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Fortuna Reports Financial Results for the First Quarter of 2024

VANCOUVER, British Columbia, May 07, 2024 (GLOBE NEWSWIRE) -- Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) (“Fortuna” or the “Company”) today reported its financial and operating results for the first quarter of 2024.

First Quarter 2024 highlights

Financial

  • Attributable net income of $26.3 million or $0.09 per share, compared to a $92.3 million attributable net loss or $0.30 per share in Q4 2023
  • Adjusted attributable net income1 of $26.7 million or $0.09 per share, compared to $20.6 million or $0.07 per share in Q4 2023
  • Generated $84.3 million of cash flow from operations before working capital changes, and free cash flow from ongoing operations1 of $12.1 million, compared to $105.4 million and $66.2 million, respectively, in Q4 2023
  • The Company paid down $40.0 million of its revolving credit facility. At the close of the quarter total net debt was $83.0 million and the total net debt to adjusted EBITDA ratio1 was 0.2:1
  • Liquidity as of March 31, 2024 was $212.7 million2, compared to $213.1 million at the end of Q4 2023

Return to Shareholders

  • Returned $3.5 million of capital to shareholders during the quarter through the Company’s normal course issuer bid (“NCIB”) program
  • On April 30, 2024 Fortuna announced that the TSX had approved the renewal of the Company’s NCIB program to purchase 5% of its outstanding common shares.

Operational

  • Gold equivalent3 production of 112,543 ounces, compared to 136,154 ounces in Q4 2023
  • Gold production of 89,678 ounces, compared to 107,376 ounces in Q4 2023
  • Silver production of 1,074,571 ounces, compared to 1,354,003 ounces in Q4 2023
  • Consolidated cash costs1 per ounce of gold equivalent sold of $879, compared to $840 in Q4 2023; adjusting for San Jose, which is mining its last year of Mineral Reserves, consolidated cash costs was $744
  • Consolidated all-in sustaining cash costs (AISC)1 per ounce of gold equivalent sold of $1,495, compared to $1,509 in Q4 2023; adjusting for San Jose, consolidated AISC was $1,412
  • Year to date Lost Time Injury Frequency Rate (LTIFR) of 1.13 and Total Recordable Injury Frequency Rate (TRIFR) of 3.10

Growth and Development

  • At Séguéla, mill throughput for the quarter averaged 195 tonnes per hour (t/hr), versus name plate design capacity of 154 t/hr. Mill constraints continued to be tested with throughputs of up to 220 t/hr being recorded over a seven-day period.
  • The Kingfisher prospect was identified at Séguéla which continues the identification of new prospects at the site. Refer to the News Release “Fortuna discovers new Kingfisher prospect at Séguéla Mine and provides exploration update at the Diamba Sud Gold Project” dated March 11, 2024.
  • Exploration continued at the Yessi Vein at San Jose including an intercept of 1kg silver equivalent over an estimated true width of 8.1 meters highlighting the potential for high-grade shoots. Refer to the News Release “Fortuna intersects 1kg Ag Eq over an estimated true width of 8.1m at the Yessi vein, San Jose Mine, Mexico” dated April 15, 2024.

"Our operations performed in line with expectations for the first quarter with 112,543 of gold equivalent production, $84.3 million in cash from operations before working capital changes and earnings per share of $0.09.” said Jorge Ganoza, Fortuna’s President and CEO.

Mr. Ganoza continued “Coming off a record fourth quarter, lower production was in line with plan as Séguéla prepared the Ancien pit for mining, a maintenance shutdown was completed at Yaramoko and San Jose focused on underground preparation with site production weighted to the second half of the year.”

Mr. Ganoza concluded, “We also executed on our capital priorities by paying down an additional $40 million in debt and advancing exciting exploration opportunities at Séguéla and Diamba Sud while also returning capital to shareholders through our share buyback program.”

First Quarter 2024 Consolidated Results

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

(Expressed in millions)

 

 

2024

 

 

 

2023

 

% Change

Sales

 

 

224.9

 

 

 

175.7

 

 

28

%

Mine operating income

 

 

69.9

 

 

 

40.4

 

 

73

%

Operating income

 

 

47.1

 

 

 

23.9

 

 

97

%

Attributable net income

 

 

26.3

 

 

 

10.9

 

 

141

%

Attributable income per share - basic

 

 

0.09

 

 

 

0.04

 

 

132

%

Adjusted attributable net income1

 

 

26.7

 

 

 

12.2

 

 

119

%

Adjusted EBITDA1

 

 

95.2

 

 

 

65.3

 

 

46

%

Net cash provided by operating activities

 

 

48.9

 

 

 

41.8

 

 

17

%

Free cash flow from ongoing operations1

 

 

12.1

 

 

 

8.5

 

 

42

%

Cash cost ($/oz Au Eq)1

 

 

879

 

 

 

916

 

 

(4

%)

All-in sustaining cash cost ($/oz Au Eq)1

 

 

1,495

 

 

 

1,514

 

 

(1

%)

Capital expenditures2

 

 

 

 

 

 

 

 

 

Sustaining

 

 

25.8

 

 

 

27.9

 

 

(8

%)

Non-sustaining3

 

 

8.8

 

 

 

1.2

 

 

633

%

Séguéla construction

 

 

-

 

 

 

25.7

 

 

(100

%)

Brownfields

 

 

6.7

 

 

 

4.9

 

 

37

%

As at

 

 

March 31, 2024

 

 

 

December 31, 2023

 

% Change

Cash and cash equivalents

 

 

87.7

 

 

 

128.1

 

 

(32

%)

Net liquidity position (excluding letters of credit)

 

 

212.7

 

 

 

213.1

 

 

(0

%)

Shareholder's equity attributable to Fortuna shareholders

 

 

1,260.8

 

 

 

1,238.4

 

 

2

%

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.

