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Fortuna Reports Results for the Fourth Quarter and Full Year 2023

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Fortuna Reports Results for the Fourth Quarter and Full Year 2023

 

 

 

 

 

Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) reported its financial and operating results for the fourth quarter and full year 2023.

 

Fourth Quarter and Full Year 2023 highlights

 

Financial

  • Attributable net loss for the quarter of $92.3 million or $0.30 per share after non-cash impairment charges of $90.6 million in Q4 2023, totaling an attributable net loss of $50.8 million for the full year 2023
  • Attributable adjusted net income1 of $20.6 million or $0.07 per share in Q4 2023, totaling $64.9 million, or $0.22 per share for the full year 2023
  • Net cash generated by operations for the quarter was $105.1 million or $0.36 per share in Q4 2023, totaling $296.3 million or $ 1.0 per share for the full year 2023
  • Free cash flow from ongoing operations1 of $66.2 million in Q4 2023; totaling $153.5 million for the full year 2023
  • The Company repaid $41.0 million of its corporate credit facility in the fourth quarter and the total net debt1 at year end stands at $83.0 million. An additional payment of $25.0 million was made subsequent to year end.
  • Liquidity as at December 31, 2023 was $213.1 million

 

Operational

  • Record gold equivalent production of 136,154 ounces3 in Q4 2023 and record annual gold equivalent production of 452,389 ounces3; representing increases of 6 and 13 percent compared to the respective periods in 2022
  • Record gold production of 107,376 ounces in Q4 2023 and 326,638 ounces for the full year 2023
  • Silver production of 1,354,003 ounces in Q4 2023 and 5,883,691 ounces for the full year 2023
  • Consolidated cash cost per gold equivalent ounce1 of $840 in Q4 2023 and $874 for the full year 2023
  • Consolidated AISC per gold equivalent ounce1 of $1,509 for Q4 2023 and $1,508 for the full year 2023
  • Continuous trend of improvement in annual safety performance across the business with a Total Recordable Injury Frequency Rate (TRIFR) of 1.22, and a Lost Time Injury Frequency Rate (LTIFR) of 0.36, compared to 2.32 and 0.39 in 2022

 

Growth and Development

  • During the fourth quarter of 2023 the Company initiated a 45,000-meter drill program at its newly acquired Diamba Sud project in Senegal. Subject to results the Company plans to produce a Preliminary Economic Assessment by the end of 2024
  • At the end of December 2023, the Séguéla Mine processing facility was performing 26% above name plate capacity. For 2024 management has identified opportunities to further optimize and debottleneck throughput.

 

1 Refer to Non-IFRS financial measures
2 AISC/oz Ag Eq calculated at realized metal prices, refer to mine site results for realized prices and Non-IFRS Financial Measures for silver equivalent ratio
3 Gold equivalent production includes gold, silver, lead and zinc and is calculated using the following metal prices: $1,802/oz Au, $21.75/oz Ag, $2,161/t Pb and $3,468/t Zn or Au:Ag = 1:82.89, Au:Pb = 1:0.83, Au:Zn = 1:0.52
 

 

Jorge A. Ganoza, President and CEO, commented, “In the fourth quarter Fortuna delivered strong free cash-flow from ongoing operations of $65 million compared to $70 million in the third quarter. The Company also achieved record gold equivalent production of 136,154 ounces and record sales of $265.3 million, representing increases of 6% and 9% respectively compared to Q3.” Mr. Ganoza added, “Fourth quarter net earnings were impacted by non-cash write-downs and the remaining short life of reserves at San Jose, where we have recorded a non-cash impairment charge of $90.6 million. At San Jose our exploration continues pursuing the discovery of new resources with the aim of extending production beyond 2024.”

 

Mr. Ganoza continued, “Fortuna had a strong close to 2023, with record annual gold production exceeding guidance and silver falling short by 7%. Gold equivalent production increased 13% to a record 452,389 gold equivalent ounces compared to 2022, and we have guided further growth in 2024. Record annual sales of $842.4 million were 24% above 2022. All our mines met or improved site AISC guidance for the year with the only exception being the San Jose Mine, which is operating on the tail end of reserves and had to contest with an illegal blockade at the beginning of the year.

 

Mr. Ganoza concluded, “For 2024 our capital allocation priorities continue to be centered on providing maximum balance sheet flexibility through further debt reduction, and funding of aggressive organic growth programs with approximately 200,000 meters of exploration drilling planned across the portfolio. The Diamba Sud project in Senegal and the Séguéla Mine in Côte d´Ivoire are priorities for our exploration programs during the year.”

 

Fourth Quarter 2023 and Full Year 2023 Consolidated Results

 

                         
    Three months ended December 31,   Years ended December 31,
(Expressed in millions)   2023     2022     % Change   2023     2022     % Change
Sales   265.3     164.7     61 %   842.4     681.5     24 %
Mine operating income   51.9     26.0     100 %   190.0     146.8     29 %
Operating loss   (77.4 )   (173.1 )   55 %   (0.4 )   (113.6 )   100 %
Attributable net loss   (92.3 )   (152.8 )   40 %   (50.8 )   (128.1 )   60 %
Attributable loss per share – basic   (0.30 )   (0.52 )   43 %   (0.17 )   (0.44 )   61 %
Adjusted attributable net income1   20.6     6.4     222 %   64.9     41.4     57 %
Adjusted EBITDA1   120.3     55.8     116 %   335.1     245.5     36 %
Net cash provided by operating activities   105.1     49.6     112 %   296.9     194.2     53 %
Free cash flow from ongoing operations1   66.2     4.4     1,405 %   153.5     69.2     122 %
Production cash cost ($/oz Au Eq)   840     873     (4 %)   874     849     3 %
All-in sustaining cash cost ($/oz Au Eq)   1,509     1,579     (4 %)   1,508     1,431     5 %
Capital expenditures2                        
Sustaining   46.8     33.9     38 %   136.1     98.1     39 %
Non-sustaining3   1.8     (2.3 )   178 %   5.2     8.2     (37 %)
Séguéla construction       23.5     (100 %)   50.0     107.7     (54 %)
Brownfields   5.5     6.5     (15 %)   16.1     23.3     (31 %)
As at               December 31, 2023   December 31, 2022   % Change
Cash and cash equivalents       128.1     80.5     59 %
Net liquidity position (excluding letters of credit)               213.1     150.5     42 %
Shareholder’s equity attributable to Fortuna shareholders               1,238.4     1,244.8     (1 %)
1 Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Capital expenditures are presented on a cash basis  
3 Non-sustaining expenditures include greenfields exploration  
Figures may not add due to rounding  
   

 

Fourth Quarter 2023 Results

 

Attributable Net Loss and Adjusted Net Income
Attributable net loss for the period was $92.3 million compared to an attributable net loss of $152.8 million in Q4 2022 The loss in the quarter is explained by the following items:

  • An impairment charge of $90.6 million related to the anticipated closure of the San Jose Mine in late 2024, as the updated mine plan is scheduled to exhaust Mineral Reserves by the end of the year compared to mid-2025 as previously planned
  • A write-down of materials inventory of $10.1 million at the San Jose, Yaramoko and Lindero Mines
  • A write-down of low-grade ore stockpiles of $5.4 million at the Lindero Mine
  • A $6.4 million severance provision associated with the scheduled closure of the San Jose Mine
  • A write-down of $5.9 million related to greenfield exploration projects in Mexico and Argentina

 

After adjusting for impairment charges and other non-recurring items, adjusted attributable net income was $20.6 million or $0.07 per share compared to $6.4 million or $0.02 per share in Q4 2022. The increase was primarily due to higher gold sales volume and higher gold prices. Higher gold sales volume was mainly due to the contribution of Séguéla in its second full quarter of production. This was combined with 7% higher sales at Yaramoko from higher processed head grade. This was partially offset by lower sales at San Jose related to lower head grades consistent with the Mineral Reserve and a reduction in mined tonnage related to operational challenges in backfilling and blasting activities. The realized gold price was $1,990 per ounce in Q4 2023 compared to $1,737 per ounce in Q4 2022.

 

Other items impacting the adjusted net income for the quarter compared to Q4 2022 were higher G&A of $3.3 million, mostly related to the addition of Séguéla G&A and timing of execution on certain corporate G&A items; higher foreign exchange loss of $2.4 million primarily related to 118% devaluation of the official exchange rate in Argentina as part of the measures taken by the new elected government to achieve a more sustainable real exchange rate in the short term; Other expenses of $2.7 million related to administrative penalties at Yaramoko, and a higher interest expense of $4.0 million as a result of higher interest rates and $1.4 million of interest charges capitalized in Q4 2022 vs nil in Q4 2023. This was partially offset by $12.4 million of investment income related to cross-border, Argentine pesos denominated bond trades.

