Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI)
is pleased to announce the start of pre-production mining at its
100 percent owned Lindero gold Project located in the Province of
Salta, Argentina. Initial blasting on Mineral Reserves commenced in
early September and the mine is planned to build stockpiles of
reserves ahead of stacking on the leach pad.
Jorge A. Ganoza, President, CEO and Director,
commented, “The start of pre-production mining is one of the
important milestones of the project as we go into the final stretch
of construction.” Mr. Ganoza added, “The Lindero mineralized body
presents us with important economic benefits that can be captured
right from the start of mining. There is no pre-stripping required
and high-grade gold Mineral Reserves will be accessed with a low
strip ratio below one in the first year.” Mr. Ganoza concluded, “In
its first full year of operation, Lindero is planned to produce
between 145 to 160 thousand ounces of gold.”
The Lindero Project construction remains on
track with placement of Mineral Reserves on the leach pad scheduled
for the fourth quarter of 2019 and first doré pour planned in the
first quarter of 2020. With Lindero in its first year of full
production, Fortuna's consolidated precious metals annual
production1 is expected to increase in 2020 to between 7.5 and 8.3
million ounces of silver and between 189 to 209 thousand ounces of
gold or between 293 to 324 thousand ounces of gold equivalent2.
Construction highlights
as at the end of August 2019:
- The overall project is 70 percent complete
- Total construction spending is US$240.8 million
- An eight megawatt power plant is being pre-commissioned; and
the medium voltage power distribution system is complete
- All major structures and equipment in the crushing circuit and
agglomeration plant have been mounted. The electrical, lubrication,
and hydraulic systems are being installed.
- The Project´s workforce to date is 2,350 people; 98 percent are
Argentinian nationals, 65 percent come from the Province of Salta,
and 10 percent come from neighboring communities. The Project
employs 105 female workers which constitute 5 percent of the
project´s workforce.
First pre-production blast on Mineral Reserves
occurred in early September 2019.
Notes:
- Based on annual production plans for the life of the San Jose,
Caylloma and Lindero mines | Assumes commencement of commercial
production at Lindero in Q1 2020 | Refer to Fortuna news release
dated April 4, 2019, “Fortuna reports updated first year gold doré
production plan for the Lindero Project, Argentina” and news
release dated February 20, 2019, “Fortuna provides construction
update at its Lindero gold project in Argentina” | Refer to the
Caylloma Mine Technical Report (Effective date: March 8, 2019) and
to the San Jose Mine Technical Report (Effective date: February 22,
2019)
- Gold equivalent is calculated using a gold to silver ratio of 1
to 72 and does not include lead nor zinc
Lindero gold
Project:https://www.globenewswire.com/NewsRoom/AttachmentNg/de25faf0-4768-4d08-83d2-673f15a2b80e
Mine and equipment fleet
The operational permits for the explosives
magazine and the explosive delivery trucks were received in August
2019. All mine equipment is on site and is fully operational. Key
equipment includes six 100 ton trucks, two 17 cubic yard wheel
loaders, one 5 cubic yard crawler excavator, two 449 HP dozers, two
250 HP motor graders, and two 800 HP rotary blast hole drill
rigs.
Blast hole drilling work at the Lindero
Deposit:https://www.globenewswire.com/NewsRoom/AttachmentNg/1c92544b-8bb3-4ad3-bba5-637c723f2724
8 megawatt power plant
The power plant consisting of twelve power
generators and ten 50 cubic meter fuel tanks is being
pre-commissioned. The plant will allow for power requirements to be
self-generated through an eight megawatt diesel generator power
plant. The medium voltage power distribution system is
complete.
8 megawatt power
plant:https://www.globenewswire.com/NewsRoom/AttachmentNg/2ceeae73-3c7f-42e7-a7d6-4857df4f5b68
18,750 tonnes per day crushing circuit
and agglomeration plant
All principal structures and equipment in the
primary, secondary, and tertiary crushing circuits have been
mounted with electrical, lubrication, and hydraulic systems being
installed. Mounting and installation of conveyor belts is the main
mechanical activity taking place at the present time.
The large agglomeration surge bin, two cement
silos, and the two agglomeration drums have been mounted with
mechanical and electrical installation continuing.
Commissioning of the crushing circuit and the agglomeration
plant is planned for the fourth quarter of 2019.
Panoramic view of the crushing circuit and
agglomeration
plant:https://www.globenewswire.com/NewsRoom/AttachmentNg/8ef0b075-ef71-4d0e-abf5-1f7e4f6b2db1
Leach pad and solution ponds
area
The 31 hectare leach pad start-up area is 88
percent advanced and scheduled to be completed in October 2019.
Construction of the sulphidization-acidification-recycle-thickening
(“SART”), pregnant, intermediate, barren, and major events solution
ponds and five-layer liner system installation are 92 percent
complete.
SART, pregnant, intermediate, barren, and major
events solution
ponds:https://www.globenewswire.com/NewsRoom/AttachmentNg/1afc382d-97ec-4cd7-874f-134c285d302d
ADR and SART plants
Concrete foundations for the adsorption,
desorption and recovery (“ADR”) and SART plants have been
completed.
