Fortuna Silver Mines Inc. (NYSE: FSM)
(TSX: FVI) reports production results for the first
quarter of 2022 from its four operating mines in the Americas and
West Africa.
Gold and silver production
highlights
- Gold production of 66,800 ounces;
93 percent increase over Q1 2021
- Silver production of 1,670,128
ounces; 13 percent decrease over Q1 2021
- Gold equivalent1 production of
103,098 ounces
The Company delivered a strong operating
performance in the first quarter of 2022 with all mines on target
to achieve annual guidance for silver and gold. Gold production of
66,800 ounces, an increase of 93 percent year-over-year, was
driven by contributions of 30,068 ounces from the Lindero Mine and
28,235 ounces from the Yaramoko Mine, acquired on July 2021 (refer
to Fortuna news release dated July 2, 2021). Silver production of
1.6 million ounces, a 13 percent decrease over the comparable
period in 2021, was primarily driven by a 14 percent decrease in
head grade at the San Jose Mine, which is in line with the Mineral
Reserve average grade.
By-product base metal production amounted to 9.1
million pounds of lead and 10.8 million pounds of zinc.
Fortuna reiterates its annual production
guidance range of 6.2 to 6.9 million ounces of silver and between
244 to 280 thousand ounces of gold or between 369,000 to
420,000 ounces gold equivalent2 in 2022, including lead and zinc by
products (refer to Fortuna news release dated January 18,
2022).
First Quarter 2022 Consolidated Operating
Highlights
|
First Quarter 2022 |
First Quarter 2021 |
|
Lindero,Argentina |
San Jose,Mexico |
Yaramoko5, Burkina
Faso |
Caylloma,Peru |
Consolidated |
Lindero,Argentina |
San Jose, Mexico |
Caylloma,Peru |
Consolidated |
OPERATIONAL FIGURES |
Tonnes milled |
|
250,947 |
127,968 |
132,574 |
|
|
259,803 |
131,887 |
|
Average tpd milled |
|
2,918 |
1,546 |
1,524 |
|
|
3,048 |
1,499 |
|
Ore placed on pad (t) |
1,295,755 |
|
N/A |
|
|
2,130,000 |
|
|
|
SILVER3 |
Grade (g/t) |
|
185 |
|
89 |
|
|
217 |
77 |
|
Recovery (%) |
|
91.03 |
|
82.11 |
|
|
90.79 |
81.45 |
|
Production (oz) |
|
1,358,189 |
|
311,939 |
1,670,128 |
|
1,646,444 |
267,311 |
1,913,755 |
GOLD4 |
Grade (g/t) |
0.88 |
1.13 |
7.50 |
0.16 |
|
0.82 |
1.36 |
0.62 |
|
Recovery (%) |
|
90.25 |
97.8 |
37.25 |
|
|
90.51 |
73.09 |
|
Production (oz) |
30,068 |
8,239 |
28,235 |
258 |
66,800 |
22,332 |
10,301 |
1,922 |
34,555 |
LEAD |
Grade (%) |
|
|
|
3.55 |
|
|
|
3.21 |
|
Recovery (%) |
|
|
|
88.11 |
|
|
|
87.69 |
|
Production (lbs) |
|
|
|
9,133,752 |
9,133,752 |
|
|
8,181,355 |
8,181,355 |
ZINC |
Grade (%) |
|
|
|
4.18 |
|
|
|
4.70 |
|
Recovery (%) |
|
|
|
88.62 |
|
|
|
87.63 |
|
Production (lbs) |
|
|
|
10,826,902 |
10,826,902 |
|
|
11,968,896 |
11,968,896 |
Notes:
- Au Eq includes gold, silver, lead and
zinc and is calculated using the following metal prices:
US$1,884/oz Au, US$24.20/oz Ag, US$2,331/t Pb and US$2,736/t
Zn or Au:Ag = 1:77.92, Au:Pb = 1:0.81, Au:Zn = 1:0.50
- Au Eq includes gold, silver, lead and
zinc and is calculated using the following metal prices:
US$1,700/oz Au, US$22/oz Ag, US$2,100/t Pb and US$2,700/t Zn
or Au:Ag = 1:77.27, Au:Pb = 1:0.81, Au:Zn = 1:0.63
- Metallurgical recovery for silver
at the Caylloma Mine is calculated based on silver content in lead
concentrate
- Lindero production includes gold in
precipitate/sludge; Yaramoko production includes only doré
- As Fortuna did not own or operate
the Yaramoko Mine during the first quarter of 2021, it is not
making a comparison to a previous period
- Totals may not add due to
rounding
Latin America
The Company's three mines in Latin America
delivered a solid first quarter to start 2022. COVID-19 screening
at our operations during January experienced a surge in detected
positive cases, reaching a peak of 800 during the month. As at the
end of March, positive screened cases had decreased to six.
