Fortuna reports 2021 full year record production of 305,859 gold
equivalent ounces and issues 2022 annual guidance
Fortuna Silver Mines Inc. (NYSE: FSM)
(TSX: FVI) reports production results for the fourth
quarter and full year 2021 from its four operating mines in the
Americas and West Africa: the Lindero Mine in Argentina, the San
Jose Mine in Mexico, the Caylloma Mine in Peru, and the Yaramoko
Mine in Burkina Faso. For the full year 2021, the Company produced
207,192 ounces of gold and 7,498,701 ounces of silver or
305,859 gold equivalent1 ounces.
2021 Consolidated Production
Highlights
- Gold production of 207,192 ounces;
274 percent increase over 2020
- Silver production of 7,498,701
ounces; 5 percent increase over 2020
- Lead production of 32,989,973
pounds; 11 percent increase over 2020
- Zinc production of 47,549,301 pounds;
4 percent increase over 2020
2022 Consolidated Production Guidance
Highlights
- Gold production of between 244 to
280 thousand ounces; a projected increase of between 16 to 35
percent over 2021
- Silver production of between 6.2 to
6.9 million ounces; a projected decrease of between 8 to
17 percent over 2021
- Gold equivalent production of
between 326 to 371 thousand ounces; a projected increase of between
7 to 21 percent over 2021
2021 Consolidated Operating
Highlights
|
Fourth Quarter 2021 |
Full Year 2021 |
|
|
Lindero3,
Argentina |
San Jose, Mexico |
Yaramoko4,Burkina
Faso |
Caylloma, Peru |
Consolidated |
Lindero3,Argentina |
San Jose,Mexico |
Yaramoko4,Burkina
Faso |
Caylloma, Peru |
Consolidated |
|
OPERATIONAL FIGURES |
|
Tonnes milled |
|
262,802 |
132,188 |
137,838 |
|
|
1,041,154 |
258,866 |
539,779 |
|
|
Average tpd milled |
|
2,920 |
1,437 |
1,549 |
|
|
2,964 |
1,407 |
1,525 |
|
|
Ore placed on pad (t) |
1,457,733 |
|
|
|
|
6,453,647 |
|
|
|
|
|
SILVER2 |
|
Grade (g/t) |
|
219 |
|
73 |
|
|
209 |
|
76 |
|
|
Recovery (%) |
|
92.82 |
|
81.26 |
|
|
91.74 |
|
81.56 |
|
|
Production (oz) |
|
1,717,533 |
|
262,710 |
1,980,243 |
|
6,425,029 |
|
1,073,672 |
7,498,701 |
|
GOLD |
|
Grade (g/t) |
1.04 |
1.27 |
6.99 |
0.44 |
|
0.96 |
1.29 |
7.13 |
0.49 |
|
|
Recovery (%) |
|
92.18 |
97.75 |
69.76 |
|
|
91.28 |
97.79 |
71.18 |
|
|
Production (oz) |
36,072 |
9,929 |
28,787 |
1,374 |
76,162 |
104,161 |
39,406 |
57,538 |
6,086 |
207,192 |
|
LEAD |
|
Grade (%) |
|
|
|
3.20 |
|
|
|
|
3.16 |
|
|
Recovery (%) |
|
|
|
86.56 |
|
|
|
|
87.73 |
|
|
Production (lbs) |
|
|
|
8,419,454 |
8,419,454 |
|
|
|
32,989,973 |
32,989,973 |
|
ZINC |
|
Grade (%) |
|
|
|
4.25 |
|
|
|
|
4.56 |
|
|
Recovery (%) |
|
|
|
88.10 |
|
|
|
|
87.54 |
|
|
Production (lbs) |
|
|
|
11,380,262 |
11,380,262 |
|
|
|
47,549,301 |
47,549,301 |
|
Notes:
- Gold equivalent production does not
include lead or zinc, and is calculated using gold to silver ratio
of 1 to 76
- Metallurgical recovery for silver
at the Caylloma Mine is calculated based on silver content in lead
concentrate
- Lindero production includes gold in
carbon columns and precipitate/sludge; Yaramoko production includes
only doré
- Production from the Yaramoko Mine
is subsequent to the completion of the business combination with
Roxgold Inc. on July 2, 2021
- Totals may not add due to
rounding
Lindero Mine, Argentina: Record
quarterly gold production of 36,072 ounces of gold, 37% over the
previous quarter, and a total of 104,161 ounces for the year, in
line with guidance
During the fourth quarter, the operation
screened 60 positive cases of COVID-19 onsite, with no disruptions
to the operations. Travel restrictions to the country were lifted
in November which led to an improvement in lead times and onsite
technical assistance from foreign vendors.