 

Depreciation and Depletion

 

Depreciation and depletion increased $27.1 million to $71.6 million in the fourth quarter of 2023 compared to $44.5 million in the comparable period of 2022. The increase was primarily due to an increase in ounces sold as well as higher depletion per ounce at Séguéla due to the depletion of the purchase price allocation from the Roxgold acquisition of $17.1 million.

 

Adjusted EBITDA and Cash Flow

 

Adjusted EBITDA for the quarter was $120.3 million, a margin of 45% over sales, compared to $55.8 million and margin over sales of 34%, reported in the same period in 2022. The main driver for the increase in EBITDA was the contribution from Séguéla with EBITDA margin of 73% in Q4 2023, combined with higher EBITDA from Yaramoko related to higher gold output. In addition, adjusted EBITDA reflects the positive impact from the inclusion of $12.4 million of investment income at our Argentine operations. The trade associated with the investment income was a one-off event executed under a time limited waiver granted by the government of Argentina in Q4 to allow exporters a partial recovery of economic losses incurred from the accumulated lag of the nominal exchange rate with respect to inflation.

 

Net cash generated by operations for the quarter was $105.1 million or $0.34 per share compared to $49.6 million or $0.17 per share in Q4 2022. The increase of $54.8 million reflects higher EBITDA of $61.8 million.

 

Free cash flow from ongoing operations for the quarter was $66.2 million compared to $4.4 million in Q4 2022. The increase reflects higher net cash generated by operations.

 

Cash cost per ounce and AISC

 

Cash cost per gold equivalent ounce was $840, a decrease from the $873 reported in Q4 2022 as the contribution of lower cost ounces from Séguéla in Q4 2023 was offset by partially offset by higher cost per ounce at San Jose, which increased by over 64% due to lower production and higher costs year over year. This combined with higher cost per gold ounce at Lindero and Yaramoko of $120 and $131 respectively associated with lower head grades at Lindero and higher costs in Q4 2023 at Yaramoko.  AISC per gold equivalent ounce was $1,509 in Q4, slightly below the $1,579 recorded the prior year due to lower capex on a per ounce basis, partially offset by higher royalties related to the higher realized gold price.

 

Full Year 2023 Results

 

Attributable Net Loss and Adjusted Net Income

 

Attributable net loss for the year was $50.8 million, compared to an attributable net loss of $128.1 million in 2022. The loss in 2023 is explained by impairment charges of $90.6 million at the San Jose Mine explained above.

 

After adjusting for impairment charges and other non-recurring items, attributable adjusted net income for 2023 was $64.9 million or $0.22 per share, compared to $41.4 million or $0.14 per share in 2022. The increase was primarily due to higher gold sales volume and higher gold prices.  Higher gold sales volume was mainly due to the contribution of Séguéla in the second half of the year upon successful commissioning and ramp-up in Q2 2023, and higher sales volume at Yaramoko explained by higher processed head grades in 2023. This was partially offset by lower production at Lindero, aligned with the grade profile in the mine plan, and lower head grades and processed ore at San Jose, explained by declining head grades in reserves and the impact of the 15 day mine stoppage in Q2 and related lingering operational challenges during the year. The realized gold price was $1,948 per ounce in 2023 compared to $1,802 per ounce in 2022.

 

Other items impacting the adjusted net income compared to 2022 were higher G&A of $2.7 million, mostly related to the addition of Séguéla G&A; higher foreign exchange loss of $4.6 million mostly related to the devaluation of the Argentine peso as described above; higher other expenses of $9.7 million related to $3.5 million of stand-by charges at San Jose and Yaramoko in Q2 2023, $2.8 million related to a new agreement with the worker´s union at San Jose in Q2 2023, and $3.7 million of administrative penalties at Yaramoko payable to the Ministry of Mines recorded in Q2 and Q4 2023, and a higher interest expense of $7.5 million as a result of an increased debt balance outstanding, higher interest rates and discontinued capitalized interest charges in the second half of the year. This was partially offset by $12.4 million of investment income related to cross-border, Argentine pesos denominated bond trades.

 

Depreciation and Depletion

 

Depreciation and depletion for 2023 increased $46.8 million to $219.7 million compared to $172.8 million in 2022. The increase was primarily due an increase in ounces sold, the start of depletion at Séguéla, including $25.3 million related to the purchase price allocation from Roxgold, and higher depletion at Yaramoko due to declining reserves which increased the depletion rate of new capital additions underground.

 

Adjusted EBITDA and Free Cash Flow

 

Adjusted EBITDA for the year was $335.1 million, a margin of 40% over sales, compared to $245.5 million reported in 2022, representing a margin of 36% over sales. The main drivers for the increase were the contribution of Séguéla with EBITDA margin of 69%, and higher production and improved margins at Yaramoko. In addition, adjusted EBITDA reflects the positive impact from the inclusion of $12.4 million of investment income at our Argentine operations as described above.

 

Net cash generated by operations for 2023 was $296.9 million or $1.00 per share compared to $194.2 million or $0.67 per share in 2022. The increase of $102.7 million is explained by higher EBITDA of $89.6 million combined with lower income tax paid of $16.3 million in 2023 primarily due to lower taxes paid at the San Jose Mine, no taxes paid at the Séguéla Mine in 2023 and higher repatriation withholding taxes incurred in 2022.

 

Free cash flow from ongoing operations for 2023 was $153.5 million compared to $69.2 million in 2022. The increase of $84.3 million reflects higher net cash generated by operations, partially offset by higher sustaining capital expenditures, including brownfields explorations. Sustaining capital expenditures on a cash basis increased by $27.6 million to $143.6 million explained by higher CAPEX at Lindero related to the leach-pad expansion and capex incurred at Séguéla in the second half of 2023.

 

Cash cost per ounce and AISC

 

Cash cost per equivalent gold ounce was $874, slightly above the $849 reported in 2022 as the contribution of lower cost ounces from Séguéla in the second half of 2023 was offset by higher cost per gold ounce at Lindero of $182 related mainly to lower planned head grades in 2023, and higher cost per equivalent gold ounce at San Jose of $379 explained primarily by lower processed ore and lower head grades.

 

AISC per ounce of gold equivalent of $1,508 in 2023 was $77 above the $1,431 recorded the prior year due mainly to higher cash cost per gold equivalent ounce and higher capex at Lindero related to the leach pad expansion.

 

Liquidity

 

Total liquidity available to the Company as at December 31, 2023 was $213.1 million, comprised of $128.1 million of cash and cash equivalents and $85.0 million undrawn (excluding letters of credit) on the Company’s revolving $250.0 million credit facility. Total net debt as of the end of the quarter was $83.2 million.

 

Subsequent to the year end the Company paid down an additional $25.0 million on its corporate credit facility, taking the outstanding debt amount to $140.0 million.

 

Lindero Mine, Argentina

 

                         
      Three months ended December 31,     Years ended December 31,
         2023     2022     2023     2022
Mine Production                        
Tonnes placed on the leach pad     1,556,000     1,334,509     6,005,049     5,498,064
                         
Gold                        
Grade (g/t)     0.63     0.80     0.64     0.81
Production (oz)     29,591     29,301     101,238     118,418
Metal sold (oz)     29,308     27,847     103,503     117,076
Realized price ($/oz)     1,993     1,732     1,942     1,803
                         
Unit Costs                        
Cash cost ($/oz Au)1     934     814     920     739
All-in sustaining cash cost ($/oz Au)1     1,557     1,219     1,565     1,140
                         
Capital Expenditures ($000’s) 2                        
Sustaining     10,607     3,973     39,358     18,035
Sustaining leases     598     567     2,393     2,398
Non-sustaining     1,302         1,978     169
Brownfields         184         1,288

 

1 Cash cost and AISC are non-IFRS financial measures. Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Capital expenditures are presented on a cash basis.
 

