Fortuna Silver Mines, Inc. (NYSE: FSM) (TSX: FVI)
is pleased to announce fourth quarter and full year 2018 production
figures from its two underground operating mines, the San Jose Mine
in Mexico and the Caylloma Mine in Peru. For the full year
2018, the Company produced 8.9 million ounces of silver and 54.2
thousand ounces of gold or 12.8 million Ag Eq1 ounces.
2018 Consolidated Production
Highlights
- Silver and gold production were 7 %
and 12 % respectively above 2018 guidance
- Silver production of 8,890,943
ounces; 5 % increase over 2017
- Gold production of 54,210 ounces; 4
% decrease over 2017
- Zinc production of 45,484,648
pounds; 3 % increase over 2017
- Lead production of 28,254,570
pounds; 5 % decrease over 2017
2018 Consolidated Operating
Results
|
Q4 2018 |
2018 |
|
Caylloma, Peru |
San Jose, Mexico |
Consolidated |
Caylloma, Peru |
San Jose, Mexico |
Consolidated |
Processed Ore |
|
|
Tonnes milled |
135,034 |
256,181 |
|
534,773 |
1,040,478 |
|
Average tpd milled |
1,500 |
2,846 |
|
1,498 |
2,956 |
|
Silver² |
|
|
Grade (g/t) |
61 |
230 |
|
63 |
260 |
|
Recovery (%) |
82.68 |
90.90 |
|
84.13 |
91.75 |
|
Production (oz) |
219,207 |
1,718,496 |
1,937,703 |
911,309 |
7,979,634 |
8,890,943 |
Notes:
- Silver equivalent is calculated using silver to gold ratio of
72 to 1
- Metallurgical recovery for silver at the Caylloma Mine is
calculated based on silver content in lead concentrate
- Totals may not add due to rounding
|
Q4 2018 |
2018 |
|
Caylloma, Peru |
San Jose, Mexico |
Consolidated |
Caylloma, Peru |
San Jose, Mexico |
Consolidated |
Gold |
|
|
Grade (g/t) |
0.20 |
1.58 |
|
0.18 |
1.75 |
|
Recovery (%) |
28.49 |
90.98 |
|
21.88 |
91.56 |
|
Production (oz) |
245 |
11,825 |
12,070 |
693 |
53,517 |
54,210 |
Lead |
|
|
Grade (%) |
2.39 |
|
|
2.62 |
|
|
Recovery (%) |
90.70 |
|
|
91.30 |
|
|
Production (lbs) |
6,452,784 |
|
6,452,784 |
28,254,570 |
|
28,254,570 |
Zinc |
|
|
Grade (%) |
4.30 |
|
|
4.28 |
|
|
Recovery (%) |
90.21 |
|
|
90.20 |
|
|
Production (lbs) |
11,537,359 |
|
11,537,359 |
45,484,648 |
|
45,484,648 |
Note: Totals may not add due to rounding
San Jose Mine, Mexico
In the fourth quarter of 2018, the San Jose Mine
produced 1,718,496 ounces of silver and 11,825 ounces of gold, 9 %
and 4 % below budget respectively. Average head grades for
silver and gold were 230 g/t and 1.58 g/t, 6 % below budget and in
line with budget respectively.
Silver and gold production for 2018 totaled
7,979,634 ounces and 53,517 ounces respectively; being 7 % and 11 %
above the mine’s annual guidance. Average head grades for
silver and gold were 260 g/t and 1.75 g/t, 8 % and 12 % above the
mine´s annual guidance respectively.
Caylloma Mine, Peru
In the fourth quarter of 2018, the Caylloma Mine
produced 219,207 ounces of silver, 5 % above budget. Average
head grade for silver was 61 g/t, 5 % above budget.
Silver production for 2018 totaled 911,309
ounces; 11 % above the mine’s annual guidance. Average head grade
for silver was 63 g/t, 10 % above the mine’s annual guidance.
In the fourth quarter of 2018, lead and zinc
production was 6,452,784 pounds and 11,537,359 pounds respectively,
2 % below budget and 2 % above budget respectively. Average
head grades for lead and zinc were 2.39% and 4.30%, 2 % below
budget and 2 % above budget respectively.
