Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) ("Endeavour") announces that it has now closed the sale of the El Cubo Mine in Guanajuato, Mexico to VanGold Mining Corp. ("VanGold") for $15 million in cash and share payments plus up to $3 million in future contingent payments (all dollar amounts in US dollars unless otherwise noted) (the "Transaction").Read More >>
SILVERCORP REPORTS ADJUSTED EARNINGS OF $13.5 MILLION, $0.08 PER SHARE, AND CASH FLOW FROM OPERATIONS OF $40.2 MILLION FOR Q1 FISCAL 2023
Trading Symbol: TSX: SVM
NYSE AMERICAN: SVM
NYSE AMERICAN: SVM
Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM) reported its financial and operating results for the three months ended June 30, 2022 ("Q1 Fiscal 2023"). All amounts are expressed in US Dollars, and figures may not add due to rounding.
HIGHLIGHTS FOR Q1 FISCAL 2023
- Mined 300,104 tonnes of ore and milled 298,176 tonnes of ore, up 30% and 23% compared to the prior year quarter;
- Sold approximately 1.9 million ounces of silver, 1,100 ounces of gold, 19.1 million pounds of lead, and 6.9 million pounds of zinc, representing increases of 17%, 10%, and 14% in silver, gold and lead sold, and a decrease of 5% in zinc sold, compared to the prior year quarter;
- Revenue of $63.6 million , up 8% compared to $58.8 million in the prior year quarter;
- Net income attributable to equity shareholders of $10.2 million , or $0.06 per share, compared to $12.2 million , or $0.07 per share in the prior year quarter;
- Adjusted earnings attributable to equity shareholders of $13.5 million , or $0.08 per share, compared to $15.8 million , or $0.09 per share in the prior year quarter. The adjustments were made to remove impacts from impairment charges, share-based compensation, foreign exchange, mark-to-market equity investments, and the share of associates' operating results.
- Cash flow from operations of $40.2 million , up 10% or $3.7 million compared to $36.5 million in the prior year quarter;
- Cash cost per ounce of silver, net of by-product credits, of negative $1.57 compared to negative $1.43 in the prior year quarter;
- All-in sustaining cost per ounce of silver, net of by-product credits, of $9.25 compared to $7.46 in the prior year quarter;
- Spent and capitalized $3.1 million on exploration drilling, $9.7 million on underground development and $1.2 million on the construction of the new mill and tailings storage facility;
- Paid $2.2 million of dividends to the Company's shareholders;
- Spent $0.9 million to buy back 334,990 common shares of the Company under its Normal Course Issuer Bid, and subsequent to the quarter, bought back further 404,970 common shares of the Company for $1.0 million ; and
- Strong balance sheet with $215.8 million in cash and cash equivalents and short-term investments, up $2.9 million or 1% compared to $212.9 million as at March 31, 2022 . The Company holds further equity investment portfolio in associates and other companies with a total market value of $147.4 million as of June 30, 2022 .
Net income attributable to equity holders of the Company in Q1 Fiscal 2023 was $10.2 million or $0.06 per share, compared to $12.2 million or $0.07 per share in the three months ended June 30, 2021 . ("Q1 Fiscal 2022").
In Q1 Fiscal 2023, the Company's consolidated financial results were mainly impacted by i) an increase of 17%, 10%, and 14%, respectively, in silver, gold and lead sold; ii) an increase of 6%, 5%, and 20%, respectively, in the realized selling prices for gold, lead and zinc; iii) a foreign exchange gain of $1.7 million arising from the appreciation of the US dollar against the Company's functional currencies, mainly the Chinese yuan and the Canadian dollar;Â offset by iv) a decrease of 13% in the realized selling price for silver; v) a decrease of 5% in zinc sold; vi) a loss of $2.7 million on equity investments; and vii) an increase of 7% in per tonne production costs.
Revenue in Q1 Fiscal 2023 was $63.6 million , up 8% compared to $58.8 million in Q1 Fiscal 2022.
Income from mine operations in Q1 Fiscal 2023 was $24.9 million , down 2% compared to $25.5 million in the prior year quarter. Income from mine operations at the Ying Mining District was $21.4 million , up 1% compared to $21.2 million in Q1 Fiscal 2022. Income from mine operations at the GC Mine was $3.6 million , down 19% compared to $4.4 million in Q1 Fiscal 2022.
Cash flow provided by operating activities in Q1 Fiscal 2023 was $40.2 million , up 10% or $3.7 million , compared to $36.5 million in Q1 Fiscal 2022.
The Company ended Q1 Fiscal 2023 with $215.8 million in cash, cash equivalents and short-term investments, up 1% or $2.9 million , compared to $212.9 million as at March 31, 2022 .
Working capital as at June 30, 2022 was $182.0 million , down 2% compared to $186.3 million as at March 31 , 2022.
CONSOLIDATED OPERATIONAL RESULTS
In Q1 Fiscal 2023, the Company mined 300,104 tonnes of ore, up 30% compared to 231,235 tonnes in Q1 Fiscal 2022. Ore milled in Q1 Fiscal 2023 was 298,176 tonnes, up 23% compared to 243,077 tonnes in Q1 Fiscal 2022.
In Q1 Fiscal 2023, the Company produced approximately 1.9 million ounces of silver, 1,100 ounces of gold, 19.1 million pounds of lead, and 6.9 million pounds of zinc, representing increases of 26%, 10% and 20%, respectively, in silver, gold and lead production, and a decrease of 4% in zinc production over Q1 Fiscal 2022. The Company is on track to produce 7.0 million to 7.3 million ounces of silver, 6,300 to 7,900 ounces of gold, 68.4 million to 71.3 million pounds of lead, and 32.0 million to 34.5 million pounds of zinc in Fiscal 2023.
Compared to Q1 Fiscal 2022, the Company's consolidated per tonne costs in the current quarter were mainly impacted by i) inflationary cost pressure resulting in higher material and utility costs; ii) an average 9% increase in employees' pay rates; iii) increased drilling and tunneling resulting in higher costs included in mining costs and sustaining capital expenditures; offset by iv) an average 2% depreciation of the Chinese yuan against the US dollar.
In Q1 Fiscal 2023, on a consolidated basis, a total of 122,930 metres or $4.9 million worth of diamond drilling were completed (Q1 Fiscal 2022 – 107,913 metres or $4.6 million ), of which approximately 66,999 metres or $1.8 million worth of underground drilling were expensed as part of mining costs (Q1 Fiscal 2022 – 50,666 metres or $1.3 million ) and approximately 55,931 metres or $3.1 million worth of drilling were capitalized (Q1 Fiscal 2022 – 57,247 metres or $3.3 million ). In addition, approximately 11,682 metres or $4.1 million worth of preparation tunnelling were completed and expensed as part of mining costs (Q1 Fiscal 2022 – 6,955 metres or $2.8 million ), and approximately 24,958 metres or $9.7 million worth of tunnels, raises, ramps and declines were completed and capitalized (Q1 Fiscal 2022 – 17,263 metres or $6.8 million ).
An application for a mining permit for the Kuanping Project has been submitted and is pending review and approval by the relevant provincial government authorities.
As of June 30, 2022 , a total of $1.2 million expenditures have been incurred on the construction of the new 3,000 tonne per day floatation mill (the "New Mill") and the new tailings storage facility (the "TSF"). The preliminary design and engineering survey, the water and soil conservation studies for the New Mill and the TSF, and the feasibility study for the TSF have been completed. The Company also received the construction permit for the New Mill and is in the process of negotiating purchases of major equipment for the New Mill. The Company expects that the final approval of the environmental and safety assessment studies, and the detailed engineering design of the New Mill and the TSF will be granted in the second quarter of Fiscal 2023.
INDIVIDAL MINE OPERATING PERFORMANCE
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held tomorrow, Friday, August 12 , at 9:00 am PDT ( 12:00 pm EDT ). To participate in the conference call, please dial the numbers below.
Canada / USA TF: 888-664-6383
International Toll: 416-764-8650
Conference ID: 38775517
Participants should dial-in 10 – 15 minutes prior to the start time. A replay of the conference call and transcript will be available on the Company's website at www.silvercorp.ca .
Mr. Guoliang Ma , P.Geo., Manager of Exploration and Resources of the Company, is the Qualified Person as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and given consent to the technical information contained in this news release.
About Silvercorp
Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential. The Company's strategy is to create shareholder value by 1) focusing on generating free cashflow from long life mines; 2) organic growth through extensive drilling for discovery; 3) ongoing merger and acquisition efforts to unlock value; and 4) long term commitment to responsible mining and ESG. For more information, please visit our website at www.silvercorp.ca .
For further information
Silvercorp Metals Inc.
Lon Shaver
Vice President
Phone: (604) 669-9397
Toll Free 1(888) 224-1881
Email: investor@silvercorp.ca
Website: www.silvercorp.ca
ALTERNATIVE PERFORMANCE (NON-IFRS) MEASURES
This earnings release should be read in conjunction with the Company's Management Discussion & Analysis ("MD&A"), the unaudited condensed consolidated interim financial statements and related notes contains therein for the three months ended June 30, 2022 , which have been posted on SEDAR under the Company's profile at www.sedar.com and are also available on the Company's website at www.silvercorp.ca under the Investor section. This earnings release refers to various alternative performance (non-IFRS) measures, such as adjusted earnings and adjusted earnings per share, cash costs and all-in sustaining costs per ounce of silver, net of by-product credits, production costs and all-in sustaining production costs per tonne of ore processed and working capital. These measures are widely used in the mining industry as a benchmark for performance, but do not have standardized meanings under IFRS as an indicator of performance and may differ from methods used by other companies with similar description. The detailed description and reconciliation of these alternative performance (non-IFRS) measures have been incorporated by reference and can be found on page 24, section 11 – Alternative Performance (Non-IFRS) Measures in the MD&A for the three months ended June 30, 2022 .
CAUTIONARY DISCLAIMER - FORWARD-LOOKING STATEMENTS
Certain of the statements and information in this news release constitute "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 provincial securities laws (collectively, "forward-looking statements"). Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "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) are not statements of historical fact and may be forward-looking statements. Forward-looking statements relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company's material properties; the sufficiency of the Company's capital to finance the Company's operations; estimates of the Company's revenues and capital expenditures; estimated production from the Company's mines in the Ying Mining District and the GC Mine; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company's operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company's properties.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks relating to: global economic and social impact of COVID-19; fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company's existing operations; competition; operations and political conditions; regulatory environment in China and Canada ; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting; and bringing actions and enforcing judgments under U.S. securities laws.