Capital expenditures are presented on a cash basis

 

3 Non-sustaining expenditures include greenfields exploration

 

Figures may not add due to rounding

 

 

 

First Quarter 2024 Results

Attributable Net Income and Adjusted Attributable Net Income
Net income attributable to Fortuna for the quarter was $26.3 million compared to $10.9 million in Q1 2023. After adjusting for non-cash and non-recurring items, adjusted attributable net income for the quarter was $26.7 million compared to $12.2 million in Q1 2023. The increase in net income and adjusted net income is explained mainly by increased gold sales volume and higher realized gold and silver prices. Higher gold sales volume was primarily due to contributions from Séguéla which was under construction in the comparable period. This was partially offset by lower silver production at San Jose as the mine exhausts its Mineral Reserves. The realized gold and silver prices were $2,087 and $23.43 per ounce respectively compared to $1,893 and $22.52 per ounce, respectively, for the comparable period in the prior year.

Other items impacting the adjusted net income for the quarter compared to Q1 2023 were higher G&A of $2.8 million, related to the addition of Séguéla G&A and timing of execution on certain corporate G&A items; higher foreign exchange loss of $2.5 million related mainly to our West African operations; and higher interest expense of $3.6 million, explained by $2.8 million of capitalized interest expense in the comparative period vs nil in Q1 2024 and higher accretion of right of use lease liabilities.

Depreciation and Depletion
Depreciation and depletion for the first quarter of 2024 was $50.3 million compared to $44.1 million in the comparable period. The increase in depreciation and depletion was primarily the result of higher sales volume and the inclusion of $15.8 million in depletion of the purchase price related to the acquisition of Roxgold Inc. This was partially offset by lower depreciation and depletion at San Jose as a result of an impairment charge in the fourth quarter of 2023.

Adjusted EBITDA and Cash Flow
Adjusted EBITDA for the quarter was $95.2 million, a margin of 42% over sales, compared to $65.3 million and margin over sales of 37%, reported in the same period in 2023. The main driver for the increase in EBITDA was the contribution from Séguéla with EBITDA margin of 62% in Q1 2024, partially offset by nil EBITDA at San Jose.

Net cash generated by operations for the quarter was $48.9 million compared to $41.8 million in Q1 2023. The increase of $7.1 million reflects higher adjusted EBITDA of $29.9 million and lower taxes paid of $7.0 million as Séguéla is expected to start remittances to the government in the second quarter. This was offset by negative changes in working capital in Q1 2024 of $35.3 million compared to negative $10.8 million in Q1 2023.

The negative change in working capital of $35.3 million consisted of the following:

  • An increase in receivables of $7.3 million driven by an increase in VAT receivables of $3.5 million at Séguéla and $5.8 million at Yaramoko
  • An increase of inventories of $9.8 million due to a $3.2 million increase in materials and supplies and a $4.9 million increase in metals inventory
  • A $17.3 million decrease in accounts payable primarily at Lindero due to $3.8 million to settle a deferred contract liability from the fourth quarter of 2023 due to timing of production, $1.8 million to settle export loans with local banks and $4.0 million related to timing of payments. Other payables movements were related to timing.

In the first quarter of 2024 capital expenditures on a cash basis were $41.4 million consisting primarily of $25.8 million in sustaining capital, including $6.7 million of brownfields exploration, and $8.8 million of non-sustaining exploration including engineering and environmental studies at Diamba Sud.

Free cash flow from ongoing operations for the quarter was $12.1 million, compared to $8.5 million in Q1 2023. The increase in free cash flow from operations was primarily the result of contributions from Séguéla which was under construction in Q1 2023 and was offset by negative working capital changes as described above.

Cash Costs and AISC
Cash cost per equivalent gold ounce was $879, compared to $915 in Q1 2023. The lower cash cost of sales per gold equivalent ounce was mainly due to the contribution of low-cost production from Séguéla and lower cost of sales per ounce of gold at Yaramoko related to higher grades. This was partially offset by higher cash costs per gold equivalent ounce at San Jose as previously capitalized costs are now expensed as the mine is in its last year of operations and higher cash cost per gold ounce at Lindero related mainly to lower planned head grades in 2024. Adjusting for San Jose, cash costs per gold equivalent ounces was $744 for the quarter.

All-in sustaining costs per gold equivalent ounce was $1,495 for the first quarter of 2024 compared to $1,514 for the first quarter of 2023. The decrease was primarily the result of lower cash costs being offset by higher sustaining capital expenditures primarily at Lindero due to the construction of the heap leach pad expansion, increased brownfields exploration at Séguéla to advance identified prospects and higher royalties in the period due to higher production, metal prices and a change of the royalty regime in Burkina Faso. Adjusting for San Jose, all-in sustaining costs per gold equivalent ounces was $1,412 for the current quarter.

