(All amounts expressed in US dollars, unless otherwise
stated)
VANCOUVER, Nov. 5, 2013 /PRNewswire/ - Fortuna Silver
Mines Inc. (NYSE: FSM) (TSX: FVI) (BVL: FVI) (Frankfurt: F4S.F)
today reported revenue of $30.2
million, cash generated from operations, before changes in
working capital of $7.6 million and a
net loss of $0.3 million in the third
quarter of 2013. Income before income tax was $2.2 million.
Third quarter 2013 financial
highlights:
- Sales of $30.2 million
- Cash flow from operations before changes in non-cash working
capital of $7.6 million
- Net loss of $0.3 million
- Income before tax of $2.2
million
- Cash position, including short term investments, and working
capital as at September 30, 2013 were
$41.8 million and $65.0 million, respectively
- Silver and gold production of 1,104,914 ounces and 4,515
ounces, respectively
- Cash cost per ounce of payable silver, net of by-product
credits, was $7.51
Jorge A. Ganoza,
President and CEO, commented: "The company has advanced in the
implementation of the cost cutting measures announced at the end of
Q2 with visible results at both our operations and at the corporate
level. At Caylloma we have reduced unit costs by 7% compared
to the previous quarter and at San
Jose, we remain on track to achieve and improve our cost
guidance for the year as we capitalize on the mill expansion to
1,800 tonnes per day." Mr. Ganoza continued: "The growth of 22% in
reserves and 39% in inferred resources announced in October
confirms the materiality of the high-grade silver-gold Trinidad
North discovery and the organic growth opportunities this deposit
continues to offer us. As we continue exploring to grow Trinidad
North this year and next, we have adjusted our mine development
plans to incorporate Trinidad North into our production mix by
early 2015, which is expected to contribute higher margin rock and
increase metal output."
Third quarter financial results
Third quarter net loss was $0.3 million (Q3 2012: income $8.0 million), resulting in a loss per share of
$nil (Q3 2012: earnings per share $0.06). Income before tax in the third quarter
was $2.2 million (Q3 2012:
$12.3 million). The decrease in
income during the third quarter was driven by lower sales of
$30.2 million (Q3 2012: $43.8 million), down 31% from the prior year
quarter, explained mainly by lower realized silver and gold prices
of 29% and 21%, respectively. Lower gold production at San Jose also contributed to the decrease in
sales, as did a slight build-up of metal inventory at the end of
the quarter. The decrease in income was further impacted by a
higher effective tax rate at our Peruvian subsidiary, as a result
of continuing weakness of the local currency.
Mine operating earnings decreased 58% to
$8.1 million (Q3 2012: $19.2 million). The decrease is attributable to
lower sales, which as described above were mainly related to lower
prices and lower gold production, with a direct impact on our
margins.
Cash generated by operating activities, before
changes in working capital, was $7.6
million, a decrease of 62% over the prior year period,
mainly because of lower sales, of 31%. Operating cash flow per
share, before changes in working capital, decreased 63% to
$0.06, compared with $0.16 a year ago (refer to non-GAAP financial
measures).
The company's cash position, including short
term investments, as at September 30,
2013 totaled $41.8 million
(December 31, 2012: $64.7 million), a decrease of $22.9 million. The decrease from year end
2012 is primarily a result of net cash generated by operating
activities of $28.2 million and cash
consumed by expenditures on mineral properties, plant and equipment
of $51.3 million. Expenditures
on mineral properties, plant and equipment was comprised of the
following: $31.8 million of plant and
equipment and mine development, $9.0
million of brownfields exploration, and $10.0 million on the acquisition of the Taviche
Oeste concession, which hosts the Trinidad North discovery. The
$31.8 million for property plant and
equipment and development includes $7.7
million related to the San
Jose mine expansion and $7.4
million related to a new tailings dam and camp facilities at
the Caylloma mine.