In the fourth quarter of 2021, a total of 1.46
million tonnes of ore were placed on the leach pad, averaging 1.04
g/t gold containing an estimated 48,900 ounces of gold. Total
gold production for the fourth quarter was 36,072 ounces.
Gold production for 2021 totaled 104,161 ounces,
comprised of 99,313 ounces in doré, 730 ounces of gold contained in
precipitate/sludge and 4,118 ounces of gold-in-carbon (GIC)
inventory, in the upper range of the production guidance (refer to
Fortuna news release dated July 19, 2021).
2021 Operating Highlights
Mine production for the quarter performed
according to management’s expectations. A total of
2,601,678 tonnes of ore were mined in the fourth quarter, at a
strip ratio of 0.77:1. Total mine production for the year accounted
for 8,493,508 tonnes of ore, at a strip ratio of 0.82:1, in line
with plan.
All processing areas performed according to
plan:
- A total of 1,444,260 tonnes of ore
were crushed and placed on the leach pad via conveyor stacking
during the fourth quarter, a 17 percent increase over the previous
quarter
- Conveyor stacking performance
averaged 16,228 tonnes per day during the fourth quarter, an
increase of 21 percent over the previous quarter; including 31 days
of conveyor stacking throughput of over 18,750 tonnes per day
- SART plant reached full design
capacity of 393 cubic meters per hour in December 2021, in line
with plan
- The expansion of carbon columns at
the ADR plant was successfully commissioned in the fourth quarter
of 2021 and is performing according to plan
Reconciliation of tonnes, head grade and gold
ounces mined as ore demonstrated a good correlation with the
reserve model throughout 2021, with differences for all parameters
of less than 6 percent for the year.
The metallurgical balance indicates that overall
actual gold recovery from the heap is performing in line with
expected theoretical recoveries, supported by ongoing
2.5-meter-tall column test works and is according to the
granulometric composition and metallurgical types of ore placed on
the leach pad to date.
|
Fourth Quarter 2021 |
Third Quarter 2021 |
Second Quarter 2021 |
First Quarter 2021 |
Ore mined1 (kt) |
2,602 |
2,466 |
1,817 |
1,610 |
Waste mined1 (kt) |
2,010 |
2,114 |
1,638 |
1,220 |
Total mined1 (kt) |
4,612 |
4,581 |
3,455 |
2,830 |
Strip ratio (waste to ore) |
0.77 |
0.86 |
0.90 |
0.76 |
Ore placed on leach pad1 – conveyors (kt) |
1,444 |
1,236 |
675 |
404 |
Ore placed on pad1 – trucks (kt) |
13 |
152 |
802 |
1,728 |
Ore placed grade1 (g/t) |
1.04 |
1.10 |
0.95 |
0.82 |
Gold placed on pad1 (oz) |
48,900 |
49,247 |
44,889 |
56,330 |
GIC inventory (oz) |
4,118 |
4,483 |
2,565 |
1,770 |
Change in GIC inventory2 (oz) |
-365 |
1,918 |
794 |
1,770 |
Gold in precipitated/sludge (oz) |
730 |
|
|
|
Doré poured (oz) |
35,707 |
24,318 |
18,726 |
20,562 |
Gold produced (oz) |
36,072 |
26,235 |
19,521 |
22,332 |
Notes:1. Lindero tonnes and gold grade are
estimated using grade control sampling of blast holes; tonnes are
reported to the nearest thousand2. Quarter-on-quarter change
in GIC inventory
Quality Assurance & Quality Control
Grade control estimates at Lindero are based on
blast hole chip samples submitted to Lindero’s on-site laboratory
for preparation and assaying for gold, using fire assay with an
atomic absorption finish. The QA-QC program includes the blind
insertion of certified reference standards and assay blanks at a
frequency of approximately 1 per 20 normal samples as well as the
submission of duplicate samples for verification of sampling and
assay precision levels by an ISO 9001:2000 certified umpire
laboratory. ALS Global Laboratory in Mendoza, Argentina prepared
the samples for assaying and then forwarded the samples to ALS
Global Laboratory in Lima, Peru for assay by standard fire assay
methods.