This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's Annual Information Form under the heading "Risk Factors" and in the Company's Annual Report on Form 40-F, and in the Company's other filings with Canadian and U.S. securities regulators. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements.
The Company's forward-looking statements are based on the assumptions, beliefs, expectations and opinions of management as of the date of this news release, 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 assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
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SOURCE Silvercorp Metals Inc
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SilverCrest Reports Q2, 2022 Financial Results
TSX:Â SIL | NYSE American: SILV
 SilverCrest Metals Inc. ("SilverCrest" or the "Company") is pleased to report the Company's unaudited financial results for the second quarter of 2022 ("Q2, 2022"). The unaudited condensed consolidated interim financial statements and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2022 are available under the Company's SEDAR profile on www.sedar.com or on SilverCrest's website www.silvercrestmetals.com . All amounts herein are presented in United States Dollars, unless otherwise stated.
The Company's top priority is the high-grade, historic Las Chispas mining district in Sonora, Mexico , where it has completed a feasibility study (the "Feasibility Study") and construction of its Las Chispas Mine ("Las Chispas"). Commissioning is underway at the Las Chispas Mine and achievement of commercial production is expected during Q4, 2022. Details of the Feasibility Study, including an updated Mineral Resource Estimate and an initial Mineral Reserve Estimate, are provided in a technical report filed under the Company's SEDAR profile entitled, "NI 43-101 Technical Report & Feasibility Study on the Las Chispas Project" with an effective date of January 4, 2021 .
Highlights - First Half 2022 ("H1, 2022")
- As of June 30, 2022 , SilverCrest had cash and cash equivalents of $118.6 million and $30.0 million remaining under a $120.0 million project financing facility (the "Credit Facility"). Given SilverCrest's strong financial position, it has decided not to draw the remaining $30.0 million , which is available to the Company until August 31, 2022 .
- During May 2022 , Las Chispas plant construction (Ausenco) along with other construction activities handled directly by SilverCrest, were completed ahead of schedule and are expected to be below the $137.7 million capital cost estimate as presented in the Feasibility Study.
- The Company started plant commissioning activities at Las Chispas after construction completion at the end of May 2022 and milled an estimated 12,700 tonnes of low-grade ore during June 2022 . Low grade material from historic stockpiles and underground mining will continue to be milled during the commissioning period.
- At the end of June 2022 , the Company completed its first precious metal pour, consisting of 312 kilograms of doré with approximately 9,200 ounces ("oz") of silver and 100 oz of gold.
- During H1, 2022, SilverCrest completed 4.1 km of underground development for a total of 21.6 km of underground development since 2019. To date, underground development costs have continued to track slightly under budget. Two of the four mining methods proposed in the Feasibility Study, long hole and resue, commenced with the extraction of select stopes in the Babicanora Main, Babi Vista, and Babicanora Norte veins.
- After 1.2 million work-hours completed during H1, 2022, the Company's Lost Time Injury Frequency Rate ("LTIFR") was 0.69 per 200,000 working hours and its Total Recordable Injury Frequency Rate ("TRIFR") was 3.97 per 200,000 working hours.
- During May 2022 , construction of the assay lab in nearby (14 km) Arizpe was completed which is expected to provide full-time local employment for 20 to 30 people.
- The Company is nearing completion of its Task Force on Climate Related Financial Disclosures ("TCFD") and its water stewardship strategy with both expected to be released during H2, 2022. Projects to help improve the local water infrastructure have been initiated.
- An updated technical report is targeted to be released in the first half of 2023 which will allow for additional data from further in-vein drifting, initial months of stoping, processing, exploration and stope delineation drill results to be included. The updated technical report will also include updated operating and sustaining capital costs to reflect new technical information for the mine, new outsourcing regulations and the impact of inflation since the Q3, 2020 cost based used in the Feasibility Study.
- In July 2022 , the Company appointed Anna Ladd-Kruger to its Board of Directors and granted her 25,000 stock options and 9,000 deferred share units.
Financial Results
At June 30 , 2022, the Company held $118.6 million ( December 31, 2021 – $176.5 million ) as cash and cash equivalents, had value-added taxes ("IVA") receivable in Mexico of $26.3 million ( December 31, 2021 – $23.3 million ), inventory of $19.4 million ( December 31, 2021 - $Nil) and mineral property, plant and equipment of $200.0 million ( December 31 , 2021– $165.7 million ).
To date, the Company has financed its operations through the issuance of common shares and debt. During H1, 2022, the Company did not generate revenue from its Las Chispas Mine, as the precious metal poured on June 30, 2022 was recorded as inventory. During H1, 2022, the Company incurred income of $0.9 million (H1, 2021 – loss of $21.4 million ) and a comprehensive loss of $6.0 million (H1, 2021 – $7.1 million ).
Please refer to the Company's Q2, 2022 unaudited condensed consolidated interim financial statements and MD&A for additional information.
Credit Facility
Under the Credit Facility, in which the Company entered into with an affiliate of RK Mine Finance ("RK") on December 31, 2020 , a final tranche of $30 million is available to the Company until August 31, 2022 . With the completion of plant construction on time and on budget, $118.6 million of cash and cash equivalents as of June 30, 2022 , and the planned progression towards achieving commercial production in Q4, 2022, the Company has decided not to draw down the final $30.0 million tranche of the Credit Facility.
Las Chispas Processing Plant Completion and Commissioning
During Q2, 2022, Ausenco Engineering Canada Inc. ("Ausenco") completed construction and handed over the Las Chispas processing plant to SilverCrest, ahead of the Feasibility Study schedule. Other construction activities handled directly by SilverCrest (road, bridge, dry stack tailings facility, temporary diesel power plant and assay lab) have also been completed, some of which are subject to testing and commissioning. While the final capital costs incurred remain to be settled, the capital cost of the Las Chispas Mine is anticipated to be below the US$137.7 million budget estimated in the Feasibility Study.
Processing plant commissioning is now underway, and 12,700 tonnes of low-grade ore was milled during June 2022 . Overall, plant commissioning is tracking in-line with our objective to reach commercial production in Q4, 2022. Given the extensive amount of underground development completed to date, there is a significant amount of stockpiled ore on surface to allow for operational flexibility and a more measured ramp-up of underground mining over the first few years of production.
The Las Chispas Mine had its first pour of silver and gold on June 30, 2022 , consisting of 312 kg of doré with approximately 9,200 oz of silver and 100 oz of gold.
Las Chispas Expenditures
During H1, 2022, Las Chispas expenditures recorded under mineral property, plant and equipment totaled $35.6 million (inclusive of unpaid accrued expenditures), of which $5.5 million was for plant and equipment purchases, $12.2 million for construction in progress costs, and $17.9 million for mineral property costs, which is net of $13.7 million of mineral property costs that were reclassified to inventory.
ABOUT SILVERCREST METALS INC.
SilverCrest is a Canadian precious metals exploration and development company headquartered in Vancouver, BC , that is focused on new discoveries, value-added acquisitions and near-term production in Mexico's historic precious metal districts. The Company's top priority is on the high-grade, historic Las Chispas mining district in Sonora, Mexico , where it has completed construction of its Las Chispas Mine and commissioning is underway. SilverCrest is the first company to successfully drill-test the historic Las Chispas Property resulting in numerous high-grade precious metal discoveries. The Company is led by a proven management team in all aspects of the precious metal mining sector, including taking projects through discovery, finance, on time and on budget construction, and production.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking statements" and "forward-looking information" (collectively "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation. These include, without limitation, statements with respect to: the timing and expectations of the Company completing commissioning and ramp up and achieving commercial production of the processing plant in Q4, 2022, and completing a technical report update by the end of H1, 2023. Such forward-looking statements or information are based on a number of assumptions, which may prove to be incorrect. Assumptions have been made regarding, among other things: impact of the COVID-19 pandemic; the reliability of mineralization estimates, mining and development costs, the conditions in general economic and financial markets; availability of skilled labour; timing and amount of expenditures related to rehabilitation and drilling programs; and effects of regulation by governmental agencies. The actual results could differ materially from those anticipated in these forward-looking statements as a result of risk factors including: uncertainty as to the impact and duration of the COVID-19 pandemic; the timing and content of work programs; results of exploration activities; the interpretation of drilling results and other geological data; receipt, maintenance and security of permits and mineral property titles; environmental and other regulatory risks; project cost overruns or unanticipated costs and expenses; and general market and industry conditions. Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made. The Company undertakes no obligation to update or revise any forward-looking statements included in this news release if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.
N. Eric Fier , CPG, P.Eng
Chief Executive Officer
SilverCrest Metals Inc.
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Fortuna Reports Results for the Second Quarter of 2022
(All amounts expressed in US dollars, tabular amounts in millions, unless otherwise stated)
Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) ("Fortuna" or the "Company") today reported its financial and operating results for the second quarter of 2022. Second Quarter 2022 Highlights
Operational
- Gold and silver production of 62,171 ounces and 1,652,895 ounces, respectively. An increase of 100% and a decrease of 13% respectively compared to the second quarter of 2021 ("Q2 2021"). Gold equivalent production of 96,712 3 ounces.
- AISC 1 per ounce of gold sold of $1,151 for the Lindero Mine and $1,565 for the Yaramoko Mine. AISC 1,2 per silver equivalent ounce of payable silver sold of $15.41 and $18.19 for the San Jose Mine and Caylloma Mine, respectively.
- All mine operations performed in line with annual guidance projections.
- Total recordable injury frequency rate of 3.01 with zero lost time injuries in over 3.1 million hours worked.
