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Fortuna Reports Results for the Fourth Quarter and Full Year 2023

Fortuna Reports Results for the Fourth Quarter and Full Year 2023

(All amounts expressed in US dollars, tabular amounts in millions, unless otherwise stated)

VANCOUVER, British Columbia, March 06, 2024 (GLOBE NEWSWIRE) -- Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) (“Fortuna” or the “Company”) today 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

%)

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

 

 

 

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

 

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

 

 

-

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

 

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.

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

 

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.

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