Fortuna Silver Mines, Inc. (NYSE: FSM)
(TSX: FVI) is pleased to
provide 2020 production, cost, and capital expenditures guidance
for its mining operations in Latin America.
2020 Consolidated Production and Cash
Cost Guidance
Mine |
Silver |
Gold |
Lead |
Zinc |
Cash Cost (US$/t) |
AISC1 |
(Moz) |
(koz) |
(Mlbs) |
(Mlbs) |
Silver |
|
|
|
|
|
(US$/oz Ag Eq) |
San Jose, Mexico |
6.6 - 7.3 |
41 - 45 |
-- |
-- |
65.6 - 72.5 |
9.6 - 11.7 |
Caylloma, Peru |
0.9 - 1.0 |
-- |
27.2 - 30.1 |
44.0 - 48.6 |
81.4 - 89.9 |
14.8 - 18.1 |
Gold |
|
|
|
|
|
(US$/oz Au) |
Lindero2,3, Argentina |
-- |
60 - 80 |
-- |
-- |
10.2 - 11.4 |
520 - 620 |
Consolidated Total |
7.5 - 8.3 |
101 - 125 |
27.2 - 30.1 |
44.0 - 48.6 |
|
|
Notes:
- All-in sustaining cost (AISC) is a non-GAAP financial measure,
refer to Forward-looking Statements regarding non-GAAP financial
measures at the end of this news release; AISC includes production
cash cost, commercial and government royalties, mining tax, export
duties (as applicable), worker’s participation (as applicable),
subsidiary G&A, sustaining capital expenditures, and
Brownfields exploration and is estimated at metal prices of
US$1,450/oz Au, US$17/oz Ag, US$2,100/t Pb, and US$2,500/t Zn
- Lindero’s production and cost guidance is based on the updated
construction and commissioning schedule, as detailed in Fortuna’s
news release dated February 13, 2020, with ore to be placed on the
leach pad and first doré pour scheduled in the second quarter of
2020. Any material changes to the construction or commissioning
schedule may have a material impact on Lindero’s production and
cost guidance
- Lindero’s all-in sustaining cost is based on commercial
production and includes an export duty of 5% of revenue
- Totals may not add due to rounding
2020 Guidance Highlights
San Jose Mine, Mexico
At the San Jose Mine, the operation plans to
process 1,062,000 tonnes averaging 223 g/t Ag and
1.39
g/t Au. Capital investment is estimated at US$17.1 million;
including US$12.2 million for sustaining capital expenditures and
US$4.9 million for Brownfields exploration programs.
Major sustaining capital investment projects
include:
|
US$2.4 million |
|
US$4.8 million |
- Equipment and infrastructure:
|
US$2.0 million |
Caylloma Mine, Peru
At the Caylloma Mine, the operation plans to
process 534,000 tonnes averaging 67 g/t Ag, 2.81% Pb and 4.46% Zn.
Capital investments are estimated at US$12.9 million; including
US$10.8 million for sustaining capital expenditures and US$2.1
million for Brownfields exploration programs.
Major sustaining capital investment projects
include:
|
US$5.0 million |
- Equipment and Infrastructure:
|
US$5.7 million |
Lindero Mine, Argentina
At the Lindero Mine, the operation plans to
place on the leach pad between 3.1 and 3.7 million tonnes averaging
1.02 g/t Au, containing between 100,000 to 125,000 ounces of gold,
of which 60,000 to 80,000 ounces of gold are expected to be
produced as gold doré in the year. Estimated gold doré production
for 2020 is consistent with the first twelve month commercial
production plan of 145,000 to 160,000 ounces as previously
projected for Lindero (refer to Fortuna news release dated April 4,
2019).
Sustaining capital investments are estimated at
US$3.3 million related to equipment and infrastructure.
Brownfields Exploration
Outlook
San Jose Mine, Mexico
The Brownfields exploration program budget for
2020 at the San Jose Mine is US$4.9 million, which includes 17,600
meters of diamond drilling and 500 meters of underground
development for drilling access, platforms and services.
Underground exploration drilling will focus on the shallow, north
extension of the Trinidad vein and the sub-parallel Victoria
mineralized zone, while surface drilling will test two new targets
to the south of the mine.
Caylloma Mine, Peru
The Brownfields exploration program budget for
2020 at the Caylloma Mine is US$2.1 million, which includes 9,500
meters of diamond drilling. Surface drilling will focus on the
extensions of three ore shoots along the Animas vein and the
possible extension of mineral resources along the San Cristobal
silver vein located to the north of the mine.
Lindero Mine, Argentina
The Brownfields exploration program budget for
2020 at the Lindero Mine is US$320,000, which includes 1,000 meters
of drilling on the Arizaro target located 3.5 kilometers to the
southeast of the mine. The drilling will test for additional
mineralization that could potentially contribute to Lindero’s
future production.
Greenfields Exploration
Outlook
Active reconnaissance exploration programs and
evaluations of possible acquisitions in Mexico, Argentina and
select other jurisdictions will continue throughout 2020.
Qualified Person
Amri Sinuhaji is the Technical Services Director
– Mine Planning for the Company and is a Qualified Person as
defined by National Instrument 43-101- Standards of Disclosure for
Mineral Projects. 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.
