Fortuna Reports Results for the Third Quarter of 2022
1 Refer to Non-IFRS financial measures
2 AISC/oz Ag Eq calculated at realized metal prices, refer to mine site results for realized prices and Non-IFRS Financial Measures for silver equivalent ratio
3 Gold equivalent production includes gold, silver, lead and zinc and is calculated using the following metal prices: US$1,718/oz Au, US$19.16/oz Ag, US$1,989/t Pb and US$3,268/t Zn or Au:Ag = 1:89.65, Au:Pb = 1:0.90,
Au:Zn = 1:0.53
Fortuna | 1
Fortuna Reports Results for the Third Quarter of 2022
(All amounts expressed in US dollars, tabular amounts in millions, unless otherwise stated)
Vancouver, November 9, 2022: Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) (“Fortuna” or the “Company”) today
reported its financial and operating results for the third quarter of 2022.
Third Quarter 2022 Highlights
Operational
• Gold and silver production of 66,344 ounces and 1,837,506 ounces, respectively . An in crease of 1% and 7%
respectively compared to the third quarter of 2021 (“Q3 2021”). Gold equivalent production of 101,8403 ounces.
• Cash costs1 per ounce of gold of $772 for the Lindero Mine and $934 for the Yaramoko mine. Cash costs 1,2 per
silver equivalent ounce of payable silver sold of $9.70 for the San Jose Mine and $11.32 for the Caylloma mine.
• AISC 1 per ounce of gold sold of $1,159 for the Lindero Mine and $1,630 for the Yaramoko Mine. AISC 1,2 per silver
equivalent ounce of payable silver sold of $14.23 and $15.66 for the San Jose Mine and Caylloma Mine,
respectively.
• The Company confirms it is tracking to meet production and the top end of cost guidance for the year.
• Total recordable injury frequency rate of 2.36 per million hours worked and zero lost time injuries in over 3. 3
million hours worked.
Financial
• Free cash flow from ongoing operations1 of $34.0 million, after operating mine capital, corporate overhead, taxes
and interest paid, compared to $29.1 million reported in Q3 2021.
• Adjusted EBITDA1 of $54.4 million compared to $75.3 million reported in Q3 2021.
• Net loss of $4.1 million or $0.01 per share, compared to $0.2 million or $0 net income per share reported in Q3
2021. Adjusted net income1 of $2.3 million or $0.01 per share compared to $22.5 million reported in Q3 2021.
• As at September 30, 2022, the Company had available liquidity of $125.9 million.
• Returned $2.9 million of capital to shareholders during the quarter through the share repurchase program.
Growth and Development
• Séguéla construction 83% complete as of the end of October. On-time and on-budget for first gold pour in mid-
2023.
• Fortuna continued to expand mineralization at the Sunbird discovery at Séguéla outside of the current reported
inferred mineral resource ( refer to Fortuna news release dated September 12, 2022: “Fortuna extends gold
mineralization at Sunbird and identifies new regional prospects at Séguéla, Cote d´Ivoire”).
NEWS RELEASE
Fortuna | 2
Jorge A. Ganoza, President and CEO, commented, “Our four mines had steady production of gold and silver in the quarter,
which places us in a comfortable position at the end of the nine months of the year to meet our annual guidance estimates.
Price inflation on key consumable products has driven cost at our operations to the upper range of annual cost guidance,
but at this stage in the year we anticipate that the risk for significant cost deviations beyond guidance has diminished.”
Mr. Ganoza continued, “Free cash flow for the period remained strong , underpinned by robust production performance
at our operating sites.” Mr. Ganoza concluded, “Construction of our flagship Séguéla mine is 83% complete as of the end
of October, remaining on -time and on -budget. We continue to successfully de-risk construction at a steady pace. All
components of the SAG mill, a major equipment in the critical path of the project, have been shipped removing the last
supply chain concerns on major equipment deliveries. Another milestone coming soon is the project connection to the
national power grid, which is planned for December.”