 

In the fourth quarter of 2023, a total of 1,556,000 tonnes of ore were placed on the heap leach pad, with an average gold grade of 0.63 g/t, containing an estimated 31,665 ounces of gold. Gold production for Q4 2023 totaled 29,591 ounces. This represents a 1% increase in total ounces, from the previous quarter. Gold production was comprised of 24,977 ounces in doré bars, 4,443 ounces of gold contained in fine carbon, and 171 ounces contained in copper concentrate. Ore mined was 2.1 million tonnes, with a stripping ratio of 0.6:1. The stripping ratio in the fourth quarter was 45 percent lower than the third quarter of 2023.

 

For the full year 2023 gold production totaled 101,238 ounces, achieving midpoint of annual production guidance. Gold production comprised of 94,905 ounces in doré bars, 6,015 ounces in gold contained in fine carbon, and 319 ounces contained in copper concentrate. The stripping ratio for 2023 was 1.14:1, aligned with the mining plan for the year.

 

The cash cost per ounce of gold for the quarter ending December 31, 2023, was $934 compared to $814 in the same period of 2022. For the year ending December 31, 2023, the cash cost per ounce was $920, an increase from $739 in 2022. The increase in cash cost per ounce of gold for both the quarter and for the full year was primarily due to lower processed gold grades in accordance with the mine plan.

 

The all-in sustaining cash cost per gold ounce sold during Q4 2023 was $1,557, up from $1,219 in the fourth quarter of 2022. For the full year of 2023, the all-in sustaining cash cost was $1,565, compared to $1,140 in 2022. The increase both for the quarter and the year was driven by higher cash costs, along with increased sustaining capital expenditures related to the leach pad expansion. This was partially mitigated by higher copper by-product credits.

 

As of December 31, 2023, the leach pad expansion project is approximately 23% complete. Mobilization of the civil contractor’s personnel and equipment has advanced with earth moving activities having commenced in January. Deliveries of geomembrane and geosynthetic clay liner are on-track, with the remaining materials expected to arrive on site in the first quarter of 2024. The leach pad expansion remains on schedule for completion during the second half of 2024.

 

Yaramoko Mine, Burkina Faso

 

                         
      Three months ended December 31,     Years ended December 31,
         2023     2022     2023     2022
Mine Production                        
Tonnes milled     110,445     142,694     531,579     546,651
                         
Gold                        
Grade (g/t)     7.16     6.45     6.81     6.37
Recovery (%)     98     98     98     98
Production (oz)     28,235     26,190     117,711     106,108
Metal sold (oz)     28,229     26,250     117,676     107,433
Realized price ($/oz)     1,984     1,742     1,945     1,802
                         
Unit Costs                        
Cash cost ($/oz Au)1     949     818     809     840
All-in sustaining cash cost ($/oz Au)1     1,720     1,829     1,499     1,529
                         
Capital Expenditures ($000’s) 2                        
Sustaining     12,620     18,994     49,938     45,665
Sustaining leases     1,077     1,419     4,758     5,692
Brownfields     1,261     2,855     4,917     5,873

 

1 Cash cost and AISC are non-IFRS financial measures. Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Capital expenditures are presented on a cash basis.
 

 

The Yaramoko Mine produced 28,235 ounces of gold in the fourth quarter of 2023 with an average gold head grade of 7.16 g/t, 8% and 11% increases when compared to the same period in 2022. Higher production was due to higher grades partially offset by lower mill throughput in the fourth quarter and a planned maintenance shutdown in December.

 

Gold production in 2023 totaled 117,711 ounces, achieving the higher end of the annual guidance range.

 

The cash cost per ounce of gold sold for the quarter ended December 31, 2023, was $949 compared to $818 in the same period in 2022. The increase for the quarter is mainly attributed to higher mining costs, particularly due to equipment, energy, and overhead expenses, but was partially offset by higher gold production. For the year ending December 31, 2023, the cash cost per ounce of gold sold was $809, a decrease from $840 in 2022. The full year decrease is mainly due to increased production and lower mining costs during prior quarters.

 

The all-in sustaining cash cost per gold ounce sold was $1,720 for the quarter ended December 31, 2023, compared to $1,829 in the same period of 2022. The change in the quarter was primarily due to the increased cash cost described above, increased royalties and an administrative penalty in Q4, offset by reduced capital expenditures. For the full year, the all-in sustaining cash cost per gold ounces sold was $1,499 in 2023, compared to $1,529 in 2022. The increased royalties and administrative penalty costs in Q4 2023 were offset by increased production and decreased costs earlier in the year.

 

Exploration and grade control drilling success in conjunction with underground development extended mineralization on the western side of the Zone 55 mineralized structure. This provided additional mining areas which demonstrated wider and higher-grade extensions of mineralization within and beyond the existing resource boundary.

 

Séguéla Mine, Côte d’Ivoire

 

 

                         
      Three months ended December 31,     Years ended December 31,
         2023     2022     2023     2022
Mine Production                        
Tonnes milled     387,624         807,617    
Average tonnes crushed per day     4,123         3,282    
                         
Gold                        
Grade (g/t)     3.62         3.42    
Recovery (%)     95         94    
Production (oz)     43,096         78,617    
Metal sold (oz)     43,018         78,521    
Realized price ($/oz)     1,994         1,963    
                         
Unit Costs                        
Cash cost ($/oz Au)1     323         357    
All-in sustaining cash cost ($/oz Au)1     737         760    
                         
Capital Expenditures ($000’s) 2                        
Sustaining     7,765         10,912    
Sustaining leases     2,285         5,329    
1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures. Refer to Non-IFRS Financial Measures.
2 Capital expenditures are presented on a cash basis
 

 

In the fourth quarter of 2023, mined material totaled 387,624 tonnes of ore, averaging 3.62 g/t Au, and containing an estimated 43,096 ounces of gold from the Antenna Pit. Movement of waste during the quarter totaled 2,110,209 tonnes, for a strip ratio of 5.4:1. Séguéla produced 43,096 ounces of gold, a 37% increase and a 5% decrease, respectively, compared to the third quarter of 2023. The increase in gold production is directly related to the mill achieving consistently higher throughput, processing 387,624 tonnes, a 25% increase over the previous quarter.

 

Gold production in 2023 totaled 78,617 ounces, exceeding the higher end of the annual guidance range.

 

Reconciliation of tonnes, grade, and gold ounces mined for the fourth quarter from Antenna show a positive correlation when compared to the long-term reserve model with 6% higher ore tonnes mined at 16% higher grades resulting in 24% more gold ounces extracted than predicted in the model.

 

Process plant performance continued to improve as feed characteristics were stabilized and initial bottlenecks addressed. Recovery in the fourth quarter increased to 94.9%, ahead of feasibility study assumptions. Plant productivity also continued to improve with throughput in the fourth quarter being 186 tonnes/hour, a 20% increase on the 154 tonnes/hour nameplate capacity.

 

Cash cost per gold ounce sold was $323 for Q4 2023 and $357 for the full year, which was below plan and guidance, primarily due to higher production, higher head grades, lower consumable consumption, and lower service costs.

 

All-in sustaining cash cost per gold ounce sold was $737 for Q4 2023 and $760 for the full year, which was below plan and guidance, primarily due to lower cash cost and higher sales volume, partially offset by higher capital expenditures.

 

San Jose Mine, Mexico

 

 

                         
      Three months ended December 31,     Years ended December 31,
         2023        2022        2023        2022
Mine Production                        
Tonnes milled     241,035     259,500     930,200     1,029,590
Average tonnes milled per day     2,678     2,883     2,643     2,925
                         
Silver                        
Grade (g/t)     145     194     171     191
Recovery (%)     91     91     91     91
Production (oz)     1,023,525     1,473,627     4,656,631     5,762,563
Metal sold (oz)     1,040,888     1,482,452     4,659,611     5,755,330
Realized price ($/oz)     23.35     21.37     23.36     21.73
                         
Gold                        
Grade (g/t)     0.91     1.13     1.06     1.14
Recovery (%)     90     90     90     90
Production (oz)     6,345     8,499     28,559     34,124
Metal sold (oz)     6,406     8,621     28,524     34,201
Realized price ($/oz)     1,983     1,734     1,942     1,802
                         
Unit Costs                        
Production cash cost ($/t)2     103.89     86.26     98.98     81.33
Production cash cost ($/oz Ag Eq)1,2     17.57     11.16     14.40     10.56
All-in sustaining cash cost ($/oz Ag Eq)1,2     21.98     15.53     19.40     15.11
                         
Capital Expenditures ($000’s) 3                        
Sustaining     3,190     3,695     14,018     15,731
Sustaining leases     246     169     878     658
Non-sustaining     505         1,682     869
Brownfields     1,257     961     4,215     5,606

 

1 Production cash cost silver equivalent and All-in sustaining cash cost silver equivalent are calculated using realized metal prices for each period respectively.
2 Production cash cost, Production cash cost silver equivalent, and All-in sustaining cash cost silver equivalent are Non-IFRS Financial Measures, refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
3 Capital expenditures are presented on a cash basis.
 