Financial
- Net income of $1.7 million or $0.01 per share, compared to $16.2 million or $0.09 net income per share reported in Q2 2021. Adjusted net income 1 of $2.1 million compared to $21.5 million reported in Q2 2021
- Sales of $167.9 million, an increase of 39% from the $120.5 million reported in Q2 2021
- Consolidated realized prices of $1,870 per ounce and $22.62 per ounce for gold and silver respectively
- Adjusted EBITDA 1 of $57.9 million compared to $54.9 million reported in Q2 2021
- Free cash flow from ongoing operations 1 of $21.9 million compared to $19.2 million reported in Q2 2021
- As at June 30, 2022, the Company had cash and cash equivalents of $116.1 million, and available liquidity of $136.1 million
Growth and Development
- Séguéla construction 66% complete as of the end of June. On-time and on-budget for first gold pour in mid-2023
- Fortuna continued to expand mineralization at the Sunbird discovery outside of the current reported inferred mineral resource (refer to Fortuna news release dated June 7, 2022: "Fortuna drills 18.3 g/t gold over 11.9 meters at the Séguéla Project, Côte d'Ivoire")
Jorge A. Ganoza, President and CEO, commented, "Our business generated healthy free cash flow of $21.9 million in spite of declining metal prices in the quarter and the compounding negative price adjustments this triggers on our concentrate sales." Mr. Ganoza continued, "Costs across our operations are tracking in the upper range of annual guidance in spite of inflationary pressures. Our teams are focused on the implementation of productivity initiatives to help mitigate rising input costs." Mr. Ganoza concluded, "I am extremely pleased with the delivery of our team at the Séguéla project. Key construction and procurement activities have been largely derisked as we remain on budget and on track to deliver first gold pour in mid-2023. Once in operation we expect Séguéla to be a flagship low cost, long lived operation for the Company."
1 Refer to Non-IFRS financial measures
2 AISC/oz Ag Eq calculated at realized metal prices, refer to mine site results for realized prices and Non-IFRS Financial Measures for silver equivalent ratio
3 Gold equivalent production includes gold, silver, lead and zinc and is calculated using the following metal prices: US$1,869/oz Au, US$22.62/oz Ag, US$2,240/t Pb and US$3,948/t Zn or Au:Ag = 1:82.65, Au:Pb = 1:0.83, Au:Zn = 1:0.47
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||
| Sales | 167.9 | 120.5 | 39 | % | 350.2 | 238.3 | 47 | % | |||||
| Mine operating income | 32.5 | 48.5 | (33 | %) | 96.0 | 99.8 | (4 | %) | |||||
| Operating income | 13.1 | 35.9 | (64 | %) | 53.9 | 76.2 | (29 | %) | |||||
| Net income | 1.7 | 16.2 | (90 | %) | 28.7 | 42.6 | (33 | %) | |||||
| Earnings per share - basic | 0.01 | 0.09 | (89 | %) | 0.10 | 0.23 | (57 | %) | |||||
| Adjusted net income 1 | 2.1 | 21.5 | (90 | %) | 35.4 | 49.0 | (28 | %) | |||||
| Adjusted EBITDA 1 | 57.9 | 54.9 | 5 | % | 138.1 | 115.7 | 19 | % | |||||
| Net cash provided by operating activities | 47.4 | 29.5 | 61 | % | 80.0 | 50.7 | 58 | % | |||||
| Free cash flow from ongoing operations 1 | 21.9 | 19.2 | 14 | % | 31.0 | 31.0 | (0 | %) | |||||
| Capital expenditures 2 | |||||||||||||
| Sustaining | 23.1 | 10.4 | 122 | % | 41.1 | 17.2 | 139 | % | |||||
| Non-sustaining 3 | 3.7 | 0.8 | 363 | % | 6.4 | 1.0 | 540 | % | |||||
| Lindero construction | - | 1.4 | (100 | %) | - | 4.0 | (100 | %) | |||||
| Séguéla construction | 23.4 | - | 100 | % | 64.1 | - | 100 | % | |||||
| Brownfields | 3.4 | 3.5 | (3 | %) | 7.4 | 5.9 | 26 | % | |||||
| As at | June 30, 2022 | December 31, 2021 | % Change | ||||||||||
| Cash and cash equivalents | 116.1 | 107.1 | 8 | % | |||||||||
| 1 Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company's financial statements on SEDAR at www.sedar.com for a description of the calculation of these measures. | |||||||||||||
| 2 Capital expenditures are presented on a cash basis | |||||||||||||
| 3 Non-sustaining expenditures include greenfields exploration | |||||||||||||
| Figures may not add due to rounding | |||||||||||||
Second Quarter 2022 Results
Net income in Q2 2022 was $1.7 million compared to $16.2 million in Q2 2021. The change in net income was mainly driven by lower sales at San Jose of $20.7 million due to declining silver prices and corresponding negative concentrate sales adjustments, and lower production. Additional items impacting the quarter were a $4.0 million write down of low-grade stockpile inventory at Yaramoko, and higher G&A expenses. The increase in G&A was related to $1.2 million of non-recurrent items and higher expenses associated with the Roxgold acquisition.
Other items contained in net income were a foreign exchange loss of $3.1 million, withholding taxes of $4.0 million, and a gain of $5.9 million on derivative contracts ($6.4 million unrealized gain and $0.6 million realized loss).
Sales for the three months ended June 30, 2022 were $167.9 million, an increase of 39% from the $120.5 million compared to the same period of 2021. Negative sales price adjustments in the quarter were $6.6 million compared to positive adjustments of $1.4 million in Q2 2021. Sales by mine in the three months ended June 30, 2022 were as follows:
- Lindero recognized adjusted sales of $57.2 million from 30,546 ounces of gold ounces sold, a 68% increase from the same period in 2021. Higher gold sales were the result of increased performance at the three-stage crushing and stacking facility.
- Yaramoko recognized adjusted sales of $45.9 million from 24,598 ounces of gold sold.
- San Jose recognized adjusted sales of $39.6 million, a 34% decrease from the $60.3 million reported in the same period in 2021. Lower sales were driven by a 13% decrease in the volume of silver and 16% decrease in the volume of gold ounces sold which was driven by lower mined grades and lower realized silver prices.
- Caylloma recognized adjusted sales of $25.2 million, a 3% decrease from the $26.0 million reported in the same period in 2021. The decrease in sales was the result of lower realized prices for silver as well as a decline in gold production which is in line with plan.
Outlook on Cost and Inflation
Inflationary pressures continued in the second quarter of 2022 as a result of geopolitical events, supply chain constraints and increases in the cost of energy and commodities. These inflationary pressures were realized in the Company's cost structure as prices increased for several key consumables including diesel, reagents, explosives and steel. The impact of inflation has been the most pronounced at the Lindero mine.
The inflation situation remains dynamic and the Company expects higher input costs to remain for the second half of the year and beyond. To mitigate inflationary pressure on its cost structure the Company will continue to focus on operational efficiencies and cost optimization across all mining operations. However, even with these efforts it is expected the continued cost pressure will push the San Jose and Lindero mines towards the upper end of our cost guidance.
Yaramoko's all-in sustaining cost for the year is expected to be at the upper end of guidance as a result of additional capital development to provide earlier access than planned to the QV Prime zone at Bagassi South. The production benefit of access to QV Prime will be in 2023 and 2024 as activities through the second half of 2022 will focus primarily on development to the ore body and preparation for mining.
Caylloma remains on track to achieve cost guidance.
Liquidity
Total liquidity available to the Company as at June 30, 2022 was $136.1 million. The Company's $200.0 million revolving credit facility was fully available as at the end of June 2022 and $20.0 million remained undrawn. Subsequent to June 30, 2022, the Company repaid $20.0 million to the credit facility bringing the total amount drawn to $160.0 million of the available $200.0 million.
Free cash flow from ongoing operations for the three months ended June 30, 2022 was $21.9 million compared to $19.2 million in Q2 2021. The increase was driven by positive changes in working capital and lower taxes paid compared to Q2 2021.
Construction and exploration expenses at Séguéla were $25.3 million for Q2 2022 and $68.1 million year to date.
Lindero Mine, Argentina
| Three months ended June 30, | Six months ended June 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Mine Production | ||||||||||
| Tonnes placed on the leach pad | 1,502,074 | 1,477,000 | 2,797,829 | 3,607,000 | ||||||
| Gold | ||||||||||
| Grade (g/t) | 0.74 | 0.95 | 0.83 | 0.87 | ||||||
| Production (oz) | 29,016 | 19,521 | 59,084 | 41,853 | ||||||
| Metal sold (oz) | 30,546 | 18,924 | 59,165 | 40,213 | ||||||
| Realized price ($/oz) | 1,869 | 1,804 | 1,879 | 1,777 | ||||||
| Unit Costs | ||||||||||
| Cash cost ($/oz Au) 1 | 687 | 644 | 690 | 629 | ||||||
| All-in sustaining cash cost ($/oz Au) 1 | 1,151 | 1,168 | 1,096 | 1,089 | ||||||
| Capital expenditures ($000's) | ||||||||||
| Sustaining | 6,123 | 4,973 | 9,248 | 9,013 | ||||||
| Non-sustaining | – | – | 169 | – | ||||||
| Brownfields | 646 | 351 | 790 | 442 | ||||||
| 1 Cash cost and AISC are non-IFRS financial measures. Refer to Non-IFRS Financial Measures. | ||||||||||
The COVID-19 absenteeism impact on production experienced at the beginning of 2022 has been greatly mitigated by strong production in the second quarter.
In the second quarter of 2022, a total of 1,502,074 tonnes of ore were placed on the heap leach pad, averaging 0.74 g/t gold, containing an estimated 35,784 ounces of gold. Gold production for Q2 2022 totaled 29,016 ounces, representing a 49% increase year-over-year. Higher gold production is explained by an increase in performance of the three-stage crushing and stacking circuits, which delivered 99% of the 1.5 million tonnes of ore placed on the pad in the quarter, compared to 46% or 0.7 million tonnes of the 1.47 million tonnes placed in the comparable quarter a year ago. Mine production was 2.2 million tonnes of mineralized material with a strip ratio of 1:1. The operation experienced a positive reconciliation for ore sent to the leach pad during the second quarter, with grades sampled at the plant being 17% higher than estimated from the reserve model.
As part of the continuous measures to improve productivity, management has implemented various high impact optimization initiatives to capture efficiencies at both the processing plant and the mining operation, some of which were implemented during the second quarter. These initiatives include: the optimization of cyanide recovery at the SART plant to significantly reduce fresh make-up cyanide consumption; lowering the consumption of sulfuric acid at the SART plant, whilst maintaining its efficiency rate and copper balance; and optimizing the mining strategy by implementing additional temporary ramps to significantly decrease trucking distance, improve truck productivity, and ultimately reduce trucking hours and total fleet diesel consumption, supporting the Company´s carbon footprint reduction strategy.