Three months ended September 30, Nine months ended September 30,
2022 2021 % Change 2022 2021 % Change
Sales 166.6 162.6 2% 516.8 400.9 29%
Mine operating income 24.7 47.3 (48%) 120.8 147.1 (18%)
Operating income 5.7 21.8 (74%) 59.6 98.0 (39%)
Net (loss) income (4.1) 0.2 (2,150%) 24.5 42.8 (43%)
(Loss) earnings per share - basic (0.01) - 0% 0.08 0.19 (58%)
Adjusted net income1 2.3 22.5 (90%) 35.4 71.5 (50%)
Adjusted EBITDA1 54.4 75.3 (28%) 189.7 191.1 (1%)
Net cash provided by operating activities 64.7 39.4 64% 144.6 90.1 60%
Free cash flow from ongoing operations1 34.0 29.1 17% 64.8 70.4 (8%)
Capital expenditures2
Sustaining 23.2 16.4 41% 64.3 37.5 71%
Non-sustaining3 4.0 0.7 467% 10.4 1.8 478%
Lindero construction - 1.4 (100%) - 4.0 (100%)
Séguéla construction 23.5 - 100% 87.6 - 100%
Brownfields 9.6 4.3 123% 17.1 10.3 66%
As at September 30, 2022 December 31, 2021 % Change
Cash and cash equivalents 90.9 107.1 (15%)
Net liquidity position 125.9 187.1 (33%)
1 Refer to Non-IFRS Financial Measures section 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
Third Quarter 2022 Results
Net loss for the period was $4.1 million compared to net income of $0.2 million in Q3 2021. Operating income was $5.7
million compared to $21.8 million in the comparative period. Higher cash costs quarter over quarter were approximately
$16.0 million due to continued inflationary pressures and higher processed tonnes at Yaramoko and San Jose.
Management estimates that if realized gold and silver prices had stayed consistent with the previous year operating
income would have been $13.0 million higher.
Additional items impacting net income in the quarter were a $3.4 million write off of the Tlamino project in Serbia, and
$1.7 million of unrealized derivative losses.
Adjusted net income for the period was $2.3 million compared to $22.5 million in Q3 2021. Adjusted EBITDA was $54.4
million compared to $75.3 million in Q3 2021. The reduction in EBITDA was consistent with the drivers of lower operating
income described above, namely lower silver and gold prices and inflationary cost pressures.
Net cash provided by operating activities was $64.7 million, compared to $39.4 million in Q3 2021, as the comparative
quarter was impacted by $23.1 million of non -recurrent expenses ($12.6 million payment including taxes for the
Fortuna | 3
settlement of the disputed royalty claim with the Mexican Geological Survey and $10.5 million of transaction costs related
to the Roxgold acquisition).
Free cash flow from ongoing operations in the quarter was $34.0 million after deducting operating mine capital, corporate
overhead, taxes and interest paid . Year to date free cash flow from on -going operations was $64.8 million compared to
$70.4 million in 2021.
Sales for the three months ended September 30, 2022 were $166.6 million, an increase of 2% from the $162.6 million
over the same period in 2021. Sales by mine in the three months ended September 30, 2022 were as follows:
▪ Lindero recognized adjusted sales of $51.9 million, a 25% increase from the $41.6 million reported in Q3 2021.
Higher sales were the result of a 28% increase in volume of gold sold, partially offset by lower realized gold price
of 3%.
▪ Yaramoko recognized adjusted sales of $46.4 million, a 5% decrease from the $49.0 million reported in Q3 2021.
Lower sales were the result of a 2% decrease in volume of gold sold and lower realized gold price of 4%.
▪ San Jose recognized adjusted sales of $42.2 million, a 4% decrease from the $43.7 m illion reported in Q3 2021.
Lower sales were driven by a 21% and 3% decrease in provisional silver and gold prices, respectively, partially
offset by an increase of 7% and 2% in the volume of silver and gold ounces, respectively, sold.
▪ Caylloma recognized adjusted sales of $26.1 million, a 7% decrease from the $28.0 million reported in Q3 2021.
The decrease in sales was driven by 22% lower realized prices for silver as well as no gold sales compared to 1,466
ounces sold in the comparative period.
Outlook on Cost and Inflation
Inflationary pressures continued in the third quarter of 2022 as a result of geopolitical events, supply chain constraints
and increases in the cost of energy and commodities. These inflationary pressures were realized in the Com pany’s cost
structure as prices increased for several key commodities including diesel, reagents, explosives and steel.
The inflation situation remains dynamic and the Company expects higher input costs to remain for the last quarter of the
year and beyond. To mitigate inflationary pressure on its cost structure the Company will continue to focus on operational
efficiencies and cost optimization across all mining operations. However, even with these efforts it is expected the
continued inflationary pressures will push costs towards the upper end of our cost guidance.
