Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI)
(“Fortuna” or the “Company”) today reported its financial
and operating results for the second quarter of
2023.
Second
Quarter 2023 highlights
Financial
- Adjusted net income of $2.9 million
or $0.01 per share
- Net income of $3.5 million or $0.01
per share
- Adjusted EBITDA1 of $44.4
million
- Net cash provided by operating
activities $44.2 million and free cash flow from ongoing operations
of $9.5 million
- Liquidity as of March 31, 2023 was
$97.9 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 64,348
ounces
- Silver production of 1,262,561
ounces
- Gold equivalent production of
93,454 ounces
- Consolidated cash costs1 per ounce
of gold equivalent sold of $968
- Consolidated all-in sustaining
costs (AISC)1 per ounce of gold equivalent sold of $1,799
- Lost Time Injury Frequency Rate
(LTIFR) of 0.43 and Total Recordable Injury Frequency Rate (TRIFR)
of 1.15. One fatal incident was recorded at the Caylloma mine in
June.
Growth and Development
- First gold pour at the Séguéla mine
in Côte d’Ivoire took place on May 24, 2023, with the first gold
shipment having taken place in July, subsequent to the close of the
quarter.
- The transaction to acquire Chesser
Resources Limited is continuing to progress and is expected to
close in the third week of September
Jorge A. Ganoza, President and CEO, commented,
“The first gold pour and sale at Séguéla is an exciting milestone
for the Company as our new flagship asset enters into production
and adds stable, high margin ounces to our portfolio. Ramp-up
activities at the process plant continue to progress, and during
the month of July the process plant met and exceeded name plate
capacity and is expected to operate at a stable rate through the
quarter.”
Mr. Ganoza continued, “Loss of production,
stand-by charges and expenses related to the illegal union blockade
at the San Jose Mine and standby charges during the repair of the
Armtec tunnel at the Yaramoko Mine, both weighed on the results and
AISC for the second quarter. Despite these headwinds the Company
generated positive free cash flow from ongoing operations of $9.5
million. At Séguéla, although we produced over four thousand ounces
in the days prior to quarter end, ahead of schedule, the first gold
sale did not take place until early in the third quarter.”
Mr. Ganoza concluded “With Séguéla contributing
its first full quarter of production in the third quarter, the
return of normal to operations at San Jose, Yaramoko continuing to
perform above expectations, and the completion of a stripping phase
in the second quarter at Lindero, we expect growing margins and
free cash flow to improve in the third and fourth quarter of the
year”.
Second Quarter 2023 Consolidated
Results
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|
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|
Three months ended June 30, |
|
Six months ended June 30, |
|
(Expressed in millions) |
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
| Sales |
|
158.4 |
|
167.9 |
|
(6 |
%) |
|
334.1 |
|
350.2 |
|
(5 |
%) |
| Mine operating income |
|
31.9 |
|
32.5 |
|
(2 |
%) |
|
72.3 |
|
96.0 |
|
(25 |
%) |
| Operating income |
|
7.7 |
|
13.1 |
|
(41 |
%) |
|
31.6 |
|
53.9 |
|
(41 |
%) |
| Net income |
|
3.5 |
|
1.7 |
|
106 |
% |
|
15.3 |
|
28.7 |
|
(47 |
%) |
| Earnings per share -
basic |
|
0.01 |
|
0.01 |
|
0 |
% |
|
0.05 |
|
0.10 |
|
(50 |
%) |
| Adjusted net income1 |
|
2.9 |
|
2.1 |
|
38 |
% |
|
16.1 |
|
35.4 |
|
(55 |
%) |
| Adjusted EBITDA1 |
|
44.4 |
|
57.9 |
|
(23 |
%) |
|
109.5 |
|
138.1 |
|
(21 |
%) |
| Net cash provided by operating
activities |
|
44.2 |
|
47.4 |
|
(7 |
%) |
|
85.4 |
|
80.0 |
|
7 |
% |
| Free cash flow from ongoing
operations1 |
|
9.5 |
|
21.9 |
|
(57 |
%) |
|
17.6 |
|
31.0 |
|
(43 |
%) |
| Production cash cost ($/oz Au
Eq) |
|
968.0 |
|
871.0 |
|
11 |
% |
|
940 |
|
820 |
|
15 |
% |
| All-in sustaining cash cost
($/oz Au Eq) |
|
1,799.0 |
|
1,434.0 |
|
25 |
% |
|
1,647 |
|
1,358 |
|
21 |
% |
| Capital expenditures2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining |
|
34.2 |
|
23.1 |
|
48 |
% |
|
62.1 |
|
41.1 |
|
51 |
% |
|
Non-sustaining3 |
|
0.9 |
|
3.7 |
|
(76 |
%) |
|
2.0 |
|
6.4 |
|
(69 |
%) |
|
Séguéla construction |
|
23.0 |
|
23.4 |
|
(2 |
%) |
|
48.1 |
|
64.1 |
|
(25 |
%) |
|
Brownfields |
|
2.4 |
|
3.4 |
|
(29 |
%) |
|
7.3 |
|
7.4 |
|
(1 |
%) |
| As at |
|
|
|
|
|
|
|
June 30, 2023 |
|
December 31, 2022 |
|
% Change |
| Cash and cash
equivalents |
|
|
|
93.4 |
|
80.5 |
|
16 |
% |
| Net
liquidity position |
|
|
|
|
|
|
|
97.9 |
|
150.5 |
|
(35 |
%) |
| 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.sedarplus.ca for a description of the calculation
of these measures. |
| 2 Capital
expenditures are presented on a cash basis |
|
| 3 Non-sustaining
expenditures include greenfields exploration |
|
| Figures may not add
due to rounding |
|
Second Quarter 2023 Results
Net income for the quarter was $3.5 million
compared to $1.7 million in Q2 2022. After adjusting for non-cash
and non-recurring items, adjusted net income for the quarter was
$2.9 million compared to $2.1 million in Q2 2022. The slight
increase in adjusted net income is explained by lower income taxes
and effective tax rate in Q2 2023, compensating for a reduction in
operating income of $5.4 million compared to Q2 222. The reduction
in operating income was due mainly to lower volume of metal sold at
San Jose due to the 15-day stoppage related to an illegal blockade
at the mine, and lower volume at Lindero related to the mine
sequence. This impact was combined with higher cash cost of sales
per gold equivalent ounce mainly due to lower production rates and
head grades at San Jose associated with the ramp-up process
following the work stoppage at the mine, and higher input costs and
lower head grades at Lindero. These effects were partially offset
by lower cost of sales per ounce of gold at Yaramoko. Operating
income was further impacted by $7.3 million of non-recurring
expenses comprised of $3.5 million of stand-by charges at San Jose
and Yaramoko, $2.8 million related to a new agreement with the
workers´ union at San Jose, and a $1.0 million administrative
penalty at Yaramoko payable to the Ministry of Mines. The positive
impact of higher gold and silver prices in Q2 2023 was offset by a
sharp drop in zinc prices. The realized gold and silver price were
$1,974 per ounce and $24.10 per ounce, respectively, in Q2 2023,
compared to $1,870 and $22.62, respectively in Q2 2022.
Adjusted EBITDA for the quarter was $44.4
million, representing a margin of 28% over sales, compared to $57.9
million reported in the same period in 2022, representing a margin
of 34% over sales. The main drivers for the decrease in adjusted
EBITDA were lower volume sold, non-recurrent items, and higher
costs per gold equivalent ounce as described above.
General and administrative expenses for the
quarter of $14.5 million were in line with the same period in 2022.
