Fortuna issues 2020 production and cost guidance
Fortuna issues 2020 production and cost guidance
Vancouver, February 20, 2020-- Fortuna Silver Mines, Inc. (NYSE: FSM) (TSX: FVI) is pleased to provide
2020 production, cost, and capital expenditures guidance for its mining operations in Latin America.
2020 Consolidated Production and Cash Cost Guidance
Mine
Silver Gold Lead Zinc Cash Cost
(US$/t) AISC1
(Moz) (koz) (Mlbs) (Mlbs)
Silver (US$/oz Ag Eq)
San Jose, Mexico 6.6 - 7.3 41 - 45 -- -- 65.6 - 72.5 9.6 - 11.7
Caylloma, Peru 0.9 - 1.0 -- 27.2 - 30.1 44.0 - 48.6 81.4 - 89.9 14.8 - 18.1
Gold (US$/oz Au)
Lindero2,3, Argentina -- 60 - 80 -- -- 10.2 - 11.4 520 - 620
Consolidated Total 7.5 - 8.3 101 - 125 27.2 - 30.1 44.0 - 48.6
Notes:
1. All-in sustaining cost (AISC) is a non-GAAP financial measure, refer to Forward-looking Statements regarding non-GAAP
financial measures at the end of this news release; AISC includes production cash cost, commercial and government
royalties, mining tax, export duties (as applicable), worker’s participation (as applicable), subsidiary G&A, sustaining
capital expenditures, and Brownfields exploration and is estimated at metal prices of US$1,450/oz Au, US$17/oz Ag,
US$2,100/t Pb, and US$2,500/t Zn
2. Lindero’s production and cost guidance is based on the updated construction and commissioning schedule, as detailed
in Fortuna’s news release dated February 13, 2020, with ore to be placed on the leach pad and first doré pour scheduled
in the second quarter of 2020. Any material changes to the construction or commissioning schedule may have a material
impact on Lindero’s production and cost guidance
3. Lindero’s all-in sustaining cost is based on commercial production and includes an export duty of 5% of revenue
4. Totals may not add due to rounding
2020 Guidance Highlights
San Jose Mine, Mexico
At the San Jose Mine, the operation plans to process 1,062,000 tonnes averaging 223 g/t Ag and
1.39 g/t Au. Capital investment is estimated at US$17.1 million; including US$12.2 million for sustaining
capital expenditures and US$4.9 million for Brownfields exploration programs.
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Major sustaining capital investment projects include:
▪ Dry stack expansion: US$2.4 million
▪ Mine development: US$4.8 million
▪ Equipment and infrastructure: US$2.0 million
Caylloma Mine, Peru
At the Caylloma Mine, the operation plans to process 534,000 tonnes averaging 67 g/t Ag, 2.81% Pb and
4.46% Zn. Capital investments are estimated at US$12.9 million; including US$10.8 million for sustaining
capital expenditures and US$2.1 million for Brownfields exploration programs.
Major sustaining capital investment projects include:
▪ Mine development: US$5.0 million
▪ Equipment and Infrastructure: US$5.7 million
Lindero Mine, Argentina
At the Lindero Mine, the operation plans to place on the leach pad between 3.1 and 3.7 million tonnes
averaging 1.02 g/t Au, containing between 100,000 to 125,000 ounces of gold, of which 60,000 to 80,000
ounces of gold are expected to be produced as gold doré in the year. Estimated gold doré production for
2020 is consistent with the first twelve month commercial production plan of 145,000 to 160,000 ounces
as previously projected for Lindero (refer to Fortuna news release dated April 4, 2019).
Sustaining capital investments are estimated at US$3.3 million related to equipment and infrastructure.
Brownfields Exploration Outlook
San Jose Mine, Mexico
The B rownfields exploration program budget for 20 20 at the San Jose Mine is US$4.9 million, which
includes 17,600 meters of diamond drilling and 500 meters of underground development for drilling
access, platforms and services. Underground exploration drilling will focus on the shallow, north extension
of the Trinidad vein and the sub-parallel Victoria mineralized zone, while surface drilling will test two new
targets to the south of the mine.
