Fortuna reports record 2023 production of 452 koz Au Eq and 2024
annual guidance of 457 to 497 koz Au Eq
Fortuna Silver Mines Inc. (NYSE: FSM)
(TSX: FVI) reports production results for the fourth
quarter and full year 2023 from its five operating mines in Latin
America and West Africa. For the full year 2023, Fortuna produced a
record 326,638 ounces of gold and 5,883,691 ounces of silver or a
record 452,389 gold equivalent ounces, including lead and zinc
by-products1. All references to dollar amounts in this news release
are expressed in US dollars.
Fourth quarter 2023
highlights
- Record gold equivalent production
of 136,154 ounces1; a 6 percent increase compared to Q3 2023
(128,671 oz Au Eq)2
- Record gold production of 107,376
ounces; a 13 percent increase compared to Q3 2023 (94,821 oz
Au)2
- Silver production of 1,354,003
ounces; a 19 percent decrease compared to Q3 2023 (1,680,751 oz
Ag)2
Full year 2023 highlights
- Record gold equivalent production
of 452,389 ounces1; a 13 percent increase compared to 2022 (401,878
oz Au Eq)3
- Record gold production of 326,638
ounces; a 26 percent increase compared to 2022 (259,427 oz
Au)3
- Silver production of 5,883,691
ounces; a 15 percent decrease compared to 2022 (6.9 Moz Ag)3
- Record lead production of
40,851,657 pounds; an 18 percent increase over 2022 (34.6 Mlbs
Pb)3
- Record zinc production of
55,060,450 pounds; a 19 percent increase over 2022 (46.2 Mlbs
Zn)3
- Continuous trend of improvement in
annual safety performance across the business with a Total
Recordable Injury Frequency Rate (TRIFR) of 1.22, and a Lost Time
Injury Frequency Rate (LTIFR) of 0.36, compared to 2.32 and 0.35 in
2022
2024 consolidated production and cost
guidance highlights
- Gold equivalent production4 of
between 457 and 497 thousand ounces; a projected increase of
between 1 and 10 percent, respectively, compared to 2023
- Gold production of between 343 and
385 thousand ounces; a projected increase of between 5 and 18
percent, respectively, compared to 2023
- Silver production of between 4.0
and 4.7 million ounces; a projected decrease of between 32 and
21 percent, respectively, compared to 2023
- Cash Cost of between $935 and
$1,055/oz Au Eq5; an approximate projected increase of between 6
and 20 percent, respectively, compared to 2023
- AISC of between $1,485 and
$1,640/oz Au Eq5; an approximate projected decrease of 1 percent
and an increase of 9 percent, respectively, compared to 2023
Notes:
- Au Eq includes gold, silver, lead and
zinc and is calculated using the following metal prices: $1,948/oz
Au, $23.37/oz Ag, $2,155/t Pb and $2,706/t Zn or Au:Ag =
1:83.38, Au:Pb = 1:0.90, Au:Zn = 1:0.72
- Refer to Fortuna news release dated
October 5, 2023, “Séguéla drives Fortuna to record gold equivalent
production of 128,671 ounces in the third quarter 2023”
- Refer to Fortuna news release dated
January 17, 2023, “Fortuna reports 2022 full year record production
of 401,878 gold equivalent ounces and issues 2023 annual
guidance”
- Au Eq includes gold, silver, lead, and
zinc and is calculated using the following metal prices: $1,800/oz
Au, $22/oz Ag, $2,000/t Pb and $2,500/t Zn or Au:Ag = 1:81.82,
Au:Pb = 1:1.11, Au:Zn = 1:1.39
- Refer to Appendix
2023 consolidated operating
results
|
Gold production (oz) |
Silver production (oz) |
Mines |
Q4 2023 |
FY 2023 |
2023 Guidance |
Q4 2023 |
FY 2023 |
2023 Guidance |
Séguéla, Côte d’Ivoire1 |
43,096 |
78,617 |
60,000 - 75,000 |
- |
- |
- |
Yaramoko, Burkina Faso2 |
28,235 |
117,711 |
110,000 - 120,000 |
- |
- |
- |
Lindero, Argentina |
29,591 |
101,238 |
96,000 - 106,000 |
- |
- |
- |
San Jose, Mexico |
6,345 |
28,559 |
34,000 - 37,000 |
1,023,525 |
4,656,631 |
5,300,000 - 5,800,000 |
Caylloma, Peru |
109 |
513 |
- |
330,478 |
1,227,060 |
1,000,000 - 1,100,000 |
Total |
107,376 |
326,638 |
282,000 - 320,000 |
1,354,003 |
5,883,691 |
6,300,000 - 6,900,000 |
Notes:
- Séguéla Mine production from June to
December 2023
- Yaramoko annual gold production
guidance revised upwards. Refer to Fortuna news release dated
October 5, 2023, “Séguéla drives Fortuna to record gold equivalent
production of 128,671 ounces in the third quarter 2023”
In 2023, record gold production was mainly
driven by Séguéla contributing 78,617 ounces in the second half of
the year, exceeding the upper range of guidance. Yaramoko also
contributed 117,711 ounces, achieving the upper end of production
guidance as a result of higher head grades. Consolidated silver
production of 5.9 million ounces was 7 percent below the lower end
of guidance, due to decreased production at San Jose as a result of
the illegal union blockade in the second quarter and operational
challenges thereafter.