San Jose Mine, Mexico: Solid production
performance and stronger fourth quarter in line with full-year
production guidance
The San Jose Mine produced 1,717,533 ounces of
silver and 9,929 ounces of gold in the fourth quarter of 2021, with
average head grades for silver and gold of 219 g/t and 1.27
g/t, respectively.
Silver and gold production for 2021 totaled
6,425,029 ounces of silver and 39,406 ounces of gold, respectively.
Average head grades for silver and gold for the year were 209 g/t
and 1.29 g/t, respectively.
Yaramoko Mine, Burkina Faso: Second
semester production slightly below guidance due to grade delay in
the fourth quarter
The Yaramoko Mine produced 28,787 ounces of gold
in the fourth quarter of 2021 with an average gold head grade of
6.99 g/t.
Gold production for the second semester of 2021
totaled 57,538 ounces of gold with an average gold head grade of
7.13 g/t; 7 percent below guidance for the period. This production
shortfall was due to lower than planned mill feed grade in the
fourth quarter of 2021, caused by the delay in mining several
high-grade stopes and some localized grade variability at the 55
Zone. The unmined stopes will be resequenced into the mine plan in
the first quarter of 2022.
Caylloma Mine, Peru: Outperformer
producing 6,086 ounces of by-product gold, a 22% increase over
upper production guidance range
Silver production in the fourth quarter of 2021
was 262,710 ounces with an average silver head grade of 73 g/t.
Full 2021-year production totaled 1,073,672 ounces, an increase of
11 percent over 2020, with an average head grade of 76 g/t.
Gold production was 1,374 ounces in the fourth
quarter with average gold head grade of 0.44 g/t. Gold production
for 2021 totaled 6,086 ounces, an increase of 48 percent over 2020,
with an average head grade of 0.49 g/t.
Lead and zinc production for the fourth quarter
of 2021 was 8,419,454 pounds and 11,380,262 pounds with average
head grades for lead and zinc of 3.20% and 4.25%, respectively.
Base metal production for the full year of 2021 totaled 47,549,301
pounds of zinc, an increase of 4 percent over 2020, and 32,989,973
pounds of lead, an increase of 11 percent over 2020. Average head
grades for lead and zinc for the year were 3.16% and 4.56%,
respectively.
2022 Consolidated Production and Cost
Guidance
The Company’s production and cost guidance set
out below for 2022 assumes that operations will continue during the
year without any major interruptions related to COVID-19. Health
protocols for control, isolation and quarantine are in place at
each of our mine sites, and these are revised and modified based on
the circumstances at each location.
Mine |
Silver(Moz) |
Gold(koz) |
Lead(Mlbs) |
Zinc(Mlbs) |
Cash
Cost1,2,3 |
AISC1,2,4,5 |
SILVER |
|
|
|
|
(US$/t) |
(US$/oz Ag Eq) |
San Jose, Mexico |
5.2 - 5.8 |
32 - 36 |
- |
- |
67.5 - 74.6 |
13.7 - 16.1 |
Caylloma, Peru |
1.0 - 1.1 |
1.8 - 2.0 |
29 - 32 |
41 - 45 |
86.6 - 95.7 |
17.8 - 21.1 |
GOLD |
|
|
|
|
(US$/oz Au) |
(US$/oz Au) |
Lindero, Argentina |
- |
115 - 127 |
- |
- |
567 - 714 |
900 - 1,100 |
Yaramoko, Burkina Faso |
- |
95 - 115 |
- |
- |
760 - 1,006 |
1,300 - 1,650 |
CONSOLIDATED TOTAL |
6.2 - 6.9 |
244 - 280 |
29 - 32 |
41 - 45 |
|
|
Notes:1. Cash Cost and all-in
sustaining cost (AISC) are non-GAAP financial measures which are
not standardized financial measures under the financial reporting
framework used to prepare the financial statements of the Company
and might not be comparable to similar financial measures disclosed
by other issuers. Refer to "Non-IFRS Financial Measures" in the
Company’s 2021 management discussion and analysis (“MD&A”) for
the three and nine months ended September 30, 2021 dated November
10, 2021 (“Q3 MD&A 2021”), which is available under Fortuna's
SEDAR profile, and the note under “Non-IFRS Financial Measures”
below.2. The following table provides the cash costs and
AISC for the four operating mines for the nine months ended
September 30, 2021 as follows:
Mine |
Cash Cost(a) |
AISC(a),(b),(c) |
SILVER |
(US$/t) |
(US$/oz Ag Eq) |
San Jose, Mexico |
74.22 |
14.13 |
Caylloma, Peru |
85.17 |
18.17 |
GOLD |
(US$/oz Au) |
(US$/oz Au) |
