Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) (“Fortuna”
or the “Company”) today reported its financial and
operating results for the first quarter of 2023.
First Quarter 2023
highlights
Financial
- Adjusted net income of $13.2
million or $0.05 per share
- Net income of $11.9 million or
$0.04 per share
- Adjusted EBITDA1 of $65.3
million
- Net cash provided by operating
activities $41.8 million and free cash flow from ongoing operations
of $8.5 million
- Liquidity as of March 31, 2023 was
$129.7 million
Return to Shareholders
- NCIB share repurchase program
renewed for up to 5% of outstanding common shares (refer to Fortuna
news release dated April 28, 2023)
Operational
- Gold production of 60,092
ounces
- Silver production of 1,586,378
ounces
- Gold equivalent production of
94,110 ounces
- Consolidated cash costs1 per ounce
of gold equivalent sold of $916
- Consolidated AISC1 per ounce of
gold equivalent sold of $1,514
- Lost Time Injury Frequency Rate
(LTIFR) of 0.56 and Total Recordable Injury Frequency Rate (TRIFR)
of 1.39
Growth and Development
- On May 8, 2023 Fortuna announced a
definitive agreement to acquire Chesser Resources Ltd. by way of an
all share transaction for a total consideration of A$89.0 million
(CAD$80.6). Upon completion, the former shareholders of Chesser
will own approximately 5.1% of the shares of Fortuna on an
undiluted basis. Chesser Resources’ Diamba Sud Project in Senegal
expands Fortuna’s advanced exploration pipeline in West
Africa.
- First gold pour at the Séguéla mine
in Cote d’Ivoire is planned for May 2023
Jorge A. Ganoza, President and CEO, commented,
“Production and total cost per ounce for the first quarter were
overall on plan, resulting in net earnings per share of $0.04 and
free cash flow from operations of $8.5 million. Commissioning
activities at Séguéla are well advanced and tracking according to
plan for first gold pour in May, giving us a higher level of
confidence in a smooth ramp-up process towards design capacity.”
Mr. Ganoza continued, “The announced Chesser transaction meets
our strategic objective of expanding our asset portfolio of high
value opportunities in countries where we operate or near
neighbours.” Mr. Ganoza concluded, “The Chesser acquisition
provides for an exciting advanced exploration opportunity,
expanding our West African presence to Senegal, a mining friendly
jurisdiction, and into the heart of the Senegal-Mali shear zone,
one of the most prolific gold belts in the West African
region.”
First Quarter 2023 Consolidated
Results
| |
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(Expressed in millions) |
|
2023 |
|
2022 |
|
% Change |
|
Sales |
|
175.7 |
|
182.3 |
|
(4 |
%) |
| Mine operating income |
|
40.4 |
|
63.5 |
|
(36 |
%) |
| Operating (loss) income |
|
23.9 |
|
40.7 |
|
(41 |
%) |
| Net (loss) income |
|
11.9 |
|
27.0 |
|
(56 |
%) |
| (Loss) earnings per share -
basic |
|
0.04 |
|
0.09 |
|
(56 |
%) |
| Adjusted net income1 |
|
13.2 |
|
33.3 |
|
(60 |
%) |
| Adjusted EBITDA1 |
|
65.3 |
|
80.3 |
|
(19 |
%) |
| Net cash provided by operating
activities |
|
41.8 |
|
33.2 |
|
26 |
% |
| Free cash flow from ongoing
operations1 |
|
8.5 |
|
9.6 |
|
(11 |
%) |
| Production cash cost ($/oz Au
Eq) |
|
916 |
|
772 |
|
19 |
% |
| All-in sustaining cash cost
($/oz Au Eq) |
|
1,514 |
|
1,284 |
|
18 |
% |
| Capital expenditures2 |
|
|
|
|
|
|
|
Sustaining |
|
27.9 |
|
18.0 |
|
55 |
% |
|
Non-sustaining3 |
|
1.2 |
|
1.9 |
|
(37 |
%) |
|
Séguéla construction |
|
25.7 |
|
42.9 |
|
(40 |
%) |
|
Brownfields |
|
4.9 |
|
2.5 |
|
96 |
% |
| As at |
|
March 31, 2023 |
|
December 31, 2022 |
|
% Change |
|
| Cash and cash equivalents |
|
84.7 |
|
80.5 |
|
5 |
% |
| Net
liquidity position |
|
129.7 |
|
150.5 |
|
(14 |
%) |
1 Refer to Non-IFRS Financial Measures section
at the end of this news release and to the MD&A accompanying
the Company’s financial statements filed on SEDAR at www.sedar.com
for a description of the calculation of these
measures. 2 Capital expenditures are presented on a cash
basis3 Non-sustaining expenditures include greenfields
explorationFigures may not add due to rounding
First Quarter 2023 Results
Net income for the quarter was $11.9 million
compared to $27.0 million in Q1 2022. After adjusting for non-cash
and non-recurring items, adjusted net income of $13.2 million for
Q1 2023 was $20.1 million lower than Q1 2022. The decrease in
adjusted net income was primarily due to higher operating expenses
related mainly to higher input costs across our operations and
lower operating margins at Yaramoko and Lindero related to lower
head grades. This impact was combined with slightly lower sales of
$6.7 million, mostly explained by lower silver prices of $22.52 per
ounce in Q1 2023 compared to $24.18 per ounce in Q1 2022. These
effects were partially offset by lower general and administrative
expenses of $2.0 million compared to Q1 2022.
Adjusted EBITDA for the quarter was $65.3
million, a 36% margin over sales, compared to $80.3 million
reported in Q1 2022, representing a 44% margin over sales. The main
driver for the decrease in EBITDA were higher operating costs and
slightly lower sales as described above.
Net cash generated by operations for the quarter
was $41.8 million or $0.14 per share compared to $33.2 million or
$0.11 per share in Q1 2022. The increase reflects lower EBITDA of
$15.0 million offset by negative changes in working capital in the
current quarter of $10.8 million versus negative changes of $27.9
million in Q1 2022, and lower-income taxes paid of $7.1
million.
