Fortuna reports record third quarter 2021 production of 87,950 gold equivalent ounces

Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) reports production results for the third quarter from its four operating mines in the Americas and West Africa, the Lindero Mine in Argentina, the San Jose Mine in Mexico, the Caylloma Mine in Peru, and the Yaramoko Mine in Burkina Faso. The company produced 65,425 ounces of gold and 1,711,881 ounces of silver or 87,950 gold equivalent 1 ounces. Gold and silver production for the first nine months of 2021 totaled 131,029 ounces and 5,518,458 ounces, respectively, or 203,640 gold equivalent 1 ounces.

Third Quarter Consolidated Production

  • Gold production of 65,425 ounces; 411 percent increase over Q3 2020
  • Silver production of 1,711,881 ounces; 20 percent decrease over Q3 2020
  • Lead production of 8,245,289 pounds; 23 percent increase over Q3 2020
  • Zinc production of 12,436,276 pounds; 21 percent increase over Q3 2020

Third Quarter Consolidated Operating Highlights

Third Quarter 2021 Third Quarter 2020
Caylloma, Peru San Jose, Mexico Lindero, Argentina Yaramoko 4 , Burkina Faso Consolidated Caylloma,
Peru
San Jose, Mexico Lindero,
Argentina
Consolidated
OPERATIONAL FIGURES
Tonnes milled 136,410 248,985 126,677 107,002 255,226
Average tpd milled 1,516 2,862 1,377 1,189 2,934
Ore placed on pad 2 (t) 1,387,134 675,000
SILVER 2
Grade (g/t) 78 195 74 254
Recovery (%) 80.97 91.84 83.06 91.87
Production (oz) 275,223 1,436,658 1,711,881 210,206 1,917,540 2,127,746
GOLD
Grade (g/t) 0.48 1.22 1.10 7.28 0.60 1.52 0.83
Recovery (%) 71.97 91.27 97.8 65.96 91.66
Production 3 (oz) 1,529 8,910 26,235 28,751 65,425 1,366 11,425 12,791
LEAD
Grade (%) 3.14 3.15
Recovery (%) 87.26 90.17
Production (lbs) 8,245,289 8,245,289 6,702,053 6,702,053
ZINC
Grade (%) 4.74 4.93
Recovery (%) 87.31 88.59
Production (lbs) 12,436,276 12,436,276 10,313,225 10,313,225

Notes:

  1. Gold equivalent production does not include lead or zinc, and is calculated using gold to silver ratio of 1 to 76
  2. Metallurgical recovery for silver at the Caylloma Mine is calculated based on silver content in lead concentrate
  3. Lindero production includes gold in carbon columns and electrolytic cement; Yaramoko production includes only doré
  4. Includes production from the Yaramoko Mine, subsequent to the completion of the business combination with Roxgold Inc. on July 2, 2021
  5. Totals may not add due to rounding

Lindero Mine, Argentina: Record production of 26,235 ounces of gold, in line with guidance

During the third quarter of 2021, the onsite impact of COVID-19 diminished resulting in less disruptions to the operations, with the company screening 74 positive cases compared to 160 cases registered in the second quarter of 2021. To date, including company and contractor personnel, 94 percent of the workforce has been vaccinated with one dose and 40 percent with two doses. The government of Argentina has announced that travel restrictions will start to ease in November, which should improve lead times and onsite technical assistance from foreign vendors.

In the third quarter of 2021, a total of 1,387,134 tonnes of ore were placed on the leach pad averaging 1.10 g/t gold containing an estimated 49,247 ounces of gold.

Total gold production for the quarter was 26,235 ounces, comprised of 24,318 ounces in doré and an increase of 1,918 ounces of gold-in-carbon (GIC) inventory. Gold production for the first nine months of 2021 totaled 68,088 ounces, in line with the updated annual guidance (refer to Fortuna news release dated July 19, 2021, " Fortuna reports production of 55,953 gold equivalent ounces for the second quarter and issues updated guidance for 2021 ").

Third Quarter 2021
Second Quarter 2021
First Quarter 2021
Ore mined 1 (kt) 2,466 1,817 1,610
Waste mined 1 (kt) 2,114 1,638 1,220
Total mined 1 (kt) 4,581 3,455 2,830
Strip ratio (waste to ore) 0.86 0.90 0.76
Ore placed on leach pad 1 – conveyors (kt) 1,236 675 404
Ore placed on pad 1 – trucks (kt) 152 802 1,728
Ore placed grade 1 (g/t) 1.10 0.95 0.82
Gold placed on pad 1 (oz) 49,247 44,889 56,330
GIC inventory (oz) 4,483 2,565 1,770
Change in GIC inventory 2 (oz) 1,918 794 1,770
Doré poured (oz) 24,318 18,726 20,562
Gold produced (oz) 26,235 19,521 22,332

Notes:

  1. Lindero tonnes and gold grade are estimated using grade control sampling of blast holes; tonnes are reported to the nearest thousand
  2. Quarter-on-quarter change in GIC inventory

Mining

The owner operated fleet continues to perform according to management´s expectations. A total of 2,466,259 tonnes of ore were mined in the third quarter, at a strip ratio of 0.86:1. Mine waste movement increased 29 percent compared to the previous quarter and is in line with plan.

