Fortuna provides construction update at its Séguéla gold Project in Côte d´Ivoire
Fortuna provides construction update at its Séguéla gold Project
in Côte d´Ivoire
Vancouver, June 21, 2022 – Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) is pleased to provide an
update on construction activities at its Séguéla gold Project located in Côte d’Ivoire. In September of 2021,
the Company made a construction decision to proceed to build a 3,750 tonne per day mill at Séguéla, with
first gold pour exp ected in mid -2023 (refer to Fortuna news release dated September 29, 2021 ). All
references to dollar amounts in this news release are expressed in US dollars.
Paul Criddle, Chief Operating Officer - West Africa of Fortuna, commented, “The Séguéla Project continues
to advance in line with our expectations through what is a challenging supply market.” Mr. Criddle
continued, “Séguéla has transitioned through the design and procurement phases to now having much of
the critical earthworks and civil works out of the ground ahead of the upcoming wet season, in line with
budget and schedule.” Mr. Criddle concluded, “Activities at the project site are really ramping up ahead
of planned gold pour in mid-2023.”
Construction Highlights
• Overall project is 61 percent complete as of June 15, 2022
• Approximately $91.6 million of the $173.5 million initial capital budget accrued as of May 31, 2022
• Approximately $143.8 million committed as of May 31, 2022
• Majority of equipment packages secured and first deliveries arriving in Abidjan, Côte d´Ivoire
• All major construction contracts executed and contractor mobilizations underway
• All key scopes now commenced and construction advancing on the ground
• Mining contract executed with Mota-Engil and long lead equipment ordered
• Key mechanical equipment has begun arriving at site
• First gold pour remains on target for mid-2023
NYSE: FSM | TSX: FVI
www.fortunasilver.com NEWS RELEASE
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Project construction overview
Accommodation Camp
The accommodation camp is complete and occupied by the project and company staff.
156-person accommodation camp
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Processing Plant
De Simone was awarded the process plant bulk earthworks contract and activities are nearing completion.
Ground improvement works are completed and only punch listed items are outstanding. All areas have
been handed over to the engineering, procurement and construction (EPC) contractor for construction of
the processing plant.
Lycopodium, the process plant EPC contractor , mobilized to site in March 2022 and has made excellent
progress in advancing the critical path scopes for the plant. As of June 15, 2022, engineering activities
were 95 percent complete, procurement activities 78 percent complete and construction activities have
commenced in the following key areas:
• Civil and concrete works for the crusher, surge bin, milling and carbon in leach (CIL) areas
• CIL tank fabrication
• Installation of high security fencing
The delivery and installation of the SAG mill remains on the Project’s critical path and, despite supply chain
challenges and risks, is expected to be delivered to site on schedule. Manufacturing of core components
such as the shell, heads and trunnions and gear and pinion are well advanced. Despite challenges around
logistics due to global port congestion at the start of the year, key mechanical packages such as the
primary crusher and high-voltage transformers have started to arrive in-country in line with the schedule.
CIL tanks fabrication overview
Thickener and water services tanks civil work overview
Primary crusher foundation overview
Primary jaw crusher
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Site Bulk Earthworks
Construction of the tailings storage facility (TSF) and water storage dam (WSD) are well advanced.
Construction of the WSD embankment is on -track to be completed by the end of June, ahead of the
upcoming wet season, and the embankment has already begun capturing and storing raw water in
preparation for commissioning and transition into operations. Likewise, good progress has been made on
the TSF embankment and is on track to be completed in the fourth quarter of 2022. High density
polyethylene (HDPE) lining of the western TSF basin has commenced and approximately 26 percent of the
total surface of the TSF has been lined by mid-June.
Water storage dam construction overview
Tailings dam construction overview
Grid Connection
Works are on-track to provide power to the site by the end of the fourth quarter of 2022 ahead of
commissioning activities at the processing plant. Despite challenges around logistics from port congestion
at the start of the year, key electrical packages such as the high-voltage transformers out of Shanghai have
started to arrive at site in line with the schedule. The 33kV tower erections are complete with transmission
line stringing commencing in June. Tower erections for the 90kV power line have commenced and the
first shut-down for tie-in to the electrical grid is scheduled for late July. The construction of the substation
is approximately 67 percent complete with all major equipment packages, such as control, automation
and communication panels, on-track for shipment in early July.
