Fortuna reports results for the second quarter of 2023
(All amounts are expressed in US dollars, tabular amounts in millions, unless otherwise stated)
VANCOUVER, British Columbia, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) (“Fortuna” or the “Company”) today reported its financial and operating results for the second quarter of 2023.
Second Quarter 2023 highlights
Financial
- Adjusted net income of
$2.9 million or$0.01 per share - Net income of
$3.5 million or$0.01 per share - Adjusted EBITDA1 of
$44.4 million - Net cash provided by operating activities
$44.2 million and free cash flow from ongoing operations of$9.5 million - Liquidity as of March 31, 2023 was
$97.9 million
Return to Shareholders
- NCIB share repurchase program renewed for up to
5% of outstanding common shares (refer to Fortuna news release dated April 28, 2023)
Operational
- Gold production of 64,348 ounces
- Silver production of 1,262,561 ounces
- Gold equivalent production of 93,454 ounces
- Consolidated cash costs1 per ounce of gold equivalent sold of
$968 - Consolidated all-in sustaining costs (AISC)1 per ounce of gold equivalent sold of
$1,799 - Lost Time Injury Frequency Rate (LTIFR) of 0.43 and Total Recordable Injury Frequency Rate (TRIFR) of 1.15. One fatal incident was recorded at the Caylloma mine in June.
Growth and Development
- First gold pour at the Séguéla mine in Côte d’Ivoire took place on May 24, 2023, with the first gold shipment having taken place in July, subsequent to the close of the quarter.
- The transaction to acquire Chesser Resources Limited is continuing to progress and is expected to close in the third week of September
Jorge A. Ganoza, President and CEO, commented, “The first gold pour and sale at Séguéla is an exciting milestone for the Company as our new flagship asset enters into production and adds stable, high margin ounces to our portfolio. Ramp-up activities at the process plant continue to progress, and during the month of July the process plant met and exceeded name plate capacity and is expected to operate at a stable rate through the quarter.”
Mr. Ganoza continued, “Loss of production, stand-by charges and expenses related to the illegal union blockade at the San Jose Mine and standby charges during the repair of the Armtec tunnel at the Yaramoko Mine, both weighed on the results and AISC for the second quarter. Despite these headwinds the Company generated positive free cash flow from ongoing operations of
Mr. Ganoza concluded “With Séguéla contributing its first full quarter of production in the third quarter, the return of normal to operations at San Jose, Yaramoko continuing to perform above expectations, and the completion of a stripping phase in the second quarter at Lindero, we expect growing margins and free cash flow to improve in the third and fourth quarter of the year”.
Second Quarter 2023 Consolidated Results
Three months ended June 30, | Six months ended June 30, | |||||||||||||
(Expressed in millions) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||
Sales | 158.4 | 167.9 | (6 | %) | 334.1 | 350.2 | (5 | %) | ||||||
Mine operating income | 31.9 | 32.5 | (2 | %) | 72.3 | 96.0 | (25 | %) | ||||||
Operating income | 7.7 | 13.1 | (41 | %) | 31.6 | 53.9 | (41 | %) | ||||||
Net income | 3.5 | 1.7 | 106 | % | 15.3 | 28.7 | (47 | %) | ||||||
Earnings per share - basic | 0.01 | 0.01 | 0 | % | 0.05 | 0.10 | (50 | %) | ||||||
Adjusted net income1 | 2.9 | 2.1 | 38 | % | 16.1 | 35.4 | (55 | %) | ||||||
Adjusted EBITDA1 | 44.4 | 57.9 | (23 | %) | 109.5 | 138.1 | (21 | %) | ||||||
Net cash provided by operating activities | 44.2 | 47.4 | (7 | %) | 85.4 | 80.0 | 7 | % | ||||||
Free cash flow from ongoing operations1 | 9.5 | 21.9 | (57 | %) | 17.6 | 31.0 | (43 | %) | ||||||
Production cash cost ($/oz Au Eq) | 968.0 | 871.0 | 11 | % | 940 | 820 | 15 | % | ||||||
All-in sustaining cash cost ($/oz Au Eq) | 1,799.0 | 1,434.0 | 25 | % | 1,647 | 1,358 | 21 | % | ||||||
Capital expenditures2 | ||||||||||||||
Sustaining | 34.2 | 23.1 | 48 | % | 62.1 | 41.1 | 51 | % | ||||||
Non-sustaining3 | 0.9 | 3.7 | (76 | %) | 2.0 | 6.4 | (69 | %) | ||||||
Séguéla construction | 23.0 | 23.4 | (2 | %) | 48.1 | 64.1 | (25 | %) | ||||||
Brownfields | 2.4 | 3.4 | (29 | %) | 7.3 | 7.4 | (1 | %) | ||||||
As at | June 30, 2023 | December 31, 2022 | % Change | |||||||||||
Cash and cash equivalents | 93.4 | 80.5 | 16 | % | ||||||||||
Net liquidity position | 97.9 | 150.5 | (35 | %) | ||||||||||
1 Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures. | ||||||||||||||
2 Capital expenditures are presented on a cash basis | ||||||||||||||
3 Non-sustaining expenditures include greenfields exploration | ||||||||||||||
Figures may not add due to rounding |
Second Quarter 2023 Results
Net income for the quarter was
Adjusted EBITDA for the quarter was
General and administrative expenses for the quarter of
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||
(Expressed in millions) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||
Mine G&A | 6.2 | 6.2 | 0 | % | 12.1 | 11.1 | 9 | % | ||||||||||
Corporate G&A | 7.2 | 8.1 | (11 | %) | 14.1 | 16.2 | (13 | %) | ||||||||||
Share-based payments | 1.1 | 0.4 | 175 | % | 3.3 | 4.0 | (18 | %) | ||||||||||
Workers' participation | — | 0.1 | (100 | %) | 0.1 | 0.4 | (75 | %) | ||||||||||
Total | 14.5 | 14.8 | (2 | %) | 29.6 | 31.7 | (7 | %) |
Net cash generated by operations for the quarter decreased
In the second quarter of 2023 the Company invested
Free cash flow from ongoing operations for the quarter was
Consolidated All-in Sustaining Cost
Consolidated AISC per gold equivalent ounce (GEO) sold for the second quarter of 2023 was
Liquidity
The Company’s total liquidity available as of June 30, 2023 was
Séguéla Gold Mine Construction Update
For the second quarter of 2023 the Company incurred and expended
(Expressed in millions) | Q2 2023 | Project to Date | |
Expended Capital Costs1 | 8.9 | 161.2 | |
Working Capital Adjustment2 | 0.3 | (12.4 | ) |
Incurred Capital Costs3 | 8.6 | 173.6 |
1 Cash basis. Excludes exploration costs, capitalized interest and management fees.
2 Primarily consists of work performed not yet invoiced and increases in the accounts payable balance offset by increases in the VAT receivable balance.