G&A is comprised of the following items:
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|
|
|
|
|
|
|
| |
|
Three months ended June 30, |
|
Six months ended June 30, |
|
(Expressed in millions) |
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
| Mine G&A |
|
|
6.2 |
|
|
6.2 |
|
0 |
% |
|
|
12.1 |
|
|
11.1 |
|
9 |
% |
| Corporate G&A |
|
|
7.2 |
|
|
8.1 |
|
(11 |
%) |
|
|
14.1 |
|
|
16.2 |
|
(13 |
%) |
| Share-based payments |
|
|
1.1 |
|
|
0.4 |
|
175 |
% |
|
|
3.3 |
|
|
4.0 |
|
(18 |
%) |
|
Workers' participation |
|
|
— |
|
|
0.1 |
|
(100 |
%) |
|
|
0.1 |
|
|
0.4 |
|
(75 |
%) |
|
Total |
|
|
14.5 |
|
|
14.8 |
|
(2 |
%) |
|
|
29.6 |
|
|
31.7 |
|
(7 |
%) |
Net cash generated by operations for the quarter
decreased $3.2 to $44.2 million from $47.4 million in Q2 2022. The
decrease reflects lower EBITDA of $13.5 million partially offset by
$7.4 million in positive changes in working capital and income tax
paid. Net cash generated by operations per share was $0.15 compared
to $0.16 in Q2 2022.
In the second quarter of 2023 the Company
invested $73.2 million in capital expenditures consisting primarily
of $35.6 million in sustaining capital to support underground
development, capitalized stripping and other projects at our
operating sites, $19.5 million in construction and pre-production
activities at Séguéla, $3.4 million of capitalized interest, a
$10.0 million payment to Newcrest related to first gold at Séguéla
and $4.5 million in costs related to the Chesser transaction.
Free cash flow from ongoing operations for the
quarter was $9.5 million, compared to $21.9 million in Q2 2022. The
decrease of $12.4 million is the result of lower net cash generated
by operations of $3.2 million and higher sustaining capex and
brownfields exploration at our operating mines of $10.8 million in
Q2 2023.
Consolidated All-in Sustaining
Cost
Consolidated AISC per gold equivalent ounce
(GEO) sold for the second quarter of 2023 was $1,799 per ounce
compared to $1,434 per ounce for the comparable quarter in 2022.
The increase in AISC was primarily the result of lower gold
equivalent ounces sold due to the impact of the illegal blockade at
the San Jose Mine, higher sustaining capital related to Phase 2 of
the leach pad expansion and higher capitalized stripping at
Lindero, higher underground development at Yaramoko, $7.3 million
in stand-by, and one-time payments from the work stoppage at San
Jose and the stoppage of underground mining at Yaramoko, and higher
costs of sales per ounce at Lindero related to lower production and
higher input costs.
Liquidity
The Company’s total liquidity available as of
June 30, 2023 was $97.9 million, comprised of $93.4 million in cash
and cash equivalents, and $4.5 million undrawn on the $250.0
million revolving credit facility.
Séguéla Gold Mine Construction
Update
For the second quarter of 2023 the Company
incurred and expended $8.6 million and $8.9 million respectively
related to construction activities. Since the project early works
began in the third quarter of 2021 the Company has incurred and
expended $173.6 million and $161.2 million respectively.
| |
|
|
|
(Expressed in millions) |
Q2 2023 |
Project to Date |
|
Expended Capital Costs1 |
8.9 |
161.2 |
|
|
Working Capital Adjustment2 |
0.3 |
(12.4 |
) |
|
Incurred Capital Costs3 |
8.6 |
173.6 |
|
1 Cash basis. Excludes exploration costs,
capitalized interest and management fees. 2 Primarily
consists of work performed not yet invoiced and increases in the
accounts payable balance offset by increases in the VAT receivable
balance. 3 Accrual basis. Excludes capitalized interest and
management fees. 4 YTD includes a correction for the
timing of payments. This has not impacted project to date
spend. As of June 30, 2023 the construction
of the mine was substantially complete with minimal remaining spend
associated with final commissioning and vendor testing. The project
was delivered on budget. Settlement of final construction related
payables is expected to be financed by free cash flow from ongoing
operations.
Lindero Mine, Argentina
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|
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|
|
|
| |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Mine Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes placed on the leach pad |
|
|
1,503,323 |
|
|
1,502,074 |
|
|
2,981,471 |
|
|
2,797,829 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
0.62 |
|
|
0.74 |
|
|
0.83 |
|
|
0.83 |
|
Production (oz) |
|
|
25,456 |
|
|
29,016 |
|
|
50,714 |
|
|
59,084 |
|
Metal sold (oz) |
|
|
25,140 |
|
|
30,546 |
|
|
51,952 |
|
|
59,165 |
|
Realized price ($/oz) |
|
|
1,975 |
|
|
1,869 |
|
|
1,879 |
|
|
1,879 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost ($/oz Au)1 |
|
|
879 |
|
|
687 |
|
|
885 |
|
|
690 |
|
All-in sustaining cash cost ($/oz Au)1 |
|
|
1,688 |
|
|
1,151 |
|
|
1,552 |
|
|
1,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining |
|
|
13,337 |
|
|
6,123 |
|
|
21,082 |
|
|
9,248 |
|
Non-sustaining |
|
|
136 |
|
|
– |
|
|
323 |
|
|
169 |
|
Brownfields |
|
|
– |
|
|
646 |
|
|
– |
|
|
790 |
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.sedarplus.ca 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 second quarter of 2023, a total of
1,503,323 tonnes of ore were placed on the heap leach pad, with an
average gold grade of 0.62 g/t, containing an estimated 29,984
ounces of gold. Gold production for Q2 2023 totaled 25,456 ounces,
comprised of 24,599 ounces of doré, an estimated 731 ounces of gold
contained in fine carbon, and 126 ounces contained in copper
concentrate. This represents a 12% decrease in total ounces,
year-over-year. This decline in gold production can primarily be
attributed to a decrease in the head grade of mineralized material
placed on the leach pad, but is in line with the planned mining
sequence. Mine production for the quarter was 0.8 million tonnes of
mineralized material, with a strip ratio of 2.69:1. 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 the quarter
ended June 30, 2023, was $879 compared to $687 in the same period
in 2022. Cash cost per ounce of gold was higher due to higher
indirect costs, and lower production. This was partially offset by
higher stripping capitalization and by-product sales from
copper.
All-in sustaining cash cost per gold ounce sold
was $1,688 during Q2 2023 compared with $1,151 in the same period
of 2022. All-in sustaining cash cost for the second quarter of 2023
was impacted by the cost issues described above, compounded by
lower ounces sold and significantly higher sustaining capital
spend.
During the quarter, sustaining capital
expenditures were primarily driven by the development of Phase 2 of
the leach pad, higher capitalized stripping, plant investments, and
capitalized maintenance.
Yaramoko Mine Complex, Burkina Faso
| |
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|
|
|
|
|
|
|
| |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Mine Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes milled |
|
|
144,202 |
|
|
138,787 |
|
|
283,852 |
|
|
266,755 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
6.51 |
|
|
5.42 |
|
|
6.23 |
|
|
6.43 |
|
Recovery (%) |
|
|
98 |
|
|
97 |
|
|
98 |
|
|
98 |
|
Production (oz) |
|
|
29,002 |
|
|
24,553 |
|
|
55,439 |
|
|
52,788 |
|
Metal sold (oz) |
|
|
25,946 |
|
|
24,598 |
|
|
55,476 |
|
|
54,128 |
|
Realized price ($/oz) |
|
|
1,976 |
|
|
1,868 |
|
|
1,933 |
|
|
1,873 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost ($/oz Au)1 |
|
|
719 |
|
|
928 |
|
|
772 |
|
|
804 |
|
All-in sustaining cash cost ($/oz Au)1 |
|
|
1,626 |
|
|
1,565 |
|
|
1,564 |
|
|
1,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining |
|
|
14,318 |
|
|
9,085 |
|
|
27,867 |
|
|
16,446 |
|
Brownfields |
|
|
1,019 |
|
|
– |
|
|
2,210 |
|
|
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.sedarplus.ca for a
description of the calculation of these measures.2 Capital
expenditures are presented on a cash basis.