General and Administrative Expenses
General and administrative expenses for the quarter of $18.2 million were higher than the same period in 2023 as Séguéla transitioned to operations and costs are no longer being capitalized, and due to timing of corporate expenses. G&A is comprised of the following items:

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

(Expressed in millions)

 

2024

 

2023

 

% Change

Mine G&A

 

 

7.5

 

 

 

6.0

 

 

25

%

Corporate G&A

 

 

8.4

 

 

 

6.7

 

 

25

%

Share-based payments

 

 

2.2

 

 

 

2.1

 

 

5

%

Workers' participation

 

 

0.1

 

 

 

0.1

 

 

0

%

Total

 

 

18.2

 

 

 

14.9

 

 

22

%


Liquidity

The Company’s total liquidity available as of March 31, 2024 was $212.7 million comprised of $87.7 million in cash and cash equivalents, and $125.0 million undrawn on the $250.0 million revolving credit facility (excluding letters of credit).

Lindero Mine, Argentina

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

2024

 

 

 

2023

 

Mine Production

 

 

 

 

 

 

 

 

Tonnes placed on the leach pad

 

 

1,547,323

 

 

 

1,478,148

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

0.60

 

 

 

0.71

 

Production (oz)

 

 

23,262

 

 

 

25,258

 

Metal sold (oz)

 

 

21,719

 

 

 

26,812

 

Realized price ($/oz)

 

 

2,072

 

 

 

1,885

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

Cash cost ($/oz Au)1

 

 

1,008

 

 

 

891

 

All-in sustaining cash cost ($/oz Au)1

 

 

1,634

 

 

 

1,424

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000's) 2

 

 

 

 

 

 

 

 

Sustaining

 

 

9,807

 

 

 

7,745

 

Sustaining leases

 

 

598

 

 

 

598

 

Non-sustaining

 

 

154

 

 

 

187

 

Cash cost and All-in sustaining cash cost 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.

Quarterly Operating and Financial Highlights

During the first quarter of 2024 total mined ore was 2.0 million tonnes at a stripping ratio of 0.54:1. A total of 1,547,323 tonnes of ore was placed on the heap leach pad at an average gold grade of 0.60 g/t, containing an estimated 29,670 ounces of gold. Gold production for Q1 2024 totaled 23,262 ounces, an 8% decrease in total ounces from the first quarter of 2023, primarily due to lower head grades. Lower mined grades are aligned with the mining sequence and the Mineral Reserves estimates.

The cash cost per ounce of gold for the quarter ending March 31, 2024, was $1,008 compared to $891, in the same period of 2023. The increase in cash cost per ounce of gold was primarily related to higher ounces sold in the comparable period due to higher production, timing of sales as 1,700 ounces of gold were still in inventory at the end of the period and additional rental equipment.

The all-in sustaining cash cost per gold ounce sold during Q1 2024 was $1,634, up from $1,424 in the first quarter of 2023. The increase in the quarter was primarily due to increased cash costs, higher capital expenditures related to the heap leach expansion and higher general and administrative costs.

As of March 31, 2024, the $51.8 million leach pad expansion project ($41.7 million capital investment in 2024) was approximately 35% complete. The construction package of the project commenced in January 2024, and is 18% complete, with contractors on site undertaking earthworks and construction of the impulsion line. The procurement and construction management (“PCM”) service was awarded to Knight Piésold consultants, with the PCM project offices installed and personnel onsite as of the third quarter of 2023. Procurement is 92% complete, with critical path items onsite. The final shipments of geomembrane and geosynthetic clay liner are currently in transit, and the pump manufacturing for the new impulsion line are all on schedule. In addition to the current works, liner installation and major mechanical works are expected to commence in the second quarter of 2024. The project is scheduled to be substantially complete in the fourth quarter of 2024, with operations beginning ore placement by the end of 2024 according to the stacking plan for the year.

Yaramoko Mine, Burkina Faso

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

2024

 

 

 

2023

 

Mine Production

 

 

 

 

 

 

 

 

Tonnes milled

 

 

107,719

 

 

 

139,650

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

8.79

 

 

 

5.94

 

Recovery (%)

 

 

98

 

 

 

97

 

Production (oz)

 

 

27,177

 

 

 

26,437

 

Metal sold (oz)

 

 

27,171

 

 

 

29,472

 

Realized price ($/oz)

 

 

2,095

 

 

 

1,899

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

Cash cost ($/oz Au)1

 

 

752

 

 

 

819

 

All-in sustaining cash cost ($/oz Au)1

 

 

1,373

 

 

 

1,509

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000's) 2

 

 

 

 

 

 

 

 

Sustaining

 

 

9,573

 

 

 

13,549

 

Sustaining leases

 

 

1,050

 

 

 

1,359

 

Brownfields

 

 

1,410

 

 

 

1,191

 

1 Cash cost and All-in sustaining cash cost 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.
Capital expenditures are presented on a cash basis.

In the first quarter of 2024, Yaramoko mined 123,877 tonnes of ore at an average grade of 8.30 g/t Au containing an estimated 33,053 ounces of gold. Mill production was 27,177 ounces of gold with an average gold head grade of 8.79 g/t. This represents a 3% and 48% increase when compared to the same period in 2023. A planned mill maintenance shutdown reduced mill throughput in the first quarter of 2024.