Cash cost per gold ounce sold was $687 for Q2 2022, compared to $644 in the second quarter of 2021. Cash costs per ounce of gold was higher due to higher consumable prices, mainly related to diesel, explosives, cyanide and cement, higher service costs related to equipment rentals, and higher labor costs due to foreign exchange and inflation. This was partially offset by the higher volume of gold sold.
All-in sustaining cash costs per gold ounce sold was $1,151 during Q2 2022 compared with $1,168 in the second quarter of 2021. All-in sustaining costs for the second quarter of 2022 were impacted by the production issues described above and offset by lower sustaining capital related to timing effects.
Sustaining capital for the quarter primarily consisted of spending on leach pad expansion and mine maintenance. Brownfields capital mainly relates to exploration at the Arizaro project.
Yaramoko Mine Complex, Burkina Faso
| Three months ended June 30, | Six months ended June 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Mine Production | ||||||||||
| Tonnes milled | 138,787 | - | 266,755 | - | ||||||
| Gold | ||||||||||
| Grade (g/t) | 5.42 | - | 6.43 | - | ||||||
| Recovery (%) | 97 | - | 98 | - | ||||||
| Production (oz) | 24,553 | - | 52,788 | - | ||||||
| Metal sold (oz) | 24,598 | - | 54,128 | - | ||||||
| Realized price ($/oz) | 1,868 | - | 1,873 | - | ||||||
| Unit Costs | ||||||||||
| Cash cost ($/oz Au) 1 | 928 | - | 804 | - | ||||||
| All-in sustaining cash cost ($/oz Au) 1 | 1,565 | - | 1,334 | - | ||||||
| Capital expenditures ($000's) | ||||||||||
| Sustaining | 9,085 | - | 16,446 | - | ||||||
| Brownfields | – | - | 488 | - | ||||||
| 1 Cash cost and AISC are non-IFRS financial measures. Refer to Non-IFRS Financial Measures. | ||||||||||
| 2 The Yaramoko Mine was acquired as part of the acquisition of Roxgold which completed on July 2, 2021. As such comparative figures for the comparative periods in 2021 are not presented. | ||||||||||
The Yaramoko Mine produced 24,553 ounces of gold in the second quarter of 2022 with an average gold head grade of 5.42 g/t, which is in line with the mining sequence and Mineral Reserve estimate. Gold production at the Yaramoko Mine is on track to meet the annual guidance range.
Cash cost per gold ounce sold was $928, which was below plan, primarily due to higher mine production and lower indirect costs during Q2 2022, slightly offset by lower head grade.
All-in sustaining cash cost per gold ounce sold was $1,565 for Q2 2022, which was below plan, primarily due to higher production, partially offset by a write-down of low grade stockpiles to net realizable value.
Sustaining capital for the Q2 2022 consisted primarily of mine development.
San Jose Mine, Mexico
| Three months ended June 30, | Six months ended June 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Mine Production | ||||||||||
| Tonnes milled | 251,945 | 269,565 | 502,892 | 529,368 | ||||||
| Average tonnes milled per day | 2,831 | 3,029 | 2,874 | 3,038 | ||||||
| Silver | ||||||||||
| Grade (g/t) | 187 | 205 | 186 | 211 | ||||||
| Recovery (%) | 91 | 92 | 91 | 91 | ||||||
| Production (oz) | 1,385,336 | 1,624,394 | 2,743,526 | 3,270,838 | ||||||
| Metal sold (oz) | 1,417,303 | 1,621,410 | 2,733,496 | 3,263,710 | ||||||
| Realized price ($/oz) | 22.56 | 26.90 | 23.39 | 26.53 | ||||||
| Gold | ||||||||||
| Grade (g/t) | 1.13 | 1.30 | 1.13 | 1.33 | ||||||
| Recovery (%) | 91 | 91 | 90 | 91 | ||||||
| Production (oz) | 8,295 | 10,266 | 16,534 | 20,567 | ||||||
| Metal sold (oz) | 8,564 | 10,212 | 16,516 | 20,499 | ||||||
| Realized price ($/oz) | 1,873 | 1,826 | 1,881 | 1,804 | ||||||
| Unit Costs | ||||||||||
| Production cash cost ($/t) 2 | 83.57 | 75.20 | 79.82 | 72.78 | ||||||
| Production cash cost ($/oz Ag Eq) 1,2 | 11.00 | 9.55 | 10.72 | 8.96 | ||||||
| Net smelter return ($/t) | 174.79 | 219.52 | 178.58 | 178.58 | ||||||
| All-in sustaining cash cost ($/oz Ag Eq) 1,2 | 15.41 | 14.31 | 15.36 | 13.19 | ||||||
| Capital expenditures ($000's) | ||||||||||
| Sustaining | 4,051 | 3,121 | 7,626 | 4,397 | ||||||
| Non-sustaining | 454 | 757 | 869 | 1,031 | ||||||
| Brownfields | 1,568 | 2,154 | 3,097 | 3,890 | ||||||
| 1 Production cash cost silver equivalent and All-in sustaining cash cost silver equivalent are calculated using realized metal prices for each period respectively | ||||||||||
| 2 Production cash cost, Production cash cost silver equivalent, and All-in sustaining cash cost silver equivalent are Non-IFRS Financial Measures, refer to Non-IFRS Financial Measures | ||||||||||
In the second quarter of 2022, the San Jose Mine produced 1,385,336 ounces of silver and 8,295 ounces of gold, 15% and 19% lower, respectively, than the comparable period in the prior year. The decreases are a result of a combination of 7% lower mill throughput, and lower average head grades of 9% for silver and 13% for gold, which are in line with the mining sequence and Mineral Reserve estimates. The mine remains on track to achieve its annual production guidance.
The San Jose team has successfully implemented long hole stoping in select areas of the mine in 2022, with the aim to improve production capacity and reduce total mining cost per tonne. In addition, a new underground shotcrete plant was commissioned in the second quarter which is expected to reduce overall mining cycle times and support costs.
The cash cost per tonne for the three months ended June 30, 2022 was $83.57 per tonne compared to $75.20 per tonne in the same period in 2021 primarily due to inflation, non-recurring maintenance and lower tonnes processed.
The all-in sustaining cash cost of payable silver equivalent for the second quarter in 2022 increased 8% to $15.41 per ounce, compared to $14.31 per ounce for the same period in 2021. The increase in all-in sustaining costs was primarily due to the result of lower silver equivalent ounces sold and increased cash costs as highlighted above.
Capital expenditures in the quarter primarily consisted of mine development. Capital expenditures were lower than the same period in 2021 primarily due to timing.
Caylloma Mine, Peru
| Three months ended June 30, | Six months ended June 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Mine Production | ||||||||||
| Tonnes milled | 135,977 | 133,645 | 268,552 | 265,532 | ||||||
| Average tonnes milled per day | 1,528 | 1,536 | 1,526 | 1,517 | ||||||
| Silver | ||||||||||
| Grade (g/t) | 77 | 76 | 83 | 77 | ||||||
| Recovery (%) | 79 | 83 | 81 | 82 | ||||||
| Production (oz) | 267,559 | 268,428 | 579,498 | 535,739 | ||||||
| Metal sold (oz) | 279,051 | 275,652 | 573,352 | 534,963 | ||||||
| Realized price ($/oz) | 22.89 | 26.54 | 23.35 | 26.42 | ||||||
| Gold | ||||||||||
| Grade (g/t) | 0.17 | 0.42 | 0.16 | 0.52 | ||||||
| Recovery (%) | 43 | 69 | 40 | 71 | ||||||
| Production (oz) | 307 | 1,261 | 565 | 3,183 | ||||||
| Metal sold (oz) | 278 | 1,466 | 603 | 3,140 | ||||||
| Realized price ($/oz) | 1,897 | 1,808 | 1,864 | 1,790 | ||||||
| Lead | ||||||||||
| Grade (%) | 3.00 | 3.09 | 3.27 | 3.15 | ||||||
| Recovery (%) | 85 | 90 | 88 | 89 | ||||||
| Production (000's lbs) | 7,637 | 8,144 | 16,771 | 16,325 | ||||||
| Metal sold (000's lbs) | 8,021 | 8,497 | 16,596 | 16,495 | ||||||
| Realized price ($/lb) | 1.02 | 0.95 | 1.04 | 0.94 | ||||||
| Zinc | ||||||||||
| Grade (%) | 4.09 | 4.58 | 4.14 | 4.64 | ||||||
| Recovery (%) | 89 | 87 | 89 | 87 | ||||||
| Production (000's lbs) | 10,886 | 11,764 | 21,713 | 23,733 | ||||||
| Metal sold (000's lbs) | 10,920 | 11,755 | 21,466 | 24,021 | ||||||
| Realized price ($/lb) | 1.79 | 1.33 | 1.74 | 1.28 | ||||||
| Unit Costs | ||||||||||
| Production cash cost ($/t) 2 | 93.31 | 87.24 | 91.48 | 83.81 | ||||||
| Production cash cost ($/oz Ag Eq) 1,2 | 13.14 | 13.98 | 12.77 | 13.54 | ||||||
| Net smelter return ($/t) | 190.60 | 189.10 | 200.96 | 200.96 | ||||||
| All-in sustaining cash cost ($/oz Ag Eq) 1,2 | 18.19 | 18.94 | 18.01 | 18.25 | ||||||
| Capital expenditures ($000's) | ||||||||||
| Sustaining | 3,793 | 2,315 | 7,742 | 3,839 | ||||||
| Brownfields | 207 | 979 | 531 | 1,609 | ||||||
| 1 Production cash cost silver equivalent and All-in sustaining cash cost silver equivalent are calculated using realized metal prices for each period respectively | ||||||||||
| 2 Production cash cost, Production cash cost silver equivalent, and All-in sustaining cash cost silver equivalent are Non-IFRS Financial Measures, refer to Non-IFRS Financial Measures | ||||||||||
The Caylloma Mine produced 267,559 ounces of silver, 7.6 million pounds of lead, and 10.9 million pounds of zinc during the three months ended June 30, 2022. The operation delivered another strong quarter of operational performance and is tracking well to deliver total production in the upper range of guidance. Silver production had an average head grade of 77 g/t which was in line with expectation. Lead production was 6% lower than the comparable period due to lower grades while zinc production was 7% lower than the comparable period due to lower grades. Gold production totaled 307 ounces with an average head grade of 0.17 g/t which was in line with expectations.