Base metal production for 2018 totaled
28,254,570 pounds of lead and 45,484,648 pounds of zinc; 10 % and 2
% above the mine’s annual guidance, respectively. Average
head grades for lead and zinc were 2.62% and 4.28%, 9 % and 2 %
above annual guidance respectively.
2019 Consolidated Production and Cash
Cost Guidance for Ongoing Operations
|
Silver(Moz) |
Gold (koz) |
Lead (Mlbs) |
Zinc (Mlbs) |
Cash Cost ($/t) |
AISC1($/oz Ag
Eq) |
|
|
San Jose Mine,
Mexico |
7.3 - 8.1 |
49 - 54 |
NA |
NA |
63.5 -
70.1 |
8.3 -
10.2 |
|
Caylloma Mine,
Peru |
0.9 - 1.0 |
-- |
26.1 -
28.8 |
39.8 -
44.0 |
80.0 -
88.4 |
11.8 -
14.5 |
|
Total |
8.2 - 9.0 |
49 - 54 |
26.1 - 28.8 |
39.8 - 44.0 |
|
|
|
■ 2019 silver equivalent2 production guidance of
11.7 - 12.9 million ounces ■ 2019 consolidated AISC1 of $9.9 -
$12.1/oz Ag Eq
Notes:
- All-In Sustaining Cost (AISC) is a non-GAAP financial measure,
refer to Forward looking Statements regarding non-GAAP financial
measures at the end of this news release; AISC per ounce of silver
equivalent, including by-products, estimated at metal prices of
$1,250/oz Au, $15.00/oz Ag, $2,100/t Pb and $2,700/t; see
“Appendix” for AISC guidance breakdown
- Silver equivalent production does not include lead or zinc and
is calculated using a silver to gold ratio of 72 to 1
- Totals may not add due to rounding
2019 Guidance Highlights
San Jose Mine, Mexico
San Jose plans to process 1,059,000 tonnes of
ore averaging 247 g/t Ag and 1.66 g/t Au. Capital investment is
estimated at $12.7 million; including $8.3 million for sustaining
capital expenditures and $4.3 million for Brownfields exploration
programs.
Major sustaining capital investment projects
include:
- Mine development:
$3.4 million
- Equipment and
Infrastructure:
$4.3 million
Caylloma Mine, Peru
Caylloma plans to process 535,500 tonnes of ore
averaging 64 g/t Ag, 2.53% Pb and 3.87% Zn. Capital investments are
estimated at $11.4 million; including $9.8 million for sustaining
capital expenditures, $0.8 million for non-sustaining CAPEX, and
$0.8 million for Brownfields exploration programs.
Major sustaining capital investment projects
include:
- Mine development:
$6.0 million
- Equipment and
Infrastructure
$3.1 million
Lindero gold Project,
Argentina
Based on the successful infill drilling campaign
completed in 2018 (refer to news release dated September 6, 2018
“Fortuna updates on infill drill program at the Lindero gold
Project in Argentina”), Fortuna is currently conducting an updated
internal estimate of Mineral Reserves with the intention of
optimizing the mine plan for Year One. Based on preliminary study
results, such updated technical information will not materially
change the existing global Mineral Reserve estimate. The Company
plans to provide a comprehensive update on Lindero construction
progress and Year One production optimization study in early March
2019.
The Company also intends to provide an update on
its consolidated Mineral Reserve and Mineral Resource estimates in
March.
Brownfields Exploration
Highlights
San Jose Mine, Mexico
The Brownfields exploration program budget for
2019 at the San Jose Mine is $4.3 million, which includes 11,500
meters of diamond drilling and 450 meters of underground
development for drilling access and platforms. Exploration drilling
will focus on the sub-parallel Victoria mineralized zone.
Caylloma Mine, Peru
The Brownfields exploration program budget for
2019 at the Caylloma Mine is $0.8 million. Work planned includes
mapping and sampling on additional mineralized silver-base metals
structures.
Lindero gold Project, Argentina
The Arizaro gold-copper porphyry target lies
within the Lindero Project concession block. In 2019, the Company
plans to further evaluate the results of the 2,180-meter drill
program completed at Arizaro in 2018 and investigate the economic
potential of including Arizaro mineralization into the existing
Lindero resource.
Greenfields Exploration Highlights
Serbia
Through an aggregate C$3.3 million equity
investment in Medgold Resources Corp. (TSX.V: MED), Fortuna funded
a Strategic Alliance with Medgold and entered into an option
agreement in respect of the Tlamino Project (see Medgold news
releases dated January 9, 2017, February 9, 2017, and March 7,
2017).