The cash cost per ounce of gold sold for the quarter ended March 31, 2024, was $752, compared to $819 in the same period in 2023. The decrease for the quarter is mainly attributed to higher head grades, which demand lower direct costs per ounce. This was partially offset by higher royalties due to higher metal prices and a change in the royalty regime in Burkina Faso which increased the royalty rate from 5% to 7% when the gold price is over $2,000 per ounce.

The all-in sustaining cash cost per gold ounce sold was $1,373 for the quarter ended March 31, 2024, compared to $1,509 in the same period of 2023. The change in the quarter was primarily due to the decreased cash cost described above, and reduced capital expenditures.

Drilling focused on infill grade control and exploring for extensions beyond the mineralized resource envelope in the deeper eastern and western portions of the 55 Zone. Stoping operations at the QVP orebody accelerated with batch mill tests confirming grade expectations.

In early April, the Government of Ghana issued a directive which stopped the export of electricity to its neighbouring countries, including Burkina Faso. As a consequence, Yaramoko has supplemented electricity used in its operations from the national grid with self-generated backup power. Production at Yaramoko has not been affected; however, Management is currently monitoring the increase in costs of the alternative energy supplies.

Séguéla Mine, Côte d’Ivoire

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

2024

 

 

 

2023

 

Mine Production

 

 

 

 

 

 

 

 

Tonnes milled

 

 

394,837

 

 

 

-

 

Average tonnes crushed per day

 

 

4,339

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

2.79

 

 

 

-

 

Recovery (%)

 

 

94

 

 

 

-

 

Production (oz)

 

 

34,556

 

 

 

-

 

Metal sold (oz)

 

 

34,450

 

 

 

-

 

Realized price ($/oz)

 

 

2,095

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

Cash cost ($/oz Au)1

 

 

459

 

 

 

-

 

All-in sustaining cash cost ($/oz Au)1

 

 

948

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000's) 2

 

 

 

 

 

 

 

 

Sustaining

 

 

3,027

 

 

 

-

 

Sustaining leases

 

 

2,265

 

 

 

-

 

Non-sustaining

 

 

1,035

 

 

 

-

 

Brownfields

 

 

4,896

 

 

 

-

 

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 first quarter of 2024, mined material totaled 420,538 tonnes of ore, averaging 2.23 g/t Au, and containing an estimated 30,192 ounces of gold from the Antenna and Ancien pits. Movement of waste during the quarter totaled 2,538,067 tonnes, for a strip ratio of 6:1.

Production was mainly focused on the Antenna pit which produced 401,109 tonnes of ore, the remainder being mined at the Ancien pit. A total of 700,229 tonnes of waste was also mined at Ancien. Waste mining commenced at Koula during the quarter with 18,063 tonnes of waste being mined.

Séguéla processed 394,837 tonnes in the quarter, producing 34,556 ounces of gold, at an average head grade of 2.79 g/t Au.

Throughput for the quarter averaged 195 tonnes per hour (t/hr), versus name plate design capacity of 154 t/hr. Mill constraints continued to be tested with throughputs of up to 220 t/hr being recorded over a seven-day period. This was achieved with a 60/20/20 blend of fresh, transitional and oxide ore respectively. The Life of Mine (LOM) blend consists of 85% fresh rock. A relining of the mill is planned in April, and further tests will then be conducted with a blend more representative of the LOM blend. Mine design and scheduling continue with the focus being on the requirements to sustainably meet the expected higher throughput rates.

Cash cost per gold ounce sold was $459, and all-in sustaining cash cost per gold ounce sold was $948 for Q1 2024. Both were within plan and guidance.

Côte d’Ivoire has been experiencing a shortage of electricity to the national grid since mid-April, due to failures at two private power generation plants, which supply approximately 25% of the electricity to the national grid. This has led to power cuts in neighborhoods, load shedding during peak hours, and electricity rationing to industries. Power output from one of the plants (CIPREL)has now been restored; however, restoration of supply from the second plant (AZITO) is not expected until July. The Séguéla mine continues to receive energy on a daily basis from the grid with interruptions. The operation has emergency backup power generation capacity to sustain critical processes only. Management is implementing various short-and medium-term mitigating measures which include operating the mill at 25% higher throughput, adjusting mine plans to prioritize higher grade Mineral Reserves, and sourcing a power backup solution for the entire operation, expected to be available on-site in July. Production in April has been only marginally affected. Management has not modified annual guidance for the Séguéla mine at this time but continues to monitor the situation closely.

San Jose Mine, Mexico

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

2024

 

 

 

2023

 

Mine Production

 

 

 

 

 

 

 

 

Tonnes milled

 

 

181,103

 

 

 

246,736

 

Average tonnes milled per day

 

 

2,182

 

 

 

2,869

 

 

 

 

 

 

 

 

 

 

Silver

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

147

 

 

 

181

 

Recovery (%)

 

 

89

 

 

 

91

 

Production (oz)

 

 

759,111

 

 

 

1,303,312

 

Metal sold (oz)

 

 

746,607

 

 

 

1,328,333

 

Realized price ($/oz)

 

 

23.47

 

 

 

22.58

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

0.90

 

 

 

1.15

 

Recovery (%)

 

 

87

 

 

 

90

 

Production (oz)

 

 

4,533

 

 

 

8,231

 