Free cash flow from ongoing operations for the
quarter was $8.5 million, compared to $9.6 million in Q1 2022. The
decrease is the result of higher net cash generated by operations
of $8.6 million compared to the Q1 2022, offset by higher
sustaining capex and brownfields exploration at our operating mines
of $12.3 million in Q1 2023.
Liquidity
The Company’s total liquidity available as of
March 31, 2023 was $129.7 million, comprised of $84.7 million in
cash and cash equivalents, and $45.0 million undrawn on the $250.0
million revolving credit facility.
Séguéla Gold Project Construction
Update
As of March 31, 2023, the Séguéla Gold Project
had approximately $22.5 million in remaining spend of the project’s
$173.5 million total initial capital, and the project remains
on-time and on-budget. The Company’s cash and cash equivalents
balance, free cash flow from ongoing operations and undrawn amounts
of the revolving credit facility are expected to fund the remaining
construction spend of the Séguéla Gold Project.
Lindero Mine, Argentina
| |
|
|
Three months ended March 31, |
|
|
|
|
2023 |
|
|
2022 |
|
| Mine Production |
|
|
|
|
|
|
|
|
Tonnes placed on the leach pad |
|
|
1,478,148 |
|
|
1,295,755 |
|
| |
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
0.71 |
|
|
0.88 |
|
|
Production (oz) |
|
|
25,258 |
|
|
30,068 |
|
|
Metal sold (oz) |
|
|
26,812 |
|
|
28,619 |
|
|
Realized price ($/oz) |
|
|
1,885 |
|
|
1,890 |
|
| |
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
Cash cost ($/oz Au)1 |
|
|
891 |
|
|
692 |
|
|
All-in sustaining cash cost ($/oz Au)1 |
|
|
1,424 |
|
|
1,038 |
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
2 |
|
|
|
|
|
|
|
|
Sustaining |
|
|
7,745 |
|
|
3,125 |
|
|
Non-sustaining |
|
|
187 |
|
|
169 |
|
|
Brownfields |
|
|
– |
|
|
144 |
|
1 Cash cost and AISC are non-IFRS financial measures; refer to
non-IFRS financial measures section at the end of this news release
and to the MD&A accompanying the Company’s financial statements
filed on SEDAR at www.sedar.com for a description of the
calculation of these measures.2 Capital expenditures are presented
on a cash basis.
Quarterly Operating and Financial Highlights
In the first quarter of 2023, a total of
1,478,148 tonnes of ore were placed on the heap leach pad, with an
average gold grade of 0.71 g/t, containing and estimated 33,510
ounces of gold. Gold production for Q1 2023 totaled 25,258 ounces,
representing a 16% decrease year-over-year. The decline in gold
production can primarily be attributed to a decrease in the head
grade of mineralized material placed on the leach pad, which is
aligned with the planned mining sequence. Mine production was 1.6
million tonnes of mineralized material, with a strip ratio of
1.07:1. This stripping ratio is consistent with the operation's
plan for the year, which anticipates a ratio of 1.17:1.
Cash cost per ounce of gold for Q1 2023, was
$891 compared to $692 in the Q1 2022. Cash cost per ounce of gold
was higher due to lower production, higher prices of key
consumables due to inflation, higher equipment rental costs due to
lower fleet availability, and timing of plant maintenance. This was
partially offset by higher stripping capitalization.
All-in sustaining cash cost per gold ounce sold
was $1,424 during Q1 2023 compared with $1,038 in Q1 2022. All-in
sustaining cash cost for Q1 2023 was impacted by the cost issues
described above, compounded by lower ounces sold and higher
sustaining capital spend, partially offset by a positive by-product
effect from copper.
During the quarter, sustaining capital
expenditures were primarily a result of Phase II expansion of the
leach pad, routine maintenance, and several minor projects. There
were no brownfields exploration capital investments made within
this period.
Yaramoko Mine Complex, Burkina Faso
| |
|
|
Three months ended March 31, |
|
|
|
|
2023 |
|
|
2022 |
|
| Mine Production |
|
|
|
|
|
|
|
|
Tonnes milled |
|
|
139,650 |
|
|
127,968 |
|
| |
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
5.94 |
|
|
7.50 |
|
|
Recovery (%) |
|
|
97 |
|
|
98 |
|
|
Production (oz) |
|
|
26,437 |
|
|
28,235 |
|
|
Metal sold (oz) |
|
|
29,530 |
|
|
29,530 |
|
|
Realized price ($/oz) |
|
|
1,899 |
|
|
1,878 |
|
| |
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
Cash cost ($/oz Au)1 |
|
|
819 |
|
|
705 |
|
|
All-in sustaining cash cost ($/oz Au)1 |
|
|
1,509 |
|
|
1,147 |
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
2 |
|
|
|
|
|
|
|
|
Sustaining |
|
|
13,549 |
|
|
7,361 |
|
|
Brownfields |
|
|
1,191 |
|
|
488 |
|
1 Cash cost and AISC are non-IFRS financial
measures; refer to non-IFRS financial measures section at the end
of this news release and to the MD&A accompanying the Company’s
financial statements filed on SEDAR at www.sedar.com for a
description of the calculation of these measures.2 Capital
expenditures are presented on a cash basis.
The Yaramoko Mine produced 26,437 ounces of gold
in the Q1 2023 with an average gold head grade of 5.94g/t, a 6%
decrease, respectively, when compared to Q1 2022. Higher mill
throughput contributed positively to the operation, offset by
reduced operating time due to planned maintenance and lower head
grades. Production for the quarter was in line with the mining
sequence and Mineral Reserves estimate.
Underground mineralized material was sourced
from the 55 Zone, with development also contributing from outside
of the current resource boundary on the western side of the
deposit.
Cash cost per ounce of gold sold in Q1 2023, was
$819, compared to $705 in Q1 2022. Cash cost per ounce increased
due to higher processing costs resulting from increased maintenance
costs and the impact of inflation on key consumables and mining
costs. Processing costs were also higher as a result of processing
of increased tonnes at lower grades.
All-in sustaining cash cost per gold ounce sold
was $1,509 for Q1 2023, compared to $1,147 in Q1 2022. This
increase was as a result of a decrease in production, increased
cash cost, and higher capital expenditures.
