Fortuna reports results for the first quarter of 2023
NEWS RELEASE
Fortuna reports results for the first quarter of 2023
(All amounts are expressed in US dollars, tabular amounts in millions, unless otherwise stated)
Vancouver, May 15, 2023: Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) (“Fortuna” or the “Company”) today reported its financial and operating results for the first quarter of 2023.
First Quarter 2023 highlights
Financial
- Adjusted net income of $13.2 million or $0.05 per share
- Net income of $11.9 million or $0.04 per share
- Adjusted EBITDA1 of $65.3 million
- Net cash provided by operating activities $41.8 million and free cash flow from ongoing operations of $8.5 million
- Liquidity as of March 31, 2023 was $129.7 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 60,092 ounces
- Silver production of 1,586,378 ounces
- Gold equivalent production of 94,110 ounces
- Consolidated cash costs1 per ounce of gold equivalent sold of $916
- Consolidated AISC1 per ounce of gold equivalent sold of $1,514
- Lost Time Injury Frequency Rate (LTIFR) of 0.56 and Total Recordable Injury Frequency Rate (TRIFR) of 1.39
Growth and Development
- On May 8, 2023 Fortuna announced a definitive agreement to acquire Chesser Resources Ltd. by way of an all share transaction for a total consideration of A$89.0 million (CAD$80.6). Upon completion, the former shareholders of Chesser will own approximately 5.1% of the shares of Fortuna on an undiluted basis. Chesser Resources’ Diamba Sud Project in Senegal expands Fortuna’s advanced exploration pipeline in West Africa.
- First gold pour at the Séguéla mine in Cote d’Ivoire is planned for May 2023
Jorge A. Ganoza, President and CEO, commented, “Production and total cost per ounce for the first quarter were overall on plan, resulting in net earnings per share of $0.04 and free cash flow from operations of $8.5 million. Commissioning activities at Séguéla are well advanced and tracking according to plan for first gold pour in May, giving us a higher level of confidence in a smooth ramp-up process towards design capacity.” Mr. Ganoza continued, “The announced Chesser transaction meets our strategic objective of expanding our asset portfolio of high value opportunities in countries where we operate or near neighbours.” Mr. Ganoza concluded, “The Chesser acquisition provides for an exciting advanced exploration opportunity, expanding our West African presence to Senegal, a mining friendly jurisdiction, and into the heart of the Senegal-Mali shear zone, one of the most prolific gold belts in the West African region.”
First Quarter 2023 Consolidated Results
| Three months ended March 31, | |||
|---|---|---|---|
| (Expressed in millions) | 2023 | 2022 | % Change |
| Sales | 175.7 | 182.3 | (4%) |
| Mine operating income | 40.4 | 63.5 | (36%) |
| Operating (loss) income | 23.9 | 40.7 | (41%) |
| Net (loss) income | 11.9 | 27.0 | (56%) |
| (Loss) earnings per share - basic | 0.04 | 0.09 | (56%) |
| Adjusted net income1 | 13.2 | 33.3 | (60%) |
| Adjusted EBITDA1 | 65.3 | 80.3 | (19%) |
| Net cash provided by operating activities | 41.8 | 33.2 | 26% |
| Free cash flow from ongoing operations1 | 8.5 | 9.6 | (11%) |
| Production cash cost ($/oz Au Eq) | 916 | 772 | 19% |
| All-in sustaining cash cost ($/oz Au Eq) | 1,514 | 1,284 | 18% |
Capital expenditures2
| Sustaining | 27.9 | 18.0 | 55% |
| Non-sustaining3 | 1.2 | 1.9 | (37%) |
| Séguéla construction | 25.7 | 42.9 | (40%) |
| Brownfields | 4.9 | 2.5 | 96% |
| As at | March 31, 2023 December 31, 2022 % Change | ||
| Cash and cash equivalents | 84.7 | 80.5 | 5% |
| Net liquidity position | 129.7 | 150.5 | (14%) |
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.sedar.com 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
First Quarter 2023 Results
Net income for the quarter was $11.9 million compared to $27.0 million in Q1 2022. After adjusting for non-cash and nonrecurring items, adjusted net income of $13.2 million for Q1 2023 was $20.1 million lower than Q1 2022. The decrease in adjusted net income was primarily due to higher operating expenses related mainly to higher input costs across our operations and lower operating margins at Yaramoko and Lindero related to lower head grades. This impact was combined with slightly lower sales of $6.7 million, mostly explained by lower silver prices of $22.52 per ounce in Q1 2023 compared to $24.18 per ounce in Q1 2022. These effects were partially offset by lower general and administrative expenses of $2.0 million compared to Q1 2022.