3 Accrual basis. Excludes capitalized interest and management fees.
4 YTD includes a correction for the timing of payments. This has not impacted project to date spend.
As of June 30, 2023 the construction of the mine was substantially complete with minimal remaining spend associated with final commissioning and vendor testing. The project was delivered on budget. Settlement of final construction related payables is expected to be financed by free cash flow from ongoing operations.
Lindero Mine, Argentina
Three months ended June 30, | Six months ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Mine Production | ||||||||||||
Tonnes placed on the leach pad | 1,503,323 | 1,502,074 | 2,981,471 | 2,797,829 | ||||||||
Gold | ||||||||||||
Grade (g/t) | 0.62 | 0.74 | 0.83 | 0.83 | ||||||||
Production (oz) | 25,456 | 29,016 | 50,714 | 59,084 | ||||||||
Metal sold (oz) | 25,140 | 30,546 | 51,952 | 59,165 | ||||||||
Realized price ($/oz) | 1,975 | 1,869 | 1,879 | 1,879 | ||||||||
Unit Costs | ||||||||||||
Cash cost ($/oz Au)1 | 879 | 687 | 885 | 690 | ||||||||
All-in sustaining cash cost ($/oz Au)1 | 1,688 | 1,151 | 1,552 | 1,096 | ||||||||
Capital Expenditures ( | ||||||||||||
Sustaining | 13,337 | 6,123 | 21,082 | 9,248 | ||||||||
Non-sustaining | 136 | – | 323 | 169 | ||||||||
Brownfields | – | 646 | – | 790 |
1 Cash cost and AISC are non-IFRS financial measures; refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Capital expenditures are presented on a cash basis.
Quarterly Operating and Financial Highlights
In the second quarter of 2023, a total of 1,503,323 tonnes of ore were placed on the heap leach pad, with an average gold grade of 0.62 g/t, containing an estimated 29,984 ounces of gold. Gold production for Q2 2023 totaled 25,456 ounces, comprised of 24,599 ounces of doré, an estimated 731 ounces of gold contained in fine carbon, and 126 ounces contained in copper concentrate. This represents a
Cash cost per ounce of gold for the quarter ended June 30, 2023, was
All-in sustaining cash cost per gold ounce sold was
During the quarter, sustaining capital expenditures were primarily driven by the development of Phase 2 of the leach pad, higher capitalized stripping, plant investments, and capitalized maintenance.
Yaramoko Mine Complex, Burkina Faso
Three months ended June 30, | Six months ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Mine Production | ||||||||||||
Tonnes milled | 144,202 | 138,787 | 283,852 | 266,755 | ||||||||
Gold | ||||||||||||
Grade (g/t) | 6.51 | 5.42 | 6.23 | 6.43 | ||||||||
Recovery (%) | 98 | 97 | 98 | 98 | ||||||||
Production (oz) | 29,002 | 24,553 | 55,439 | 52,788 | ||||||||
Metal sold (oz) | 25,946 | 24,598 | 55,476 | 54,128 | ||||||||
Realized price ($/oz) | 1,976 | 1,868 | 1,933 | 1,873 | ||||||||
Unit Costs | ||||||||||||
Cash cost ($/oz Au)1 | 719 | 928 | 772 | 804 | ||||||||
All-in sustaining cash cost ($/oz Au)1 | 1,626 | 1,565 | 1,564 | 1,334 | ||||||||
Capital Expenditures ( | ||||||||||||
Sustaining | 14,318 | 9,085 | 27,867 | 16,446 | ||||||||
Brownfields | 1,019 | – | 2,210 | 488 |
1 Cash cost and AISC are non-IFRS financial measures; refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Capital expenditures are presented on a cash basis.
The Yaramoko Mine produced 29,002 ounces of gold in the second quarter of 2023 with an average gold head grade of 6.51g/t, an
Access to the underground mine was impacted for 27 days in April due to a failure of the Armtec tunnelling structure at the mine portal. Throughout this period, processing operations were maintained by milling surface ore stockpiles. Underground mine production resumed on May 1.
Cash cost per ounce of gold sold for the quarter ended June 30, 2023, was
All-in sustaining cash cost per gold ounce sold was
Sustaining capital for Q2 2023 was higher due to higher mine development and the Zone 55 Primary Vent Circuit extension. Brownfields expenditure was primarily related to diamond drilling.
San Jose Mine, Mexico
Three months ended June 30, | Six months ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Mine Production | ||||||||||||
Tonnes milled | 194,887 | 251,945 | 441,623 | 502,892 | ||||||||
Average tonnes milled per day | 2,633 | 2,831 | 2,760 | 2,874 | ||||||||
Silver | ||||||||||||
Grade (g/t) | 168 | 187 | 186 | 186 | ||||||||
Recovery (%) | 91 | 91 | 91 | 91 | ||||||||
Production (oz) | 957,265 | 1,385,336 | 2,260,577 | 2,743,525 | ||||||||
Metal sold (oz) | 942,671 | 1,417,303 | 2,271,004 | 2,733,496 | ||||||||
Realized price ($/oz) | 24.09 | 22.56 | 23.20 | 23.39 | ||||||||
Gold | ||||||||||||
Grade (g/t) | 1.02 | 1.13 | 1.13 | 1.13 | ||||||||
Recovery (%) | 90 | 91 | 90 | 90 | ||||||||
Production (oz) | 5,778 | 8,295 | 14,009 | 16,534 | ||||||||
Metal sold (oz) | 5,695 | 8,564 | 14,050 | 16,516 | ||||||||
Realized price ($/oz) | 1,973 | 1,873 | 1,929 | 1,881 | ||||||||
Unit Costs | ||||||||||||
Production cash cost ($/t)2 | 102.77 | 83.57 | 93.77 | 79.82 | ||||||||
Production cash cost ($/oz Ag Eq)1,2 | 15.93 | 11.00 | 13.26 | 10.72 | ||||||||
All-in sustaining cash cost ($/oz Ag Eq)1,2 | 24.07 | 15.41 | 19.01 | 15.36 | ||||||||
Capital Expenditures ( | ||||||||||||
Sustaining | 3,593 | 4,051 | 7,366 | 7,626 | ||||||||
Non-sustaining | 524 | 454 | 793 | 869 | ||||||||
Brownfields | 788 | 1,568 | 1,875 | 3,097 |
1 Production cash cost per ounce of silver equivalent and all-in sustaining cash cost per ounce of silver equivalent are calculated using realized metal prices for each period respectively.