The Yaramoko Mine produced 29,002 ounces of gold
in the second quarter of 2023 with an average gold head grade of
6.51g/t, an 18% increase when compared to the same period in 2022.
Production benefitted from higher grades mined and an increase in
milled tonnes. Better than expected grades were sourced from the
extension of the deposit beyond the current resource boundary on
the western side of the 55 Zone. Production at Yaramoko is expected
to be at the upper end of annual guidance range. In light of the
recent success encountering extensions of mineralization on the
fringes of the resource boundary at Zone 55, the Company expects to
provide a Mineral Reserve and Mineral Resource update before year
end.
Access to the underground mine was impacted for
27 days in April due to a failure of the Armtec tunnelling
structure at the mine portal. Throughout this period, processing
operations were maintained by milling surface ore stockpiles.
Underground mine production resumed on May 1.
Cash cost per ounce of gold sold for the quarter
ended June 30, 2023, was $719 compared to $928 in the same period
in 2022. Cash cost per ounce decreased due to higher production and
higher head grades, lower indirect costs, and lower mining costs
related to lower stoping and operating development costs.
All-in sustaining cash cost per gold ounce sold
was $1,626 for Q2 2023, compared to $1,565 for the same period in
2022. This increase was as a result of increased capital
expenditures related to underground development, $2.0 million in
stand-by charges incurred while the mine access ramp was remediated
and a $1.0 million administrative penalty.
Sustaining capital for Q2 2023 was higher due to
higher mine development and the Zone 55 Primary Vent Circuit
extension. Brownfields expenditure was primarily related to diamond
drilling. San Jose Mine, Mexico
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Mine Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes milled |
|
|
194,887 |
|
|
251,945 |
|
|
441,623 |
|
|
502,892 |
|
Average tonnes milled per day |
|
|
2,633 |
|
|
2,831 |
|
|
2,760 |
|
|
2,874 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Silver |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
168 |
|
|
187 |
|
|
186 |
|
|
186 |
|
Recovery (%) |
|
|
91 |
|
|
91 |
|
|
91 |
|
|
91 |
|
Production (oz) |
|
|
957,265 |
|
|
1,385,336 |
|
|
2,260,577 |
|
|
2,743,525 |
|
Metal sold (oz) |
|
|
942,671 |
|
|
1,417,303 |
|
|
2,271,004 |
|
|
2,733,496 |
|
Realized price ($/oz) |
|
|
24.09 |
|
|
22.56 |
|
|
23.20 |
|
|
23.39 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
1.02 |
|
|
1.13 |
|
|
1.13 |
|
|
1.13 |
|
Recovery (%) |
|
|
90 |
|
|
91 |
|
|
90 |
|
|
90 |
|
Production (oz) |
|
|
5,778 |
|
|
8,295 |
|
|
14,009 |
|
|
16,534 |
|
Metal sold (oz) |
|
|
5,695 |
|
|
8,564 |
|
|
14,050 |
|
|
16,516 |
|
Realized price ($/oz) |
|
|
1,973 |
|
|
1,873 |
|
|
1,929 |
|
|
1,881 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production cash cost ($/t)2 |
|
|
102.77 |
|
|
83.57 |
|
|
93.77 |
|
|
79.82 |
|
Production cash cost ($/oz Ag Eq)1,2 |
|
|
15.93 |
|
|
11.00 |
|
|
13.26 |
|
|
10.72 |
|
All-in sustaining cash cost ($/oz Ag Eq)1,2 |
|
|
24.07 |
|
|
15.41 |
|
|
19.01 |
|
|
15.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining |
|
|
3,593 |
|
|
4,051 |
|
|
7,366 |
|
|
7,626 |
|
Non-sustaining |
|
|
524 |
|
|
454 |
|
|
793 |
|
|
869 |
|
Brownfields |
|
|
788 |
|
|
1,568 |
|
|
1,875 |
|
|
3,097 |
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.sedarplus.ca for a description of the
calculation of these measures.3 Capital expenditures are presented
on a cash basis
In the second quarter of 2023, the San Jose Mine
produced 957,265 ounces of silver and 5,778 ounces of gold, 31% and
30% lower, respectively, when compared to the same period in
2022.
The decrease in production is explained by the
15-day full shutdown of operations due to the illegal blockade by
the workers’ union related to demands for higher profit sharing
distributions and higher absenteeism and resignations of personnel
following the resolution of the blockade. The 15-day shutdown
reduced planned production for the quarter by 47,200 tonnes and
impacted mine preparation, delaying access to higher grade stopes
planned in the quarter. The Company has adjusted its mine plan to
access these higher grade stopes in the third quarter and has taken
the necessary steps to address worker absenteeism.
The cash cost per tonne for the three months
ended June 30, 2023, was $102.77 compared to $83.57 in the same
period in 2022. The increase was primarily due to inflation and the
appreciation of the Mexican Peso, affecting consumables, labour
costs and other services paid in Pesos. Cash cost was further
negatively affected by decreased production due to the work
stoppages noted earlier and the impact of the plant running below
optimal throughput rates during quarter.
All-in sustaining cash costs of payable silver
equivalent for the three months ended June 30, 2023, increased 24%
to $24.07 per ounce, compared to $15.41 per ounce for the same
period in 2022. The increase was driven by higher cash cost, lower
production, and an extraordinary bonus negotiated as part of the
union agreement. This was offset slightly by lower royalties and
lower capital expenditures.
In the second quarter of 2023, sustaining
capital expenditure was lower than the same period in 2022, due to
the one-time purchase of two scooptrams in 2022. This was partially
offset by higher development costs in this quarter. Brownfields
expenditures continued to face challenges stemming from geological
and operational delays.
Caylloma Mine, Peru
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Mine Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes milled |
|
|
137,004 |
|
|
135,977 |
|
|
262,999 |
|
|
268,552 |
|
Average tonnes milled per day |
|
|
1,539 |
|
|
1,528 |
|
|
1,494 |
|
|
1,526 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Silver |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
84 |
|
|
77 |
|
|
83 |
|
|
83 |
|
Recovery (%) |
|
|
83 |
|
|
79 |
|
|
81 |
|
|
81 |
|
Production (oz) |
|
|
305,296 |
|
|
267,559 |
|
|
588,362 |
|
|
579,498 |
|
Metal sold (oz) |
|
|
336,086 |
|
|
279,051 |
|
|
599,656 |
|
|
573,352 |
|
Realized price ($/oz) |
|
|
24.13 |
|
|
22.89 |
|
|
23.30 |
|
|
23.35 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (g/t) |
|
|
0.12 |
|
|
0.17 |
|
|
0.16 |
|
|
0.16 |
|
Recovery (%) |
|
|
16 |
|
|
43 |
|
|
40 |
|
|
40 |
|
Production (oz) |
|
|
89 |
|
|
307 |
|
|
255 |
|
|
565 |
|
Metal sold (oz) |
|
|
— |
|
|
278 |
|
|
22 |
|
|
603 |
|
Realized price ($/oz) |
|
|
— |
|
|
1,897 |
|
|
1,895 |
|
|
1,864 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lead |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (%) |
|
|
3.72 |
|
|
3.00 |
|
|
3.27 |
|
|
3.27 |
|
Recovery (%) |
|
|
91 |
|
|
85 |
|
|
87 |
|
|
88 |
|
Production (000's lbs) |
|
|
10,207 |
|
|
7,637 |
|
|
19,716 |
|
|
16,771 |
|
Metal sold (000's lbs) |
|
|
11,419 |
|
|
8,021 |
|
|
20,201 |
|
|
16,596 |
|
Realized price ($/lb) |
|
|
0.96 |
|
|
1.02 |
|
|
0.99 |
|
|
1.04 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Zinc |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade (%) |
|
|
5.18 |
|
|
4.09 |
|
|
4.14 |
|
|
4.14 |
|
Recovery (%) |
|
|
90 |
|
|
89 |
|
|
89 |
|
|
89 |
|
Production (000's lbs) |
|
|
14,037 |
|
|
10,886 |
|
|
27,088 |
|
|
21,713 |
|
Metal sold (000's lbs) |
|
|
13,986 |
|
|
10,920 |
|
|
27,800 |
|
|
21,466 |
|
Realized price ($/lb) |
|
|
1.23 |
|
|
1.79 |
|
|
1.34 |
|
|
1.74 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Unit Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production cash cost ($/t)2 |
|
|
103.38 |
|
|
93.31 |
|
|
100.84 |
|
|
91.48 |
|
Production cash cost ($/oz Ag Eq)1,2 |
|
|
14.76 |
|
|
13.14 |
|
|
14.02 |
|
|
12.77 |
|
All-in sustaining cash cost ($/oz Ag Eq)1,2 |
|
|
19.18 |
|
|
18.19 |
|
|
18.12 |
|
|
18.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital Expenditures ($000's)
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining |
|
|
2,943 |
|
|
3,793 |
|
|
5,753 |
|
|
7,742 |
|
Brownfields |
|
|
336 |
|
|
207 |
|
|
540 |
|
|
531 |
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.sedarplus.ca for a description of the
calculation of these measures.3 Capital expenditures are presented
on a cash basis.