Sustaining capital in Q1 2023 increased due to
higher mine development. Brownfields expenditure was primarily
higher due to an increase in diamond drilling meters.
San Jose Mine, Mexico
| |
|
|
Three months ended March 31, |
|
|
|
|
2023 |
|
|
2022 |
|
| Mine Production |
|
|
|
|
|
|
|
|
Tonnes milled |
|
|
246,736 |
|
|
250,947 |
|
|
Average tonnes milled per day |
|
|
2,869 |
|
|
2,918 |
|
| |
|
|
|
|
|
|
|
| Silver |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
181 |
|
|
185 |
|
|
Recovery (%) |
|
|
91 |
|
|
91 |
|
|
Production (oz) |
|
|
1,303,312 |
|
|
1,358,189 |
|
|
Metal sold (oz) |
|
|
1,328,333 |
|
|
1,316,193 |
|
|
Realized price ($/oz) |
|
|
22.58 |
|
|
24.27 |
|
| |
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
1.15 |
|
|
1.13 |
|
|
Recovery (%) |
|
|
90 |
|
|
90 |
|
|
Production (oz) |
|
|
8,231 |
|
|
8,239 |
|
|
Metal sold (oz) |
|
|
8,355 |
|
|
7,952 |
|
|
Realized price ($/oz) |
|
|
1,900 |
|
|
1,890 |
|
| |
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
Production cash cost ($/t)2 |
|
|
86.66 |
|
|
76.05 |
|
|
Production cash cost ($/oz Ag Eq)1,2 |
|
|
11.42 |
|
|
10.42 |
|
|
All-in sustaining cash cost ($/oz Ag Eq)1,2 |
|
|
15.51 |
|
|
15.32 |
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
3 |
|
|
|
|
|
|
|
|
Sustaining |
|
|
3,772 |
|
|
3,575 |
|
|
Non-sustaining |
|
|
269 |
|
|
415 |
|
|
Brownfields |
|
|
1,088 |
|
|
1,529 |
|
1 Production cash cost per ounce of silver
equivalent and all-in sustaining cash cost per ounce of silver
equivalent are calculated using realized metal prices for each
period respectively.2 Production cash cost per tonne, production
cash cost per ounce of silver equivalent, and all-in sustaining
cash cost per ounce of silver equivalent are non-IFRS financial
measures, refer to non-IFRS financial measures section at the end
of this news release and to the MD&A accompanying the Company’s
financial statements filed on SEDAR at www.sedar.com for a
description of the calculation of these measures.3 Capital
expenditures are presented on a cash basis.
In the first quarter of 2023, the San Jose Mine
produced 1,303,312 ounces of silver and 8,231 ounces of gold, 4%
and unchanged, respectively, when compared to Q1 2022. Production
for the quarter was aligned with the mining sequence and Mineral
Reserves estimate.
The cash cost per tonne for Q1 2023, was $86.66
compared to $76.05 in Q1 2022. The increase was primarily due to
inflation and the appreciation of the Mexican Peso, affecting
consumables, labor costs and other services paid in local
currency.
All-in sustaining cash costs of payable per
ounce of silver equivalent for Q1 2023, increased 2% to $15.58 per
ounce, compared to $15.32 in Q1 2022. The increase was due to
higher cash costs partially offset by lower sustaining capital
expenditures and increased silver equivalent production, mainly due
to lower silver prices.
In the first quarter of 2023, sustaining capital
expenditures were lower than expected, primarily due to delays in
executing purchases related to components and overhauls. This
contrasts with Q1 2022, when significant planned mine acquisitions
had been carried over from the previous quarter. The decrease in Q1
2023 was partially offset by an increase in expenditures related to
development and infill drilling meters. Brownfields exploration
expenditures faced challenges from geological and operational
delays, but accelerated spending is anticipated in Q2 2023.
Caylloma Mine, Peru
| |
|
|
Three months ended March 31, |
|
|
|
|
2023 |
|
|
2022 |
|
| Mine Production |
|
|
|
|
|
|
|
|
Tonnes milled |
|
|
125,995 |
|
|
132,574 |
|
|
Average tonnes milled per day |
|
|
1,448 |
|
|
1,524 |
|
| |
|
|
|
|
|
|
|
| Silver |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
85 |
|
|
89 |
|
|
Recovery (%) |
|
|
82 |
|
|
82 |
|
|
Production (oz) |
|
|
283,066 |
|
|
311,939 |
|
|
Metal sold (oz) |
|
|
263,570 |
|
|
294,301 |
|
|
Realized price ($/oz) |
|
|
22.24 |
|
|
23.78 |
|
| |
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
0.15 |
|
|
0.16 |
|
|
Recovery (%) |
|
|
27 |
|
|
37 |
|
|
Production (oz) |
|
|
166 |
|
|
258 |
|
|
Metal sold (oz) |
|
|
22 |
|
|
325 |
|
|
Realized price ($/oz) |
|
|
1,895 |
|
|
1,828 |
|
| |
|
|
|
|
|
|
|
| Lead |
|
|
|
|
|
|
|
|
Grade (%) |
|
|
3.74 |
|
|
3.55 |
|
|
Recovery (%) |
|
|
92 |
|
|
88 |
|
|
Production (000's lbs) |
|
|
9,509 |
|
|
9,134 |
|
|
Metal sold (000's lbs) |
|
|
8,782 |
|
|
8,575 |
|
|
Realized price ($/lb) |
|
|
1.02 |
|
|
1.06 |
|
| |
|
|
|
|
|
|
|
| Zinc |
|
|
|
|
|
|
|
|
Grade (%) |
|
|
5.21 |
|
|
4.18 |
|
|
Recovery (%) |
|
|
90 |
|
|
89 |
|
|
Production (000's lbs) |
|
|
13,051 |
|
|
10,827 |
|
|
Metal sold (000's lbs) |
|
|
13,815 |
|
|
10,546 |
|
|
Realized price ($/lb) |
|
|
1.45 |
|
|
1.69 |
|
| |
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
Production cash cost ($/t)2 |
|
|
98.07 |
|
|
89.60 |
|
|
Production cash cost ($/oz Ag Eq)1,2 |
|
|
13.14 |
|
|
12.39 |
|
|
All-in sustaining cash cost ($/oz Ag Eq)1,2 |
|
|
16.88 |
|
|
17.83 |
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
3 |
|
|
|
|
|
|
|
|
Sustaining |
|
|
2,810 |
|
|
3,949 |
|
|
Brownfields |
|
|
204 |
|
|
324 |
|
1 Production cash cost per ounce of silver
equivalent and all-in sustaining cash cost per ounce of silver
equivalent are calculated using realized metal prices for each
period respectively.2 Production cash cost per tonne, production
cash cost per ounce of silver equivalent, and all-in sustaining
cash cost per ounce of silver equivalent are non-IFRS financial
measures, refer to non-IFRS financial measures section at the end
of this news release and to the MD&A accompanying the Company’s
financial statements filed on SEDAR at www.sedar.com for a
description of the calculation of these measures.3 Capital
expenditures are presented on a cash basis.