Liquidity
Total liquidity available to the Company as at September 30, 2022 was $125.9 million, comprised of $90.9 million of cash
and cash equivalents and $35.0 million undrawn on the Company’s revolving $200 million credit facility.
The Company has secured credit approval from its banking syndicate to increase the existing senior secured revolving
credit facility by $50.0 million to $250.0 million. The upsized facility will include a $50.0 million accordion feature, and is
expected to close in the fourth quarter of 2022, subject to the completion of definitive documentation between the
parties.
Séguéla Construction
As of September 30, 2022, the Séguéla Project had approximately $54.8 million in remaining spend of the project’s $173.5
million construction budget, and the project remains on time and on budget. The Company’s cash and cash equivalents
balance, free cash flow from ongoing operations and undrawn amounts of the credit facility are expected to be sufficient
to fund the construction of the Séguéla Project.
Fortuna | 4
Lindero Mine, Argentina
Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
Mine Production
Tonnes placed on the leach pad 1,365,726 1,387,134 4,163,555 4,994,134
Gold
Grade (g/t) 0.83 1.10 0.83 0.94
Production (oz) 30,032 26,235 89,116 68,088
Metal sold (oz) 30,064 23,559 89,229 63,788
Realized price ($/oz) 1,719 1,772 1,825 1,775
Unit Costs
Cash cost ($/oz Au)1 772 646 717 635
All-in sustaining cash cost ($/oz Au)1 1,159 1,270 1,117 1,182
Capital expenditures ($000's) 2
Sustaining 4,814 9,385 14,062 20,040
Non-sustaining – – 169 –
Brownfields 314 47 1,104 489
1 Cash cost and AISC are non-IFRS financial measures. Refer to Non-IFRS Financial Measures.
Quarterly Operating and Financial Highlights
In the third quarter of 2022, a total of 1,365,726 tonnes of ore were placed on the heap leach pad, averaging 0.83 g/t gold,
containing an estimated 36,501 ounces of gold. Gold production for Q3 2022 totaled 30,032 ounces, representing a 14%
increase year-over-year. Higher gold production is mainly explained by an increase in performance of the three -stage
crushing and stacking circuits, which delivered 100% of the 1.37 million tonnes of ore placed on the pad in the quarter,
compared to 89% or 1.2 million tonnes of the 1.39 million tonnes placed during the comparable quarter a year ago. Mine
production was 2.2 million tonnes of mineralized material with a lower strip ratio of 0.83:1 when compared to the second
quarter of 2022. The reduction in the stripping ratio was a result of optimizing the mine plan sequence during the period.
The operation experienced a positive reconciliatio n for ore sent to the leach pad during the third quarter, with grades
sampled at the plant being 5.6% higher than estimated from the reserve model.
Cash cost per ounce of gold for the three months ended September 30, 2022 was $772 compared to $646 in the third
quarter of 2021. Cash cost per ounce of gold was higher due to higher consumable prices, mainly related to diesel,
explosives and reagents, higher service costs related to maintenance equipment rentals and higher maintenance
contractor expenses, partially offset by lower labor cost.
All-in sustaining cash cost per gold ounce sold was $1,159 during Q3 2022 compared with $1,270 in the third quarter of
2021. All-in sustaining cash cost for the third quarter of 2022 was impacted by the issues described above, offset by higher
ounces sold, lower sustaining capital and a positive by-product effect.
Sustaining capital for the quarter primarily consisted of spending on the leach pad and mine maintenance. Construction
of Phase-1B of the leach pad was complete d during the quarter as planned, ensuring sufficient capacity to support the
production plan through the second half of 2024. Detailed engineering work for the Phase -2 leach pad expansion was
initiated in the third quarter of 2022 and is expected to be com pleted by year end. Construction work on Phase -2 is
planned to commence in 2023. Brownfields capital primarily relates to exploration at the Arizaro project.