 

In the fourth quarter of 2023, San Jose produced 1,023,525 ounces of silver and 6,345 ounces of gold, 31% and 25% decreases respectively, at average head grades for silver and gold of 145 g/t and 0.91 g/t, 25% and 20% decreases respectively, when compared to the same period in 2022. The decrease in silver and gold production for the quarter is explained by the declining grade profile of Mineral Reserves in the mine plan, as well as lower tonnage extracted from the mine. The reduction in tonnage is due to operational challenges leading to delays in backfilling and blasting operations in stopes P and Q during December 2023. During the fourth quarter, the processing plant milled 241,035 tonnes at an average of 2,678 tonnes per day.

 

Production in 2023 totaled 4,656,631 ounces of silver and 28,559 ounces of gold, 12% and 16% below annual guidance range, respectively. The decrease in production is attributed primarily to the 15-day illegal union blockade in the second quarter, the associated disruption to operations thereafter, and a silver and gold head grade reconciliation to reserves at the lower end of guidance range.

 

The cash cost per silver equivalent ounce for the three months ending December 31, 2023, was $17.57, an increase from $11.16 in the same period of 2022. This increase was primarily attributed to lower head grades, as discussed above, and higher cash costs per tonne primarily related to the appreciation of the Mexican peso, higher mining contractor tariffs, and a 7% decrease in processed ore. For the year ending December 31, 2023 the cash cost per silver equivalent ounce sold was $14.40 compared to $10.56. The full year increase was driven by lower head grades, and higher cash cost per tonne, which was similarly influenced by the appreciation of the Mexican Peso and 10% lower tonnes processed.

 

The all-in sustaining cash cost of payable silver equivalent for the three months ended December 31, 2023 increased by 42% to $21.98 per ounce, and full year 2023 increased by 28% to $19.40 per ounce. This compares to $15.53 per ounce and $15.11 per ounce for the same periods in 2022. These increases were mainly driven by higher cash costs and lower production, slightly mitigated by lower workers’ participation costs.

 

The decrease in Brownfields expenditures is primarily attributable to reduced drilling activity in 2023. Drilling in 2023 was however higher than initially anticipated, owing to the emergent drilling campaign at the Yessi vein, discovered in the third quarter of the year. Exploration at the Yessi vein continues.

 

Caylloma Mine, Peru

 

                         
      Three months ended December 31,     Years ended December 31,
         2023     2022     2023     2022
Mine Production                        
Tonnes milled     140,800     138,491     543,876     546,186
Average tonnes milled per day     1,564     1,556     1,528     1,539
                         
Silver                        
Grade (g/t)     88     75     85     80
Recovery (%)     83     81     83     81
Production (oz)     330,478     273,119     1,227,060     1,144,714
Metal sold (oz)     353,935     289,870     1,229,298     1,156,381
Realized price ($/oz)     23.06     21.28     23.37     21.81
                         
Gold                        
Grade (g/t)     0.11     0.12     0.13     0.14
Recovery (%)     21     22     22     32
Production (oz)     109     122     513     777
Metal sold (oz)             40     603
Realized price ($/oz)             1,902     1,864
                         
Lead                        
Grade (%)     3.84     3.22     3.74     3.27
Recovery (%)     91     89     91     88
Production (000’s lbs)     10,798     8,735     40,852     34,588
Metal sold (000’s lbs)     11,641     9,118     41,074     34,869
Realized price ($/lb)     0.97     0.96     0.98     0.98
                         
Zinc                        
Grade (%)     5.00     4.63     5.11     4.32
Recovery (%)     90     89     90     89
Production (000’s lbs)     13,933     12,575     55,060     46,176
Metal sold (000’s lbs)     14,407     11,027     56,166     44,770
Realized price ($/lb)     1.13     1.35     1.23     1.57
                         
Unit Costs                        
Production cash cost ($/t)2     100.71     95.70     100.40     92.96
Production cash cost ($/oz Ag Eq)1,2     13.67     12.46     14.28     12.34
All-in sustaining cash cost ($/oz Ag Eq)1,2     22.34     20.30     19.90     17.97
                         
Capital Expenditures ($000’s) 3                        
Sustaining     8,635     7,188     17,903     18,694
Sustaining leases     912     845     3,538     3,350
Brownfields     966     473     2,302     1,202

 

1 Production cash cost silver equivalent and All-in sustaining cash cost silver equivalent are calculated using realized metal prices for each period respectively.
2 Production cash cost, Production cash cost silver equivalent, and All-in sustaining cash cost silver equivalent are Non-IFRS Financial Measures, refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
3 Capital expenditures are presented on a cash basis.
 

 

In the fourth quarter, the Caylloma Mine produced 330,478 ounces of silver at an average head grade of 88 g/t, a 21% and 17% increase, respectively, when compared to the previous quarter. Silver production for 2023 totaled 1,227,060 ounces, exceeding the upper end of annual guidance range by 10%.

 

Lead and zinc production for the quarter was 10.8 million pounds of lead, and 13.9 million pounds of zinc. Lead and zinc production rose by 24% and 11%, respectively, compared to the same period in 2022. Head grades averaged 3.84%, and 5.00%, a 19% and 8% increase, respectively, when compared to the previous quarter. Record lead and zinc production for 2023 totaled 40.9 and 55.1 million pounds, respectively. Increased production is the result of positive grade reconciliation to the reserve model in levels 16 and 18 of the Animas vein. Gold production for the quarter totaled 109 ounces with an average head grade of 0.11 g/t.

 

The cash cost per silver equivalent ounce sold for the quarter ended December 31, 2023, was $13.67 compared to $12.46 in the same period in 2022. The increase for the quarter is attributed primarily due to higher cash cost per tonne, higher treatment charges and the impact of higher silver prices on the calculation of silver equivalent ounces . For the year ended December 31, 2023, the cash cost per ounce of gold sold was $14.3, compared to $12.3 in 2022. The full year increase was driven mainly by the same factors explained above for the quarter.

 

The all-in sustaining cash cost per ounce of payable silver equivalent for the three months ended December 31, 2023, increased 10% to $22.34, compared to $20.30 for the same period in 2022. The all-in sustaining cash cost per ounce of payable silver equivalent for the full year 2023 increased 11% to $19.90, compared to $17.97 in 2022. The increases were mainly driven by the impact of higher silver prices on the calculation of silver equivalent ounces, higher cash costs per ounce and higher capital costs.

 

Underground development for the quarter was mainly focused on mine levels 15, 16, and 18. The increase in Brownfields expenditures is primarily attributable to greater meterage and additional diamond drilling.

 

Qualified Person

 

Eric Chapman, Senior Vice President of Technical Services, is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (Registration Number 36328), and is the Company’s Qualified Person (as defined by National Instrument 43-101). Mr. Chapman has reviewed and approved the scientific and technical information contained in this news release and has verified the underlying data.

 

Fourth Quarter Unaudited and Annual Audited Income Statement and Cash Flow

 

Income Statement

 

                           
      Three months ended December 31,     Years ended December 31,
  Note   2023     2022     2023     2022  
Sales 20   $ 265,314     $ 164,723     $ 842,428     $ 681,491  
Cost of sales 21     213,462       138,683       652,403       534,695  
Mine operating income       51,852       26,040       190,025       146,796  
                           
General and administration 22     19,909       16,676       64,073       61,456  
Foreign exchange loss       2,430       442       10,885       8,866  
Impairment of mineral properties, plant and equipment 32     90,615       182,842       90,615       182,842  
Write-off of mineral properties       5,263       372       5,985       5,874  
Other (income) expenses 23     11,009       (1,186 )     18,874       1,310  
        129,226       199,146       190,432       260,348  
                           
Operating loss       (77,374 )     (173,106 )     (407 )     (113,552 )
                           
Investment gains 5     12,395             12,395        
Interest and finance costs, net 24     (7,535 )     (3,111 )     (21,790 )     (12,057 )
(Loss) gain on derivatives 20     (301 )     453       (1,249 )     500  
        4,559       (2,658 )     (10,644 )     (11,557 )
                           
Loss before income taxes       (72,815 )     (175,764 )     (11,051 )     (125,109 )
                           