In the first quarter of 2023, the Caylloma Mine
produced 283,066 ounces of silver, 9.5 million pounds of lead, and
13.1 million pounds of zinc. Silver production was 9% lower
compared to Q1 2022, but was in line with the mining sequence and
Mineral Reserves estimate. Lead and zinc production rose by 4% and
21% respectively, compared to Q1 2022, due to higher head grades
from levels 16 and 17 within the Animas vein, and higher tonnes.
Gold production totaled 166 ounces with an average head grade of
0.15 g/t.
The cash cost per tonne of processed ore in Q1
2023 increased 9% to $98.07 compared to $89.60 in Q1 2022. The
increase was mainly due to higher mining costs driven by inflation
and its direct impact on the price of materials, compounded by
lower tonnes processed.
The all-in sustaining cash cost per payable
silver equivalent ounce in Q1 2023, decreased 3% to $17.29 per
ounce, compared to $17.83 per ounce in Q1 2022. The decrease was
mainly increased silver equivalent production, mainly due to lower
silver prices.
Sustaining capital expenditures in Q1 2023
decreased primarily due to blockades limiting project executions.
Spending on execution of the developments located on levels 15 and
level 18 at the Animas vein was offset by decreased expenditure on
other levels. The decrease in brownfields exploration capital
expenditures was primarily due to a decrease in diamond drilling
meters.
Qualified Person
Eric Chapman, Senior Vice President of Technical
Services, is a Professional Geoscientist of the Association of
Professional Engineers and Geoscientists of the Province of British
Columbia (Registration Number 36328), and is the Company’s
Qualified Person (as defined by National Instrument 43-101). Mr.
Chapman has reviewed and approved the scientific and technical
information contained in this news release and has verified the
underlying data.
Non-IFRS Financial Measures
The Company has disclosed certain financial
measures and ratios in this news release which are not defined
under the International Financial Reporting Standards (“IFRS”), as
issued by the International Accounting Standards Board, and are not
disclosed in the Company's financial statements, including but not
limited to: cash cost per ounce of gold sold; all-in sustaining
cash cost per ounce of gold sold; all-in cash cost per ounce of
gold sold; total production cash cost per tonne; cash cost per
payable ounce of silver equivalent sold; all-in sustaining cash
cost per payable ounce of silver equivalent sold; all-in cash cost
per payable ounce of silver equivalent sold; free cash flow from
ongoing operations; adjusted net income; adjusted EBITDA and
working capital.
These non-IFRS financial measures and non-IFRS
ratios are widely reported in the mining industry as benchmarks for
performance and are used by management to monitor and evaluate the
Company's operating performance and ability to generate cash. The
Company believes that, in addition to financial measures and ratios
prepared in accordance with IFRS, certain investors use these
non-IFRS financial measures and ratios to evaluate the Company’s
performance. However, the measures do not have a standardized
meaning under IFRS and may not be comparable to similar financial
measures disclosed by other companies. Accordingly, non-IFRS
financial measures and non-IFRS ratios should not be considered in
isolation or as a substitute for measures and ratios of the
Company’s performance prepared in accordance with IFRS. The Company
has calculated these measures consistently for all periods
presented.
To facilitate a better understanding of these
measures and ratios as calculated by the Company, descriptions are
provided below. In addition see “Non-IFRS Financial Measures” in
the Company’s management’s discussion and analysis for the three
months ended March 31, 2023 (“Q1 2023 MDA”), which section is
incorporated by reference in this news release, for additional
information regarding each non-IFRS financial measure and non-IFRS
ratio disclosed in this news release, including an explanation of
their composition; an explanation of how such measures and ratios
provide useful information to an investor and the additional
purposes, if any, for which management of the Company uses such
measures and ratio. The Q1 2023 MD&A may be accessed on SEDAR
at www.sedar.com under the Company’s profile.
Except as otherwise described in the Q1 2023
MD&A, the Company has calculated these measures consistently
for all periods presented.
Reconciliation to adjusted net income for the three
months ended March 31, 2023 and 2022
| |
|
Three months ended March 31, |
|
Consolidated (in millions of US dollars) |
|
2023 |
|
|
2022 |
|
| Net income |
|
11.9 |
|
|
27.0 |
|
|
Adjustments, net of tax: |
|
|
|
|
|
|
Foreign exchange loss, Séguéla Project |
|
- |
|
|
0.6 |
|
|
Unrealized loss on derivatives |
|
1.0 |
|
|
- |
|
|
Accretion on right of use assets |
|
0.6 |
|
|
0.6 |
|
|
Other non-cash/non-recurring items |
|
(0.3 |
) |
|
1.3 |
|
|
Adjusted Net Income |
|
13.2 |
|
|
29.5 |
|
1 Amounts are recorded in Cost of sales2 Amounts are recorded in
General and AdministrationFigures may not add due to rounding
Reconciliation to adjusted EBITDA for the three months
ended March 31, 2023 and 2022
| |
|
Three months ended March 31, |
|
Consolidated (in millions of US dollars) |
|
2023 |
|
|
2022 |
|
| Net (loss) income |
|
11.9 |
|
|
27.0 |
|
| Adjustments: |
|
|
|
|
|
|
Community support provision and accruals |
|
(0.1 |
) |
|
- |
|
|
Foreign exchange loss, Séguéla Project |
|
- |
|
|
0.6 |
|
|
Net finance items |
|
2.6 |
|
|
2.8 |
|
|
Depreciation, depletion, and amortization |
|
44.4 |
|
|
38.1 |
|
|
Income taxes |
|
7.9 |
|
|
6.8 |
|
|
Other non-cash/non-recurring items |
|
(1.4 |
) |
|
5.0 |
|
|
Adjusted EBITDA |
|
65.3 |
|
|
80.3 |
|
Figures may not add due to rounding
Reconciliation of free cash flow from
ongoing operations for the three months ended March 31, 2023 and
2022
In 2022, the Company changed the method for
calculating free cash flow from ongoing operations. The calculation
now uses taxes paid as opposed to the previous method which used
current income taxes. While this may create larger quarter over
quarter fluctuations due to the timing of income tax payments,
management believes the revised method is a better representation
of the free cash flow generated by the Company’s ongoing
operations. Comparative values from 2021 have been restated using
the change in the methodology.
