separate performance obligations identified.

· Recognize revenue when each separate performance obligation is satisfied.

The Company recognizes revenue through entering into concentrate sales contracts with customers with the performance obligation of delivering its concentrate production in exchange for consideration valued initially under provisional pricing arrangements. Revenue from sales is recorded at the time of delivery based on forward prices for the expected date of final settlement. The final sale prices are determined by quoted market prices in a period subsequent to the date of sale.

Subsequent variations in metal prices are recognized as embedded derivative pricing adjustments at fair value from contracts with customers.

The Company recognizes deferred revenue from advanced consideration received for fixed and variable precious metals deliveries over a specified period. Deferred revenue is recognized into revenue as performance obligations to metals delivery are satisfied over the term of the delivery contract.

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.

f. Defined benefit plans

The cost of defined benefit plans is determined using the projected unit credit method. The related pension liability recognized in the consolidated statement of financial position is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.

Actuarial valuations for defined benefit plans are carried out annually. The discount rate applied in arriving at the present value of the pension liability represents the yield on high quality corporate bonds denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

Actuarial gains and losses arise from the difference between the actual long-term rate of return on plan assets for a period and the expected long-term rate of return on plan assets for that period, or from changes in actuarial assumptions used to determine the accrued benefit obligation. Actuarial gains and losses arising in the year are recognized in full in the period in which they occur, in other comprehensive income and retained earnings without recycling to the consolidated statement of loss and comprehensive loss in subsequent periods.

Current service cost, the recognized element of any past service cost, interest expense arising on the pension liability and the expected return on plan assets are recognized in the same line items in the consolidated statement of loss and comprehensive loss as the related compensation cost.

The values attributed to plan liabilities are assessed in accordance with the advice of independent qualified actuaries. Service costs arising from plan amendments are recognized immediately.

g. Share-based payments

The Company’s stock option plan allows its employees (including directors and officers) and non-employees to acquire shares of the Company. Accordingly, the fair value of the option is either charged to operations or capitalized to exploration or development expenditures, depending on the accounting for the optionee’s other compensation, with a corresponding increase in equity reserve.

The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted using the Black-Scholes Option Pricing Model.

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

The costs of equity-settled transactions are recognized, together with a corresponding increase in equity reserve, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the “vesting date”). The cumulative expense recognized for equity-settled transactions at each reporting date up to the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in equity reserve. No expense is recognized for awards that do not ultimately vest.

Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.

h.   Income taxes

Income tax comprises of current and deferred tax.  Income tax is recognized in the consolidated statement of loss and comprehensive loss except to the extent that it relates to items recognized directly in other comprehensive income (loss) or directly in equity, in which case the income tax is also recognized directly in other comprehensive income (loss) or equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries operate and generate taxable profit. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities in the consolidated statement of financial position and the corresponding tax bases used in the computation of taxable profit. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the consolidated statement of financial position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses to the extent it is probable future taxable profits will be available against which they can be utilized.

The Company did not recognize any deferred income taxes relating to its investments in subsidiaries.

Deferred tax assets and liabilities are offset where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset.

i. Earnings/loss per share

Basic earnings/loss per share is calculated by dividing the net earnings/loss for the period attributable to equity owners of the Company by the weighted average number of common shares outstanding during the period.

Diluted earnings/loss per share is calculated by adjusting the weighted average number of common shares outstanding for dilutive instruments. The number of shares included with respect to options, warrants and similar instruments is computed using the treasury stock method. The treasury stock method, which assumes that outstanding stock options and warrants with an average exercise price below the market price of the underlying shares, are exercised and the assumed proceeds are used to repurchase common shares of the Company at the average market price of the common shares for the period. The Company’s potentially dilutive common shares comprise stock options granted to employees, and warrants.

j. Comprehensive income (loss)

Comprehensive income (loss) is the change in the Company’s net assets that results from transactions, events and circumstances from sources other than the Company’s shareholders and includes items that would not normally be included in net earnings such as foreign currency gains or losses related to the Company’s net investment in foreign operations and unrealized gains or losses on available-for-sale securities net of tax. The Company’s comprehensive income (loss), components of other comprehensive income (loss) and cumulative translation adjustments are presented in the consolidated statements of comprehensive income (loss) and the consolidated statements of changes in equity.

Page | 12

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

k. Inventories

Concentrates, ore stockpile, and spare parts and supplies are valued at the lower of cost and estimated net realizable value. Cost for concentrates and ore stockpile includes all direct costs incurred in production including direct labour and materials, freight, depreciation and amortization and directly attributable overhead costs determined on a weighted average basis for the Mexican operations and first in, first out method for the U.S. operations. Cost for spare parts and supplies are determined using the 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.

Any write-downs of inventory to net realizable value are recorded as cost of sales. If there is a subsequent increase in the value of inventories, the previous write-downs to net realizable value are reversed to the extent that the related inventory has not been sold.

Ore stockpile represents ore that has been extracted from the mine and is available for further processing. Costs added to ore stockpile are valued based on current mining cost per tonne incurred up to the point of stockpiling the ore and are removed at the average cost per tonne. Ore stockpile is verified by periodic surveys.

Materials and supplies inventory are valued at the lower of cost and net realizable value, where cost is determined using the first-in-first-out method. Any provision for obsolescence is determined by reference to specific items of stock. A regular review is undertaken to determine the extent of any provision for obsolescence by comparing those items to their net realizable value. If carrying value exceeds net realizable value, a write-down is recognized.

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.

l. Property, plant and equipment

(i) Producing mining interests

Producing mining interests are carried at cost less accumulated depletion and amortization and accumulated impairment losses. Following the completion of commissioning, the costs related to the mining interests are depleted and charged to operations on the unit of production method as a proportion of estimated recoverable mineral reserves.

Completion of the commissioning is deemed to have occurred when major mine and processing plant components are completed, operating results are being achieved consistently for a period of time and that there are indicators that these operational results, including mill capacity and recovery, will be sustainable in the future.

Construction in progress is not depreciated until the assets are ready for their intended use.

(ii) Non-producing mining interests

The Company follows the method of accounting for its non-producing mining interests whereby all costs relating to the acquisition and development are deferred and capitalized by property until the property to which they directly relate is placed into production, sold, discontinued or subject to a condition of impairment. Exploration expenses not related to placing the property into production are expensed as incurred.

Page | 13

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

In the event that a mining interest is placed into production, capitalization of costs ceases, the costs are transferred to producing mining interests and the mining interest is depleted on a unit of production basis. The recoverability of amounts is dependent upon the discovery of economically recoverable mineral reserves, the ability of the Company to finance the development of the properties, and on the future profitable production or proceeds from the disposition thereof.

(iii) Plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate assets (major components) of property, plant and equipment.

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within that part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. Repairs and maintenance are charged to the consolidated statement of loss and comprehensive loss during the period in which they are incurred.

Depreciation is recorded over the estimated useful life of the asset as follows:

· Mining interests – unit of production based upon estimated proven and probable reserves.

· Plant and equipment – 3-30 years over straight line basis or units of production based upon estimated proven and probable reserves as applicable.

· Corporate office equipment – 3-10 years over straight line basis.