The cash cost per tonne of processed ore for the three months ended June 30, 2022 increased 7% to $93.31 compared to $87.24 in the same period in 2021. The increase was mainly the result of high inflation on mine costs, unexpected dewatering costs and increased mill maintenance.
The all-in sustaining cash cost for the three months ended June 30, 2022 decreased 4% to $18.19 per ounce compared to $18.94 per ounce for the same period in 2021. The decrease was mainly driven by higher silver equivalent production due to lower realized silver prices.
Sustaining capital expenditures for the quarter primarily related to greater execution of the development located in level 16 and the opening of level 18. The decrease in Brownfields capital expenditures was due to lower spending on drilling and development.
Qualified Person
Eric Chapman, Senior Vice President of Technical Services, is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (Registration Number 36328), and is the Company's Qualified Person (as defined by National Instrument 43-101). Mr. Chapman has reviewed and approved the scientific and technical information contained in this news release and has verified the underlying data.
Non-IFRS Financial Measures
The Company has disclosed certain financial measures and ratios in this news release which are not defined under the International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board, and are not disclosed in the Company's financial statements, including but not limited to: cash cost per ounce of gold sold; all-in sustaining cash cost per ounce of gold sold; all-in cash cost per ounce of gold sold; total production cash cost per tonne; cash cost per payable ounce of silver equivalent sold; all-in sustaining cash cost per payable ounce of silver equivalent sold; all-in cash cost per payable ounce of silver equivalent sold; free cash flow from ongoing operations; adjusted net income; adjusted EBITDA and working capital.
These non-IFRS financial measures and non-IFRS ratios are widely reported in the mining industry as benchmarks for performance and are used by management to monitor and evaluate the Company's operating performance and ability to generate cash. The Company believes that, in addition to financial measures and ratios prepared in accordance with IFRS, certain investors use these non-IFRS financial measures and ratios to evaluate the Company's performance. However, the measures do not have a standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other companies. Accordingly, non-IFRS financial measures and non-IFRS ratios should not be considered in isolation or as a substitute for measures and ratios of the Company's performance prepared in accordance with IFRS. The Company has calculated these measures consistently for all periods presented.
To facilitate a better understanding of these measures and ratios as calculated by the Company, descriptions are provided below. In addition, see "Non-IFRS Financial Measures" in the Company's management's discussion and analysis for the three and six months ended June 30, 2022 ("Q2 2022 MD&A"), which section is incorporated by reference in this news release, for additional information regarding each non-IFRS financial measure and non-IFRS ratio disclosed in this news release, including an explanation of their composition; an explanation of how such measures and ratios provide useful information to an investor and the additional purposes, if any, for which management of Fortuna uses such measures and ratio. The Q2 2022 MD&A may be accessed on SEDAR at www.sedar.com under the Company's profile, Fortuna Silver Mines Inc.
Except as otherwise described in the Q2 2022 MD&A, the Company has calculated these measures consistently for all periods presented.
Adjusted Net Income for the Three and Six Months Ended June 30, 2022 and 2021
| Three months ended June 30, | Six months ended June 30, | |||||||||
| Consolidated | 2022 | 2021 | 2022 | 2021 | ||||||
| Net income | 1.7 | 16.2 | 28.6 | 42.6 | ||||||
| Adjustments, net of tax: | ||||||||||
| Community support provision and accruals 1 | - | 0.1 | - | 0.1 | ||||||
| Foreign exchange loss, Lindero Mine 2 | - | 0.5 | - | 2.6 | ||||||
| Write off of mineral properties | - | - | 1.5 | - | ||||||
| Unrealized loss (gain) on derivatives | (4.4 | ) | - | (2.2 | ) | - | ||||
| Roxgold transaction costs | - | 3.5 | - | 3.5 | ||||||
| Inventory adjustment | 3.3 | - | 3.3 | - | ||||||
| Accretion on right of use assets | 0.6 | - | 1.2 | - | ||||||
| Other non-cash/non-recurring items | 0.9 | 1.2 | 3.0 | 0.2 | ||||||
| Adjusted Net Income | 2.1 | 21.5 | 35.4 | 49.0 | ||||||
| 1 Amounts are recorded in Cost of sales | ||||||||||
| 2 Amounts are recorded in General and Administration | ||||||||||
| Figures may not add due to rounding | ||||||||||
Adjusted EBITDA for the Three and Six Months Ended June 30, 2022 and 2021
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Net income | 1.7 | 16.2 | 28.6 | 42.6 | ||||||||
| Adjustments: | ||||||||||||
| Community support provision and accruals | - | (0.1 | ) | - | (0.1 | ) | ||||||
| Inventory adjustment | 4.0 | - | 4.0 | (0.1 | ) | |||||||
| Foreign exchange loss, Lindero Mine | - | 0.5 | - | 2.6 | ||||||||
| Foreign exchange loss, Séguéla Project | 0.3 | - | 0.9 | - | ||||||||
| Net finance items | 3.7 | 2.1 | 6.5 | 4.6 | ||||||||
| Depreciation, depletion, and amortization | 42.5 | 20.5 | 80.6 | 39.7 | ||||||||
| Income taxes | 13.6 | 12.0 | 20.4 | 25.3 | ||||||||
| Other non-cash/non-recurring items | (7.9 | ) | 3.7 | (2.9 | ) | 1.1 | ||||||
| Adjusted EBITDA | 57.9 | 54.9 | 138.1 | 115.7 | ||||||||
Figures may not add due to rounding
Free Cash Flow from ongoing operations for the Three and Six Months Ended June 30, 2022 and 2021
In 2022, the Company changed the method for calculating Free Cash Flow from Ongoing Operations. The calculation now uses taxes paid as opposed to the previous method which used current income taxes. While this may create larger quarter over quarter fluctuations due to the timing of income tax payments, management believes the revised method is a better representation of the Free Cash Flow generated by the Company's ongoing operations. Comparative values from 2021 have been restated using the change in methodology.
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| Consolidated | 2022 | 2021 | 2022 | 2021 | |||||||||
| (Restated) | (Restated) | ||||||||||||
| Net cash provided by operating activities | 47.4 | 29.5 | 80.0 | 50.7 | |||||||||
| Adjustments | |||||||||||||
| Roxgold transaction costs | - | 3.5 | - | 3.5 | |||||||||
| Additions to mineral properties, plant and equipment | (25.5 | ) | (13.8 | ) | (46.0 | ) | (23.2 | ) | |||||
| Progresso royalty payment | 3.0 | - | 3.0 | - | |||||||||
| Other adjustments | (3.0 | ) | - | (6.0 | ) | - | |||||||
| Free cash flow from ongoing operations | 21.9 | 19.2 | 31.0 | 31.0 | |||||||||
Figures may not add due to rounding
Cash Cost per Ounce of Gold Sold for the Three and Six Months Ended June 30, 2022 and 2021
| Lindero Mine | Three months ended June 30, | Six months ended June 30, | |||||||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Cost of sales | 41,326 | 24,280 | 77,194 | 46,466 | |||||||||||
| Changes in doré inventory | (305 | ) | 1,652 | 712 | 1,002 | ||||||||||
| Inventory adjustment | (739 | ) | - | - | - | ||||||||||
| Export duties | (4,284 | ) | (2,582 | ) | (8,292 | ) | (5,382 | ) | |||||||
| Depletion and depreciation | (14,296 | ) | (9,178 | ) | (26,305 | ) | (15,423 | ) | |||||||
| By product credits | - | (70 | ) | - | (128 | ) | |||||||||
| Production cash cost 1 | 21,702 | 14,102 | 43,309 | 26,535 | |||||||||||
| Changes in doré inventory | 305 | (1,652 | ) | (712 | ) | (1,002 | ) | ||||||||
| Realized gain in diesel hedge | (1,037 | ) | (253 | ) | (1,819 | ) | (253 | ) | |||||||
| Treatment charges | - | (10 | ) | - | - | ||||||||||
| Cash cost applicable per gold ounce sold | A | 20,970 | 12,187 | 40,778 | 25,280 | ||||||||||
| Ounces of gold sold | B | 30,534 | 18,924 | 59,141 | 40,213 | ||||||||||
| Cash cost per ounce of gold sold 1 ($/oz) | =A/B | 687 | 644 | 690 | 629 | ||||||||||
| 1 June 30, 2021 restated, Sustaining leases moved to All-In Sustaining | |||||||||||||||
| Yaramoko Mine | Three months ended June 30, | Six months ended June 30, | ||||||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | ||||||||||
| Cost of sales | 44,240 | - | 82,281 | - | ||||||||||
| Changes in doré inventory | - | - | (1,320 | ) | - | |||||||||
| Inventory net realizable value adjustment | (4,027 | ) | - | (4,027 | ) | - | ||||||||
| Export duties | (2,748 | ) | - | (6,081 | ) | - | ||||||||
| Depletion and depreciation | (14,626 | ) | - | (28,654 | ) | - | ||||||||
| Refining charges | (174 | ) | - | (329 | ) | - | ||||||||
| By product credits | (20 | ) | - | (25 | ) | - | ||||||||
| Production cash cost | 22,645 | - | 41,845 | - | ||||||||||
| Changes in doré inventory | - | - | 1,320 | - | ||||||||||
| Refining charges | 174 | - | 329 | - | ||||||||||
| Cash cost applicable per gold ounce sold | A | 22,819 | - | 43,494 | - | |||||||||
| Ounces of gold sold | B | 24,598 | - | 54,128 | - | |||||||||
| Cash cost per ounce of gold sold ($/oz) | =A/B | 928 | - | 804 | - | |||||||||
All-in Sustaining Cash Cost per Ounce of Gold Sold for the Three and Six Months Ended June 30, 2022 and 2021
| Lindero Mine | Three months ended June 30, | Six months ended June 30, | ||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | ||||||
| Cash cost applicable | 20,970 | 12,187 | 40,778 | 25,280 | ||||||
| Export duties and mining taxes | 4,284 | 2,582 | 8,292 | 5,382 | ||||||
| General and administrative expenses (operations) | 2,548 | 1,478 | 4,453 | 2,616 | ||||||
| Adjusted operating cash cost | 27,802 | 16,247 | 53,523 | 33,278 | ||||||