Mine reconciliation and metallurgical performance

Reconciliation of tonnes, grade and gold ounces mined as ore, continues to demonstrate a good correlation with the reserve model with differences for all parameters of less than 6 percent for the third quarter and less than 3 percent for the year to date.

The metallurgical balance indicates that overall actual gold recovery from the heap continues to increase and is in line with expected theoretical recoveries based on the granulometric composition and metallurgical types of ore placed on the leach pad and results of ongoing 2.5-meter-tall column test work conducted to date.

Processing

All processing areas are performing as planned with 1,235,602 tonnes of crushed ore placed on the leach pad via conveyor stacking during the third quarter, an 83 percent increase over the previous quarter.

Material placed during the quarter on the leach pad was in line with the updated plan, averaging 13,430 tonnes per day, 41 percent above the previous quarter. The operation has achieved steady growth in performance through the quarter, averaging 14,514 tonnes per day during the month of September, including over 16,000 tonnes per day during the second half of the month.

The expansion of carbon columns at the ADR plant is on schedule and commissioning is expected early in the fourth quarter of 2021.

Quality Assurance & Quality Control

Grade control estimates at Lindero are based on blast hole chip samples submitted to Lindero's on-site laboratory for preparation and assaying for gold, using fire assay with an atomic absorption finish. The QA-QC program includes the blind insertion of certified reference standards and assay blanks at a frequency of approximately 1 per 20 normal samples as well as the submission of duplicate samples for verification of sampling and assay precision levels by an ISO 9001:2000 certified umpire laboratory. ALS Global Laboratory in Mendoza, Argentina prepared the samples for assaying and then forwarded the samples to ALS Global Laboratory in Lima, Peru for assay by standard fire assay methods.

San Jose Mine, Mexico: Quarterly performance as expected, year to date production results aligned with guidance

The San Jose Mine produced 1,436,658 ounces of silver and 8,910 ounces of gold in the third quarter of 2021 with average head grades for silver and gold of 195 g/t and 1.22 g/t, respectively. Silver and gold production for the first nine months of 2021 totaled 4,707,496 ounces of silver and 29,477 ounces of gold. Production for the quarter and year to date are in line with guidance with lower head grades for silver and gold versus the third quarter of 2020.

Yaramoko Mine, Burkina Faso

The Yaramoko Mine produced 28,751 ounces of gold in the third quarter of 2021 with an average gold head grade of 7.28 g/t; slightly below the plan for the quarter.

Unplanned downtime due to the premature changeout of a SAG mill pinion bearing in August contributed to slightly lower mill throughput of 126,677 tonnes in the quarter against a plan of 127,917 tonnes. This, in addition to some necessary re-sequencing of production stopes at the 55 Zone, due to isolated ground conditions causing bridging which resulted in a reprioritization of lower grade stopes, contributed to the minor production shortfall.

These issues have been remedied and are not expected to continue nor affect fourth quarter performance which is expected to be in line with guidance.

Caylloma Mine, Peru: Outperformance; 12 percent increase in gold production, 23 percent increase in lead production and a 21 percent increase in zinc production compared with the third quarter of 2020

Since the third quarter of 2020, Caylloma's production continues to benefit from higher contribution of mineralized material from the expansion into the Animas NE reserves, where the company has focused exploration over the last couple of years. In the third quarter of 2021, the mine produced 275,223 ounces of silver with an average head grade of 78 g/t. Silver production for the first nine months of 2021 totaled 810,962 ounces, which is above plan.

Gold production was 1,529 ounces, an increase of 12 percent over the third quarter of 2020. The increase in production is due to higher head grades located in the Animas NE vein. Gold production for the first nine months of 2021 totaled 4,712 ounces, which is above plan.

Lead and zinc production for the third quarter of 2021 was 8,245,289 pounds and 12,436,276 pounds respectively. Base metal production for the first nine months of 2021 totaled 36,169,039 pounds of zinc and 24,570,519 pounds of lead. The higher zinc and lead production for the quarter, compared to the same period in 2020, is mainly due to the voluntary 21-day suspension of operations in 2020 to sanitize and disinfect the mine site (refer to Fortuna news release dated July 28, 2021, " Fortuna announces resumption of production at the Caylloma Mine, Peru ".

The Animas NE vein is emerging as a new center of gravity for the mine's production, where exploration potential remains open in multiple directions.

Qualified Persons

Eric Chapman, Senior Vice President of Technical Services, is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (Registration Number 36328). Mr. Chapman has reviewed and approved the scientific and technical information contained in this news release.

