Fortuna provides update on the Lindero gold Project in Argentina
Fortuna provides update on the Lindero gold Project in Argentina
Vancouver, March 22, 2017-- Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) is
pleased to present an update of preliminary results of the optimization work being conducted on
the feasibility study (“Feasibility Study”) prepared in 2016 on the company’s 100% owned
Lindero gold Project located in the Province of Salta, Argentina.
Jorge Ganoza, President, CEO and Director, commented, “ We are extremely pleased with gold
recovery results to date as they are supportive of our initial view that the Lindero project presents
significant opportunities to reduce recovery time and improve gold extraction.” Mr. Ganoza
continued, “ The long lead item in this optimization plan is the metallurg ical process. With
metallurgical tests almost completed, our engineering team is now in a position to initiate basic
engineering activities on several fronts. We plan to have the project ready for a construction
decision in the third quarter of 2017.”
Mineral processing optimization highlights:
• Preliminary tall-column leach tests consistently a bove 76% gold extraction for the four
metallurgical types of ore
• Cyanide cure during agglomeration allows over 70% gold extraction in the first 30 days
of leaching for the four metallurgical types of ore
• Copper concentration in solution amenable to treatment with sulfidization, acidification,
recycling and thickening (“SART”) plant technology
• Agglomeration with modest cement addition to achieve heap heights of approximately 80
meters for 9 millimeter high pressure grinding rolls (“HPGR”) crushed ore
In September 2016, Fortuna started a pre -construction review of the project with the objective of
optimizing certain components of the F easibility Study. This review includes the validation of
the geological model and resource/reserve estimates, optimization of the mine design , review of
the metallurgical process including key metallurgy laboratory tests, and an update of the
infrastructure basic engineering.
Metallurgy
Based on existing project information and preliminary results of ongoing metallurgical tests ,
Fortuna believes that significant improvements can be achieved in gold recovery and leach time
compared to the Feasibility Study’s average gold extraction of 68% over 240 days.
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Optimization of the process design has confirmed the benefit of the use of a HPGR crusher, the
inclusion of cyanide cure of ore, and copper removal / cyanide recovery with a SART plant.
Results to date indicate that these components could allow for improved gold leaching kinetics
and effective extraction of copper from the pregnant solution.
The table below compares preliminary gold extraction figures obtained by Fortuna as of March
20, 2017 with the Feasibility Study results. These results, estimated from solution assays, are for
10-meter tall column leaching tests that have been running for 72 days.
Met Type Preliminary*
Gold Extraction
Feasibility Study Gold
Extraction
1 80.9% 68%
2 76.9% 74%
3 77.3% 69%
4 76.2% 62%
(*) Results are based on solution assay only and are therefore preliminary in nature and final results need to be adjusted when tails assays are
completed at the end of the test. Also a deduction of approximately 4% needs to be accounted for in gold extraction figures for design purposes
when going from a laboratory test to commercial operation.
Final results are expected in April when assaying of tail s material from the column s is
completed.
Metallurgical Tests
In August 2016, samples were collected from existing drill core at Lindero and sent to Base
Metals Laboratory (BML), located in Kamloops, British Columbia, for preparation which
included crushing with a HPGR mill at the University of British Columbia. All preparation and
tests are being carried out individually for the four metallurgical types identified in the resource
as shown in the following table:
Met Type Met Type
Description
Met Type Percentage in
Resource Estimation
1 Fresh intrusive 67%
2 Oxide porphyry 10%
3 Fresh porphyry 4%
4 Sediments 19%
A portion of the prepared material was sent to the laboratory of HydroGeoSense in Tucson,
Arizona, for hydrodynamic column testwork with the purpose of evaluating permeability
characteristics to determine maximum heap heights. As a result of the low to medium values
obtained, agglomeration with cement is recommended to reach heap he ights of approximately 80
meters. Testwork also confirmed that cement addition was sufficient for pH control during
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leaching, therefore no lime is required. Maximum cement consumption per metallurgical type is
shown in the table below:
Met Type Maximum Consumption
(kg/t)
1 4.5
2 4.5
3 1.5
4 0.0
Once optimum conditions for agglomeration were determined, leaching column testwork was
initiated. The first step was a set of 32 scoping short column tests to determine the optimum
leaching conditions (cyanide strength, irrigation rate, etc.) to run the 10-meter tall columns.