Residual values, method of amortization and useful lives of the assets are reviewed annually and adjusted if appropriate.

(iv) Impairment and reversal of impairment

The Company reviews and evaluates the carrying values of its property, plant and equipment to determine whether there is an indication of impairment or reversal of impairment. For exploration and evaluation assets, indication includes but is not limited to expiration of the right to explore, substantive expenditure in the specific area is neither budgeted nor planned, and if the entity has decided to discontinue exploration activity in the specific area.

When the carrying value of assets exceeds the recoverable amount, the carrying value of the assets is reduced to the recoverable amount. The recoverable amount takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use of the asset. To achieve this, the recoverable amount is the higher of value in use (being the net present value of expected pre-tax future cash flows of the relevant asset) and fair value less costs to dispose the asset.

If, after the Company has previously recognized an impairment loss, circumstances indicate that the recoverable amount of the impaired assets is greater than the carrying amount, the Company reverses the impairment loss by the amount the revised fair value exceeds its carrying amount, to a maximum of the previous impairment loss. In no case shall the revised carrying amount exceed the original carrying amount, after depreciation or amortization, that would have been determined if no impairment loss had been recognized.

(v) Care and maintenance

The Company may elect to place its mining operations in care and maintenance if continued operation is no longer economically feasible due to change in circumstances. During care and maintenance, depreciable property, plant and equipment continue to be depreciated over their useful lives.

Page | 14

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

m. Decommissioning provision

The Company recognizes contractual, statutory and legal obligations associated with retirement of mining properties when those obligations result from the acquisition, construction, development or normal operation of the assets. Initially, the decommissioning provision is recognized at its fair value in the period in which it is incurred. Upon initial recognition of the liability, the corresponding decommissioning provision is added to the carrying amount of that asset and the cost is amortized as an expense over the economic life of the related asset. Following the initial recognition of the decommissioning provision, the periodic unwinding of the discount is recognized in the consolidated statement of loss and comprehensive loss and adjusted for changes to the amount or timing of the underlying cash flows to settle the obligation.

n. Financial instruments

The Company classifies and measures its financial instruments at fair value, with changes in fair value recognized in profit or loss as they arise. Unless restrictive criteria regarding the objective and contractual cash flows of the instrument are met then classification and measurement are at either amortized cost or fair value through other comprehensive income.

Cash and cash equivalents and trade and other receivables are classified and measured as financial assets at amortized cost. Embedded derivatives arising from subsequent adjustments in provisional sales revenue are classified and measured as financial instruments at fair value through profit or loss. Trade and other payables are classified and measured as financial liabilities at amortized cost. Loans receivable are classified and measured as financial assets at fair value through profit or loss and loans payable are classified as financial liabilities initially at fair value through profit or loss and subsequently carried at amortized cost. Investment in equity instruments are classified and measured as financial assets at fair value through other comprehensive income.

Loans from the government are accounted for as a loan payable until forgiveness is reasonably assured and the loan is derecognized through the consolidated statement of loss and comprehensive loss.

o. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset and amortized over the expected useful life of that asset. Other borrowing costs not directly attributable to a qualifying asset are expensed in the period incurred.

p. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

q. Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence, and related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.

r. Restricted cash

Restricted cash includes cash that has been pledged for reclamation and closure activities which are not available for immediate disbursement.

Page | 15

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

4. Significant accounting judgments and estimates

The preparation of financial statements in conformity with the IFRS Accounting Standards 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 from those estimates.

The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:

(i) Reserves and resources

Proven and probable reserves are the economically mineable parts of the Company’s measured and indicated mineral resources. The Company estimates its proven and probable reserves and measured and indicated and inferred mineral resources based on information compiled by appropriately qualified persons. The information relating to the geological data on the size, depth and shape of the ore bodies requires complex geological judgments to interpret the data. The estimation of future cash flows related to proven and probable reserves is based upon factors such as 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.

Changes in the proven and probable reserves or measured, indicated and inferred mineral resources estimates may impact the carrying value of mining properties and equipment, depletion and amortization, impairment assessments and the timing of decommissioning provisions.

(ii) Depletion and amortization

Mining properties are depleted using the unit-of-production method over a period not to exceed the estimated life of the ore body based on estimated recoverable reserves.

Property, plant and equipment are depreciated, net of residual value over their estimated useful life but do not exceed the related estimated life of the mine based on estimated recoverable mineral reserves.

The calculation of the units of production rate, and therefore the annual depletion and amortization expense, could be materially affected by changes in the underlying estimates. Changes in estimates can be the result of actual future production differing from current forecasts of future production and expansion of mineral reserves through exploration activities.

(iii) Decommissioning provision

The Company assesses its decommissioning provision on an annual basis or when new material information becomes available. Mining and exploration activities are subject to various laws and regulations governing the protection of the environment. In general, these laws and regulations are continually changing and the Company has made, and intends to make in the future, expenditures to comply with such laws and regulations. Accounting for decommissioning provision requires management to make estimates of the time and future costs the Company will incur to complete the rehabilitation work required to comply with existing laws and regulations at each mining operation. Also, future changes to environmental laws and regulations could increase the extent of rehabilitation work required to be performed by the Company. Increases in future costs could materially impact the amounts charged to operations for decommissioning provision. The provision represents management’s best estimate of the present value of the future decommissioning provision. The actual future expenditures may differ from the amounts currently provided.

(iv) Share-based payments

The amount expensed for share-based compensation is based on the application of a recognized option valuation formula, which is highly dependent on, among other things, the expected volatility of the Company’s registered shares, estimated forfeitures, and the expected life of the options. The Company uses an expected volatility rate for its shares based on past stock trading data, adjusted for future expectations, and actual volatility may be significantly different.

Page | 16

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

The resulting value calculated is not necessarily the value that the holder of the option could receive in an arm’s length transaction, given that there is no market for the options and they are not transferable. It is management’s view that the value derived is highly subjective and dependent entirely upon the input assumptions made.

(v) Income taxes

Preparation of the consolidated financial statements requires an estimate of income taxes in each of the jurisdictions in which the Company operates. The process involves an estimate of the Company’s current tax exposure and an assessment of temporary differences resulting from differing treatment of items, such as depletion and amortization, for tax and accounting purposes, and when they might reverse.

These differences result in deferred tax assets and liabilities that are included in the Company’s consolidated statements of financial position.

An assessment is also made to determine the likelihood that the Company’s future tax assets will be recovered from future taxable income. To the extent that recovery is not considered likely, the related tax benefits are not recognized.

Judgment is required to continually assess changing tax interpretations, regulations and legislation, to ensure liabilities are complete and to ensure assets, net of valuation allowances, are realizable. The impact of different interpretations and applications could be material.

(vi) Assessment of impairment and reversal of impairment indicators

The Company applies judgment in assessing whether indicators of impairment or reversal of impairment exist for a cash generating unit which would require impairment testing. Internal and external sources such as changes in use of an asset, capital and production forecasts, commodity prices, quantities of reserves and resources, and changes in market, economic, and legal environment are used by management in determining whether there are any indicators.