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 an advanced development project 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 shareholders and 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

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 anticipated performance in 2021; estimated production forecasts and sales for 2021; 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 2021; the estimated amount of ore to be placed on the leach pad at the Lindero Mine in 2021, the grade of gold and the amount of gold estimated to be contained therein; the timing of the commencement of steady state production at the Lindero Mine; the timing of the expansion of the ADR plant at the Lindero Mine; the expansion of the heap leach pad at the Lindero Mine; undisclosed risks and liabilities relating to the Roxgold business combination; risks that the anticipated benefits of the Roxgold business combination will not be realized or fully realized; the Company's business strategy, plans and outlook; the merit of the Company's mines and mineral properties; mineral resource and reserve estimates; production costs; timelines; 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", "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, changes in general economic conditions and financial markets; the impact of the COVID-19 pandemic on the Company's mining operations and construction activities; the duration and impacts of COVID-19 on the Company's production, workforce, business, operations and financial condition, and the risks relating to a global pandemic, which unless contained could cause a slowdown in global economic growth; uncertainties related to the impacts of COVID-19 which may include: changing market conditions, changing restrictions on the mining industry in the countries in which the Company operates, the ability to operate as a result of government imposed restrictions, including restrictions on travel, the transportation of concentrates and doré, access to refineries, the impact of additional waves of the pandemic or increases of incidents of COVID-19 in the countries in which we operate; the duration of any suspension of operations at the Company's mines as a result of COVID-19 which may affect production and the Company' business operations and financial condition; the easing of travel restrictions imposed in Argentina which were put in place to curb the spread of COVID-19; the risks associated with the completion of the business combination with Roxgold, including the ability of the Company to successfully consolidate functions, integrate operations, procedures and personnel; changes in prices for gold, silver and other metals; changes in the prices of key supplies; technological and operational hazards in Fortuna's mining and mine development activities; risks inherent in mineral exploration; the ability of the current exploration programs to identify and or expand mineral resources, operational risks in exploration and development; delays or changes in plans with respect to exploration or development projects; 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; governmental and other approvals; changes in government, political unrest or instability in countries where Fortuna is active; fluctuations in currencies and exchange rates; the imposition of capital control in countries in which the Company operates; 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 in accordance with the Company's public statements and stated goals; that there will be no material adverse change affecting the Company or its properties; that the reconciliation of mineral reserves at the Lindero Mine remains consistent with the mineral reserve model; 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, labour and contractor availability and other operating or technical difficulties); the duration and impacts of COVID-19 on the Company's production, workforce, business, operations and financial condition, and the risks relating to a global pandemic, which unless contained could cause a slowdown in global economic growth; government mandates in Peru, Mexico, Argentina, Burkina Faso and Côte d'Ivoire with respect to mining operations generally or auxiliary businesses or services required for the Company's operations; government and the Company's attempts to reduce the spread of COVID-19 which may affect may aspects of the Company's operations, including transportation of personnel to and from site, contractor and supplier availability and the ability to sell or deliver concentrate and doré; the expected trends in mineral prices and currency exchange rates; that the Company's activities will be in accordance with the Company's public statements and stated goals; that there will be no material adverse change affecting the Company or its properties; that all required approvals and permits will be obtained for the Company's business and operations; that there will be no significant disruptions affecting 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.


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MAG Silver Corp. (TSX NYSE American: MAG) ("MAG", or the "Company") announces the Company's consolidated financial results for the year ended December 31, 2023. For details of the audited consolidated financial statements of the Company for the year ended December 31, 2023 ("2023 Financial Statements") and management's discussion and analysis for the year ended December 31, 2023 ("2023 MD&A"), please see the Company's filings on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") at ( www.sedarplus.ca ) or on the Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") at ( www.sec.gov ).

All amounts herein are reported in $000s of United States dollars ("US$") unless otherwise specified (C$ refers to Canadian dollars).

KEY HIGHLIGHTS (on a 100% basis unless otherwise noted)

  • MAG reported net income of $48,659 ($0.47 per share) driven by income from Juanicipio (equity accounted) of $65,099 and Adjusted EBITDA 1 of $97,480 for the year ended December 31, 2023.

  • MAG reported net income of $15,694 ($0.15 per share) driven by income from Juanicipio (equity accounted) of $21,069 and Adjusted EBITDA 1 of $29,787 for the three months ended December 31, 2023.

  • A total of 346,766 tonnes of mineralized material at a silver head grade of 467 grams per tonne ("g/t") was processed at Juanicipio during the fourth quarter. Milling performance for 2023 totalled 1,268,757 tonnes at a head grade of 472 g/t.

  • Juanicipio achieved silver production of 4.5 million ounces during the fourth quarter. Silver production for 2023 totalled 16.8 million ounces.

