Fortuna reports financial results for the first quarter of 2024
1Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statemen ts filed on SEDAR+ at www.sedarplus.ca for a
description of the calculation of these measures.
2 Excluding letters of credit
3 Au Eq includes gold, silver, lead and zinc and is calculated using the following metal prices: $ 2,087/oz Au, $23.4/oz Ag, $2,084/t Pb and $2,450/t Zn or Au:Ag = 1:89.8, Au:Pb = 1:1.0, Au:Zn =
0.85 for Q1 2024, and the following metal prices: $1,802/oz Au, $21.75/oz Ag, $2,161/t Pb and $3,468/t Zn or Au:Ag = 1:82.99, Au:Pb = 1:0.83, Au:Zn = 1:0.52 for Q4 2023.
Fortuna reports financial results for the first quarter of 2024
(All amounts are expressed in US dollars, tabular amounts in millions, unless otherwise stated)
Vancouver, May 7, 2024: Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) (“Fortuna” or the “Company”) today reported
its financial and operating results for the first quarter of 2024.
First Quarter 2024 highlights
Financial
• Attributable net income of $26.3 million or $0.09 per share, compared to a $92.3 million attributable net loss or
$0.30 per share in Q4 2023
• Adjusted attributable net income1 of $26.7 million or $0. 09 per share, compared to $ 20.6 million or $0.0 7 per
share in Q4 2023
• Generated $84.3 million of cash flow from operations before working capital changes , and free cash flow from
ongoing operations1 of $12.1 million, compared to $105.4 million and $66.2 million, respectively, in Q4 2023
• The Company paid down $40.0 million of its revolving credit facility. At the close of the quarter total net debt was
$83.0 million and the total net debt to adjusted EBITDA ratio1 was 0.2:1
• Liquidity as of March 31, 2024 was $212.7 million2, compared to $213.1 million at the end of Q4 2023
Return to Shareholders
• Returned $3.5 million of capital to shareholders during the quarter through the Company’s normal course issuer
bid (“NCIB”) program
• On April 30, 2024 Fortuna announced that the TSX had approved the renewal of the Company’s NCIB program to
purchase 5% of its outstanding common shares.
Operational
• Gold equivalent3 production of 112,543 ounces, compared to 136,154 ounces in Q4 2023
• Gold production of 89,678 ounces, compared to 107,376 ounces in Q4 2023
• Silver production of 1,074,571 ounces, compared to 1,354,003 ounces in Q4 2023
• Consolidated cash costs1 per ounce of gold equivalent sold of $8 79, compared to $840 in Q4 2023; adjusting for
San Jose, which is mining its last year of Mineral Reserves, consolidated cash costs was $744
• Consolidated all-in sustaining cash costs (AISC)1 per ounce of gold equivalent sold of $1,495, compared to $1,509
in Q4 2023; adjusting for San Jose, consolidated AISC was $1,412
• Year to date Lost Time Injury Frequency Rate (LTIFR) of 1.13 and Total Recordable Injury Frequency Rate (TRIFR)
of 3.10
NEWS RELEASE
Fortuna | 2
Growth and Development
• At Séguéla, mill throughput for the quarter averaged 195 tonnes per hour (t/hr), versus name plate design capacity
of 154 t/hr. Mill constraints continued to be tested with throughputs of up to 220 t/hr being recorded over a
seven-day period.
• The Kingfisher prospect was identified at Séguéla which continues the identification of new prospects at the site.
Refer to the News Release “Fortuna discovers new Kingfisher prospect at Séguéla Mine and provides exploration
update at the Diamba Sud Gold Project” dated March 11, 2024.
• Exploration continued at the Yessi Vein at San Jose including an intercept of 1kg silver equivalent over an
estimated true width of 8.1 meters highlighting the potential for high -grade shoots. Refer to the News Release
“Fortuna intersects 1kg Ag Eq over an estimated true width of 8.1m at the Yessi vein, San Jose Mine, Mexico ”
dated April 15, 2024.