The Company determines recoverable amount based on the after-tax discounted cash flows from a cash generating unit’s life-of-mine cash flow projection which incorporates 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. Absent a life-of-mine cash flow projection, a market approach of comparable companies is used to determine recoverable amount of in-situ ounces from the cash generating unit.

(vii) Commercial production

The determination of timing on which a mining property enters into commercial production is a significant judgment since capitalization of development costs ceases upon declaration of commercial production. As a mining property is constructed, development costs incurred are capitalized. Commercial production is declared once the mining property is available for its intended use on a commercial scale as defined by management. Revenue recognition, cost of sales, and depletion of the mining property begins when commercial production has been achieved, and are recognized into the consolidated statement of loss and comprehensive loss.

(viii) Cash flows from ongoing production and impact on operations

The Company had negative operating cash flows during the year ended December 31, 2023 with a working capital deficit as at December 31, 2023. The ability to achieve cash flow positive production through meeting production targets at the Cosalá Operations and Galena Complex, allowing the Company to generate sufficient operating cash flows, while facing market fluctuations in commodity prices and inflationary pressures, and maintaining access to capital markets, are significant judgments in these consolidated financial statements with respect to the Company’s liquidity. Should the Company continue to experience lower commodity prices and negative operating cash flows in future periods, the Company will need to raise additional funds through the issuance of equity or debt securities which funding cannot be assured.

Page | 17

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

5. Changes in accounting policies and recent accounting pronouncements

The following are changes in accounting policies effective as of January 1, 2023:

(i) Income taxes

The Company adopted amendments to IAS 12 - Income Taxes requiring companies to recognize deferred tax on transactions that give rise to equal amounts of taxable and deductible temporary differences on initial recognition. The amendments were effective for accounting periods beginning on or after January 1, 2023 and adoption did not have a material impact on the Company’s financial statements.

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted, including Non-Current Liabilities with Covenants (Amendments to IAS 1) effective for annual periods beginning on or after January 1, 2024. These standards are not expected to have a material impact on the Company in the current or future reporting periods.

6. Trade and other receivables

	December 31,		December 31,
	2023		2022
Trade receivables	$	5,875	$	5,624
Other receivables		3,611		5,928
	$	9,486	$	11,552

Other receivables as at December 31, 2022 include $5.3 million in refundable tax credits from the Galena Complex through the Employee Retention Credit under the U.S. CARES Act collected in April 2023.

7. Inventories

	December 31,		December 31,
	2023		2022
Concentrates	$	1,769	$	1,694
Finished goods		-		368
In-circuit work in progress		-		205
Ore stockpiles		913		898
Spare parts and supplies		5,975		5,670
	$	8,657	$	8,835

The amount of inventories recognized in cost of sales was $75.1 million during the year ended December 31, 2023 (2022: $72.1 million) including concentrates, ore on leach pads, and ore stockpiles write-down to net realizable value of $1.7 million (2022: $8.5 million) during the year ended December 31, 2023.

Page | 18

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

8. 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, 2022	$	208,266		$	12,469	$	110,273		$	11,373		$	240		$	342,621
Asset additions		9,302			-		10,304			720			(4	)		20,322
Change in decommissioning provision		(2,156	)		-		-			-			-			(2,156	)
Balance at December 31, 2022		215,412			12,469		120,577			12,093			236			360,787
Asset additions		11,517			-		8,420			238			1			20,176
Asset disposals		-			-		(769	)		(646	)		-			(1,415	)
Change in decommissioning provision		(110	)		-		-			-			-			(110	)
Balance at December 31, 2023	$	226,819		$	12,469	$	128,228		$	11,685		$	237		$	379,438
Accumulated depreciation
and depletion
Balance at January 1, 2022	$	(101,091	)	$	-	$	(57,755	)	$	(5,732	)	$	(130	)	$	(164,708	)
Depreciation/depletion for the year		(9,918	)		-		(10,077	)		(1,306	)		(39	)		(21,340	)
Impairment for the year		(3,539	)		-		(9,901	)		-			-			(13,440	)
Balance at December 31, 2022		(114,548	)		-		(77,733	)		(7,038	)		(169	)		(199,488	)
Depreciation/depletion for the year		(11,926	)		-		(7,707	)		(1,185	)		(31	)		(20,849	)
Impairment for the year		(6,000	)		-		-			-			-			(6,000	)
Balance at December 31, 2023	$	(132,474	)	$	-	$	(85,440	)	$	(8,223	)	$	(200	)	$	(226,337	)
Carrying value
at December 31, 2022	$	100,864		$	12,469	$	42,844		$	5,055		$	67		$	161,299
at December 31, 2023	$	94,345		$	12,469	$	42,788		$	3,462		$	37		$	153,101

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 years ended December 31, 2023 and 2022 caused by market capitalization being less than the net assets of the Company. Impairments were recorded as at December 31, 2023 and September 31, 2022. The Company assessed the recoverability of the $32.1 carrying amount of the Relief Canyon Mine cash-generating unit (2022: $56.7 million) and a $6.0 million impairment to the carrying value was identified (2022: $13.4 million). The Company allocated $6.0 million of the impairment against mineral interests relating to the Relief Canyon Mine as at December 31, 2023 (2022: $3.5 million of the impairment against mineral interests and $9.9 million to plant and equipment relating to the Relief Canyon Mine as at September 30, 2022). The $26.1 million recoverable amount of the Relief Canyon Mine’s net assets (2022: $43.3 million) was determined based on a market approach of trading multiples of comparable companies. Publicly traded companies with gold mining assets of similar development and production stages to the Relief Canyon Mine were identified and assessed for total enterprise value and contained gold equivalent ounces to derive at an implied valuation multiple. The derived implied valuation multiples of feasibility and pre-production stage companies ranging from $23 per contained gold equivalent ounce to $31 per contained gold equivalent ounce were compared to that of the Relief Canyon Mine in assessing the recoverability of its carrying amount (2022: development and production stage companies ranging from $64 per contained gold equivalent ounce to $77 per contained gold equivalent ounce).

Fair value models are considered to be Level 3 within the fair value hierarchy. Key assumptions used in Relief Canyon Mine’s fair value models include estimation of total enterprise value and contained gold equivalent ounces of publicly traded companies based on observable market data. Total enterprise value was derived from market capitalization adjusted for a control premium while excluding cash and cash equivalents and book value of other non-mining assets and discounting for production delays. An increase and decrease in market capitalization of 1% would impact the recoverable amount by estimates of approximately $0.2 million (2022: $0.4 million) increase and $0.2 million (2022: $0.4 million) decrease, respectively. If a subsequent impairment test indicated further changes in market multiples and contained gold equivalent ounces, it could result in a material recovery or further impairment to the carrying amount.

The carrying amounts of mineral interests, plant and equipment, and right-of-use lease assets from the Relief Canyon Mine is approximately $16.3 million, $9.6 million, and $1.5 million, respectively, as at December 31, 2023 (December 31, 2022: $22.5 million, $12.4 million, and $3.0 million, respectively).

Page | 19

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

The Company completed the acquisition of the San Felipe property located in Sonora, Mexico on October 8, 2020. As at December 31, 2023, the carrying amount of this property was $12.5 million included in non-producing properties.