  • Juanicipio continued to capitalize on available milling capacity at the Saucito plant (100% Fresnillo owned) to maintain processing rates during periods of maintenance. Approximately 5% of the material processed during the fourth quarter was processed through the Saucito plant.

  • Juanicipio delivered robust cost performance with cash cost 2 of $3.76 per silver ounce sold and all-in sustaining cost 2 of $9.17 per silver ounce sold in the fourth quarter.
  • Juanicipio generated strong operating cash flow of $84,038 and free cash flow 2 of $61,993 in the fourth quarter. Operating cash flow and free cash flow 2 for 2023 totalled $145,064 and $60,814, respectively.

  • At the end of the year, Juanicipio held cash balances of $42,913, representing an increase of $41,811 over 2022, driven by strong operating cash flows.

  • Juanicipio returned a total of $18,765 in interest and loan principal repayments to MAG during the fourth quarter. Interest and loan principal repayments returned to MAG during 2023 totalled $33,354.

  • MAG concluded a $40,000 senior secured revolving credit facility (the "Credit Facility") with the Bank of Montreal on October 4, 2023.

  • Effective June 20, 2023, MAG was included in the NYSE Arca Gold Miners Index which is tracked by the VanEck Vectors Gold Miners ETF.

CORPORATE

  • In September the Company published its second annual sustainability report underscoring its commitment to transparency with its stakeholders while providing a comprehensive overview of the Company's environmental, social and governance ("ESG") commitments, practices and performance for the 2022 year. The 2022 sustainability report is supported by the MAG Silver 2022 ESG Data Table which discloses MAG's historical ESG performance data.

  • During early 2024, as part of the Company's longer term succession planning, Dr. Lex Lambeck was promoted to the position of Vice President, Exploration. Lex has been the project manager for the Deer Trail Project in Utah since it was acquired by MAG in 2019, led by Dr. Peter Megaw. Lex's leadership was instrumental in the application of the "Hub and Spoke" thesis at Deer Trail as well as the Carissa discovery demonstrating his strong skills in generative exploration in district scale settings which will be invaluable in overseeing the Company's portfolio of exploration properties, including exploration at Juanicipio.

  • Marc Turcotte, with his almost 10 years experience at MAG as Vice President, Corporate Development, was promoted to the position of Chief Development Officer. In this broader executive role, Marc will leverage his proven track record in identifying unique situations to zero-in-on and assess inorganic growth opportunities aligned with the Company's commitment to continued Tier-1 growth and expansion. Marc was the architect of the consolidation of the Deer Trail project in Utah as well as the catalyst behind the acquisition of Gatling Exploration which brought the Larder project into MAG's portfolio of high quality, high impact exploration properties.

  • Tom Peregoodoff was appointed to the Board of Directors of MAG effective January 1, 2024. Mr. Peregoodoff will fill the vacancy to be created by the planned retirement in June 2024 of Dan MacInnis, who does not plan to seek re-election at the Company's 2024 annual general meeting of shareholders. Tom brings with him over 30 years of industry knowledge and leadership and has extensive experience in all aspects and stages of the global mining business, specializing in mineral exploration.

EXPLORATION

  • Juanicipio:
    • Infill drilling at Juanicipio continued in 2023, with one rig on surface and one underground with the goal of upgrading and expanding the Valdecañas Vein System at depth and further defining areas to be mined in the near to mid-term.
    • During 2023, 13,273 metres (three months ended December 31, 2023: nil metres) and 22,015 metres (three months ended December 31, 2023: 6,686 metres), were drilled from surface and underground respectively. Drilling for the year, both surface and underground, was infill in nature and continues to confirm defined mineralization.

  • Deer Trail Project, Utah:
    • Results from the 12,157 metres in surface-based Phase 2 drilling on the Deer Trail Carbonate Replacement Deposit project were reported on January 17, 2023 and August 3, 2023 (see news releases dated January 17, 2023 and August 3, 2023 available under the Company's SEDAR+ profile at www.sedarplus.ca ).
    • On May 29, 2023 MAG started a Phase 3 drilling program focused on up to three porphyry "hub" targets thought to be the source of the manto, skarn and epithermal mineralization and extensive alteration throughout the project area including that at the Deer Trail and Carissa zones. An early onset of winter snowfall impacted the commencement of the third porphyry "hub" target which is expected to be drilled next season and drilling has shifted to offset the Carissa discovery and test other high-potential targets.
    • During 2023, 5,525 metres (three months ended December 31, 2023: 1,609 metres) were drilled at high elevation with final results and interpretation pending.