Séguéla Mine, Côte
d’IvoireExceeds annual production guidance by 5
percent; operating 20 percent above nameplate capacity
|
Q4 2023 |
FY 2023 |
2023 Guidance |
Tonnes milled |
387,624 |
807,617 |
- |
Average tpd milled |
4,123 |
3,146 |
- |
Gold grade (g/t) |
3.62 |
3.42 |
- |
Gold recovery (%) |
94.9 |
93.9 |
- |
Gold production (oz)1 |
43,096 |
78,6172 |
60,000 - 75,000 |
Notes:
- Production includes doré only
- Séguéla Mine production from June
to December 2023
Highlights
- Q4 2023 gold production: 43,096
ounces
- FY 2023 gold production: 78,617
ounces, exceeds annual production guidance
In the fourth quarter of 2023, mined material
totaled 409,293 tonnes of ore, averaging 3.34 g/t Au, and
containing an estimated 43,913 ounces of gold from the Antenna pit.
Movement of waste during the quarter totaled 2,110,209 tonnes from
Antenna and 104,472 tonnes from the Ancien pit, for a strip ratio
of 5.4:1.
In the fourth quarter of 2023, Séguéla produced
43,096 ounces of gold at an average head grade of 3.62 g/t Au,
a 37 percent increase and a 5 percent decrease, respectively,
compared to the previous quarter. The increase in gold production
is directly related to the mill achieving consistently higher
throughput, processing 387,624 tonnes, a 25 percent increase over
the previous quarter.
Mine reconciliation to reserve model
Reconciliation of tonnes, grade, and gold ounces
mined for the fourth quarter from Antenna show a positive
correlation when compared to the long-term reserve model with 6
percent higher ore tonnes mined at 16 percent higher grades
resulting in 24 percent more gold ounces extracted than predicted
in the model.
Processing
Process plant performance continued to improve
as feed characteristics were stabilized and initial bottlenecks
addressed. Recovery in the fourth quarter increased to 94.9 %,
ahead of feasibility study assumptions. Plant productivity also
continued to improve with throughput in the fourth quarter being
186 t/hr, a 20 percent increase on the 154 t/hr nameplate
capacity.
Yaramoko Mine, Burkina Faso
Strong performance, achieves higher end of annual
production guidance
Based on Yaramoko’s strong performance during
the year, management increased guidance in the third quarter of
2023 from 96 to 102 thousand ounces of gold to 110 to 120 thousand
ounces of gold (refer to Fortuna news release dated October 5,
2023).
|
Q4 2023 |
FY 2023 |
2023 Guidance |
Tonnes milled |
110,445 |
531,579 |
- |
Average tpd milled |
1,200 |
1,456 |
- |
Gold grade (g/t) |
7.16 |
6.81 |
- |
Gold recovery (%) |
98.3 |
98.0 |
- |
Gold production1 (oz) |
28,235 |
117,711 |
110,000 - 120,000 |
Note:
- Production includes doré only
Highlights
- Q4 2023 gold production: 28,235
ounces
- FY 2023 gold production: 117,711
ounces, achieving higher end of annual production guidance
- 3 years LTI-free as of September
2023
- Obtained ISO 14001 and 45001
certification
In the fourth quarter of 2023, Yaramoko produced
28,235 ounces of gold at an average head grade of 7.16 g/t Au,
a 17 and 7 percent decrease, respectively, compared to the previous
quarter. Reduced production was due to lower mill throughput in the
fourth quarter, the depletion of low-grade stockpiles, and a
planned maintenance shutdown in December.
Exploration and grade control drilling success
in conjunction with underground development extended mineralization
on the western side of the Zone 55 mineralized structure. This
provided additional mining areas which demonstrated wider and
higher-grade extensions of mineralization within and beyond the
existing resource boundary.
Lindero Mine, Argentina
Achieved midpoint of annual production
guidance
|
Q4 2023 |
FY 2023 |
2023 Guidance |
Ore placed on pad (t) |
1,556,000 |
6,005,049 |
- |
Gold grade (g/t) |
0.63 |
0.64 |
- |
Gold production (oz)1 |
29,591 |
101,238 |
96,000 - 106,000 |
Note:
- Gold production includes doré, gold
in carbon, and gold in copper concentrate
Highlights
- Q4 2023 gold production: 29,591
ounces
- FY 2023 gold production: 101,238
ounces, achieving midpoint of annual production guidance
During the fourth quarter of 2023, ore mined was
2.1 million tonnes, with a stripping ratio of 0.6:1, 45 percent
lower than the previous quarter. The stripping ratio for 2023 was
1.14:1, aligned with the mining plan for the year. A total of 1.6
million tonnes of ore were placed on the leach pad at an average
gold grade of 0.63 g/t, containing an estimated
31,665 ounces.
Lindero’s gold production in the fourth quarter
of 2023 was 29,591 ounces, a 41 percent increase compared to the
previous quarter. Gold production was comprised of 24,977 ounces in
doré bars, 4,443 ounces of gold contained in fine carbon, and 171
ounces contained in copper concentrate.