Operating Results
|
|
QUARTERLY RESULTS |
|
YEAR TO
DATE RESULTS |
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2013 |
2012 |
|
2013 |
2012 |
Consolidated Metal
Production |
|
Consolidated |
Consolidated |
|
Consolidated |
Consolidated |
|
|
|
|
|
|
|
Silver (oz) |
|
1,104,914 |
1,027,741 |
|
3,171,139 |
2,977,027 |
Gold (oz) |
|
4,515 |
5,348 |
|
14,191 |
16,330 |
Lead (000's lb) |
|
4,730 |
4,452 |
|
14,010 |
12,951 |
Zinc (000's lb) |
|
6,468 |
5,615 |
|
18,535 |
16,260 |
Copper (000's lb) |
|
- |
- |
|
- |
48 |
Production cash cost (US$/oz Ag)* |
|
7.51 |
6.15 |
|
7.25 |
4.98 |
* Net of by-product
credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
In the third quarter of 2013, the company
delivered 1,104,914 ounces of silver, 4,515 ounces of gold and base
metal by-products.
In the nine months of 2013, the company produced
3,171,139 ounces of silver and 14,191 ounces of gold. When compared
with the same period the previous year, silver production increased
7%, while gold production decreased 13%. Fortuna reaffirms its
production guidance of 4.5 million ounces of silver and 23,600
ounces of gold or 5.9 million ounces of Ag Eq* for 2013.
(*) Ag Eq calculated using Ag = US$23.11/oz and Au = US$1,413.65/oz
San Jose
mine, Mexico
|
|
QUARTERLY RESULTS |
|
YEAR TO
DATE RESULTS |
|
|
Three months ended September 30, |
|
Nine
months ended September 30, |
|
|
2013 |
2012 |
|
2013 |
2012 |
Mine
Production |
|
San Jose |
San Jose |
|
San Jose |
San Jose |
Tonnes milled |
|
102,088 |
91,607 |
|
297,829 |
270,674 |
Average tonnes milled per day
(tpd) |
|
1,200 |
1,048 |
|
1,141 |
1,024 |
|
|
|
|
|
|
|
Silver |
|
|
|
|
|
|
|
Grade (g/t) |
|
184 |
191 |
|
189 |
192 |
|
Recovery (%) |
|
89 |
89 |
|
89 |
87 |
|
Production (oz) |
|
536,191 |
502,835 |
|
1,609,534 |
1,457,997 |
Gold |
|
|
|
|
|
|
|
Grade (g/t) |
|
1.37 |
1.73 |
|
1.49 |
1.87 |
|
Recovery (%) |
|
88 |
89 |
|
88 |
87 |
|
Production (oz) |
|
3,970 |
4,501 |
|
12,611 |
14,064 |
Unit costs |
|
|
|
|
|
|
|
Production cash costs (US$/oz Ag)* |
|
8.37 |
4.81 |
|
7.08 |
2.20 |
|
Production cash cost (US$/tonne) |
|
72.09 |
80.59 |
|
75.68 |
70.94 |
|
Unit net smelter return (US$/tonne) |
|
135.75 |
213.44 |
|
167.08 |
214.02 |
* Net of by-product
credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silver and gold production for the quarter was
7% above and 12% below the previous year, respectively. Silver
production increased on the back of higher throughput compared with
the prior year. Gold production decreased due to lower head grade
of 21%. The decrease in gold head grade was anticipated in the mine
plan to an extent; our mine plan anticipated a lower head grade of
14%. The further decrease in head grade beyond the plan is due to
local variability encountered in the production stopes.
Reconciliation of the gold production grades with the long term
resource and reserve models is within accepted ranges for the
respective resource and reserve categories. We do not anticipate
this as being a trend and expect to revert to the planned head
grades as the mining progresses out of this lower grade zone.
Mill expansion to 1,800 tpd was commissioned
towards the end of September 2013.
Throughput rate up to October
23rd was 1,630 tpd. We expect to stabilize mill
throughput at 1,800 tpd by November
2013.