  • Larder Project, Ontario:
    • On July 12, 2023 drilling resumed at the Larder Project to test additional targets by the end of the year on the Cheminis and Bear areas. During 2023 17,504 metres were drilled at Swansea, Cheminis and Bear.
    • Cheminis Success: The magnetotellurics survey carried out in the summer of 2023 enabled modelling of the south volcanic gold zone at Cheminis and is proving to be applicable elsewhere across the property. Drilling in three successive Cheminis drillholes (GAT-23-019, 020A, and 021B, see Table 1 below) intersected grades of 1.1 to 20.3 g/t gold over core lengths of 0.6 - 11.1 metres demonstrating continuity. This also extended the gold-hosting mine sequence down to 700 metres below surface, more than 370 metres below the deepest workings in this portion of the Cadillac-Larder Break. Incorporating these results into the model should enhance predictability in follow-up drilling.
    • Bear Success: Increased predictability has led to continued success and further definition of the North Bear zone, especially in hole GAT-23-022NA (see Table 1 below) which cut 5.1 metres grading 4.6 g/t gold (including a high-grade zone of 1.4 metre grading 16.2 g/t gold). These intercepts extend gold mineralization to 650 metres below surface, and it remains open in all directions.

Table 1: 2023 Larder Drillholes Highlights

Hole ID From (m) To (m) Length (m) 1 Gold (g/t) Lithology Target/Zone
GAT-23-019 767.00 776.50 9.50 2.1 Mafic Volcanics South Cheminis Mine Sequence Zone
Including 767.40 768.80 1.40 5.1 South Volcanics South Cheminis Mine Sequence Zone
Including 767.80 768.00 0.30 11.0 South Volcanics South Cheminis Mine Sequence Zone
and 945.00 955.00 10.00 1.1 Green Komatiites North Cheminis Zone
Including 946.00 949.50 3.50 2.1 Green Komatiites North Cheminis Zone
GAT-23-020A 605.30 605.90 0.60 9.4 Quartz Vein & South Volcanics South Cheminis Zone
and 672.90 678.80 5.90 3.5 Komatiite-Syenite Contact North Cheminis Zone
Including 676.30 678.80 2.50 6.3 Komatiite-Syenite Contact North Cheminis Zone
Including 678.30 678.80 0.50 20.3 Green Komatiite-Syenite Contact North Cheminis Zone
GAT-23-021B 757.40 768.50 11.10 3.2 Brecciated South Volcanics with Graphite South Cheminis Mine Sequence Zone
Including 766.00 768.00 2.00 10.2 South Volcanics South Cheminis Mine Sequence Zone
GAT-23-022NA 784.60 785.50 0.90 6.0 Green Komatiites North Bear Zone
and 789.50 794.60 5.10 4.6 Green Komatiite with Graphite North Bear Zone
Including 790.30 791.70 1.40 16.2 Quartz Vein with Graphite North Bear Zone
Including 791.20 793.70 0.50 33.8 Quartz Vein with Graphite North Bear Zone
and 939.50 940.20 0.70 5.7 South Volcanics South Bear Zone


JUANICIPIO RESULTS

All results of Juanicipio in this section are on a 100% basis, unless otherwise noted.

Operating Performance

The following table and subsequent discussion provide a summary of the operating performance of Juanicipio for the years ended December 31, 2023 and 2022, unless otherwise noted.

Key mine performance data of Juanicipio (100% basis) Year ended
December 31, December 31,
2023 2022
Metres developed (m) 14,864 12,999
Material mined (t) 1,097,289 792,693
Material processed (t) 1,268,757 646,148
Silver head grade (g/t) 472 520
Gold head grade (g/t) 1.27 1.39
Lead head grade (%) 1.14 % 0.90 %
Zinc head grade (%) 2.05 % 1.72 %
Silver payable ounces (koz) 15,318 8,697
Gold payable ounces (koz) 31.73 20.27
Lead payable pounds (klb) 25,862 9,892
Zinc payable pounds (klb) 36,881 14,898

During the year ended December 31, 2023 a total of 1,097,289 tonnes of mineralized material were mined. This represents an increase of 38% over 2022. Increases in mined tonnages at Juanicipio have been driven by the operational ramp up of the milling facility.

During the year ended December 31, 2023 a total of 1,268,757 tonnes of mineralized material were processed through the Juanicipio, Saucito and Fresnillo plants. This represents an increase of 96% over 2022. The increase in milled tonnage has been driven by the Juanicipio mill commissioning and operational ramp up. As reported by the operator, Fresnillo, the Juanicipio processing facility achieved nameplate capacity of 4,000 tpd during September 2023 with silver recovery consistently above 88%. Juanicipio continued to capitalize on available milling capacity at the Saucito plant (100% Fresnillo owned) to maintain processing rates during periods of maintenance. Approximately 5% of the material processed during the fourth quarter of 2023 was processed through the Saucito plant.

The average silver head grade for the mineralized material processed in the year ended December 31, 2023 was 472 g/t (year ended December 31, 2022: 520 g/t).

The following table provides a summary of the total cash costs (1) and all-in-sustaining costs ("AISC") (1) of Juanicipio for the years ended December 31, 2023, and 2022.

