Jorge A. Ganoza (Foto: Gestión)
Jorge A. Ganoza, President and CEO, commented: “We once again exceeded annual production guidance and continue to provide year-over-year growth into 2016. I want to highlight that our silver and gold production growth comes with industry leading low costs. This, added to the strength of our balance sheet, positions the company to continue thriving through the phases of the metals cycle.”
2015 Consolidated Production Highlights
- Silver and gold production were 2 % and 13 % respectively above 2015 production guidance
- Silver production of 6,624,635 ounces; 0.4 % increase over 2014
- Gold production of 39,689 ounces; 12 % increase over 2014
- Zinc production of 35,828,558 pounds; 31 % increase over 2014
- Lead production of 23,834,964 pounds; 48 % increase over 2014
(*) Ag Eq calculated using silver to gold ratio of 60 to 1
2015 Operating Results
| Q4 2015 | 2015 | |||||
|---|---|---|---|---|---|---|
| Caylloma, Peru | San Jose, Mexico | Consolidated | Caylloma, Peru | San Jose, Mexico | Consolidated | |
| Processed Ore | ||||||
| Tonnes milled | 117,776 | 172,789 | 466,286 | 717,505 | ||
| Average tpd milled | 1,309 | 2,071 | 1,306 | 2,072 | ||
| Silver | ||||||
| Grade (g/t) | 103.31 | 244.7 | 136 | 234 | ||
| Recovery (%) | 82.78 | 92.79 | 83.03 | 91.40 | ||
| Production (oz) | 323,820 | 1,261,495 | 1,585,315 | 1,695,742 | 4,928,893 | 6,624,635 |
| Q4 2015 | 2015 | |||||
|---|---|---|---|---|---|---|
| Caylloma, Peru | San Jose, Mexico | Consolidated | Caylloma, Peru | San Jose, Mexico | Consolidated | |
| Gold | ||||||
| Grade (g/t) | 0.22 | 1.90 | 0.26 | 1.83 | ||
| Recovery (%) | 23.23 | 92.55 | 30.28 | 91.26 | ||
| Production (oz) | 193 | 9,762 | 9,955 | 1,163 | 38,526 | 39,689 |
| Lead | ||||||
| Grade (%) | 3.38 | 2.47 | ||||
| Recovery (%) | 95.27 | 93.98 | ||||
| Production (lbs) | 8,361,240 | 8,361,240 | 23,834,964 | 23,834,964 | ||
| Zinc | ||||||
| Grade (%) | 4.09 | 3.84 | ||||
| Recovery (%) | 90.39 | 90.79 | ||||
| Production (lbs) | 9,598,503 | 9,598,503 | 35,828,558 | 35,828,558 | ||
San Jose Mine, Mexico
Silver and gold annual production were 15 percent and 16 percent above 2015 guidance, respectively. Annual average head grades for silver and gold were 234 g/t and 1.83 g/t or 9 percent and 10 percent above plan.
Increase in silver and gold production was the result of higher contributions in ore tonnage and grade from Level 1100 relative to the mine plan, and 3 percent higher metallurgical recoveries and mill throughput.
Caylloma Mine, Peru
Silver annual production was 1.7 million ounces or 11 percent below revised guidance of 1.9 million ounces. Decrease in silver production was the result of the decision to re-direct mining to focus on base metal-rich zones of the polymetallic Animas Vein. Mining at the high-grade Bateas Vein stopped in the fourth quarter of 2015.
Zinc and lead annual production were 12 percent and 22 percent above revised 2015 guidance of 32.1 million pounds and 19.5 million pounds, respectively.
2016 Production and Cash Cost Guidance
| Mine | Silver (Moz) |
Gold (koz) |
Investments ($ M) |
Cash Cost ($/t) |
AISCC1 ($/oz Ag) |
|---|---|---|---|---|---|
| San Jose, Mexico | 5.9 | 42.0 | 46.0 | 57.4 | 9.1 |
| Caylloma, Peru | 1.2 | 0.9 | 12.9 | 79.4 | 12.5 |
| Total | 7.0 | 42.8 | 58.9 |
Notes:
- All-in sustaining cash cost (AISCC) per ounce of silver is net of by-products gold, lead and zinc
- Total figures may not add up due to rounding
- The 2016 San Jose Mine AISCC of $9.1/oz Ag includes $2.5/oz Ag or $13.9 million in sustaining capital investments mainly related to mine development and the expansion of the dry stack tailings deposit
- Consolidated AISCC of $11.1/ oz Ag, refer to the appendix for details
- Caylloma Mine zinc and lead production forecast at 43.7 million pounds and 42.5 million pounds, respectively
2016 Outlook
San Jose Mine, Mexico
San Jose plans to process 875,000 tonnes of ore averaging 230 g/t Ag and 1.65 g/t Au. Increase of mill throughput from 2,000 tpd to 3,000 tpd is planned for July. Capital investment is estimated at $46 million.
Major capital investments include:
- 3,000 tpd mill expansion: $21.9 million
- Mine development: $7.0 million
- Dry stack tailings deposit expansion: $4.5 million
- Brownfields exploration: $8.2 million
Caylloma Mine, Peru
Caylloma plans to process 503,100 tonnes of ore averaging 89 g/t Ag, 4.08 % Pb and 4.37 % Zn. A 10 percent increase in mill throughput from 1,300 tpd to 1,430 tpd is planned for March. Capital investment is estimated at $12.9 million.
Major capital investments include:
- Mine development: $6.4 million
- Processing plant optimization: $1.0 million
- Brownfields exploration: $2.9 million
Brownfields Exploration Highlights
San Jose Mine, Mexico
Brownfields exploration program budget for 2016 at the San Jose Mine is $8.2 million, which includes 22,000 meters of diamond drilling and the development of a 1,500 meter underground exploration drift that will allow better access to test the northern extension of the Trinidad North vein system. Exploration drilling is in progress at the Trinidad Central zone in the San Jose Mine and at La Noria/San Antonio vein system, a parallel vein system located two kilometers to the west of the San Jose Mine area. The company disclosed further details of San Jose’s brownfields exploration program on December 16, 2015 (refer to “Fortuna provides year-end update for the San Jose Mine, Mexico“).
Caylloma Mine, Peru
Brownfields exploration program budget for 2016 at the Caylloma Mine is $2.9 million, which includes 17,000 meters of diamond drilling. Drilling will be focused on testing new exploration targets in the northern portion of the Caylloma District and in the Pisacca prospect area located a short distance to the southwest of the plant as well as further exploring the northeastern extension of the Animas Vein.
Qualified Person
Edwin A. Gutierrez, Technical Services Corporate Manager, is the Qualified Person for Fortuna Silver Mines Inc. as defined by National Instrument 43-101. Mr. Gutierrez is a Registered Member of the Society for Mining, Metallurgy and Exploration, Inc. (SME Registered Member Number 4119110RM) and is responsible for ensuring that the information contained in this news release is an accurate summary of the original reports and data provided to or developed by Fortuna Silver Mines.
About Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma silver mine in southern Peru and the San Jose silver-gold mine in Mexico. The company is selectively pursuing acquisition opportunities throughout the Americas and in select other areas. For more information, please visit our website at www.fortunasilver.com.
ON BEHALF OF THE BOARD
Jorge A. Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.
Trading symbols: NYSE: FSM | TSX: FVI
Investor Relations:
Carlos Baca- T (Peru): +51.1.616.6060, ext. 0