9. Precious metals delivery and purchase agreement

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 secured by shares, property, and assets of Relief Canyon. The Purchase Agreement consisted 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 December 31, 2023, the fair value of the repurchase option was nil.

The Company initially recorded the advances received on precious metals delivery, net of transaction costs, as deferred revenue and expected to recognize the amounts in revenue as performance obligations to metals delivery were satisfied over the term of the metals delivery and purchase agreements.

As at December 31, 2021, the Company derecognized the outstanding carrying value of deferred revenue, net of transaction costs, and recognized the fixed and variable deliveries of precious metals as a financial liability measured at fair value through profit or loss as the Company expected that metal deliveries to Sandstorm may no longer be satisfied through internal gold production alone. The fair value of the metals contract liability was determined using forward commodity pricing curves at the end of the fiscal 2021 reporting period resulting in $20.8 million loss to fair value on metals contract liability. A $3.4 million loss to fair value on metals contract liability due to changes in forward commodity pricing curves was recorded during the year ended December 31, 2023 (2022: $0.7 million loss).

On February 26, 2023, the Company amended its Purchase Agreement with Sandstorm for the right to increase its advance payment by $2.75 million per calendar quarter or up to $11.0 million in aggregate during fiscal 2023 in order to satisfy the gold delivery obligations under the Purchase Agreement. The advances are to be repaid through balancing fixed deliveries of gold commencing at the end of the existing agreement within the 12-month period from November 2025 to October 2026. The advances of $2.75 million per quarter were drawn in full during fiscal 2023.

The following table summarizes the continuity of the Company’s net metals contract liability during the year:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Net metals contract liability, beginning of year	$	30,989		$	40,905
Advance increase (net of financing expense)		13,989			-
Delivery of metals produced		(1,720	)		(3,278	)
Delivery of metals purchased		(9,899	)		(7,436	)
Revaluation of metals contract liability		3,478			798
Net metals contract liability, end of year	$	36,837		$	30,989
Current portion	$	12,512		$	11,324
Non-current portion		24,325			19,665
	$	36,837		$	30,989

Page | 20

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

10. Convertible debenture

On April 28, 2021, the Company issued a $12.5 million CAD convertible debenture (the “Convertible Debenture”) due April 28, 2024 with interest payable at 8% per annum secured by the Company’s interest in the Galena Complex and by shares of one of the Company’s Mexican subsidiaries.

The Convertible Debenture was: redeemable at the Company’s option to prepay the principal amount subject to payment of a redemption premium of 30% during the first year, 20% during the second year, and 10% during the third year prior to maturity (the “Redemption Option”); retractable at the holder’s option at a cumulative $0.3 million CAD per month starting in the second month from inception where the Company may settle the retraction amount through either cash or issuance of the Company’s common shares determined by dividing 95% of the 20 day volume weighted average price of the Company’s common shares (the “Retraction Option”); and convertible at the holder’s option into the Company’s common shares at a conversion price of $3.35 CAD (the “Conversion Option”).

On inception, the Convertible Debenture, which may be settled through a fixed amount of the Company’s own equity instruments, was treated as a compound financial instrument with the principal portion classified as a liability component and the Conversion Option as an equity component. The initial fair value of the principal portion 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 were allocated to the Conversion Option as equity. A net derivative liability of $1.4 million was recorded on initial recognition based on the estimated fair value of the combined Redemption Option and Retraction Option.

On November 12, 2021, the Company amended the Convertible Debenture by increasing the principal balance by $6.3 million CAD to a total outstanding principal of $18.8 million CAD, in addition to amending its conversion price of $3.35 CAD to $1.48 CAD, and the terms to its Retraction Option retractable at a cumulative $0.3 million CAD per month to a cumulative $0.45 million CAD per month. All other material terms of the Convertible Debenture remained unchanged. The Company derecognized the associated carrying values of the Convertible Debenture prior to amendment and recognized an amended compound financial instrument with the amended principal portion classified as a liability component and the amended Conversion Option as an equity component. The fair value of the amended principal portion was determined using a market interest rate for an equivalent non-convertible instrument at the date of the amendment. A net derivative liability of $2.1 million was recorded on amendment date based on the estimated fair value of the combined Redemption Option and Retraction Option.

On October 22, 2022, the Company amended the Convertible Debenture by increasing the principal balance by $7.0 million CAD to a total outstanding principal of $25.8 million CAD, in addition to amending its interest rate of 8% per annum to 9.5% per annum, its conversion price of $1.48 CAD to $1.00 CAD, and the terms to its Retraction Option retractable at a cumulative $0.45 million CAD per month to a cumulative $0.5 million CAD per month with a beginning cumulated retraction balance of $1.5 million CAD. All other material terms of the Convertible Debenture remained unchanged. The Company derecognized the associated carrying values of the Convertible Debenture prior to amendment and recognized an amended compound financial instrument with the amended principal portion classified as a liability component and the amended Conversion Option as an equity component. The fair value of the amended principal portion was determined using a market interest rate for an equivalent non-convertible instrument at the date of the amendment. A net derivative liability of $1.3 million was recorded on amendment date based on the estimated fair value of the combined Redemption Option and Retraction Option.

On June 21, 2023, the Company amended the Convertible Debenture by increasing the principal balance by $8.0 million CAD to a total outstanding principal of $33.8 million CAD, in addition to amending its interest rate of 9.5% per annum to 11.0% per annum, its conversion price of $1.00 CAD to $0.80 CAD, the terms to its Retraction Option retractable at a cumulative $0.5 million CAD per month to a cumulative $1.0 million CAD per month starting in August 2023, and extending the maturity date from April 28, 2024 to July 1, 2024, with mutual option to extend by one calendar quarter up to April 28, 2025, with October 1, 2024 being the effective maturity date as at December 31, 2023, and April 28, 2025 being the effective maturity date as at March 28, 2024. All other material terms of the Convertible Debenture remained unchanged. The Company derecognized the associated carrying values of the Convertible Debenture prior to amendment and recognized an amended compound financial instrument with the amended principal portion classified as a liability component and the amended Conversion Option as an equity component. The fair value of the amended principal portion was determined using a market interest rate for an equivalent non-convertible instrument at the date of the amendment. A net derivative liability of $1.3 million was recorded on amendment date based on the estimated fair value of the combined Redemption Option and Retraction Option.

Page | 21

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

On October 30, 2023, the Company amended the Convertible Debenture by increasing the principal balance by $2.0 million CAD to a total outstanding principal of $35.8 million CAD. All other material terms of the Convertible Debenture remained unchanged.

During the year ended December 31, 2023, the principal amount of the Convertible Debenture was reduced by $3.7 million CAD through partial exercises of the Retraction Option by the holder settled through issuance of 8,329,064 of the Company’s common shares (year ended December 31, 2022: $7.2 million CAD settled through issuance of 11,240,839 common shares).

The Company recognized a gain of $0.1 million for the year ended December 31, 2023 (2022: gain of $0.2 million) as a result of the change in the estimated fair value of the combined Redemption Option and Retraction Option.