Quarterly Highlights
- At the Lindero Mine, gold
production exceeded 30,000 ounces for the second consecutive
quarter
- At the San Jose and Caylloma mines,
silver production is on target to achieve the upper range of annual
guidance
Lindero Mine, Argentina: Gold production
on target to achieve annual guidance
Gold production was 30,068 ounces,
representing a 35 percent increase year-over-year. Higher gold
production is explained by an increase in performance of the
three-stage crushing and stacking circuits to design parameters,
which delivered 100 percent of the 1.3 million tonnes of ore placed
on the pad in the quarter, compared to 19 percent or 0.4 million
tonnes of the 2.1 million tonnes placed in the comparable quarter a
year ago. Mine production was 2.4 million tonnes of mineralized
material with a strip ratio of 0.54:1.
In the first quarter of 2022, a total of 1.3
million tonnes of ore were placed on the leach pad, averaging
0.88 g/t gold and containing 36,568 ounces of gold. The
operation lost man-hours in January as a result of the sudden surge
in COVID-19 cases causing a 14 percent shortfall in ore placed on
the pad, compared to plan for the quarter. The Company is executing
a recovery plan during the second and third quarters of the year
and does not anticipate any impact on achieving annual production
guidance.
The reconciliation of ore sent to the leach pad
for tonnes and grade were within 1 percent compared to the reserve
model in the first quarter.
San Jose Mine, Mexico: Silver and gold
production in line to meet annual guidance
The San Jose Mine produced 1,358,189 ounces of
silver and 8,239 ounces of gold, both on target to meet the annual
guidance range. Measured against the comparable quarter, silver and
gold production was 18 percent and 20 percent lower,
respectively. The driver for the decrease in production was
primarily lower average head grades of 15 percent and 17 percent
for silver and gold, respectively; which is in line with Mineral
Reserve estimates.
Caylloma Mine, Peru: Steady
performer
The Caylloma Mine produced 311,939 ounces of
silver and is on target to meet the upper range of annual guidance.
Silver production was 17 percent higher than the comparable period,
driven by a 15 percent increase in average head grade from the
contribution of newly scheduled higher-grade production stopes
located in level 16 of the Animas vein.
Zinc and lead production of 10,826,902 pounds
and 9,133,752 pounds are in line to meet annual guidance range.
West Africa
In the first quarter of 2022, the West African
region performed strongly. Following the January military coup in
Burkina Faso, business in country returned quickly to normal and
our operations in the country were never disrupted. Gold production
at the Yaramoko Mine is in line to meet the annual guidance
range.
At the Séguéla gold Project in Côte d’Ivoire,
construction activities are progressing on-time and on-budget with
delivery of key supply packages such as the SAG mill and high
voltage transformers on schedule. Overall construction is 48
percent complete as of the end of March 2022.
Yaramoko Mine, Burkina Faso: Gold
production on target to meet the upper range of annual
guidance
The Yaramoko Mine produced 28,235 ounces of gold
in the first quarter of 2022 with an average gold head grade of
7.50 g/t.Gold production is on target to meet the upper end of the
annual guidance range primarily due to mill feed grade being 9
percent higher than budgeted for the period. Positive grade
reconciliation compared to the reserve model at the 55 Zone and
additional tonnes from ore development explain the increase in
grade.
Qualified Person
Eric Chapman, Senior Vice President of Technical
Services of Fortuna, is a Professional Geoscientist of the
Association of Professional Engineers and Geoscientists of the
Province of British Columbia (Registration Number 36328) and a
Qualified Person as defined by National Instrument 43-101-
Standards of Disclosure for Mineral Projects. Mr. Chapman has
reviewed and approved the scientific and technical information
contained in this news release and has verified the underlying
data.
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 a 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. Ganoza President, CEO,
and DirectorFortuna Silver Mines Inc.