| Sustaining leases | 563 | 538 | 1,268 | 1,056 | ||||||
| Sustaining capital expenditures 1 | 6,123 | 4,973 | 9,248 | 9,013 | ||||||
| Brownfields exploration expenditures 1 | 646 | 351 | 790 | 442 | ||||||
| All-in sustaining cash cost | 35,134 | 22,109 | 64,829 | 43,789 | ||||||
| Non-sustaining capital expenditures 1 | - | - | 169 | - | ||||||
| All-in cash cost | 35,134 | 22,109 | 64,998 | 43,789 | ||||||
| Ounces of gold sold | 30,534 | 18,924 | 59,141 | 40,213 | ||||||
| All-in sustaining cash cost per ounce of gold sold | 1,151 | 1,168 | 1,096 | 1,089 | ||||||
| All-in cash cost per ounce of gold sold | 1,151 | 1,168 | 1,099 | 1,089 | ||||||
| 1 Presented on a cash basis | ||||||||||
| Yaramoko Mine | Three months ended June 30, | Six months ended June 30, | ||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | ||||||
| Cash cost applicable | 22,819 | - | 43,494 | - | ||||||
| Inventory net realizable value adjustment | 1,955 | - | 1,955 | - | ||||||
| Export duties and mining taxes | 2,748 | - | 6,081 | - | ||||||
| General and administrative expenses (operations) | 472 | - | 882 | - | ||||||
| Adjusted operating cash cost | 27,994 | - | 52,412 | - | ||||||
| Sustaining leases | 1,419 | - | 2,854 | - | ||||||
| Sustaining capital expenditures 1 | 9,085 | - | 16,446 | - | ||||||
| Brownfields exploration expenditures 1 | - | - | 488 | - | ||||||
| All-in sustaining cash cost | 38,498 | - | 72,200 | - | ||||||
| All-in cash cost | 38,498 | - | 72,200 | - | ||||||
| Ounces of gold sold | 24,598 | - | 54,128 | - | ||||||
| All-in sustaining cash cost per ounce of gold sold | 1,565 | - | 1,334 | - | ||||||
| All-in cash cost per ounce of gold sold | 1,565 | - | 1,334 | - | ||||||
| 1 Presented on a cash basis | ||||||||||
Production Cash Cost per Tonne and Cash Cost per Payable Ounce of Silver Equivalent Sold
| San Jose Mine | Three months ended June 30, | Six months ended June 30, | |||||||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Cost of sales | 32,478 | 31,363 | 61,377 | 60,071 | |||||||||||
| Changes in concentrate inventory | (5 | ) | 65 | 72 | 94 | ||||||||||
| Depletion and depreciation in concentrate inventory | 2 | (47 | ) | (19 | ) | (33 | ) | ||||||||
| Inventory adjustment | (583 | ) | (23 | ) | (46 | ) | 138 | ||||||||
| Royalties and mining taxes | (1,349 | ) | (1,384 | ) | (2,741 | ) | (2,727 | ) | |||||||
| Workers participation | (170 | ) | (1,646 | ) | (897 | ) | (3,355 | ) | |||||||
| Depletion and depreciation | (9,319 | ) | (8,056 | ) | (17,606 | ) | (15,660 | ) | |||||||
| Cash cost 3 | A | 21,054 | 20,272 | 40,140 | 38,528 | ||||||||||
| Total processed ore (tonnes) | B | 251,945 | 269,565 | 502,892 | 529,368 | ||||||||||
| Production cash cost per tonne 3 ($/t) | =A/B | 83.57 | 75.20 | 79.82 | 72.78 | ||||||||||
| Cash cost 3 | A | 21,054 | 20,272 | 40,140 | 38,528 | ||||||||||
| Changes in concentrate inventory | 5 | (65 | ) | (72 | ) | (94 | ) | ||||||||
| Depletion and depreciation in concentrate inventory | (2 | ) | 47 | 19 | 33 | ||||||||||
| Inventory adjustment | 583 | 23 | 46 | (138 | ) | ||||||||||
| Treatment charges | (146 | ) | 2,420 | (55 | ) | 2,181 | |||||||||
| Refining charges | 920 | (1,392 | ) | 1,792 | (378 | ) | |||||||||
| Cash cost applicable per payable ounce sold 3 | C | 22,414 | 21,305 | 41,870 | 40,132 | ||||||||||
| Payable ounces of silver equivalent sold 1 | D | 2,037,238 | 2,231,385 | 3,905,109 | 4,477,204 | ||||||||||
| Cash cost per ounce of payable silver equivalent sold 2,3 ($/oz) | =C/D | 11.00 | 9.55 | 10.72 | 8.96 | ||||||||||
| Mining cost per tonne 3 | 37.28 | 40.68 | 37.37 | 39.20 | |||||||||||
| Milling cost per tonne | 20.79 | 16.13 | 19.40 | 16.48 | |||||||||||
| Indirect cost per tonne | 15.67 | 12.64 | 15.15 | 11.66 | |||||||||||
| Community relations cost per tonne | 5.99 | 1.01 | 5.42 | 0.67 | |||||||||||
| Distribution cost per tonne | 3.84 | 4.74 | 2.48 | 4.77 | |||||||||||
| Production cash cost per tonne 3 ($/t) | 83.57 | 75.20 | 79.82 | 72.78 | |||||||||||
| 1 Silver equivalent sold for Q2 2022 is calculated using a silver to gold ratio of 83.0:1 (Q2 2021: 67.9:1). Silver equivalent sold for YTD 2022 is calculated using a silver to gold ratio of 80.5:1 (YTD 2021: 68.0:1). | |||||||||||||||
| 2 Silver equivalent is calculated using the realized prices for gold and silver. Refer to Financial Results – Sales and Realized Prices | |||||||||||||||
| 3 June 30, 2021 restated, Sustaining leases moved to All-In Sustaining | |||||||||||||||
| Caylloma Mine | Three months ended June 30, | Six months ended June 30, | |||||||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Cost of sales | 17,284 | 16,413 | 33,305 | 32,030 | |||||||||||
| Changes in concentrate inventory | (235 | ) | (294 | ) | (124 | ) | (229 | ) | |||||||
| Depletion and depreciation in concentrate inventory | (40 | ) | 18 | (166 | ) | 22 | |||||||||
| Inventory adjustment | 40 | 122 | 312 | (242 | ) | ||||||||||
| Royalties and mining taxes | (221 | ) | (62 | ) | (468 | ) | (89 | ) | |||||||
| Provision for community support | 100 | - | (26 | ) | - | ||||||||||
| Workers participation | (321 | ) | (573 | ) | (934 | ) | (1,213 | ) | |||||||
| Depletion and depreciation | (3,919 | ) | (3,965 | ) | (7,333 | ) | (8,026 | ) | |||||||
| Cash cost 3 | A | 12,688 | 11,659 | 24,566 | 22,253 | ||||||||||
| Total processed ore (tonnes) | B | 135,978 | 133,645 | 268,552 | 265,532 | ||||||||||
| Production cash cost per tonne 3 ($/t) | =A/B | 93.31 | 87.24 | 91.48 | 83.81 | ||||||||||
| Cash cost | A | 12,688 | 11,659 | 24,566 | 22,253 | ||||||||||
| Changes in concentrate inventory | 235 | 294 | 124 | 229 | |||||||||||
| Depletion and depreciation in concentrate inventory | 40 | (18 | ) | 166 | (22 | ) | |||||||||
| Inventory adjustment | (40 | ) | (122 | ) | (312 | ) | 242 | ||||||||
| Treatment charges | 4,253 | 3,590 | 8,167 | 6,747 | |||||||||||
| Refining charges | 372 | 428 | 764 | 833 | |||||||||||
| Cash cost applicable per payable ounce sold 3 | C | 17,548 | 15,831 | 33,475 | 30,282 | ||||||||||
| Payable ounces of silver equivalent sold 1 | D | 1,335,602 | 1,132,781 | 2,621,212 | 2,235,781 | ||||||||||
| Cash cost per ounce of payable silver equivalent sold 2,3 ($/oz) | =C/D | 13.14 | 13.98 | 12.77 | 13.54 | ||||||||||
| Mining cost per tonne | 40.27 | 31.69 | 37.40 | 30.46 | |||||||||||
| Milling cost per tonne | 14.96 | 15.50 | 16.00 | 14.54 | |||||||||||
| Indirect cost per tonne | 29.51 | 30.95 | 30.04 | 30.26 | |||||||||||
| Community relations cost per tonne | 7.55 | 1.13 | 7.30 | 0.85 | |||||||||||
| Distribution cost per tonne | 1.02 | 7.97 | 0.74 | 7.70 | |||||||||||
| Production cash cost per tonne 3 ($/t) | 93.31 | 87.24 | 91.48 | 83.81 | |||||||||||
| 1 Silver equivalent sold for Q2 2022 is calculated using a silver to gold ratio of 82.9:1 (Q2 2021: 68.1:1), silver to lead ratio of 1:22.5 pounds (Q2 2021: 1:27.9), and silver to zinc ratio of 1:12.8 pounds (Q2 2021: 1:20.0). Silver equivalent sold for YTD 2022 is calculated using a silver to gold ratio of 79.8:1 (YTD 2021: 67.8:1), silver to lead ratio of 1:22.5 pounds (YTD 2021: 1:28.2), and silver to zinc ratio of 1:13.4 pounds (YTD 2021: 1:20.6). | |||||||||||||||
| 2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results - Sales and Realized Prices | |||||||||||||||
| 3 June 30, 2021 restated, Sustaining leases moved to All-In Sustaining | |||||||||||||||
All-in Sustaining Cash Cost and All-in Cash Cost per Payable Ounce of Silver Equivalent Sold
| San Jose Mine | Three months ended June 30, | Six months ended June 30, | ||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | ||||||
| Cash cost applicable 4 | 22,414 | 21,305 | 41,870 | 40,132 | ||||||
| Royalties and mining taxes | 1,349 | 1,384 | 2,741 | 2,727 | ||||||
| Workers' participation | 212 | 2,058 | 1,121 | 4,194 | ||||||
| General and administrative expenses (operations) | 1,649 | 1,771 | 3,239 | 3,446 | ||||||
| Adjusted operating cash cost 4 | 25,624 | 26,518 | 48,971 | 50,499 | ||||||
| Care and maintenance costs (impact of COVID-19) | (2 | ) | - | - | ||||||
| Sustaining leases 4 | 149 | 143 | 306 | 263 | ||||||
| Sustaining capital expenditures 3 | 4,051 | 3,121 | 7,626 | 4,397 | ||||||
| Brownfields exploration expenditures 3 | 1,568 | 2,154 | 3,097 | 3,890 | ||||||
| All-in sustaining cash cost | 31,390 | 31,936 | 60,000 | 59,049 | ||||||
| Non-sustaining capital expenditures 3 | 454 | 757 | 869 | 1,031 | ||||||
| All-in cash cost | 31,844 | 32,693 | 60,869 | 60,080 | ||||||
| Payable ounces of silver equivalent sold 1 | 2,037,238 | 2,231,385 | 3,905,109 | 4,477,204 | ||||||
| All-in sustaining cash cost per ounce of payable silver equivalent sold 2 | 15.41 | 14.31 | 15.36 | 13.19 | ||||||
| All-in cash cost per ounce of payable silver equivalent sold 2 | 15.63 | 14.65 | 15.59 | 13.42 | ||||||
| 1 Silver equivalent sold for Q2 2022 is calculated using a silver to gold ratio of 83.0:1 (Q2 2021: 67.9:1). Silver equivalent sold for YTD 2022 is calculated using a silver to gold ratio of 80.5:1 (YTD 2021: 68.0:1). | ||||||||||
| 2 Silver equivalent is calculated using the realized prices for gold and silver. Refer to Financial Results - Sales and Realized Prices | ||||||||||
| 3 Presented on a cash basis | ||||||||||
| 4 June 30, 2021 restated, Sustaining leases moved from Cash Cost | ||||||||||
| Caylloma Mine | Three months ended June 30, | Six months ended June 30, | ||||||||
| (Expressed in $'000's, except unit costs) | 2022 | 2021 | 2022 | 2021 | ||||||
| Cash cost applicable 4 | 17,548 | 15,831 | 33,475 | 30,282 | ||||||
| Royalties and mining taxes | 221 | 62 | 468 | 89 | ||||||
| Workers' participation | 380 | 685 | 1,085 | 1,421 | ||||||
| General and administrative expenses (operations) | 1,187 | 885 | 2,245 | 2,163 | ||||||
| Adjusted operating cash cost 4 | 19,336 | 17,463 | 37,273 | 33,955 | ||||||