Adjusted EBITDA for the quarter was $65.3 million, a 36% margin over sales, compared to $80.3 million reported in Q1 2022, representing a 44% margin over sales. The main driver for the decrease in EBITDA were higher operating costs and slightly lower sales as described above.
Net cash generated by operations for the quarter was $41.8 million or $0.14 per share compared to $33.2 million or $0.11 per share in Q1 2022. The increase reflects lower EBITDA of $15.0 million offset by negative changes in working capital in the current quarter of $10.8 million versus negative changes of $27.9 million in Q1 2022, and lower-income taxes paid of $7.1 million.
Free cash flow from ongoing operations for the quarter was $8.5 million, compared to $9.6 million in Q1 2022. The decrease is the result of higher net cash generated by operations of $8.6 million compared to the Q1 2022, offset by higher sustaining capex and brownfields exploration at our operating mines of $12.3 million in Q1 2023.
Fortuna | 2
Liquidity
The Company’s total liquidity available as of March 31, 2023 was $129.7 million, comprised of $84.7 million in cash and cash equivalents, and $45.0 million undrawn on the $250.0 million revolving credit facility.
Séguéla Gold Project Construction Update
As of March 31, 2023, the Séguéla Gold Project had approximately $22.5 million in remaining spend of the project’s $173.5 million total initial capital, and the project remains on-time and on-budget. The Company’s cash and cash equivalents balance, free cash flow from ongoing operations and undrawn amounts of the revolving credit facility are expected to fund the remaining construction spend of the Séguéla Gold Project.
Lindero Mine, Argentina
| Three months ended March 31, | |
|---|---|
| 2023 | 2022 |
Mine Production Tonnes placed on the leach pad 1,478,148 1,295,755
Gold
| Grade (g/t) | 0.71 | 0.88 |
| Production (oz) | 25,258 | 30,068 |
| Metal sold (oz) | 26,812 | 28,619 |
| Realized price ($/oz) | 1,885 | 1,890 |
Unit Costs Cash cost ($/oz Au)1 891 692 All-in sustaining cash cost ($/oz Au)1 1,424 1,038
Capital Expenditures ($000's) 2
| Sustaining | 7,745 | 3,125 |
| Non-sustaining | 187 | 169 |
| Brownfields | – | 144 |
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.sedar.com 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 first quarter of 2023, a total of 1,478,148 tonnes of ore were placed on the heap leach pad, with an average gold grade of 0.71 g/t, containing and estimated 33,510 ounces of gold. Gold production for Q1 2023 totaled 25,258 ounces, representing a 16% decrease year-over-year. The decline in gold production can primarily be attributed to a decrease in the head grade of mineralized material placed on the leach pad, which is aligned with the planned mining sequence. Mine production was 1.6 million tonnes of mineralized material, with a strip ratio of 1.07:1. This stripping ratio is consistent with the operation's plan for the year, which anticipates a ratio of 1.17:1.
Cash cost per ounce of gold for Q1 2023, was $891 compared to $692 in the Q1 2022. Cash cost per ounce of gold was higher due to lower production, higher prices of key consumables due to inflation, higher equipment rental costs due to lower fleet availability, and timing of plant maintenance. This was partially offset by higher stripping capitalization.
All-in sustaining cash cost per gold ounce sold was $1,424 during Q1 2023 compared with $1,038 in Q1 2022. All-in sustaining cash cost for Q1 2023 was impacted by the cost issues described above, compounded by lower ounces sold and higher sustaining capital spend, partially offset by a positive by-product effect from copper.
Fortuna | 3
During the quarter, sustaining capital expenditures were primarily a result of Phase II expansion of the leach pad, routine maintenance, and several minor projects. There were no brownfields exploration capital investments made within this period.