The company has collected core samples from a diamond drill program carried out in the third
quarter of 2016 for confirmatory fresh ore column leach tests. These samples have been
delivered to BML for the respective metallurgy testwork.
Mineral Reserves and Resources
The Feasibility Study was prepared as at October 23, 2015 in accordance with NI 43 -101, and
defines a Mineral Reserve totaling 82.5 million tonnes averaging 0.63 g/t Au and containing 1.7
million ounces of gold with a projected life of 12 years (see Fortuna news release dated February
27, 2017).
Fortuna has conducted a validation program which included relogging of all available drill core,
heterogeneity testwork to establish the variability of the mineralization and subsequent sampling
protocols, drilling of 4,461 meters to increase confidence in the geological interpretation, a
geotechnical review of pit slope angle design parameters, and a re -estimation of reserves and
resources. The work completed has not identified any significant changes with respect to the
reserves and resources stated in the Feasibility Study.
Mining
A tradeoff analysis evaluating different fleet size equipme nt has been completed . Results
indicate that the mine can accommodate different truck and shovel options, ranging from 150 ton
to 50 ton trucks, with varying impacts on CAPEX and OPEX. F inal selection of fleet equipment
is expected in the third quarter of 2017.
Infrastructure
Basic engineering for the infrastructure is being updated to reflect changes from the optimization
in mineral process design, project layout, and economic parameters in Argentina since the
publication of the Feasibility Study in early 2016.
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Lindero gold Project
In July 2016, Fortuna completed the acquisition of Goldrock Mines Corp. whose principal asset
was the Lindero Project (see Fortuna news release dated July 28, 2016 ). In addition to the
Feasibility Study, Lindero has an approved environmental impact study and has been granted all
major permits for the construction of an 18,750 tpd open pit, heap leach gold mine. The
Feasibility Study considers a life of mine average annual production for the first nine years of
approximately 108,000 ounces of gold at an all -in sustaining cash cost of US$715 per ounce of
gold.
Qualified Persons
Geoff Allard, Professional Engineer (Arizona Registration Number 49711), is a Qualified Person
as defined by National Instrument 43- 101. Metallurgical testing has been under the direction of
Mr. Allard who has reviewed the metallurgical statements in this news release and concludes that
they are an accurate representation of the metallurgical work to date.
Eric N. Chapman, M.Sc., Vice President of Technical Services, is the Qualified Person for
Fortuna Sil ver Mines Inc. as defined by National Instrument 43- 101. Mr. Chapman is a
Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the
Province of British Columbia (Registration Number 36328) and is responsible for ensur ing that
the information contained in this news release is an accurate summary of the original reports and
data provided to or developed by Fortuna Silver Mines.
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 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” wit hin 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 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 its mines
and mineral properties; the Company’s business strategy, plans and outlook; the merit of the Company’s mines and
mineral properties; mineral resource and reserve estimates; timelines; the future financial or operating
performance of the Company; expenditures; approvals and other matters. Often, but not always, these Forward
looking Stateme nts 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 “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 ; changes in prices for
silver and other metals; technological and operational hazards in Fortuna’s mining and mine development
activities; risks inherent in mineral exploration; uncertainties inherent in the estimation of mineral reserves, mineral
resources, and metal recoveries; governmental and other approvals; 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 dif fer 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 expectations regarding mine production costs; expec ted trends in mineral
prices and currency exchange rates; the accuracy of the Company’s current mineral resource and reserve
estimates; that the Company’s activities will be in accordance with the Company’s public statements and stated
goals; that there wi ll 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 Stateme nts 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 F orward looking
Statements will prove to be accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, investors should not place undue reliance on Forward looking
Statements.
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 disclosur e by a
Canadian company of scientific and technical information concerning mineral projects. Canadian standards,
including NI 43- 101, differ significantly from the requirements of the United States Securities and Exchange
Commission ("SEC"), 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
"reserves". Under U.S. standards, mineralization may not be class ified 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.
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The SEC's disclosure standards 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 cautioned 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 feasibili ty or pre-feasibility studies except 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 normally only permits issuers to report mineralization that does not constitute "reserves" by SEC 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, and reserves reported in compliance with NI 43- 101 may not
qualify as "reserves" under 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.