Caylloma Mine, Peru
The B rownfields exploration program budget for 20 20 at the Caylloma Mine is US$2.1 million, which
includes 9,500 meters of diamond drilling. Surface drilling will focus on the extensions of three ore shoots
along the Animas vein and the possible extension of mineral resources along the San Cristobal silver vein
located to the north of the mine.
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Lindero Mine, Argentina
The Brownfields exploration program budget for 2020 at the Lindero Mine is US$320,000, which includes
1,000 meters of drilling on the Arizaro target located 3.5 kilometers to the southeast of the mine . The
drilling will test for additional mineralization t hat could potentially contribute to Lindero ’s future
production.
Greenfields Exploration Outlook
Active reconnaissance exploration programs and evaluations of possible acquisitions in Mexico, Argentina
and select other jurisdictions will continue throughout 2020.
Qualified Person
Amri Sinuhaji is the Technical Services Director – Mine Planning for the Company and is a Qualified Person
as defined by National Instrument 43-101- Standards of Disclosure for Mineral Projects. Mr. Sinuhaji is a
Professional Engineer registered with the Association of Professional Engineers and Geoscientists of the
Province of British Columbia (#48305) and has reviewed and approved the scientific and technical
information contained in this news release.
About Fortuna Silver Mines Inc.
Fortuna is a growth oriented, precious metals producer focused on mining opportunities in Latin America.
Our primary assets are the Caylloma silver Mine in southern Peru, the San Jose silver-gold Mine in Mexico
and the Lindero gold Project, currently under construction, in Argentina. The Company is selectively
pursuing acquisition opportunities throughout the Americas and in select other areas. For more
information, please visit our website at www.fortunasilver.com.
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
T (Peru): +51.1.616.6060, ext. 0
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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 lookin g
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 material ly from those reflected in the Forward-looking Statements. The Forward looking
Statements in this news release may include, without limitation, statements about the Company’s plans for its mines
and mineral properties; the Company’s business strategy, plan s and outlook; future operating performance such as
the Company´s production forecasts for gold silver and other metals; future costs forecasts and future production
plans; estimated production rates for gold, silver and other metals produced by the Compa ny; the prices of gold,
silver and other materials ; the sufficiency of the Company’s working capital, anticipated operating cash flow or the
Company’s ability to raise necessary funds; timing of production, production levels and the cash costs and total costs
of production at the Caylloma mine, the San Jose mine and the Lindero mine; planned development activities for 2020
at Lindero, including the commissioning of the processing facilities; planned preparations for operation s at Lindero,
including expected timing of the placement of first ore on the leach pad and the first dor é pour at the Lindero mine
in the second quarter of 2020, the mining rate, stock piling of ore prior to first production; targeted timing for
production and commercial production at Lindero; the expected production costs, economics, grade and other
operating parameters at Lindero; planned production at Lindero in 2020; the merit of the Company’s mines and
mineral properties; mineral resource and reserve estimates; the Company’s ability to convert infe rred mineral
resources to indicated mineral resources and to convert mineral res ources to mineral reserves; timelines; the future
financial or operating performance of the Company; the effects of laws, regula tions and government policies
affecting our operations or potential future operations; future successful development of our projects; the estimates
of expected or anticipated economic returns from the Company’s mining operations including future sales of metals,
concentrate or other products produced by the Company; the Company’s ability to achieve its production and cost
guidance; capital expenditures at the Company’s operatio ns; approvals and other matters. Often, but not always,
these Forward looking Sta tements can be identified by the use of words such as “estimated”, “potential”, “open”,
“future”, “assumed”, “projected”, “used”, “detailed”, “has been”, “gain”, “planned”, “reflecting”, “will”,
“containing”, “remaining”, “expected”, “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 of production,
development plans and cost estimates for the Caylloma mine, the San J ose mine and the Lindero mine; changes in
prices for silver and other metals; technological and operational hazards in Fortuna’s mining and mine development
activities; market risks related to the sale of the Company’s concentrates and metals; future devel opment risks,
including start-up delays and cost overruns at Lindero; risks inherent in mineral exploration; uncertainties inherent
in the estimation of mineral reserves, mineral resources, and metal recoveries; the Company’s ability to replace
mineral reserves; changes to current estimates of mineral reserves and resources; changes to production estimates;
the Company’s ability to obtain adequate financing for further exploration and development programs and
opportunities; governmental and other approvals ; recoverability of value added tax and significant delays in the
Company’s collection process; claims and legal proceedings, including adverse rulings in litigation against the
Company; 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.