11. Pre-payment facility

On December 12, 2022, the Company amended its existing offtake agreement with Ocean Partners USA, Inc. of lead concentrates produced from the Galena Complex to include a pre-payment facility of $3.0 million with an initial term of three years at an interest of U.S. SOFR rate plus 6.95% per annum (the “Facility”) to fund general working capital at the Galena Complex. Principal on the Facility is repaid through semi-monthly installments deductible from concentrate deliveries or paid in cash and can be redrawn on a revolving basis. The Facility shall automatically extend for a full calendar year if there is an outstanding payment balance within 12 months of the maturity of the Facility. The Facility was drawn in full in February 2023.

12. Promissory notes

On December 15, 2020, the Company issued a $5 million promissory note (the “2020 Promissory Note”) to Sandstorm due March 15, 2023 with interest payable at 7% per annum and repayable at the Company’s option prior to maturity. Repayment of principal on the 2020 Promissory Note began in June 2022 where $2.5 million was paid during the year ended December 31, 2022. On March 31, 2023, the Company amended the 2020 Promissory Note with the remaining principal of $2.5 million be repaid in four equal instalments due June 30 and October 1, 2023, and July 1 and October 1, 2024, in addition to amending its interest rate to 8% per annum. Principal of $0.6 million was paid during the year ended December 31, 2023.

On December 27, 2023, the Company issued a $2.4 million promissory note (the “2023 Promissory Note”) to Sandstorm due December 27, 2024 with interest payable at 8% per annum.

13. Government loan

On May 11, 2020, the Company received approximately $4.5 million in loan through the Paycheck Protection Program under the U.S. CARES Act (the “Government Loan”) to assist with payroll and other expenses at the Galena Complex during the COVID-19 pandemic. The Government Loan has a term of two years at an interest rate of 1% per annum and may be forgiven if proceeds are used for payroll and other specifically defined expenses and employee and compensation levels are maintained. The Company received confirmation via letter dated March 31, 2022 from the U.S. Small Business Administration that $4.3 million of the Government Loan has been forgiven resulting in a gain on forgiveness recognized through profit or loss during the year ended December 31, 2022.

14. Royalty payable

On April 12, 2023, the Company entered into a $4.0 million net smelter returns royalty agreement (the “Royalty Agreement”) with Sandstorm to be repaid through a 2.5% royalty on attributable production from the Galena Complex and Cosalá Operations. The royalty reduces to 0.2% on attributable production from the Galena Complex and Cosalá Operations after the aggregate repayment of $4.0 million and may be eliminated thereafter with a buyout payment of $1.9 million.

Page | 22

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

On inception, the Royalty Agreement was classified as a hybrid instrument of host financial liability with embedded derivatives from the reduced 0.2% royalty on attributable production and buyout payment. The Company elected at inception to designate the entire hybrid instrument at fair value through profit or loss with its initial fair value be representative of the $4.0 million in proceeds received. Subsequent measurement of fair value for the hybrid instrument was determined based on an income approach of expected future cash flows into a single current discounted amount. Key assumptions used in the fair value determination of the hybrid instrument as at December 31, 2023 include timing of repayment of the $4.0 million, which considers factors such as forecasted production and commodity prices in quantifying expected net smelter returns, feasibility of the reduced 0.2% royalty on attributable production versus the buyout payment, and applicable discount rates. The Company recognized a loss of $0.8 million for the year ended December 31, 2023 as a result of the change in the estimated fair value of the Royalty Agreement.

15. Post-employment benefit obligations

The Company maintains two non-contributory defined benefit pension plans covering substantially all employees at its U.S. operating subsidiary, U.S. Silver – Idaho, Inc. One plan covers salaried employees and one plan covers hourly employees. Benefits for the salaried plan are based on salary and years of service. Hourly plan benefits are based on negotiated benefits and years of service. The Company’s funding policy is to contribute annually the minimum amount prescribed, as specified by applicable regulations. The expected average service life of the active plan participants as at December 31, 2023 is approximately 9 years.

The amounts recognized in the consolidated statements financial position are as follows:

	December 31,		December 31,
	2023		2022
Present value of funded obligations		26,176		25,652
Fair value of plan assets		19,639		18,683
Deficit of funded plans	$	6,537	$	6,969

The movements in the defined benefit obligations are as follows:

	December 31,			December 31,
	2023			2022
Obligations, beginning of year	$	25,652		$	33,646
Current service costs		462			857
Interest costs		1,217			899
Benefits paid		(1,272	)		(1,243	)
Actuarial loss (gain)		117			(8,507	)
Obligations, end of year	$	26,176		$	25,652

The movements in the fair value of plan assets are as follows:

	December 31,			December 31,
	2023			2022
Assets, beginning of year	$	18,683		$	22,780
Return on assets		912			617
Actuarial gain (loss)		995			(3,857	)
Employer contributions		321			386
Benefits paid		(1,272	)		(1,243	)
Assets, end of year	$	19,639		$	18,683

Page | 23

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

The amounts recognized in the consolidated statements of loss and comprehensive loss are as follows:

	December 31,		December 31,
	2023		2022
Current service costs, interest costs, and return on assets included in cost of sales	$	767	$	1,139

The principal actuarial assumptions are as follows:

	December 31,			December 31,
	2023			2022
Discount rate (expense)		5.00	%		2.75	%
Discount rate (year end disclosures)		4.75	%		5.00	%
Future salary increases (salaried plan only)		5.00	%		5.00	%

A 1% decrease in discount rate would have resulted in approximately $3.6 million increase in the defined benefit obligation from $26.2 million to $29.8 million as at December 31, 2023 (2022: $3.4 million increase in the defined benefit obligation from $25.7 million to $29.1 million). A 1% increase in future salary increases would have resulted in approximately $0.1 million increase in the defined benefit obligation from $26.2 million to $26.3 million as at December 31, 2023 (2022: $0.1 million increase in the defined benefit obligation from $25.7 million to $25.8 million).

Plan assets are fully comprised of pooled or mutual funds. The expected return on plan assets at 4.9% (2022: 2.7%) is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yield on fixed interest investments is based on gross redemption yields as at the end of the reporting period. Expected returns on equity investments reflect long-term real rates of return in the market.

Expected contributions to pension benefit plans for the year ended December 31, 2024 are approximately $1.5 million, inclusive of contributions for fiscal 2023 of $0.6 million. For the year ended December 31, 2023, the actuarial gains charged to other comprehensive income are $0.9 million (2022: actuarial gains of $4.7 million).

16. Decommissioning provision

The decommissioning provision consists of land rehabilitation, demolition of buildings and mine facilities, and related costs. Although the ultimate amount of the decommissioning provision is uncertain, the fair value of these obligations is based on information currently available, including closure plans and the Company’s interpretation of current regulatory requirements.

Fair value is determined based on the net present value of future cash expenditures upon reclamation and closure. Reclamation and closure costs are capitalized into property, plant and equipment depending on the nature of the asset related to the obligation and amortized over the life of the related asset.

Page | 24

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

The decommissioning provision relates to reclamation and closure costs of the Company’s Cosalá Operations, Galena Complex, and Relief Canyon Mine. The decommissioning provision is estimated at an undiscounted amount of $20.5 million over a period of 5 to 15 years, and discounted using a risk-free rate varying from 3.5% to 10.2% (2022: estimated at an undiscounted amount of $19.9 million over a period of 5 to 15 years, and discounted using a risk-free rate varying from 2.3% to 10.0%).