Yaramoko Mine Complex, Burkina Faso
| Three months ended March 31, | |
|---|---|
| 2023 | 2022 |
Mine Production Tonnes milled 139,650 127,968
Gold
| Grade (g/t) | 5.94 | 7.50 |
| Recovery (%) | 97 | 98 |
| Production (oz) | 26,437 | 28,235 |
| Metal sold (oz) | 29,530 | 29,530 |
| Realized price ($/oz) | 1,899 | 1,878 |
Unit Costs Cash cost ($/oz Au)1 819 705 All-in sustaining cash cost ($/oz Au)1 1,509 1,147
Capital Expenditures ($000's) 2 Sustaining 13,549 7,361 Brownfields 1,191 488 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.sedar.com for a description of the calculation of these measures.
2 Capital expenditures are presented on a cash basis.
The Yaramoko Mine produced 26,437 ounces of gold in the Q1 2023 with an average gold head grade of 5.94g/t, a 6% decrease, respectively, when compared to Q1 2022. Higher mill throughput contributed positively to the operation, offset by reduced operating time due to planned maintenance and lower head grades. Production for the quarter was in line with the mining sequence and Mineral Reserves estimate.
Underground mineralized material was sourced from the 55 Zone, with development also contributing from outside of the current resource boundary on the western side of the deposit.
Cash cost per ounce of gold sold in Q1 2023, was $819, compared to $705 in Q1 2022. Cash cost per ounce increased due to higher processing costs resulting from increased maintenance costs and the impact of inflation on key consumables and mining costs. Processing costs were also higher as a result of processing of increased tonnes at lower grades.
All-in sustaining cash cost per gold ounce sold was $1,509 for Q1 2023, compared to $1,147 in Q1 2022. This increase was as a result of a decrease in production, increased cash cost, and higher capital expenditures.
Sustaining capital in Q1 2023 increased due to higher mine development. Brownfields expenditure was primarily higher due to an increase in diamond drilling meters.
Fortuna | 4
San Jose Mine, Mexico
| Three months ended March 31, | |
|---|---|
| 2023 | 2022 |
Mine Production Tonnes milled 246,736 250,947 Average tonnes milled per day 2,869 2,918
Silver
| Grade (g/t) | 181 | 185 | ||
| Recovery (%) | 91 | 91 | ||
| Production (oz) | 1,303,312 | 1,358,189 | ||
| Metal sold (oz) | 1,328,333 | 1,316,193 | ||
| Realized price ($/oz) | 22.58 | 24.27 |
Gold
| Grade (g/t) | 1.15 | 1.13 |
| Recovery (%) | 90 | 90 |
| Production (oz) | 8,231 | 8,239 |
| Metal sold (oz) | 8,355 | 7,952 |
| Realized price ($/oz) | 1,900 | 1,890 |
Unit Costs
| Production cash cost ($/t)2 | 86.66 | 76.05 |
| Production cash cost ($/oz Ag Eq)1,2 | 11.42 | 10.42 |
| All-in sustaining cash cost ($/oz Ag Eq)1,2 | 15.51 | 15.32 |
Capital Expenditures ($000's) 3
| Sustaining | 3,772 | 3,575 |
| Non-sustaining | 269 | 415 |
| Brownfields | 1,088 | 1,529 |
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.sedar.com for a description of the calculation of these measures.
3 Capital expenditures are presented on a cash basis.
In the first quarter of 2023, the San Jose Mine produced 1,303,312 ounces of silver and 8,231 ounces of gold, 4% and unchanged, respectively, when compared to Q1 2022. Production for the quarter was aligned with the mining sequence and Mineral Reserves estimate.
The cash cost per tonne for Q1 2023, was $86.66 compared to $76.05 in Q1 2022. The increase was primarily due to inflation and the appreciation of the Mexican Peso, affecting consumables, labor costs and other services paid in local currency.
All-in sustaining cash costs of payable per ounce of silver equivalent for Q1 2023, increased 2% to $15.58 per ounce, compared to $15.32 in Q1 2022. The increase was due to higher cash costs partially offset by lower sustaining capital expenditures and increased silver equivalent production, mainly due to lower silver prices.
In the first quarter of 2023, sustaining capital expenditures were lower than expected, primarily due to delays in executing purchases related to components and overhauls. This contrasts with Q1 2022, when significant planned mine acquisitions had been carried over from the previous quarter. The decrease in Q1 2023 was partially offset by an increase in expenditures related to development and infill drilling meters. Brownfields exploration expenditures faced challenges from geological and operational delays, but accelerated spending is anticipated in Q2 2023.
