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Fortuna reports on Yaramoko's updated reserves and resources evaluation work and its Brownfields exploration program
Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) provides an update on the evaluation work of the Mineral Reserves and Mineral Resources and the brownfields exploration program at the Yaramoko Mine complex in Burkina Faso.
Following the completion of Fortuna's acquisition of Roxgold Inc. on July 2, 2021, the Company updated the technical report previously filed by Roxgold in 2017 and filed a new technical report on March 30, 2022 (the "2022 Technical Report") to describe the proposed open pit mining operation at the 55 Zone as disclosed by Roxgold on November 10, 2020. During the first half of 2022, the Company carried out additional exploration drilling and a re-evaluation of the modeling and estimation techniques to improve the definition of the mineralization. A summary of the drilling and evaluation programs completed at Yaramoko during 2022 are summarized below, together with the highlights of its brownfields exploration program.
2022 Drilling Programs and Studies
55 Zone underground drilling
Underground drilling of the 55 Zone concentrated on grade control drilling within the Mineral Resource and Mineral Reserve boundaries to provide increased confidence in the mine plans. Step-out drilling associated with the 2022 grade control drilling program returned encouraging results, incrementally extending the western limit of the drill defined mineralization a further 20 to 50 meters, where it remains open. Additional step-out drilling is planned for the first half of 2023.
In addition, four holes totaling 1,490 meters were drilled to test the area between the 4900 and 5100 meters above Relative Level (mRL) on the eastern side of the 55 Zone, which confirmed an up-dip extension of a high-grade shoot previously intersected in the development drives between the 4800 and 4900 mRL.
109 Zone open pit exploration drilling and first-time estimate of Mineral Reserves
A total of 60 reverse circulation and diamond core drill holes totaling 4,922 meters were completed at the 109 Zone during 2022, including 13 holes drilled for geotechnical purposes. Drilling was designed to infill and upgrade the geological confidence to support the estimation of Mineral Resources and Mineral Reserves.
55 Zone open pit drilling
Reverse circulation drilling to test projections of near surface structural splays identified from mapping of the underground openings was completed during 2022, with 25 holes completed for a total of 1,500 meters. Historic resource drilling had intersected several isolated high-grade intervals related to sub-parallel mineralized veins associated with the main 55 Zone and which coincided with structures identified from detailed mapping of the near surface 55 Zone underground workings.
The drilling was successful in identifying the mineralized structures and veins although continuity of economic intervals and strike lengths resulted in downgrading of the potential.
55 Zone open pit re-evaluation
Roxgold´s proposal to build an open pit at the 55 Zone was based on extracting high-grade near surface material that formed the crown pillar by mining both remnant mineralization identified as being adjacent to existing mine workings and additional sub-parallel structures related to the main 55 Zone structure. Based on recommendations in the 2022 Technical Report, Fortuna completed an evaluation of the mineralization that was identified as potentially recoverable from surface, which was to include an underground transition study and the preparation of a void management plan.
During this evaluation process, the Company identified a spatial discrepancy attributed to a surveying error which occurred prior to August 2020. This resulted in horizontal differences averaging from 2 to 3 meters between the drill holes used to define the 55 Zone main mineralized structure and the underground face channel samples collected during underground development. The updated estimate, having corrected for this inconsistency, results in a reduction of 120,000 ounces of gold previously identified as modelled remnant mineralized material. Subsequently, an economic evaluation of the open pit resulted in a reduction of a further 46,000 ounces of mineralized material which the Company determined cannot be economically extracted from surface or underground due to its isolated location and low-grade nature.
The updated estimate of the 55 Zone crown pillar decreases the life of mine from 5 years to 3 years and results in a reduction in pit size that reduces risk associated with the plan by lowering the strip ratio from 55:1 to 19:1; optimising throughput during the last three years; no longer requiring the relocation of infrastructure; removing the need for significant pre-stripping; and eliminating the requirement to expand the tailings storage facility as a result of processing fewer tonnes.
Bagassi South QV Prime Underground re-evaluation
An evaluation was conducted to assess the optimal mining method proposed for the QV Prime structure at Bagassi South. Changing the method from the originally proposed long hole stoping to shrinkage stoping resulted in lower dilution levels and an increase in estimated gold content in the updated Mineral Reserve.
Yaramoko Mineral Reserves and Mineral Resources as of June 30, 2022
| Mineral Reserves – Proven and Probable as of June 30, 2022 | ||||
| Property | Classification | Tonnes (000) | Au (g/t) | Contained Au (koz) |
| 55 Zone underground | Proven | 29 | 4.83 | 4 |
| Probable | 743 | 7.42 | 177 | |
| Proven + Probable | 772 | 7.32 | 182 | |
| 55 Zone open pit | Proven | 72 | 5.79 | 13 |
| Probable | 73 | 4.69 | 11 | |
| Proven + Probable | 145 | 5.23 | 24 | |
| 109 Zone open pit | Proven | |||
| Probable | 160 | 1.77 | 9 | |
| Proven + Probable | 160 | 1.77 | 9 | |
| Bagassi South QV Prime underground | Proven | |||
| Probable | 142 | 6.75 | 31 | |
| Proven + Probable | 142 | 6.75 | 31 | |
| Bagassi South underground | Proven | |||
| Probable | 10 | 4.44 | 1.4 | |
| Proven + Probable | 10 | 4.44 | 1.4 | |
| Stockpiles | Proven | 180 | 2.59 | 15 |
| Probable | ||||
| Proven + Probable | 180 | 2.59 | 15 | |
| TOTAL | Proven | 281 | 3.64 | 33 |
| Probable | 1,128 | 6.33 | 230 | |
| Proven + Probable | 1,409 | 5.80 | 263 | |
| Mineral Resources– Measured and Indicated (exclusive of Reserves) as of June 30, 2022 | ||||||
| Property | Classification | Tonnes (000) | Au (g/t) | Contained Au (koz) | ||
| 55 Zone underground | Measured | 81 | 6.35 | 17 | ||
| Indicated | 199 | 6.42 | 41 | |||
| Measured + Indicated | 280 | 6.40 | 58 | |||
| 55 Zone open pit | Measured | |||||
| Indicated | 46 | 4.18 | 6 | |||
| Measured + Indicated | 46 | 4.18 | 6 | |||
| 109 Zone open pit | Measured | |||||
| Indicated | 32 | 1.63 | 2 | |||
| Measured + Indicated | 32 | 1.63 | 2 | |||
| Bagassi South QV Prime underground | Measured | |||||
| Indicated | 74 | 7.27 | 17 | |||
| Measured + Indicated | 74 | 7.27 | 17 | |||
| Bagassi South underground | Measured | |||||
| Indicated | 54 | 7.07 | 12 | |||
| Measured + Indicated | 54 | 7.07 | 12 | |||
| TOTAL | Measured | 81 | 6.35 | 17 | ||
| Indicated | 404 | 6.02 | 78 | |||
| Measured + Indicated | 485 | 6.08 | 95 | |||
Mineral Resources– Inferred (exclusive of Reserves) as of June 30, 2022 | ||||||
| Property | Classification | Tonnes (000) | Au (g/t) | Contained Au (koz) | ||
| 55 Zone underground | Inferred | 26 | 6.74 | 6 | ||
| 55 Zone open pit | Inferred | 41 | 3.62 | 5 | ||
| 109 Zone open pit | Inferred | 3 | 1.35 | 0 | ||
| Bagassi South QV Prime underground | Inferred | 22 | 6.12 | 4 | ||
| Bagassi South underground | Inferred | 49 | 6.07 | 10 | ||
| TOTAL | Inferred | 141 | 5.39 | 25 | ||
Notes:
- Mineral Reserves and Mineral Resources are as defined by the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves
- Mineral Resources are exclusive of Mineral Reserves
- Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
- Factors that could materially affect the reported Mineral Resources or Mineral Reserves include: changes in metal price and exchange rate assumptions; changes in local interpretations of mineralization; changes to assumed metallurgical recoveries, mining dilution and recovery; and assumptions as to the continued ability to access the site, retain mineral and surface rights titles, maintain environmental and other regulatory permits, and maintain the social license to operate
- Mineral Resources and Reserves for the Yaramoko Mine are estimated and reported as of June 30, 2022
- Mineral Reserves for Yaramoko are reported at a cut-off grade of 1.26 g/t Au for the 55 Zone open pit, 0.73 g/t Au for the 109 Zone open pit, 4.1 g/t Au for 55 Zone and Bagassi South underground (SLS), 3.1 g/t Au for Bagassi South QV Prime (shrinkage) based on an assumed gold price of US$1,600/oz, metallurgical recovery rates of 98.0%, underground mining costs of US$135/t, processing cost of US$31/t and G&A costs of US$28/t, surface mining costs of US$3.44/t, processing cost of US$27/t and G&A costs of US$25/t. Underground average mining recovery is estimated at 86% (SLS) and 90% (shrinkage) for Bagassi South, 92% (SLS) for 55 Zone stopes and 100% for sill drifts. A mining dilution factor of 10% has been applied for sill drifts, 0.6 meter and 0.4 meter dilution skin has been applied for SLS and shrinkage mining respectively. Surface mining recovery is estimated to average 100% and mining dilution 0% having been accounted for during block regularization to 5 meters x 5 meters x 5 meters size within an optimized pit shell and only Proven and Probable categories reported within the final pit designs. Yaramoko Mineral Resources are reported in situ at a gold grade cut-off grade of 0.9 g/t Au for the 55 Zone open pit, 0.5 g/t Au for the 109 Zone open pit, and 2.9 g/t Au for underground (Zone 55 and Bagassi South), based on an assumed gold price of US$1,700/oz and the same costs, metallurgical recovery and constrained within an optimised pit shell. The Yaramoko Mine is subject to a 10% carried interest held by the government of Burkina Faso.