Key mine performance data of Juanicipio (100% basis) Year ended
December 31, December 31,
2023 2022
Total operating cash costs (1) 88,080 40,522
Operating cash cost per silver ounce sold ($/oz) (1) 5.75 4.66
Total cash costs (1) 93,025 40,871
Cash cost per silver ounce sold ($/oz) (1) 6.07 4.70
All-in sustaining costs (1) 158,151 83,463
All-in sustaining cost per silver ounce sold ($/oz) (1) 10.32 9.60

(1) Total operating cash costs, operating cash cost per ounce, total cash costs, cash cost per ounce, all-in sustaining costs, and all-in sustaining cost per ounce are non-IFRS measures, please see below ‘ Non-IFRS Measures ' section and section 12 of the 2023 MD&A dated March 18, 2024, available on SEDAR+ at www.sedarplus.ca for a detailed reconciliation of these measures to the 2023 Financial Statements.


Financial Results

The following table presents excerpts of the financial results of Juanicipio for the years ended December 31, 2023 and 2022 (MAG's share of income from its equity accounted investment in Juanicipio).

Year ended
December 31, December 31,
2023 2022
$ $
Sales 442,288 215,736
Cost of sales:
Production cost (171,830 ) (61,985 )
Depreciation and amortization (68,475 ) (20,913 )
Gross profit 201,983 132,838
Consulting and administrative expenses (18,768 ) (8,436 )
Extraordinary mining and other duties (4,945 ) (349 )
Interest expense (18,524 ) (2,298 )
Exchange losses and other (2,937 ) (5,160 )
Net income before tax 156,809 116,595
Income tax expense (27,381 ) (26,348 )
Net income (100% basis) 129,428 90,247
MAG's 44% portion of net income 56,948 39,709
Interest on Juanicipio loans - MAG's 44% 8,150 1,058
MAG's 44% equity income 65,099 40,767

Sales increased by $226,552 during the year ended December 31, 2023, mainly due to 84% higher metal volumes and 5% higher realized metal prices.

Offsetting higher sales was higher depreciation ($47,561) as the Juanicipio mill achieved commercial production and commenced depreciating the processing facility and associated equipment, and higher production cost ($109,845) which was driven by higher sales and operational ramp-up in mining and processing, including $44,027 in inventory movements as commissioning stockpiles were drawn down.

Other expenses increased by $28,932 mainly as a result of higher extraordinary mining and other duties ($4,596) related to higher precious metal revenues from the sale of concentrates, higher consulting and administrative expenses ($10,332) as an operator services agreement became effective upon initiation of commercial production whereby Fresnillo and its affiliates continue to operate the mine, and higher interest incurred on shareholder loans ($16,227) which were completely expensed during 2023, whereas being only partly expensed with the rest capitalized to construction in progress during 2022.

Taxes increased by $1,033 impacted by deferred tax charges associated with fixed assets as well as higher taxable profits generated during the period.

Mineralized Material Processed at Juanicipio, Saucito and Fresnillo Plants (100% basis)

Year Ended December 31, 2023 (1,268,757 tonnes processed) Year Ended
December 31, 2022
Amount

$
Payable Metals Quantity Average Price
$
Amount
$
Silver 15,317,765 ounces 23.66 per oz 362,457 188,722
Gold 31,735 ounces 1,978.07 per oz 62,774 36,958
Lead 11,731 tonnes 0.96 per lb. 24,746 9,380
Zinc 16,729 tonnes 1.15 per lb. 42,496 23,398
Treatment, refining, and other processing costs ( 2 ) (50,185 ) (42,722 )
Sales 442,288 215,736
Production cost (171,830 ) (61,985 )
Depreciation and amortization (1) (68,475 ) (20,913 )
Gross Profit 201,983 132,838

(1) The underground mine was considered readied for its intended use on January 1, 2022, whereas the Juanicipio processing facility started commissioning and ramp-up activities in January 2023, achieving commercial production status on June 1, 2023.
(2) Includes toll milling costs from processing mineralized material at the Saucito and Fresnillo plants.


Sales and treatment charges are recorded on a provisional basis and are adjusted based on final assay and pricing adjustments in accordance with the offtake contracts.

MAG FINANCIAL RESULTS – YEAR ENDED DECEMBER 31, 2023

As at December 31, 2023, MAG had working capital of $67,262 (December 31, 2022: $29,232) including cash of $68,707 (December 31, 2022: $29,955) and no long-term debt. As well, as at December 31, 2023, Juanicipio had working capital of $86,336 including cash of $42,913 (MAG's attributable share is 44%).

The Company's net income for the year ended December 31, 2023 amounted to $48,659 (December 31, 2022: $17,644) or $0.47/share (December 31, 2022: $0.18/share). MAG recorded its 44% income from equity accounted investment in Juanicipio of $65,099 (December 31, 2022: $40,767) which included MAG's 44% share of net income from operations as well as loan interest earned on loans advanced to Juanicipio (see above for MAG's share of income from its equity accounted investment in Juanicipio).