"Our operations performed in line with expectations for the first quarter with 112,543 of gold equivalent production ,
$84.3 million in cash from operations before working capital changes and earnings per share of $0.09.” said Jorge Ganoza,
Fortuna’s President and CEO. Mr. Ganoza continued “Coming of f a record fourth quarter, lower production was in line
with plan as Séguéla prepared the Ancien pit for mining, a maintenance shutdown was completed at Yaramoko and San
Jose focused on underground preparation with site production weighted to the second half of the year.” Mr. Ganoza
concluded, “We also executed on our capital priorities by paying down an additional $40 million in debt and advancing
exciting exploration opportunities at Séguéla and Diamba Sud while also returning capital to shareholders through our
share buyback program.”
First Quarter 2024 Consolidated Results
Three months ended March 31,
(Expressed in millions) 2024 2023 % Change
Sales 224.9 175.7 28%
Mine operating income 69.9 40.4 73%
Operating income 47.1 23.9 97%
Attributable net income 26.3 10.9 141%
Attributable income per share - basic 0.09 0.04 132%
Adjusted attributable net income1 26.7 12.2 119%
Adjusted EBITDA1 95.2 65.3 46%
Net cash provided by operating activities 48.9 41.8 17%
Free cash flow from ongoing operations1 12.1 8.5 42%
Cash cost ($/oz Au Eq)1 879 916 (4%)
All-in sustaining cash cost ($/oz Au Eq)1 1,495 1,514 (1%)
Capital expenditures2
Sustaining 25.8 27.9 (8%)
Non-sustaining3 8.8 1.2 633%
Séguéla construction - 25.7 (100%)
Brownfields 6.7 4.9 37%
As at March 31, 2024 December 31, 2023 % Change
Cash and cash equivalents 87.7 128.1 (32%)
Net liquidity position (excluding letters of credit) 212.7 213.1 (0%)
Shareholder's equity attributable to Fortuna shareholders 1,260.8 1,238.4 2%
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
Fortuna | 3
First Quarter 2024 Results
Attributable Net Income and Adjusted Attributable Net Income
Net income attributable to Fortuna for the quarter was $26.3 million compared to $10.9 million in Q1 2023. After adjusting
for non-cash and non-recurring items, adjusted attributable net income for the quarter was $ 26.7 million compared to
$12.2 million in Q1 2023. The increase in net income and adjusted net income is explained mainly by increased gold sales
volume and higher realized gold and silver prices. Higher gold sales volume was primarily due to contribution s from
Séguéla which was under construction in the comparable period. This was partially offset by lower silver production at
San Jose as the mine exhausts its Mineral Reserves. The realized gold and silver prices were $2,087 and $23.43 per ounce
respectively compared to $1,893 and $22.52 per ounce, respectively, for the comparable period in the prior year.
Other items impacting the adjusted net income for the quarter compared to Q1 2023 were higher G&A of $2.8 million,
related to the addition of Séguéla G&A and timing of execution on certain corporate G&A items; higher foreign exchange
loss of $2.5 million related mainly to our West African operations; and higher interest expense of $3.6 million, explained
by $2.8 million of capitalized interest expense in the comparative period vs nil in Q1 2024 and higher accretion of right of
use lease liabilities.
Depreciation and Depletion
Depreciation and depletion for the first quarter of 2024 was $5 0.3 million compared to $44.1 million in the comparable
period. The increase in depreciation and depletion was primarily the result of higher sales volume and the inclusion of
$15.8 million in depletion of the purchase price related to the acquisition of Roxgold Inc. This was partially offset by lower
depreciation and depletion at San Jose as a result of an impairment charge in the fourth quarter of 2023.
Adjusted EBITDA and Cash Flow
Adjusted EBITDA for the quarter was $95.2 million, a margin of 42% over sales, compared to $65.3 million and margin over
sales of 37%, reported in the same period in 2023. The main driver for the increase in EBITDA was the contribution from
Séguéla with EBITDA margin of 62% in Q1 2024, partially offset by nil EBITDA at San Jose.
