Fortuna challenges decision to re-assess extension of San Jose Mine Environmental Impact Authorization
Fortuna challenges decision to re-assess extension of San Jose Mine
Environmental Impact Authorization
Vancouver, January 5, 2023: Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI ) reports that its Mexican
subsidiary, Compania Minera Cuzcatlan (“Minera Cuzcatlan”), has received written notice of a resolution
(the “SEMARNAT Resolution”) issued by the Secretaria de Medio Ambiente y Recursos Naturales
(“SEMARNAT”) which provides that SEMARNAT is re-assessing the 12-year extension (“EIA Extension”) to
the environmental impact authorization (“EIA”) for the San Jose Mine, located in Oaxaca, Mexico that it
granted to Minera Cuzcatlan in December 2021 (refer to Fortuna news release dated December 20, 2021).
Jorge A. Ganoza, President an d CEO, commented, “It is incomprehensible that we find ourselves again
having to contest a controversial resolution issued by SEMARNAT. This specific authorization, one of the
many under which San Jose operates, was confirmed by the Federal Court last November, with a ruling in
our favor against SEMARNAT .” Mr. Ganoza added, “ Moreover, under the four years of the current
Mexican Administration, the San Jose Mine has been audited annually by the Federal Envir onmental
Attorney’s Office (PROFEPA) as well as the National Water Commission (CONAGUA), and in every single
audit, San Jose´s compliance with environmental obligations has been confirmed. Further, during this
period, SEMARNAT has issued two multi-year environmental authorizations f or the mine and tailings
facility.” Mr. Ganoza concluded, “Minera Cuzcatlan is diligently working with the government authorities
to resolve this matter and is concurrently pursuing all pertinent legal protection.”
Subsequent to the grant of the EIA Extension on December 16, 2021, SEMARNAT suggested that it had
made a typographical error in the EIA Extension and that the correct term was two years (refer to Fortuna
news release dated February 4, 2022 ). Minera Cuzcatlan initiated legal proceedings to challenge and
revoke the alleged typographical error, and on November 7, 2022, the Company announced that the
Mexican Federal Administrative Court had issued a judgment in favour of the Company and re-confirmed
the term of the EIA Extension for the San Jose Mine for a period of 12 years (Refer to Fortuna Q3 2022
MD&A).
On January 2, 2023, Minera Cuzcatlan received the SEMARNAT Resolution which annuls the EIA Extension
and requires SEMARNAT to re-assess its decision to extend the EIA by conducting a review of the following
two areas of the extension that it previously considered , and subsequently issue a new decision related
to the extension of the EIA that:
• SEMARNAT did not have authority to grant an extension to the EIA for more than half of the
original 12-year term of the EIA
• In the EIA Extension , SEMARNAT did not provide sufficient analysis to justify the compliance by
the Company of some of its environmental obligations in order for SEMARNAT to grant the
extension of the term of the EIA
Management of the Company believes that the SEMARNAT Resolution is unfounded and has no merits,
as:
NYSE: FSM | TSX: FVI
www.fortunasilver.com NEWS RELEASE
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(i) SEMARNAT has the authority under the General Ecological Equilibrium and Environmental
Protection Law to grant an extension of the EIA for a period of 12 years
(ii) By granting the extension to the EI A in December 2021, SEMARNAT had confirmed that
operations at the San Jose Mine are conducted in compliance with all environmental
obligations under the EIA which justified the EIA Extension
As a result, Minera Cuzcatlan will pursue all legal protection available to it, which includes initiating legal
proceedings against SEMARNAT to contest and revoke the annulment of the EIA , which revocation is
appealable by the Company.
Minera Cuzcatlan is in full compliance with all material environmental laws and continues to operate
under the terms of the EIA. The Company continues to work with communities from the surrounding area
in relation to the mine to enhance and expand the soci al benefits of the mine in the region. The mine is
the single largest employer in the region of Valles Centrales and provides direct employment to over 1,200
people. The Company has sustainable development initiatives with various neighbouring communities
and works with over 150 small local enterprises.
About Fortuna Silver Mines Inc.
Fortuna Silver Mines Inc. is a Canadian precious metals mining company with four operating mines in
Argentina, Burkina Faso, Mexico and Peru, and a fifth mine under construction in Côte d'Ivoire.
Sustainability is integral to all our operations and relationships. We produce gold and silver and generate
shared value over the long -term for our stakeholders through efficient production, environmental
protection, and social responsibility. For more information, please visit our website.
ON BEHALF OF THE BOARD
Jorge A. Ganoza
President, CEO, and Director
Fortuna Silver Mines Inc.
Trading symbols: NYSE: FSM | TSX: FVI
Investor Relations:
Carlos Baca | [email protected] | Twitter: @Fortuna_Silver | LinkedIn: fortunasilvermines
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 United States Private Securities Litigation Reform Act of 1995 (collectively, "Forward -looking Statements"). All statements
included herein, other tha n 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 t he
Forward-looking Statements. The Forward-looking Statements in this news release include, without limitation, statements about
the legal proceedings to be initiated by Minera Cuzcatlan to contest and revoke the annulment of the EIA; the likelihood of success
in the legal proceedings; the Company’s business strategy, plans and outlook; the merit of the Company’s mines and mineral
properties; the future financial or operating performance of the Company; expenditures; approvals and other matters. Often, but
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not always, these Forward-looking Statements can be identified by the use of words such as "estimated", “expected”, “intended”,
“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, factors beyond our control,
including but not limited to, the ability of Minera Cuzcatlan to successfully contest and revoke the SEMARNAT Resolution; changes
in laws, rules or regulations and other challenges discussed in our public filings ; changes in general economic conditions and
financial markets; the continued rising rates of global inflation which impact the costs of operations; the risks relating to a global
pandemic, including the COVID -19 pandemic, as well as risks associated with w ar 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; the imposition of capital controls in coun tries in which the Company operates; the continuance of
currency controls in Argentina; changes in the prices of key supplies; technological and operational hazards in Fortuna’s mi ning
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 productio n
and cost estimates; changes in the position of regulatory authori ties 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 material ly
from those described in Forward -looking Statements, there may be ot her 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 that the Company will be successful in revoking the SEMARNAT Resolution; that the Company’s
activities will be conducted in accordance with the Company’s public statements and stated goals; that there will be no mater ial
adverse change affecting the Co mpany, 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, labor
and contractor availability and other o perating or technical difficulties); the duration and impacts of COVID -19 and other geo -
political uncertainties on the Company’s production, workforce, business, operations and financial condition; the expected trends
in mineral prices and currency exchang e rates; that the Company will be successful in mitigating the impact of inflation on its
business and operations; 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 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 tho se anticipated in such statements. Accordingly, investors should not place undue reliance
on Forward-looking Statements.