Fortuna | 5
Yaramoko Mine Complex, Burkina Faso
Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
Mine Production
Tonnes milled 137,202 126,677 403,957 126,677
Gold
Grade (g/t) 6.21 7.28 6.34 7.28
Recovery (%) 97 98 97 98
Production (oz) 27,130 28,751 79,918 28,751
Metal sold (oz) 27,055 27,494 81,183 27,494
Realized price ($/oz) 1,716 1,783 1,821 1,783
Unit Costs
Cash cost ($/oz Au)1 934 720 847 720
All-in sustaining cash cost ($/oz Au)1 1,630 1,188 1,433 1,188
Capital expenditures ($000's) 3
Sustaining 10,225 7,398 26,671 7,398
Brownfields 2,530 560 3,018 560
1 Cash cost and AISC are non-IFRS financial measures. Refer to Non-IFRS Financial Measures.
2 The Yaramoko Mine was acquired as part of the acquisition of Roxgold which completed on July 2, 2021. Comparative figures in 2021 are included from July 2, 2021
onward.
3 Capital expenditures are presented on a cash basis
The Yaramoko Mine produced 27,130 ounces of gold in the third quarter of 2022 with an average gold head grade of
6.21g/t, which is in line with the mining sequence and Mineral Reserve estimate. The operation benefitted from higher
mill throughput and operating time during the quarter offset by lower head grades when compared to the third quarter
in 2021. Gold production for the first nine months of 2022 is in line with the annual guidance range.
Cash cost per gold ounce sold was $934, compared to $720 in the third quarter of 2021 , primarily due to higher mining
service costs related to inflation, higher processing costs due to annual mill inspection and repair moved up from
November, and the processing of lower grade stockpiles during Q3 2022 as the site is currently mine constrained. This was
partially offset by favorable foreign exchange rates.
All-in sustaining cash cost per gold ounce sold was $1,630 for Q3 2022, compared to $1,188 for the same period in 2021,
as a result of decreased production, increased cash cost, and an increase in capital expenditures.
The operational focus remains on advancing development of the decline to maintain stope sequencing flexibility in the
mine for the remainder of 2022 and into 2023. Sustaining capital for Q3 2022 was higher due to higher mine development
and equipment purchases related to the QV Prime project in Bagassi South. Brownfields expenditure was higher due to
greater amounts of diamond drilling as well as further development of the 109 Zone.
Fortuna | 6
San Jose Mine, Mexico
Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
Mine Production
Tonnes milled 267,198 248,984 770,090 778,352
Average tonnes milled per day 3,071 2,862 2,939 2,980
Silver
Grade (g/t) 196 195 189 206
Recovery (%) 92 92 91 91
Production (oz) 1,545,410 1,436,658 4,288,936 4,707,496
Metal sold (oz) 1,539,382 1,440,946 4,272,878 4,704,656
Realized price ($/oz) 19.14 24.16 21.86 25.80
Gold
Grade (g/t) 1.16 1.22 1.14 1.29
Recovery (%) 91 91 91 91
Production (oz) 9,091 8,910 25,625 29,477
Metal sold (oz) 9,064 8,922 25,580 29,421
Realized price ($/oz) 1,722 1,784 1,825 1,798
Unit Costs
Production cash cost ($/t)2 79.37 77.52 79.66 74.22
Production cash cost ($/oz Ag Eq)1,2 9.70 9.99 10.35 9.28
All-in sustaining cash cost ($/oz Ag Eq)1,2 14.23 15.51 14.95 14.13
Capital expenditures ($000's) 3
Sustaining 4,410 3,553 12,036 9,525
Non-sustaining – 745 869 1,776
Brownfields 1,548 2,547 4,645 6,437
1 Production cash cost silver equivalent and All-in sustaining cash cost silver equivalent are calculated using realized metal prices for each period respectively
2 Production cash cost, Production cash cost silver equivalent, and All-in sustaining cash cost silver equivalent are Non-IFRS Financial Measures, refer to Non-IFRS
Financial Measures
3 Capital expenditures are presented on a cash basis
In the third quarter of 2022, the San Jose Mine produced 1,545,410 ounces of silver and 9,091 ounces of gold, 8% and 2%
higher, respectively, when compared to the equivalent period in 2021. The result is primarily due to higher mill
throughput, with grades in line with the mining sequence and Mineral Reserve estimates. Silver production is tracking to
meet the upper range of annual guidance.
The cash cost per tonne for the three months ended September 30, 2022 was $79.37 compared to $77.52 in the same
period in 2021 primarily due to cost increases related to inflation, offset by higher tonnes processed.
All-in sustaining cash costs of $14.23 per ounce was lower than the $15.51 per ounce for the same period in 2021 with
higher silver equivalent ounces offsetting higher costs.
Capital expenditures for the quarter was lower than the previous year primarily due to lower brownfields exploration cost
as the site focused on less capital-intensive exploration.