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Forward looking Statements contained herein are based on the assumptio ns, beliefs, expectations and opinions of
management, including but not limited to expectations regarding mine production costs; expected trends in mineral
prices and currency exchange rates; the accuracy of the Company’s current mineral resource and reser ve estimates;
that the Company’s activities will be in accordance with the Company’s public statements and stated goals; that
there will be no material adverse change affecting the Company or its properties; that all required approvals will be
obtained; that there will be no significant disruptions affecting 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, whet her as a result of new information, future events or results or
otherwise, except as required by law. There can be no assurance that Forward-looking Statements will prove to be
accurate, as actual results and future events could differ materially from thos e anticipated in such statements.
Accordingly, investors should not place undue reliance on Forward looking Statements.
This news release also refers to non-GAAP financial measures, such as all-in sustaining cash cost; cash cost per tonne
of processed ore . These measures do not have a standardized meaning or method of calculation, even though the
descriptions of such measures may be similar. These performance measures have no meaning under International
Financial Reporting Standards (IFRS) and therefore, a mounts presented may not be comparable to similar data
presented by other mining companies.
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. Equivalent U.S. reporting requirements
are currently governed by the United States Securities and Exchange Commission ("SEC") Industry Guide 7 (“Industry
Guide 7”) under the U.S. Securities Act of 1933, as amended. Canadian standards, including NI 43 -101, differ
significantly from the requirements of the SEC currently in effect under Industry Guide 7, and reserve and resource
information contained in this news release may not be comparable to similar information disclosed by U.S.
companies. In particular, the term "resource" does not equate to the term "reser ves". Under the SEC's disclosure
standards currently in effect under Industry Guide 7, mineralization may not be classified as a "reserve" unless the
determination has been made that the mineralization could be economically and legally produced or extracted at the
time the reserve determination is made. The SEC has not recognized the reporting of mineral deposits which do not
meet the Industry Guide 7 definition of “reserve” prior to the adoption of the Modernization of Property Disclosures
for Mining Registrants, which rules will be required to be complied with in the first fiscal year beginning on or after
January 1, 2021. As a result, the SEC's disclosure standards currently in effect normally do not permit the inclusion of
information concerning "measured mineral resources", "indicated mineral resources" or "inferred mineral resources"
or other descriptions of the amount of mineralization in mineral deposits that do not constitute "reserves" by U.S.
standards in documents filed with the SEC. You are cauti oned not to assume that resources will ever be converted
into reserves. You should also understand that "inferred mineral resources" have a great amount of uncertainty as
to their existence and great uncertainty as to their economic and legal feasibility. You should also not assume that
all or any part of an "inferred mineral resource" will ever be upgraded to a higher category. Under Canadian rules,
estimated "inferred mineral resources" may not form the basis of feasibility or pre -feasibility studies exce pt in rare
cases. You are cautioned not to assume that all or any part of an "inferred mineral resource" exists or is economically
or legally mineable. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian
regulations; however, the SEC's disclosure standards currently in effect under Industry Guide 7 normally only permit
issuers to report mineralization that does not constitute "reserves" by such standards as in-place tonnage and grade
without reference to unit measures. The requirements of NI 43 -101 for identification of "reserves" are also not the
same as those of the SEC's disclosure standards currently in effect under Industry Guide 7, and reserves reported in
compliance with NI 43 -101 may not qualify as "reserves" under s uch SEC standards. Accordingly, information
concerning mineral deposits set forth in this news release may not be comparable with information made public by
companies that report in accordance with U.S. standards.