	December 31,			December 31,
	2023			2022
Provisions, beginning of year	$	11,715		$	13,444
Decommissioning costs and change in estimates		(109	)		(2,156	)
Accretion on decommissioning provision		587			427
Provisions, end of year	$	12,193		$	11,715

17. Share capital

On May 17, 2021, the Company entered into an at-the-market offering agreement (the “May 2021 ATM Agreement”) where the Company may at its discretion and from time-to-time during the term of the May 2021 ATM Agreement, sell in the United States, through its agent, such number of common shares of the Company as would result in aggregate gross proceeds of up to $50.0 million. The May 2021 ATM Agreement expired on February 28, 2023 and the Company has received aggregate gross proceeds of $44.4 million through issuance of 44,085,122 common shares, with approximately $1.7 million in transaction costs incurred and offset against share capital.

During fiscal 2022, the Company closed quarterly non-brokered private placements with Sandstorm for total gross proceeds of $9.9 million through total issuance of 15,200,000 of the Company’s common shares priced at approximately $0.85 CAD per share.

The Company closed non-brokered private placements for total gross proceeds of $0.8 million in July of 2023 through total issuance of 2,234,041 of the Company’s common shares priced at approximately $0.47 CAD per share.

a. Authorized

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

	December 31,		December 31,
	2023		2022
Issued
218,689,766(2022:204,455,721)common shares	$	455,548	$	449,374
Nil (2022: Nil) preferred shares		-		-
	$	455,548	$	449,374

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.

Page | 25

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

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

				Year ended					Year ended
				December 31,					December 31,
				2023					2022
				Weighted					Weighted
				average					average
				exercise					exercise
	Number			price		Number			price
	(thousands)			CAD		(thousands)			CAD
Balance, beginning of year		12,367		$	2.40		12,579		$	2.81
Granted		8,200			0.62		3,750			1.20
Expired		(3,197	)		3.79		(3,962	)		2.56
Balance, end of year		17,370		$	1.30		12,367		$	2.40

The following table summarizes information on stock options outstanding and exercisable as at December 31, 2023:

	Weighted
	average				Weighted				Weighted
	remaining				average				average
Exercise	contractual				exercise				exercise
price	life		Outstanding		price		Exercisable		price
CAD	(years)		(thousands)		CAD		(thousands)		CAD
$0.01 to $1.00		2.46		8,500	$	0.62		2,933	$	0.62
$1.01 to $2.00		0.86		6,785		1.47		5,648		1.51
$3.01 to $4.00		0.93		2,085		3.54		2,085		3.54
				17,370	$	1.30		10,666	$	1.67

c. Share-based payments

The weighted average fair value at grant date of the Company’s stock options granted during the year ended December 31, 2023 was $0.22 (2022: $0.43).

Page | 26

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

The Company used the Black-Scholes Option Pricing Model to estimate fair value using the following weighted-average assumptions:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Expected stock price volatility (1)		67	%		68	%
Risk free interest rate		3.62	%		1.78	%
Expected life	3 years			3 years
Expected forfeiture rate		3.60	%		3.53	%
Expected dividend yield		0	%		0	%
Share-based payments included in cost of sales	$	-		$	-
Share-based payments included in general and
administrative expenses		1,764			2,487
Total share-based payments	$	1,764		$	2,487

(1)   Expected volatility has been based on historical volatility of the Company’s publicly traded shares.

d. Warrants

The warrants that are issued and outstanding as at December 31, 2023 are as follows:

Number of		Exercise		Issuance	Expiry
warrants		price (CAD)		date	date
	3,500,000		0.55	Jun 2023	Jun 21, 2026
	750,000		0.55	Oct 2023	Oct 30, 2026
	4,250,000

e.   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 50% 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 December 31, 2023, 2,379,554 (2022: 1,409,069) deferred share units are issued and outstanding.

Page | 27

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

18. Weighted average basic and diluted number of common shares outstanding

	Year ended		Year ended
	December 31,		December 31,
	2023		2022
Basic weighted average number of shares		212,701,865		184,416,034
Effect of dilutive stock options and warrants		-		-
Diluted weighted average number of shares		212,701,865		184,416,034

Diluted weighted average number of common shares for the year ended December 31, 2023 excludes nil anti-dilutive preferred shares (2022: nil), 17,370,000 anti-dilutive stock options (2022: 12,366,667) and 4,250,000 anti-dilutive warrants (2022: 1,275,792).

19. 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.

20. Revenue

The following is a disaggregation of revenue categorized by commodities sold:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Silver
Sales revenue	$	62,419		$	37,084
Derivative pricing adjustments		687			758
		63,106			37,842
Zinc
Sales revenue	$	38,421		$	59,262
Derivative pricing adjustments		325			1,280
		38,746			60,542
Lead
Sales revenue	$	25,438		$	29,731
Derivative pricing adjustments		19			(164	)
		25,457			29,567
Other by-products
Sales revenue	$	1,044		$	995
Derivative pricing adjustments		196			220
		1,240			1,215
Total sales revenue	$	127,322		$	127,072
Total derivative pricing adjustments		1,227			2,094
Gross revenue	$	128,549		$	129,166
Proceeds before intended use		188			-
Treatment and selling costs		(39,175	)		(44,150	)
	$	89,562		$	85,016

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 25).

Page | 28

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

21. 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:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Salaries and employee benefits	$	33,307		$	29,803
Raw materials and consumables		33,465			29,568
Utilities		4,181			4,285
Other costs		5,461			6,602
Costs before intended use		188			-
Employee retention credit		-			(3,962	)
Changes in inventories		(3,267	)		(2,663	)
Inventory write-downs		1,725			8,459
	$	75,060		$	72,092

22. 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:

	Year ended		Year ended
	December 31,		December 31,
	2023		2022
Salaries and employee benefits	$	2,502	$	2,848
Directors’ fees		341		372
Share-based payments		1,764		2,487
Professional fees		1,921		1,568
Office and general		2,078		2,105
	$	8,606	$	9,380

Page | 29

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

23. Income taxes

The components of income tax expense (recovery) are as follows:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Current income tax expense (recovery)	$	(2,157	)	$	4,836
Deferred income tax expense (recovery)		97			(1,118	)
Income tax expense (recovery)	$	(2,060	)	$	3,718

The Company’s effective rate of income tax differs from the statutory rate of 26.5% as follows:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Loss before income taxes	$	(40,233	)	$	(41,469	)
Statutory rate		26.5	%		26.5	%
Tax recovery at statutory rate		(10,662	)		(10,989	)
Mexican mining royalty		852			1,435
Impact of foreign tax rates		9			674
Non-deductible expenses		2,351			4,351
Losses not recognized		5,390			8,247
Income tax expense (recovery)	$	(2,060	)	$	3,718

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

	December 31,			December 31,
	2023			2022
Property, plant and equipment	$	787		$	815
Other		319			333
Total deferred tax liabilities		1,106			1,148
Provisions and reserves		(477	)		(800	)
Net deferred tax liabilities	$	629		$	348

Page | 30

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

Deferred income taxes have not been recognized in respect of the following deductible temporary differences, as management does not consider their utilization to be probable for the foreseeable future:

	December 31,		December 31,
	2023		2022
Inventories	$	39,904	$	9,074
Property, plant and equipment		41,892		36,709
Mexican tax losses (expiring in 2025 - 2031)		33,999		32,112
Canadian tax losses (expiring in 2034 - 2043)		37,103		31,892
U.S. tax losses (expiring in 2025 - 2037)		31,957		31,957
U.S. tax losses (no expiry)		165,649		191,790
Provisions and other		72,190		72,283
Deferred Mexican mining royalty		629		348
	$	423,323	$	406,165

Canadian tax losses include a dual Canadian and U.S. resident entity with $20.9 million in losses (2022: $17.6 million).