The Caylloma Mine produced 305,296 ounces of
silver, 10.2 million pounds of lead, and 14.0 million pounds of
zinc during the second quarter of 2023. Silver production was 14%
higher compared to the same quarter in 2022, as production
benefitted from higher grade stopes at the lower levels of the
Animas vein. Lead and zinc production rose by 34% and 29%
respectively, compared to the same period in 2022, due to higher
head grades sourced from lower levels at the Animas vein. Gold
production totaled 89 ounces with an average head grade of 0.12
g/t.
The cash cost per tonne of processed ore for the
three months ended June 30, 2023 increased 11% to $103.38 compared
to $93.31 in the same period in 2022. The increase was mainly due
to higher mining costs driven by inflation and its direct impact on
the price of materials.
The all-in sustaining cash cost per ounce of
payable silver equivalent for the three months ended June 30, 2023,
increased 5% to $19.18 per ounce, compared to $18.19 per ounce for
the same period in 2022. The increase was driven by higher cash
cost and the impact of metal prices on the calculation of silver
equivalent ounces. This was partially offset slightly by lower
capital expenditures.
Capital costs for the period primarily consisted
of underground development in mine levels 15, 16 and 18.
Qualified Person
Eric Chapman, Senior Vice President of Technical
Services, is a Professional Geoscientist of the Engineers and
Geoscientists 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.
Raul Espinoza, F.AusIMM CP, Director of
Technical Services for the Company is a Qualified Person as defined
by NI 43-101, and has reviewed and approved the scientific and
technical information pertaining to the Séguéla Project contained
in this MD&A 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 sustaining cash cost per
ounce of gold equivalent sold; all-in cash cost per ounce of gold
sold; production cash cost per ounce of gold equivalent; 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
and six months ended June 30, 2023 (“Q2 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 Q2 2023 MD&A may be accessed on SEDAR+
at www.sedarplus.ca under the Company’s profile.
Except as otherwise described in the Q2 2023
MD&A, the Company has calculated these measures consistently
for all periods presented.
Reconciliation to adjusted net income for the three and
six months ended June 30, 2023 and 2022
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
Consolidated (in millions of US dollars) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Net income |
|
3.5 |
|
|
|
1.7 |
|
|
|
15.3 |
|
|
|
28.6 |
|
|
Adjustments, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
Community support provision and accruals1 |
|
- |
|
|
|
- |
|
|
|
(0.1 |
) |
|
|
- |
|
|
Foreign exchange loss, Séguéla Project |
|
(0.2 |
) |
|
|
- |
|
|
|
(0.1 |
) |
|
|
- |
|
|
Write off of mineral properties |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1.5 |
|
|
Unrealized loss on derivatives |
|
(1.3 |
) |
|
|
(4.4 |
) |
|
|
(0.3 |
) |
|
|
(2.2 |
) |
|
Inventory adjustment |
|
0.8 |
|
|
|
3.3 |
|
|
|
0.8 |
|
|
|
3.3 |
|
|
Accretion on right of use assets |
|
0.5 |
|
|
|
0.6 |
|
|
|
1.1 |
|
|
|
1.2 |
|
|
Other non-cash/non-recurring items |
|
(0.4 |
) |
|
|
0.9 |
|
|
|
(0.6 |
) |
|
|
3.0 |
|
|
Adjusted Net Income |
|
2.9 |
|
|
|
2.1 |
|
|
|
16.1 |
|
|
|
35.4 |
|
| 1 Amounts are recorded in Cost of
sales |
|
|
|
|
|
|
|
|
|
|
|
| 2 Amounts are recorded in General
and Administration |
|
|
|
|
|
|
|
|
|
|
|
| Figures may not add due to
rounding |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to adjusted EBITDA for
the three and six months ended June 30, 2023 and 2022
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
Consolidated (in millions of US dollars) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Net income |
|
3.5 |
|
|
|
1.7 |
|
|
|
15.3 |
|
|
|
28.6 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Community support provision and accruals |
|
- |
|
|
|
- |
|
|
|
(0.1 |
) |
|
|
- |
|
|
Inventory adjustment |
|
1.0 |
|
|
|
4.0 |
|
|
|
0.9 |
|
|
|
4.0 |
|
|
Foreign exchange loss, Séguéla Mine |
|
(0.2 |
) |
|
|
0.3 |
|
|
|
(0.1 |
) |
|
|
0.9 |
|
|
Net finance items |
|
3.5 |
|
|
|
3.7 |
|
|
|
6.1 |
|
|
|
6.5 |
|
|
Depreciation, depletion, and amortization |
|
39.8 |
|
|
|
42.5 |
|
|
|
84.2 |
|
|
|
80.6 |
|
|
Income taxes |
|
1.0 |
|
|
|
13.6 |
|
|
|
9.0 |
|
|
|
20.4 |
|
|
Other non-cash/non-recurring items |
|
(4.2 |
) |
|
|
(7.9 |
) |
|
|
(5.8 |
) |
|
|
(2.9 |
) |
|
Adjusted EBITDA |
|
44.4 |
|
|
|
57.9 |
|
|
|
109.5 |
|
|
|
138.1 |
|
Figures may not add due to rounding
Reconciliation of free cash flow from
ongoing operations for the three and six months ended June 30, 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.