2 Production cash cost per tonne, production cash cost per ounce of silver equivalent, and all-in sustaining cash cost per ounce of silver equivalent are non-IFRS financial measures, refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
3 Capital expenditures are presented on a cash basis
In the second quarter of 2023, the San Jose Mine produced 957,265 ounces of silver and 5,778 ounces of gold,
The decrease in production is explained by the 15-day full shutdown of operations due to the illegal blockade by the workers’ union related to demands for higher profit sharing distributions and higher absenteeism and resignations of personnel following the resolution of the blockade. The 15-day shutdown reduced planned production for the quarter by 47,200 tonnes and impacted mine preparation, delaying access to higher grade stopes planned in the quarter. The Company has adjusted its mine plan to access these higher grade stopes in the third quarter and has taken the necessary steps to address worker absenteeism.
The cash cost per tonne for the three months ended June 30, 2023, was
All-in sustaining cash costs of payable silver equivalent for the three months ended June 30, 2023, increased
In the second quarter of 2023, sustaining capital expenditure was lower than the same period in 2022, due to the one-time purchase of two scooptrams in 2022. This was partially offset by higher development costs in this quarter. Brownfields expenditures continued to face challenges stemming from geological and operational delays.
Caylloma Mine, Peru
Three months ended June 30, | Six months ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Mine Production | ||||||||||||
Tonnes milled | 137,004 | 135,977 | 262,999 | 268,552 | ||||||||
Average tonnes milled per day | 1,539 | 1,528 | 1,494 | 1,526 | ||||||||
Silver | ||||||||||||
Grade (g/t) | 84 | 77 | 83 | 83 | ||||||||
Recovery (%) | 83 | 79 | 81 | 81 | ||||||||
Production (oz) | 305,296 | 267,559 | 588,362 | 579,498 | ||||||||
Metal sold (oz) | 336,086 | 279,051 | 599,656 | 573,352 | ||||||||
Realized price ($/oz) | 24.13 | 22.89 | 23.30 | 23.35 | ||||||||
Gold | ||||||||||||
Grade (g/t) | 0.12 | 0.17 | 0.16 | 0.16 | ||||||||
Recovery (%) | 16 | 43 | 40 | 40 | ||||||||
Production (oz) | 89 | 307 | 255 | 565 | ||||||||
Metal sold (oz) | — | 278 | 22 | 603 | ||||||||
Realized price ($/oz) | — | 1,897 | 1,895 | 1,864 | ||||||||
Lead | ||||||||||||
Grade (%) | 3.72 | 3.00 | 3.27 | 3.27 | ||||||||
Recovery (%) | 91 | 85 | 87 | 88 | ||||||||
Production (000's lbs) | 10,207 | 7,637 | 19,716 | 16,771 | ||||||||
Metal sold (000's lbs) | 11,419 | 8,021 | 20,201 | 16,596 | ||||||||
Realized price ($/lb) | 0.96 | 1.02 | 0.99 | 1.04 | ||||||||
Zinc | ||||||||||||
Grade (%) | 5.18 | 4.09 | 4.14 | 4.14 | ||||||||
Recovery (%) | 90 | 89 | 89 | 89 | ||||||||
Production (000's lbs) | 14,037 | 10,886 | 27,088 | 21,713 | ||||||||
Metal sold (000's lbs) | 13,986 | 10,920 | 27,800 | 21,466 | ||||||||
Realized price ($/lb) | 1.23 | 1.79 | 1.34 | 1.74 | ||||||||
Unit Costs | ||||||||||||
Production cash cost ($/t)2 | 103.38 | 93.31 | 100.84 | 91.48 | ||||||||
Production cash cost ($/oz Ag Eq)1,2 | 14.76 | 13.14 | 14.02 | 12.77 | ||||||||
All-in sustaining cash cost ($/oz Ag Eq)1,2 | 19.18 | 18.19 | 18.12 | 18.01 | ||||||||
Capital Expenditures ( | ||||||||||||
Sustaining | 2,943 | 3,793 | 5,753 | 7,742 | ||||||||
Brownfields | 336 | 207 | 540 | 531 |
1 Production cash cost per ounce of silver equivalent and all-in sustaining cash cost per ounce of silver equivalent are calculated using realized metal prices for each period respectively.
2 Production cash cost per tonne, production cash cost per ounce of silver equivalent, and all-in sustaining cash cost per ounce of silver equivalent are non-IFRS financial measures, refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
3 Capital expenditures are presented on a cash basis.
The Caylloma Mine produced 305,296 ounces of silver, 10.2 million pounds of lead, and 14.0 million pounds of zinc during the second quarter of 2023. Silver production was
The cash cost per tonne of processed ore for the three months ended June 30, 2023 increased
The all-in sustaining cash cost per ounce of payable silver equivalent for the three months ended June 30, 2023, increased
Capital costs for the period primarily consisted of underground development in mine levels 15, 16 and 18.
Qualified Person
Eric Chapman, Senior Vice President of Technical Services, is a Professional Geoscientist of the Engineers and Geoscientists of British Columbia (Registration Number 36328), and is the Company’s Qualified Person (as defined by National Instrument 43-101). Mr. Chapman has reviewed and approved the scientific and technical information contained in this news release and has verified the underlying data.
Raul Espinoza, F.AusIMM CP, Director of Technical Services for the Company is a Qualified Person as defined by NI 43-101, and has reviewed and approved the scientific and technical information pertaining to the Séguéla Project contained in this MD&A and has verified the underlying data.