24. Key management transactions

Remuneration to directors and key management who have the authority and responsibility for planning, directing and continuing the activities of the Company:

	Year ended		Year ended
	December 31,		December 31,
	2023		2022
Salaries and employee benefits	$	1,235	$	1,595
Directors’ fees		341		372
Share-based payments		1,549		2,104

Gross proceeds of $0.4 million from the $0.8 million raised through non-brokered private placements in July of 2023 were from members of the Company’s board and management.

25. 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.

Page | 31

Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

As of December 31, 2023, the Company’s exposure to credit risk with respect to trade receivables amounts to $5.9 million (2022: $5.6 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 December 31, 2023, and December 31, 2022.

(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.

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

	December 31, 2023
			Less than						Over 5
	Total		1 year		2-3 years		4-5 years		years
Trade and other payables	$	22,960	$	22,960	$	-	$	-	$	-
Pre-payment facility		2,250		2,250		-		-		-
Promissory notes		4,275		4,275		-		-		-
Interest on promissory notes		303		303		-		-		-
Convertible debenture		18,146		18,146		-		-		-
Interest on convertible debenture		2,002		2,002		-		-		-
Royalty payable		5,087		2,487		2,600		-		-
Metals contract liability		36,837		12,512		24,325		-		-
Projected pension contributions		6,604		1,558		1,926		2,046		1,074
Decommissioning provision		20,459		-		-		-		20,459
Other long-term liabilities		1,610		-		787		194		629
	$	120,533	$	66,493	$	29,638	$	2,240	$	22,162

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

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

	December 31, 2023
			Less than						Over 5
	Total		1 year		2-3 years		4-5 years		years
Trade and other payables	$	455	$	455	$	-	$	-	$	-
Other long-term liabilities		981		-		787		194		-
	$	1,436	$	455	$	787	$	194	$	-

The following table summarizes the continuity of the Company’s total lease liabilities discounted using an incremental borrowing rate ranging from 3% to 20% applied during the year:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
Lease liabilities, beginning of year	$	3,142		$	4,774
Additions		225			720
Lease principal payments		(2,527	)		(2,352	)
Lease interest payments		(154	)		(1,040	)
Accretion on lease liabilities		750			1,040
Lease liabilities, end of year	$	1,436		$	3,142

(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 interest rate risk of the 3 month U.S. LIBOR rate plus 7.2% per annum from the Cosalá Operations’ advance payments of concentrate, and the 3 month U.S. SOFR rate plus 6.95% per annum from the Facility. Interest rates of other financial instruments are fixed.

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

(2) Currency risk

As at December 31, 2023, 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 December 31, 2023
	CAD		MXN
Cash and cash equivalents	$	244	$	641
Trade and other receivables		30		3,582
Trade and other payables		3,631		11,052

As at December 31, 2023, the CAD/USD and MXN/USD exchange rates were 1.32 and 16.89, respectively. The sensitivity of the Company’s net loss and comprehensive loss due to changes in the exchange rates for the year ended December 31, 2023 is included in the following table:

	CAD/USD		MXN/USD
	Exchange rate		Exchange rate
	+/- 10%		+/- 10%
Approximate impact on:
Net loss	$	1,545	$	3,512
Other comprehensive loss		128		20

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

As at December 31, 2023 and December 31, 2022, the Company does not have any non-hedge foreign exchange forward contracts outstanding. During the year ended December 31, 2023, and 2022, the Company did not settle any non-hedge foreign exchange forward contracts.

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 December 31, 2023, 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 $0.6 million (2022: $0.6 million).

As at December 31, 2023 and December 31, 2022, the Company does not have any non-hedge commodity forward contracts outstanding. During the year ended December 31, 2023, the Company did not settle any non-hedge commodity forward contracts.

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 year ended December 31, 2023 was nil (2022: 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 year ended December 31, 2023 was a gain of $0.1 million (2022: gain of $0.2 million).

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

b. Fair values

The fair value of cash, restricted cash, trade and other receivables, and other financial assets and liabilities listed below approximate their carrying amounts mainly due to the short-term maturities of these instruments.

The methods and assumptions used in estimating the fair value of 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.

· Metals contract liability: Fixed and variable deliveries of precious metals are classified and measured as financial liabilities at fair value through profit or loss determined using forward commodity pricing curves at end of the reporting period.

· Convertible debenture and promissory notes: The principal portion of the convertible debenture and promissory notes are initially measured at fair value and subsequently carried at amortized cost.

· Royalty payable: The financial liability is measured at fair value through profit or loss determined using discounted cash flows of expected future royalty payments at end of the reporting period.

· 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).

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

	December 31,		December 31,
	2023		2022
Level 1
Cash and cash equivalents	$	2,061	$	1,964
Restricted cash		4,351		4,139
Level 2
Trade and other receivables		9,486		11,552
Derivative instruments		1,230		991
Metals contract liability		36,837		30,989
Level 3
Royalty payable		3,947		-
Amortized cost
Pre-payment facility		2,250		-
Promissory notes		4,275		2,500
Government loan		-		222
Convertible debenture		15,384		9,621

26. 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 years ended December 31, 2023 and 2022 were earned in Mexico and the United States. The following segmented information is presented as at and during the years ended December 31, 2023 and 2022. The Cosalá Operations segment operates in Mexico while the Galena Complex and Relief Canyon segments operate in the United States.