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in millions) |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net cash provided by operating
activities |
|
44.2 |
|
|
|
47.4 |
|
|
|
85.4 |
|
|
|
80.0 |
|
| Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
Séguéla, working capital |
|
4.4 |
|
|
|
- |
|
|
|
4.4 |
|
|
|
- |
|
|
Additions to mineral properties, plant and equipment |
|
(36.2 |
) |
|
|
(25.5 |
) |
|
|
(66.5 |
) |
|
|
(46.0 |
) |
|
Mexican royalty payment |
|
- |
|
|
|
3.0 |
|
|
|
- |
|
|
|
3.0 |
|
|
Other adjustments |
|
(2.9 |
) |
|
|
(3.0 |
) |
|
|
(5.7 |
) |
|
|
(6.0 |
) |
| Free
cash flow from ongoing operations |
|
9.5 |
|
|
|
21.9 |
|
|
|
17.6 |
|
|
|
31.0 |
|
Figures may not add due to rounding
Reconciliation of cash cost per ounce of gold sold for
the three and six months ended June 30, 2023 and 2022
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lindero
Mine |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Cost of sales |
|
|
40,280 |
|
|
|
41,326 |
|
|
|
82,005 |
|
|
|
77,194 |
|
| Changes in doré inventory |
|
|
11 |
|
|
|
(305 |
) |
|
|
(1,320 |
) |
|
|
712 |
|
| Inventory adjustment |
|
|
- |
|
|
|
(739 |
) |
|
|
15 |
|
|
|
- |
|
| Export duties |
|
|
(3,850 |
) |
|
|
(4,284 |
) |
|
|
(7,776 |
) |
|
|
(8,292 |
) |
| Depletion and
depreciation |
|
|
(11,873 |
) |
|
|
(14,296 |
) |
|
|
(25,065 |
) |
|
|
(26,305 |
) |
| By
product credits |
|
|
(2,486 |
) |
|
|
- |
|
|
|
(3,284 |
) |
|
|
- |
|
| Production cash cost |
|
|
22,082 |
|
|
|
21,702 |
|
|
|
44,575 |
|
|
|
43,309 |
|
| Changes in doré inventory |
|
|
(11 |
) |
|
|
305 |
|
|
|
1,320 |
|
|
|
(712 |
) |
|
Realized gain in diesel hedge |
|
|
- |
|
|
|
(1,037 |
) |
|
|
- |
|
|
|
(1,819 |
) |
| Cash cost applicable per gold
ounce sold |
A |
|
22,071 |
|
|
|
20,970 |
|
|
|
45,895 |
|
|
|
40,778 |
|
| Ounces
of gold sold |
B |
|
25,104 |
|
|
|
30,534 |
|
|
|
51,843 |
|
|
|
59,141 |
|
| Cash
cost per ounce of gold sold ($/oz) |
=A/B |
|
879 |
|
|
|
687 |
|
|
|
885 |
|
|
|
690 |
|
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Yaramoko
Mine |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Cost of sales |
|
|
38,353 |
|
|
|
44,240 |
|
|
|
83,216 |
|
|
|
82,281 |
|
| Changes in doré inventory |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,320 |
) |
| Inventory net realizable value
adjustment |
|
|
(827 |
) |
|
|
(4,027 |
) |
|
|
(827 |
) |
|
|
(4,027 |
) |
| Export duties |
|
|
(3,086 |
) |
|
|
(2,748 |
) |
|
|
(6,448 |
) |
|
|
(6,081 |
) |
| Depletion and
depreciation |
|
|
(15,788 |
) |
|
|
(14,626 |
) |
|
|
(33,156 |
) |
|
|
(28,654 |
) |
| Refining charges |
|
|
- |
|
|
|
(174 |
) |
|
|
- |
|
|
|
(329 |
) |
| By
product credits |
|
|
- |
|
|
|
(20 |
) |
|
|
- |
|
|
|
(25 |
) |
| Production cash cost |
|
|
18,652 |
|
|
|
22,645 |
|
|
|
42,785 |
|
|
|
41,845 |
|
| Changes in doré inventory |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,320 |
|
|
Refining charges |
|
|
- |
|
|
|
174 |
|
|
|
- |
|
|
|
329 |
|
| Cash cost applicable per gold
ounce sold |
A |
|
18,652 |
|
|
|
22,819 |
|
|
|
42,785 |
|
|
|
43,494 |
|
| Ounces
of gold sold |
B |
|
25,946 |
|
|
|
24,598 |
|
|
|
55,418 |
|
|
|
54,128 |
|
| Cash
cost per ounce of gold sold ($/oz) |
=A/B |
|
719 |
|
|
|
928 |
|
|
|
772 |
|
|
|
804 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash cost per ounce of gold equivalent
sold for the three and six months ended June 30, 2023 and
2022
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Cost of sales |
|
|
126,542 |
|
|
|
135,328 |
|
|
|
261,760 |
|
|
|
254,157 |
|
| Changes in concentrate
inventory and dore inventory |
|
|
151 |
|
|
|
(545 |
) |
|
|
(1,383 |
) |
|
|
(660 |
) |
| Cost of sales-Right of
use |
|
|
761 |
|
|
|
- |
|
|
|
1,456 |
|
|
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
82 |
|
|
|
(38 |
) |
|
|
(90 |
) |
|
|
(185 |
) |
| Inventory adjustment |
|
|
(1,813 |
) |
|
|
(5,309 |
) |
|
|
(1,703 |
) |
|
|
(12,053 |
) |
| Royalties, export duties and
mining taxes |
|
|
(8,495 |
) |
|
|
(8,602 |
) |
|
|
(17,206 |
) |
|
|
(35,595 |
) |
| Provision for community
support |
|
|
(52 |
) |
|
|
100 |
|
|
|
(78 |
) |
|
|
(26 |
) |
| Workers' participation |
|
|
(164 |
) |
|
|
(491 |
) |
|
|
(627 |
) |
|
|
(1,831 |
) |
| Depletion and
depreciation |
|
|
(39,598 |
) |
|
|
(42,160 |
) |
|
|
(83,553 |
) |
|
|
(53,593 |
) |
| By
product credits |
|
|
(2,486 |
) |
|
|
(20 |
) |
|
|
(3,284 |
) |
|
|
(25 |
) |
| Production cash cost |
|
|
74,928 |
|
|
|
78,263 |
|
|
|
155,292 |
|
|
|
150,189 |
|
| Changes in concentrate
inventory and dore inventory |
|
|
(151 |
) |
|
|
545 |
|
|
|
1,383 |
|
|
|
660 |
|
| Cost of sales-Right of
use |
|
|
(761 |
) |
|
|
- |
|
|
|
(1,456 |
) |
|
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
(82 |
) |
|
|
38 |
|
|
|
90 |
|
|
|
185 |
|
| Inventory adjustment |
|
|
986 |
|
|
|
543 |
|
|
|
891 |
|
|
|
(266 |
) |
| Realized gain in diesel
hedge |
|
|
- |
|
|
|
(1,037 |
) |
|
|
- |
|
|
|
(1,819 |
) |
| Treatment charges |
|
|
5,385 |
|
|
|
4,107 |
|
|
|
10,424 |
|
|
|
8,112 |
|
|
Refining charges |
|
|
984 |
|
|
|
1,292 |
|
|
|
2,175 |
|
|
|
2,556 |
|
| Cash cost applicable per gold
equivalent ounce sold |
A |
|
81,289 |
|
|
|
83,751 |
|
|
|
168,799 |
|
|
|
159,617 |
|
| Ounces
of gold equivalent sold |
B |
|
83,994 |
|
|
|
96,105 |
|
|
|
179,534 |
|
|
|
194,548 |
|
| Cash
cost per ounce of gold equivalent sold ($/oz) |
=A/B |
|
968 |
|
|
|
871 |
|
|
|
940 |
|
|
|
820 |
|
| Gold equivalent
was calculated using the realized prices for gold of $1,975/oz Au,
$24.1/oz Ag, $2,115/t Pb, and $2,713/t Zn for Q2 2023 and using the
realized prices for gold of $1,862/oz Au, $22.6/oz Ag, $2,240/t Pb,
and $3,948/t Zn for Q2 2022. |
| Gold equivalent
was calculated using the realized prices for gold of $1,930/oz Au,
$23.2/oz Ag, $2,174/t Pb, and $2,954/t Zn for YTD 2023 and using