Gold production for 2023 totaled 101,238 ounces,
comprised of 94,905 ounces in doré bars, 6,015 ounces in gold
contained in fine carbon, and 319 ounces contained in copper
concentrate.
As of December 31, 2023, the leach pad expansion
project is approximately 23 percent complete. Mobilization of the
civil contractor’s personnel and equipment has advanced with earth
moving activities having commenced in January. Deliveries of
geomembrane and geosynthetic clay liner are on-track, with the
remaining materials expected to arrive on site in the first quarter
of 2024. The leach pad expansion remains on schedule for completion
during the second half of 2024.
San Jose Mine, Mexico
Illegal blockade and operational challenges lead to
shortfall in annual production guidance
|
Q4 2023 |
FY 2023 |
2023 Guidance |
Tonnes milled |
241,035 |
930,200 |
- |
Average tpd milled |
2,678 |
2,643 |
- |
Silver grade (g/t) |
145 |
171 |
- |
Silver recovery (%) |
90.78 |
90.96 |
- |
Silver production (oz) |
1,023,525 |
4,656,631 |
5,300,000 - 5,800,000 |
Gold grade (g/t) |
0.91 |
1.06 |
- |
Gold recovery (%) |
89.64 |
90.18 |
- |
Gold production (oz) |
6,345 |
28,559 |
34,000 - 37,000 |
Highlights
- Q4 2023 production: 1,023,525
ounces of silver and 6,345 ounces of gold
- FY 2023 production: 4,656,631
ounces of silver, and 28,559 ounces of gold
During the fourth quarter of 2023, the San Jose
Mine produced 1.02 million ounces of silver, and 6,345 ounces of
gold, a 25 and 23 percent decrease, respectively, with average head
grades for silver and gold of 145 g/t and 0.91 g/t, a 23 and 20
percent decrease, respectively, when compared to the previous
quarter.
The decrease in silver and gold production for
the quarter is explained by the declining grade profile of Mineral
Reserves in the mine plan, as well as lower tonnage extracted from
the mine. The reduction in tonnage is due to operational challenges
leading to delays in backfilling and blasting operations in stopes
P and Q during December 2023. During the fourth quarter, the
processing plant milled 241,035 tonnes at an average of 2,678
tonnes per day.
Production in 2023 totaled 4,656,631 ounces of
silver and 28,559 ounces of gold, 12 percent and 16 percent below
annual guidance range, respectively. The decrease in production is
attributed primarily to the 15-day illegal union blockade in the
second quarter (refer to Fortuna news release dated May 2, 2023),
the associated disruption to operations thereafter, and a silver
and gold head grade reconciliation to reserves at the lower end of
guidance range.
Exploration continues at the newly discovered
Yessi vein with encouraging results (refer to Fortuna news release
dated December 12, 2023).
Caylloma Mine, Peru
Outperformer, exceeds annual production guidance for all
metals
|
Q4 2023 |
FY 2023 |
2023 Guidance |
Tonnes milled |
140,800 |
543,876 |
- |
Average tpd milled |
1,564 |
1,528 |
- |
Silver grade (g/t) |
88 |
85 |
- |
Silver recovery (%) |
83.40 |
82.57 |
- |
Silver production (oz)1 |
330,478 |
1,227,060 |
1,000,000 - 1,100,000 |
Lead grade (%) |
3.84 |
3.74 |
- |
Lead recovery (%) |
90.58 |
91.14 |
- |
Lead production (lbs) |
10,798,242 |
40,851,657 |
29,000,000 - 32,000,000 |
Zinc grade (%) |
5.00 |
5.11 |
- |
Zinc recovery (%) |
89.86 |
89.83 |
- |
Zinc production (lbs) |
13,933,215 |
55,060,450 |
43,000,000 - 48,000,000 |
Note:
- Metallurgical recovery for silver
is calculated based on silver content in lead concentrate
Highlights
- Q4 2023 production: 330,478 oz
silver, 10.8 Mlbs lead, and 14.0 Mlbs zinc
- FY 2023 production: 1,227,060 oz
silver, exceeds annual production guidance
- FY 2023 record base metal
production: 40.9 Mlbs lead, 55.1 Mlbs zinc, exceeding annual
production guidance by 28 and 15 percent, respectively
In the fourth quarter, the Caylloma Mine
produced 330,478 ounces of silver at an average head grade of 88
g/t, a 7 and 6 percent increase, respectively, when compared to the
previous quarter. Silver production for 2023 totaled 1,227,060
ounces, exceeding the upper end of annual guidance range by 10
percent.
Lead and zinc production for the quarter was
10.8 and 14.0 million pounds, respectively, a 4 percent increase
for lead, with no variation for zinc, when compared to the previous
quarter. Head grades averaged 3.84 %, and 5.00 %, a 5 percent
increase, and 1 percent decrease, respectively, when compared to
the previous quarter. Record lead and zinc production for 2023
totaled 40.9 and 55.1 million pounds, respectively. Increased
production is the result of positive grade reconciliation to the
reserve model in levels 16 and 18 of the Animas vein.