Investor Relations: Carlos Baca
| info@fortunasilver.com
Forward-looking Statements
This news release contains forward-looking
statements which constitute “forward-looking information” within
the meaning of applicable Canadian securities legislation and
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995 (collectively, “Forward-looking Statements”). All
statements included herein, other than statements of historical
fact, are Forward-looking Statements and are subject to a variety
of known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those reflected
in the Forward-looking Statements. The Forward-looking Statements
in this news release may include, without limitation, statements
about the Company’s plans for its mines and mineral properties; the
Company’s anticipated operational performance in 2022; estimated
production forecasts for 2022; the duration and impacts of COVID-19
on the Company’s production, workforce, business, operations and
financial condition; the assumptions related to the supply of
COVID-19 vaccines and the distribution of the vaccines in the
countries in which we operate, and the lessening or increase in
COVID-19 related restrictions; metal price estimates, estimated
metal grades in 2022; undisclosed risks and liabilities relating to
the Roxgold business combination; risks that the anticipated
benefits of the Roxgold business combination will not be realized
or fully realized; the timing of construction and development of
the mine at the Séguéla Project and the capital expenditures
related to same; the Company’s business strategy, plans and
outlook; the merit of the Company’s mines and mineral properties;
mineral resource and reserve estimates; production costs;
timelines; the future financial or operating performance of the
Company; capital and operating expenditures; approvals and other
matters. Often, but not always, these Forward-looking Statements
can be identified by the use of words such as “estimated”,
“potential”, “open”, “future”, “assumed”, “projected”, “used”,
“detailed”, “has been”, “gain”, “planned”, “reflecting”, “will”,
“anticipated”, “estimated” “containing”, “remaining”, “to be”, or
statements that events, “could” or “should” occur or be achieved
and similar expressions, including negative variations.
Forward-looking Statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any results, performance or achievements
expressed or implied by the Forward-looking Statements. Such
uncertainties and factors include, among others, changes in general
economic conditions and financial markets; the impact of the
COVID-19 pandemic on the Company’s mining operations and
construction activities; 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; the risks associated with the
completion of the Roxgold Acquisition, including the ability of the
Company to successfully consolidate functions, integrate
operations, procedures and personnel; adverse changes in prices for
gold, silver and other metals; fluctuation in currencies and
foreign exchange rates; inflation; the imposition of capital
controls in countries in which the Company operates; any extension
of the currency controls in Argentina; 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 the Company to obtain
an extension of the San Jose environmental impact authorization
("EIA"), including the Company's success in challenging an alleged
typographical error in the San Jose EIA received by the Company in
December 2021 and in obtaining a permanent injunction or equivalent
court protection to allow the continued operation of the San Jose
mine pending the approval of an extension to the San Jose EIA;
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 duration and impacts of COVID-19 and other
geo-political uncertainties on the Company’s production, workforce,
business, operations and financial condition; the expected trends
in mineral prices and currency exchange rates; that the Company
will obtain succeed in challenging the alleged typographical error
in the December 2021 extension to the San Jose EIA; that all
required approvals and permits will be obtained for the Company’s
business and operations on acceptable terms; that there will be no
significant disruptions affecting the Company's operations and such
other assumptions as set out herein. Forward-looking Statements are
made as of the date hereof and the Company disclaims any obligation
to update any Forward-looking Statements, whether as a result of
new information, future events or results or otherwise, except as
required by law. There can be no assurance that these
Forward-looking Statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, investors should not
place undue reliance on Forward-looking Statements.
Cautionary Note to United States Investors
Concerning Estimates of Reserves and Resources
Reserve and resource estimates included in this
news release have been prepared in accordance with National
Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI
43-101") and the Canadian Institute of Mining, Metallurgy, and
Petroleum Definition Standards on Mineral Resources and Mineral
Reserves. NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for public disclosure by
a Canadian company of scientific and technical information
concerning mineral projects. Unless otherwise indicated, all
mineral reserve and mineral resource estimates contained in the
technical disclosure have been prepared in accordance with NI
43-101 and the Canadian Institute of Mining, Metallurgy and
Petroleum Definition Standards on Mineral Resources and
Reserves.
Canadian standards, including NI 43-101, differ
significantly from the requirements of the Securities and Exchange
Commission, and mineral reserve and resource information included
in this news release may not be comparable to similar information
disclosed by U.S. companies.
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