Galena Shaft Upgrade Doubles Americas Gold & Silver Hoisting Capacity

The Hidden Bottleneck That Determines Whether Underground Mines Succeed or Fail

Every underground mine has a physical ceiling on how much material it can move in a given period of time. That ceiling is not set by the size of the orebody, the grade of the mineralisation, or even the skill of the workforce. It is set by the infrastructure that connects the surface to the underground workings. When that infrastructure is constrained, every other improvement in drilling, blasting, haulage, or processing runs headfirst into the same immovable limit.

Vertical shaft systems are the defining example of this dynamic. In deep underground operations, a shaft is not simply a hole in the ground. It functions as the mine's central artery, moving personnel downward, equipment inward, and ore upward, all within the same fixed window of operational hours. When hoisting capacity is insufficient, the mine cannot accelerate regardless of what else has been improved. The shaft sets the tempo for everything else.

This is precisely why the completion of Phase 2 of the Americas Gold & Silver Galena shaft upgrade at the Galena Complex in Idaho represents something more than a routine maintenance event. It reflects a deliberate decision to remove the most fundamental constraint on future production growth before that growth is attempted. Furthermore, as underground mine engineering has evolved, shaft system performance has increasingly become the defining variable in production outcomes.

What Hoisting Capacity Actually Means at an Operating Mine

The term "hoisting capacity" refers to the rate at which a shaft system can move material between underground levels and the surface. It is typically expressed in short tonnes per hour (stph) and is governed by a combination of motor power, skip payload, cycle time, rope speed, and safety braking systems.

In practical terms, the relationship between hoisting rate and daily production is straightforward. A shaft operating at 42 short tonnes per hour across a standard operational window produces a fixed ceiling on how many tonnes of ore and waste can be extracted per day. When underground development expands, new stopes are opened, and production faces advance, the shaft must be capable of handling the increased material flow. If it cannot, the mine operates below its geological potential regardless of what the resource estimate shows.

This is a critically underappreciated dynamic in underground mine valuation. Investors who focus exclusively on resource size and silver grade often miss the operational reality that infrastructure throughput can be the binding constraint on production conversion. Understanding mine economics basics makes it clear that a high-grade resource that cannot be efficiently hoisted to surface is, in practical terms, only partially accessible.

Breaking Down the Two-Phase Engineering Program

The Americas Gold & Silver Galena shaft upgrade at the No. 3 Shaft was structured as a sequential two-phase program, with each phase targeting different components of the hoisting system.

Phase 2, completed at the end of June 2026, addressed the more technically complex aspects of the system. The core modifications included:

• Replacement of the original 1,750-horsepower motor with a 2,250-horsepower unit, representing a 29% increase in raw motor power
• Installation of a backup 2,250-horsepower motor, eliminating single-point failure risk and providing redundancy that supports continuous operations
• Integration of weight-measuring systems to optimise skip payloads and maximise throughput per cycle
• Upgraded brake and hoist-pad assemblies enabling safe operation at materially higher rope speeds
• Automation and communications systems supporting real-time operational monitoring and control

The project required a two-week extension beyond the originally planned shutdown window, reflecting the complexity of integrating these systems within an operating mine environment. Total capital expenditure came in at approximately US$1.1 million. You can review the full company announcement for further technical detail on the upgrade scope.

The Numbers Behind a More Than 100% Capacity Increase

The performance outcomes from the completed upgrade are significant when viewed in the context of the operation's production targets.

To contextualise why this matters operationally: the company's near-term ore production target for the Galena Complex is approximately 650 tonnes per day by the end of 2026. Against a total hoisting capacity of roughly 1,350 tonnes per day, the upgraded shaft provides a capacity buffer of approximately 107% above the production target. In other words, at the targeted production rate, the shaft would be operating at roughly 48% of its total capacity.

That buffer is not idle capacity. It is strategic headroom. It means that as underground development accelerates, as new stopes are commissioned, and as the optimised mine plan is implemented in the second half of 2026, the shaft system will not become a rate-limiting factor again for the foreseeable future.

Infrastructure investments that remove operational ceilings at low capital intensity consistently rank among the highest-return expenditures an underground mining company can make. Doubling throughput capacity for US$1.1 million, in a sector where shaft rehabilitation projects routinely cost multiples of that figure, is a meaningful signal about how management approaches capital allocation.