The steel structure for the building to house
the ADR plant is 90 percent complete with electromechanical and
piping installation commenced in September 2019. The ADR plant is
scheduled to be commissioned in the first quarter of 2020.
ADR
plant:https://www.globenewswire.com/NewsRoom/AttachmentNg/aa8bc250-6956-4cca-bf4c-596f39ce349b
Steel structure installation at the SART plant
is 40 percent complete. Electromechanical and pipe installation is
planned to commence by the end of September 2019.
SART
plant:https://www.globenewswire.com/NewsRoom/AttachmentNg/bd9749dc-d10b-4f12-a07b-c6f6356b7d66
Construction camp and ancillary
facilities
Fresh water wells, pumping and distribution
systems are 40 percent complete; commissioning is planned for the
fourth quarter of 2019.
Further updates on the construction of the Lindero gold Project
will be provided as the development of the Project
proceeds.
Please click on the following link to access Lindero’s
construction video updates:
https://fortunasilver.com/mines-and-projects/development/lindero-project-argentina/construction-videos/
and on the following link to access Lindero’s construction photo
gallery:
https://fortunasilver.com/mines-and-projects/development/lindero-project-argentina/construction-gallery/crushing-circuit/.
About the Lindero gold Project,
Argentina
In September 2017, the commencement of
construction at Lindero was officially launched (see Fortuna news
releases dated September 21, 2017 and December 21, 2017). Lindero
has been designed as an 18,750 tonnes per day owner operated open
pit mine with a pit life of 13 years based on existing mineral
reserves. Crushed ore will be placed on a leach pad with the
pregnant solution pumped to SART1 and ADR2 plants prior to
electrowinning and refining where gold will be poured to doré
bars.
The initial capital cost budget estimate for the
construction of Lindero as set out in the technical report entitled
“Fortuna Silver Mines Inc.: Lindero Property, Salta Province,
Argentina” dated effective October 31, 2017 is forecast to increase
to US$298 million, an increase of 25 percent over what was budgeted
in the technical report; this amount does not include value added
tax which is expected to be recovered in the first 24 months from
the start of mining operations. The technical report of the Lindero
Project is available on SEDAR at www.sedar.com and on the Company's
website at
https://fortunasilver.com/site/assets/files/4098/lindero-project-technical-report-effective-date-31-oct-2017.pdf.
Qualified Person
Amri Sinuhaji, Technical Services Director –
Mine Planning, is the Qualified Person for Fortuna Silver Mines
Inc. as defined by National Instrument 43-101. Mr. Sinuhaji
is a Professional Engineer registered with the Association of
Professional Engineers and Geoscientists of the Province of British
Columbia (#48305) and has reviewed and approved the scientific and
technical information contained in this news release.
About Fortuna
Silver Mines Inc.
Fortuna is a growth oriented, precious metals
producer focused on mining opportunities in Latin America.
Our primary assets are the Caylloma silver Mine in southern
Peru, the San Jose silver-gold Mine in Mexico and the Lindero gold
Project, currently under construction, in Argentina. The
Company is selectively pursuing acquisition opportunities
throughout the Americas and in select other areas. For more
information, please visit our website at www.fortunasilver.com.
Jorge A. Ganoza President, CEO and
DirectorFortuna Silver Mines Inc.
Trading symbols: NYSE: FSM | TSX: FVI
Investor Relations:
Carlos BacaT (Peru): +51.1.616.6060, ext. 0
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 include, without limitation, statements about
the Company's plans for its mines and mineral properties; the
Company's business strategy, plans and outlook; the merit of the
Company's mines and mineral properties; the future financial or
operating performance of the Company; 2019 production and cost
guidance; 2020 estimated production guidance; the Company’s
exploration activities, including related capital expenditures; the
timing of the completion of construction at Lindero; the timing of
commissioning of the plant and the first dore pour; the
construction costs at the Lindero Project and proposed expenditures
at the Lindero Project. 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", "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, changes in general
economic conditions and financial markets; changes in prices for
silver and other metals; technological and operational hazards in
Fortuna's mining and mine development activities; risks inherent in
mineral exploration; uncertainties inherent in the estimation of
mineral reserves, mineral resources, and metal recoveries;
governmental and other approvals; political unrest or instability
in countries where Fortuna is active; labor relations issues; as
well as those factors discussed under "Risk Factors" in the
Company's Annual Information Form dated March 29, 2019 and filed on
SEDAR at www.sedar.com. 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 expectations regarding the
Company's plans for its mines and mineral properties; mine
production costs; expected trends in mineral prices and currency
exchange rates; the accuracy of the Company's current mineral
resource and reserve estimates; that the Company's activities will
be in accordance with the Company's public statements and stated
goals; that there will be no material adverse change affecting the
Company or its properties; that all required approvals will be
obtained; that there will be no significant disruptions affecting
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 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.
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