| Sustaining leases 4 | 956 | 694 | 1,664 | 1,390 | ||||||
| Sustaining capital expenditures 3 | 3,793 | 2,315 | 7,742 | 3,839 | ||||||
| Brownfields exploration expenditures 3 | 207 | 979 | 531 | 1,609 | ||||||
| All-in sustaining cash cost | 24,292 | 21,451 | 47,210 | 40,793 | ||||||
| All-in cash cost | 24,292 | 21,451 | 47,210 | 40,793 | ||||||
| Payable ounces of silver equivalent sold 1 | 1,335,602 | 1,132,781 | 2,621,212 | 2,235,781 | ||||||
| All-in sustaining cash cost per ounce of payable silver equivalent sold 2 | 18.19 | 18.94 | 18.01 | 18.25 | ||||||
| All-in cash cost per ounce of payable silver equivalent sold 2 | 18.19 | 18.94 | 18.01 | 18.25 | ||||||
| 1 Silver equivalent sold for Q2 2022 is calculated using a silver to gold ratio of 82.9:1 (Q2 2021: 68.1:1), silver to lead ratio of 1:22.5 pounds (Q2 2021: 1:27.9), and silver to zinc ratio of 1:12.8 pounds (Q2 2021: 1:20.0). Silver equivalent sold for YTD 2022 is calculated using a silver to gold ratio of 79.8:1 (YTD 2021: 67.8:1), silver to lead ratio of 1:22.5 pounds (YTD 2021: 1:28.2), and silver to zinc ratio of 1:13.4 pounds (YTD 2021: 1:20.6). | ||||||||||
| 2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results - Sales and Realized Prices | ||||||||||
| 3 Presented on a cash basis | ||||||||||
| 4 June 30, 2021 restated, Sustaining leases moved from Cash Cost | ||||||||||
Additional information regarding the Company's financial results and activities underway are available in the Company's second quarter 2022 Financial Statements and accompanying Q2 2022 MD&A, which are available for download on the Company's website, www.fortunasilver.com , on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar .
Conference Call and Webcast
A conference call to discuss the financial and operational results will be held on Thursday, August 11, 2022 at 9:00 a.m. Pacific time | 12:00 p.m. Eastern time. Hosting the call will be Jorge A. Ganoza, President and CEO, Luis D. Ganoza, Chief Financial Officer, Cesar Velasco, Chief Operating Officer - Latin America, and Paul Criddle, Chief Operating Officer - West Africa.
Shareholders, analysts, media and interested investors are invited to listen to the live conference call by logging onto the webcast at: https://www.webcaster4.com/Webcast/Page/1696/46215 or over the phone by dialing in just prior to the starting time.
Conference call details:
Date: Thursday, August 11, 2022
Time: 9:00 a.m. Pacific time | 12:00 p.m. Eastern time
Dial in number (Toll Free): +1. 888.506.0062
Dial in number (International): +1.973.528.0011
Entry code: 359194
Replay number (Toll Free): +1.877.481.4010
Replay number (International): +1.919.882.2331
Replay Passcode: 46215
Playback of the earnings call will be available until Thursday, August 25, 2022. Playback of the webcast will be available until Friday, August 11, 2023. In addition, a transcript of the call will be archived on the Company's website.
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
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 include, without limitation, statements about the Company's plans for its mines and mineral properties; the Company's anticipated performance in 2022, including estimated production and costs of production for 2022; estimated capital expenditures in 2022 and exploration spending in 2022, including amounts for exploration activities at the Séguéla and San Jose properties; the Company's plans for the construction of the open pit mine at the Séguéla project in Cote d'Ivoire; the economics for the construction of the mine at the Séguéla project as set out in the feasibility study, the estimated construction capital expenditures for the project, the timelines and schedules for the construction and production of gold at the Séguéla project; statements regarding the Company's liquidity; 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; anticipated approvals and other matters. Often, but not always, these Forward-looking Statements can be identified by the use of words such as "estimated", "expected", "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, 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 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; the risks associated with the acquisition of Roxgold, including the ability of the Company to successfully consolidate functions, integrate operations, procedures and personnel; adverse changes in prices for gold, silver and other metals; the ability of the Company to successfully challenge an alleged typographical error in the environmental impact authorization ("EIA") granted for the San Jose Mine in December 2021; fluctuation in currencies and foreign exchange rates; inflation; the imposition of capital controls in countries in which the Company operates; any extension of the 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 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 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 construction at the Séguéla gold Project will continue on the time line and in accordance with the budget as planned; the duration and impacts of COVID-19; geo-political uncertainties that may affect the Company's production, workforce, business, operations and financial condition; that the Company will the expected trends in mineral prices and currency exchange rates; that the Company will succeed in challenging the alleged typographical error in the December 2021 extension to the San Jose EIA; 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.
News Provided by GlobeNewswire via QuoteMedia
Pan American Silver Reports Mineral Reserves and Mineral Resources as at June 30, 2022
Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) ("Pan American", or the "Company") today reported its estimated mineral reserves and mineral resources as at June 30, 2022 . Proven and probable mineral reserves are estimated to contain approximately 514.9 million ounces of silver and 3.6 million ounces of gold. Measured and indicated mineral resources (excluding proven and probable reserves) are estimated to total approximately 838.6 million ounces of silver and 8.1 million ounces of gold. In addition, inferred mineral resources total 507.7 million ounces of silver and 5.7 million ounces of gold.
"We successfully replaced 11 million ounces of silver mineral reserves and 96.1 thousand ounces of gold mineral reserves at our producing mines over the past 12 months. Most of our exploration drilling was focused on near-mine exploration at La Colorada , Huaron and Timmins and produced positive results. Most notably, 7.3 million ounces of silver mineral reserves were added at La Colorada , more than replacing the 6.7 million ounces mined," said Christopher Emerson , Pan American's Vice President of Business Development and Geology. "Gold and silver mineral reserves were impacted by the reclassification of mineral reserves to mineral resources at the Dolores underground mine and considering the localized overestimation of the contained ounces within Phase 9B , which offset reserve gains at La Arena, Shahuindo and Timmins ."
Mr. Emerson added: "We continue to add mineral resources at our silver operations, with an increase of 20.7 million silver ounces in measured and indicated mineral resources and an increase of 47.3 million silver ounces in inferred mineral resources over the past year, largely attributed to gains at Huaron and La Colorada ."
This news release does not provide an update to the mineral resource estimate for the La Colorada Skarn. Pan American plans to provide that update in the third quarter of 2022.
Summary of Pan American's total mineral reserves and resources, as at June 30, 2022 (1,2,3)
Tonnes (Mt) | Ag (g/t) | Contained | Au (g/t) | Contained | |
Proven Reserves | 115.7 | 60 | 174.5 | 0.61 | 2.0 |
Probable Reserves | 112.3 | 124 | 340.4 | 0.48 | 1.6 |
Proven and Probable Reserves | 228.0 | 91 | 514.9 | 0.54 | 3.6 |
Measured Resources | 203.4 | 89 | 128.0 | 0.39 | 2.3 |
Indicated Resources | 751.8 | 118 | 710.6 | 0.30 | 5.8 |
Measured and Indicated Resources | 955.2 | 113 | 838.6 | 0.32 | 8.1 |
Inferred Resources | 404.0 | 51 | 507.7 | 0.73 | 5.7 |
(1) See table below entitled "Metal price assumptions used to estimate mineral reserves and mineral resources as of June 30, 2022". | |
(2) Please refer to the complete mineral reserve and resource table at the end of this news release for more information. | |
(3) Totals may not add up due to rounding. Total average grades of each element are with respect to those mines that produce the element. |
Summary of Pan American's total mineral reserves and resources, as at June 30, 2021 (1,2)
Tonnes (Mt) | Ag (g/t) | Contained | Au (g/t) | Contained | |
Proven Reserve | 122.0 | 60 | 180.4 | 0.63 | 2.3 |
Probable Reserves | 121.2 | 117 | 348.9 | 0.54 | 1.9 |
Proven and Probable Reserves | 243.2 | 89 | 529.3 | 0.58 | 4.2 |
Measured Resources | 219.5 | 68 | 121.0 | 0.36 | 2.3 |
Indicated Resources | 771.0 | 111 | 696.9 | 0.31 | 6.0 |
Measured and Indicated Resources | 990.5 | 101 | 817.9 | 0.31 | 8.3 |
Inferred Resources | 417.3 | 47 | 460.4 | 0.70 | 5.8 |
(1) See the news release dated August 10, 2021 for the metal price assumptions used to estimate mineral reserves and mineral resources as of June 30, 2021, and for the complete mineral reserve and resource tables. | |
(2) Totals may not add up due to rounding. Total average grades of each element are with respect to those mines that produce the element. |
Reserve and resource highlights for the 12 months ended June 30, 2022 :
- At La Colorada , we added 7.3 million ounces of silver mineral reserves, replacing 108% of mined production. In addition, 42.8 million ounces of silver were added to inferred mineral resources, with infill drilling recovering to pre-COVID-19 levels.