Non-IFRS Financial Measures
The Company has disclosed certain financial measures and ratios in this news release which are not defined under the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, and are not disclosed in the Company's financial statements, including but not limited to: cash cost per ounce of gold sold; all-in sustaining cash cost per ounce of gold sold; all-in sustaining cash cost per ounce of gold equivalent sold; all-in cash cost per ounce of gold sold; production cash cost per ounce of gold equivalent; total production cash cost per tonne; cash cost per payable ounce of silver equivalent sold; all-in sustaining cash cost per payable ounce of silver equivalent sold; all-in cash cost per payable ounce of silver equivalent sold; free cash flow from ongoing operations; adjusted net income; adjusted EBITDA and working capital.
These non-IFRS financial measures and non-IFRS ratios are widely reported in the mining industry as benchmarks for performance and are used by management to monitor and evaluate the Company's operating performance and ability to generate cash. The Company believes that, in addition to financial measures and ratios prepared in accordance with IFRS, certain investors use these non-IFRS financial measures and ratios to evaluate the Company’s performance. However, the measures do not have a standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other companies. Accordingly, non-IFRS financial measures and non-IFRS ratios should not be considered in isolation or as a substitute for measures and ratios of the Company’s performance prepared in accordance with IFRS. The Company has calculated these measures consistently for all periods presented.
To facilitate a better understanding of these measures and ratios as calculated by the Company, descriptions are provided below. In addition see “Non-IFRS Financial Measures” in the Company’s management’s discussion and analysis for the three and six months ended June 30, 2023 (“Q2 2023 MDA”), which section is incorporated by reference in this news release, for additional information regarding each non-IFRS financial measure and non-IFRS ratio disclosed in this news release, including an explanation of their composition; an explanation of how such measures and ratios provide useful information to an investor and the additional purposes, if any, for which management of the Company uses such measures and ratio. The Q2 2023 MD&A may be accessed on SEDAR+ at www.sedarplus.ca under the Company’s profile.
Except as otherwise described in the Q2 2023 MD&A, the Company has calculated these measures consistently for all periods presented.
Reconciliation to adjusted net income for the three and six months ended June 30, 2023 and 2022
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
Consolidated (in millions of US dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net income | 3.5 | 1.7 | 15.3 | 28.6 | |||||||||||
Adjustments, net of tax: | |||||||||||||||
Community support provision and accruals1 | - | - | (0.1 | ) | - | ||||||||||
Foreign exchange loss, Séguéla Project | (0.2 | ) | - | (0.1 | ) | - | |||||||||
Write off of mineral properties | - | - | - | 1.5 | |||||||||||
Unrealized loss on derivatives | (1.3 | ) | (4.4 | ) | (0.3 | ) | (2.2 | ) | |||||||
Inventory adjustment | 0.8 | 3.3 | 0.8 | 3.3 | |||||||||||
Accretion on right of use assets | 0.5 | 0.6 | 1.1 | 1.2 | |||||||||||
Other non-cash/non-recurring items | (0.4 | ) | 0.9 | (0.6 | ) | 3.0 | |||||||||
Adjusted Net Income | 2.9 | 2.1 | 16.1 | 35.4 | |||||||||||
1 Amounts are recorded in Cost of sales | |||||||||||||||
2 Amounts are recorded in General and Administration | |||||||||||||||
Figures may not add due to rounding |
Reconciliation to adjusted EBITDA for the three and six months ended June 30, 2023 and 2022
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
Consolidated (in millions of US dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net income | 3.5 | 1.7 | 15.3 | 28.6 | |||||||||||
Adjustments: | |||||||||||||||
Community support provision and accruals | - | - | (0.1 | ) | - | ||||||||||
Inventory adjustment | 1.0 | 4.0 | 0.9 | 4.0 | |||||||||||
Foreign exchange loss, Séguéla Mine | (0.2 | ) | 0.3 | (0.1 | ) | 0.9 | |||||||||
Net finance items | 3.5 | 3.7 | 6.1 | 6.5 | |||||||||||
Depreciation, depletion, and amortization | 39.8 | 42.5 | 84.2 | 80.6 | |||||||||||
Income taxes | 1.0 | 13.6 | 9.0 | 20.4 | |||||||||||
Other non-cash/non-recurring items | (4.2 | ) | (7.9 | ) | (5.8 | ) | (2.9 | ) | |||||||
Adjusted EBITDA | 44.4 | 57.9 | 109.5 | 138.1 |
Figures may not add due to rounding
Reconciliation of free cash flow from ongoing operations for the three and six months ended June 30, 2023 and 2022
In 2022, the Company changed the method for calculating free cash flow from ongoing operations. The calculation now uses taxes paid as opposed to the previous method which used current income taxes. While this may create larger quarter over quarter fluctuations due to the timing of income tax payments, management believes the revised method is a better representation of the free cash flow generated by the Company’s ongoing operations.
