Fortuna reports production of 2.1 million ounces of silver and 12,791 ounces of gold for the third quarter of 2020
Fortuna reports production of 2.1 million ounces of silver and 12,791 ounces of
gold for the third quarter of 2020
Vancouver, October 14, 20 20 – Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) reports production
results for the third quarter of 2020 from its two operating mines in Latin America, the San Jose Mine in
Mexico and the Caylloma Mine in Peru. The C ompany produced 2.1 million ounces of silver and 12,791
ounces of gold, plus base metal by-products. Silver and gold production for the first nine months of 2020
totaled 5.2 million ounces and 29,992 ounces, respectively. At the beginning of the second quarter of
2020, the Company withdrew its production and cost guidance for 2020 until further notice, due to the
uncertainties related to the impact caused by COVID -19 constraints on the Company’s business and
operations (refer to Fortuna news release dated April 2, 2020).
Third Quarter Production Highlights
• Silver production of 2,127,746 ounces; 10 percent increase over Q3 2019
• Gold production of 12,791 ounces; 12 percent increase over Q3 2019
• Lead production of 6,702,053 pounds; 6 percent decrease over Q3 2019
• Zinc production of 10,313,225 pounds; 10 percent decrease over Q3 2019
• Cash cost1 for San Jose is US$67.6/t
• Cash cost1 for Caylloma is US$82.6/t
Consolidated Operating Highlights
Third Quarter 2020 Third Quarter 2019
Caylloma,
Peru
San Jose,
Mexico
Lindero,
Argentina Consolidated Caylloma,
Peru
San Jose,
Mexico
Lindero,
Argentina Consolidated
PROCESSED ORE
Tonnes milled 107,002 255,226 - - 134,338 267,998 - -
Average tpd milled 1,189 2,934 - - 1,493 3,045 - -
Ore placed on pad² (t) - - 675,000 - - - Nil Nil
SILVER3
Grade (g/t) 74 254 - - 64 219 - -
Recovery (%) 83.06 91.87 - - 82.42 90.72 - -
Production (oz) 210,206 1,917,540 - 2,127,746 228,168 1,709,125 - 1,937,293
GOLD
Grade (g/t) 0.60 1.52 0.83 - 0.25 1.40 - -
Gold placed on pad² (oz) - - 17,980 - - - - -
Recovery (%) 65.96 91.66 - - 46.61 90.56 - -
Production (oz) 1,366 11,425 - 12,791 494 10,942 - 11,436
LEAD
Grade (%) 3.15 - - - 2.68 - - -
Recovery (%) 90.17 - - - 90.16 - - -
Production (lbs) 6,702,053 - - 6,702,053 7,157,229 - - 7,157,229
ZINC
Grade (%) 4.93 - - - 4.35 - - -
Recovery (%) 88.59 - - - 89.38 - - -
Production (lbs) 10,313,225 - - 10,313,225 11,517,861 - - 11,517,861
Notes:
1. Preliminary estimates of cash operating costs per tonne are subject to modification on final cost consolidation
NYSE: FSM | TSX: FVI
www.fortunasilver.com NEWS RELEASE
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2. Lindero tonnes and gold grade are estimated using grade control sampling of blast holes
3. Metallurgical recovery for silver and gold at the Caylloma Mine is calculated based on silver and gold content in lead
concentrate
4. Totals may not add due to rounding
San Jose Mine, Mexico
The San Jose Mine produced 1,917,540 ounces of silver and 11,425 ounces of gold in the third quarter of
2020 with average head grades for silver and gold of 254 g/t and 1.52 g/t, respectively. Silver and gold
production for the first nine months of 2020 totaled 4.5 million ounces of silver and 27,710 ounces of
gold.
Despite a minor decrease in mined tonnage, silver an d gold production increased in the third quarter of
2020 compared to the same period in 2019 due to better grades encountered in the peripheral low-grade
areas of the mine.
Caylloma Mine, Peru
In the third quarter of 2020, the Caylloma Mine produced 210,206 ounces of silver with an average head
grade of 74 g/t. Silver production for the first nine months of 2020 totaled 704,190 ounces.
Gold production was 1,366 ounces with an average head grade of 0.60 g/t. The increase in production is
due to higher head grades encountered in some of the production levels in the Animas vein. Gold
production for the first nine months of 2020 totaled 2,282 ounces.
Lead and zinc production was 6,702,053 pounds and 10,313,225 pounds with average head grades for
lead and zinc of 3.15% and 4.93%, respectively. Lead and zinc production was impacted in the quarter by
a voluntary suspension of operations in July 2020 to disinfect and sanitize the mine site (refer to Fortuna
news release dated July 28, 2020 ) and was partially offset by higher grades encountered in production
stopes. Base metal production for the first nine months of 2020 totaled 33,111,227 pounds of zinc and
21,201,856 pounds of lead.
Lindero Project, Argentina
In the third quarter of 2020, a total of 675,000 tonnes of ore have been placed on the leach pad averaging
0.83 g/t gold, containing an estimated 17,980 ounces of gold. Average gold head grade of ore placed on
the leach pad is below budget of 1.00 g/t to 1.10 g/t (refer to Fortuna news release dated May 8, 2020).
The lower average head grade is due to COVID -19 related restrictions which delayed the start of mining
activities and limited the access to high-grade ore from the pit and resulted in the shortfall being sourced
from the medium grade stockpile.
The table below details material movements from the pit as estimated from the grade control model
versus the Mineral Reserve block model for the third quarter of 2020. Reconciliation of the estimates
indicate a good correlation with differences of less than five percent for all parameters. Management
considers the result to be very encouraging when considering the variation in data density between the
models.
