Fortuna Reports 2013 Record Production of 5.9 Million Silver
Equivalent Ounces and Issues Guidance for 2014
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan 13, 2014) -
Fortuna Silver Mines, Inc. (NYSE:FSM) (TSX:FVI) (BVLAC:FVI)
(FRANKFURT:F4S) is pleased to announce 2013 production figures from
its two underground operating silver mines located in Latin
America, the San Jose Mine in Mexico and the Caylloma Mine in Peru.
The company produced 4.6 million ounces of silver and 21,242 ounces
of gold or 5.9 million Ag Eq* ounces.
For 2014, silver production is scheduled to grow by 30% to 6
million ounces and gold production by 51% to 32,300 ounces or 8
million Ag Eq ounces, plus base metal by-products, at an estimated
all-in sustaining cash cost** of US$17.14 per ounce of silver.
Jorge A. Ganoza, President and CEO, commented: "We continue to
successfully source significant organic growth from our assets. At
our San Jose Mine, we are expanding throughput to 2,000 tpd in the
second quarter of this year." Mr. Ganoza added, "Consolidated
silver production grew sixteen percent in 2013 and for 2014, we are
forecasting a thirty percent increase driven by the San Jose plant
expansion. As a result of lower operating costs and reduced capital
requirements, our all-in sustaining cash cost per ounce of silver
is forecast to drop approximately nineteen percent to
US$17.14."
2013 Consolidated Production Highlights
- Silver was 5% above and gold 10% below 2013 production
guidance
- Silver production of 4,631,264 ounces; 16% increase over
2012
- Gold production of 21,242 ounces; 3% increase over 2012
- Lead production of 17,780,282 pounds; 1% decrease over
2012
- Zinc production of 25,210,845 pounds; 13% increase over
2012
(*) Ag Eq calculated using Au = US$1,241/oz and Ag = US$20.25/oz
(**) All-in sustaining cash cost per ounce of silver is based on
the guidelines from the World Gold council.
2013 Consolidated Operating Results
|
Q4 2013 |
2013 |
|
Caylloma, Peru |
San Jose, Mexico |
|
Consolidated |
Caylloma, Peru |
San Jose, Mexico |
|
Consolidated |
Processed Ore |
|
|
|
Tonnes milled |
116,127 |
158,218 |
|
|
458,560 |
456,048 |
|
|
Average tpd milled |
1,290 |
1,741 |
|
|
1,284 |
1,296 |
|
|
Silver |
|
|
|
Grade (g/t) |
174 |
202 |
|
|
173 |
194 |
|
|
Recovery (%) |
83.48 |
89.17 |
|
|
82.33 |
88.94 |
|
|
Production (oz) |
542,457 |
917,668 |
|
1,460,125 |
2,104,061 |
2,527,203 |
|
4,631,264 |
|
|
|
|
|
|
|
|
|
|
Q4 2013 |
|
2013 |
|
Caylloma, Peru |
San Jose, Mexico |
|
Consolidated |
|
Caylloma, Peru |
San Jose, Mexico |
|
Consolidated |
Gold |
|
|
|
Grade (g/t) |
0.38 |
1.42 |
|
|
|
0.36 |
1.46 |
|
|
Recovery (%) |
43.83 |
88.84 |
|
|
|
41.92 |
88.61 |
|
|
Production (oz) |
632 |
6,420 |
|
7,052 |
|
2,212 |
19,031 |
|
21,242 |
Lead |
|
|
|
Grade (%) |
1.59 |
|
|
|
|
1.92 |
|
|
|
Recovery (%) |
92.62 |
|
|
|
|
91.45 |
|
|
|
Production (lbs) |
3,769,939 |
|
|
3,769,939 |
|
17,780,282 |
|
|
17,780,282 |
Zinc |
|
|
|
Grade (%) |
2.88 |
|
|
|
|
2.83 |
|
|
|
Recovery (%) |
90.59 |
|
|
|
|
88.11 |
|
|
|
Production (lbs) |
6,675,772 |
|
|
6,675,772 |
|
25,210,845 |
|
|
25,210,845 |
|
|
|
|
|
|
|
|
|
|
San Jose Mine, Mexico
Silver annual production was in accordance with budget. Gold
annual production was 9% below budget due to variations in the head
grade relative to the resource model. The company is analyzing the
reasons for these variations and is taking measures to improve the
accuracy of gold grade estimate predicted by the resource model and
the mining schedule production plans.
The mill expansion to 1,800 tpd was successfully completed and
commissioned in September of last year on-time and on-budget.
Caylloma Mine, Peru
Silver annual production was 6% over budget mainly due to the
improvement in metallurgical recovery which is 6% above budget.