| |
|
Three months ended March 31, |
|
Consolidated (in millions of US dollars) |
|
2023 |
|
|
2022 |
|
| |
|
|
|
(Restated) |
|
| Net cash provided by operating
activities |
|
41.8 |
|
|
33.2 |
|
| Adjustments |
|
|
|
|
|
Additions to mineral properties, plant and equipment |
|
(30.4 |
) |
|
(20.5 |
) |
|
Other adjustments |
|
(2.9 |
) |
|
(3.1 |
) |
| Free
cash flow from ongoing operations |
|
8.5 |
|
|
9.6 |
|
Figures may not add due to rounding
Reconciliation of cash cost per ounce of gold sold for
the three months ended March 31, 2023 and 2022
| Lindero
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cost of sales |
|
|
41,725 |
|
|
35,867 |
|
| Changes in doré inventory |
|
|
(1,331 |
) |
|
1,017 |
|
| Inventory adjustment |
|
|
15 |
|
|
739 |
|
| Export duties |
|
|
(3,926 |
) |
|
(4,008 |
) |
| Depletion and
depreciation |
|
|
(13,192 |
) |
|
(12,009 |
) |
| By
product credits |
|
|
(799 |
) |
|
- |
|
| Production cash cost1 |
|
|
22,492 |
|
|
21,607 |
|
| Changes in doré inventory |
|
|
1,331 |
|
|
(1,017 |
) |
|
Realized gain in diesel hedge |
|
|
- |
|
|
(782 |
) |
| Cash cost applicable per gold
ounce sold |
A |
|
23,823 |
|
|
19,808 |
|
| Ounces
of gold sold |
B |
|
26,739 |
|
|
28,607 |
|
| Cash
cost per ounce of gold sold1 ($/oz) |
=A/B |
|
891 |
|
|
692 |
|
| |
| Yaramoko
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cost of sales |
|
|
44,863 |
|
|
38,041 |
|
| Changes in doré inventory |
|
|
- |
|
|
(1,320 |
) |
| Export duties |
|
|
(3,362 |
) |
|
(3,333 |
) |
| Depletion and
depreciation |
|
|
(17,368 |
) |
|
(14,028 |
) |
| By
product credits |
|
|
- |
|
|
(5 |
) |
| Production cash cost |
|
|
24,133 |
|
|
19,355 |
|
| Changes in doré inventory |
|
|
- |
|
|
1,320 |
|
|
Refining charges |
|
|
- |
|
|
155 |
|
| Cash cost applicable per gold
ounce sold |
A |
|
24,133 |
|
|
20,830 |
|
| Ounces
of gold sold |
B |
|
29,472 |
|
|
29,530 |
|
| Cash
cost per ounce of gold sold ($/oz) |
=A/B |
|
819 |
|
|
705 |
|
Reconciliation of cash cost per ounce of gold equivalent
sold for the three months ended March 31, 2023 and
2022
|
Consolidated |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cost of sales |
|
|
135,219 |
|
|
118,828 |
|
| Changes in concentrate
inventory and dore inventory |
|
|
(1,534 |
) |
|
(115 |
) |
| Cost of sales-Right of
use |
|
|
694 |
|
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
(173 |
) |
|
(147 |
) |
| Inventory adjustment |
|
|
111 |
|
|
2,222 |
|
| Royalties, export duties and
mining taxes |
|
|
(8,711 |
) |
|
(8,980 |
) |
| Provision for community
support |
|
|
(25 |
) |
|
(126 |
) |
| Workers' participation |
|
|
(463 |
) |
|
(1,340 |
) |
| Depletion and
depreciation |
|
|
(43,955 |
) |
|
(37,738 |
) |
| By
product credits |
|
|
(799 |
) |
|
(5 |
) |
| Production cash cost |
|
|
80,364 |
|
|
72,599 |
|
| Changes in concentrate
inventory and dore inventory |
|
|
1,534 |
|
|
115 |
|
| Cost of sales-Right of
use |
|
|
(694 |
) |
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
173 |
|
|
147 |
|
| Inventory adjustment |
|
|
(96 |
) |
|
(1,483 |
) |
| Realized gain in diesel
hedge |
|
|
- |
|
|
(782 |
) |
| Treatment charges |
|
|
5,038 |
|
|
4,786 |
|
|
Refining charges |
|
|
1,191 |
|
|
638 |
|
| Cash cost applicable per gold
equivalent ounce sold |
A |
|
87,511 |
|
|
76,021 |
|
| Ounces
of gold equivalent sold |
B |
|
95,541 |
|
|
98,448 |
|
| Cash
cost per ounce of gold equivalent sold ($/oz) |
=A/B |
|
916 |
|
|
772 |
|
Reconciliation of all-in sustaining cash cost per ounce
of gold sold for the three months ended March 31, 2023 and
2022
| Lindero
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cash cost applicable |
|
|
23,823 |
|
|
19,808 |
|
| Export duties and mining
taxes |
|
|
3,926 |
|
|
4,008 |
|
| General
and administrative expenses (operations) |
|
|
1,992 |
|
|
1,905 |
|
| Adjusted operating cash
cost |
|
|
29,741 |
|
|
25,721 |
|
| Sustaining leases |
|
|
598 |
|
|
705 |
|
| Sustaining capital
expenditures1 |
|
|
7,745 |
|
|
3,125 |
|
|
Brownfields exploration expenditures1 |
|
|
- |
|
|
144 |
|
| All-in sustaining cash
cost |
|
|
38,084 |
|
|
29,695 |
|
|
Non-sustaining capital expenditures1 |
|
|
187 |
|
|
169 |
|
| All-in cash cost |
|
|
38,271 |
|
|
29,864 |
|
| Ounces
of gold sold |
|
|
26,739 |
|
|
28,607 |
|
| All-in
sustaining cash cost per ounce of gold sold |
|
|
1,424 |
|
|
1,038 |
|
| All-in
cash cost per ounce of gold sold |
|
|
1,431 |
|
|
1,044 |
|
1 Presented on a cash basis
|
|
|
|
|
|
|
|
|
| Yaramoko
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cash cost applicable |
|
|
24,133 |
|
|
20,830 |
|
| Export duties and mining
taxes |
|
|
3,362 |
|
|
3,333 |
|
| General
and administrative expenses (operations) |