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(Expressed in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net cash provided by operating activities | 44.2 | 47.4 | 85.4 | 80.0 | |||||||||||
Adjustments | |||||||||||||||
Séguéla, working capital | 4.4 | - | 4.4 | - | |||||||||||
Additions to mineral properties, plant and equipment | (36.2 | ) | (25.5 | ) | (66.5 | ) | (46.0 | ) | |||||||
Mexican royalty payment | - | 3.0 | - | 3.0 | |||||||||||
Other adjustments | (2.9 | ) | (3.0 | ) | (5.7 | ) | (6.0 | ) | |||||||
Free cash flow from ongoing operations | 9.5 | 21.9 | 17.6 | 31.0 |
Figures may not add due to rounding
Reconciliation of cash cost per ounce of gold sold for the three and six months ended June 30, 2023 and 2022
Lindero Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Cost of sales | 40,280 | 41,326 | 82,005 | 77,194 | ||||||||||||
Changes in doré inventory | 11 | (305 | ) | (1,320 | ) | 712 | ||||||||||
Inventory adjustment | - | (739 | ) | 15 | - | |||||||||||
Export duties | (3,850 | ) | (4,284 | ) | (7,776 | ) | (8,292 | ) | ||||||||
Depletion and depreciation | (11,873 | ) | (14,296 | ) | (25,065 | ) | (26,305 | ) | ||||||||
By product credits | (2,486 | ) | - | (3,284 | ) | - | ||||||||||
Production cash cost | 22,082 | 21,702 | 44,575 | 43,309 | ||||||||||||
Changes in doré inventory | (11 | ) | 305 | 1,320 | (712 | ) | ||||||||||
Realized gain in diesel hedge | - | (1,037 | ) | - | (1,819 | ) | ||||||||||
Cash cost applicable per gold ounce sold | A | 22,071 | 20,970 | 45,895 | 40,778 | |||||||||||
Ounces of gold sold | B | 25,104 | 30,534 | 51,843 | 59,141 | |||||||||||
Cash cost per ounce of gold sold ($/oz) | =A/B | 879 | 687 | 885 | 690 | |||||||||||
Yaramoko Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Cost of sales | 38,353 | 44,240 | 83,216 | 82,281 | ||||||||||||
Changes in doré inventory | - | - | - | (1,320 | ) | |||||||||||
Inventory net realizable value adjustment | (827 | ) | (4,027 | ) | (827 | ) | (4,027 | ) | ||||||||
Export duties | (3,086 | ) | (2,748 | ) | (6,448 | ) | (6,081 | ) | ||||||||
Depletion and depreciation | (15,788 | ) | (14,626 | ) | (33,156 | ) | (28,654 | ) | ||||||||
Refining charges | - | (174 | ) | - | (329 | ) | ||||||||||
By product credits | - | (20 | ) | - | (25 | ) | ||||||||||
Production cash cost | 18,652 | 22,645 | 42,785 | 41,845 | ||||||||||||
Changes in doré inventory | - | - | - | 1,320 | ||||||||||||
Refining charges | - | 174 | - | 329 | ||||||||||||
Cash cost applicable per gold ounce sold | A | 18,652 | 22,819 | 42,785 | 43,494 | |||||||||||
Ounces of gold sold | B | 25,946 | 24,598 | 55,418 | 54,128 | |||||||||||
Cash cost per ounce of gold sold ($/oz) | =A/B | 719 | 928 | 772 | 804 | |||||||||||
Reconciliation of cash cost per ounce of gold equivalent sold for the three and six months ended June 30, 2023 and 2022
Consolidated | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Cost of sales | 126,542 | 135,328 | 261,760 | 254,157 | ||||||||||||
Changes in concentrate inventory and dore inventory | 151 | (545 | ) | (1,383 | ) | (660 | ) | |||||||||
Cost of sales-Right of use | 761 | - | 1,456 | - | ||||||||||||
Depletion and depreciation in concentrate inventory | 82 | (38 | ) | (90 | ) | (185 | ) | |||||||||
Inventory adjustment | (1,813 | ) | (5,309 | ) | (1,703 | ) | (12,053 | ) | ||||||||
Royalties, export duties and mining taxes | (8,495 | ) | (8,602 | ) | (17,206 | ) | (35,595 | ) | ||||||||
Provision for community support | (52 | ) | 100 | (78 | ) | (26 | ) | |||||||||
Workers' participation | (164 | ) | (491 | ) | (627 | ) | (1,831 | ) | ||||||||
Depletion and depreciation | (39,598 | ) | (42,160 | ) | (83,553 | ) | (53,593 | ) | ||||||||
By product credits | (2,486 | ) | (20 | ) | (3,284 | ) | (25 | ) | ||||||||
Production cash cost | 74,928 | 78,263 | 155,292 | 150,189 | ||||||||||||
Changes in concentrate inventory and dore inventory | (151 | ) | 545 | 1,383 | 660 | |||||||||||
Cost of sales-Right of use | (761 | ) | - | (1,456 | ) | - | ||||||||||
Depletion and depreciation in concentrate inventory | (82 | ) | 38 | 90 | 185 | |||||||||||
Inventory adjustment | 986 | 543 | 891 | (266 | ) | |||||||||||
Realized gain in diesel hedge | - | (1,037 | ) | - | (1,819 | ) | ||||||||||
Treatment charges | 5,385 | 4,107 | 10,424 | 8,112 | ||||||||||||
Refining charges | 984 | 1,292 | 2,175 | 2,556 | ||||||||||||
Cash cost applicable per gold equivalent ounce sold | A | 81,289 | 83,751 | 168,799 | 159,617 | |||||||||||
Ounces of gold equivalent sold | B | 83,994 | 96,105 | 179,534 | 194,548 | |||||||||||
Cash cost per ounce of gold equivalent sold ($/oz) | =A/B | 968 | 871 | 940 | 820 | |||||||||||
Gold equivalent was calculated using the realized prices for gold of | ||||||||||||||||
Gold equivalent was calculated using the realized prices for gold of | ||||||||||||||||
Reconciliation of all-in sustaining cash cost per ounce of gold sold for the three and six months ended June 30, 2023 and 2022
Lindero Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||
Cash cost applicable | 22,071 | 20,970 | 45,895 | 40,778 | ||||||||
Export duties and mining taxes | 3,850 | 4,284 | 7,776 | 8,292 | ||||||||
General and administrative expenses (operations) | 2,507 | 2,548 | 4,499 | 4,453 | ||||||||
Adjusted operating cash cost | 28,428 | 27,802 | 58,170 | 53,523 | ||||||||
Sustaining leases | 599 | 563 | 1,197 | 1,268 | ||||||||
Sustaining capital expenditures1 | 13,337 | 6,123 | 21,082 | 9,248 | ||||||||
Brownfields exploration expenditures1 | - | 646 | - | 790 | ||||||||
All-in sustaining cash cost | 42,364 | 35,134 | 80,449 | 64,829 | ||||||||
Non-sustaining capital expenditures1 | 136 | - | 323 | 169 | ||||||||
All-in cash cost | 42,500 | 35,134 | 80,772 | 64,998 | ||||||||
Ounces of gold sold | 25,104 | 30,534 | 51,843 | 59,141 | ||||||||