2024 consolidated production and cost
guidance
Mine |
Silver (Moz) |
Gold (koz) |
Lead (Mlbs) |
Zinc (Mlbs) |
Cash Cost1,3 |
AISC1,2,3,5 |
Silver |
|
|
|
|
($/oz Ag Eq) |
($/oz Ag Eq) |
San Jose, Mexico |
3.1 - 3.6 |
19 - 23 |
- |
- |
20.3 - 22.3 |
22.8 - 24.0 |
Caylloma, Peru |
0.9 - 1.1 |
- |
29 - 34 |
36 - 39 |
12.7 - 14.0 |
18.0 - 21.0 |
Gold |
|
|
|
|
($/oz Au) |
($/oz Au) |
Lindero, Argentina4 |
- |
93 - 105 |
- |
- |
850 - 950 |
1,730 - 1,950 |
Yaramoko, Burkina Faso |
- |
105 - 119 |
- |
- |
865 - 965 |
1,220 - 1,320 |
Séguéla, Côte d´Ivoire |
- |
126 - 138 |
- |
- |
630 - 730 |
1,110 - 1,230 |
Consolidated Total |
4.0 - 4.7 |
343 - 385 |
29 - 34 |
36 - 39 |
$935 - 1,0556 |
$1,485 - 1,6406 |
Notes:1. Cash Cost and all-in
sustaining cost (AISC) are non-IFRS financial measures which are
not standardized financial measures under the financial reporting
framework used to prepare the financial statements of the Company
and might not be comparable to similar financial measures disclosed
by other issuers. Refer to the note under “Non-IFRS Financial
Measures” below. 2. Cash cost includes
production cash cost and for Lindero, is net of copper by-product
credit. AISC includes sustaining capital expenditures, worker’s
participation (as applicable) commercial and government royalties
mining tax, export duties (as applicable), subsidiary G&A and
Brownfields exploration and is estimated at metal prices of
$1,800/oz Au, $22/oz Ag, $2,000/t Pb, and $2,500/t Zn. AISC
excludes government mining royalty recognized as income tax within
the scope of IAS-12.3. Silver equivalent is calculated
at metal prices of $1,800/oz Au, $22/oz Ag, $2,000/t Pb and
$2,500/t Zn.4. The cost guidance for the Lindero Mine
does not take into account potential changes by the new Argentine
Government to national macroeconomic policies, the taxation system
and import and export duties which, if implemented, may have a
material impact on costs. 5. Historical non-IFRS measure
cost comparatives: The following table provides the historical cash
costs and historical AISC for the Company’s four mines which were
operating during the year ended December 31, 2022, as follows:
Mine |
Cash Costa,b,c |
AISCa,b,c |
Silver |
($/oz Ag Eq) |
($/oz Ag Eq) |
San Jose, Mexico |
10.56 |
15.11 |
Caylloma, Peru |
12.34 |
17.97 |
Gold |
($/oz Au) |
($/oz Au) |
Lindero, Argentina |
740 |
1,142 |
Yaramoko, Burkina Faso |
840 |
1,529 |
(a) Cash cost and AISC are non-IFRS
financial measures; refer to the note under “Non-IFRS Financial
Measures” below.(b) Silver equivalent was calculated at
metal prices of $1,802/oz Au, $21.75/oz Ag, $2,161/t Pb and
$3,468/t Zn for the year ended December 31, 2022.
(c) Further details on the cash costs and AISC for the
year ended December 31, 2022 are disclosed on pages 38, 40, and 41
(with respect to cash costs) and pages 39 and 42 (with respect to
AISC) of the Company’s management discussion and analysis
(“MD&A”) for the year ended December 31, 2022 dated as of March
15, 2023 (“2022 MD&A”) which is available under Fortuna's
SEDAR+ profile at www.sedarplus.ca and is incorporated by reference
into this news release, and the note under “Non-IFRS Financial
Measures” below.
6. Refer to Appendix.
2024 Guidance Outlook
Séguéla Mine, Côte
d’IvoireMill throughput expanded to 1.46 Mta,
achieving 70% of mill expansion scheduled for 2026
The 2024 mine plan considers mining in the
Antenna, Ancien, and Koula pits, with plans to process 1.46 million
tonnes of ore averaging 3.0 g/t Au, and capital investments
estimated at $39.8 million, including $32 million for sustaining
capital expenditures and $7.8 million for Brownfields exploration
programs.
Feasibility and optimization work is underway to
realize the opportunity to incorporate underground mineable
resources at the Sunbird, Ancien, and Koula deposits.
Major sustaining capital investments
include:
|
$17.1
million |
- Tailings storage facility (TSF) lift
|
$4.8 million |
|
$10.1 million |
Capitalized stripping at Séguéla corresponds to
further mining of the Antenna pit and development and mining of the
Ancien and Koula pits. The overall stripping ratio for 2024 is
planned to be 8.2:1. AISC for 2024 reflects the ongoing TSF
expansion project, which will add tailings holding capacity for the
next two years and is expected to be completed in the first half of
2024.