Net cash generated by operations for the quarter was $48.9 million compared to $41.8 million in Q1 2023. The increase
of $7.1 million reflects higher adjusted EBITDA of $29.9 million and lower taxes paid of $7.0 million as Séguéla is expected
to start remittances to the government in the second quarter. This was offset by negative changes in working capital in
Q1 2024 of $35.3 million compared to negative $10.8 million in Q1 2023.
The negative change in working capital of $35.3 million consisted of the following:
• An increase in receivables of $7.3 million driven by an increase in VAT receivables of $3.5 million at Séguéla and
$5.8 million at Yaramoko
• An increase of inventories of $9.8 million due to a $3.2 million increase in materials and supplies and a $4.9 million
increase in metals inventory
• A $17.3 million decrease in accounts payable primarily at Lindero due to $3.8 million to settle a deferred contract
liability from the fourth quarter of 2023 due to timing of production, $1.8 million to settle export loans with local
banks and $4.0 million related to timing of payments. Other payables movements were related to timing.
In the first quarter of 2024 capital expenditures on a cash basis were $41.4 million consisting primarily of $25.8 million in
sustaining capital, including $6.7 million of brownfields exploration, and $ 8.8 million of non -sustaining exploration
including engineering and environmental studies at Diamba Sud.
Free cash flow from ongoing operations for the quarter was $ 12.1 million, compared to $8.5 million in Q1 2023. The
increase in free cash flow from operations was primarily the result of contributions from Séguéla which was under
construction in Q1 2023 and was offset by negative working capital changes as described above.
Fortuna | 4
Cash Costs and AISC
Cash cost per equivalent gold ounce was $8 79, compared to $9 15 in Q1 2023. The lower cash cost of sales per gold
equivalent ounce was mainly due to the contribution of low -cost production from Séguéla and lower cost of sales per
ounce of gold at Yaramoko related to higher grades. This was partially offset by higher cash costs per gold equivalent
ounce at San Jose as previously capitalized costs are now expensed as the mine is in its last year of operations and higher
cash cost per gold ounce at Lindero related mainly to lower planned head grades in 2024 . Adjusting for San Jose, cash
costs per gold equivalent ounces was $744 for the quarter.
All-in sustaining costs per gold equivalent ounce was $1,495 for the first quarter of 2024 compared to $1,514 for the first
quarter of 2023 . The decrease was primarily the result of lower cash costs being offset by higher sustaining capital
expenditures primarily at Lindero due to the construction of the heap leach pad expansion, increased brownfields
exploration at Séguéla to advance identified prospects and higher royalties in the period due to higher production, metal
prices and a change of the royalty regime in Burkina Faso. Adjusting for San Jose, all-in sustaining costs per gold equivalent
ounces was $1,412 for the current quarter.
General and Administrative Expenses
General and administrative expenses for the quarter of $18.2 million were higher than the same period in 2023 as Séguéla
transitioned to operations and costs are no longer being capitalized , and due to timing of corporate expenses . G&A is
comprised of the following items:
Three months ended March 31,
(Expressed in millions) 2024 2023 % Change
Mine G&A 7.5 6.0 25%
Corporate G&A 8.4 6.7 25%
Share-based payments 2.2 2.1 5%
Workers' participation 0.1 0.1 0%
Total 18.2 14.9 22%
Liquidity
The Company’s total liquidity available as of March 31, 2024 was $212.7 million comprised of $87.7 million in cash and
cash equivalents, and $125.0 million undrawn on the $250.0 million revolving credit facility (excluding letters of credit).