All-in sustaining cash cost per ounce of gold sold | 1,688 | 1,151 | 1,552 | 1,096 | ||||||||
All-in cash cost per ounce of gold sold | 1,693 | 1,151 | 1,558 | 1,099 | ||||||||
1 Presented on a cash basis |
Yaramoko Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||
Cash cost applicable | 18,652 | 22,819 | 42,785 | 43,494 | ||||||||
Inventory net realizable value adjustment | 334 | 1,955 | 334 | 1,955 | ||||||||
Export duties and mining taxes | 3,086 | 2,748 | 6,448 | 6,081 | ||||||||
General and administrative expenses (operations) | 609 | 472 | 1,498 | 882 | ||||||||
Standby costs | 2,999 | - | 2,999 | - | ||||||||
Adjusted operating cash cost | 25,680 | 27,994 | 54,064 | 52,412 | ||||||||
Sustaining leases | 1,161 | 1,419 | 2,520 | 2,854 | ||||||||
Sustaining capital expenditures1 | 14,318 | 9,085 | 27,867 | 16,446 | ||||||||
Brownfields exploration expenditures1 | 1,019 | - | 2,210 | 488 | ||||||||
All-in sustaining cash cost | 42,178 | 38,498 | 86,661 | 72,200 | ||||||||
All-in cash cost | 42,178 | 38,498 | 86,661 | 72,200 | ||||||||
Ounces of gold sold | 25,946 | 24,598 | 55,418 | 54,128 | ||||||||
All-in sustaining cash cost per ounce of gold sold | 1,626 | 1,565 | 1,564 | 1,334 | ||||||||
All-in cash cost per ounce of gold sold | 1,626 | 1,565 | 1,564 | 1,334 | ||||||||
1 Presented on a cash basis |
Reconciliation of all-in sustaining cash cost per ounce of gold equivalent sold for the three and six months ended June 30, 2023 and 2022
Consolidated | Three months ended June 30, | Six months ended June 30, | |||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | |||||||||
Cash cost applicable | 81,289 | 83,751 | 168,800 | 159,617 | |||||||||
Cost of sales-Right of use | 334 | 1,955 | 334 | 1,955 | |||||||||
Inventory adjustment - cash portion | 8,495 | 8,602 | 17,206 | 17,582 | |||||||||
Royalties, export duties and mining taxes | 168 | 592 | 706 | 2,206 | |||||||||
Workers' participation | 6,128 | 5,856 | 11,955 | 10,819 | |||||||||
General and administrative expenses (operations) | 8,312 | 8,525 | 17,081 | 19,864 | |||||||||
General and administrative expenses (Corporate) | 7,083 | - | 7,083 | - | |||||||||
Adjusted operating cash cost | 111,809 | 109,281 | 223,165 | 212,043 | |||||||||
Care and maintenance costs (impact of COVID-19) | - | (2 | ) | - | - | ||||||||
Sustaining leases | 2,931 | 3,087 | 5,906 | 6,092 | |||||||||
Sustaining capital expenditures | 34,192 | 23,052 | 62,068 | 41,063 | |||||||||
Brownfields exploration expenditures | 2,142 | 2,421 | 4,625 | 4,905 | |||||||||
All-in sustaining cash cost | 151,074 | 137,839 | 295,764 | 264,103 | |||||||||
Payable ounces of gold equivalent sold | 83,994 | 96,105 | 179,534 | 194,548 | |||||||||
All-in sustaining cash cost per ounce of gold equivalent sold | 1,799 | 1,434 | 1,647 | 1,358 | |||||||||
Gold equivalent was calculated using the realized prices for gold of | |||||||||||||
Gold equivalent was calculated using the realized prices for gold of |
Reconciliation of production cash cost per tonne and cash cost per payable ounce of silver equivalent sold for the three and six months ended June 30, 2023 and 2022
San Jose Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Cost of sales | 29,366 | 32,478 | 61,889 | 61,377 | ||||||||||||
Changes in concentrate inventory | (89 | ) | (5 | ) | (18 | ) | 72 | |||||||||
Cost of sales-right of use | 193 | - | 326 | - | ||||||||||||
Depletion and depreciation in concentrate inventory | 29 | 2 | - | (19 | ) | |||||||||||
Inventory adjustment | (165 | ) | (583 | ) | (294 | ) | (46 | ) | ||||||||
Royalties and mining taxes | (1,040 | ) | (1,349 | ) | (2,297 | ) | (2,741 | ) | ||||||||
Workers participation | 267 | (170 | ) | 250 | (897 | ) | ||||||||||
Depletion and depreciation | (8,532 | ) | (9,319 | ) | (18,444 | ) | (17,606 | ) | ||||||||
Cash cost3 | A | 20,029 | 21,054 | 41,412 | 40,140 | |||||||||||
Total processed ore (tonnes) | B | 194,887 | 251,945 | 441,623 | 502,892 | |||||||||||
Production cash cost per tonne ($/t) | =A/B | 102.77 | 83.57 | 93.77 | 79.82 | |||||||||||
Cash cost3 | A | 20,029 | 21,054 | 41,412 | 40,140 | |||||||||||
Changes in concentrate inventory | 89 | 5 | 18 | (72 | ) | |||||||||||
Depletion and depreciation in concentrate inventory | (29 | ) | (2 | ) | - | 19 | ||||||||||
Inventory adjustment | 165 | 583 | 294 | 46 | ||||||||||||
Treatment charges | 445 | (146 | ) | 225 | (55 | ) | ||||||||||
Refining charges | 668 | 920 | 1,612 | 1,792 | ||||||||||||
Cash cost applicable per payable ounce sold | C | 21,367 | 22,414 | 43,561 | 41,870 | |||||||||||
Payable ounces of silver equivalent sold1 | D | 1,341,320 | 2,037,238 | 3,284,402 | 3,905,109 | |||||||||||
Cash cost per ounce of payable silver equivalent sold2 ($/oz) | =C/D | 15.93 | 11.00 | 13.26 | 10.72 | |||||||||||
Mining cost per tonne | 45.71 | 37.28 | 42.00 | 37.37 | ||||||||||||
Milling cost per tonne | 23.53 | 20.79 | 21.77 | 19.40 | ||||||||||||
Indirect cost per tonne | 22.01 | 15.67 | 20.64 | 15.15 | ||||||||||||
Community relations cost per tonne | 4.35 | 3.84 | 2.95 | 2.48 | ||||||||||||
Distribution cost per tonne | 7.17 | 5.99 | 6.41 | 5.42 | ||||||||||||
Production cash cost per tonne ($/t) | 102.77 | 83.57 | 93.77 | 79.82 | ||||||||||||
1 Silver equivalent sold for Q2 2023 is calculated using a silver to gold ratio of 81.9:1 (Q2 2022: 83.0:1). Silver equivalent sold for YTD 2023 is calculated using silver to gold ratio of 83.1:1 (YTD 2022: 80.1:1) | ||||||||||||||||
2 Silver equivalent is calculated using the realized prices for gold and silver. Refer to Financial Results – Sales and Realized Prices |
Caylloma Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Cost of sales | 18,543 | 17,284 | 34,651 | 33,305 | ||||||||||||
Changes in concentrate inventory | 229 | (235 | ) | (45 | ) | (124 | ) | |||||||||
Cost of sales-right of use | 568 | - | 1,130 | - | ||||||||||||