the realized prices for gold of $1,877/oz Au, $23.3/oz Ag, $2,287/t
Pb, and $3,844/t Zn for YTD 2022. |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of all-in sustaining cash cost per ounce
of gold sold for the three and six months ended June 30, 2023 and
2022
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lindero
Mine |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Cash cost applicable |
|
|
22,071 |
|
|
20,970 |
|
|
45,895 |
|
|
40,778 |
| Export duties and mining
taxes |
|
|
3,850 |
|
|
4,284 |
|
|
7,776 |
|
|
8,292 |
| General
and administrative expenses (operations) |
|
|
2,507 |
|
|
2,548 |
|
|
4,499 |
|
|
4,453 |
| Adjusted operating cash
cost |
|
|
28,428 |
|
|
27,802 |
|
|
58,170 |
|
|
53,523 |
| Sustaining leases |
|
|
599 |
|
|
563 |
|
|
1,197 |
|
|
1,268 |
| Sustaining capital
expenditures1 |
|
|
13,337 |
|
|
6,123 |
|
|
21,082 |
|
|
9,248 |
|
Brownfields exploration expenditures1 |
|
|
- |
|
|
646 |
|
|
- |
|
|
790 |
| All-in sustaining cash
cost |
|
|
42,364 |
|
|
35,134 |
|
|
80,449 |
|
|
64,829 |
|
Non-sustaining capital expenditures1 |
|
|
136 |
|
|
- |
|
|
323 |
|
|
169 |
| All-in cash cost |
|
|
42,500 |
|
|
35,134 |
|
|
80,772 |
|
|
64,998 |
| Ounces
of gold sold |
|
|
25,104 |
|
|
30,534 |
|
|
51,843 |
|
|
59,141 |
| All-in
sustaining cash cost per ounce of gold sold |
|
|
1,688 |
|
|
1,151 |
|
|
1,552 |
|
|
1,096 |
| All-in
cash cost per ounce of gold sold |
|
|
1,693 |
|
|
1,151 |
|
|
1,558 |
|
|
1,099 |
| 1 Presented on a
cash basis |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Yaramoko
Mine |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Cash cost applicable |
|
|
18,652 |
|
|
22,819 |
|
|
42,785 |
|
|
43,494 |
| Inventory net realizable value
adjustment |
|
|
334 |
|
|
1,955 |
|
|
334 |
|
|
1,955 |
| Export duties and mining
taxes |
|
|
3,086 |
|
|
2,748 |
|
|
6,448 |
|
|
6,081 |
| General and administrative
expenses (operations) |
|
|
609 |
|
|
472 |
|
|
1,498 |
|
|
882 |
| Standby
costs |
|
|
2,999 |
|
|
- |
|
|
2,999 |
|
|
- |
| Adjusted operating cash
cost |
|
|
25,680 |
|
|
27,994 |
|
|
54,064 |
|
|
52,412 |
| Sustaining leases |
|
|
1,161 |
|
|
1,419 |
|
|
2,520 |
|
|
2,854 |
| Sustaining capital
expenditures1 |
|
|
14,318 |
|
|
9,085 |
|
|
27,867 |
|
|
16,446 |
|
Brownfields exploration expenditures1 |
|
|
1,019 |
|
|
- |
|
|
2,210 |
|
|
488 |
| All-in
sustaining cash cost |
|
|
42,178 |
|
|
38,498 |
|
|
86,661 |
|
|
72,200 |
| All-in cash cost |
|
|
42,178 |
|
|
38,498 |
|
|
86,661 |
|
|
72,200 |
| Ounces
of gold sold |
|
|
25,946 |
|
|
24,598 |
|
|
55,418 |
|
|
54,128 |
| All-in
sustaining cash cost per ounce of gold sold |
|
|
1,626 |
|
|
1,565 |
|
|
1,564 |
|
|
1,334 |
| All-in
cash cost per ounce of gold sold |
|
|
1,626 |
|
|
1,565 |
|
|
1,564 |
|
|
1,334 |
| 1 Presented on a
cash basis |
Reconciliation of all-in sustaining cash cost per ounce
of gold equivalent sold for the three and six months ended June 30,
2023 and 2022
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
| Cash cost applicable |
|
|
81,289 |
|
|
83,751 |
|
|
|
168,800 |
|
|
159,617 |
| Cost of sales-Right of
use |
|
|
334 |
|
|
1,955 |
|
|
|
334 |
|
|
1,955 |
| Inventory adjustment - cash
portion |
|
|
8,495 |
|
|
8,602 |
|
|
|
17,206 |
|
|
17,582 |
| Royalties, export duties and
mining taxes |
|
|
168 |
|
|
592 |
|
|
|
706 |
|
|
2,206 |
| Workers' participation |
|
|
6,128 |
|
|
5,856 |
|
|
|
11,955 |
|
|
10,819 |
| General and administrative
expenses (operations) |
|
|
8,312 |
|
|
8,525 |
|
|
|
17,081 |
|
|
19,864 |
| General
and administrative expenses (Corporate) |
|
|
7,083 |
|
|
- |
|
|
|
7,083 |
|
|
- |
| Adjusted operating cash
cost |
|
|
111,809 |
|
|
109,281 |
|
|
|
223,165 |
|
|
212,043 |
| Care and maintenance costs
(impact of COVID-19) |
|
|
- |
|
|
(2 |
) |
|
|
- |
|
|
- |
| Sustaining leases |
|
|
2,931 |
|
|
3,087 |
|
|
|
5,906 |
|
|
6,092 |
| Sustaining capital
expenditures |
|
|
34,192 |
|
|
23,052 |
|
|
|
62,068 |
|
|
41,063 |
|
Brownfields exploration expenditures |
|
|
2,142 |
|
|
2,421 |
|
|
|
4,625 |
|
|
4,905 |
| All-in sustaining cash
cost |
|
|
151,074 |
|
|
137,839 |
|
|
|
295,764 |
|
|
264,103 |
| Payable
ounces of gold equivalent sold |
|
|
83,994 |
|
|
96,105 |
|
|
|
179,534 |
|
|
194,548 |
| All-in
sustaining cash cost per ounce of gold equivalent sold |
|
|
1,799 |
|
|
1,434 |
|
|
|
1,647 |
|
|
1,358 |
| Gold equivalent
was calculated using the realized prices for gold of $1,975/oz Au,
$24.1/oz Ag, $2,115/t Pb, and $2,713/t Zn for Q2 2023 and using the
realized prices for gold of $1,862/oz Au, $22.6/oz Ag, $2,240/t Pb,
and $3,948/t Zn for Q2 2022. |
| Gold equivalent
was calculated using the realized prices for gold of $1,930/oz Au,
$23.2/oz Ag, $2,174/t Pb, and $2,954/t Zn for YTD 2023 and using
the realized prices for gold of $1,877/oz Au, $23.3/oz Ag, $2,287/t
Pb, and $3,844/t Zn for YTD 2022. |
Reconciliation of production cash cost per tonne and
cash cost per payable ounce of silver equivalent sold for the three
and six months ended June 30, 2023 and 2022
| |
|
|
|
|
|
|
|
|
|
|
|
|
| San Jose
Mine |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Cost of sales |
|
|
29,366 |
|
|
|
32,478 |
|
|
|
61,889 |
|
|
|
61,377 |
|
| Changes in concentrate
inventory |
|
|
(89 |
) |
|
|
(5 |
) |
|
|
(18 |
) |
|
|
72 |
|
| Cost of sales-right of
use |
|
|
193 |
|
|
|
- |
|
|
|
326 |
|
|
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
29 |
|
|
|
2 |
|
|
|
- |
|
|
|
(19 |
) |
| Inventory adjustment |
|
|
(165 |
) |
|
|
(583 |
) |
|
|
(294 |
) |
|
|
(46 |
) |
| Royalties and mining
taxes |
|
|
(1,040 |
) |
|
|
(1,349 |
) |
|
|
(2,297 |
) |
|
|
(2,741 |
) |
| Workers participation |
|
|
267 |
|
|
|
(170 |
) |
|
|
250 |
|
|
|
(897 |
) |
|
Depletion and depreciation |
|
|
(8,532 |
) |
|
|
(9,319 |
) |
|
|