Exploration work on the Tlamino Project in 2019
will consist of maiden metallurgical testing on the mineralized
material intersected in the 2018 Barje Project drill program and
approximately 4,000 meters of diamond drilling on the Barje and
Karamanaica Targets (see Medgold news releases dated June 11, 2018,
June 18, 2018, July 5, 2018, July 18, 2018, September 20, 2018 and
November 19, 2018). Fortuna retains the right to earn a 51 %
interest in the Tlamino Project by spending $3.0 million by March
2020, and gain an additional 19 % interest by spending a further
$5.0 million and completing a preliminary economic assessment by
March 2023.
Mexico
Through an aggregate C$2.6 million equity
investment in Prospero Silver Corp. (TSX.V: PSL), Fortuna funded a
Strategic Alliance with Prospero (see Prospero Silver news
release dated April 17, 2017, May 9, 2018, September 6, 2018). This
strategic alliance provided for the initial drilling of multiple
targets at Prospero’s Matorral, Petate, Pachuca SE, Buenavista and
Bermudez properties located in Durango, Hidalgo and Chihuahua
States. High-level epithermal clay alteration with anomalous gold,
silver or pathfinder elements are present at each property, none of
which has been previously drilled.
Drilling at all five projects was completed in
2017 and 2018 and Fortuna selected the Pachuca SE Project as its
selected property (see Prospero silver news releases dated August
24, 2017, September 18, 2017, November 8, 2017, January 10, 2018,
January 25, 2018, March 14, 2018, March 29, 2018, May 9, 2018, May
30, 2018, September 8, 2018 and December 10, 2018). The parties are
currently preparing the definitive option agreement. The Pachuca SE
Project option agreement will give Fortuna the right to earn up to
a 70 % interest by spending $8 million over six years and
completing a preliminary economic assessment.
Argentina
The Company is revisiting the extensive
reconnaissance exploration database comprising over fifteen years
of sampling and generative work in northern Argentina, acquired
from Goldrock Mines along with the Lindero Project in 2016.
In addition, the Company intends to continue the
evaluation of new opportunities on third-party properties.
Qualified Persons
Amri Sinuhaji, Technical Services Director, and
David Volkert, Vice President of Exploration, are the Qualified
Persons for Fortuna Silver Mines Inc. as defined by National
Instrument 43-101. Mr. Sinuhaji is a Professional Engineer
registered with the Association of Professional Engineers and
Geoscientists of the Province of British Columbia (#48305) and is
responsible for ensuring that the production and guidance
information contained in this news release is an accurate summary
of the original reports and data provided to or developed by
Fortuna Silver Mines and he has reviewed and approved such
scientific and technical information contained in this news
release. Mr. Volkert is a Professional Geologist registered with
the Association of Professional Engineers and Geoscientists of the
Province of British Columbia (#191936) and is a certified
Professional Geologist with the American Institute of Professional
Geologists (#10759) and is responsible for ensuring that the
Brownfields and Greenfields exploration information contained in
this news release is an accurate summary of the original reports
and data provided to or developed by Fortuna Silver Mines and he
has reviewed the exploration data underlying the exploration
information contained herein. Mr. Volkert has reviewed and approved
such scientific and technical information related to the
Brownfields and Greenfields exploration information contained in
this news release.
About Fortuna
Silver Mines Inc.
Fortuna is a growth oriented, precious metals
producer focused on mining opportunities in Latin America.
Our primary assets are the Caylloma silver Mine in southern
Peru, the San Jose silver-gold Mine in Mexico and the Lindero gold
Project in Argentina. The company is selectively pursuing
acquisition opportunities throughout the Americas and in select
other areas. For more information, please visit our website
at www.fortunasilver.com.
ON BEHALF OF THE BOARD
Jorge A. Ganoza President, CEO and
DirectorFortuna Silver Mines Inc.