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Material Parameter Grade Control Model1, 3 Mineral Reserve Model2, 3 Difference
Mineral Tonnes 1,147,000 1,130,000 1.5 %
Gold (g/t) 0.68 0.71 -4.2 %
Gold (oz) 25,200 25,900 -2.8 %
Waste Tonnes 633,000 630,000 0.4 %
Notes:
1. Grade control model numbers are based on estimates from blast holes
2. Mineral Reserve model numbers are based on the Mineral Reserve estimates as of March 31, 2019 (refer to Fortuna
news release dated April 4, 2019). See also the Technical Report entitled “Fortuna Silver Mines Inc.: Lindero Property,
Salta Province, Argentina” with an effective date of October 31, 2017 prepared by Eric Chapman, Edwin Gutierrez, Geoff
Allard and Denys Parra Murrugarra. The updated Mineral Reserve estimate does not materially change the information
presented in the Technical Report.
3. Based on a gold cut-off grade of 0.27 g/t
From the com mencement of mining operations in September 2019 (see Fortuna news release dated
September 13, 2019 ) to the end of the third quarter 2020, a total of 2.3 million tonnes of mineralized
material averaging 0.61 g/t Au, containing 45,700 ounces of gold has been extracted from the pit. Of this
amount, 1.6 million tonnes averaging 0.52 g/t Au, containing an estimated 27,500 ounces of gold has been
stockpiled, with the remaining 682,000 tonnes averaging 0.83 g/t Au, containing 18, 200 ounces sent to
the crushers.
Commissioning of the ADR plant was completed accordin g to plan. The c arbon columns’ system is
performing as per design capacity generating enriched carbon which is ready for the first gold pour in the
upcoming days.
Quality Assurance & Quality Control
Grade control estimates are based on blast hole chip samples submitted to Lindero’s on -site laboratory
for preparation and assaying for gold, using fire assay with an atomic absorption finish. The QA -QC
program includes the blind insertion of certified reference standards and assay blanks at a frequency of
approximately 1 per 20 normal samples as well as the submission of duplicate samples for verification of
sampling and assay precision levels by an ISO 9001:2000 certified umpire laboratory. ALS Global
Laboratory in Mendoza, Argentina prepared the samples for assaying and then forwarded the samples to
ALS Global Laboratory in Lima, Peru for assay by standard fire assay methods.
Qualified Person
Amri Sinuhaji is the Technical Services Director – Mine Planning for the Company and is a Professional
Engineer registered with the Association of P rofessional Engineers and Geoscientists of the Province of
British Columbia (#48305) and a Qualified Person as defined by National Instrument 43-101- Standards of
Disclosure for Mineral Projects. Mr. Sinuhaji has reviewed and approved the scientific and t echnical
information 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 operations in Peru, Mexico
and Argentina. Sustainability is integral to all our operations and relationships. We produce silver and gold
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and generate shared value over the long -term for our shareholders and stakeholders through efficient
production, environmental protection and social responsibility. 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.
Investor Relations:
Carlos Baca | T (Peru): +51.1.616.6060, ext. 0
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 -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 duration and impacts of COVID -19 on the Company’s production, workforce, business,
operations and financial condition; the impact of the voluntary suspension of operations at the Caylloma Mine during
July 2020; the Company’s anticipated performance in 2020; production forecasts, production cost estimates, and
metal price estimates, metal grades, the estimated amount of ore on the leach pad at Lindero, the anticipated first
gold pour in October 2020, the Company’s business strategy, plans and outlook; the merit of the Company’s mines
and mineral properties; mineral resource and reserve estimates; production costs; timelines; the future financial or
operating performance of the Company; expenditures; approvals an d 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”, “wi ll”, “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; the impact of the COVID-19 pandemic
on the Company’s mining operations and constr uction activities; the duration and impacts of COVID -19 on the
Company’s production, workforce, business, operations and financial condition, and the risks relating to a global
pandemic, which unless contained could cause a slowdown in global economic growth; the duration of any
suspension of operations at the Company’s mines and the Lindero Project, the impact of the suspension of operations
on production and the Company’ business operations and financial condition; changes in prices for gold, silver and
other metals; technolog ical 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; changes to current estimates of mineral reserves and resources; changes to production and cost
estimates; 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 discus sed under “Risk Factors” in the
Company's Annual Information Form. Although the Company has attempted to identify important factors that could
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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.
Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of
management, including but not limited to the duration and impacts of COVID -19 on the Company’s production,
workforce, business, operations and financial condition, and the risks relating to a global pandemic, which unless
contained could cause a slowdown in global economic gro wth; the duration of any suspension of operations at the
Company’s mines and the Lindero Project, the impact of the suspension of operations on production and the
Company’ business operations and financial condition; the expected trends in mineral prices a nd 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 will be no material adverse
change affecting the Company or its properties; that the reconciliation of mineral reserves at the Lindero Project
remains consistent with the mineral reserve model; that all required approvals will be obtained; that there will be no
significant disruptions af fecting 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 those anticipated in such statements. Accord ingly, 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 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 curr ently 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 "reserves". 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. While the SEC recognizes the reporting of mineral deposits which do not
meet the Industry Standard Guide 7 definition of “reserve” as of February 25, 2019, the effective adoption of the
Modernization of Property Disclosures for Mining Registrants, such rules are not required to be compiled with until
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 i nformation 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 ec onomic 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 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 und er 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 re ference 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 such 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.