Metal sold (oz)

 

 

4,460

 

 

 

8,355

 

Realized price ($/oz)

 

 

2,074

 

 

 

1,900

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

Cash cost ($/oz Ag Eq)1,2

 

 

21.98

 

 

 

11.35

 

All-in sustaining cash cost ($/oz Ag Eq)1,2

 

 

24.24

 

 

 

15.51

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000's) 3

 

 

 

 

 

 

 

 

Sustaining

 

 

 

 

 

3,772

 

Sustaining leases

 

 

261

 

 

 

162

 

Non-sustaining

 

 

3,477

 

 

 

269

 

Brownfields

 

 

 

 

 

1,088

 

Cash cost per ounce of silver equivalent and All-in sustaining cash cost per ounce of silver equivalent are calculated using realized metal prices for each period respectively.
2 Cash cost per ounce of silver equivalent, and all-in sustaining cash cost per ounce of 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.
Capital expenditures are presented on a cash basis

In the first quarter of 2024, San Jose produced 759,111 ounces of silver and 4,533 ounces of gold, 42% and 45% decreases respectively, at average head grades for silver and gold of 147 g/t and 0.90 g/t, 19% and 22% decreases respectively, when compared to the same period in 2023. The decrease in silver and gold production, when compared to the first quarter of 2023, is explained by lower tonnes extracted and lower grades, which is consistent with the annual plan and guidance. During the first quarter, the processing plant milled 181,103 tonnes at an average of 2,182 tonnes per day, in line with the plan for the period.

The cash cost per silver equivalent ounce for the three months ending March 31, 2024, was $21.98, an increase from $11.42 in the same period of 2023. The San Jose Mine has less operational flexibility in 2024 compared to 2023, due to the reduced and more dispersed Mineral Reserves associated with the Trinidad deposit, which also increase mine costs. Production areas contain lower head grades and a higher presence of ferrous oxides in the upper levels, which impacted recoveries by approximately 2% in the quarter. Ore processed decreased by 27% due to lower tonnes mined.

The all-in sustaining cash cost per payable silver equivalent ounce for the three months ended March 31, 2024, increased by 56% to $24.24. This compares to $15.51 per ounce for the same period in 2023. These increases were mainly driven by higher cash costs and lower production, slightly mitigated by lower capital expenditure. The operation is experiencing further cost pressures driven by the continued appreciation of the Mexican peso. The Company conducts regular assessments and trade-offs between maintaining operations and opting for a care and maintenance option.

Sustaining capital expenditure has decreased as we near the anticipated closure of the mine. Drilling in 2024 was higher due to the drilling campaign at the Yessi vein, which was discovered in the third quarter of 2023. Exploration at the Yessi vein is ongoing.

Caylloma Mine, Peru

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

2024

 

 

 

2023

 

Mine Production

 

 

 

 

 

 

 

 

Tonnes milled

 

 

137,096

 

 

 

125,995

 

Average tonnes milled per day

 

 

1,540

 

 

 

1,448

 

 

 

 

 

 

 

 

 

 

Silver

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

87

 

 

 

85

 

Recovery (%)

 

 

82

 

 

 

82

 

Production (oz)

 

 

315,460

 

 

 

283,066

 

Metal sold (oz)

 

 

325,483

 

 

 

263,570

 

Realized price ($/oz)

 

 

23.34

 

 

 

22.24

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

0.12

 

 

 

0.15

 

Recovery (%)

 

 

29

 

 

 

27

 

Production (oz)

 

 

150

 

 

 

166

 

Metal sold (oz)

 

 

63

 

 

 

22

 

Realized price ($/oz)

 

 

2,024

 

 

 

1,895

 

 

 

 

 

 

 

 

 

 

Lead

 

 

 

 

 

 

 

 

Grade (%)

 

 

3.48

 

 

 

3.74

 

Recovery (%)

 

 

91

 

 

 

92

 

Production (000's lbs)

 

 

9,531

 

 

 

9,509

 

Metal sold (000's lbs)

 

 

9,825

 

 

 

8,782

 

Realized price ($/lb)

 

 

0.95

 

 

 

1.02

 

 

 

 

 

 

 

 

 

 

Zinc

 

 

 

 

 

 

 

 

Grade (%)

 

 

4.46

 

 

 

5.21

 

Recovery (%)

 

 

90

 

 

 

90

 

Production (000's lbs)

 

 

12,183

 

 

 

13,051

 

Metal sold (000's lbs)

 

 

12,466

 

 

 

13,815

 

Realized price ($/lb)

 

 

1.11

 

 

 

1.45

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

Cash cost ($/oz Ag Eq)1,2

 

 

11.61

 

 

 

12.74

 

All-in sustaining cash cost ($/oz Ag Eq)1,2

 

 

17.18

 

 

 

16.88

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000's) 3

 

 

 

 

 

 

 

 

Sustaining

 

 

3,377

 

 

 

2,810

 

Sustaining leases

 

 

906

 

 

 

856

 

Brownfields

 

 

358

 

 

 

204

 

Cash cost per ounce of silver equivalent and All-in sustaining cash cost per ounce of silver equivalent are calculated using realized metal prices for each period respectively.
2 Cash cost per ounce of silver equivalent, and all-in sustaining cash cost per ounce of 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.
Capital expenditures are presented on a cash basis.