Trading symbols: NYSE: FSM | TSX: FVI
Investor Relations:
Carlos BacaT (Peru): +51.1.616.6060, ext. 0
Forward looking Statements
This news release contains forward looking
statements which constitute “forward looking information” within
the meaning of applicable Canadian securities legislation and
“forward looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995 (collectively, “Forward looking Statements”). All
statements included herein, other than statements of historical
fact, are Forward looking Statements and are subject to a variety
of known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those reflected
in the Forward looking Statements. The Forward looking Statements
in this news release may include, without limitation, statements
about the Company’s plans for its mines and mineral properties; the
Company’s business strategy, plans and outlook; future operating
performance such as the Company´s production forecasts and plan;
the merit of the Company’s mines and mineral properties; mineral
resource and reserve estimates; timelines; the future financial or
operating performance of the Company; 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”, “containing”, “remaining”, “to be”, or statements
that events, “could” or “should” occur or be achieved and similar
expressions, including negative variations.
Forward looking Statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any results, performance or achievements
expressed or implied by the Forward looking Statements. Such
uncertainties and factors include, among others, changes in general
economic conditions and financial markets; changes in prices for
silver and other metals; technological and operational hazards in
Fortuna’s mining and mine development activities; risks inherent in
mineral exploration; uncertainties inherent in the estimation of
mineral reserves, mineral resources, and metal recoveries; changes
to current estimates of mineral reserves and resources; changes to
production estimates; governmental and other approvals; political
unrest or instability in countries where Fortuna is active; labor
relations issues; as well as those factors discussed under “Risk
Factors” in the Company's Annual Information Form. Although the
Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in Forward looking Statements, there may be other
factors that cause actions, events or results to differ from those
anticipated, estimated or intended.
Forward looking Statements contained herein are
based on the assumptions, beliefs, expectations and opinions of
management, including but not limited to expectations regarding
mine production costs; expected trends in mineral prices and
currency exchange rates; the accuracy of the Company’s current
mineral resource and reserve estimates; that the Company’s
activities will be in accordance with the Company’s public
statements and stated goals; that there will be no material adverse
change affecting the Company or its properties; that all required
approvals will be obtained; that there will be no significant
disruptions affecting operations and such other assumptions as set
out herein. Forward looking Statements are made as of the date
hereof and the Company disclaims any obligation to update any
Forward looking Statements, whether as a result of new information,
future events or results or otherwise, except as required by law.
There can be no assurance that Forward looking Statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, investors should not place undue reliance on Forward
looking Statements.
This news release also refers to non-GAAP
financial measures, such as all in sustaining cash cost; cash cost
per tonne of processed ore. These measures do not have a
standardized meaning or method of calculation, even though the
descriptions of such measures may be similar. These performance
measures have no meaning under International Financial Reporting
Standards (IFRS) and therefore, amounts presented may not be
comparable to similar data presented by other mining companies.
APPENDIX
2019 AISC Guidance Breakdown
San Jose Mine, Mexico:
Item |
$/oz Ag Eq |
Production cash cost |
5.9 - 7.2 |
Commercial and government royalties/mining tax |
0.6 - 0.8 |
Workers’ participation |
0.4 - 0.5 |
Subsidiary G&A |
0.4 - 0.5 |
Sustaining capital expenditures |
0.7 - 0.8 |
Brownfields exploration |
0.3 - 0.4 |
AISC¹ |
8.3 - 10.2 |
Caylloma Mine, Peru:
Item |
$/oz Ag Eq |
Production cash cost |
9.1 - 11.2 |
Commercial and government royalties/mining tax |
0.2 - 0.2 |
Workers’ participation |
0.2 - 0.2 |
Subsidiary G&A |
0.6 - 0.7 |
Sustaining capital expenditures |
1.6 - 2.0 |
Brownfields exploration |
0.1 - 0.2 |
AISC¹ |
11.8 - 14.5 |
Consolidated AISC:
Item |
$/oz Ag Eq |
Production cash cost |
6.9 - 8.5 |
Commercial and government royalties/mining tax |
0.5 - 0.6 |
Workers’ participation |
0.3 - 0.4 |
Subsidiary G&A |
0.5 - 0.6 |
Corporate G&A |
0.5 - 0.6 |
Sustaining capital expenditures |
1.0 - 1.2 |
Brownfields exploration |
0.3 - 0.3 |
AISC¹ |
9.9 - 12.1 |
Note:
- Totals may not add up due to rounding
Prospero Silver (TSXV:PSL)
Historical Stock Chart
From Oct 2024 to Nov 2024
Prospero Silver (TSXV:PSL)
Historical Stock Chart
From Nov 2023 to Nov 2024