2014 Production and Cash Cost Guidance
Mine |
|
Silver (Moz) |
|
Gold (koz) |
|
Investments (US$ million) |
|
Cash Cost (*) (US$/t) |
|
All-in Sustaining Cash Cost (US$/ oz Ag) |
San
Jose, Mexico |
|
4.0 |
|
30.4 |
|
29.4 |
|
67.1 |
|
14.43 |
Caylloma, Peru |
|
2.0 |
|
1.9 |
|
10.7 |
|
88.3 |
|
17.01 |
Total |
|
6.0 |
|
32.3 |
|
40.1 |
|
-- |
|
-- |
- Caylloma Mine zinc and lead production forecast of 22.6 million
pounds and 16.6 million pounds respectively
- Consolidated all-in sustaining cash cost per ounce of silver of
US$17.14. Please refer to the appendix for detail.
2014 Outlook
San Jose Mine, Mexico
San Jose plans to process 683,000 tonnes of ore averaging 203
g/t Ag and 1.56 g/t Au. Investments for 2014 are estimated to be
US$29.4 million.
The company has captured opportunities in spare capacity of
major equipment allowing for an additional processing plant
expansion to 2,000 tpd by the beginning of the second quarter. The
mill and mine will increase production without incurring in
additional capital investments. The company will be conducting
engineering studies to assess a further expansion beyond 2,000
tpd.
Major investments include:
- Mine development: US$7.0 million
- Tailings dam expansion: US$11.7 million
- Water evaporation control project: US$2.2 million
- Brownfields exploration: US$5.3 million
Caylloma Mine, Peru
Caylloma plans to process 464,100 tonnes of ore averaging 167
g/t Ag. Capital expenditures for 2014 are estimated to be US$10.7
million.
Major investments include:
- Mine development: US$4.7 million
- Maintenance and energy: US$1.9 million
- Brownfields exploration: US$1.1 million
Brownfields Exploration
The 2014 Brownfields exploration program at the San Jose
property is focused on testing the potential for extensions of the
high-grade silver-gold resources identified at Trinidad North (see
Fortuna Silver news release dated Oct. 17, 2013). Step-out and
delineation drilling totaling over 16,000 meters will explore the
Trinidad North structure over a further 550 meter strike extension
and to depths between 1300 and 900 meters in elevation. Underground
workings will be advanced a further 300 meters to the north to
provide access for drill stations.
At the Caylloma property, Brownfields exploration drilling will
focus on testing the Don Luis I and Cailloma 6 vein systems where
exploration completed-to-date has identified potential for
high-grade silver mineralization.
Qualified Person
Boris G. Caro, Technical Services Corporate Manager, is a
Qualified Person for Fortuna Silver Mines Inc. as defined by
National Instrument 43-101. Mr. Caro is a Member of Australasian
Institute of Mining and Metallurgy (Membership Number 305462) and a
Registered Member of the Chilean Mining Commission (Registered
Member Number 0229) and is responsible for ensuring that the
information contained in this news release is an accurate summary
of the original reports and data provided to or developed by
Fortuna Silver Mines.
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) (BVLAC: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 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.
Appendix - All-in sustaining cash cost per ounce of Ag, net of
by-product credits
San Jose Mine all-in sustaining cash cost/ oz Ag:
Item |
2014 Guidance (US$/oz) |
Cash cost net of by-product credits |
4.97 |
|
Government royalty & mining tax |
0.14 |
|
Worker's participation |
1.03 |
|
G&A (subsidiary) |
0.84 |
Adjusted operating cash cost |
6.98 |
|
Corporate G&A |
0.00 |
|
Sustaining capex |
6.06 |
|
Brownfields exploration |
1.39 |
All-in sustaining cash cost |
14.43 |
Caylloma Mine all-in sustaining cash cost/oz Ag:
Item |
2014 Guidance (US$/oz) |
Cash cost net of by-product credits |
9.36 |
|
Government royalty & mining tax |
0.34 |
|
Worker's participation |
0.33 |
|
G&A (subsidiary) |
1.65 |
Adjusted operating cash cost |
11.68 |
|
Corporate G&A |
0.00 |
|
Sustaining capex |
4.76 |
|
Brownfields exploration |
0.57 |
All-in sustaining cash cost |
17.01 |
Consolidated all-in sustaining cash cost/oz Ag:
Item |
2014 Guidance (US$/oz) |
Cash cost net of by-product credits |
6.44 |
|
Government royalty & mining tax |
0.21 |
|
Worker's participation |
0.80 |
|
G&A (subsidiary) |
1.11 |
Adjusted operating cash cost |
8.56 |
|
Corporate G&A |
1.84 |
|
Sustaining capex |
5.62 |
|
Brownfields exploration |
1.11 |
All-in sustaining cash cost |
17.14 |
Fortuna Silver Mines Inc.Investor Relations:Carlos BacaT (Peru):
+51.1.616.6060, ext. 0www.fortunasilver.com
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