- Matthew Cobb, (MAIG #5486) is the Qualified Person responsible for Mineral Resources being an employee of Roxgold Inc. (a wholly-owned subsidiary of Fortuna), Raul Espinoza (FAUSIMM (CP) #309581) is the Qualified Person responsible for Mineral Reserves, being an employee of Fortuna
- Totals may not add due to rounding procedures
Changes to the Yaramoko Mine Mineral Reserves and Mineral Resources since December 31, 2021
Proven and Probable Reserves decreased from 2.1 million tonnes averaging 6.78 g/t Au containing 464,000 ounces of gold to 1.4 million tonnes averaging 5.80 g/t Au containing 263,000 ounces of gold in the first six months of 2022 representing a 34 percent decrease in tonnes and 43 percent decrease in gold ounces. Reasons for the changes include:
- 55 Zone underground and Bagassi South underground: decrease of 12 percent or 53,000 ounces due to production related depletion and sterilization
- 55 Zone open pit: decrease of 26 percent or 120,000 ounces due to a reduction of remnant mineralized material related to a survey discrepancy identified in the historical model that was corrected in the updated resource model evaluation
- 55 Zone open pit: decrease of 10 percent or 46,000 ounces due to changes in pit size as material at depth cannot be economically extracted from surface due to increased strip ratios as a result of the depletion of the aforementioned remnant material
- 55 Zone underground and Bagassi South underground: increase of 1 percent or 5,000 ounces due to updated geological interpretation as a result of brownfields drilling counteracting marginal increases in cut-off grades
- 109 Zone open pit: gain of 2 percent or 9,000 ounces due to infill drilling and first time estimation of resources and reserves
- Bagassi South QV Prime: gain of 2 percent or 8,000 ounces in the Bagassi South underground mine due to a change in the proposed mining method to shrinkage stoping and subsequent re-evaluation of the Mineral Reserves
Measured and Indicated Resources excluding reserves remain relatively unchanged at 0.5 million tonnes averaging 6.10 g/t Au containing 95,000 ounces of gold.
Inferred Resources decreased slightly from 0.25 million tonnes averaging 4.41 g/t Au containing 35,000 ounces of gold to 0.14 million tonnes averaging 5.39 g/t Au containing 25,000 ounces of gold in the first 6 months of 2022. Reasons for the changes are related to geological reinterpretation and upgrading based on the exploration and infill drilling.
The aforementioned updated Mineral Resources and Mineral Reserves for the Yaramoko Mine will be included in the Company's consolidated Mineral Resource and Mineral Reserve update to be released prior to the end of the first quarter of 2023, subject to the completion of depletion for the period from June 30, 2022 to December 31, 2022. The Company will also prepare an updated technical report for the Yaramoko Mine to be filed together with its annual continuous disclosure filings prior to the end of the first quarter. The aforementioned changes in the Mineral Resources and Mineral Reserves are not material to the Company´s consolidated Mineral Resources and Mineral Reserves.
Brownfields Exploration Highlights
A program of 11 reverse circulation holes totaling 1,182 meters was completed in 2022 as part of a scout drilling program to test the projected northwest extension of the QV and QV Prime veins approximately 300 to 400 meters along strike from Bagassi South.
Hosted in similar variably sheared granite and mafic volcanic lithologies to the Bagassi South mineralization (refer to Figure 1), drilling intersected quartz vein hosted mineralization interpreted as a continuation of the Bagassi South vein system. At Bagassi South this system comprises several veins including the QV, QV Prime, QV1 to QV3 veins and is characterized by anastomosing and steeply plunging high-grade shoots within the vein system. Refer to Appendix 1 for full results.
Highlight intervals include:
- YRM-22-RC-BGR-006 : 7.36 g/t Au over an estimated true width of 5.5 meters from 119 meters downhole, including 17.43 g/t Au over an estimated true width of 2.2 meters from 123 meters
- YRM-22-RC-BGR-004 : 1.92 g/t Au over an estimated true width of 7.3 meters from 22 meters
Figure 1. Plan view of scout drilling testing strike projections of the QV and QV Prime veins at Bagassi South.
Quality Assurance & Quality Control (QA-QC)
All drilling data completed by the Company utilized the following procedures and methodologies. All drilling was carried out under the supervision of the Company's personnel.
All RC drilling used a 5.25-inch face sampling pneumatic hammer with samples collected into 60-liter plastic bags. Samples were kept dry by maintaining enough air pressure to exclude groundwater inflow. If water ingress exceeded the air pressure, RC drilling was stopped, and drilling converted to diamond core tails. Once collected, RC samples were riffle split through a three-tier splitter to yield a 12.5% representative sample for submission to the analytical laboratory. The residual 87.5% sample were stored at the drill site until assay results were received and validated. Coarse reject samples for all mineralized samples corresponding to significant intervals are retained and stored on-site at the company-controlled core yard.
All DD drill holes at Yaramoko were drilled with HQ sized diamond drill bits. The core was logged, marked up for sampling using standard lengths of one meter or to a geological boundary. Samples were then cut into equal halves using a diamond saw. One half of the core was left in the original core box and stored in a secure location at the company core yard at the project site. The other half was sampled, catalogued, and placed into sealed bags and securely stored at the site until shipment.
All Yaramoko RC and DD core samples were transported to ALS Laboratories in Ouagadougou for preparation. Routine gold analysis using a 50-gram charge and fire assay with an atomic absorption finish was completed for all samples. Quality control procedures included the systematic insertion of blanks, duplicates and sample standards into the sample stream. In addition, the ALS laboratory inserted its own quality control samples.
Qualified Persons
Eric Chapman, Senior Vice President of Technical Services at Fortuna, is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (Registration Number 36328) and a Qualified Person as defined by National Instrument 43-101- Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. Chapman has reviewed and approved the scientific and technical information contained in this news release related to the Mineral Resources and Mineral Reserves at the Yaramoko Mine and has verified the underlying data.
Paul Weedon, Senior Vice President of Exploration at Fortuna, is a member of the Australian Institute of Geoscientists (Membership #6001) and a Qualified Person as defined by NI 43-101. Mr. Weedon has reviewed and approved the scientific and technical information contained in this news release related to the exploration programs at the Yaramoko Mine. Mr. Weedon has verified the data disclosed, and the sampling, analytical and test data underlying the information or opinions contained herein by reviewing geochemical and geological databases and reviewing diamond drill core. There were no limitations to the verification process.
About Fortuna Silver Mines Inc.
Fortuna Silver Mines Inc. is a Canadian precious metals mining company with four operating mines in Argentina, Burkina Faso, Mexico and Peru, and a fifth mine under construction in Côte d'Ivoire. Sustainability is integral to all our operations and relationships. We produce gold and silver and generate shared value over the long-term for our stakeholders through efficient production, environmental protection, and social responsibility. For more information, please visit our website .
ON BEHALF OF THE BOARD
Jorge A. Ganoza
President, CEO, and Director
Fortuna Silver Mines Inc.
Investor Relations:
Carlos Baca | info@fortunasilver.com | Twitter : @Fortuna_Silver | LinkedIn : fortunasilvermines | YouTube : Fortuna Silver Mines
Forward looking Statements
This news release contains forward-looking statements which constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (collectively, "Forward-looking Statements"). All statements included herein, other than statements of historical fact, are Forward-looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward-looking Statements. The Forward-looking Statements in this news release may include, without limitation, statements about the Company's plans for its mines and mineral properties; the Company's business strategy, plans and outlook; the merit of the Company's mines and mineral properties; the Yaramoko Mine Mineral Resource and Mineral Reserve estimates; expected metallurgical recoveries; the Company's ability to convert Inferred Mineral Resources to Indicated Mineral Resources and to convert Mineral Resources to Mineral Reserves; timelines; production at the Yaramoko Mine; the future financial or operating performance of the Company; the effects of laws, regulations and government policies affecting our operations or potential future operations; future successful development of the Yaramoko Mine; the estimates of expected or anticipated economic returns from the Company's mining operations including future sales of metals, doré and concentrate or other products produced by the Company and the Company's ability to achieve its production and cost guidance; capital expenditures at the Company's operations; estimated brownfields and greenfields expenditures in 2023; the success of the Company's exploration activities, including infill drill programs at its mines and development projects; the duration and impacts of COVID-19 on the Company's production, workforce, business, operations and financial condition; metal price estimates, estimated metal grades in 2023; approvals and other matters. Often, but not always, these Forward-looking Statements can be identified by the use of words such as "estimated", "potential", "open", "future", "assumed", "projected", "used", "detailed", "has been", "gain", "planned", "reflecting", "will", "anticipated", "estimated" "containing", "remaining", "to be", or statements that events, "could" or "should" occur or be achieved and similar expressions, including negative variations.
Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others, operational risks associated with mining and mineral processing; uncertainty relating to Mineral Resource and Mineral Reserve estimates; uncertainty relating to capital and operating costs, production schedules and economic returns; risks relating to the Company's ability to replace its Mineral Reserves; risks associated with mineral exploration and project development; uncertainty relating to the repatriation of funds as a result of currency controls; environmental matters including obtaining or renewing environmental permits and potential liability claims; uncertainty relating to nature and climate conditions; risks associated with political instability and changes to the regulations governing the Company's business operations; changes in national and local government legislation, taxation, controls, regulations and political or economic developments in countries in which the Company does or may carry on business; risks associated with war, hostilities or other conflicts, such as the Ukrainian – Russian conflict, and the impact it may have on global economic activity; risks relating to the termination of the Company's mining concessions in certain circumstances; developing and maintaining relationships with local communities and stakeholders; risks associated with losing control of public perception as a result of social media and other web-based applications; potential opposition to the Company's exploration, development and operational activities; risks related to the Company's ability to obtain adequate financing for planned exploration and development activities; property title matters; risks relating to the integration of businesses and assets acquired by the Company; impairments; risks associated with climate change legislation; reliance on key personnel; adequacy of insurance coverage; operational safety and security risks; legal proceedings and potential legal proceedings; the ability of the Company to successfully contest and revoke the resolution issued by SEMARNAT which annuls the extension of the environmental impact authorization for the San Jose mine; uncertainties relating to general economic conditions; risks relating to a global pandemic, including COVID-19, which could impact the Company's business, operations, financial condition and share price; competition; fluctuations in metal prices; risks associated with entering into commodity forward and option contracts for base metals production; fluctuations in currency exchange rates and interest rates; tax audits and reassessments; risks related to hedging; uncertainty relating to concentrate treatment charges and transportation costs; sufficiency of monies allotted by the Company for land reclamation; risks associated with dependence upon information technology systems, which are subject to disruption, damage, failure and risks with implementation and integration; risks associated with climate change legislation; labor relations issues; as well as those factors discussed under "Risk Factors" in the Company's Annual Information Form. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward-looking Statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to the accuracy of the Company's current mineral resource and reserve estimates; that the Company's activities will be conducted in accordance with the Company's public statements and stated goals; that there will be no material adverse change affecting the Company, its properties or its production estimates (which assume accuracy of projected ore grade, mining rates, recovery timing, and recovery rate estimates and may be impacted by unscheduled maintenance, labour and contractor availability and other operating or technical difficulties); the duration and effect of global and local inflation; the duration and impacts of COVID-19 and geo-political uncertainties on the Company's production, workforce, business, operations and financial condition; the expected trends in mineral prices, inflation and currency exchange rates; that the Company will be successful in challenging the annulment of the extension to the San Jose environmental impact authorization; that all required approvals and permits will be obtained for the Company's business and operations on acceptable terms; that there will be no significant disruptions affecting the Company's operations and such other assumptions as set out herein. Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward-looking Statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that these Forward-looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements.
Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources
Reserve and resource estimates included in this news release have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for public disclosure by a Canadian company of scientific and technical information concerning mineral projects. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Reserves.
Canadian standards, including NI 43-101, differ significantly from the requirements of the Securities and Exchange Commission, and mineral reserve and resource information included in this news release may not be comparable to similar information disclosed by U.S. companies.
APPENDIX 1. Yaramoko Mine, Burkina Faso: Bagassi South QV and QV Prime drill results
| HoleID | Easting (ADINDAN_30N) | Northing (ADINDAN_30N) | Elevation (m) | EOH Depth (m) | UTM Azimuth | Dip | Depth From (m) | Depth To (m) | Width (m) | EST 1 (m) | Au (ppm) | Hole Type 2 |
| YRM-22-RC-BGR-001 | 469543 | 1297805 | 309 | 121 | 210 | 48 | 99 | 100 | 1 | 0.84 | 0.42 | RC |
| YRM-22-RC-BGR-002 | 469520 | 1297754 | 310 | 80 | 210 | 50 | NSR 3 | RC | ||||
| YRM-22-RC-BGR-003A | 469575 | 1297752 | 311 | 110 | 210 | 50 | 71 | 75 | 4 | 3.36 | 3.02 | RC |
| YRM-22-RC-BGR-004 | 469596 | 1297689 | 316 | 80 | 210 | 50 | 22 | 31 | 9 | 7.3 | 1.92 | RC |
| YRM-22-RC-BGR-005 | 469615 | 1297723 | 312 | 115 | 210 | 50 | NSR 3 | RC | ||||
| YRM-22-RC-BGR-006 | 469626 | 1297748 | 313 | 144 | 212 | 56 | 119 | 129 | 10 | 5.5 | 7.36 | RC |
| incl | 123 | 127 | 4 | 2.2 | 17.43 | RC | ||||||
| YRM-22-RC-BGR-007 | 469559 | 1297716 | 311 | 46 | 210 | 50 | 30 | 31 | 1 | 0.84 | 3.22 | RC |
| YRM-22-RC-BGR-008 | 469601 | 1297797 | 318 | 170 | 210 | 50 | 158 | 159 | 1 | 0.84 | 0.37 | RC |
| YRM-22-RC-BGR-009 | 469673 | 1297617 | 319 | 44 | 210 | 50 | NSR 3 | RC | ||||
| YRM-22-RC-BGR-010 | 469705 | 1297660 | 321 | 105 | 210 | 50 | NSR 3 | RC | ||||
| YRM-22-RC-BGR-011 | 469768 | 1297668 | 323 | 167 | 210 | 50 | 146 | 150 | 4 | 3.1 | 1.27 | RC |
| YRM-22-RC-BGR-001 | 469543 | 1297805 | 309 | 121 | 210 | 48 | 99 | 100 | 1 | 0.84 | 0.42 | RC |
| YRM-22-RC-BGR-002 | 469520 | 1297754 | 310 | 80 | 210 | 50 | NSR 3 | RC | ||||
| YRM-22-RC-BGR-003A | 469575 | 1297752 | 311 | 110 | 210 | 50 | 71 | 75 | 4 | 3.36 | 3.02 | RC |
Notes:
- EST: Estimated true width
- RC: Reverse circulation
- NSR: No significant result
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/213adcb0-a016-4411-bc6e-3c005affdf76
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Endeavour Silver Announces Filing of NI 43-101 Technical Reports for Guanacevi and Bolañitos Mines
Endeavour Silver Corp. ("Endeavour" or the "Company") (TSX: EDR, NYSE: EXK) announces today it has filed technical reports (the " Technical Reports ") prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects.
The Technical Reports are entitled "NI 43-101 Technical Report: Updated Mineral Resource and Reserve Estimates for the Guanaceví Project, Durango State, Mexico" (the " 2022 Guanacevi Report ") with an effective date of November 5, 2022, and "NI 43-101 Technical Report: Updated Mineral Resource and Reserve Estimates for the Bolañitos Project, Guanajuato State, Mexico" (the " 2022 Bolañitos Report ") with an effective date of November 9, 2022 and are co-authored by the Company and by Hard Rock Consulting, LLC (" Hard Rock "), a full-service geologic and mine engineering firm.
Below is a summary of material information from the 2022 Guanacevi Report
Mineral Resource Estimate:
| Classification | Tonnes | Grade | Contained Metal | |||||
| Mass (kt) | Silver (g/t) | Gold (g/t) | AgEq (g/t) | Silver (koz) | Gold (koz) | AgEq (koz) | ||
| Measured | 138.8 | 569 | 1.4 | 670 | 2,538 | 6.1 | 2,992 | |
| Indicated | 575.6 | 443 | 1.1 | 528 | 8,197 | 21.0 | 9,770 | |
| Measured and Indicated | 714.4 | 467 | 1.2 | 556 | 10,735 | 27.0 | 12,762 | |
| Inferred | 838.7 | 416 | 0.9 | 487 | 11,225 | 25.0 | 13,132 | |
Notes:
- The effective date of the Mineral Resource estimate is May 31, 2022. The QP for the estimate, Mr. Richard A. Schwering, SME-RM of Hard Rock, is independent of Endeavour Silver.
- Inferred Mineral Resources are that part of a Mineral Resource for which the grade or quality are estimated on the basis of limited geological evidence and sampling. Inferred Mineral Resources do not have demonstrated economic viability and may not be converted to a Mineral Reserve. It is reasonably expected, though not guaranteed, that the majority of Inferred Mineral Resources could be upgraded to Indicated mineral resources with continued exploration.
- Measured, Indicated and Inferred resource silver equivalent cut-off grades were 252 g/t for veins inside the El Curso and Porvenir Frisco Concession, 212 g/t for the Santa Cruz Sur Vein System, and 219 g/t for the remaining Mineral Resources including those veins estimated using VLP methods at Guanaceví.
- Metallurgical recoveries were 86.4% for silver and 90.1% for gold.
- Silver equivalents are based on a 79.6:1 silver to gold price ratio.
- Price assumptions are $US21.80 per troy ounce for silver and $US1,735.00 per troy ounce for gold for the Mineral Resource cut-off calculations. These prices are based on the 36-month moving average as of the effective date.
- Mineral Resources are reported exclusive of Mineral Reserves.
- Rounding may result in apparent differences when summing tonnes, grade and contained metal content. Tonnage and grade measurements are in metric units. Grades are reported in grams per tonne (g/t). Contained metal is reported as troy ounces (t. oz).
Mineral Reserve Estimate:
| Classification | Tonnes | Grade | Contained Metal | ||||
| Mass (kt) | Silver (g/t) | Gold (g/t) | AgEq (g/t) | Silver (koz) | Gold (koz) | AgEq (koz) | |
| Proven | 162.7 | 543 | 1.31 | 648 | 2,841 | 6.9 | 3,390 |
| Probable | 1,096.7 | 466 | 1.11 | 555 | 16,445 | 39 | 19,579 |
| Proven and Probable | 1,259.4 | 476 | 1.14 | 567 | 19,287 | 46.0 | 22,969 |
Notes:
- Cutoff Grades: 219 g/t AgEq for Milache; 212 g/t AgEq for Santa Cruz Sur and 252 g/t AgEq for El Curso and El Porvenir including the royalties payable.
- Minimum Mining Width: 0.8m.