(18,444 |
) |
|
|
(17,606 |
) |
| Cash cost3 |
A |
|
20,029 |
|
|
|
21,054 |
|
|
|
41,412 |
|
|
|
40,140 |
|
| Total
processed ore (tonnes) |
B |
|
194,887 |
|
|
|
251,945 |
|
|
|
441,623 |
|
|
|
502,892 |
|
|
Production cash cost per tonne ($/t) |
=A/B |
|
102.77 |
|
|
|
83.57 |
|
|
|
93.77 |
|
|
|
79.82 |
|
| Cash cost3 |
A |
|
20,029 |
|
|
|
21,054 |
|
|
|
41,412 |
|
|
|
40,140 |
|
| Changes in concentrate
inventory |
|
|
89 |
|
|
|
5 |
|
|
|
18 |
|
|
|
(72 |
) |
| Depletion and depreciation in
concentrate inventory |
|
|
(29 |
) |
|
|
(2 |
) |
|
|
- |
|
|
|
19 |
|
| Inventory adjustment |
|
|
165 |
|
|
|
583 |
|
|
|
294 |
|
|
|
46 |
|
| Treatment charges |
|
|
445 |
|
|
|
(146 |
) |
|
|
225 |
|
|
|
(55 |
) |
|
Refining charges |
|
|
668 |
|
|
|
920 |
|
|
|
1,612 |
|
|
|
1,792 |
|
| Cash cost applicable per
payable ounce sold |
C |
|
21,367 |
|
|
|
22,414 |
|
|
|
43,561 |
|
|
|
41,870 |
|
| Payable
ounces of silver equivalent sold1 |
D |
|
1,341,320 |
|
|
|
2,037,238 |
|
|
|
3,284,402 |
|
|
|
3,905,109 |
|
| Cash
cost per ounce of payable silver equivalent sold2 ($/oz) |
=C/D |
|
15.93 |
|
|
|
11.00 |
|
|
|
13.26 |
|
|
|
10.72 |
|
| Mining cost per tonne |
|
|
45.71 |
|
|
|
37.28 |
|
|
|
42.00 |
|
|
|
37.37 |
|
| Milling cost per tonne |
|
|
23.53 |
|
|
|
20.79 |
|
|
|
21.77 |
|
|
|
19.40 |
|
| Indirect cost per tonne |
|
|
22.01 |
|
|
|
15.67 |
|
|
|
20.64 |
|
|
|
15.15 |
|
| Community relations cost per
tonne |
|
|
4.35 |
|
|
|
3.84 |
|
|
|
2.95 |
|
|
|
2.48 |
|
|
Distribution cost per tonne |
|
|
7.17 |
|
|
|
5.99 |
|
|
|
6.41 |
|
|
|
5.42 |
|
|
Production cash cost per tonne ($/t) |
|
|
102.77 |
|
|
|
83.57 |
|
|
|
93.77 |
|
|
|
79.82 |
|
| 1 Silver equivalent
sold for Q2 2023 is calculated using a silver to gold ratio of
81.9:1 (Q2 2022: 83.0:1). Silver equivalent sold for YTD 2023 is
calculated using silver to gold ratio of 83.1:1 (YTD 2022:
80.1:1) |
| 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 June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Cost of sales |
|
|
18,543 |
|
|
|
17,284 |
|
|
|
34,651 |
|
|
|
33,305 |
|
| Changes in concentrate
inventory |
|
|
229 |
|
|
|
(235 |
) |
|
|
(45 |
) |
|
|
(124 |
) |
| Cost of sales-right of
use |
|
|
568 |
|
|
|
- |
|
|
|
1,130 |
|
|
|
- |
|
| Depletion and depreciation in
concentrate inventory |
|
|
53 |
|
|
|
(40 |
) |
|
|
(91 |
) |
|
|
(166 |
) |
| Inventory adjustment |
|
|
(822 |
) |
|
|
40 |
|
|
|
(597 |
) |
|
|
312 |
|
| Royalties and mining
taxes |
|
|
(519 |
) |
|
|
(221 |
) |
|
|
(685 |
) |
|
|
(468 |
) |
| Provision for community
support |
|
|
(52 |
) |
|
|
100 |
|
|
|
(78 |
) |
|
|
(26 |
) |
| Workers participation |
|
|
(431 |
) |
|
|
(321 |
) |
|
|
(877 |
) |
|
|
(934 |
) |
|
Depletion and depreciation |
|
|
(3,405 |
) |
|
|
(3,919 |
) |
|
|
(6,888 |
) |
|
|
(7,333 |
) |
| Cash cost3 |
A |
|
14,164 |
|
|
|
12,688 |
|
|
|
26,520 |
|
|
|
24,566 |
|
| Total
processed ore (tonnes) |
B |
|
137,004 |
|
|
|
135,978 |
|
|
|
263,000 |
|
|
|
268,552 |
|
|
Production cash cost per tonne ($/t) |
=A/B |
|
103.38 |
|
|
|
93.31 |
|
|
|
100.84 |
|
|
|
91.48 |
|
| Cash cost |
A |
|
14,164 |
|
|
|
12,688 |
|
|
|
26,520 |
|
|
|
24,566 |
|
| Changes in concentrate
inventory |
|
|
(229 |
) |
|
|
235 |
|
|
|
45 |
|
|
|
124 |
|
| Depletion and depreciation in
concentrate inventory |
|
|
(53 |
) |
|
|
40 |
|
|
|
91 |
|
|
|
166 |
|
| Inventory adjustment |
|
|
822 |
|
|
|
(40 |
) |
|
|
597 |
|
|
|
(312 |
) |
| Treatment charges |
|
|
4,941 |
|
|
|
4,253 |
|
|
|
10,199 |
|
|
|
8,167 |
|
|
Refining charges |
|
|
316 |
|
|
|
372 |
|
|
|
563 |
|
|
|
764 |
|
| Cash cost applicable per
payable ounce sold |
C |
|
19,961 |
|
|
|
17,548 |
|
|
|
38,015 |
|
|
|
33,475 |
|
| Payable
ounces of silver equivalent sold1 |
D |
|
1,352,522 |
|
|
|
1,335,602 |
|
|
|
2,711,988 |
|
|
|
2,621,212 |
|
| Cash
cost per ounce of payable silver equivalent sold2,3 ($/oz) |
=C/D |
|
14.76 |
|
|
|
13.14 |
|
|
|
14.02 |
|
|
|
12.77 |
|
| Mining cost per tonne |
|
|
47.78 |
|
|
|
40.27 |
|
|
|
45.53 |
|
|
|
37.40 |
|
| Milling cost per tonne |
|
|
14.98 |
|
|
|
14.96 |
|
|
|
15.31 |
|
|
|
16.00 |
|
| Indirect cost per tonne |
|
|
30.75 |
|
|
|
29.51 |
|
|
|
30.10 |
|
|
|
30.04 |
|
| Community relations cost per
tonne |
|
|
0.85 |
|
|
|
1.02 |
|
|
|
0.73 |
|
|
|
0.74 |
|
|
Distribution cost per tonne |
|
|
9.02 |
|
|
|
7.55 |
|
|
|
9.17 |
|
|
|
7.30 |
|
|
Production cash cost per tonne ($/t) |
|
|
103.38 |
|
|
|
93.31 |
|
|
|
100.84 |
|
|
|
91.48 |
|
| 1 Silver equivalent
sold for Q2 2023 is calculated using a silver to gold ratio of
0.0:1 (Q2 2022: 82.9:1), silver to lead ratio of 1:28.2 pounds (Q2
2022: 1:22.5), and silver to zinc ratio of 1:19.6 pounds (Q2 2022:
1:12.8). Silver equivalent sold for YTD 2023 is calculated using a
silver to gold ratio of 81.3:1 (YTD 2022: 79.8:1), silver to lead
ratio of 1:23.6 pounds (YTD 2022: 1:22.5), and silver to zinc ratio
of 1:17.4 pounds (YTD 2022: 1:13.4). |
| 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 and six months ended June 30, 2023 and
2022
| |
|
|
|
|
|
|
|
|
|
|
|
|
| San Jose
Mine |
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
| Cash cost applicable |
|
|
21,367 |
|
|
|
22,414 |
|
|
|
43,561 |
|
|
|
41,870 |
| Cost of sales-right of
use |
|
|
(193 |
) |
|
|
- |
|
|
|
(326 |
) |
|
|
- |
| Royalties and mining
taxes |
|
|
1,040 |
|
|
|
1,349 |
|
|
|
2,297 |
|
|
|
2,741 |
| Workers' participation |
|
|
(333 |
) |
|
|
212 |
|
|
|
(312 |
) |
|
|
1,121 |
| General and administrative
expenses (operations) |
|
|
1,722 |
|
|
|
1,649 |
|
|
|
3,524 |
|
|
|
3,239 |
|
Stand-by costs |
|
|
4,084 |
|
|
|
- |
|
|
|
4,084 |
|
|
|
- |
| Adjusted operating cash
cost |
|
|
27,687 |
|
|
|
25,624 |
|
|
|
52,828 |
|
|
|
48,971 |
| Care and maintenance costs
(impact of COVID-19) |
|
|
- |
|
|
|
(2 |
) |
|
|
- |
|
|
|
- |