|
|
889 |
|
|
410 |
|
| Adjusted operating cash
cost |
|
|
28,384 |
|
|
24,573 |
|
| Sustaining leases |
|
|
1,359 |
|
|
1,435 |
|
| Sustaining capital
expenditures1 |
|
|
13,549 |
|
|
7,361 |
|
|
Brownfields exploration expenditures1 |
|
|
1,191 |
|
|
488 |
|
| All-in
sustaining cash cost |
|
|
44,483 |
|
|
33,857 |
|
| All-in cash cost |
|
|
44,483 |
|
|
33,857 |
|
| Ounces
of gold sold |
|
|
29,472 |
|
|
29,530 |
|
| All-in
sustaining cash cost per ounce of gold sold |
|
|
1,509 |
|
|
1,147 |
|
| All-in
cash cost per ounce of gold sold |
|
|
1,509 |
|
|
1,147 |
|
1 Presented on a cash basis
Reconciliation of all-in sustaining cash cost per ounce
of gold equivalent sold for the three months ended March 31, 2023
and 2022
|
Consolidated |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cash cost applicable |
|
|
87,511 |
|
|
76,021 |
|
| Royalties, export duties and
mining taxes |
|
|
8,711 |
|
|
8,980 |
|
| Workers' participation |
|
|
538 |
|
|
1,614 |
|
| General and administrative
expenses (operations) |
|
|
5,827 |
|
|
4,963 |
|
| General
and administrative expenses (Corporate) |
|
|
8,681 |
|
|
11,339 |
|
| Adjusted operating cash
cost |
|
|
111,268 |
|
|
102,917 |
|
| Care and maintenance costs
(impact of COVID-19) |
|
|
- |
|
|
2 |
|
| Sustaining leases |
|
|
2,975 |
|
|
3,005 |
|
| Sustaining capital
expenditures3 |
|
|
27,876 |
|
|
18,010 |
|
|
Brownfields exploration expenditures3 |
|
|
2,483 |
|
|
2,485 |
|
| All-in sustaining cash
cost |
|
|
144,602 |
|
|
126,419 |
|
| Payable
ounces of gold equivalent sold |
|
|
95,541 |
|
|
98,448 |
|
| All-in
sustaining cash cost per ounce of gold equivalent sold |
|
|
1,514 |
|
|
1,284 |
|
Gold equivalent was calculated using the
realized prices for gold of $1,893/oz Au, $22.5/oz Ag, $2,256/t Pb,
and $3,197/t Zn for Q1 2023 and using the realized prices for gold
of $1,884/oz Au, $24.2/oz Ag, $2,331/t Pb, and $3,736/t Zn for Q1
2022
Reconciliation of production cash cost per tonne and
cash cost per payable ounce of silver equivalent sold for the three
months ended March 31, 2023 and 2022
| San Jose
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cost of sales |
|
|
32,523 |
|
|
28,899 |
|
| Changes in concentrate
inventory |
|
|
71 |
|
|
77 |
|
| Cost of sales-right of
use |
|
|
133 |
|
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
(29 |
) |
|
(21 |
) |
| Inventory adjustment |
|
|
(129 |
) |
|
537 |
|
| Royalties and mining
taxes |
|
|
(1,257 |
) |
|
(1,392 |
) |
| Workers participation |
|
|
(17 |
) |
|
(727 |
) |
|
Depletion and depreciation |
|
|
(9,912 |
) |
|
(8,287 |
) |
| Cash cost3 |
A |
|
21,383 |
|
|
19,086 |
|
| Total
processed ore (tonnes) |
B |
|
246,736 |
|
|
250,947 |
|
|
Production cash cost per tonne3 ($/t) |
=A/B |
|
86.66 |
|
|
76.05 |
|
| Cash cost3 |
A |
|
21,383 |
|
|
19,086 |
|
| Changes in concentrate
inventory |
|
|
(71 |
) |
|
(77 |
) |
| Depletion and depreciation in
concentrate inventory |
|
|
29 |
|
|
21 |
|
| Inventory adjustment |
|
|
129 |
|
|
(537 |
) |
| Treatment charges |
|
|
(220 |
) |
|
872 |
|
|
Refining charges |
|
|
944 |
|
|
91 |
|
| Cash cost applicable per
payable ounce sold3 |
C |
|
22,194 |
|
|
19,456 |
|
| Payable
ounces of silver equivalent sold1 |
D |
|
1,944,265 |
|
|
1,867,871 |
|
| Cash
cost per ounce of payable silver equivalent sold2,3 ($/oz) |
=C/D |
|
11.42 |
|
|
10.42 |
|
| Mining cost per tonne3 |
|
|
39.05 |
|
|
37.45 |
|
| Milling cost per tonne |
|
|
20.39 |
|
|
18.01 |
|
| Indirect cost per tonne |
|
|
19.56 |
|
|
14.63 |
|
| Community relations cost per
tonne |
|
|
1.85 |
|
|
4.84 |
|
|
Distribution cost per tonne |
|
|
5.81 |
|
|
1.12 |
|
|
Production cash cost per tonne3 ($/t) |
|
|
86.66 |
|
|
76.05 |
|
1 Silver equivalent sold for Q1 2023 is calculated using a
silver to gold ratio of 81.2:1 (Q1 2022: 77.9:1). 2
Silver equivalent is calculated using the realized prices for gold
and silver. Refer to Financial Results – Sales and Realized
Prices
| |
|
|
|
|
|
| Caylloma
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cost of sales |
|
|
16,108 |
|
|
16,021 |
|
| Changes in concentrate
inventory |
|
|
(274 |
) |
|
111 |
|
| Cost of sales-right of
use |
|
|
561 |
|
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
(144 |
) |
|
(126 |
) |
| Inventory adjustment |
|
|
225 |
|
|
272 |
|
| Royalties and mining
taxes |
|
|
(166 |
) |
|
(247 |
) |
| Provision for community
support |
|
|
(25 |
) |
|
(126 |
) |
| Workers participation |
|
|
(446 |
) |
|
(613 |
) |
|
Depletion and depreciation |
|
|
(3,483 |
) |
|
(3,414 |
) |
| Cash cost3 |
A |
|
12,356 |
|
|
11,878 |
|
| Total
processed ore (tonnes) |
B |
|
125,996 |
|
|
132,574 |
|
|
Production cash cost per tonne3 ($/t) |