In 2024, annual ore processing is expanded to
1.46 million tonnes, 17 percent above tonnage scheduled for year 1
in the 2021 Technical Report, and close to the expansion target of
1.57 million tonnes scheduled for year 3. Process plant
de-bottlenecking initiatives in 2024 still present upside
opportunities for throughput capacity.
Cash cost and AISC:
- The Company expects a 2024 cash
cost between $630 and $730 per ounce of gold, an increase of
approximately 113 percent over 2023 at the upper range, and 84
percent at the lower range of guidance. The increase is mainly due
to the mine’s stripping ratio rising from 3.7:1 to 8.2:1, in
accordance with the mine plan. In addition, higher costs are
anticipated for processing, which include milling, energy
consumption, freight, transportation, and overhead.
- The Company expects a 2024 AISC
between $1,110 and $1,230 per ounce of gold, an increase of
approximately 54 percent over 2023 at the upper range, and 39
percent at the lower range of guidance. The increase is explained
by higher cash cost per ounce and higher capex per ounce of
approximately $120 related to capitalized stripping costs.
Yaramoko Mine, Burkina
FasoGrade and tonnages benefit from exploration
success in 2023
At the Yaramoko Mine, the Company plans to
process 435,000 tonnes of ore averaging 8.3 g/t Au. Capital
investment decreases substantially compared to previous years and
in 2024 mainly comprises of development and exploration
activities.
Major sustaining capital investment projects
include:
|
$13.9 million |
|
$6.1 million |
Cash cost and AISC:
- The Company expects a 2024 cash
cost between $865 and $965 per ounce of gold, an increase of
approximately 29 percent over 2023 at the upper range, and 16
percent at the lower range of guidance. The increase is due
primarily to the reallocation of fixed mining costs from capex to
opex and lower processed ore.
- The Company expects a 2024 AISC
between $1,220 and $1,320 per ounce of gold, a decrease of
approximately 7 percent under 2023 at the upper range, and 14
percent at the lower range of guidance. The decrease is explained
by lower capex year over year of approximately $250 per ounce of
gold.
Lindero Mine,
ArgentinaSustaining capital intensive year,
including a one-time leach pad expansion of $41.7
million
The Lindero Mine is expected to place 6.6
million tonnes of ore on the leach pad averaging 0.62 g/t Au,
containing an estimated 131,000 ounces of gold. Capital investments
are estimated at $64.0 million, including $51.5 million in
capital projects, and $12.5 million in capitalized stripping
costs.
Major sustaining capital investments
include:
|
$12.5 million |
- Leach pad phase II expansion
|
$41.7 million |
- Heavy equipment replacement and overhaul
|
$6.6 million |
- Plant critical spare parts
|
$3.2 million |
Cash cost and AISC:
- The Company expects a 2024 cash
cost between $850 and $950 per ounce of gold, mostly in line with
2023.
- The Company expects a 2024 AISC
between $1,730 and $1,950 per ounce of gold, an increase of
approximately 22 percent over 2023 at the upper range, and 9
percent at the lower range of guidance. 2024 is a particularly
capital intensive year for Lindero, including a one-time leach pad
phase II expansion project which is planned to be completed in the
second half of 2024, with a capital estimate of $41.7 million.
While the mine continues delivering on cost
savings from operational efficiency programs, the economics of
Lindero are exposed to potential significant impacts in changes to
macro-economic and taxation policies, derived from emergency
announcements made by the newly elected Government in its attempt
to eliminate the national fiscal deficit. Cash cost per ounce does
not include any potential changes to the Argentine taxation regime
on imports and export duties, as these are still being discussed by
the Government and Congress. However, if passed as advertised,
these represent additional risks to higher cash cost per ounce and
AISC estimates.
San Jose Mine,
MexicoCost increments lead to exhaustion of
reserves by year end 2024
At the San Jose Mine, the Company plans to
process 0.90 million tonnes of ore averaging 142 g/t Ag and
0.9 g/t Au. Silver and gold production reflect the
declining grade profile of the tail end of the Mineral
Reserves.
The updated mine plan for 2024 is scheduled to
exhaust Mineral Reserves by the end of 2024, compared to mid-2025
as previously planned. Over the past 12 months, the operation has
experienced significant cost increments, of which the main drivers
are:
- Mexican Peso appreciation;
representing approximately 35 percent of cost increment.
- Higher contractor costs for
transportation, distribution, shotcrete, maintenance, and mining
services; representing approximately 16 percent of cost
increment.
- Higher labor costs and new labor
reform mandates, which took effect on January 1, 2024; representing
approximately 21 percent of cost increment.
- Change from owner’s mining fleet to
contractor for mine development; representing approximately 6
percent of cost increment.
- Higher costs in fuel, energy,
materials, and consumables related to 2023 inflation; representing
approximately 5 percent of cost increment.
As a result of the cost increments described
above, the mine plan has been reduced by approximately six months,
leading to an anticipated closure in late 2024 from the previous
estimation of closure in mid-2025. The Company has assigned a
dedicated team to review and update a multiyear progressive mine
closure and monitoring plan with a current budget of approximately
$27 million, which will begin its implementation during 2024.