Fortuna | 5
Caylloma Mine, Peru
| Three months ended March 31, | |
|---|---|
| 2023 | 2022 |
Mine Production Tonnes milled 125,995 132,574 Average tonnes milled per day 1,448 1,524
Silver
| Grade (g/t) | 85 | 89 |
| Recovery (%) | 82 | 82 |
| Production (oz) | 283,066 | 311,939 |
| Metal sold (oz) | 263,570 | 294,301 |
| Realized price ($/oz) | 22.24 | 23.78 |
Gold
| Grade (g/t) | 0.15 | 0.16 |
| Recovery (%) | 27 | 37 |
| Production (oz) | 166 | 258 |
| Metal sold (oz) | 22 | 325 |
| Realized price ($/oz) | 1,895 | 1,828 |
Lead
| Grade (%) | 3.74 | 3.55 |
| Recovery (%) | 92 | 88 |
| Production (000's lbs) | 9,509 | 9,134 |
| Metal sold (000's lbs) | 8,782 | 8,575 |
| Realized price ($/lb) | 1.02 | 1.06 |
Zinc
| Grade (%) | 5.21 | 4.18 |
| Recovery (%) | 90 | 89 |
| Production (000's lbs) | 13,051 | 10,827 |
| Metal sold (000's lbs) | 13,815 | 10,546 |
| Realized price ($/lb) | 1.45 | 1.69 |
Unit Costs
| Production cash cost ($/t)2 | 98.07 | 89.60 |
| Production cash cost ($/oz Ag Eq)1,2 | 13.14 | 12.39 |
| All-in sustaining cash cost ($/oz Ag Eq)1,2 | 16.88 | 17.83 |
Capital Expenditures ($000's) 3 Sustaining 2,810 3,949 Brownfields 204 324 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.sedar.com for a description of the calculation of these measures.
3 Capital expenditures are presented on a cash basis.
In the first quarter of 2023, the Caylloma Mine produced 283,066 ounces of silver, 9.5 million pounds of lead, and 13.1 million pounds of zinc. Silver production was 9% lower compared to Q1 2022, but was in line with the mining sequence and Mineral Reserves estimate. Lead and zinc production rose by 4% and 21% respectively, compared to Q1 2022, due to higher head grades from levels 16 and 17 within the Animas vein, and higher tonnes. Gold production totaled 166 ounces with an average head grade of 0.15 g/t.
Fortuna | 6
The cash cost per tonne of processed ore in Q1 2023 increased 9% to $98.07 compared to $89.60 in Q1 2022. The increase was mainly due to higher mining costs driven by inflation and its direct impact on the price of materials, compounded by lower tonnes processed.
The all-in sustaining cash cost per payable silver equivalent ounce in Q1 2023, decreased 3% to $17.29 per ounce, compared to $17.83 per ounce in Q1 2022. The decrease was mainly increased silver equivalent production, mainly due to lower silver prices.
Sustaining capital expenditures in Q1 2023 decreased primarily due to blockades limiting project executions. Spending on execution of the developments located on levels 15 and level 18 at the Animas vein was offset by decreased expenditure on other levels. The decrease in brownfields exploration capital expenditures was primarily due to a decrease in diamond drilling meters.
Qualified Person
Eric Chapman, Senior Vice President of Technical Services, is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the Province 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.
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 cash cost per ounce of gold sold; 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 months ended March 31, 2023 (“Q1 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 Q1 2023 MD&A may be accessed on SEDAR at www.sedar.com under the Company’s profile.
Except as otherwise described in the Q1 2023 MD&A, the Company has calculated these measures consistently for all periods presented.