Income taxes                          
Current income tax expense 25     27,057       7,756       42,636       35,783  
Deferred income tax expense (recovery) 25     (10,033 )     (23,086 )     (10,057 )     (24,986 )
        17,024       (15,330 )     32,579       10,797  
Net loss for the year     $ (89,839 )   $ (160,434 )   $ (43,630 )   $ (135,906 )
                           
Net loss attributable to:                          
Fortuna shareholders     $ (92,316 )   $ (152,772 )   $ (50,836 )   $ (128,132 )
Non-controlling interest 30     2,477       (7,662 )     7,206       (7,774 )
      $ (89,839 )   $ (160,434 )   $ (43,630 )   $ (135,906 )
                           
Loss per share 19                        
Basic     $ (0.30 )   $ (0.52 )   $ (0.17 )   $ (0.44 )
Diluted     $ (0.30 )   $ (0.52 )   $ (0.17 )   $ (0.44 )
                           
Weighted average number of common shares outstanding (000’s)                  
Basic       306,511       291,429       295,067       291,281  
Diluted       306,511       291,429       295,067       291,281  

 

 

Statement of Cash Flow

 

                           
      Three months ended December 31,   Years ended December 31,
  Note   2023     2022     2023     2022  
                           
Operating activities:                          
Net loss for the year     $ (89,839 )     (160,434 )   $ (43,630 )   $ (135,906 )
Items not involving cash                          
Depletion and depreciation       71,602       44,499       219,688       172,809  
Accretion expense 24     1,597       1,256       6,773       4,830  
Income taxes       17,023       (15,329 )     32,579       10,797  
Interest expense, net 24     5,933       1,855       15,017       7,227  
Share-based payments, net of cash settlements       2,602       2,961       2,017       (1 )
Impairment of mineral properties, plant and equipment 32     90,615       182,841       90,615       182,841  
Inventory net realizable value adjustments 6     5,260       3,809       6,188       8,898  
Inventory obsolescence adjustments 6     10,097             10,097        
Write-off of mineral properties 9     5,210       372       5,985       5,874  
Unrealized foreign exchange loss       4,441       (1,911 )     5,706       4,554  
Investment gains 5     (12,395 )           (12,395 )      
Unrealized gains on derivatives       81       182       (170 )     (1,194 )
Other 23     4,462       (239 )     5,142        
Closure and reclamation payments 16     (599 )     (270 )     (1,203 )     (623 )
Changes in working capital 29     887       38       (9,737 )     (18,021 )
Cash provided by operating activities       116,977       59,630       332,672       242,085  
Income taxes paid       (6,271 )     (7,351 )     (25,872 )     (42,222 )
Interest paid       (6,916 )     (3,366 )     (13,545 )     (7,465 )
Interest received       1,287       660       3,654       1,851  
Net cash provided by operating activities       105,076       49,573       296,909       194,249  
                           
 

Investing activities:

                         
Costs related to Chesser acquisition, net of cash acquired 8     (10,260 )           (13,321 )      
Restricted cash                         (1,911 )
Additions to mineral properties and property, plant and equipment       (51,852 )     (70,402 )     (217,314 )     (251,236 )
Contractor advances on Séguéla construction                   (8 )     (2,186 )
Purchases of investments 5     (9,359 )           (9,359 )      
Proceeds from sale of investments 5     21,754             21,754        
Other investing activities       (1,283 )           1,364        
Cash used in investing activities       (51,000 )     (70,402 )     (216,884 )     (255,333 )
                           
 

Financing activities:

                         
Transaction costs on credit facility 14                       (688 )
Proceeds from credit facility 14     10,000       15,000       75,500       80,000  
Repayment of credit facility 14     (50,500 )           (90,500 )     (20,000 )
Repurchase of common shares 18                       (5,929 )
Issuance of common shares from option exercise       301             301        
Payments of lease obligations       (4,976 )     (2,988 )     (16,625 )     (12,209 )
Dividend payment to non-controlling interest       (87 )           (1,392 )     (2,708 )
Cash (used in) provided by financing activities       (45,262 )     12,012       (32,716 )     38,466  
Effect of exchange rate changes on cash and cash equivalents       1,551       1,457       346       (3,986 )
Increase (decrease) in cash and cash equivalents during the year       10,365       (7,360 )     47,655       (26,604 )
Cash and cash equivalents, beginning of the year       117,780     $ 116,126       80,493       107,097  
Cash and cash equivalents, end of the year     $ 128,145     $ 108,766     $ 128,148     $ 80,493  
                           
Cash and cash equivalents consist of:                          
Cash     $ 106,135     $ 65,140     $ 106,135     $ 65,140  
Cash equivalents       22,013       15,353       22,013       15,353  
Cash and cash equivalents, end of the year     $ 128,148     $ 80,493     $ 128,148     $ 80,493  
Supplemental cash flow information (Note 29)                          
                           

 

Non-IFRS Financial Measures

 

The Company has disclosed certain financial measures and ratios in this news release which are not defined under the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, and are not disclosed in the Company’s financial statements, including but not limited to: cash cost per ounce of gold equivalent sold; all-in sustaining cash cost per ounce of gold equivalent sold; all-in cash cost per ounce of gold equivalent sold; total production cash cost per tonne; cash cost per payable ounce of silver equivalent sold; all-in sustaining cash cost per payable ounce of silver equivalent sold; all-in cash cost per payable ounce of silver equivalent sold; free cash flow from ongoing operations; adjusted net income; attributable adjusted net income; adjusted EBITDA; net debt and working capital.

 

These non-IFRS financial measures and non-IFRS ratios are widely reported in the mining industry as benchmarks for performance and are used by management to monitor and evaluate the Company’s operating performance and ability to generate cash. The Company believes that, in addition to financial measures and ratios prepared in accordance with IFRS, certain investors use these non-IFRS financial measures and ratios to evaluate the Company’s performance. However, the measures do not have a standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other companies. Accordingly, non-IFRS financial measures and non-IFRS ratios should not be considered in isolation or as a substitute for measures and ratios of the Company’s performance prepared in accordance with IFRS. The Company has calculated these measures consistently for all periods presented.

 

To facilitate a better understanding of these measures and ratios as calculated by the Company, descriptions are provided below. In addition, see “Non-IFRS Financial Measures” in the Company’s management’s discussion and analysis for the fiscal year ended December 31, 2023, which section is incorporated by reference in this news release, for additional information regarding each non-IFRS financial measure and non-IFRS ratio disclosed in this news release, including an explanation of their composition; an explanation of how such measures and ratios provide useful information to an investor and the additional purposes, if any, for which management of Fortuna uses such measures and ratio. The 2023 MD&A may be accessed on SEDAR+ at www.sedarplus.ca under the Company’s profile, Fortuna Silver Mines Inc.

 

Except as otherwise described in the 2023 MD&A, the Company has calculated these measures consistently for all periods presented.

 

Reconciliation to Adjusted Net Income for the Three and Twelve Months ended December 31, 2023 and 2022

 

                       
    Three months ended December 31,     Years ended December 31,
Consolidated (in millions of US dollars)   2023       2022       2023       2022  
Net income   (89.8 )     (160.4 )     (43.6 )     (135.9 )
Adjustments, net of tax:                      
Community support provision and accruals1   (0.4 )     (0.1 )     (0.5 )     (0.1 )
Foreign exchange loss, Séguéla Mine2         (0.4 )           0.8  
Write off of mineral properties   4.0       0.3       4.5       5.1  
Unrealized loss on derivatives   0.1       0.1       (0.3 )     (0.4 )
Impairment of mineral properties, plant and equipment   90.6       164.5       90.6       164.5  
Inventory adjustment   13.5       3.8       14.2       8.0  
Accretion on right of use assets   0.5       0.5       3.3       2.3  
Other non-cash/non-recurring items   4.9       (1.1 )     4.4       (1.7 )
Adjusted Net Income   23.4       7.2       72.6       42.6  
1 Amounts are recorded in Cost of sales                      
2 Amounts are recorded in General and Administration                      
Figures may not add due to rounding                      

 

 

Reconciliation to Attributable Adjusted Net Income for the Three and Twelve Months ended December 31, 2023 and 2022

 