Multiple considerations are being included such as closure-related
technical studies and designs, remediation of affected areas,
decommissioning and removal of infrastructure, landform reshaping,
revegetation, and value-added activities for the communities
associated with progressive closure, repurposing, and where
appropriate, long-term monitoring and maintenance, whilst adhering
to strict compliance with mine closure governmental regulations and
high international standards.
The Company is engaged in an intensive
exploration program to delineate the newly discovered Yessi
vein.
Cash cost and AISC:
- The Company expects a 2024 cash
cost between $20.3 and $22.3 per ounce of silver, an increase of
approximately 70 percent over 2023 at the upper range, and 54
percent at the lower range of guidance. The increase is mainly
explained by lower production related to the grade profile as per
the remaining life of mine plan, and the impact of higher projected
operational expenditures, reflecting incremental costs throughout
2023. In addition, cash cost includes remaining lateral and
vertical development and infill drilling required to complete final
stoping and mining, as well as mining equipment overhauling,
totaling $10.7 million.
- The Company expects a 2024 AISC
between $22.8 and $24.0 per ounce of silver, an increase of
approximately 31 percent over 2023 at the upper range, and 24
percent at the lower range of guidance. The increase is mainly
explained by lower volume and higher cash cost, partially offset by
no capital expenditures in 2024.
Caylloma Mine,
PeruConsistent performer
At the Caylloma Mine, the Company plans to
process 0.5 million tonnes of ore averaging 78 g/t Ag, 3.12 % Pb,
and 4.20 % Zn. Capital investments are estimated at $21.0 million,
including $19.0 million for sustaining capital expenditures and
$2.0 million for Brownfields exploration programs.
Sustaining capital investments include:
|
$5.1 million |
- Caylloma Mine substation power grid enhancement
|
$2.9 million |
- Plant power sub-station, phase II
|
$1.4 million |
- New paste backfill system
|
$4.7 million |
- Operating permits and Global Industry Standard on Tailings
Management (GISTM)
|
$1.2 million |
|
$3.7 million |
Cash cost and AISC:
- The Company expects a 2024 cash
cost between $12.7 and $14.0 per ounce of silver, a decrease of
approximately 6 percent under 2023 at the upper range, and 14
percent at the lower range of guidance. The decrease is mainly due
to lower treatment and refining charges in 2024.
- The Company expects a 2024 AISC
between $18.0 and $21.0 per ounce of silver, in line with 2023 at
the upper range, and a decrease of 14 percent at the lower range of
guidance. The decrease is explained mainly by lower cash costs and
slightly lower capital expenditures.
2024 Exploration Outlook
Fortuna continues to advance its robust pipeline of
Brownfields and Greenfields exploration projects in West Africa and
the Americas, building on the success of the exploration programs
carried out in 2023.
Brownfields Exploration
Fortuna´s consolidated Brownfields exploration
budget for 2024 for its five mines and the Diamba Sud Gold Project
totals $30.8 million, which includes 192,500 meters of reverse
circulation, diamond core, and air core exploration drilling.
Séguéla Mine, Côte d’Ivoire
The Brownfields exploration program budget for
2024 at Séguéla is $7.8 million, which includes 41,750 meters of
exploration drilling, focused on testing and extending underground
targets associated with the Sunbird, Ancien, and Koula deposits, as
well as advancing emerging deposits such as Barana, Badior, and
Kestral, and continuing to explore for additional prospects.
San Jose Mine, Mexico
The Brownfields exploration program budget for
2024 at San Jose is $4.9 million, which includes 13,900 meters of
diamond drilling, focused on testing and extending the Yessi vein
as well as exploring additional targets within the mine area.
Yaramoko Mine, Burkina Faso
The Brownfields exploration program budget for
2024 at Yaramoko is $6.1 million, which includes 41,450 meters of
exploration drilling, with underground drilling testing western and
depth extensions to the Zone 55 deposit, surface drilling testing
several anomalies along the Boni Shear, Bagassi South surface
extensions, and other surface targets.
Caylloma Mine, Peru
The Brownfields exploration program budget for
2024 at Caylloma is $2.0 million, supporting field exploration,
regional geophysics, and ongoing studies of the structural controls
to mineralization on the Animas vein.
Diamba Sud Gold Project,
Senegal
The Brownfields exploration program budget for
2024 at the Diamba Sud Gold Project is $9.9 million, which includes
42,700 meters of drilling, including extension and resource
development, in addition to the testing and advancement of
previously identified geochemistry anomalies. Additional
geochemical and geophysical surveys at Diamba Sud will be conducted
in support of advancing the project.
Greenfields Exploration
Greenfields exploration will continue in Mexico,
Argentina, Senegal, and Côte d'Ivoire advancing generative programs
across several projects supported by a budget of $7.5 million,
including continuing active corporate development.
Qualified Person
Eric Chapman, Senior Vice President of Technical
Services of Fortuna, is a Professional Geoscientist registered with
Engineers and Geoscientists British Columbia (Registration Number
36328) and a Qualified Person as defined by National Instrument
43-101 Standards of Disclosure for Mineral Projects. Mr. Chapman
has reviewed and approved the scientific and technical information
contained in this news release and has verified the underlying
data.