| Sustaining leases |
|
|
214 |
|
|
|
149 |
|
|
|
376 |
|
|
|
306 |
| Sustaining capital
expenditures3 |
|
|
3,593 |
|
|
|
4,051 |
|
|
|
7,366 |
|
|
|
7,626 |
|
Brownfields exploration expenditures3 |
|
|
788 |
|
|
|
1,568 |
|
|
|
1,875 |
|
|
|
3,097 |
| All-in sustaining cash
cost |
|
|
32,282 |
|
|
|
31,390 |
|
|
|
62,445 |
|
|
|
60,000 |
|
Non-sustaining capital expenditures3 |
|
|
524 |
|
|
|
454 |
|
|
|
793 |
|
|
|
869 |
| All-in cash cost |
|
|
32,806 |
|
|
|
31,844 |
|
|
|
63,238 |
|
|
|
60,869 |
| Payable
ounces of silver equivalent sold1 |
|
|
1,341,320 |
|
|
|
2,037,238 |
|
|
|
3,284,402 |
|
|
|
3,905,109 |
| All-in
sustaining cash cost per ounce of payable silver equivalent
sold2 |
|
|
24.07 |
|
|
|
15.41 |
|
|
|
19.01 |
|
|
|
15.36 |
| All-in
cash cost per ounce of payable silver equivalent sold2 |
|
|
24.46 |
|
|
|
15.63 |
|
|
|
19.25 |
|
|
|
15.59 |
| 1 Silver equivalent
sold for Q2 2023 is calculated using a silver to gold ratio of
81.9:1 (Q2 2022: 83.0:1). Silver equivalent sold for YTD 2023 is
calculated using silver to gold ratio of 83.1:1 (YTD 2022:
80.1:1) |
| 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 June 30, |
|
|
Six months ended June 30, |
|
(Expressed in $'000's, except unit costs) |
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
| Cash cost applicable |
|
|
19,960 |
|
|
|
17,548 |
|
|
38,015 |
|
|
|
33,475 |
| Cost of sales-right of
use |
|
|
(568 |
) |
|
|
- |
|
|
(1,130 |
) |
|
|
- |
| Royalties and mining
taxes |
|
|
519 |
|
|
|
221 |
|
|
685 |
|
|
|
468 |
| Workers' participation |
|
|
501 |
|
|
|
380 |
|
|
1,018 |
|
|
|
1,085 |
| General
and administrative expenses (operations) |
|
|
1,290 |
|
|
|
1,187 |
|
|
2,434 |
|
|
|
2,245 |
| Adjusted operating cash
cost |
|
|
21,702 |
|
|
|
19,336 |
|
|
41,022 |
|
|
|
37,273 |
| Sustaining leases |
|
|
957 |
|
|
|
956 |
|
|
1,813 |
|
|
|
1,664 |
| Sustaining capital
expenditures3 |
|
|
2,943 |
|
|
|
3,793 |
|
|
5,753 |
|
|
|
7,742 |
|
Brownfields exploration expenditures3 |
|
|
336 |
|
|
|
207 |
|
|
540 |
|
|
|
531 |
| All-in
sustaining cash cost |
|
|
25,938 |
|
|
|
24,292 |
|
|
49,128 |
|
|
|
47,210 |
| All-in cash cost |
|
|
25,938 |
|
|
|
24,292 |
|
|
49,128 |
|
|
|
47,210 |
| Payable
ounces of silver equivalent sold1 |
|
|
1,352,522 |
|
|
|
1,335,602 |
|
|
2,711,988 |
|
|
|
2,621,212 |
| All-in
sustaining cash cost per ounce of payable silver equivalent
sold2 |
|
|
19.18 |
|
|
|
18.19 |
|
|
18.12 |
|
|
|
18.01 |
| All-in
cash cost per ounce of payable silver equivalent sold2 |
|
|
19.18 |
|
|
|
18.19 |
|
|
18.12 |
|
|
|
18.01 |
| 1 Silver equivalent
sold for Q2 2023 is calculated using a silver to gold ratio of
0.0:1 (Q2 2022: 82.9:1), silver to lead ratio of 1:28.2 pounds (Q2
2022: 1:22.5), and silver to zinc ratio of 1:19.6 pounds (Q2 2022:
1:12.8). Silver equivalent sold for YTD 2023 is calculated using a
silver to gold ratio of 81.3:1 (YTD 2022: 79.8:1), silver to lead
ratio of 1:23.6 pounds (YTD 2022: 1:22.5), and silver to zinc ratio
of 1:17.4 pounds (YTD 2022: 1:13.4). |
| 2 Silver equivalent
is calculated using the realized prices for gold, silver, lead, and
zinc. Refer to Financial Results - Sales and Realized Prices |
| 3 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
and six months ended June 30, 2023 and accompanying Q2 2023
MD&A, which are available for download on the Company’s
website, www.fortunasilver.com, on SEDAR+ at www.sedarplus.ca 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 Thursday, August 10, 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, Paul
Weedon, Senior Vice President, Exploration, and Julien Baudrand,
Senior Vice President, Sustainability.
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/1696/48784 or over the
phone by dialing in just prior to the starting time.
Conference call details:
Date: Thursday, August 10,
2023Time: 9:00 a.m. Pacific time | 12:00 p.m.
Eastern timeDial in number (Toll Free):
+1.888.506.0062Dial in number (International):
+1.973.528.0011Access code: 333780 Replay
number (Toll Free): +1.877.481.4010Replay number
(International): +1.919.882.2331Replay
passcode: 48784
Playback of the earnings call will be available until Thursday,
August 24, 2023. Playback of the webcast will be available until
Saturday, August 10, 2024. In addition, a transcript of the call
will be archived on the Company’s website.
About Fortuna Silver Mines
Inc.
Fortuna Silver Mines Inc. is a Canadian precious
metals mining company with four 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. GanozaPresident, 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 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 anticipated timeline to ramp up production to
design capacity at the Séguéla Mine and anticipated gold production
in 2023; statements regarding the Company's liquidity, access to
capital; the impact of high inflation on the costs of production
and the supply chain; 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; ; uncertainty relating
to new mining operations such as the Séguéla Mine, including the
possibility that actual capital and operating costs and economic
returns will differ significantly from those estimated for such
projects prior to production; Fortuna’s ability to ramp up in
production to design capacity at the Séguéla Mine as estimated;
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); that production at the Séguéla Mine will ramp up to
design capacity as anticipated; geo-political uncertainties that
may affect the Company’s production, workforce, business,
operations and financial condition; the 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.
Fortuna Mining (TSX:FVI)
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Fortuna Mining (TSX:FVI)
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From Jan 2024 to Jan 2025