=A/B |
|
98.07 |
|
|
89.60 |
|
| Cash cost |
A |
|
12,356 |
|
|
11,878 |
|
| Changes in concentrate
inventory |
|
|
274 |
|
|
(111 |
) |
| Depletion and depreciation in
concentrate inventory |
|
|
144 |
|
|
126 |
|
| Inventory adjustment |
|
|
(225 |
) |
|
(272 |
) |
| Treatment charges |
|
|
5,259 |
|
|
3,914 |
|
|
Refining charges |
|
|
247 |
|
|
392 |
|
| Cash cost applicable per
payable ounce sold3 |
C |
|
18,055 |
|
|
15,927 |
|
| Payable
ounces of silver equivalent sold1 |
D |
|
1,373,699 |
|
|
1,285,610 |
|
| Cash
cost per ounce of payable silver equivalent sold2,3 ($/oz) |
=C/D |
|
13.14 |
|
|
12.39 |
|
| Mining cost per tonne |
|
|
43.06 |
|
|
35.29 |
|
| Milling cost per tonne |
|
|
15.68 |
|
|
16.23 |
|
| Indirect cost per tonne |
|
|
29.40 |
|
|
30.60 |
|
| Community relations cost per
tonne |
|
|
0.61 |
|
|
7.04 |
|
|
Distribution cost per tonne |
|
|
9.32 |
|
|
0.45 |
|
|
Production cash cost per tonne3 ($/t) |
|
|
98.07 |
|
|
89.60 |
|
1 Silver equivalent sold for Q1 2023 is
calculated using a silver to gold ratio of 0.0:1 (Q1 2022: 76.9:1),
silver to lead ratio of 1:22.3 pounds (Q1 2022: 1:22.5), and silver
to zinc ratio of 1:15.7 pounds (Q1 2022: 1:14.0). 2
Silver equivalent is calculated using the realized prices for gold,
silver, lead, and zinc. Refer to Financial Results - Sales and
Realized Prices
Reconciliation of all-in sustaining cash
cost and all-in cash cost per payable ounce of silver equivalent
sold for the three months ended March 31, 2023 and
2022
| San Jose
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cash cost applicable4 |
|
|
22,194 |
|
|
19,456 |
|
| Cost of sales-right of
use |
|
|
(133 |
) |
|
- |
|
| Royalties and mining
taxes |
|
|
1,257 |
|
|
1,392 |
|
| Workers' participation |
|
|
21 |
|
|
909 |
|
| General
and administrative expenses (operations) |
|
|
1,802 |
|
|
1,590 |
|
| Adjusted operating cash
cost4 |
|
|
25,141 |
|
|
23,347 |
|
| Care and maintenance costs
(impact of COVID-19) |
|
|
- |
|
|
2 |
|
| Sustaining leases |
|
|
162 |
|
|
157 |
|
| Sustaining capital
expenditures3 |
|
|
3,772 |
|
|
3,575 |
|
|
Brownfields exploration expenditures3 |
|
|
1,088 |
|
|
1,529 |
|
| All-in sustaining cash
cost |
|
|
30,163 |
|
|
28,610 |
|
|
Non-sustaining capital expenditures3 |
|
|
269 |
|
|
415 |
|
| All-in cash cost |
|
|
30,432 |
|
|
29,025 |
|
| Payable
ounces of silver equivalent sold1 |
|
|
1,944,265 |
|
|
1,867,871 |
|
| All-in
sustaining cash cost per ounce of payable silver equivalent
sold2 |
|
|
15.51 |
|
|
15.32 |
|
| All-in
cash cost per ounce of payable silver equivalent sold2 |
|
|
15.65 |
|
|
15.54 |
|
1 Silver equivalent sold for Q1 2023 is calculated using a
silver to gold ratio of 81.2:1 (Q1 2022: 77.9:1). 2
Silver equivalent is calculated using the realized prices for gold
and silver. Refer to Financial Results - Sales and Realized
Prices 3 Presented on a cash basis
| |
|
|
|
|
|
|
| Caylloma
Mine |
|
|
Three months ended March 31, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
| Cash cost applicable4 |
|
|
18,055 |
|
|
15,927 |
|
| Cost of sales-right of
use |
|
|
(561 |
) |
|
- |
|
| Royalties and mining
taxes |
|
|
166 |
|
|
247 |
|
| Workers' participation |
|
|
517 |
|
|
705 |
|
| General
and administrative expenses (operations) |
|
|
1,144 |
|
|
1,058 |
|
| Adjusted operating cash
cost4 |
|
|
19,321 |
|
|
17,937 |
|
| Sustaining leases |
|
|
856 |
|
|
708 |
|
| Sustaining capital
expenditures3 |
|
|
2,810 |
|
|
3,949 |
|
|
Brownfields exploration expenditures3 |
|
|
204 |
|
|
324 |
|
| All-in
sustaining cash cost |
|
|
23,191 |
|
|
22,918 |
|
| All-in cash cost |
|
|
23,191 |
|
|
22,918 |
|
| Payable
ounces of silver equivalent sold1 |
|
|
1,373,699 |
|
|
1,285,610 |
|
| All-in
sustaining cash cost per ounce of payable silver equivalent
sold2 |
|
|
16.88 |
|
|
17.83 |
|
| All-in
cash cost per ounce of payable silver equivalent sold2 |
|
|
16.88 |
|
|
17.83 |
|
1 Silver equivalent sold for Q1 2023 is
calculated using a silver to gold ratio of 0.0:1 (Q1 2022: 76.9:1),
silver to lead ratio of 1:22.3 pounds (Q1 2022: 1:22.5), and silver
to zinc ratio of 1:15.7 pounds (Q1 2022: 1:14.0). 2
Silver equivalent is calculated using the realized prices for gold,
silver, lead, and zinc. Refer to Financial Results - Sales and
Realized Prices3 Presented on a cash basis
Additional information regarding the Company’s
financial results and activities underway are available in the
Company’s audited consolidated financial statements for the three
months ended March 31, 2023 and accompanying Q1 2023 MD&A,
which are available for download on the Company’s website,
www.fortunasilver.com, on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar.