Lindero, Argentina |
635 |
1,182 |
Yaramoko, Burkina Faso |
720 |
1,188 |
(a) Cash Cost and AISC are non-GAAP
financial measures. Refer to Non-IFRS Financial
Measures(b) Presented on a cash
basis(c) Silver equivalent was calculated using the
realized prices for gold (US$1,783 per ounce), silver (US$25.80 per
ounce), lead US$0.98 per pound) and zinc (US$1.31 per pound) for
the nine months ended September 30, 2021(d) Further
details on the cash costs and AISC for the nine months ended
September 30, 2021 are disclosed on pages 21, 23 and 24 (with
respect to cash costs) and pages 22, 24 and 25 (with respect to
AISC) of the Q3 MD&A 2021 which is available under Fortuna's
SEDAR profile at www.sedar.com and is incorporated by reference
into this news release, and the note under “Non-GAAP Financial
Measures” below(e) The estimated increase in all in
sustaining costs at Yaramoko for 2022 are due to decreased
estimated gold ounce production coupled with increased operating
and capital costs as mining moves to the deeper regions of the
underground mine3. The most comparable financial measure
to cash costs is cost of sales. Please see the condensed interim
consolidated financial statements of the Company for the three and
nine months ended September 30, 2021 and pages 21, 23 and 24 of the
Q3 MD&A 2021 for a reconciliation.4. AISC includes
production cash cost, commercial and government royalties, mining
tax, export duties (as applicable), worker’s participation (as
applicable), subsidiary G&A, sustaining capital expenditures,
and Brownfields exploration and is estimated at metal prices of
US$1,700/oz Au, US$22/oz Ag, US$2,100/t Pb, and US$2,700/t Zn. AISC
excludes government mining royalty recognized as income tax within
the scope of IAS-12.5. The most comparable financial
measure to AISC is cost of sales. Please see the condensed interim
consolidated financial statements of the Company for the three and
nine months ended September 30, 2021 and pages 22, 24 and 25 of the
Q3 MD&A 2021 for a reconciliation.6. Totals may not
add due to rounding.
2022 Guidance Outlook
Lindero Mine, Argentina
The Lindero Mine is expected to place 6.2
million tonnes of ore on the leach pad averaging
0.80 g/t Au, containing an estimated 160,000 ounces of
gold. Capital investments are estimated at US$26.3 million,
including US$17.7 million for sustaining capital, US$7.3 million of
capitalized stripping and US$1.3 million for Brownfields
exploration programs.
Major sustaining capital investment projects
include:
•
Engineering and procurement for the leach pad expansion (phase
2) |
US$4.4
million |
• Mine fleet maintenance and acquisition |
US$6.4 million |
• Maintenance of crushing, SART and ADR plants |
US$1.8 million |
San Jose Mine, Mexico
At the San Jose Mine, the operation plans to
process 1.06 million tonnes of ore averaging 176 g/t Ag and
1.09 g/t Au. Silver production and costs reflect the
declining grade profile of Mineral Reserves. Capital investment is
estimated at US$20.8 million, including US$13.4 million for
sustaining capital expenditures and US$7.4 million for Brownfields
exploration programs.
Major sustaining capital investment projects
include:
• Underground fleet equipment acquisition |
US$3.7
million |
• Underground mine development |
US$5.7 million |
• Infill drilling |
US$1.3 million |
Yaramoko Mine, Burkina Faso
At the Yaramoko Mine, the operation plans to
process 516,000 tonnes of ore averaging 6.52 g/t Au. Capital
investments are estimated at US$48.4 million, including US$45.9
million for sustaining capital expenditures and US$2.5 million for
Brownfields exploration programs.
Major sustaining capital investment projects
include:
• Mine development extending depth at the 55 Zone |
US$32.6
million |
• Ventilation and refrigeration plant upgrade |
US$3.8 million |
• Underground pumping station |
US$0.9 million |
Caylloma Mine, Peru
At the Caylloma Mine, the operation plans to
process 532,000 tonnes of ore averaging 73 g/t Ag, 2.95% Pb, and
4.23% Zn. Capital investments are estimated at US$17.7 million,
including US$16.3 million for sustaining capital expenditures and
US$1.4 million for Brownfields exploration programs.