Fortuna | 7
Reconciliation to adjusted net income for the three months ended March 31, 2023 and 2022
| Three months ended March 31, | ||
|---|---|---|
| Consolidated (in millions of US dollars) | 2023 | 2022 |
Net income 11.9 27.0 Adjustments, net of tax:
| Foreign exchange loss, Séguéla Project | - | 0.6 |
| Unrealized loss on derivatives | 1.0 | - |
| Accretion on right of use assets | 0.6 | 0.6 |
| Other non-cash/non-recurring items | (0.3) | 1.3 |
| Adjusted Net Income | 13.2 | 29.5 |
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 months ended March 31, 2023 and 2022
| Three months ended March 31, | ||
|---|---|---|
| Consolidated (in millions of US dollars) | 2023 | 2022 |
Net (loss) income 11.9 27.0 Adjustments:
| Community support provision and accruals | (0.1) | - |
| Foreign exchange loss, Séguéla Project | - | 0.6 |
| Net finance items | 2.6 | 2.8 |
| Depreciation, depletion, and amortization | 44.4 | 38.1 |
| Income taxes | 7.9 | 6.8 |
| Other non-cash/non-recurring items | (1.4) | 5.0 |
| Adjusted EBITDA | 65.3 | 80.3 |
Figures may not add due to rounding
Reconciliation of free cash flow from ongoing operations for the three months ended March 31, 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. Comparative values from 2021 have been restated using the change in the methodology.
| Three months ended March 31, | ||
|---|---|---|
| Consolidated (in millions of US dollars) | 2023 | 2022 |
(Restated) Net cash provided by operating activities 41.8 33.2 Adjustments
| Additions to mineral properties, plant and equipment | (30.4) | (20.5) |
| Other adjustments | (2.9) | (3.1) |
| Free cash flow from ongoing operations | 8.5 | 9.6 |
Figures may not add due to rounding
Fortuna | 8
Reconciliation of cash cost per ounce of gold sold for the three months ended March 31, 2023 and 2022
| Lindero Mine | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
| Cost of sales | 41,725 | 35,867 |
| Changes in doré inventory | (1,331) | 1,017 |
| Inventory adjustment | 15 | 739 |
| Export duties | (3,926) | (4,008) |
| Depletion and depreciation | (13,192) | (12,009) |
| By product credits | (799) | - |
| Production cash cost1 | 22,492 | 21,607 |
| Changes in doré inventory | 1,331 | (1,017) |
| Realized gain in diesel hedge | - | (782) |
| Cash cost applicable per gold ounce sold | A 23,823 | 19,808 |
| Ounces of gold sold | B 26,739 | 28,607 |
| Cash cost per ounce of gold sold1($/oz) | =A/B 891 | 692 |
| Cost of sales | 44,863 | 38,041 |
| Changes in doré inventory | - | (1,320) |
| Export duties | (3,362) | (3,333) |
| Depletion and depreciation | (17,368) | (14,028) |
| By product credits | - | (5) |
| Production cash cost | 24,133 | 19,355 |
| Changes in doré inventory | - | 1,320 |
| Refining charges | - | 155 |
| Cash cost applicable per gold ounce sold | A 24,133 | 20,830 |
| Ounces of gold sold | B 29,472 | 29,530 |
| Cash cost per ounce of gold sold ($/oz) | =A/B 819 | 705 |
| Yaramoko Mine | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
Reconciliation of cash cost per ounce of gold equivalent sold for the three months ended March 31, 2023 and 2022
| Consolidated | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
| Cost of sales | 135,219 | 118,828 |
| Changes in concentrate inventory and dore inventory | (1,534) | (115) |
| Cost of sales-Right of use | 694 | - |
| Depletion and depreciation in concentrate inventory | (173) | (147) |
| Inventory adjustment | 111 | 2,222 |
| Royalties, export duties and mining taxes | (8,711) | (8,980) |
| Provision for community support | (25) | (126) |
| Workers' participation | (463) | (1,340) |
| Depletion and depreciation | (43,955) | (37,738) |
| By product credits | (799) | (5) |
| Production cash cost | 80,364 | 72,599 |
| Changes in concentrate inventory and dore inventory | 1,534 | 115 |
| Cost of sales-Right of use | (694) | - |
| Depletion and depreciation in concentrate inventory | 173 | 147 |
| Inventory adjustment | (96) | (1,483) |
| Realized gain in diesel hedge | - | (782) |
| Treatment charges | 5,038 | 4,786 |
| Refining charges | 1,191 | 638 |
| Cash cost applicable per gold equivalent ounce sold | A 87,511 | 76,021 |