Paul Weedon, Senior Vice President of
Exploration for Fortuna Silver Mines Inc., is a Qualified Person as
defined by National Instrument 43-101 being a member of the
Australian Institute of Geoscientists (Membership #6001). Mr.
Weedon has reviewed and approved the scientific and technical
information relating to exploration contained in this news
release.
About Fortuna Silver Mines
Inc.
Fortuna Silver Mines Inc. is a Canadian precious
metals mining company with five operating mines in Argentina,
Burkina Faso, Côte d'Ivoire, Mexico, and Peru. Sustainability is
integral to all our operations and relationships. We produce gold
and silver and generate shared value over the long-term for our
stakeholders through efficient production, environmental
protection, and social responsibility. For more information, please
visit our website.
ON BEHALF OF THE BOARD
Jorge A. Ganoza President, CEO,
and DirectorFortuna Silver Mines Inc.
Investor Relations:
Carlos Baca |
info@fortunasilver.com | www.fortunasilver.com | X
| LinkedIn | YouTube
Forward-looking Statements
This news release contains forward-looking
statements which constitute “forward-looking information” within
the meaning of applicable Canadian securities legislation and
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995 (collectively, “Forward-looking Statements”). All
statements included herein, other than statements of historical
fact, are Forward-looking Statements and are subject to a variety
of known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those reflected
in the Forward-looking Statements. The Forward-looking Statements
in this news release may include, without limitation, statements
about the Company’s plans for its mines and mineral properties;
changes in general economic conditions and financial markets; the
impact of inflationary pressures on the Company’s business and
operations; estimates of production in 2023 that remain subject to
verification and adjustment; the Company’s anticipated financial
and operational performance in 2024; estimated production forecasts
for 2024; estimated costs; estimated cash costs and all-in
sustaining cash costs and expenditures for 2024; estimated capital
expenditures in 2024; estimated Brownfields and Greenfields
expenditures in 2024; exploration plans; the future results of
exploration activities; the timing of the implementation and
completion of sustaining capital investment projects at the
Company’s mines; expectations with respect to metal grade estimates
and the impact of any variations relative to metals grades
experienced; metal prices, currency exchange rates and interest
rates in 2024; timing of and possible outcome of litigation;
mineral resource and mineral reserve estimates; life of mine
estimates, including the estimated closure of the San Jose Mine in
late 2024; the Company’s expectation that the leach pad expansion
project at the Lindero Mine will be completed during the second
half of 2024; the Company’s expectation that the two year capacity
lift of the TSF at the Séguéla Mine should be completed in H1 2024;
the Company’s business strategy, plans and outlook; the merit of
the Company’s mines and mineral properties; and the future
financial or operating performance of the Company. Often, but not
always, these Forward-looking Statements can be identified by the
use of words such as “estimated”, “potential”, “open”, “future”,
“assumed”, “projected”, “used”, “detailed”, “has been”, “gain”,
“planned”, “reflecting”, “will”, “anticipated”, “estimated”
“containing”, “remaining”, “to be”, or statements that events,
“could” or “should” occur or be achieved and similar expressions,
including negative variations.
Forward-looking Statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance, or achievements of the Company to be
materially different from any results, performance or achievements
expressed or implied by the Forward-looking Statements. Such
uncertainties and factors include, among others, operational risks
associated with mining and mineral processing; uncertainty relating
to Mineral Resource and Mineral Reserve estimates; uncertainty
relating to capital and operating costs, production schedules and
economic returns; uncertainties related to new mining operations,
including the possibility that actual capital and operating costs
and economic returns will differ significantly from those estimated
for such projects prior to production; risks relating to the
Company’s ability to replace its Mineral Reserves; risks associated
with mineral exploration and project development; uncertainty
relating to the repatriation of funds as a result of currency
controls; environmental matters including obtaining or renewing
environmental permits and potential liability claims; uncertainty
relating to nature and climate conditions; risks associated with
political instability and changes to the regulations governing the
Company’s business operations; changes in national and local
government legislation, taxation, controls, regulations and
political or economic developments in countries in which the
Company does or may carry on business, including relating to the
newly elected government in Argentina; risks associated with war,
hostilities or other conflicts, such as the Ukrainian – Russian
conflict, and the impact it may have on global economic activity;
risks relating to the termination of the Company’s mining
concessions in certain circumstances; developing and maintaining
relationships with local communities and stakeholders; risks
associated with losing control of public perception as a result of
social media and other web-based applications; potential opposition
to the Company’s exploration, development and operational
activities; risks related to the Company’s ability to obtain
adequate financing for planned exploration and development
activities; property title matters; risks relating to the
integration of businesses and assets acquired by the Company;
impairments; risks associated with climate change legislation;
reliance on key personnel; adequacy of insurance coverage;
operational safety and security risks; legal proceedings and
potential legal proceedings; the possibility that the ruling in
favor of Compania Minera Cuzcatlan S.A. de C.V. (“Minera
Cuzcatlan”) to reinstate the environmental impact authorization at
the San Jose mine (the “EIA”) will be successfully appealed;
uncertainties relating to general economic conditions; risks
relating to a global pandemic, which could impact the Company’s
business, operations, financial condition and share price;
competition; fluctuations in metal prices; risks associated with
entering into commodity forward and option contracts for base
metals production; fluctuations in currency exchange rates and
interest rates; tax audits and reassessments; risks related to
hedging; uncertainty relating to concentrate treatment charges and
transportation costs; sufficiency of monies allotted by the Company
for land reclamation; risks associated with dependence upon
information technology systems, which are subject to disruption,
damage, failure and risks with implementation and integration;
risks associated with climate change legislation; labor relations
issues; as well as those factors discussed under “Risk Factors” in
the Company's Annual Information Form for the fiscal year ended
December 31, 2022. Although the Company has attempted to identify
important factors that could cause actual actions, events, or
results to differ materially from those described in
Forward-looking Statements, there may be other factors that cause
actions, events or results to differ from those anticipated,
estimated or intended.