                       
    Three months ended December 31,     Years ended December 31,
Consolidated (in millions of US dollars)   2023       2022       2023       2022  
Net loss attributable to shareholders   (92.3 )     (152.8 )     (50.8 )     (128.1 )
Adjustments, net of tax:                      
Community support provision and accruals1   (0.4 )     (0.1 )     (0.5 )     (0.1 )
Foreign exchange loss, Séguéla Mine2         (0.4 )           1.1  
Write off of mineral properties   4.0       0.3       4.5       5.1  
Unrealized loss (gain) on derivatives   0.1       0.1       (0.3 )     (0.4 )
Impairment of mineral properties, plant and equipment   90.6       155.9       90.6       155.9  
Inventory adjustment   13.2       3.8       13.9       7.6  
Accretion on right of use assets   0.5       0.5       3.1       2.3  
Other non-cash/non-recurring items   4.9       (0.9 )     4.4       (2.0 )
Attributable Adjusted Net Income   20.6       6.4       64.9       41.4  
1 Amounts are recorded in Cost of sales                      
2 Amounts are recorded in General and Administration                      
Figures may not add due to rounding                      

 

 

Reconciliation to Adjusted EBITDA for the Three and Twelve Months ended December 31, 2023 and 2022

 

                       
    Three months ended December 31,     Years ended December 31,
Consolidated (in millions of US dollars)   2023       2022       2023       2022  
Net income   (89.8 )     (160.4 )     (43.6 )     (135.9 )
Adjustments:                      
Community support provision and accruals   (0.5 )     (0.1 )     (0.7 )     (0.1 )
Inventory adjustment   15.4       3.8       16.3       8.9  
Foreign exchange loss, Séguéla Mine         (0.4 )     0.8       0.8  
Net finance items   7.5       3.1       21.8       12.1  
Depreciation, depletion, and amortization   71.6       45.3       219.6       172.8  
Income taxes   17.0       (15.3 )     32.6       10.8  
Impairment of mineral properties, plant and equipment   90.6       182.8       90.6       182.8  
Other non-cash/non-recurring items   8.5       (3.0 )     (2.3 )     (6.7 )
Adjusted EBITDA   120.3       55.8       335.1       245.5  

Figures may not add due to rounding

 

Reconciliation of Free Cash Flow from ongoing operations for the Three and Twelve Months ended December 31, 2023 and 2022

 

                       
    Three months ended December 31,     Years ended December 31,
Consolidated (in millions of US dollars)   2023       2022       2023       2022  
                       
Net cash provided by operating activities   105.1       49.6       296.9       194.2  
Adjustments                      
Séguéla, working capital               4.4        
Additions to mineral properties, plant and equipment   (46.3 )     (39.6 )     (143.6 )     (113.4 )
Gain on blue chip swap investments   12.4             12.4        
Mexican royalty payment                     3.0  
Other adjustments   (5.0 )     (5.6 )     (16.6 )     (14.6 )
Free cash flow from ongoing operations   66.2       4.4       153.5       69.2  

Figures may not add due to rounding

 

Reconciliation of Cash Cost per Gold Equivalent Ounce Sold for the Three and Twelve Months ended December 31, 2023 and 2022

 

                         
Cash Cost Per Gold Equivalent Ounce Sold – Q4 2023      Lindero        Yaramoko        Séguéla        San Jose        Caylloma        GEO Cash Costs  
Cost of sales   57,913     49,598     46,239     41,108     18,599     213,457  
Inventory adjustment   (7,884 )   (3,033 )       (4,407 )   (683 )   (16,007 )
Depletion, depreciation, and amortization   (15,061 )   (15,345 )   (25,972 )   (11,407 )   (3,476 )   (71,261 )
Royalties and taxes   (3,916 )   (4,437 )   (6,364 )   (815 )   (227 )   (15,759 )
By-product credits   (4,183 )                   (4,183 )
Right of use               219     365     584  
Other               344     (397 )   (53 )
Production cash costs   26,869     26,783     13,903     25,042     14,181     106,778  
Inventory adjustment               (147 )   683     536  
Right of use               (219 )   (365 )   (584 )
Depletion and depreciation in concentrate inventory               56     10     66  
Realized gain on diesel hedge                        
Treatment and refining charges               1,505     4,241     5,746  
Cash cost applicable per gold equivalent ounce sold   26,869     26,783     13,903     26,237     18,750     112,542  
Ounces of gold equivalent sold   28,779     28,229     43,018     17,650     16,236     133,912  
Cash cost per ounce of gold equivalent sold ($/oz)   934     949     323     1,487     1,155     840  
Gold equivalent was calculated using the realized prices for gold of $1,990/oz Au, $23.3/oz Ag, $2,137/t Pb, and $2,499/t Zn for Q4 2023.
 

 

 

                         
Cash Cost Per Gold Equivalent Ounce Sold – Q4 2022      Lindero        Yaramoko        Séguéla      San Jose        Caylloma        GEO Cash Costs  
Cost of sales   43,057     42,084       34,775     16,676     136,592  
Inventory adjustment   (312 )         27     216     (69 )
Depletion, depreciation, and amortization   (13,441 )   (17,884 )     (10,557 )   (2,960 )   (44,842 )
Royalties and taxes   (3,353 )   (2,732 )     (1,260 )   (181 )   (7,526 )
By-product credits   (982 )                 (982 )
Right of use                      
Other             (601 )   (497 )   (1,098 )
Production cash costs   24,969     21,468       22,384     13,254     82,075  
Inventory adjustment   (1,379 )         (27 )   (216 )   (1,622 )
Right of use                      
Depletion and depreciation in concentrate inventory             47     (120 )   (73 )
Realized gain on diesel hedge   (1,105 )                 (1,105 )
Treatment and refining charges             947     3,128     4,075  
Cash cost applicable per gold equivalent ounce sold   22,485     21,468       23,351     16,046     83,350  
Ounces of gold equivalent sold   27,634     26,250       25,747     15,795     95,426  
Cash cost per ounce of gold equivalent sold ($/oz)   814     818       907     1,016     873  
Gold equivalent was calculated using the realized prices for gold of $1,737/oz Au, $21.4/oz Ag, $2,106/t Pb, and $2,986/t Zn for Q4 2022.
 

 

 

                         
Cash Cost Per Gold Equivalent Ounce Sold – Year 2023      Lindero        Yaramoko        Séguéla        San Jose        Caylloma        GEO Cash Costs  
Cost of sales   176,696     186,757     79,472     140,068     69,408     652,401  
Inventory adjustment   (10,693 )   (3,859 )       (4,564 )   (576 )   (19,692 )
Depletion, depreciation, and amortization   (51,258 )   (73,064 )   (40,529 )   (40,058 )   (13,390 )   (218,299 )
Royalties and taxes   (14,958 )   (14,678 )   (10,932 )   (4,390 )   (1,078 )   (46,036 )
By-product credits   (7,921 )                   (7,921 )
Right of use               758     1,933     2,691  
Other               253     (1,692 )   (1,439 )
Production cash costs   91,866     95,156     28,011     92,067     54,605     361,705  
Inventory adjustment   2,823             10     576     3,409  
Right of use               (758 )   (1,933 )   (2,691 )
Depletion and depreciation in concentrate inventory               30     76     106  
Realized gain on diesel hedge                        
Treatment and refining charges               4,352     19,974     24,326  
Cash cost applicable per gold equivalent ounce sold   94,689     95,156     28,011     95,701     73,298     386,855  
Ounces of gold equivalent sold   102,896     117,676     78,521     80,458     63,229     442,780  
Cash cost per ounce of gold equivalent sold ($/oz)   920     809     357     1,189     1,159     874  
Gold equivalent was calculated using the realized prices for gold of $1,948/oz Au, $23.4/oz Ag, $2,155/t Pb, and $2,706/t Zn for year 2023.
 

 

 

                         
Cash Cost Per Gold Equivalent Ounce Sold – Year 2022      Lindero      Yaramoko      Séguéla      San Jose      Caylloma      GEO Cash Costs
Cost of sales   164,179     171,846       129,088     67,491     532,604  
Inventory adjustment   293     (6,397 )     156     48     (5,900 )
Depletion, depreciation, and amortization   (54,644 )   (64,894 )     (37,773 )   (14,108 )   (171,419 )
Royalties and taxes   (15,545 )   (11,630 )     (5,262 )   (867 )   (33,304 )
By-product credits   (1,214 )   (25 )             (1,239 )
Right of use                      
Other       (329 )     (2,477 )   (1,789 )   (4,595 )
Production cash costs   93,069     88,571       83,732     50,775     316,147  
Inventory adjustment   (1,984 )   1,320       (156 )   (48 )   (868 )
Right of use                      
Depletion and depreciation in concentrate inventory             (2 )   76     74  
Realized gain on diesel hedge   (4,620 )                 (4,620 )
Treatment and refining charges       329       3,508     15,476     19,313  
Cash cost applicable per gold equivalent ounce sold   86,465     90,220       87,082     66,279     330,046  
Ounces of gold equivalent sold   116,950     107,433       99,439     64,952     388,774  
Cash cost per ounce of gold equivalent sold ($/oz)   739     840       876     1,020     849  
Gold equivalent was calculated using the realized prices for gold of $1,802/oz Au, $21.8/oz Ag, $2,161/t Pb, and $3,468/t Zn for year 2022.
 