| Ounces of gold equivalent sold | B 95,541 | 98,448 |
| Cash cost per ounce of gold equivalent sold ($/oz) | =A/B 916 | 772 |
Fortuna | 9
Reconciliation of all-in sustaining cash cost per ounce of gold sold for the three months ended March 31, 2023 and 2022
| Lindero Mine | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
| Cash cost applicable | 23,823 | 19,808 |
| Export duties and mining taxes | 3,926 | 4,008 |
| General and administrative expenses (operations) | 1,992 | 1,905 |
| Adjusted operating cash cost | 29,741 | 25,721 |
| Sustaining leases | 598 | 705 |
| Sustaining capital expenditures1 | 7,745 | 3,125 |
| Brownfields exploration expenditures1 | - | 144 |
| All-in sustaining cash cost | 38,084 | 29,695 |
| Non-sustaining capital expenditures1 | 187 | 169 |
| All-in cash cost | 38,271 | 29,864 |
| Ounces of gold sold | 26,739 | 28,607 |
| All-in sustaining cash cost per ounce of gold sold | 1,424 | 1,038 |
| All-in cash cost per ounce of gold sold | 1,431 | 1,044 |
1 Presented on a cash basis
| Yaramoko Mine | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
| Cash cost applicable | 24,133 | 20,830 |
| Export duties and mining taxes | 3,362 | 3,333 |
| General and administrative expenses (operations) | 889 | 410 |
| Adjusted operating cash cost | 28,384 | 24,573 |
| Sustaining leases | 1,359 | 1,435 |
| Sustaining capital expenditures1 | 13,549 | 7,361 |
| Brownfields exploration expenditures1 | 1,191 | 488 |
| All-in sustaining cash cost | 44,483 | 33,857 |
| All-in cash cost | 44,483 | 33,857 |
| Ounces of gold sold | 29,472 | 29,530 |
| All-in sustaining cash cost per ounce of gold sold | 1,509 | 1,147 |
| All-in cash cost per ounce of gold sold | 1,509 | 1,147 |
1 Presented on a cash basis
Reconciliation of all-in sustaining cash cost per ounce of gold equivalent sold for the three months ended March 31, 2023 and 2022
| Three months ended | ||
|---|---|---|
| Consolidated | March 31, | |
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
Cash cost applicable 87,511 76,021
| Royalties, export duties and mining taxes | 8,711 | 8,980 |
| Workers' participation | 538 | 1,614 |
| General and administrative expenses (operations) | 5,827 | 4,963 |
General and administrative expenses (Corporate) 8,681 11,339 Adjusted operating cash cost 111,268 102,917 Care and maintenance costs (impact of COVID-19) - 2 Sustaining leases 2,975 3,005 Sustaining capital expenditures3 27,876 18,010 Brownfields exploration expenditures3 2,483 2,485 All-in sustaining cash cost 144,602 126,419 Payable ounces of gold equivalent sold 95,541 98,448 All-in sustaining cash cost per ounce of gold equivalent sold 1,514 1,284
Fortuna | 10
Gold equivalent was calculated using the realized prices for gold of $1,893/oz Au, $22.5/oz Ag, $2,256/t Pb, and $3,197/t Zn for Q1 2023 and using the realized prices for gold of $1,884/oz Au, $24.2/oz Ag, $2,331/t Pb, and $3,736/t Zn for Q1 2022
Reconciliation of production cash cost per tonne and cash cost per payable ounce of silver equivalent sold for the three months ended March 31, 2023 and 2022
| San Jose Mine | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
| Cost of sales | 32,523 | 28,899 |
| Changes in concentrate inventory | 71 | 77 |
| Cost of sales-right of use | 133 | - |
| Depletion and depreciation in concentrate inventory | (29) | (21) |
| Inventory adjustment | (129) | 537 |
| Royalties and mining taxes | (1,257) | (1,392) |
| Workers participation | (17) | (727) |
| Depletion and depreciation | (9,912) | (8,287) |
| Cash cost3 | A 21,383 | 19,086 |
| Total processed ore (tonnes) | B 246,736 | 250,947 |
| Production cash cost per tonne3($/t) | =A/B 86.66 | 76.05 |
| Cash cost3 | A 21,383 | 19,086 |
| Changes in concentrate inventory | (71) | (77) |
| Depletion and depreciation in concentrate inventory | 29 | 21 |
| Inventory adjustment | 129 | (537) |
| Treatment charges | (220) | 872 |
| Refining charges | 944 | 91 |
| Cash cost applicable per payable ounce sold3 | C 22,194 | 19,456 |
| Payable ounces of silver equivalent sold1 | D 1,944,265 | 1,867,871 |
| Cash cost per ounce of payable silver equivalent sold2,3($/oz) | =C/D 11.42 | 10.42 |