Fortuna | 7
Caylloma Mine, Peru
Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
Mine Production
Tonnes milled 139,143 136,410 407,695 401,942
Average tonnes milled per day 1,546 1,516 1,533 1,517
Silver
Grade (g/t) 79 78 82 77
Recovery (%) 82 81 81 82
Production (oz) 292,096 275,223 871,594 810,962
Metal sold (oz) 293,159 295,532 866,511 830,495
Realized price ($/oz) 19.31 24.67 21.98 25.80
Gold
Grade (g/t) 0.11 0.48 0.14 0.51
Recovery (%) 19 72 35 72
Production (oz) 91 1,529 656 4,712
Metal sold (oz) — 1,466 603 3,140
Realized price ($/oz) — 1,808 1,864 1,790
Lead
Grade (%) 3.33 3.14 3.29 3.15
Recovery (%) 89 87 88 88
Production (000's lbs) 9,085 8,245 25,856 24,571
Metal sold (000's lbs) 9,155 8,859 25,751 25,354
Realized price ($/lb) 0.90 1.06 0.99 0.98
Zinc
Grade (%) 4.37 4.74 4.22 4.67
Recovery (%) 89 87 89 87
Production (000's lbs) 11,885 12,436 33,598 36,169
Metal sold (000's lbs) 12,277 12,754 33,743 36,775
Realized price ($/lb) 1.48 1.36 1.65 1.31
Unit Costs
Production cash cost ($/t)2 93.12 86.04 92.03 85.17
Production cash cost ($/oz Ag Eq)1,2 11.32 12.75 12.25 13.25
All-in sustaining cash cost ($/oz Ag Eq)1,2 15.66 17.66 17.16 18.17
Capital expenditures ($000's) 3
Sustaining 3,764 3,480 11,506 7,930
Brownfields 198 1,168 729 2,777
1 Production cash cost silver equivalent and All-in sustaining cash cost silver equivalent are calculated using realized metal prices for each period respectively
2 Production cash cost, Production cash cost silver equivalent, and All-in sustaining cash cost silver equivalent are Non-IFRS Financial Measures, refer to Non-IFRS
Financial Measures
3 Capital expenditures are presented on a cash basis
The Caylloma Mine produced 292,096 ounces of silver, 9.1 million pounds of lead, and 11.9 million pounds of zinc during
the three months ended September 30, 2022. The operation delivered another strong quarter of operational performance
and is tracking well to deliver total production in the upper range of guidance. Measured against the comparable quarter
of the previous year, silver was 6% higher due to a combination of increased mill throughput, higher grades and better
recoveries. Lead production was 10% higher than the comparable period as a result of higher head grades, recovery, and
mill throughput. Zinc production was 4% lower than the comparable period, mainly impacted by lower head grades
partially offset by higher mill throughput and recovery. Gold production totaled 91 ounces with an average head grade of
0.11 g/t.
The cash cost per tonne of processed ore for the three months ended September 30, 2022 increased 8% to $93.12
compared to $86.04 in the same period in 2021. The increase was mainly the result of higher mining costs driven by
inflation and its direct impact on the price of materials, such as explosives, fuel, cement, reagents, mill balls and others.
Fortuna | 8
The all -in sustaining cash cost for the three months ended September 30, 2022 decreased 11% to $15.66 per ounce
compared to $17.66 per ounce for the same period in 2021 as a result of higher costs being offset by an increase in silver
equivalent production.
Sustaining capital expenditures for the quarter increased primarily due to greater execution of the developments located
in level 16 and level 18, offset by decreased expenditure on other levels. The decrease in brownfields capital expenditures
was due to significantly lower spending on drilling and development. During the third quarter o f 2022, an assessment
study for a potential expansion of the mine and processing plant was commenced, with tradeoff results expected to be
delivered in the first quarter of 2023.
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 limi ted 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 fi nancial 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 nine months ended September 30, 2022 (“Q3 2022 MD&A”), 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 explana tion of how such measures and ratios provide
useful information to an investor and the additional purposes, if any, for which management of Fortuna uses such
measures and ratio. The Q3 2022 MD&A may be accessed on SEDAR at www.sedar.com under the Company’s profile,
Fortuna Silver Mines Inc.
Except as otherwise described in the Q3 2022 MD&A, the Company has calculated these measures consistently for all
periods presented.