Fortuna | 5
Lindero Mine, Argentina
Three months ended March 31,
2024 2023
Mine Production
Tonnes placed on the leach pad 1,547,323 1,478,148
Gold
Grade (g/t) 0.60 0.71
Production (oz) 23,262 25,258
Metal sold (oz) 21,719 26,812
Realized price ($/oz) 2,072 1,885
Unit Costs
Cash cost ($/oz Au)1 1,008 891
All-in sustaining cash cost ($/oz Au)1 1,634 1,424
Capital Expenditures ($000's) 2
Sustaining 9,807 7,745
Sustaining leases 598 598
Non-sustaining 154 187
1 Cash cost and All-in sustaining cash cost 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
During the first quarter of 2024 total mined ore was 2.0 million tonnes at a stripping ratio of 0.54:1. A total of 1,547,323
tonnes of ore was placed on the heap leach pad at an average gold grade of 0.60 g/t, containing an estimated 29,670
ounces of gold. Gold production for Q1 2024 totaled 23,262 ounces, an 8% decrease in total ounces from the first quarter
of 2023, primarily due to lower head grades. Lower mined grades are aligned with the mining sequence and the Mineral
Reserves estimates.
The cash cost per ounce of gold for the quarter ending March 31, 2024, was $1,008 compared to $891, in the same period
of 2023. The increase in cash cost per ounce of gold was primarily related to higher ounces sold in the comparable period
due to higher production, timing of sales as 1,700 ounces of gold were still in inventory at the end of the perio d and
additional rental equipment.
The all-in sustaining cash cost per gold ounce sold during Q1 2024 was $1,634, up from $1,424 in the first quarter of 2023.
The increase in the quarter was primarily due to increased cash costs, higher capital expenditures related to the heap
leach expansion and higher general and administrative costs.
As of March 31, 2024, the $51.8 million leach pad expansion project ($41.7 million capital investment in 2024) was
approximately 35% complete. The construction package of the project commenced in January 2024, and is 18% complete,
with contractors on site undertaking earthworks and construction of the impulsion line. The procurement and
construction management (“PCM”) service was awarded to Knight Piésold consultants, with the PCM project offices
installed and personnel onsite as of the third quarter of 2023. Procurement is 92% complete, with critical path items
onsite. The final shipments of geomembrane and geosynthet ic clay liner are currently in transit, and the pump
manufacturing for the new impulsion line are all on schedule. In addition to the current works, liner installation and major
mechanical works are expected to commence in the second quarter of 2024. The project is scheduled to be substantially
complete in the fourth quarter of 2024, with operations beginning ore placement by the end of 2024 according to the
stacking plan for the year.
Fortuna | 6
Yaramoko Mine, Burkina Faso
Three months ended March 31,
2024 2023
Mine Production
Tonnes milled 107,719 139,650
Gold
Grade (g/t) 8.79 5.94
Recovery (%) 98 97
Production (oz) 27,177 26,437
Metal sold (oz) 27,171 29,472
Realized price ($/oz) 2,095 1,899
Unit Costs
Cash cost ($/oz Au)1 752 819
All-in sustaining cash cost ($/oz Au)1 1,373 1,509
Capital Expenditures ($000's) 2
Sustaining 9,573 13,549
Sustaining leases 1,050 1,359
Brownfields 1,410 1,191
1 Cash cost and All-in sustaining cash cost 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.
In the first quarter of 2024, Yaramoko mined 123,877 tonnes of ore at an average grade of 8.30 g/t Au containing an
estimated 33,053 ounces of gold. Mill production was 27,177 ounces of gold with an average gold head grade of 8.79 g/t.
This represents a 3% and 48% increase when compared to the same period in 2023. A planned mill maintenance shutdown
reduced mill throughput in the first quarter of 2024.
The cash cost per ounce of gold sold for the quarter ended March 31, 2024, was $752, compared to $819 in the same
period in 2023. The decrease for the quarter is mainly attributed to higher head grades, which demand lower direct costs
per ounce. This was p artially offset by higher royalties due to higher metal prices and a change in the royalty regime in
Burkina Faso which increased the royalty rate from 5% to 7% when the gold price is over $2,000 per ounce.