| Mining cost per tonne3 | 39.05 | 37.45 |
| Milling cost per tonne | 20.39 | 18.01 |
| Indirect cost per tonne | 19.56 | 14.63 |
| Community relations cost per tonne | 1.85 | 4.84 |
| Distribution cost per tonne | 5.81 | 1.12 |
| Production cash cost per tonne3($/t) | 86.66 | 76.05 |
1 Silver equivalent sold for Q1 2023 is calculated using a silver to gold ratio of 81.2:1 (Q1 2022: 77.9:1).
2 Silver equivalent is calculated using the realized prices for gold and silver. Refer to Financial Results – Sales and Realized Prices
Fortuna | 11
| Caylloma Mine | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
| Cost of sales | 16,108 | 16,021 |
| Changes in concentrate inventory | (274) | 111 |
| Cost of sales-right of use | 561 | - |
| Depletion and depreciation in concentrate inventory | (144) | (126) |
| Inventory adjustment | 225 | 272 |
| Royalties and mining taxes | (166) | (247) |
| Provision for community support | (25) | (126) |
| Workers participation | (446) | (613) |
| Depletion and depreciation | (3,483) | (3,414) |
| Cash cost3 | A 12,356 | 11,878 |
| Total processed ore (tonnes) | B 125,996 | 132,574 |
| Production cash cost per tonne3($/t) | =A/B 98.07 | 89.60 |
| Cash cost | A 12,356 | 11,878 |
| Changes in concentrate inventory | 274 | (111) |
| Depletion and depreciation in concentrate inventory | 144 | 126 |
| Inventory adjustment | (225) | (272) |
| Treatment charges | 5,259 | 3,914 |
| Refining charges | 247 | 392 |
| Cash cost applicable per payable ounce sold3 | C 18,055 | 15,927 |
| Payable ounces of silver equivalent sold1 | D 1,373,699 | 1,285,610 |
| Cash cost per ounce of payable silver equivalent sold2,3($/oz) | =C/D 13.14 | 12.39 |
| Mining cost per tonne | 43.06 | 35.29 |
| Milling cost per tonne | 15.68 | 16.23 |
| Indirect cost per tonne | 29.40 | 30.60 |
| Community relations cost per tonne | 0.61 | 7.04 |
| Distribution cost per tonne | 9.32 | 0.45 |
| Production cash cost per tonne3($/t) | 98.07 | 89.60 |
1 Silver equivalent sold for Q1 2023 is calculated using a silver to gold ratio of 0.0:1 (Q1 2022: 76.9:1), silver to lead ratio of 1:22.3 pounds (Q1 2022: 1:22.5), and silver to zinc ratio of 1:15.7 pounds (Q1 2022: 1:14.0).
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 months ended March 31, 2023 and 2022
| San Jose Mine | Three months ended March 31, | |
|---|---|---|
| (Expressed in $'000's, except unit costs) | 2023 | 2022 |
| Cash cost applicable4 | 22,194 | 19,456 |
| Cost of sales-right of use | (133) | - |
| Royalties and mining taxes | 1,257 | 1,392 |
| Workers' participation | 21 | 909 |
| General and administrative expenses (operations) | 1,802 | 1,590 |
| Adjusted operating cash cost4 | 25,141 | 23,347 |
| Care and maintenance costs (impact of COVID-19) | - | 2 |
| Sustaining leases | 162 | 157 |
| Sustaining capital expenditures3 | 3,772 | 3,575 |
| Brownfields exploration expenditures3 | 1,088 | 1,529 |
| All-in sustaining cash cost | 30,163 | 28,610 |
| Non-sustaining capital expenditures3 | 269 | 415 |
| All-in cash cost | 30,432 | 29,025 |
| Payable ounces of silver equivalent sold1 | 1,944,265 | 1,867,871 |
| All-in sustaining cash cost per ounce of payable silver equivalent sold2 | 15.51 | 15.32 |
| All-in cash cost per ounce of payable silver equivalent sold2 | 15.65 | 15.54 |
1 Silver equivalent sold for Q1 2023 is calculated using a silver to gold ratio of 81.2:1 (Q1 2022: 77.9:1).
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
Fortuna | 12