Conference Call and Webcast
A conference call to discuss the financial and
operational results will be held on Tuesday, May 16, 2023 at 9:00
a.m. Pacific time | 12:00 p.m. Eastern time. Hosting the call will
be Jorge A. Ganoza, President and CEO; Luis D. Ganoza, Chief
Financial Officer; Cesar Velasco, Chief Operating Officer - Latin
America; David Whittle, Chief Operating Officer - West Africa; and
Paul Weedon, Senior Vice President Exploration.
Shareholders, analysts, media and interested
investors are invited to listen to the live conference call by
logging onto the webcast at
https://www.webcaster4.com/Webcast/Page/1696/48290 or over the
phone by dialing in just prior to the starting time.
Conference call details:
Date: Tuesday, May 16,
2023Time: 9:00 a.m. Pacific time | 12:00 p.m.
Eastern time
Dial in number (Toll Free):
+1.888.506.0062Dial in number (International):
+1.973.528.0011Access code: 256829
Replay number (Toll Free):
+1.877.481.4010Replay number (International):
+1.919.882.2331Replay passcode: 48290
Playback of the earnings call will be available until Tuesday,
May 30, 2023. Playback of the webcast will be available until
Thursday, May 16, 2024.
About Fortuna Silver Mines Inc.
Fortuna Silver Mines Inc. is a Canadian precious
metals mining company with four operating mines in Argentina,
Burkina Faso, Mexico, and Peru, and our fifth mine under
construction in Côte d’Ivoire. 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. GanozaPresident, CEO,
and DirectorFortuna Silver Mines Inc.
Investor Relations:
Carlos Baca | info@fortunasilver.com |
www.fortunasilver.com | Twitter |
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 include, without limitation, statements about
the Company's plans for its mines and mineral properties; the
Company’s anticipated financial and operational performance in
2023; estimated production and costs of production for 2023,
including grade and volume of metal produced and sales, revenues
and cashflows, and capital costs (sustaining and non-sustaining),
and operating costs, including projected production cash costs and
all-in sustaining costs; the ability of the Company to mitigate the
inflationary pressures on supplies used in its operations;
estimated capital expenditures and estimated exploration spending
in 2023, including amounts for exploration activities at its
properties; the Company’s plans for the transition from
construction to operations of a mine at the Séguéla project in Cote
d’Ivoire; the economics for the construction of the mine at the
Séguéla project, including the estimated construction capital
expenditures for the project, the timelines and schedules for the
construction and production of gold at the Séguéla project;
statements regarding the Company's liquidity, access to capital;
the impact of high inflation on the costs of production and the
supply chain; the impact of COVID-19 on the Company’s operations;
the Company's business strategy, plans and outlook; the merit of
the Company's mines and mineral properties; mineral resource and
reserve estimates, metal recovery rates, concentrate grade and
quality; changes in tax rates and tax laws, requirements for
permits, anticipated approvals and other matters. Often, but not
always, these Forward-looking Statements can be identified by the
use of words such as "estimated", “expected”, “anticipated”,
"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; the risks relating to a
global pandemic, including the COVID-19 pandemic, as well as risks
associated with war or other geo-political hostilities, such as the
Ukrainian – Russian conflict, any of which could continue to cause
a disruption in global economic activity; fluctuation in currencies
and foreign exchange rates; increases in the rate of inflation; the
imposition or any extension of capital controls in countries in
which the Company operates; any changes in tax laws in Argentina
and the other countries in which we operate; changes in the prices
of key supplies; 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; changes to
current estimates of mineral reserves and resources; changes to
production and cost estimates; the ability of Minera Cuzcatlan to
successfully contest and revoke the resolution of SEMARNAT which
revoked the environmental impact authorization at the San Jose
mine; changes in the position of regulatory authorities with
respect to the granting of approvals or permits; governmental and
other approvals; changes in government, 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 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
changes to production estimates (which assume accuracy of projected
ore grade, mining rates, recovery timing, and recovery rate
estimates and may be impacted by unscheduled maintenance, labour
and contractor availability and other operating or technical
difficulties); the construction at the Séguéla gold Project will
continue on the time line and in accordance with the budget as
planned; the duration and impacts of COVID-19; geo-political
uncertainties that may affect the Company’s production, workforce,
business, operations and financial condition; tthe expected trends
in mineral prices and currency exchange rates; that the Company
will be successful in mitigating the impact of inflation on its
business and operations; that Minera Cuzcatlan will be successful
in the legal proceedings to reinstate the environmental impact
authorization at the San Jose mine; 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, the ability to meet current and
future obligations 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.
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