High voltage (HV) substation construction work overview
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Mining
Mota-Engil ha s been awarded the contract for mining services at Séguéla. The agreement has been
executed and orders for long lead items placed . Mota-Engil has commenced recruitment for the project
and will advance mobilization and establishment of site infrastructure in the third quarter of 2022.
Operational Readiness
Fortuna is advancing its organizational infrastructure in Côte d’Ivoire to prepare for the start of operations
at Séguéla, as well as establishing a regional office to service both Séguéla and the Yaramoko Mine. Key
administration and logistics personnel that support the ongoing project execution phase are already in
place, developing the systems and procedures required for this. Recruitment for the S éguéla operations
group has commenced with key senior members of this team expected to be on board in the third quarter
of 2022.
Cost
As of May 31, 2022, $143.8 million of the total approved budget of $173.5 million, including $8.9 million
contingency, has been committed. Of the total commitments to date , these include contracts for a
guaranteed maximum price for $87 million, fixed price contracts for $15.4 million and earthworks bill of
quantity and schedule of rates for $13.7 million. The remaining commitments are largely comprised of
employee salaries, equipment and material purchase orders, land compensation and livelihood
restoration programs . Consequently, management of Fortuna believes that risks associated with the
volatile market conditions and price escalations have been mitigated as far as practicable.
Project commitments as of May 31, 2022
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Schedule
Construction at Séguéla is tracking on schedule with the project’s next major milestones below:
Qualified Person
Paul Criddle, FAusIMM, Chief Operating Officer, West Africa for Fortuna, is a Qualified Person as defined
by National Instrument 43 -101, Standards of Disclosure for Mineral Projects, and has reviewed and
approved the scientific and technical information pertaining to the Séguéla gold Project contained in this
news release and has verified the underlying data.
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.
Investor Relations:
Carlos Baca | [email protected] | Twitter: @Fortuna_Silver | LinkedIn: fortunasilvermines
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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” provision s
of the Private Securities Litigation Reform Act of 1995 (collectively, “Forward looking 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 materially 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 the construction of an open pit gold mine at the Séguéla gold Project, including the timeline for construction,
the costs of constructing the mine, the securing of contracts necessary for the construction of the mine, the signing of the Mining
Convention with the Government of Côte d’Ivoire, the ability to sign contracts for outstanding equipment and services in line with
the estimates for same, the timing of the first gold pour; the Company’s business strategy, plans and outlook; the merit of t he
Company’s mineral properties; mineral resource and reserve estimates; timelines; the future financial or operating performanc e
of the Company; expenditures; approvals and other matters. Often, but not always, these Forward looking Statements 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”, “to be”, or statements that events, “could” or “s hould”
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; the duration and effects of the COVID -19 pandemic on our operations and workforce and the
effects on the global economy and society; changes in prices for silver, gold and other metals; changes in the prices of supplies
required for the construction at the Séguéla gold Project such as equipment and services; the ability to sign the Mining Convention
on terms currently contemplated and acceptable to the Company; technological and operational hazards in Fortuna’s mining and
mine development activities; risks inherent in mineral exploration; fluctuations in prices for energy, labor, materials, supplies and
services; fluctuations in currencies ; increases in inflation ; uncertainties inherent in the estimation of mineral reserves, mineral
resources, and metal recoveries; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner;
governmental and other approvals; political unrest o r 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 anticipa ted,
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 construction at the Séguéla gold Project will continue on the time line and in accordance with
the budget as planned; that COVID-19 and the current inflationary environment will not have an adverse effect on the construction
at the Séguéla gold Project and will not adversely affect the supply chain of materials and equipment for the construction; expected
trends in mineral prices and currency exchange rates; 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; th at
all required approval s 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 lo oking 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 Forward looking Statements will prove to be accurate, as
actual results and future events could diffe r materially from those anticipated in such statements. Accordingly, investors should
not place undue reliance on Forward looking Statements.