Depletion and depreciation in concentrate inventory | 53 | (40 | ) | (91 | ) | (166 | ) | |||||||||
Inventory adjustment | (822 | ) | 40 | (597 | ) | 312 | ||||||||||
Royalties and mining taxes | (519 | ) | (221 | ) | (685 | ) | (468 | ) | ||||||||
Provision for community support | (52 | ) | 100 | (78 | ) | (26 | ) | |||||||||
Workers participation | (431 | ) | (321 | ) | (877 | ) | (934 | ) | ||||||||
Depletion and depreciation | (3,405 | ) | (3,919 | ) | (6,888 | ) | (7,333 | ) | ||||||||
Cash cost3 | A | 14,164 | 12,688 | 26,520 | 24,566 | |||||||||||
Total processed ore (tonnes) | B | 137,004 | 135,978 | 263,000 | 268,552 | |||||||||||
Production cash cost per tonne ($/t) | =A/B | 103.38 | 93.31 | 100.84 | 91.48 | |||||||||||
Cash cost | A | 14,164 | 12,688 | 26,520 | 24,566 | |||||||||||
Changes in concentrate inventory | (229 | ) | 235 | 45 | 124 | |||||||||||
Depletion and depreciation in concentrate inventory | (53 | ) | 40 | 91 | 166 | |||||||||||
Inventory adjustment | 822 | (40 | ) | 597 | (312 | ) | ||||||||||
Treatment charges | 4,941 | 4,253 | 10,199 | 8,167 | ||||||||||||
Refining charges | 316 | 372 | 563 | 764 | ||||||||||||
Cash cost applicable per payable ounce sold | C | 19,961 | 17,548 | 38,015 | 33,475 | |||||||||||
Payable ounces of silver equivalent sold1 | D | 1,352,522 | 1,335,602 | 2,711,988 | 2,621,212 | |||||||||||
Cash cost per ounce of payable silver equivalent sold2,3 ($/oz) | =C/D | 14.76 | 13.14 | 14.02 | 12.77 | |||||||||||
Mining cost per tonne | 47.78 | 40.27 | 45.53 | 37.40 | ||||||||||||
Milling cost per tonne | 14.98 | 14.96 | 15.31 | 16.00 | ||||||||||||
Indirect cost per tonne | 30.75 | 29.51 | 30.10 | 30.04 | ||||||||||||
Community relations cost per tonne | 0.85 | 1.02 | 0.73 | 0.74 | ||||||||||||
Distribution cost per tonne | 9.02 | 7.55 | 9.17 | 7.30 | ||||||||||||
Production cash cost per tonne ($/t) | 103.38 | 93.31 | 100.84 | 91.48 | ||||||||||||
1 Silver equivalent sold for Q2 2023 is calculated using a silver to gold ratio of 0.0:1 (Q2 2022: 82.9:1), silver to lead ratio of 1:28.2 pounds (Q2 2022: 1:22.5), and silver to zinc ratio of 1:19.6 pounds (Q2 2022: 1:12.8). Silver equivalent sold for YTD 2023 is calculated using a silver to gold ratio of 81.3:1 (YTD 2022: 79.8:1), silver to lead ratio of 1:23.6 pounds (YTD 2022: 1:22.5), and silver to zinc ratio of 1:17.4 pounds (YTD 2022: 1:13.4). | ||||||||||||||||
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results - Sales and Realized Prices |
Reconciliation of all-in sustaining cash cost and all-in cash cost per payable ounce of silver equivalent sold for the three and six months ended June 30, 2023 and 2022
San Jose Mine | Three months ended June 30, | Six months ended June 30, | |||||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Cash cost applicable | 21,367 | 22,414 | 43,561 | 41,870 | |||||||||||
Cost of sales-right of use | (193 | ) | - | (326 | ) | - | |||||||||
Royalties and mining taxes | 1,040 | 1,349 | 2,297 | 2,741 | |||||||||||
Workers' participation | (333 | ) | 212 | (312 | ) | 1,121 | |||||||||
General and administrative expenses (operations) | 1,722 | 1,649 | 3,524 | 3,239 | |||||||||||
Stand-by costs | 4,084 | - | 4,084 | - | |||||||||||
Adjusted operating cash cost | 27,687 | 25,624 | 52,828 | 48,971 | |||||||||||
Care and maintenance costs (impact of COVID-19) | - | (2 | ) | - | - | ||||||||||
Sustaining leases | 214 | 149 | 376 | 306 | |||||||||||
Sustaining capital expenditures3 | 3,593 | 4,051 | 7,366 | 7,626 | |||||||||||
Brownfields exploration expenditures3 | 788 | 1,568 | 1,875 | 3,097 | |||||||||||
All-in sustaining cash cost | 32,282 | 31,390 | 62,445 | 60,000 | |||||||||||
Non-sustaining capital expenditures3 | 524 | 454 | 793 | 869 | |||||||||||
All-in cash cost | 32,806 | 31,844 | 63,238 | 60,869 | |||||||||||
Payable ounces of silver equivalent sold1 | 1,341,320 | 2,037,238 | 3,284,402 | 3,905,109 | |||||||||||
All-in sustaining cash cost per ounce of payable silver equivalent sold2 | 24.07 | 15.41 | 19.01 | 15.36 | |||||||||||
All-in cash cost per ounce of payable silver equivalent sold2 | 24.46 | 15.63 | 19.25 | 15.59 | |||||||||||
1 Silver equivalent sold for Q2 2023 is calculated using a silver to gold ratio of 81.9:1 (Q2 2022: 83.0:1). Silver equivalent sold for YTD 2023 is calculated using silver to gold ratio of 83.1:1 (YTD 2022: 80.1:1) | |||||||||||||||
2 Silver equivalent is calculated using the realized prices for gold and silver. Refer to Financial Results - Sales and Realized Prices | |||||||||||||||
3 Presented on a cash basis |
Caylloma Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||||
(Expressed in $'000's, except unit costs) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Cash cost applicable | 19,960 | 17,548 | 38,015 | 33,475 | ||||||||||
Cost of sales-right of use | (568 | ) | - | (1,130 | ) | - | ||||||||
Royalties and mining taxes | 519 | 221 | 685 | 468 | ||||||||||
Workers' participation | 501 | 380 | 1,018 | 1,085 | ||||||||||
General and administrative expenses (operations) | 1,290 | 1,187 | 2,434 | 2,245 | ||||||||||
Adjusted operating cash cost | 21,702 | 19,336 | 41,022 | 37,273 | ||||||||||
Sustaining leases | 957 | 956 | 1,813 | 1,664 | ||||||||||
Sustaining capital expenditures3 | 2,943 | 3,793 | 5,753 | 7,742 | ||||||||||
Brownfields exploration expenditures3 | 336 | 207 | 540 | 531 | ||||||||||
All-in sustaining cash cost | 25,938 | 24,292 | 49,128 | 47,210 | ||||||||||
All-in cash cost | 25,938 | 24,292 | 49,128 | 47,210 | ||||||||||
Payable ounces of silver equivalent sold1 | 1,352,522 | 1,335,602 | 2,711,988 | 2,621,212 | ||||||||||
All-in sustaining cash cost per ounce of payable silver equivalent sold2 | 19.18 | 18.19 | 18.12 | 18.01 | ||||||||||
All-in cash cost per ounce of payable silver equivalent sold2 | 19.18 | 18.19 | 18.12 | 18.01 | ||||||||||