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

	As at December 31, 2023										As at December 31, 2022
	Cosalá Operations		Galena Complex		Relief Canyon		Corporate and Other		Total		Cosalá Operations		Galena Complex		Relief Canyon		Corporate and Other		Total
Cash and cash equivalents	$	687	$	791	$	43	$	540	$	2,061	$	317	$	204	$	717	$	726	$	1,964
Trade and other receivables		7,068		2,388		-		30		9,486		3,921		7,593		-		38		11,552
Inventories		6,310		2,244		103		-		8,657		5,390		2,727		718		-		8,835
Prepaid expenses		1,003		909		404		516		2,832		745		1,232		452		601		3,030
Restricted cash		162		53		4,136		-		4,351		141		53		3,945		-		4,139
Property, plant and equipment		51,600		73,490		27,404		607		153,101		52,141		70,479		37,927		752		161,299
Total assets	$	66,830	$	79,875	$	32,090	$	1,693	$	180,488	$	62,655	$	82,288	$	43,759	$	2,117	$	190,819
Trade and other payables	$	12,184	$	4,843	$	1,421	$	4,512	$	22,960	$	12,861	$	8,029	$	2,658	$	3,512	$	27,060
Derivative instruments		-		-		-		1,230		1,230		-		-		-		991		991
Shares pending issuance from retraction		-		-		-		436		436		-		-		-		-		-
Pre-payment facility		-		2,250		-		-		2,250		-		-		-		-		-
Other long-term liabilities		30		1,074		-		506		1,610		-		1,192		-		623		1,815
Metals contract liability		-		-		-		36,837		36,837		-		-		-		30,989		30,989
Convertible debenture		-		-		-		15,384		15,384		-		-		-		9,621		9,621
Promissory notes		-		-		-		4,275		4,275		-		-		-		2,500		2,500
Royalty payable		-		-		-		3,947		3,947		-		-		-		-		-
Government loan		-		-		-		-		-		-		222		-		-		222
Post-employment benefit obligations		-		6,537		-		-		6,537		-		6,969		-		-		6,969
Decommissioning provision		2,605		5,563		4,025		-		12,193		2,070		5,603		4,042		-		11,715
Deferred tax liabilities		629		-		-		-		629		348		-		-		-		348
Total liabilities	$	15,448	$	20,267	$	5,446	$	67,127	$	108,288	$	15,279	$	22,015	$	6,700	$	48,236	$	92,230

	Year ended December 31, 2023															Year ended December 31, 2022
	Cosalá Operations			Galena Complex			Relief Canyon			Corporate and Other			Total			Cosalá Operations			Galena Complex			Relief Canyon			Corporate and Other			Total
Revenue	$	46,163		$	43,283		$	116		$	-		$	89,562		$	53,418		$	31,405		$	193		$	-		$	85,016
Cost of sales		(36,160	)		(38,132	)		(768	)		-			(75,060	)		(33,371	)		(30,969	)		(7,752	)		-			(72,092	)
Depletion and amortization		(7,982	)		(9,093	)		(3,614	)		(160	)		(20,849	)		(7,375	)		(7,473	)		(6,338	)		(154	)		(21,340	)
Care and maintenance costs		-			(594	)		(3,248	)		-			(3,842	)		-			(513	)		(3,987	)		-			(4,500	)
Corporate general and administrative		-			-			-			(8,606	)		(8,606	)		-			-			-			(9,380	)		(9,380	)
Exploration costs		(835	)		(2,455	)		(142	)		-			(3,432	)		(1,296	)		(2,122	)		(366	)		-			(3,784	)
Accretion on decommissioning provision		(212	)		(217	)		(158	)		-			(587	)		(164	)		(158	)		(105	)		-			(427	)
Interest and financing expense		(296	)		(414	)		(633	)		(6,846	)		(8,189	)		(210	)		(63	)		(1,199	)		(326	)		(1,798	)
Foreign exchange gain (loss)		(664	)		-			-			1,068			404			(863	)		-			-			(2,695	)		(3,558	)
Gain on disposal of assets		-			283			119			-			402			-			-			-			-			-
Impairment to property, plant and equipment		-			-			(6,000	)		-			(6,000	)		-			-			(13,440	)		-			(13,440	)
Loss on metals contract liability		-			-			-			(3,396	)		(3,396	)		-			-			-			(657	)		(657	)
Other gain on derivatives		-			-			-			120			120			-			-			-			214			214
Fair value loss on royalty payable		-			-			-			(760	)		(760	)		-			-			-			-			-
Gain on government loan forgiveness		-			-			-			-			-			-			4,277			-			-			4,277
Income (loss) before income taxes		14			(7,339	)		(14,328	)		(18,580	)		(40,233	)		10,139			(5,616	)		(32,994	)		(12,998	)		(41,469	)
Income tax recovery (expense)		1,876			184			-			-			2,060			(4,695	)		977			-			-			(3,718	)
Net income (loss) for the year	$	1,890		$	(7,155	)	$	(14,328	)	$	(18,580	)	$	(38,173	)	$	5,444		$	(4,639	)	$	(32,994	)	$	(12,998	)	$	(45,187	)

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Americas Gold and Silver Corporation

Notes to the consolidated financial statements

For the years ended December 31, 2023 and 2022

(In thousands of U.S. dollars, unless otherwise stated)      

c. Major customers

For the year ended December 31, 2023, the Company sold concentrates and finished goods to two major customers accounting for 51% of revenues from Cosalá Operations and 48% of revenues from Galena Complex (2022: two major customers accounting for 83% of revenues from Cosalá Operations and Galena Complex and 16% of revenues from Galena Complex).

27. Capital management

Capital is defined as equity. The Company’s objectives when managing its capital are to safeguard its ability to continue as a going concern and to maximize the value for its shareholders.

The Company’s activities have been funded so far through debt and equity financing based on cash needs, and through operations. The Company typically sells its shares by way of private placement. There were no changes in these objectives, policies and processes used to manage capital during the year.

The Company manages its capital structure and determines its capital requirements in light of the changing economic conditions and the risk characteristics of its assets. To reach its objectives the Company may have to maintain or adjust its capital structure by issuing new share capital or new debt.

At this stage of its development, it is the policy of the Company to preserve cash to fund its operations and complete its capital projects and not to pay dividends. As of December 31, 2023, and 2022, the Company is not subject to any externally imposed capital requirements.

The following summarizes the Company’s capital structure:

	December 31,		December 31,
	2023		2022
Equity attributable to shareholders of the Company	$	53,418	$	81,227

28. 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 $11.7 million (MXN 196.8 million), of which $5.0 million (MXN 84.4 million) would be applied against available tax losses. The Company appealed this reassessment and the Mexican tax authorities subsequently reversed $5.6 million (MXN 94.6 million) of their original reassessment. The remaining $6.1 million (MXN 102.2 million) consists of $5.0 million (MXN 84.4 million) related to transactions with certain suppliers and $1.1 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 $1.1 million (MXN 17.8 million) to secure the value added tax portion of the reassessment. The deductions of $5.0 million (MXN 84.4 million), if denied, would be offset by available tax losses. The Company accrued $1.2 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 December 31, 2023, the accrued liability of the probable obligation was $1.0 million (December 31, 2022: $1.0 million).

29. Subsequent events

On March 21, 2024, the Company amended its Purchase Agreement with Sandstorm for the right to increase its advance payment by $3.25 million per calendar quarter or up to $6.5 million in aggregate during the first half of 2024 in order to satisfy the gold delivery obligations under the Purchase Agreement. The advances are to be repaid through balancing fixed deliveries of gold commencing at the end of the existing agreement within the 6-month period from November 2026 to April 2027. The first calendar quarter advance of $3.25 million was drawn in full in March 2024.

On March 25, 2024, the Convertible Debenture’s effective maturity date was mutually extended to April 28, 2025 (see Note 10).

On March 27, 2024, the Company completed a private placement of 26,000,000 units at a price of $0.30 CAD per unit for total gross proceeds of $7.8 million CAD. Each unit consisted of one common share and one common share purchase warrant where each warrant is exercisable for one common share at an exercise price of $0.40 CAD for a period of three years.

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