ON BEHALF OF THE BOARD
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 may include, without limitation, statements
about the Company’s plans for its mines and mineral properties; the
Company’s business strategy, plans and outlook; future operating
performance such as the Company´s production forecasts for gold
silver and other metals; future costs forecasts and future
production plans; estimated production rates for gold, silver and
other metals produced by the Company; the prices of gold,
silver and other materials; the sufficiency of the Company’s
working capital, anticipated operating cash flow or the Company’s
ability to raise necessary funds; timing of production, production
levels and the cash costs and total costs of production at
the Caylloma mine, the San Jose mine and the Lindero mine; planned
development activities for 2020 at Lindero, including the
commissioning of the processing facilities; planned preparations
for operations at Lindero, including expected timing of the
placement of first ore on the leach pad and the first doré pour at
the Lindero mine in the second quarter of 2020, the mining rate,
stock piling of ore prior to first production; targeted timing for
production and commercial production at Lindero; the expected
production costs, economics, grade and other operating parameters
at Lindero; planned production at Lindero in 2020; the merit
of the Company’s mines and mineral properties; mineral resource and
reserve estimates; the Company’s ability to convert inferred
mineral resources to indicated mineral resources and to convert
mineral resources to mineral reserves; timelines; the future
financial or operating performance of the Company; the effects of
laws, regulations and government policies affecting our operations
or potential future operations; future successful development of
our projects; the estimates of expected or anticipated economic
returns from the Company’s mining operations including future sales
of metals, concentrate or other products produced by the Company;
the Company’s ability to achieve its production and cost guidance;
capital expenditures at the Company’s operations; approvals and
other matters. 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”, “expected”, “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; uncertainty of
production, development plans and cost estimates for the Caylloma
mine, the San Jose mine and the Lindero mine; changes in prices for
silver and other metals; technological and operational hazards in
Fortuna’s mining and mine development activities; market risks
related to the sale of the Company’s concentrates and metals;
future development risks, including start-up delays and cost
overruns at Lindero; risks inherent in mineral exploration;
uncertainties inherent in the estimation of mineral reserves,
mineral resources, and metal recoveries; the Company’s ability to
replace mineral reserves; changes to current estimates of mineral
reserves and resources; changes to production estimates; the
Company’s ability to obtain adequate financing for further
exploration and development programs and opportunities;
governmental and other approvals; recoverability of value added tax
and significant delays in the Company’s collection process; claims
and legal proceedings, including adverse rulings in litigation
against the Company; 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. 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
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.
This news release also refers to non-GAAP
financial measures, such as all-in sustaining cash cost; cash cost
per tonne of processed ore. These measures do not have a
standardized meaning or method of calculation, even though the
descriptions of such measures may be similar. These performance
measures have no meaning under International Financial Reporting
Standards (IFRS) and therefore, amounts presented may not be
comparable to similar data presented by other mining companies.
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. Equivalent U.S. reporting requirements
are currently governed by the United States Securities and Exchange
Commission ("SEC") Industry Guide 7 (“Industry Guide 7”) under the
U.S. Securities Act of 1933, as amended. Canadian standards,
including NI 43-101, differ significantly from the requirements of
the SEC currently in effect under Industry Guide 7, and reserve and
resource information contained in this news release may not be
comparable to similar information disclosed by U.S. companies. In
particular, the term "resource" does not equate to the term
"reserves". Under the SEC's disclosure standards currently in
effect under Industry Guide 7, mineralization may not be classified
as a "reserve" unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time the reserve determination is made. The SEC
has not recognized the reporting of mineral deposits which do not
meet the Industry Guide 7 definition of “reserve” prior to the
adoption of the Modernization of Property Disclosures for Mining
Registrants, which rules will be required to be complied with in
the first fiscal year beginning on or after January 1, 2021. As a
result, the SEC's disclosure standards currently in effect normally
do not permit the inclusion of information concerning "measured
mineral resources", "indicated mineral resources" or "inferred
mineral resources" or other descriptions of the amount of
mineralization in mineral deposits that do not constitute
"reserves" by U.S. standards in documents filed with the SEC. You
are cautioned not to assume that resources will ever be converted
into reserves. You should also understand that "inferred mineral
resources" have a great amount of uncertainty as to their existence
and great uncertainty as to their economic and legal feasibility.
You should also not assume that all or any part of an "inferred
mineral resource" will ever be upgraded to a higher category. Under
Canadian rules, estimated "inferred mineral resources" may not form
the basis of feasibility or pre-feasibility studies except in rare
cases. You are cautioned not to assume that all or any part of an
"inferred mineral resource" exists or is economically or legally
mineable. Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian regulations; however, the SEC's
disclosure standards currently in effect under Industry Guide 7
normally only permit issuers to report mineralization that does not
constitute "reserves" by such standards as in-place tonnage and
grade without reference to unit measures. The requirements of NI
43-101 for identification of "reserves" are also not the same as
those of the SEC's disclosure standards currently in effect under
Industry Guide 7, and reserves reported in compliance with NI
43-101 may not qualify as "reserves" under such SEC standards.
Accordingly, information concerning mineral deposits set forth in
this news release may not be comparable with information made
public by companies that report in accordance with U.S.
standards.
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