 

Reconciliation of All-in Sustaining Cash Cost per Ounce of Gold Equivalent Sold for the Three and Twelve Months ended December 31, 2023 and 2023

 

                             
AISC Per Gold Equivalent Ounce Sold – Q4 2023      Lindero      Yaramoko        Séguéla      San Jose        Caylloma      Corporate      GEO AISC  
Cash cost applicable per gold equivalent ounce sold   26,869   26,783     13,903   26,237     18,750     112,542  
Inventory net realizable value adjustment                    
Royalties and taxes   3,916   4,437     6,364   815     227     15,759  
Worker’s participation           (430 )   399     (31 )
General and administration   2,833   (336 )   1,398   1,789     1,344   12,603   19,631  
Stand-by     2,700               2,700  
Total cash costs   33,618   33,584     21,665   28,411     20,720   12,603   150,601  
Sustaining capital1   11,205   14,958     10,050   4,693     10,513     51,419  
All-in sustaining costs   44,823   48,542     31,715   33,104     31,233   12,603   202,020  
Gold equivalent ounces sold   28,779   28,229     43,018   17,650     16,236     133,912  
All-in sustaining costs per ounce   1,557   1,720     737   1,876     1,924     1,509  
Gold equivalent was calculated using the realized prices for gold of $1,990/oz Au, $23.3/oz Ag, $2,137/t Pb, and $2,499/t Zn for Q4 2023.
1 Presented on a cash basis
                             

 

                             
AISC Per Gold Equivalent Ounce Sold – Q4 2022      Lindero      Yaramoko      Séguéla      San Jose      Caylloma      Corporate      GEO AISC
Cash cost applicable per gold equivalent ounce sold   22,485   21,468     23,351   16,046     83,350
Inventory net realizable value adjustment   1,052             1,052
Royalties and taxes   3,353   2,732     1,260   181     7,526
Worker’s participation         751   480     1,231
General and administration   2,081   531     2,319   928   10,329   16,188
Stand-by              
Total cash costs   28,971   24,731     27,681   17,635   10,329   109,347
Sustaining capital3   4,724   23,268     4,825   8,506     41,323
All-in sustaining costs   33,695   47,999     32,506   26,141   10,329   150,670
Gold equivalent ounces sold   27,634   26,250     25,747   15,795     95,426
All-in sustaining costs per ounce   1,219   1,829     1,263   1,655     1,579
Gold equivalent was calculated using the realized prices for gold of $1,737/oz Au, $21.4/oz Ag, $2,106/t Pb, and $2,986/t Zn for Q4 2022.
1 Presented on a cash basis
                             

 

                             
AISC Per Gold Equivalent Ounce Sold – Year 2023      Lindero      Yaramoko      Séguéla      San Jose      Caylloma      Corporate      GEO AISC
Cash cost applicable per gold equivalent ounce sold   94,689   95,156   28,011   95,701     73,298     386,855
Inventory net realizable value adjustment     334             334
Royalties and taxes   14,958   14,678   10,932   4,390     1,078     46,036
Worker’s participation         (316 )   1,927     1,611
General and administration   9,624   919   4,510   7,040     4,810   35,903   62,806
Stand-by     5,699     4,084         9,783
Total cash costs   119,271   116,786   43,453   110,899     81,113   35,903   507,425
Sustaining capital3   41,751   59,613   16,241   19,111     23,743     160,459
All-in sustaining costs   161,022   176,399   59,694   130,010     104,856   35,903   667,884
Gold equivalent ounces sold   102,896   117,676   78,521   80,458     63,229     442,780
All-in sustaining costs per ounce   1,565   1,499   760   1,616     1,658     1,508
Gold equivalent was calculated using the realized prices for gold of $1,948/oz Au, $23.4/oz Ag, $2,155/t Pb, and $2,706/t Zn for year 2023.
1 Presented on a cash basis
                             

 

                             
AISC Per Gold Equivalent Ounce Sold – Year 2022      Lindero      Yaramoko      Séguéla      San Jose      Caylloma      Corporate      GEO AISC
Cash cost applicable per gold equivalent ounce sold   86,465   90,220     87,082   66,279     330,046
Inventory net realizable value adjustment   1,052   3,125           4,177
Royalties and taxes   15,545   11,630     5,262   867     33,304
Worker’s participation         3,096   2,087     5,183
General and administration   8,578   2,101     7,164   4,063   37,661   59,567
Stand-by              
Total cash costs   111,640   107,076     102,604   73,296   37,661   432,277
Sustaining capital3   21,721   57,230     21,995   23,246     124,192
All-in sustaining costs   133,361   164,306     124,599   96,542   37,661   556,469
Gold equivalent ounces sold   116,950   107,433     99,439   64,952     388,774
All-in sustaining costs per ounce   1,140   1,529     1,253   1,486     1,431
Gold equivalent was calculated using the realized prices for gold of $1,802/oz Au, $21.8/oz Ag, $2,161/t Pb, and $3,468/t Zn for year 2022.
1 Presented on a cash basis
                             

 

Reconciliation of Production Cash Cost per Tonne and Cash Cost per Payable Silver Equivalent Ounce Sold for the Three and Twelve Months ended December 31, 2023 and 2022

 

             
Cash Cost Per Silver Equivalent Ounce Sold – Q4 2023      San Jose        Caylloma        SEO Cash Costs  
Cost of sales   41,108     18,599     59,707  
Inventory adjustment   (4,407 )   (683 )   (5,090 )
Depletion, depreciation, and amortization   (11,407 )   (3,476 )   (14,883 )
Royalties and taxes   (815 )   (227 )   (1,042 )
By-product credits            
Right of use   219     365     584  
Other   344     (397 )   (53 )
Production cash costs   25,042     14,181     39,223  
Total tonnes   241,035     140,800     381,835  
Production cash cost per tonne   104     101     103  
             
             
Cash Costs   25,042     14,181     39,223  
Inventory adjustment   (147 )   683     536  
Depletion and depreciation in concentrate inventory   56     10     66  
Treatment and refining charges   1,505     4,241     5,746  
Cash cost applicable per silver equivalent sold   26,456     19,115     45,571  
Ounces of silver equivalent sold1   1,505,763     1,398,062     2,903,825  
Cash cost per ounce of silver equivalent sold ($/oz)   17.57     13.67     15.69  
1 Silver equivalent sold for Q4 2023 for San Jose is calculated using a silver to gold ratio of 84.9:1. Silver equivalent sold for Q4 2023 for Caylloma is calculated using a silver to gold ratio of 0.0:1, silver to lead ratio of 1:23.8 pounds, and silver to zinc ratio of 1:20.3 pounds.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
             

 

 

             
Cash Cost Per Silver Equivalent Ounce Sold – Q4 2022      San Jose        Caylloma        SEO Cash Costs  
Cost of sales   34,775     16,676     51,451  
Inventory adjustment   27     216     243  
Depletion, depreciation, and amortization   (10,557 )   (2,960 )   (13,517 )
Royalties and taxes   (1,260 )   (181 )   (1,441 )
By-product credits            
Right of use            
Other   (601 )   (497 )   (1,098 )
Production cash costs   22,384     13,254     35,638  
Total tonnes   259,500     138,491     397,991  
Production cash cost per tonne   86     96     90  
             
             
Cash Costs   22,384     13,254     35,638  
Inventory adjustment   (27 )   (216 )   (243 )
Depletion and depreciation in concentrate inventory   47     (120 )   (73 )
Treatment and refining charges   947     3,128     4,075  
Cash cost applicable per silver equivalent sold   23,351     16,046     39,397  
Ounces of silver equivalent sold1   2,092,500     1,287,998     3,380,498  
Cash cost per ounce of silver equivalent sold ($/oz)   11.16     12.46     11.65  
1 Silver equivalent sold for San Jose for Q4 2022 is 81.2:1.Silver equivalent sold for Caylloma for Q4 2022 is calculated using a silver to gold ratio of 0.0:1, silver to lead ratio of 1:22.3 pounds, and silver to zinc ratio 1:15.7.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
             