- External Dilution Long Hole: 35% (Milache 40%)
- Silver Equivalent: 79.6:1 silver to gold
- Gold Price: US $1,735/oz.
- Silver Price: US $21.80/oz.
- Gold Recovery: 91.0%
- Silver Recovery: 86.4%
- Mineral resources are estimated exclusive of and in addition to mineral reserves.
- Figures in table are rounded to reflect estimate precision; small differences generated by rounding are not material to estimates.
Below is a summary of material information from the 2022 Bolañitos Report
Mineral Resource Estimate:
| Classification | Tonnes | Grade | Contained Metal | |||||
| Mass (kt) | Silver (g/t) | Gold (g/t) | AgEq (g/t) | Silver (koz) | Gold (koz) | AgEq (koz) | ||
| Measured | 42.0 | 97 | 3.0 | 322 | 131 | 4.0 | 435 | |
| Indicated | 411.5 | 111 | 2.3 | 279 | 1,470 | 30.0 | 3,697 | |
| Measured and Indicated | 453.5 | 110 | 2.3 | 283 | 1,601 | 34.0 | 4,132 | |
| Inferred | 1,656.6 | 141 | 2.5 | 331 | 7,494 | 132.2 | 17,608 | |
Notes:
- The effective date of the Mineral Resource estimate is May 31, 2022. The QP for the estimate, Mr. Richard A. Schwering, SME-RM of Hard Rock, is independent of Endeavour.
- Inferred Mineral Resources are that part of a Mineral Resource for which the grade or quality are estimated on the basis of limited geological evidence and sampling. Inferred Mineral Resources do not have demonstrated economic viability and may not be converted to a Mineral Reserve. It is reasonably expected, though not guaranteed, that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
- Measured, Indicated, and Inferred resource silver equivalent cut-off grades were 149 g/t for veins located in the La Luz and San Miguel production areas and veins estimated using VLP methods at Bolañitos, 157 g/t for the Belen vein system, and 151 g/t for veins located in the Lucero production area.
- Metallurgical recoveries were 85.7% for silver and 90.1% for gold.
- Silver equivalents are based on a 79.6:1 silver to gold price ratio.
- Price assumptions are $US21.80 per troy ounce for silver and $US1,735.00 per troy ounce for gold for resource cut-off calculations. These prices are based on the 36-month moving average as of the effective date.
- Mineral Resources are reported exclusive of Mineral Reserves.
- Rounding may result in apparent differences when summing tonnes, grade and contained metal content. Tonnage and grade measurements are in metric units. Grades are reported in grams per tonne (g/t). Contained metal is reported as troy ounces (t. oz).
Mineral Reserve Estimate:
| Classification | Tonnes | Grade | Contained Metal | ||||
| Mass (kt) | Silver (g/t) | Gold (g/t) | AgEq (g/t) | Silver (koz) | Gold (koz) | AgEq (koz) | |
| Proven | 158 | 57 | 2.63 | 266 | 290 | 13.4 | 1,357 |
| Probable | 376 | 73 | 2.41 | 265 | 878 | 29.2 | 3,199 |
| Proven + Probable | 534 | 101 | 2.8 | 326 | 1,168 | 42.6 | 4,556 |
Notes:
- Cut-Off Grades: 149 g/t silver equivalent for San Miguel, 149 g/t silver equivalent for La Luz, 151 g/t silver equivalent for Lucero and 157 g/t silver equivalent for Belen
- Minimum Mining Width: 0.8 m.
- Cut and Fill Stope Size: 7m W x 4m H
- Long Hole Stope Size: 7m W x 20m H
- External Dilution Cut and Fill: 24%
- External Dilution Long Hole: 40%
- Gold Price: US $1,735 /oz
- Silver Price: US $21.80 /oz
- Gold Recovery: 90.1%
- Silver Recovery: 85.7%
- Dilution factors averaged 37.14%. Dilution factors are calculated based on internal stope dilution calculations and external dilution factors of 24% for cut and fill and 40% for long hole.
- Silver equivalents are based on a 79.6:1 silver:gold ratio.
- Figures in table are rounded to reflect estimate precision; small differences generated by rounding are not material to estimates.
Reconciliation to Previously Disclosed Mineral Resource and Mineral Reserve Estimates
The following table compares the current mineral resource and mineral reserve estimates to those previously disclosed by the Company (see news release dated February 3, 2021). The changes in mineral resource and mineral reserve estimates resulted from a combination of depletion through mining and production, increases in gold price to $1735/oz (2022) from $1465/oz (2020) and silver price to $21.80/oz (2022) from $16.51/oz (2020) which affected cut-off grades, re-classification of vertical longitudinal projection Mineral Resources from Indicated and Inferred to Inferred only, and mineral resource and mineral reserve expansion through drilling and mine development.
| Silver-Gold Proven and Probable Reserves | |||||||||||||||
| Tonnes (000s) | Ag (g/t) | Au (g/t) | Ag Eq (g/t) | Ag (koz) | Au (koz) | Ag Eq (koz) | |||||||||
| Proven | |||||||||||||||
| Guanaceví (Dec 2020) | 141 | 319 | 0.82 | 385 | 1,445 | 3.7 | 1,742 | ||||||||
| Guanaceví (May 2022) | 163 | 543 | 1.31 | 648 | 2,841 | 6.9 | 3,390 | ||||||||
| Difference (%) | 16% | 70% | 60% | 68% | 97% | 86% | 95% | ||||||||
| Bolañitos (Dec 2020) | 76 | 34 | 2.62 | 243 | 83 | 6.4 | 596 | ||||||||
| Bolañitos (May 2022) | 158 | 57 | 2.63 | 266 | 290 | 13.4 | 1,357 | ||||||||
| Difference (%) | 107% | 68% | 1% | 9% | 249% | 109% | 128% | ||||||||
| Probable | |||||||||||||||
| Guanaceví (Dec 2020) | 948 | 346 | 0.95 | 422 | 10,554 | 28.8 | 12,859 | ||||||||
| Guanaceví (May 2022) | 1,097 | 466 | 1.11 | 555 | 16,445 | 39.0 | 19,579 | ||||||||
| Difference (%) | 16% | 35% | 17% | 32% | 56% | 35% | 52% | ||||||||
| Bolañitos (Dec 2020) | 237 | 53 | 2.51 | 254 | 405 | 19.1 | 1,930 | ||||||||
| Bolañitos (May 2022) | 376 | 73 | 2.41 | 265 | 878 | 29.2 | 3,199 | ||||||||
| Difference (%) | 59% | 37% | -4% | 4% | 117% | 53% | 66% | ||||||||
| Silver-Gold Measured and Indicated Resources | |||||||||||||||
| Tonnes (000s) | Ag (g/t) | Au (g/t) | Ag Eq (g/t) | Ag (koz) | Au (koz) | Ag Eq (koz) | |||||||||
| Measured | |||||||||||||||
| Guanaceví (Dec 2020) | 95 | 405 | 0.88 | 475 | 1,240 | 2.7 | 1,456 | ||||||||
| Guanaceví (May 2022) | 139 | 569 | 1 | 670 | 2,538 | 6 | 2,992 | ||||||||
| Difference (%) | 46% | 41% | 59% | 41% | 105% | 127% | 106% | ||||||||
| Bolañitos (Dec 2020) | 35 | 76 | 2.37 | 265 | 85 | 2.6 | 296 | ||||||||
| Bolañitos (May 2022) | 42 | 97 | 3 | 322 | 131 | 4 | 435 | ||||||||
| Difference (%) | 21% | 28% | 27% | 21% | 55% | 51% | 47% | ||||||||
| Indicated | |||||||||||||||
| Guanaceví (Dec 2020) | 566 | 363 | 0.82 | 428 | 6,603 | 14.9 | 7,797 | ||||||||
| Guanaceví (May 2022) | 576 | 443 | 1 | 528 | 8,197 | 21 | 9,770 | ||||||||
| Difference (%) | 2% | 22% | 34% | 23% | 24% | 41% | 25% | ||||||||
| Bolañitos (Dec 2020) | 193 | 105 | 2.67 | 319 | 654 | 16.5 | 1,976 | ||||||||
| Bolañitos (May 2022) | 412 | 111 | 2 | 279 | 1,470 | 30 | 3,697 | ||||||||
| Difference (%) | 113% | 5% | -14% | -12% | 125% | 82% | 87% | ||||||||
| Silver-Gold Inferred Resources | |||||||||||||||
| Tonnes (000s) | Ag (g/t) | Au (g/t) | Ag Eq (g/t) | Ag (koz) | Au (koz) | Ag Eq (koz) | |||||||||
| Inferred | |||||||||||||||
| Guanaceví (Dec 2020) | 866 | 495 | 1.18 | 589 | 13,765 | 32.7 | 16,384 | ||||||||
| Guanaceví (May 2022) | 839 | 416 | 1 | 487 | 11,225 | 25 | 13,132 | ||||||||
| Difference (%) | -3% | -16% | -23% | -17% | -18% | -24% | -20% | ||||||||
| Bolañitos (Dec 2020) | 311 | 80 | 2.82 | 305 | 798 | 28.2 | 3,054 | ||||||||
| Bolañitos (May 2022) | 1,657 | 141 | 3 | 331 | 7,494 | 132 | 17,608 | ||||||||
| Difference (%) | 433% | 77% | -11% | 8% | 839% | 369% | 477% | ||||||||
National Instrument 43-101 Disclosure
The 2022 Guanacevi Report and the 2022 Bolañitos Report were co-authored by Dale Mah, P.Geo., Vice President, Corporate Development of Endeavour, Don Gray, SME-RM, Chief Operations Officer of Endeavour and Richard A. Schwering, SME-RM of Hard Rock Consulting LLC. Mr. Schwering is independent of Endeavour. These authors are Qualified Persons as defined by NI 43-101 and are responsible for all sections of the Technical Reports. These Qualified Persons have prepared the scientific and technical information in the Guanacevi and Bolañitos reports and have reviewed and approved the technical information contained in this news release.