December 31, December 31,
2023 2022
$ $
Income from equity accounted investment in Juanicipio 65,099 40,767
General and administrative expenses (13,594 ) (12,352 )
General exploration and business development (736 ) (193 )
Exploration and evaluation assets written down - (10,471 )
Operating Income 50,769 17,751
Interest income 2,594 630
Other income 1,017 -
Foreign exchange loss (144 ) (366 )
Income before income tax 54,236 18,015
Deferred income tax expense (5,577 ) (371 )
Net income 48,659 17,644

NON-IFRS MEASURES

The following table provides a reconciliation of operating cash cost and cash cost per silver ounce of Juanicipio to production cost of Juanicipio on a 100% basis (the nearest IFRS measure) as presented in the notes to the 2023 Financial Statements.

Year ended December 31,
(in thousands of US$, except per ounce amounts) 2023 2022
Production cost as reported 171,830 61,985
Depreciation on inventory movements (3,919 ) 5,551
Adjusted production cost 167,911 67,536
Treatment, refining, and other processing costs 50,185 42,722
By-product revenues (2) (130,016 ) (69,736 )
Total operating cash costs (1) 88,080 40,522
Extraordinary mining and other duties 4,945 349
Total cash costs (1) 93,025 40,871
Silver ounces sold 15,317,765 8,697,372
Operating cash cost per silver ounce sold ($/ounce) 5.75 4.66
Cash cost per silver ounce sold ($/ounce) 6.07 4.70

(1) As Q3 2023 represented the first full quarter of commercial production, information presented for total operating cash costs and total cash costs together with their associated per unit values are not directly comparable.
(2) By-product revenues relates to the sale of other metals contained in the lead and zinc concentrates produced and delivered, namely gold, lead, and zinc.


The following table provides a reconciliation of AISC of Juanicipio to production cost and various operating expenses of Juanicipio on a 100% basis (the nearest IFRS measure), as presented in the notes to the 2023 Financial Statements.

Year ended December 31,
(in thousands of US$, except per ounce amounts) 2023 2022
Total cash costs 93,025 40,871
General and administrative expenses 18,768 8,436
Exploration 7,575 7,824
Sustaining capital expenditures 37,728 25,268
Sustaining lease payments 856 854
Interest on lease liabilities (48 ) (23 )
Accretion on closure and reclamation costs 247 232
All-in sustaining costs (1) 158,151 83,463
Silver ounces sold 15,317,765 8,697,372
All-in sustaining cost per silver ounce sold ($/ounce) 10.32 9.60
Average realized price per silver ounce sold ($/ounce) 23.66 21.70
All-in sustaining margin ($/ounce) 13.34 12.10
All-in sustaining margin 204,306 105,259

(1) As Q3 2023 represented the first full quarter of commercial production, information presented for all-in sustaining costs and all-in sustaining margin together with their associated per unit values are not directly comparable.


For the year ended December 31, 2023 the Company incurred corporate general and administrative expenses of $13,242 (year ended December 31, 2022: $12,216), which exclude depreciation expense.

The Company's attributable silver ounces sold for the year ended December 31, 2023 were 6,739,817 (year ended December 31, 2022: 3,826,844), resulting in additional AISC for the Company of $1.96/oz (year ended December 31, 2022: $3.19/oz), in addition to Juanicipio's AISC presented in the above table.

The following table provides a reconciliation of Earnings before interest, tax, depreciation and amortization ("EBITDA") and Adjusted EBITDA attributable to the Company based on its economic interest in Juanicipio to net income (the nearest IFRS measure) of the Company per the 2023 Financial Statements. All adjustments are shown net of estimated income tax.

Year ended December 31,
(in thousands of US$) 2023 2022
Net income after tax 48,659 17,644
Add back (deduct):
Taxes 5,577 371
Depreciation and depletion 352 136
Finance costs (income and expenses) (3,467 ) (264 )
EBITDA (1) 51,121 17,887
Add back (deduct):
Adjustment for non-cash share-based compensation 2,894 3,250
Exploration property write-down - 10,471
Share of net earnings related to Juanicipio (65,099 ) (40,767 )
MAG attributable interest in Junicipio Adjusted EBITDA 108,564 65,403
Adjusted EBITDA (1) 97,480 56,244

(1) As Q3 2023 represents the first full quarter of commercial production, information presented for EBITDA and Adjusted EBITDA is not directly comparable.


The following table provides a reconciliation of free cash flow of Juanicipio to its cash flow from operating activities on a 100% basis (the nearest IFRS measure), as presented in the notes to the 2023 Financial Statements.