Why Infrastructure Must Be Built Before Production, Not After

One of the less-discussed realities of underground mine development is the sequencing constraint that governs production growth. The logical order is non-negotiable:

1. Infrastructure capacity must be established before development rates can be sustainably increased
2. Underground development must advance before new ore stopes can be accessed and prepared
3. Stope preparation must be completed before ore production can scale to target levels
4. Processing infrastructure must be commissioned before mined ore can be converted to recoverable metal

Attempting to accelerate any of these steps without completing the one that precedes it creates operational bottlenecks that erode productivity and inflate unit costs. The Americas Gold & Silver Galena shaft upgrade addresses the first and most foundational step in this sequence, consequently clearing the path for every subsequent investment to deliver its intended value.

This sequencing logic also matters for investor analysis. The shaft upgrade does not immediately produce additional ounces of silver. Its value is forward-looking: it is the enabling condition that determines whether future investments in development, equipment, and exploration can actually be converted into production.

The Broader Galena Improvement Program

The No. 3 Shaft project is one component of a multi-pillar operational overhaul across the Galena Complex. Management has been advancing improvements simultaneously across several interconnected areas:

• Mining methods: Reviewing and optimising extraction sequences to improve ore recovery and reduce dilution
• Equipment fleets: Upgrading underground mobile equipment to support higher development rates
• Underground infrastructure: Addressing ventilation, ground support, and access development to enable deeper and wider mining
• Mill processing: Scheduled delivery of new flotation cells in Q4 2026 to improve throughput and recovery rates
• Mine planning: Development of an optimised mine plan targeted for completion in H2 2026

Each pillar reinforces the others. A shaft capable of moving 1,350 tonnes per day is only valuable if the underground development has advanced sufficiently to fill it, and if the mill can process what arrives at surface. The flotation cell upgrade and the optimised mine plan are therefore not independent milestones but complementary steps in the same operational progression.

How the 64,000-Metre Exploration Program Connects to the Shaft Upgrade

Infrastructure capacity and exploration success are connected by a dependency that is easy to overlook. Exploration drilling programs identify mineralisation and expand resource inventories. However, none of that geological upside translates into mineable production unless the infrastructure exists to extract it.

Americas Gold & Silver has initiated what it describes as its largest-ever exploration program, with approximately 64,000 metres of planned drilling across both its Idaho and Mexico operations. Recent work at Galena has already identified new high-grade silver veins, adding potential future mining inventory to the complex. Furthermore, interpreting drill results from these campaigns will be central to understanding how the resource base evolves.

The No. 3 Shaft upgrade ensures that as those exploration results mature into development targets, the mine's central hoisting artery will not become a secondary constraint on converting new discoveries into production. This is a point of genuine strategic foresight: addressing infrastructure before exploration success demands it, rather than after.

Galena and Cosalá: Two Operations, Two Distinct Priorities

Understanding the company's overall strategy requires viewing Galena and the Cosalá Operations in Mexico as complementary but distinct operational phases.

While Galena is in an infrastructure-building and development phase, Cosalá has progressed to commercial production from the EC120 mine and is focused on optimising its mining areas and building geological confidence through ongoing drilling. Together, the two operations are designed to support a longer-term production growth trajectory.

Management has indicated an ambition to grow consolidated silver production toward the 5 million ounce per year level over the next few years, with further scale potential beyond that threshold depending on how exploration and development progress at both sites. These are company-stated objectives and involve forward-looking assumptions that may not reflect actual future results.

What Investors Should Monitor in the Months Ahead

The completion of the Americas Gold & Silver Galena shaft upgrade creates a set of observable performance indicators that investors can track as the operation moves into the second half of 2026 and beyond.

Near-Term Indicators to Watch

• Whether underground development rates accelerate now that the hoisting constraint has been removed
• Whether actual daily ore movement approaches the targeted 650 tpd threshold by end-2026
• Delivery and commissioning of new flotation cells in Q4 2026 and their impact on mill recovery rates
• Completion and content of the optimised mine plan targeted for H2 2026

Exploration Catalysts to Track

• Ongoing drill results from the approximately 64,000-metre program across Idaho and Cosalá
• Any additional high-grade silver vein discoveries or resource extensions at Galena following recent positive results
• How exploration findings are incorporated into the updated mine plan and capital allocation decisions

In addition, a completed definitive feasibility study at some future point would provide investors with considerably more granular confidence around production assumptions and capital requirements. The shaft upgrade has removed one of the most fundamental physical constraints on production growth at Galena. The question now is whether the operational, geological, and processing improvements that follow can convert that expanded capacity into the silver production trajectory management has outlined.

Disclaimer: This article contains forward-looking statements and projections based on company-stated objectives and publicly available information. Actual results may differ materially from those discussed. This content is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence before making investment decisions.

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