The Technical Reports are available for download under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.edrsilver.com , and will be filed on EDGAR as soon as practicable at www.sec.gov. There are no differences in the Technical Reports from the information disclosed in this News Release.
About Endeavour Silver
Endeavour is a mid-tier precious metals mining company that operates two high-grade, underground silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. The Company's philosophy of corporate social integrity creates value for all stakeholders.
SOURCE Endeavour Silver Corp.
Contact Information
Galina Meleger, Vice President of Investor Relations
Tel: (604) 685-9775
Email: gmeleger@edrsilver.com
Website: www.edrsilver.com
Follow Endeavour Silver on Facebook , Twitter , Instagram and LinkedIn
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of the United States private securities litigation reform act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include but are not limited to estimates of mineral resources and mineral reserves contained in the Technical Reports, statements regarding Endeavour's anticipated performance in 2022 and the timing and results of various operations and activities. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.
Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include but are not limited to the ultimate impact of the COVID 19 pandemic on operations and results, changes in production and costs guidance, national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; financial risks due to precious metals prices, operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development, risks in obtaining necessary licenses and permits, and challenges to the Company's title to properties; as well as those factors described in the section "risk factors" contained in the Company's most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities available at www.sedar.com .
Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company's mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management's expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.
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MAG Silver Announces US$40 Million Bought Deal MJDS Prospectus Offering and C$20 Million Bought Deal Flow-Through Private Placement
MAG Silver Corp. (TSX NYSE American: MAG) (" MAG " or the " Company ") announced today that it is has entered into an agreement with a syndicate of underwriters (the " Underwriters ") led by BMO Capital Markets and Raymond James Ltd. under which the Underwriters have agreed to buy on a bought deal basis 2,735,000 common shares (the " Common Shares ") at a price of US$14.65 per Common Share for gross proceeds of approximately US$40 million (the " Public Offering" ). The Company has granted the Underwriters an option, exercisable at the offering price for a period of 30 days following the closing of the Public Offering, to purchase up to an additional 15% of the Public Offering to cover over-allotments, if any.
The Company concurrently announced that it is undertaking a bought deal private placement of 843,000 common shares to be issued on a flow-through basis under the Income Tax Act (Canada) (the " Flow-Through Shares ") at a price of C$23.75 per Flow-Through Share for aggregate gross proceeds of C$20 million (the " Flow-Through Private Placement "). The Company has granted the Underwriters an option exercisable, in whole or in part, at any time up to 48 hours prior to the closing of the Flow-Through Private Placement, to purchase an additional 15% of the Flow-Through Private Placement to cover over-allotments, if any.
Public Offering
The Common Shares will be offered by way of a short form prospectus in all provinces and territories of Canada, other than Quebec, and will be offered in the United States pursuant to a prospectus filed as part of a registration statement under the Canada/U.S. multi-jurisdictional disclosure system. A registration statement on Form F-10, including the U.S. preliminary prospectus (together with any amendments thereto, the " Registration Statement "), registering the Common Shares under the U.S. Securities Act of 1933, as amended (the " U.S. Securities Act ") has been filed with the United States Securities and Exchange Commission (the " SEC ") but has not yet become effective. The preliminary short form prospectus and Registration Statement are subject to completion and amendment. Such documents contain important information about the Public Offering. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Common Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
The net proceeds of the Public Offering will be used to fund exploration on Juanicipio and MAG's other projects including Deer Trail, certain sustaining and development capital requirements at the Juanicipio Project not included in the initial project capital estimates, and for working capital and general corporate purposes.
The Public Offering is expected to close on or about February 7, 2023 and is subject to the Company receiving all necessary regulatory approvals, including conditional acceptance of the Toronto Stock Exchange and approval by the NYSE American. The completion of the Public Offering is not conditional upon the completion of the Flow-Through Private Placement. The preliminary short form prospectus is available on SEDAR at www.sedar.com . The Registration Statement is available on the SEC's website at www.sec.gov . The Common Shares to be sold in the Public Offering described in this document may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. Before readers invest, they should read the prospectus in the Registration Statement and other documents the Company has filed with Canadian regulatory authorities and the SEC for more complete information about the Company and the Public Offering. Potential investors may get any of these documents for free by visiting EDGAR on the SEC website at www.sec.gov or, when such documents become available, via SEDAR at www.sedar.com . Copies of the prospectus relating to the Public Offering may be obtained for free upon request in Canada by contacting BMO Nesbitt Burns Inc. ("BMO Capital Markets"), Brampton Distribution Centre C/O The Data Group of Companies, 9195 Torbram Road, Brampton, Ontario, L6S 6H2 by telephone at 905-791-3151 Ext 4312 or by email at torbramwarehouse@datagroup.ca , and in the United States by contacting BMO Capital Markets Corp., Attn: Equity Syndicate Department, 151 W 42nd Street, 32nd Floor, New York, NY 10036, or by telephone at (800) 414-3627 or by email at bmoprospectus@bmo.com .
Flow-Through Private Placement
The total gross proceeds from the Flow-Through Private Placement will be used to incur expenses that are eligible "Canadian exploration expenses" that will qualify as "flow-through mining expenditures", as such terms are defined in the Income Tax Act (Canada) (the " Qualifying Expenditures "), related to the Company's Larder Project located in Ontario, Canada. The Company will have until December 31, 2024 to incur and renounce the Qualifying Expenditures using the proceeds of the Flow-Through Private Placement.
The Flow-Through Private Placement is expected to close on or about February 16, 2023 and will be subject to customary conditions including, but not limited to, the receipt of all necessary regulatory approvals, including conditional acceptance of the Toronto Stock Exchange and approval by the NYSE American. The completion of the Flow-Through Private Placement is not conditional upon the completion of the Public Offering.
The Flow-Through Shares issued pursuant to the Flow-Through Private Placement will be subject to a hold period expiring four months and one day from the date of issuance in accordance with applicable Canadian securities laws. The Flow-Through Shares have not been, and will not be, registered under the U.S. Securities Act and are not permitted to be offered or sold within the United States absent such registration or an applicable exemption from the registration requirements therein.
About MAG Silver Corp.
MAG Silver Corp. is a growth-oriented Canadian development and exploration company focused on becoming a top-tier primary silver mining company by exploring and advancing high-grade, district scale, precious metals projects in the Americas. Its principal focus and asset is the Juanicipio Project (44%), being developed with Fresnillo Plc (56%), the operator. The project is located in the Fresnillo Silver Trend in Mexico, the world's premier silver mining camp, where the operator is currently advancing underground mine development and commissioning a 4,000 tonnes per day processing plant. Underground mine production of mineralized development material commenced in Q3 2020, and an expanded exploration program is in place targeting multiple highly prospective targets at Juanicipio. MAG is also executing multi-phase exploration programs at the Deer Trail 100% earn-in Project in Utah and the recently acquired Larder Project, located in the historically prolific Abitibi region of Canada.
For further information on behalf of MAG Silver Corp.
Contact Michael J. Curlook, VP Investor Relations and Communications
Phone: (604) 630-1399
Website: www.magsilver.com
Toll Free: (866) 630-1399
Email: info@magsilver.com
Neither the Toronto Stock Exchange nor the NYSE American has reviewed or accepted responsibility for the accuracy or adequacy of this press release, which has been prepared by management.
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain statements that may be deemed to be "forward-looking information" within the meaning of applicable Canadian securities legislation or "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). All statements in this release, other than statements of historical facts, are forward-looking statements, including statements regarding the anticipated financial and other impacts of the Public Offering and Flow-Through Private Placement, the anticipated completion and expected timing for closing of the Public Offering and Flow-Through Private Placement, expected use of proceeds and receipt of regulatory approvals. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward-looking statements are necessarily based upon estimates and assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, regarding future business decisions, are subject to change. Assumptions underlying the Company's expectations regarding forward-looking statements contained in this news release include, amongst other things, that the Company will be able to raise sufficient equity under the Public Offering and/or Flow-Through Private Placement to support its intended use of proceeds and future growth; that the global financial markets and general economic conditions will be stable and conducive to equity financings of this nature and the business of the Company generally; and that the Company's mineral projects will not experience any significant disruptions that would materially affect operations. Although MAG believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to: risks related to the Company's ability to arrange financing under the Public Offering and/or Flow-Through Private Placement on favourable terms, if at all; general economic, market or business conditions; political risk, currency risk and capital cost inflation; volatility of the common shares in the capital of the Company and risks related to a change in the intended use of proceeds from the Public Offering and/or Flow-Through Private Placement. The reader is referred to the Company's filings with the SEC and Canadian securities regulators for disclosure regarding these and other risk factors. There is no certainty that any forward-looking statement will come to pass, and investors should not place undue reliance upon forward-looking statements. Investors are urged to consider closely the disclosures in MAG's annual and quarterly reports and other public filings, accessible through the Internet at www.sedar.com and www.sec.gov.
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Fortuna provides update on San Jose's Environmental Impact Authorization
Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI ) is pleased to report that the Mexican Federal Administrative Court (the "Court") has granted a provisional injunction to Compañia Minera Cuzcatlan ("Minera Cuzcatlan"), Fortuna's Mexican subsidiary, which allows the San Jose Mine to continue to operate under the terms of the 12-year environmental impact authorization ("EIA").