The all-in sustaining cash cost per gold ounce sold was $1,373 for the quarter ended March 31, 2024, compared to $1,509
in the same period of 2023. The change in the quarter was primarily due to the decreased cash cost described above, and
reduced capital expenditures.
Drilling focused on infill grade control and exploring for extensions beyond the mineralized resource envelope in the
deeper eastern and western portions of the 55 Zone. Stoping operations at the QVP orebody accelerated with batch mill
tests confirming grade expectations.
In early April, the Government of Ghana issued a directive which stopped the export of electricity to its neighbouring
countries, including Burkina Faso. As a consequence, Yaramoko has supplemented electricity used in its operations from
the national grid with self -generated backup power. Production at Yaramoko has not been affected; however,
Management is currently monitoring the increase in costs of the alternative energy supplies.
Fortuna | 7
Séguéla Mine, Côte d’Ivoire
Three months ended March 31,
2024 2023
Mine Production
Tonnes milled 394,837 -
Average tonnes crushed per day 4,339 -
Gold
Grade (g/t) 2.79 -
Recovery (%) 94 -
Production (oz) 34,556 -
Metal sold (oz) 34,450 -
Realized price ($/oz) 2,095 -
Unit Costs
Cash cost ($/oz Au)1 459 -
All-in sustaining cash cost ($/oz Au)1 948 -
Capital Expenditures ($000's) 2
Sustaining 3,027 -
Sustaining leases 2,265 -
Non-sustaining 1,035 -
Brownfields 4,896 -
1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures. Refer to Non-IFRS Financial Measures.
2 Capital expenditures are presented on a cash basis
In the first quarter of 2024, mined material totaled 420,538 tonnes of ore, averaging 2.23 g/t Au, and containing an
estimated 30,192 ounces of gold from the Antenna and Ancien pits. Movement of waste during the quarter totaled
2,538,067 tonnes, for a strip ratio of 6:1.
Production was mainly focused on the Antenna pit which produced 401,109 tonnes of ore, the remainder being mined at
the Ancien pit. A total of 700,229 tonnes of waste was also mined at Ancien. Waste mining commenced at Koula during
the quarter with 18,063 tonnes of waste being mined.
Séguéla processed 394,837 tonnes in the quarter, producing 34,556 ounces of gold, at an average head grade of 2.79 g/t
Au.
Throughput for the quarter averaged 195 tonnes per hour (t/hr), versus name plate design capacity of 154 t/hr. Mill
constraints continued to be tested with throughputs of up to 220 t/hr being recorded over a seven -day period. This was
achieved with a 60/20/20 blend of fresh, transitional and oxide ore respectively. The Life of Mine (LOM) blend consists of
85% fresh rock. A relining of the mill is planned in April, and further tests will then be conducted with a blend more
representative of the LOM blend. Mi ne design and scheduling continue with the focus being on the requirements to
sustainably meet the expected higher throughput rates.
Cash cost per gold ounce sold was $459, and all -in sustaining cash cost per gold ounce sold was $9 48 for Q1 2024. Both
were within plan and guidance.
Côte d’Ivoire has been experiencing a shortage of electricity to the national grid since mid -April, due to failures at two
private power generation plants, which supply approximately 25% of the electricity to the national grid. This has led to
power cuts in neighborhoods, load shedding during peak hours, and electricity rationing to industries. Power output from
one of the plants (CIPREL)has now been restored; however, restoration of supply from the second plant (AZITO) is not
expected until July. The Séguéla mine continues to receive energy on a daily basis from the grid with interruptions. The
operation has emergency backup power generation capacity to sustain critical processes only. Management is
implementing various short -and medium -term mitigating m easures which include operating the mill at 25% higher
throughput, adjusting mine plans to prioritize higher grade Mineral Reserves, and sourcing a power backup solution for
Fortuna | 8
the entire operation, expected to be available on -site in July. Production in April has been only marginally affected.
Management has not modified annual guidance for the Séguéla mine at this time but continues to monitor the situation
closely.