In the first quarter, the Caylloma Mine produced 315,460 ounces of silver, 11% higher compared to the first quarter 2023, at an average head grade of 87 g/t Ag.

Lead and zinc production for the quarter was 9.5 million pounds of lead, and 12.2 million pounds of zinc. Lead production was in line and zinc production decreased by 7% compared to the same period in 2023. Head grades averaged 3.48%, and 4.46%, a 7% and 14% decrease, respectively, when compared to the first quarter of 2023.

Lower metal production compared to the previous quarter was due to lower grades, which are in line with the Mineral Reserves estimates and production guidance for the year.

The cash cost per silver equivalent ounces for the three months ended March 31, 2024 was $11.61, a 12% decrease compared to the comparable period in 2023. This was primarily due to lower treatment and refining charges.

The all-in sustaining cash cost per ounce of payable silver equivalent for the three months ended March 31, 2024, increased 2% to $17.18, compared to $16.88 for the same period in 2023. The decrease in cash costs per ounce was offset by higher capital expenditure, as well as the impact of increasing silver prices on the calculation of silver equivalent ounces resulting in lower equivalent silver ounces sold.

Underground development for the quarter was mainly focused on mine levels 15, 16, 17, and 18. The increase in Brownfields expenditures is primarily attributable to greater footage, additional diamond drilling, and cost inflation.

Qualified Person

Eric Chapman, Senior Vice President of Technical Services, is a Professional Geoscientist of the Engineers and Geoscientists 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.

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 sold; all-in sustaining cash cost per ounce of gold sold; all-in sustaining cash cost per ounce of gold equivalent sold; all-in cash cost per ounce of gold sold; production cash cost per ounce of gold equivalent; 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; adjusted attributable net income; adjusted EBITDA 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 three months ended March 31, 2024 (“Q1 2024 MDA”), 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 the Company uses such measures and ratio. The Q1 2024 MD&A may be accessed on SEDAR+ at www.sedarplus.ca under the Company’s profile.

Except as otherwise described in the Q1 2024 MD&A, the Company has calculated these measures consistently for all periods presented.

Reconciliation of Debt to total net debt and net debt to adjusted EBITDA ratio for March 31, 2024

 

 

 

 

 

(Expressed in millions except Total net debt to Adjusted EBITDA ratio)

 

As at March 31, 2024

 

Credit facility

$

125.0

 

Convertible debenture

 

45.7

 

Debt

 

170.7

 

Less: Cash and Cash Equivalents

 

(87.7

)

Total net debt1

$

83.0

 

Adjusted EBITDA (last four quarters)

$

335.1

 

Total net debt to adjusted EBITDA ratio

 

0.2:1

 

Excluding letters of credit

 

 

 

 

 

Reconciliation of net income to adjusted attributable net income for the three months ended March 31, 2024 and 2023

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

(Expressed in millions)

 

2024

 

 

2023

 

Net income attributable to shareholders

 

 

26.3

 

 

 

10.9

 

Adjustments, net of tax:

 

 

 

 

 

 

Community support provision and accruals1

 

 

(0.2

)

 

 

-

 

Unrealized loss (gain) on derivatives

 

 

-

 

 

 

1.0

 

Accretion on right of use assets

 

 

0.9

 

 

 

0.6

 

Other non-cash/non-recurring items

 

 

(0.3

)

 

 

(0.3

)

Adjusted attributable net income

 

 

26.7

 

 

 

12.2

 

Amounts are recorded in Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income to adjusted EBITDA for the three ended March 31, 2024 and 2023

 

 

 

 

 

 

 

 

Three months ended March 31,

Consolidated (in millions of US dollars)

 

2024

 

 

 

2023

 

Net income

 

29.1

 

 

 

11.9

 

Adjustments:

 

 

 

 

 

Community support provision and accruals

 

(0.3

)

 

 

(0.1

)

Net finance items

 

6.2

 

 

 

2.6

 

Depreciation, depletion, and amortization

 

50.3

 

 

 

44.4

 

Income taxes

 

14.5

 

 

 

7.9

 

Other non-cash/non-recurring items

 

(4.6

)

 

 

(1.4

)

Adjusted EBITDA

 

95.2

 

 

 

65.3

 

Figures may not add due to rounding

Reconciliation of net cash from operating activities to free cash flow from ongoing operations for the three months ended March 31, 2024 and 2023

In 2022, the Company changed the method for calculating free cash flow from ongoing operations. The calculation now uses taxes paid as opposed to the previous method which used current income taxes. While this may create larger quarter over quarter fluctuations due to the timing of income tax payments, management believes the revised method is a better representation of the free cash flow generated by the Company’s ongoing operations.