Year ended December 31,
(in thousands of US$) 2023 2022
Cash flow from operating activities 145,064 129,261
Less:
Cash flow used in investing activities (83,393 ) (155,758 )
Sustaining lease payments (856 ) (854 )
Juanicipio free cash flow (1) 60,814 (27,351 )

(1) As Q3 2023 represents the first full quarter of commercial production, comparative information presented for free cash flow of Juanicipio is not directly comparable.


Qualified Persons:
All scientific or technical information in this press release including assay results referred to, and mineral resource estimates, if applicable, is based upon information prepared by or under the supervision of, or has been approved by Dr. Peter Megaw, Ph.D., CPG, MAG's Chief Exploration Officer and Gary Methven, P.Eng., Vice President, Technical Services; both are "Qualified Persons" for purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects .

About MAG Silver Corp.

MAG Silver Corp. is a growth-oriented Canadian exploration company focused on advancing high-grade, district scale precious metals projects in the Americas. MAG is emerging as a top-tier primary silver mining company through its (44%) joint venture interest in the 4,000 tonnes per day Juanicipio Mine, operated by Fresnillo plc (56%). The mine is located in the Fresnillo Silver Trend in Mexico, the world's premier silver mining camp, where in addition to underground mine production and processing of high-grade mineralised material, an expanded exploration program is in place targeting multiple highly prospective targets. MAG is also executing multi-phase exploration programs at the 100% earn-in Deer Trail Project in Utah and the 100% owned Larder Project, located in the historically prolific Abitibi region of Canada.

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.

Certain information contained in this release, including any information relating to MAG's future oriented financial information, are "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation (collectively herein referred as "forward-looking statements"), including the "safe harbour" provisions of provincial securities legislation, the U.S. Private Securities Litigation Reform Act of 1995, Section 21E of the U.S. Securities Exchange Act of 1934, as amended and Section 27A of the U.S. Securities Act. Such forward-looking statements include, but are not limited to:

  • statements that address achieving the nameplate 4,000 tpd milling rate at Juanicipio;
  • statements that address our expectations regarding exploration and drilling;
  • statements regarding production expectations and nameplate;
  • statements regarding the additional information from future drill programs;
  • estimated future exploration and development operations and corresponding expenditures and other expenses for specific operations;
  • the expected capital, sustaining capital and working capital requirements at Juanicipio, including the potential for additional cash calls;
  • expected upside from additional exploration;
  • expected results from Deer Trail Project Phase 3 drilling;
  • expected results from the Larder Project at the Cheminis zone;
  • expected capital requirements and sources of funding; and
  • other future events or developments.

When used in this release, any statements that express or involve discussions with respect to predictions, beliefs, plans, projections, objectives, assumptions or future events of performance (often but not always using words or phrases such as "anticipate", "believe", "estimate", "expect", "intend", "plan", "strategy", "goals", "objectives", "project", "potential" or variations thereof or stating that certain actions, events, or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions), as they relate to the Company or management, are intended to identify forward-looking statements. Such statements reflect the Company's current views with respect to future events and are subject to certain known and unknown risks, uncertainties and assumptions.

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 release include, among others: MAG's ability to carry on its various exploration and development activities including project development timelines, the timely receipt of required approvals and permits, the price of the minerals produced, the costs of operating, exploration and development expenditures, the impact on operations of the Mexican tax and legal regimes, MAG's ability to obtain adequate financing, outbreaks or threat of an outbreak of a virus or other contagions or epidemic disease will be adequately responded to locally, nationally, regionally and internationally.

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. These forward-looking statements involve known and unknown risks, uncertainties and many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including amongst others: commodities prices; changes in expected mineral production performance; unexpected increases in capital costs or cost overruns; exploitation and exploration results; continued availability of capital and financing; general economic, market or business conditions; risks relating to the Company's business operations; risks relating to the financing of the Company's business operations; risks related to the Company's ability to comply with restrictive covenants and maintain financial covenants pursuant to the terms of the Credit Facility; the expected use of the Credit Facility; risks relating to the development of Juanicipio and the minority interest investment in the same; risks relating to the Company's property titles; risks related to receipt of required regulatory approvals; pandemic risks; supply chain constraints and general costs escalation in the current inflationary environment heightened by the invasion of Ukraine by Russia and the events relating to the Israel-Hamas war; risks relating to the Company's financial and other instruments; operational risk; environmental risk; political risk; currency risk; market risk; capital cost inflation risk; risk relating to construction delays; the risk that data is incomplete or inaccurate; the risks relating to the limitations and assumptions within drilling, engineering and socio-economic studies relied upon in preparing economic assessments and estimates, including the 2017 PEA; as well as those risks more particularly described under the heading "Risk Factors" in the Company's Annual Information Form dated March 27, 2023 available under the Company's profile on SEDAR+ at www.sedarplus.ca .

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. The Company's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and, other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.

Please Note: 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.sedarplus.ca and www.sec.gov .

LEI: 254900LGL904N7F3EL14

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