Forward-looking Statements contained herein are
based on the assumptions, beliefs, expectations and opinions of
management, including, but not limited to, the accuracy of the
Company’s current mineral resource and reserve estimates; that the
Company’s activities will be conducted in accordance with the
Company’s public statements and stated goals; that there will be no
material adverse change affecting the Company, its properties or
its production estimates (which assume accuracy of projected ore
grade, mining rates, recovery timing, and recovery rate estimates
and may be impacted by unscheduled maintenance, labor and
contractor availability and other operating or technical
difficulties); the duration and effect of global and local
inflation; the duration and impacts of geo-political uncertainties
on the Company’s production, workforce, business, operations and
financial condition; the expected trends in mineral prices,
inflation and currency exchange rates; that any appeal in respect
of the ruling in favor of Minera Cuzcatlan to reinstate the EIA
will not be successful; that all required approvals and permits
will be obtained for the Company’s business and operations on
acceptable terms; that there will be no significant disruptions
affecting the Company's operations and such other assumptions as
set out herein. Forward-looking Statements are made as of the date
hereof and the Company disclaims any obligation to update any
Forward-looking Statements, whether as a result of new information,
future events, or results or otherwise, except as required by law.
There can be no assurance that these Forward-looking Statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, investors should not place undue reliance on
Forward-looking Statements.
Cautionary Note to United States Investors
Concerning Estimates of Reserves and Resources
Reserve and resource estimates included in this
news release have been prepared in accordance with National
Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI
43-101") and the Canadian Institute of Mining, Metallurgy, and
Petroleum Definition Standards on Mineral Resources and Mineral
Reserves. NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for public disclosure by
a Canadian company of scientific and technical information
concerning mineral projects. Unless otherwise indicated, all
mineral reserve and mineral resource estimates contained in the
technical disclosure have been prepared in accordance with NI
43-101 and the Canadian Institute of Mining, Metallurgy and
Petroleum Definition Standards on Mineral Resources and
Reserves.
Canadian standards, including NI 43-101, differ
significantly from the requirements of the Securities and Exchange
Commission, and mineral reserve and resource information included
in this news release may not be comparable to similar information
disclosed by U.S. companies.
Non-IFRS Financial Measures
This news release also refers to non-IFRS
financial measures, including cash costs and all-in sustaining
costs. These measures are not standardized financial measures under
International Financial Reporting Standards (IFRS), the financial
reporting framework used to prepare the financial statements of the
Company, and therefore may not be comparable to similar financial
measures disclosed by other mining companies. These Non-IFRS
Measures include cash costs and all-in sustaining cash costs.
Readers should refer to the “Non-IFRS Financial
Measures” section in the Company’s 2022 MD&A, which section is
incorporated herein by reference, for an explanation of these
measures and reconciliations to the Company’s reported financial
results in accordance with IFRS. The MD&A 2022 is available on
SEDAR+ at www.sedarplus.ca.
Appendix:
2024 cash cost and consolidated AISC guidance
Cash Cost Guidance ($/oz Au Eq) |
2024 Guidance |
Lindero |
850 |
- |
950 |
San Jose |
1,775 |
- |
1,965 |
Caylloma |
1,045 |
- |
1,150 |
Yaramoko |
865 |
- |
965 |
Séguéla |
630 |
- |
730 |
Consolidated cash cost |
$935 |
- |
$1,055 |
AISC Guidance ($/oz Au Eq) |
2024 Guidance |
Lindero |
1,730 |
- |
1,950 |
San Jose |
1,915 |
- |
2,020 |
Caylloma |
1,475 |
- |
1,720 |
Yaramoko |
1,220 |
- |
1,320 |
Séguéla |
1,110 |
- |
1,230 |
Corporate G&A |
|
65 |
|
Consolidated AISC |
$1,485 |
- |
$1,640 |
Note:
- Cash cost includes production cash
cost and for Lindero, is net of copper by-product credit. AISC
includes sustaining capital expenditures, worker’s participation
(as applicable) commercial and government royalties mining tax,
export duties (as applicable), subsidiary G&A and Brownfields
exploration and is estimated at metal prices of $1,800/oz Au,
$22/oz Ag, $2,000/t Pb, and $2,500/t Zn. AISC excludes government
mining royalty recognized as income tax within the scope of
IAS-12.
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