Major sustaining capital investment projects
include:
• Mine underground developments |
US$5.7
million |
• Mine backfill system |
US$4.3 million |
• Maintenance and energy projects |
US$3.5 million |
Séguéla Gold Project, Côte
d’Ivoire
At the end of 2021, the Séguéla Project is 29
percent complete with critical path items on-track, targeting first
gold pour in mid-2023 with ramp up to nameplate capacity in the
third quarter of 2023. Critical path activities of “SAG Mill
Procurement and Processing Plant EPC” contracts are 30 percent
complete and are advancing in line with cost and schedule.
Connection to the national electrical grid is on-track for
completion in the fourth quarter of 2022, ahead of commissioning
activities. Likewise, the tailings storage facility and water
storage dam are expected to be completed before plant commissioning
and the upcoming wet season, respectively.
In 2022, the key scopes for advancement to
protect the project schedule are the processing plant EPC contract
and the Mining Contract. The EPC contractor, Lycopodium, will
mobilise to site in the first quarter of 2022. Similarly, in the
second quarter of 2022, the Mining Contract is scheduled to be
awarded and mobilisation is anticipated to commence ahead of mining
operations schedule to start in the first quarter of 2023.
Management is working on the optimization of the
mine design, strip ratio and scheduling and has identified
potential gains that could lead to further improvements in the
project cash flows. Continued reported drilling success at Koula
depth and Sunbird satellite deposits represent further upside
opportunities to the project.
2022 Exploration Outlook
Fortuna continues to advance its robust pipeline
of Brownfield and Greenfield exploration projects in West Africa
and the Americas, building on the success of the exploration
programs carried out in 2021.
Brownfields Exploration
Fortuna´s consolidated Brownfields exploration
budget for 2022 for its four mines totals US$20 million, which
includes 113,000 meters of exploration drilling across all types
(reverse circulation, diamond core and air core), and 1,120 meters
of underground development.
San Jose Mine, Mexico
The Brownfields exploration program budget for
2022 at the San Jose Mine is US$7.4 million, which includes 26,200
meters of diamond drilling and 1,120 meters of underground
development for drilling access, platforms, and services.
Séguéla Project, Côte
d’Ivoire
The Brownfields exploration program budget for
2022 at the Séguéla Project is US$7.2 million, which includes
48,000 meters of exploration drilling to grow the emerging Sunbird
prospect (refer to Fortuna news release dated December 9, 2021),
test for further depth extensions at Koula, Ancien and Antenna, and
continued generation and testing of near-mine targets.
Yaramoko Mine, Burkina Faso
The Brownfields exploration program budget for
2022 at the Yaramoko Mine is US$2.7 million, which includes 34,000
meters of exploration drilling, testing several surface
geochemistry anomalies generated in 2021, in addition to expanding
the 109 Zone and testing strike and depth projections of the 55
Zone.
Caylloma Mine, Peru
The Brownfields exploration program budget for
2022 at the Caylloma Mine is US$1.4 million, with the exploration
focus turning to further understanding the region-wide controls on
vein development and geometry, and the relationship to the
formation of high-grade shoots at Animas, San Cristobal and other
mineralized zones.
Lindero Mine, Argentina
The Brownfields exploration program budget for
2022 at the Lindero Mine is US$1.3 million, which includes 4,650
meters of drilling on the Arizaro target located 3.5 kilometers to
the southeast of the mine where encouraging results were
intersected in the 2021 programs (refer to Fortuna news release
dated December 9, 2021).
Greenfields Exploration
Reconnaissance exploration and evaluation of
potential new projects will continue to be actively pursued during
2022 across select jurisdictions including Mexico, West Africa,
Argentina and select other jurisdictions with a budget of US$8.8
million.