 

 

             
Cash Cost Per Silver Equivalent Ounce Sold – Year 2023      San Jose        Caylloma        SEO Cash Costs  
Cost of sales   140,068     69,408     209,476  
Inventory adjustment   (4,564 )   (576 )   (5,140 )
Depletion, depreciation, and amortization   (40,058 )   (13,390 )   (53,448 )
Royalties and taxes   (4,390 )   (1,078 )   (5,468 )
By-product credits            
Right of use   758     1,933     2,691  
Other   253     (1,692 )   (1,439 )
Production cash costs   92,067     54,605     146,672  
Total tonnes   930,200     543,877     1,474,077  
Production cash cost per tonne   99     100     100  
             
             
Cash Costs   92,067     54,605     146,672  
Inventory adjustment   10     576     586  
Depletion and depreciation in concentrate inventory   30     76     106  
Treatment and refining charges   4,352     19,974     24,326  
Cash cost applicable per silver equivalent sold   96,459     75,231     171,690  
Ounces of silver equivalent sold1   6,700,419     5,269,540     11,969,959  
Cash cost per ounce of silver equivalent sold ($/oz)   14.40     14.28     14.34  
1 Silver equivalent sold for year 2023 for San Jose is calculated using a silver to gold ratio of 83.1:1. Silver equivalent sold for year 2023 for Caylloma is calculated using a silver to gold ratio of 81.4:1, silver to lead ratio of 1:23.9 pounds, and silver to zinc ratio of 1:19.0 pounds.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
             

 

 

             
Cash Cost Per Silver Equivalent Ounce Sold – Year 2022      San Jose        Caylloma        SEO Cash Costs  
Cost of sales   129,088     67,491     196,579  
Inventory adjustment   156     48     204  
Depletion, depreciation, and amortization   (37,773 )   (14,108 )   (51,881 )
Royalties and taxes   (5,262 )   (867 )   (6,129 )
By-product credits            
Right of use            
Other   (2,477 )   (1,789 )   (4,266 )
Production cash costs   83,732     50,775     134,507  
Total tonnes   1,029,590     546,186     1,575,776  
Production cash cost per tonne   81     93     85  
             
             
Cash Costs   83,732     50,775     134,507  
Inventory adjustment   (156 )   (48 )   (204 )
Depletion and depreciation in concentrate inventory   (2 )   76     74  
Treatment and refining charges   3,508     15,476     18,984  
Cash cost applicable per silver equivalent sold   87,082     66,279     153,361  
Ounces of silver equivalent sold1   8,243,436     5,372,277     13,615,713  
Cash cost per ounce of silver equivalent sold ($/oz)   10.56     12.34     11.26  
1 Silver equivalent sold for year 2022 for San Jose is calculated using a silver to gold ratio of 82.9:1. Silver equivalent sold for year 2022 for Caylloma is calculated using a silver to gold ratio of 85.5:1, silver to lead ratio of 1:22.9 pounds, and silver to zinc ratio of 1:13.9 pounds.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
             

 

Reconciliation of All-in Sustaining Cash Cost and All-in Cash Cost per Payable Silver Equivalent Ounce Sold for the Three and Twelve Months ended December 31, 2023 and 2022

 

             
AISC Per Silver Equivalent Ounce Sold – Q4 2023      San Jose        Caylloma      SEO AISC  
Cash cost applicable per silver equivalent ounce sold   26,237     18,750   44,987  
Royalties and taxes   815     227   1,042  
Worker’s participation   (430 )   399   (31 )
General and administration   1,789     1,344   3,133  
Stand-by          
Total cash costs   28,411     20,720   49,131  
Sustaining capital3   4,693     10,513   15,206  
All-in sustaining costs   33,104     31,233   64,337  
Silver equivalent ounces sold1   1,505,763     1,398,062   2,903,825  
All-in sustaining costs per ounce2   21.98     22.34   22.16  
1 Silver equivalent sold for Q4 2023 for San Jose is calculated using a silver to gold ratio of 84.9:1. Silver equivalent sold for Q4 2023 for Caylloma is calculated using a silver to gold ratio of 0.0:1, silver to lead ratio of 1:23.8 pounds, and silver to zinc ratio of 1:20.3 pounds.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
3 Presented on a cash basis
             

 

 

             
AISC Per Silver Equivalent Ounce Sold – Q4 2022      San Jose      Caylloma      SEO AISC
Cash cost applicable per silver equivalent ounce sold   23,351   16,046   39,397
Royalties and taxes   1,260   181   1,441
Worker’s participation   751   480   1,231
General and administration   2,319   928   3,247
Stand-by      
Total cash costs   27,681   17,635   45,316
Sustaining capital3   4,825   8,506   13,331
All-in sustaining costs   32,506   26,141   58,647
Silver equivalent ounces sold1   2,092,500   1,287,998   3,380,498
All-in sustaining costs per ounce2   15.53   20.30   17.35
1 Silver equivalent sold for San Jose for Q4 2022 is 81.2:1.Silver equivalent sold for Caylloma for Q4 2022 is calculated using a silver to gold ratio of 0.0:1, silver to lead ratio of 1:22.3 pounds, and silver to zinc ratio 1:15.7.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
3 Presented on a cash basis
             

 

             
AISC Per Silver Equivalent Ounce Sold – Year 2023      San Jose        Caylloma      SEO AISC
Cash cost applicable per silver equivalent ounce sold   95,701     73,298   168,999
Royalties and taxes   4,390     1,078   5,468
Worker’s participation   (316 )   1,927   1,611
General and administration   7,040     4,810   11,850
Stand-by   4,084       4,084
Total cash costs   110,899     81,113   192,012
Sustaining capital3   19,111     23,743   42,854
All-in sustaining costs   130,010     104,856   234,866
Silver equivalent ounces sold1   6,700,419     5,269,540   11,969,959
All-in sustaining costs per ounce2   19.40     19.90   19.62
1 Silver equivalent sold for year 2023 for San Jose is calculated using a silver to gold ratio of 83.1:1. Silver equivalent sold for year 2023 for Caylloma is calculated using a silver to gold ratio of 81.4:1, silver to lead ratio of 1:23.9 pounds, and silver to zinc ratio of 1:19.0 pounds.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
3 Presented on a cash basis
             

 

 

             
AISC Per Silver Equivalent Ounce Sold – Year 2022      San Jose      Caylloma      SEO AISC
Cash cost applicable per silver equivalent ounce sold   87,082   66,279   153,361
Royalties and taxes   5,262   867   6,129
Worker’s participation   3,096   2,087   5,183
General and administration   7,164   4,063   11,227
Stand-by      
Total cash costs   102,604   73,296   175,900
Sustaining capital3   21,995   23,246   45,241
All-in sustaining costs   124,599   96,542   221,141
Silver equivalent ounces sold1   8,243,436   5,372,277   13,615,713
All-in sustaining costs per ounce2   15.11   17.97   16.24
1 Silver equivalent sold for year 2022 for San Jose is calculated using a silver to gold ratio of 82.9:1. Silver equivalent sold for year 2022 for Caylloma is calculated using a silver to gold ratio of 85.5:1, silver to lead ratio of 1:22.9 pounds, and silver to zinc ratio of 1:13.9 pounds.
2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices
3 Presented on a cash basis
             

 

Additional information regarding the Company’s financial results and activities underway are available in the Company’s audited consolidated financial statements for the year ended December 31, 2023 and accompanying 2023 MD&A, which are available for download on the Company’s website, www.fortunasilver.com, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar.

 

About Fortuna Silver Mines Inc.

 

Fortuna Silver Mines Inc. is a Canadian precious metals mining company with five operating mines in Argentina, Burkina Faso, Côte d’Ivoire, Mexico, and Peru. 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.

 

Posted March 10, 2024

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April 12, 2024

VIZSLA COPPER CLOSES NON-BROKERED PRIVATE PLACEMENT FOR GROSS PROCEEDS OF $2.5M AND PROVIDES UPDATES

Vizsla Copper Corp. (TSX-V: VCU) (OTCQB: VCUFF) (FRANKFURT: 97E0) is pleased to... READ MORE

April 12, 2024

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