1 Silver equivalent sold for Q2 2023 is calculated using a silver to gold ratio of 0.0:1 (Q2 2022: 82.9:1), silver to lead ratio of 1:28.2 pounds (Q2 2022: 1:22.5), and silver to zinc ratio of 1:19.6 pounds (Q2 2022: 1:12.8). Silver equivalent sold for YTD 2023 is calculated using a silver to gold ratio of 81.3:1 (YTD 2022: 79.8:1), silver to lead ratio of 1:23.6 pounds (YTD 2022: 1:22.5), and silver to zinc ratio of 1:17.4 pounds (YTD 2022: 1:13.4). | ||||||||||||||
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results - Sales and Realized Prices | ||||||||||||||
3 Presented on a cash basis | ||||||||||||||
Additional information regarding the Company’s financial results and activities underway are available in the Company’s audited consolidated financial statements for the three and six months ended June 30, 2023 and accompanying Q2 2023 MD&A, which are available for download on the Company’s website, www.fortunasilver.com, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar.
Conference Call and Webcast
A conference call to discuss the financial and operational results will be held on Thursday, August 10, 2023, at 9:00 a.m. Pacific time | 12:00 p.m. Eastern time. Hosting the call will be Jorge A. Ganoza, President and CEO, Luis D. Ganoza, Chief Financial Officer, Cesar Velasco, Chief Operating Officer – Latin America, David Whittle, Chief Operating Officer – West Africa, Paul Weedon, Senior Vice President, Exploration, and Julien Baudrand, Senior Vice President, Sustainability.
Shareholders, analysts, media and interested investors are invited to listen to the live conference call by logging onto the webcast at: https://www.webcaster4.com/Webcast/Page/1696/48784 or over the phone by dialing in just prior to the starting time.
Conference call details:
Date: Thursday, August 10, 2023
Time: 9:00 a.m. Pacific time | 12:00 p.m. Eastern time
Dial in number (Toll Free): +1.888.506.0062
Dial in number (International): +1.973.528.0011
Access code: 333780
Replay number (Toll Free): +1.877.481.4010
Replay number (International): +1.919.882.2331
Replay passcode: 48784
Playback of the earnings call will be available until Thursday, August 24, 2023. Playback of the webcast will be available until Saturday, August 10, 2024. In addition, a transcript of the call will be archived on the Company’s website.
About Fortuna Silver Mines Inc.
Fortuna Silver Mines Inc. is a Canadian precious metals mining company with four operating mines in Argentina, Burkina Faso, Côte d’Ivoire, Mexico, and Peru. 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 Director
Fortuna Silver Mines Inc.
Investor Relations:
Carlos Baca | info@fortunasilver.com | www.fortunasilver.com | X | LinkedIn | YouTube
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 include, without limitation, statements about the Company's plans for its mines and mineral properties; the Company’s anticipated financial and operational performance in 2023; estimated production and costs of production for 2023, including grade and volume of metal produced and sales, revenues and cashflows, and capital costs (sustaining and non-sustaining), and operating costs, including projected production cash costs and all-in sustaining costs; the ability of the Company to mitigate the inflationary pressures on supplies used in its operations; estimated capital expenditures and estimated exploration spending in 2023, including amounts for exploration activities at its properties; the anticipated timeline to ramp up production to design capacity at the Séguéla Mine and anticipated gold production in 2023; statements regarding the Company's liquidity, access to capital; the impact of high inflation on the costs of production and the supply chain; the Company's business strategy, plans and outlook; the merit of the Company's mines and mineral properties; mineral resource and reserve estimates, metal recovery rates, concentrate grade and quality; changes in tax rates and tax laws, requirements for permits, anticipated approvals and other matters. Often, but not always, these Forward-looking Statements can be identified by the use of words such as "estimated", “expected”, “anticipated”, "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; ; uncertainty relating to new mining operations such as the Séguéla Mine, including the possibility that actual capital and operating costs and economic returns will differ significantly from those estimated for such projects prior to production; Fortuna’s ability to ramp up in production to design capacity at the Séguéla Mine as estimated; 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; fluctuation in currencies and foreign exchange rates; increases in the rate of inflation; the imposition or any extension of capital controls in countries in which the Company operates; any changes in tax laws in Argentina and the other countries in which we operate; 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 Minera Cuzcatlan to successfully contest and revoke the resolution of SEMARNAT which revoked the environmental impact authorization at the San Jose mine; 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); that production at the Séguéla Mine will ramp up to design capacity as anticipated; geo-political uncertainties that may affect the Company’s production, workforce, business, operations and financial condition; the expected trends in mineral prices and currency exchange rates; that the Company will be successful in mitigating the impact of inflation on its business and operations; that Minera Cuzcatlan will be successful in the legal proceedings to reinstate the environmental impact authorization at the San Jose mine; 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, the ability to meet current and future obligations 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.