Qualified Person
Amri Sinuhaji is the Technical Services Director
– Mine Planning for the Company and is a Professional Engineer
registered with the Association of Professional Engineers and
Geoscientists of the Province of British Columbia (#48305) and a
Qualified Person as defined by National Instrument 43-101-
Standards of Disclosure for Mineral Projects. Mr. Sinuhaji 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;
estimates of production in 2021 that remain subject to verification
and adjustment; the Company’s anticipated financial or operational
performance in 2022; estimated production forecasts and sales for
2022; estimated cash costs and all-in sustaining cash costs and
expenditures for 2022; estimated capital expenditures in 2022;
estimated Brownfields and Greenfields expenditures in 2022;
exploration plans; the future results of exploration activities;
the timing of the implementation and completion of sustaining
capital investment projects at the Company’s mines; 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 duration and impacts of COVID-19 on
the Company’s production, workforce, business, operations and
financial condition, and the risks relating to a global pandemic,
which unless contained could cause a slowdown in global economic
growth; uncertainties related to the impacts of COVID-19 which may
include: changing market conditions, changing restrictions on the
mining industry in the countries in which the Company operates, the
ability to operate as a result of government imposed restrictions,
including restrictions on travel, the transportation of
concentrates and doré, access to refineries, the impact of
additional waves of the pandemic or increases of incidents of
COVID-19 in the countries in which we operate; the duration of any
suspension of operations at the Company’s mines as a result of
COVID-19 which may affect production and the Company’s business
operations and financial condition; the risks associated with the
completion of the business combination with Roxgold, including the
ability of the Company to successfully consolidate functions,
integrate operations, procedures and personnel; changes in prices
for gold, silver and other metals; changes in the prices of key
supplies; technological and operational hazards in Fortuna’s mining
and mine development activities; risks inherent in mineral
exploration; the ability of the current exploration programs to
identify and/or expand mineral resources; operational risks in
exploration and development; delays or changes in plans with
respect to exploration or development projects including the
construction of the mine at the Séguéla Project; 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;
governmental and other approvals; changes in government, political
unrest or instability in countries where Fortuna is active;
fluctuations in currencies and exchange rates; the imposition of
capital control in countries in which the Company operates; 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 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 the
reconciliation of mineral reserves at each of the Company’s mines
remains consistent with the mineral reserve model; 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, labor and contractor
availability and other operating or technical difficulties); the
duration and impacts of COVID-19 on the Company’s production,
workforce, business, operations and financial condition, and the
risks relating to a global pandemic, which could cause a slowdown
in global economic growth; government mandates in Peru, Mexico,
Argentina, Burkina Faso and Côte d’Ivoire with respect to mining
operations generally or auxiliary businesses or services required
for the Company’s operations; government and the Company’s attempts
to reduce the spread of COVID-19 which may affect many aspects of
the Company’s operations, including transportation of personnel to
and from site, contractor and supplier availability and the ability
to sell or deliver concentrate and doré; the expected trends in
mineral prices and currency exchange rates; 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 and permits will be obtained for the Company’s business
and operations; 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 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.
Non-IFRS Financial Measures
This news release also refers to non-IFRS
financial measures, including cash costs and all-in sustaining
costs. These measures are not standardized financial measures under
International Financial Reporting Standards (IFRS), the financial
reporting framework used to prepare the financial statements of the
Company, and therefore may not be comparable to similar financial
measures disclosed by other mining companies. These Non-IFRS
Measures include:
Cash Costs. The Company’s method of calculating
cash costs may differ from the measures used by other companies
with similar descriptions. Investors are cautioned that Cash Costs
should not be construed as an alternative to production costs,
depreciation and amortization, and royalties determined in
accordance with IFRS as an indicator of performance. The most
comparable financial measure to cash costs is cost of sales.
All-in Sustaining Costs. The Company has adopted
an AISC performance measure; however this performance measure does
not have a standardized meaning. The Company conforms its AISC to
that set out in the guidance issued by the World Gold Council.
Although the WGC has published a standardized definition, companies
may calculate these measures differently. All-in sustaining cash
cost includes total production cash costs incurred at the Company’s
mining operations. Sustaining capital expenditures, corporate
selling, general and administrative expenses, and brownfield
exploration expenditures are added to the cash cost to calculate
the all-in-sustaining cost. The Company believes that this measure
represents the total costs of selling gold and silver from
operations and provides the Company and its stakeholders with
additional information on the Company’s operational performance and
the ability to generate cash flows. Certain cash expenditures such
as new project spending, tax payments, dividends, and financing
costs are not included. AISC also excludes government mining
royalty recognized as income tax within the scope of IAS-12. The
most comparable financial measure to AISC is a combination of
financial measures which include: cost of sales, capital
expenditures, general and administrative expenses and
royalties.
Readers should refer to the “Non-IFRS Financial
Measures” section in the Company’s MD&A for the three and nine
months ended September 30, 2021 dated November 10, 2021, which
section is incorporated herein by reference, for an explanation of
these measures and reconciliations to the Company’s reported
financial results in accordance with IFRS. The Company’s
Management’s Discussion and Analysis for the three and nine months
ended September 30, 2021 is available on SEDAR at
www.sedar.com.
Fortuna Silver Mines (LSE:0QYM)
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