Caylloma mine, Peru
|
|
QUARTERLY RESULTS |
|
YEAR TO
DATE RESULTS |
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2013 |
2012 |
|
2013 |
|
2012 |
Mine
Production |
|
Caylloma |
Caylloma |
|
Caylloma |
|
Caylloma |
Tonnes milled |
|
117,111 |
117,386 |
|
342,433 |
|
346,700 |
Average tonnes milled per day
(tpd) |
|
1,301 |
1,306 |
|
1,283 |
|
1,286 |
|
|
|
|
|
|
|
|
Silver |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
180 |
181 |
|
173 |
|
178 |
|
Recovery (%) |
|
84 |
77 |
|
82 |
|
77 |
|
Production (oz) |
|
568,722 |
524,906 |
|
1,561,605 |
|
1,519,030 |
Gold |
|
|
|
|
|
|
|
|
Grade (g/t) |
|
0.34 |
0.44 |
|
0.35 |
|
0.42 |
|
Recovery (%) |
|
43 |
51 |
|
41 |
|
47 |
|
Production (oz) |
|
545 |
847 |
|
1,580 |
|
2,266 |
Lead |
|
|
|
|
|
|
|
|
Grade (%) |
|
1.97 |
1.97 |
|
2.04 |
|
1.93 |
|
Recovery (%) |
|
93 |
87 |
|
91 |
|
88 |
|
Production (000's lb) |
|
4,730 |
4,452 |
|
14,010 |
|
12,951 |
Zinc |
|
|
|
|
|
|
|
|
Grade (%) |
|
2.84 |
2.55 |
|
2.81 |
|
2.49 |
|
Recovery (%) |
|
88 |
85 |
|
87 |
|
85 |
|
Production (000's lb) |
|
6,468 |
5,615 |
|
18,535 |
|
16,260 |
Copper |
|
|
|
|
|
|
|
|
Production (000's lb) |
|
0 |
0 |
|
0 |
|
48 |
Unit costs |
|
|
|
|
|
|
|
|
Production cash cost (US$/oz Ag)* |
|
6.70 |
7.43 |
|
7.43 |
|
7.64 |
|
Production cash cost (US$/tonne) |
|
87.07 |
85.14 |
|
91.47 |
|
84.11 |
|
Unit net smelter return (US$/tonne) |
|
154.18 |
180.94 |
|
166.37 |
|
179.19 |
* Net of by-product
credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silver production for the quarter was 8% above
the prior year period due to improved silver recovery.
Metallurgical recovery for silver was 84% or 9% above the second
quarter of 2012 as a result of optimization initiatives implemented
during the year.
Conference call to review 2013 third quarter
financial and operating results:
Shareholders, analysts, media and interested
investors are invited to listen to the live conference call by
logging onto the webcast at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=171846 or
over the phone by dialing just prior to the starting time.
Conference call details:
Date: Wednesday,
November 6, 2013
Time: 9:00 a.m. Pacific |
12:00 p.m. Lima | 12:00
p.m. Eastern
Dial in number (Toll Free): +1.877.407.8035
Dial in number (International): +1.201.689.8035
Replay number (Toll Free): +1.877.660.6853
Replay number (International): +1.201.612.7415
Replay Passcodes (both are required for playback):
- Conference ID #: 13572570
Playback of the webcast will be available until
June 2, 2014. Playback of the
conference call will be available until 11:59 p.m. Eastern on November 20, 2013. In addition, a
transcript of the call will be archived in the company's
website.
Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base
metal producer focused on mining opportunities in Latin America. Our primary assets are
the Caylloma silver mine in southern Peru and the San
Jose silver-gold mine in Mexico. The company is selectively
pursuing additional acquisition opportunities throughout the
Americas. For more information, please visit our website at
www.fortunasilver.com.
ON BEHALF OF THE BOARD
Jorge A. Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.
Trading symbols: NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F
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 U.S. Private Securities Litigation Reform
Act of 1995. Forward-looking statements are statements that
are not historical facts and that are subject to a variety of risks
and uncertainties which could cause actual events or results to
differ materially from those reflected in the forward-looking
statements. When used in this document, the words such as
"anticipates", "believes", "plans", "estimates", "expects",
"forecasts", "targets", "intends", "advance", "projects",
"calculates" and similar expressions are forward-looking
statements.
The forward-looking statements are based on
an assumed set of economic conditions and courses of actions,
including estimates of future production levels, expectations
regarding mine production costs, expected trends in mineral prices
and statements that describe Fortuna's future plans, objectives or
goals. There is a significant risk that actual results will vary,
perhaps materially, from results projected depending on such
factors as 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, the timing and
availability of financing, governmental and other approvals,
political unrest or instability in countries where Fortuna is
active, labor relations and other risk factors.
Although Fortuna has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements or
information, there may be other factors that cause results to be
materially different from those anticipated, described, estimated,
assessed or intended. There can be no assurance that any
forward-looking statements or information will prove to be accurate
as actual results and future events could differ materially from
those anticipated in such statements or information. Accordingly,
readers should not place undue reliance on forward-looking
statements or information.
SOURCE Fortuna Silver Mines Inc.