 

 

 

 

 

 

 

 

Three months ended March 31,

(Expressed in millions)

2024

 

 

2023

 

 

 

 

 

 

 

Net cash provided by operating activities

 

48.9

 

 

 

41.8

 

Additions to mineral properties, plant and equipment

 

(32.4

)

 

 

(30.4

)

Gain on blue chip swap investments

 

2.6

 

 

 

-

 

Right of use payments

 

(4.9

)

 

 

(3.0

)

Other adjustments

 

(2.1

)

 

 

0.1

 

Free cash flow from ongoing operations

 

12.1

 

 

 

8.5

 

Figures may not add due to rounding

Reconciliation of cost of sales to cash cost per ounce of gold equivalent sold for the three months ended March 31, 2024 and 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Cost Per Gold Equivalent Ounce Sold - Q1 2024

 

Lindero

 

 

Yaramoko

 

 

Séguéla

 

 

San Jose

 

 

Caylloma

 

 

GEO Cash Costs

Cost of sales

 

34,049

 

 

 

34,951

 

 

 

45,209

 

 

 

23,724

 

 

 

17,105

 

 

 

155,040

 

Depletion, depreciation, and amortization

 

(11,580

)

 

 

(10,215

)

 

 

(23,916

)

 

 

(391

)

 

 

(3,824

)

 

 

(49,926

)

Royalties and taxes

 

(253

)

 

 

(4,293

)

 

 

(5,472

)

 

 

(704

)

 

 

(354

)

 

 

(11,076

)

By-product credits

 

(424

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(424

)

Other

 

 

 

 

 

 

 

 

 

 

6

 

 

 

(331

)

 

 

(325

)

Treatment and refining charges

 

 

 

 

 

 

 

 

 

 

973

 

 

 

1,231

 

 

 

2,204

 

Cash cost applicable per gold equivalent ounce sold

 

21,792

 

 

 

20,443

 

 

 

15,821

 

 

 

23,608

 

 

 

13,827

 

 

 

95,491

 

Ounces of gold equivalent sold

 

21,628

 

 

 

27,171

 

 

 

34,450

 

 

 

12,090

 

 

 

13,330

 

 

 

108,670

 

Cash cost per ounce of gold equivalent sold ($/oz)

 

1,008

 

 

 

752

 

 

 

459

 

 

 

1,953

 

 

 

1,037

 

 

 

879

 

Gold equivalent was calculated using the realized prices for gold of $2,087/oz Au, $23.4/oz Ag, $2,084/t Pb, and $2,450/t Zn for Q1 2024.

Figures may not add due to rounding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Cost Per Gold Equivalent Ounce Sold - Q1 2023

 

Lindero

 

 

Yaramoko

 

 

Séguéla

 

 

 

San Jose

 

 

Caylloma

 

 

GEO Cash Costs

Cost of sales

 

41,725

 

 

 

44,863

 

 

 

 

 

 

32,523

 

 

 

16,108

 

 

 

135,219

 

Depletion, depreciation, and amortization

 

(13,192

)

 

 

(17,368

)

 

 

 

 

 

(9,912

)

 

 

(3,483

)

 

 

(43,955

)

Royalties and taxes

 

(3,926

)

 

 

(3,362

)

 

 

 

 

 

(1,257

)

 

 

(166

)

 

 

(8,711

)

By-product credits

 

(799

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(799

)

Other

 

15

 

 

 

 

 

 

 

 

 

(17

)

 

 

(471

)

 

 

(473

)

Treatment and refining charges

 

 

 

 

 

 

 

 

 

 

724

 

 

 

5,506

 

 

 

6,230

 

Cash cost applicable per gold equivalent ounce sold

 

23,823

 

 

 

24,133

 

 

 

 

 

 

22,061

 

 

 

17,494

 

 

 

87,511

 

Ounces of gold equivalent sold

 

26,763

 

 

 

29,472

 

 

 

 

 

 

23,127

 

 

 

16,179

 

 

 

95,541

 

Cash cost per ounce of gold equivalent sold ($/oz)

 

891

 

 

 

819

 

 

 

 

 

 

954

 

 

 

1,081

 

 

 

916

 

Gold equivalent was calculated using the realized prices for gold of $1,893/oz Au, $22.5/oz Ag, $2,256/t Pb, and $3,197/t Zn for Q1 2023.

Figures may not add due to rounding

 

Reconciliation of cost of sales to all-in sustaining cash cost per ounce of gold equivalent sold for the three months ended March 31, 2024 and 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AISC Per Gold Equivalent Ounce Sold - Q1 2024

 

Lindero

 

 

 

Yaramoko

 

 

 

Séguéla

 

 

 

San Jose

 

 

 

Caylloma

 

 

 

Corporate

 

 

 

GEO AISC

 

Cash cost applicable per gold equivalent ounce sold

 

21,792

 

 

 

20,443

 

 

 

15,821

 

 

 

23,608

 

 

 

13,827

 

 

 

 

 

 

95,491

 

Royalties and taxes

 

253

 

 

 

4,293

 

 

 

5,472

 

 

 

704

 

 

 

354

 

 

 

 

 

 

11,076

 

Worker's participation

 

 

 

 

 

 

 

 

 

 

 

 

 

417

 

 

 

 

 

 

417

 

General and administration

 

2,879

 

 

 

550

 

 

 

1,168

 

 

 

1,458

 

 

 

1,219

 

 

 

10,649

 

 

 

17,923

 

Total cash costs

 

24,924

 

 

 

25,286

 

 

 

22,461

 

 

 

25,770

 

 

 

15,817

 

 

 

10,649

 

 

 

124,907

 

Sustaining capital1

 

10,405

 

 

 

12,033

 

 

 

10,188

 

 

 

261

 

 

 

4,641

 

 

 

 

 

 

37,528

 

All-in sustaining costs

 

35,329

 

 

 

37,319

 

 

 

32,649

 

 

 

26,031

 

 

 

20,458

 

 

 

10,649

 

 

 

162,435

 

Gold equivalent ounces sold

 

21,628

 

 

 

27,171

 

 

 

34,450

 

 

 

12,090

 

 

 

13,330

 

 

 

 

 

 

108,670

 

All-in sustaining costs per ounce

 

1,634

 

 

 

1,373

 

 

 

948

 

 

 

2,153

 

 

 

1,535

 

 

 

 

 

 

1,495

 

Gold equivalent was calculated using the realized prices for gold of $2,087/oz Au, $23.4/oz Ag, $2,084/t Pb, and $2,450/t Zn for Q1 2024.