Minera Cuzcatlan initiated legal proceedings (the "Legal Proceedings") to contest and revoke the annulment of the EIA in response to the resolution issued by the Secretaria de Medio Ambiente y Recursos Naturales ("SEMARNAT"). SEMARNAT is re-assessing the 12-year extension to the EIA for the San Jose Mine that it granted to Minera Cuzcatlan in December 2021 (refer to Fortuna news releases dated December 20, 2021 and January 5, 2023).
The Court has admitted the Legal Proceedings, and as a first step has granted a provisional injunction in favor of Minera Cuzcatlan. It is expected that the Court will decide on the grant of a permanent injunction, within the coming weeks, which would continue in effect until the Court has ruled on the revocation of the EIA.
Minera Cuzcatlan is in full compliance with all material environmental laws and continues to operate under the terms of the EIA. The Company continues to work with communities from the surrounding area in relation to the mine to enhance and expand the social benefits of the mine in the region. The mine is the single largest employer in the region of Valles Centrales and provides direct employment to over 1,200 people. The Company has sustainable development initiatives with various neighboring communities and works with over 150 small local enterprises.
About Fortuna Silver Mines Inc.
Fortuna Silver Mines Inc. is a Canadian precious metals mining company with four operating mines in Argentina, Burkina Faso, Mexico and Peru, and a fifth mine under construction in Côte d'Ivoire. Sustainability is integral to all our operations and relationships. We produce gold and silver and generate shared value over the long-term for our stakeholders through efficient production, environmental protection, and social responsibility. For more information, please visit our website .
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 | info@fortunasilver.com | Twitter : @Fortuna_Silver | LinkedIn : fortunasilvermines
| YouTube : Fortuna Silver Mines
Forward-looking Statements
This news release contains forward-looking statements which constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, "Forward-looking Statements"). All statements included herein, other than statements of historical fact, are Forward-looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward-looking Statements. The Forward-looking Statements in this news release include, without limitation, statements about the legal proceedings initiated by Minera Cuzcatlan to contest and revoke the annulment of the EIA; the likelihood of success in the legal proceedings; the Company's business strategy, plans and outlook; the merit of the Company's mines and mineral properties; the future financial or operating performance of the Company; expenditures; approvals and other matters . Often, but not always, these Forward-looking Statements can be identified by the use of words such as "estimated", "expected", "intended", "anticipated", "potential", "open", "future", "assumed", "projected", "used", "detailed", "has been", "gain", "planned", "reflecting", "will", "containing", "remaining", "to be", or statements that events, "could" or "should" occur or be achieved and similar expressions, including negative variations .
Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others, factors beyond our control, including but not limited to , the ability of Minera Cuzcatlan to successfully contest and revoke the SEMARNAT Resolution; changes in laws, rules or regulations and other challenges discussed in our public filings; changes in general economic conditions and financial markets; the continued rising rates of global inflation which impact the costs of operations; the risks relating to a global pandemic, including the COVID-19 pandemic, as well as risks associated with war or other geo-political hostilities, such as the Ukrainian – Russian conflict, any of which could continue to cause a disruption in global economic activity; fluctuation in currencies and foreign exchange rates; the imposition of capital controls in countries in which the Company operates; the continuance of currency controls in Argentina; changes in the prices of key supplies; technological and operational hazards in Fortuna's mining and mine development activities; risks inherent in mineral exploration; uncertainties inherent in the estimation of mineral reserves, mineral resources, and metal recoveries; changes to current estimates of mineral reserves and resources; changes to production and cost estimates; changes in the position of regulatory authorities with respect to the granting of approvals or permits; governmental and other approvals; changes in government, political unrest or instability in countries where Fortuna is active; labor relations issues; as well as those factors discussed under "Risk Factors" in the Company's Annual Information Form. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward-looking Statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to that the Company will be successful in revoking the SEMARNAT Resolution; that the Company's activities will be conducted in accordance with the Company's public statements and stated goals; that there will be no material adverse change affecting the Company, its properties or changes to production estimates (which assume accuracy of projected ore grade, mining rates, recovery timing, and recovery rate estimates and may be impacted by unscheduled maintenance, labor and contractor availability and other operating or technical difficulties); the duration and impacts of COVID-19 and other geo-political uncertainties on the Company's production, workforce, business, operations and financial condition; the expected trends in mineral prices and currency exchange rates ; that the Company will be successful in mitigating the impact of inflation on its business and operations; that all required approvals and permits will be obtained for the Company's business and operations on acceptable terms; that there will be no significant disruptions affecting the Company's operations and such other assumptions as set out herein. Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward-looking Statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that these Forward-looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements.
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First Majestic Produces 7.6M AgEq Oz in Q4 2022 and a Record 31.3M AgEq Oz in 2022; Annual Retail Silver Bullion Sales Increase 27% to New Record; Announces 2023 Production and Cost Guidance and Conference Call Details
First Majestic Silver Corp. (NYSE: AG) (TSX: FR) ("First Majestic" or the "Company") announces that total production in the fourth quarter of 2022 from the Company's four producing operations, the San Dimas SilverGold Mine, the Jerritt Canyon Gold Mine, the Santa Elena SilverGold Mine and the La Encantada Silver Mine reached 7.6 million silver equivalent ("AgEq") ounces, consisting of 2.4 million silver ounces and 63,039 gold ounces. Total production for the full year of 2022 reached a new Company record of 31.3 million AgEq ounces, consisting of 10.5 million silver ounces and 248,394 gold ounces, or a 16% increase compared to 2021.
In 2023, the Company is expecting to increase production to a new Company record of between 33.2 to 37.1 million AgEq ounces, consisting of 10.0 to 11.1 million ounces of silver and 277,000 to 310,000 ounces of gold, with an all-in sustaining cost ("AISC") guidance of between $18.47 to $19.72 per AgEq ounce. Based on the midpoint of the guidance range the Company expects AgEq ounces to increase 12% when compared to 2022.
Q4 2022 HIGHLIGHTS
- Total Production Decreased by 14% Q/Q: The Company produced 7.6 million AgEq ounces representing a 14% decrease when compared to the record of 8.8 million AgEq ounces in the previous quarter. The decrease was primarily due to lower production at San Dimas and Santa Elena, slightly offset by higher gold production at Jerritt Canyon and higher silver production at La Encantada.
- Transitioning to 100% Ermitaño Ores at Santa Elena: Continued strong metal production from the Ermitaño mine enabled Santa Elena to produce 2.3 million AgEq ounces in the fourth quarter, or 16% below the record 2.7 million AgEq in the prior quarter. In 2023, Santa Elena is expected to produce between 7.8 to 8.7 million AgEq ounces as it transitions to full production from Ermitaño while exploration continues at the recently discovered Silvana vein within the Santa Elena mine.
- Significant Production Growth Geared Up at Jerritt Canyon in 2023: The secondary escapeway in the West Generator mine was completed in November allowing for improved ore production although a severe cold weather disturbance in December limited haulage and deliveries to the plant. With the additional ramp up of Smith Zone 10 and the restart of the Saval II mine, gold production at Jerritt Canyon is expected to be between 119,000 to 133,000 ounces in 2023, representing a mid-point increase of 74% compared to 2022.
- Santa Elena's Dual-Circuit Completed: The Company successfully completed the commissioning of the dual-circuit processing plant at Santa Elena during the quarter which includes the new 3,000 tonne per day ("tpd") filter press, designed to improve the leaching performance and reduce operating costs.
- 10 Drill Rigs Active: The Company concluded its 2022 exploration program during the quarter by completing a total of 16,086 metres of drilling across the Company's mines. Throughout the quarter a total of 10 drill rigs were active consisting of four rigs at San Dimas, two rigs at Jerritt Canyon, three rigs at Santa Elena and one rig at La Encantada.
FY 2022 HIGHLIGHTS
- Silver production in 2022 reached 10.5 million ounces (compared to 12.8 million ounces in 2021) which missed the lower end of the Company's revised guidance range of between 11.2 to 11.9 million ounces of silver primarily due to lower than expected silver grades at San Dimas and prioritizing higher gold grade ores from the Ermitaño mine at Santa Elena.
- Gold production in 2022 reached a new Company record of 248,394 ounces (compared to 192,353 in 2021) but slightly missed the lower end of the Company's revised guidance range of between 256,000 to 273,000 ounces primarily due to lower than expected gold grades at Jerritt Canyon.
- Santa Elena produced a new annual record of 9.1 million AgEq oz in 2022, representing an 81% increase compared to 2021.
- The Santa Elena operation was awarded the prestigious "Silver Helmet Award" in the category of "Underground Mining of More Than 500 Workers" by the Mining Chamber of Mexico for its outstanding performance in occupational safety and health. The distinguished annual award of excellence is only awarded to a select handful of mining operations in Mexico.
- Successfully expanded Santa Elena's liquid natural gas ("LNG") powerplant from 12 MW to 24 MW to supply low-cost, clean power to the Ermitaño mine and the recently completed dual-circuit plant.
- Sold a record 444,576 ounces of silver bullion, representing a 27% increase compared to 2021 and approximately 4.2% of the Company's silver production, on First Majestic's online bullion store at an average silver price of $26.20 per ounce for total proceeds of $11.6 million.
"The Company reached a new annual production record of 31.3 million AgEq ounces in 2022 primarily due to the significant increase in production from the Ermitaño mine at Santa Elena," said Keith Neumeyer, President & CEO. "Santa Elena was the bright spot in our portfolio in 2022 as we brought the high-grade core vein online in the second half of 2022 which increased production by 81% compared to 2021. At Jerritt Canyon, we unfortunately ended the year with extremely challenging weather conditions as northern Nevada experienced a severe cold spell and double the normal snowfall amounts which impacted ore deliveries from SSX and West Generator. Our San Dimas and La Encantada mines in Mexico delivered solid results as expected."