Figures may not add due to rounding

1 Presented on a cash basis

 

AISC Per Gold Equivalent Ounce Sold - Q1 2023

 

Lindero

 

 

 

Yaramoko

 

 

 

Séguéla

 

 

 

San Jose

 

 

 

Caylloma

 

 

 

Corporate

 

 

 

GEO AISC

 

Cash cost applicable per gold equivalent ounce sold

 

23,823

 

 

 

24,133

 

 

 

 

 

 

22,061

 

 

 

17,494

 

 

 

 

 

 

87,511

 

Royalties and taxes

 

3,926

 

 

 

3,362

 

 

 

 

 

 

1,257

 

 

 

166

 

 

 

 

 

 

8,711

 

Worker's participation

 

 

 

 

 

 

 

 

 

 

21

 

 

 

517

 

 

 

 

 

 

538

 

General and administration

 

1,992

 

 

 

889

 

 

 

 

 

 

1,802

 

 

 

1,144

 

 

 

8,681

 

 

 

14,508

 

Total cash costs

 

29,741

 

 

 

28,384

 

 

 

 

 

 

25,141

 

 

 

19,321

 

 

 

8,681

 

 

 

111,268

 

Sustaining capital3

 

8,343

 

 

 

16,099

 

 

 

 

 

 

5,022

 

 

 

3,870

 

 

 

 

 

 

33,334

 

All-in sustaining costs

 

38,084

 

 

 

44,483

 

 

 

 

 

 

30,163

 

 

 

23,191

 

 

 

8,681

 

 

 

144,602

 

Gold equivalent ounces sold

 

26,763

 

 

 

29,472

 

 

 

 

 

 

23,127

 

 

 

16,179

 

 

 

 

 

 

95,541

 

All-in sustaining costs per ounce

 

1,424

 

 

 

1,509

 

 

 

 

 

 

1,304

 

 

 

1,433

 

 

 

 

 

 

1,514

 

Gold equivalent was calculated using the realized prices for gold of $1,893/oz Au, $22.5/oz Ag, $2,256/t Pb, and $3,197/t Zn for Q1 2023.

Figures may not add due to rounding

1 Presented on a cash basis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cost of sales to cash cost per payable ounce of silver equivalent sold for the three months ended March 31, 2024 and 2023

 

 

 

 

 

 

 

 

 

Cash Cost Per Silver Equivalent Ounce Sold - Q1 2024

 

San Jose

 

 

 

Caylloma

 

 

 

SEO Cash Costs

 

Cost of sales

 

23,724

 

 

 

17,105

 

 

 

40,829

 

Depletion, depreciation, and amortization

 

(391

)

 

 

(3,824

)

 

 

(4,215

)

Royalties and taxes

 

(704

)

 

 

(354

)

 

 

(1,058

)

Other

 

6

 

 

 

(331

)

 

 

(325

)

Treatment and refining charges

 

973

 

 

 

1,231

 

 

 

2,204

 

Cash cost applicable per silver equivalent sold

 

23,608

 

 

 

13,827

 

 

 

37,435

 

Ounces of silver equivalent sold1

 

1,073,948

 

 

 

1,190,990

 

 

 

2,264,938

 

Cash cost per ounce of silver equivalent sold ($/oz)

 

21.98

 

 

 

11.61

 

 

 

16.53

 

1 Silver equivalent sold for Q1 2024 for San Jose is calculated using a silver to gold ratio of 88.4:1. Silver equivalent sold for Q1 2024 for Caylloma is calculated using a silver to gold ratio of 86.8:1, silver to lead ratio of 1:24.7 pounds, and silver to zinc ratio of 1:21.0 pounds.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results - Sales and Realized Prices

Figures may not add due to rounding

 

 

 

 

 

 

 

 

 

 

 

Cash Cost Per Silver Equivalent Ounce Sold - Q1 2023

 

San Jose

 

 

 

Caylloma

 

 

 

SEO Cash Costs

 

Cost of sales

 

32,523

 

 

 

16,108

 

 

 

48,631

 

Depletion, depreciation, and amortization

 

(9,912

)

 

 

(3,483

)

 

 

(13,395

)

Royalties and taxes

 

(1,257

)

 

 

(166

)

 

 

(1,423

)

Other

 

(17

)

 

 

(471

)

 

 

(488

)

Treatment and refining charges

 

724

 

 

 

5,506

 

 

 

6,230

 

Cash cost applicable per silver equivalent sold

 

22,061

 

 

 

17,494

 

 

 

39,555

 

Ounces of silver equivalent sold1

 

1,944,265

 

 

 

1,373,699

 

 

 

3,317,964

 

Cash cost per ounce of silver equivalent sold ($/oz)

 

11.35