Mr. Neumeyer continues, "For 2023, significant improvements are expected at Jerritt Canyon where gold production is projected to nearly double along with lower AISC when compared to 2022. Our Mexican operations, which are generating healthy margins at current prices, are estimated to generate 70% of our total production in 2023 with AISC of approximately $17 per oz."
Production Details Table:
| Q4 | Q3 | Q/Q | FY | FY | Y/Y | |
| 2022 | 2022 | Change | Consolidated Production Results | 2022 | 2021 | Change |
| 851,564 | 836,514 | 2% | Ore processed/tonnes milled | 3,468,987 | 3,339,394 | 4% |
| 7,558,791 | 8,766,192 | -14% | Total production - Silver equivalent ounces | 31,252,921 | 26,855,783 | 16% |
| 2,396,696 | 2,736,100 | -12% | Silver ounces produced | 10,522,052 | 12,842,944 | -18% |
| 63,039 | 67,072 | -6% | Gold ounces produced | 248,394 | 192,353 | 29% |
Quarterly Mine by Mine Production Table:
| Mine | Ore Processed | Tonnes per Day | Ag Grade (g/t) | Au Grade (g/t) | Ag Recovery | Au Recovery | Ag Oz Produced | Au Oz Produced | AgEq Oz Produced |
| San Dimas | 210,108 | 2,284 | 220 | 3.12 | 94% | 96% | 1,392,506 | 20,257 | 3,054,098 |
| Jerritt Canyon | 179,502 | 1,951 | - | 3.51 | - | 83% | - | 16,845 | 1,388,140 |
| Santa Elena | 207,188 | 2,252 | 47 | 4.33 | 64% | 90% | 199,388 | 25,830 | 2,302,904 |
| La Encantada | 254,766 | 2,769 | 120 | 0.01 | 82% | 90% | 804,802 | 107 | 813,649 |
*Certain amounts shown may notadd exactlytothetotal amount due to rounding differences.
*The following prices were used in the calculation of silver equivalent ounces: Silver: $21.12 per ounce; Gold: $1,726 per ounce.
At the San Dimas Silver/Gold Mine:
- San Dimas produced 3,054,098 AgEq ounces during the quarter consisting of 1,392,506 ounces of silver and 20,257 ounces of gold, representing decreases of 16% and 14%, respectively, when compared to the prior quarter.
- The mill processed a total of 210,108 tonnes of ore with average silver and gold grades of 220 g/t and 3.12 g/t, respectively. Silver and gold grades were lower in the fourth quarter primarily due to the processing of lower grade development ores from the Perez vein and higher tonnages from underground areas with challenging ground conditions within the Jessica and Regina veins in the Noche Buena area.
- Silver and gold recoveries during the quarter averaged 94% and 96%, respectively.
- The Central Block and Sinaloa Graben areas contributed approximately 75% and 25%, respectively, of the total production during the quarter.
- During the quarter, a total of four underground drill rigs completed 8,799 metres of drilling on the property.
At the Jerritt Canyon Gold Mine:
- During the quarter, Jerritt Canyon produced 16,845 ounces of gold, representing a 3% increase compared to the prior quarter. The increase was primarily due to a 3% increase in gold grades offset by lower than expected throughput due to severe weather in December which significantly impacted ore haulage and deliveries from the SSX and West Generator mines.
- The mill processed a total of 179,502 tonnes of ore with an average gold grade and recovery of 3.51 g/t and 83%, respectively. The Company expects ore volumes and gold grades to continue to improve in the first half of 2023 as higher-grade ore pods from the Smith Zone 10, West Generator and Saval II areas are processed at the mill.
- During the quarter, an ore purchase agreement was signed with a third-party to provide up to 32,000 tonnes of sulphide gold ore by the end of 2023. Limited initial ore deliveries were received and processed in the month of December. Furthermore, improvements in blend optimization will result in a reduction in coal consumption in the roasters due to the higher sulphur content of the purchased material.
- The Company completed the secondary escapeway in the West Generator mine in November which is now allowing for improved ore deliveries and gold production. This new ore feed, along with the start of the Saval II mine, is anticipated to increase gold grades and increase the amount of fresh ore feed to the plant in 2023.
- During the quarter, two underground drill rigs completed 4,185 metres of drilling on the property.
At the Santa Elena Silver/Gold Mine:
- Santa Elena produced 2,302,904 AgEq ounces consisting of 199,388 ounces of silver and 25,830 ounces of gold during the quarter, representing a 35% decrease in silver ounces and a 4% decrease in gold ounces when compared to the prior quarter. The decrease in silver production was primarily due to processing a higher percentage of ore from the Ermitaño mine with higher gold grades than the Santa Elena mine.
- The mill processed a total of 207,188 tonnes of ore consisting of 41,953 tonnes (20% of total) from Santa Elena and 165,235 tonnes (80% of total) from Ermitaño.
- Silver and gold grades from Santa Elena averaged 102 g/t and 0.99 g/t, respectively, while silver and gold grades from Ermitaño averaged 32 g/t and 5.17 g/t, respectively.
- Consolidated silver and gold recoveries averaged 64% and 90%, respectively, during the quarter. The Company completed the dual-circuit project at the Santa Elena processing plant which includes an additional leaching tank, a fourth CCD thickener and the new 3,000 tpd tailings filter-press. Going forward, the dual-circuit will be able to treat finer grind sized material in an effort to improve metallurgical recoveries, reduce moisture in the tailings and reduce material handling costs.
- During the quarter, three drill rigs consisting of two surface rigs and one underground rig, completed 2,232 metres of drilling on the property.
At the La Encantada Silver Mine:
- During the quarter, La Encantada produced 804,802 ounces of silver, representing a 4% increase compared to the prior quarter. The increase was primarily due to a 4% increase in silver recoveries.
- The mill processed a total of 254,766 tonnes of ore with an average silver grade and recovery of 120 g/t and 82%, respectively. The Company began processing development ores from the Beca-Zone orebody in the quarter and expects to begin stope production to access higher grade ore in the second quarter of 2023.
- During the quarter, one underground rig completed 870 metres of drilling on the property.
2023 PRODUCTION GUIDANCE
The Company expects 2023 total production from its four operating mines to reach a new Company record of between 33.2 to 37.1 million AgEq ounces consisting of 10.0 to 11.1 million ounces of silver and 277,000 to 310,000 ounces of gold. Based on the midpoint of the guidance range the Company expects AgEq ounces to increase 12% when compared to 2022. Silver production is expected to remain consistent with 2022 rates whereas the gold production is expected to increase by 18% year-over-year. The increase in forecast gold production is primarily due to improvements in mine production at Jerritt Canyon resulting in an expected 74% increase in gold ounces in 2023 when compared to the prior year. In addition, strong gold production is expected to continue at Santa Elena as the plant will only process Ermitaño ores in 2023. The Company has identified a new vein in the Santa Elena mine, called Silvana, and plans to drill test the area in 2023 with the goal of developing a mine plan to bring the vein into production by 2024.
A mine-by-mine breakdown of the 2023 production guidance is included in the table below. The Company reports cost guidance to reflect cash costs and AISC on a per AgEq payable ounce. For 2023, the Company is using an 84:1 silver to gold ratio compared to an 85:1 silver to gold ratio in its revised 2022 guidance. Metal price and foreign currency assumptions for calculating equivalents are silver: $21.50/oz, gold: $1,800/oz, MXN:USD 20:1.
GUIDANCE FOR 2023
| Silver Oz (M) | Gold Oz (k) | Silver Eqv Oz (M) | Cash Cost | AISC | |
| Silver: | ($ per AgEq oz) | ($ per AgEq oz) | |||
| San Dimas, Mexico | 6.4 - 7.2 | 72 - 81 | 12.5 - 14.0 | 9.62 - 10.19 | 13.02 - 13.91 |
| Santa Elena, Mexico | 0.7 - 0.7 | 86 - 95 | 7.8 - 8.7 | 11.59 - 12.21 | 14.60 - 15.53 |
| La Encantada, Mexico | 2.9 - 3.2 | - | 2.9 - 3.2 | 16.73 - 17.69 | 19.86 - 21.14 |
| Mexico Total: | 10.0 - 11.1 | 158 - 176 | 23.2 - 25.9 | 12.12 - 12.77 | 16.69 - 17.83 |
| Gold: | ($ per AuEq oz) | ($ per AuEq oz) | |||
| Jerritt Canyon, USA | - | 119 - 133 | 10.0 - 11.2 | 1,502 - 1,592 | 1,733 - 1,842 |
| Total Production | ($ per AgEq oz) | ($ per AgEq oz) | |||
| Consolidated | 10.0 - 11.1 | 277 - 310 | 33.2 - 37.1 | 13.88 - 14.66 | 18.47 - 19.72 |
* Certain amounts shown may not add exactly to the total amount due to rounding differences.
* Cash Costs and AISC are non-GAAP measures and are not standardized financial measures under the Company's financial reporting framework. The Company calculates cash costs and consolidated AISC in the manner set out in the table below. These measures have been calculated on a basis consistent with historical periods.
The Company is projecting its 2023 AISC to be within a range of $18.47 to $19.72 on a per consolidated payable AgEq ounce basis. Excluding non-cash items, the Company anticipates its 2023 AISC to be within a range of $17.92 to $19.10 per payable AgEq ounce. An itemized AISC cost table is provided below:
| All-In Sustaining Cost Calculation | FY 2023 ($ /AgEq oz) | |||||||
| Total Cash Costs per Payable Silver Ounce | 13.88 | - | 14.66 | |||||
| General and Administrative Costs | 0.98 | - | 1.09 | |||||
| Sustaining Development Costs | 1.36 | - | 1.45 | |||||
| Sustaining Property, Plant and Equipment Costs | 0.73 | - | 0.82 | |||||
| Profit Sharing | 0.57 | - | 0.63 | |||||
| Share-based Payments (non-cash) | 0.39 | - | 0.43 | |||||
| Lease Payments | 0.41 | - | 0.45 | |||||
| Accretion of Reclamation Costs (non-cash) | 0.16 | - | 0.18 | |||||
| All-In Sustaining Costs: (AgEq Oz) | 18.47 | - | 19.72 | |||||
| All-In Sustaining Costs: (AgEq Oz excluding non-cash items) | 17.92 | - | 19.10 | |||||
- AISC is a non-GAAP measure and is calculated based on the Company's consolidated operating performance. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles, the definition of "sustaining costs" and the distinction between sustaining and expansionary capital costs.
- Total cash cost per payable AgEq ounce includes estimated royalties and 0.5% Mexico mining environmental fee of $0.40 to $0.44 per payable AgEq ounce.
- For further details of these measures, including equivalent historical information, please see "Non-GAAP Measures" on pages 33-42 of the Company's Management's Discussion and Analysis for the third quarter of 2022, available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
CAPITAL INVESTMENTS IN 2023
In 2023, the Company plans to invest a total of $187.8 million on capital expenditures consisting of $78.4 million for sustaining activities and $109.5 million for expansionary projects. This represents a 6% decrease compared to the 2022 revised capital expenditures and is aligned with the Company's future growth strategy of increasing underground and plant processing rates at Jerritt Canyon, San Dimas and Santa Elena.
| 2023 Capital Guidance ($millions) | Sustaining | Expansionary | Total |
| Underground Development | 51.2 | 43.6 | 94.8 |
| Exploration | 0.0 | 39.8 | 39.8 |
| Property, Plant and Equipment | 25.4 | 19.9 | 45.3 |
| Corporate Projects | 1.7 | 6.2 | 7.9 |
| Total | $78.4 | $109.5 | $187.8 |
The 2023 annual guidance includes total capital investments of $94.8 million to be spent on underground development; $45.3 million towards property, plant and equipment; $39.8 million in exploration; and $7.9 million towards corporate innovation projects. Management may revise the guidance during the year to reflect actual and anticipated changes in metal prices or to the business.
The Company plans to complete approximately 40,700 metres of underground development in 2023 compared to 45,614 metres completed in 2022. The 2023 development program consists of approximately 17,900 metres at San Dimas; 9,000 metres at Jerritt Canyon; 10,500 metres at Santa Elena and 3,300 metres at La Encantada. At San Dimas, the Company is planning to concentrate development metres in the Perez Vein, located in the Sinaloa Graben block, and continue development activities in the Noche Buena sector. At Santa Elena, underground development will focus exclusively in the Ermitaño mine to achieve 2,500 tonnes per day of underground ore extraction throughout all of 2023. At Jerritt Canyon, development activities will be focused in newly discovered areas within the Smith and SSX mines while also ramping up production at West Generator and Saval II mines. At La Encantada, the Company is developing the second levels of both the Ojuelas and Milagros orebodies for 2023 production.
The Company is planning approximately 245,350 metres of exploration drilling in 2023 compared to 248,123 metres completed in 2022. The 2023 drilling program is expected to consist of:
- At San Dimas, approximately 77,450 metres of drilling are planned with infill, step-out and exploratory holes focused on near mine and brownfield targets including major ore controlling structures in the West, Central, Sinaloa and Tayoltita blocks. Exploration efforts will focus on adding Inferred Resources along known veins and identifying new veins in locations where post mineral cover has deferred work to date.
- At Jerritt Canyon, approximately 112,900 metres are planned to drill a mixture of surface and underground infill, step-out, and exploratory holes to support the life of mine and test the presence of new ore bodies. Surface exploration will aim to test newly identified targets on the property, including follow up drilling from recent drill intercepts at Winters Creek and Waterpipe II. Underground drilling is planned for SSX, Smith and West Generator where the focus is to replicate the Smith Zone 10 success by targeting above the water table, near active development mineralization to facilitate a fast turnaround to mining.
- At Santa Elena, approximately 47,000 metres are planned with near mine drilling to continue testing the newly identified Silvana vein in Santa Elena and infill drilling at the Ermitaño vein to convert Inferred Resources to Indicated Resources. Greenfield drilling at Santa Elena will focus on several targets within a 5-kilometre radius around the processing plant where the goal is to find a new mineralized vein. The Company is also planning to return to the Los Hernandez property, nearby to the Las Chispas mine, to test updated targets and projections of mineralized structures.
- Finally, at La Encantada the Company has planned approximately 8,000 metres to continue searching for a new mineralized breccia body as well as extend and de-risk some of the known veins and vein systems.
Q4 2022 EARNINGS AND DIVIDEND ANNOUNCEMENT
The Company is planning to release its fourth quarter 2022 unaudited financial results, and to announce the fourth quarter dividend payment, and shareholder record and payable dates on February 23, 2023.
CONFERENCE CALL
The Company will be holding a conference call and webcast today, January 19, 2023 at 8:00 am PT (11:00 am ET) to discuss the quarterly production results as well as its 2023 production, cost and capital guidance. To participate in the conference call, please dial the following:
Toll Free Canada & USA:1-800-319-4610
Outside of Canada & USA: 1-604-638-5340
Toll Free Germany:0800 180 1954
Toll Free UK:0808 101 2791
Participants should dial in 10 minutes prior to the conference.
Click on "January 19, 2023 Webcast Link" on the First Majestic homepage as a simultaneous audio webcas31t of the conference call will be posted at www.firstmajestic.com.
The conference call will be recorded and you can listen to an archive of the conference by calling:
Canada & USA Toll Free: 1-800-319-6413
Outside Canada & USA: 1-604-638-9010
Access Code:9809 followed by the # sign
The replay will be available approximately one hour after the conference and will be available for seven days following the conference. The replay will also be available on the Company's website for one month.
ABOUT THE COMPANY
First Majestic is a publicly traded mining company focused on silver and gold production in Mexico and the United States. The Company presently owns and operates the San Dimas Silver/Gold Mine, the Jerritt Canyon Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine.
First Majestic is proud to offer a portion of its silver production for sale to the public. Bars, ingots, coins and medallions are available for purchase online at its Bullion Store at some of the lowest premiums available.
FOR FURTHER INFORMATION contact info@firstmajestic.com, visit our website at www.firstmajestic.com or call our toll free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP.
"signed"
Keith Neumeyer, President & CEO
Non-GAAP Financial Measures
This press release includes reference to certain financial measures which are not standardized measures under the Company's financial reporting framework. These measures include cash costs per silver equivalent ounce produced, all-in sustaining cost (or "AISC") per silver equivalent ounce produced, total production cost per tonne, average realized silver price per ounce sold, working capital, adjusted EPS and cash flow per share. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. These measures are widely used in the mining industry as a benchmark for performance but do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures disclosed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For a complete description of how the Company calculates such measures and a reconciliation of certain measures to GAAP terms please see "Non-GAAP Measures" in the Company's most recent management discussion and analysis filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov and which is incorporated by reference herein.
Cautionary Note Regarding Forward Looking Statements
This press release contains "forward‐looking information" and "forward-looking statements" under applicable Canadian and U.S. securities laws (collectively, "forward‐looking statements"). These statements relate to future events or the Company's future performance, business prospects or opportunities that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management made in light of management's experience and perception of historical trends, current conditions and expected future developments. Forward-looking statements include, but are not limited to, statements with respect to: release of the Company's financial statements; dividends; the Company's business strategy; future planning processes; commercial mining operations; cash flow; budgets; the timing and amount of estimated future production; throughput capacity; ore feed and grades; recovery rates; mine plans and mine life; costs and timing of development at the Company's projects; capital projects and exploration activities and the possible results thereof. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. As such, investors are cautioned not to place undue reliance upon guidance and forward-looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur. All statements other than statements of historical fact may be forward‐looking statements. Statements concerning proven and probable mineral reserves and mineral resource estimates may also be deemed to constitute forward‐looking statements to the extent that they involve estimates of the mineralization that will be encountered as and if the property is developed, and in the case of measured and indicated mineral resources or proven and probable mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "forecast", "potential", "target", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward‐looking statements".
Actual results may vary from forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from those expressed or implied by such forward-looking statements, including but not limited to: the duration and effects of the coronavirus and COVID-19, and any other pandemics or epidemics on our operations and workforce, and the effects on global economies and society; general economic conditions including inflation risks; actual results of exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; commodity prices; variations in ore reserves, grade or recovery rates; actual performance of plant, equipment or processes relative to specifications and expectations; accidents; labour relations; relations with local communities; changes in national or local governments; changes in applicable legislation or application thereof; delays in obtaining approvals or financing or in the completion of development or construction activities; exchange rate fluctuations; requirements for additional capital; government regulation; environmental risks; reclamation expenses; outcomes of pending litigation; limitations on insurance coverage as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in the Company's most recent Annual Information Form, available on www.sedar.com, and Form 40-F on file with the United States Securities and Exchange Commission in Washington, D.C. Although First Majestic has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
The Company believes that the expectations reflected in these forward‐looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward‐looking statements included herein should not be unduly relied upon. These statements speak only as of the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws.
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