- At Huaron, we added 7.0 million ounces of silver mineral reserves, replacing 165% of mined production. Net mineral reserves have increased for a second consecutive year, and exploration drilling has successfully expanded the southeastern portion of the deposit.
- At La Arena, we added 55.8 thousand ounces of gold mineral reserves, replacing 46% of mined production and extending mine life by an additional six months. Exploration drilling has increased mineral reserves for the past three years, and drilling on the northwest portion of the open pit has identified mineralization extending at shallow depths from the current pit. This zone remains open and will be targeted for further exploration in 2022.
- At Shahuindo, we added 161 thousand ounces of gold mineral reserves, replacing 81% of mined production. Infill drilling has increased model confidence with a focus on defining high grade structures in the northwest portion of the pit.
- At Timmins , we added 36.9 thousand ounces of gold mineral reserves, replacing 26% of mined production. In addition, exploration drilling has successfully defined 53 thousand ounces of new gold inferred mineral resources at the SW144 zone in the Timmins west mine.
A detailed summary of the silver and gold mineral reserves and mineral resources as of June 30, 2022 is provided in the following tables.
Pan American Mineral Reserves as at June 30, 2022 (1,2)
Property | Location | Classification | Tonnes (Mt) | Ag (g/t) | Contained | Au (g/t) | Contained |
Silver Segment | |||||||
Huaron | Peru | Proven | 7.0 | 169 | 38.1 | -- | -- |
Probable | 3.9 | 167 | 21.1 | -- | -- | ||
Morococha (92.3%) (3) | Peru | Proven | 3.3 | 156 | 16.6 | -- | -- |
Probable | 3.3 | 158 | 16.6 | -- | -- | ||
La Colorada | Mexico | Proven | 3.8 | 340 | 41.5 | 0.23 | 27.5 |
Probable | 6.2 | 303 | 59.9 | 0.18 | 36.0 | ||
Manantial Espejo | Argentina | Proven | 0.3 | 250 | 2.4 | 2.35 | 22.8 |
Probable | 0.1 | 246 | 0.9 | 3.06 | 10.8 | ||
San Vicente (95%) (3) | Bolivia | Proven | 1.1 | 314 | 10.8 | -- | -- |
Probable | 0.6 | 289 | 5.2 | -- | -- | ||
Joaquin | Argentina | Proven | 0.1 | 401 | 1.6 | 0.24 | 1.0 |
Probable | 0.0 | 575 | 0.6 | 0.31 | 0.3 | ||
Escobal | Guatemala | Proven | 2.5 | 486 | 39.5 | 0.42 | 34.2 |
Probable | 22.1 | 316 | 225.0 | 0.34 | 243.8 | ||
Total Silver Segment (4) | 54.3 | 275 | 479.7 | 0.33 | 376.3 | ||
Gold Segment | |||||||
La Arena | Peru | Proven | 20.5 | -- | -- | 0.38 | 251.4 |
Probable | 21.8 | -- | -- | 0.27 | 191.8 | ||
Dolores | Mexico | Proven | 12.9 | 21 | 8.6 | 0.57 | 235.4 |
Probable | 4.1 | 18 | 2.4 | 0.60 | 77.7 | ||
Shahuindo | Peru | Proven | 58.9 | 8 | 15.3 | 0.51 | 971.3 |
Probable | 45.3 | 6 | 8.8 | 0.41 | 604.2 | ||
Timmins | Canada | Proven | 5.3 | -- | -- | 2.89 | 491.0 |
Probable | 4.9 | -- | -- | 2.74 | 432.5 | ||
Total Gold Segment (4) | 173.6 | 9 | 35.1 | 0.58 | 3,255.2 | ||
Total Gold and Silver | Proven + | 228.0 | 91 | 514.9 | 0.54 | 3,631.5 |
(1) See table below entitled "Metal price assumptions used to estimate mineral reserves and mineral resources as of June 30, 2022". | |
(2) Mineral reserve estimates were prepared under the supervision of, or were reviewed by, Christopher Emerson, FAusIMM, Vice President Business Development and Geology, and Martin G. Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, each of whom are Qualified Persons as that term is defined in NI 43-101. | |
(3) This information represents the portion of mineral reserves attributable to Pan American based on its ownership interest in the operating entity as indicated. | |
(4) Totals may not add up due to rounding. Total average grades of each element are with respect to those mines that produce the element. |
Pan American Silver Measured and Indicated Mineral Resources as at June 30, 2022 (1,2)
Property | Location | Classification | Tonnes (Mt) | Ag (g/t) | Contained | Au (g/t) | Contained |
Silver Segment | |||||||
Huaron | Peru | Measured | 2.1 | 163 | 10.9 | -- | -- |
Indicated | 2.4 | 166 | 12.7 | -- | -- | ||
Morococha | Peru | Measured | 0.6 | 130 | 2.7 | -- | -- |
Indicated | 0.7 | 124 | 3.0 | -- | -- | ||
La Colorada | Mexico | Measured | 1.9 | 216 | 13.0 | 0.14 | 8.2 |
Indicated | 3.4 | 191 | 20.8 | 0.17 | 18.0 | ||
Manantial | Argentina | Measured | 0.2 | 158 | 1.1 | 1.79 | 11.9 |
Indicated | 0.7 | 264 | 5.8 | 2.94 | 63.9 | ||
Joaquin | Measured | 0.1 | 349 | 1.3 | 0.29 | 1.0 | |
Indicated | 0.4 | 329 | 4.2 | 0.26 | 3.3 | ||
San Vicente | Bolivia | Measured | 0.9 | 191 | 5.7 | -- | -- |
Indicated | 0.3 | 188 | 2.1 | -- | -- | ||
Navidad | Argentina | Measured | 15.4 | 137 | 67.8 | -- | -- |
Indicated | 139.8 | 126 | 564.5 | -- | -- | ||
Escobal | Guatemala | Measured | 2.3 | 251 | 18.6 | 0.23 | 16.7 |
Indicated | 14.2 | 201 | 91.6 | 0.20 | 93.0 | ||
Total Silver Segment (4) | 185.4 | 138 | 825.7 | 0.29 | 216.2 | ||
Gold Segment | |||||||
Dolores | Mexico | Measured | 2.1 | 30 | 2.1 | 0.53 | 36.5 |
Indicated | 0.8 | 57 | 1.5 | 1.13 | 29.7 | ||
La Bolsa | Mexico | Measured | 10.8 | 10 | 3.5 | 0.70 | 242.8 |
Indicated | 10.6 | 8 | 2.7 | 0.54 | 184.3 | ||
Pico Machay | Peru | Measured | 4.7 | -- | -- | 0.91 | 137.5 |
Indicated | 5.9 | -- | -- | 0.67 | 127.1 | ||
La Arena | Peru | Measured | 0.8 | -- | -- | 0.16 | 4.0 |
Indicated | 2.1 | -- | -- | 0.17 | 11.9 | ||
Shahuindo | Peru | Measured | 8.3 | 5 | 1.3 | 0.29 | 76.7 |
Indicated | 13.2 | 4 | 1.8 | 0.23 | 98.1 | ||
Timmins | Canada | Measured | 3.4 | -- | -- | 3.32 | 357.6 |
Indicated | 4.5 | -- | -- | 3.08 | 449.6 | ||
La Arena II | Peru | Measured | 148.9 | -- | -- | 0.25 | 1209.7 |
Indicated | 547.5 | -- | -- | 0.23 | 4070.0 | ||
Whitney (82.8%) (3) | Canada | Measured | 0.8 | -- | -- | 7.02 | 180.7 |
Indicated | 1.9 | -- | -- | 6.77 | 406.3 | ||
Gold River | Canada | Indicated | 0.7 | -- | -- | 5.29 | 117.4 |
Marlhill | Canada | Indicated | 0.4 | -- | -- | 4.52 | 57.4 |
Vogel | Canada | Indicated | 2.2 | -- | -- | 1.75 | 125.0 |
Total Gold | 769.7 | 9 | 12.9 | 0.32 | 7,922.2 | ||
Total Gold and Silver | Measured + | 955.2 | 113 | 838.6 | 0.32 | 8,138.4 | |
(1) See table below entitled "Metal price assumptions used to estimate mineral reserves and mineral resources as of June 30, 2022". | |
(2) Mineral resource estimates were prepared under the supervision of, or were reviewed by, Christopher Emerson, FAusIMM, Vice President Business Development, and Geology and Martin G. Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, each of whom are Qualified Persons as that term is defined in NI 43-101. | |
(3) This information represents the portion of mineral resources attributable to Pan American based on its ownership interest in the operating entity as indicated. | |
(4) Totals may not add up due to rounding. Total average grades of each element are with respect to those mines that produce the element. |
Pan American Inferred Mineral Resources as at June 30, 2022 (1,2)
Property | Location | Classification | Tonnes (Mt) | Ag (g/t) | Contained | Au (g/t) | Contained |
Silver Segment | |||||||
Huaron | Peru | Inferred | 7.2 | 155 | 36.1 | -- | -- |
Morococha | Peru | Inferred | 5.2 | 143 | 24.0 | -- | -- |
La Colorada | Mexico | Inferred | 14.9 | 195 | 93.9 | 0.20 | 98.4 |
La Colorada | Mexico | Inferred | 100.4 | 44 | 141.0 | -- | -- |
Manantial | Argentina | Inferred | 0.5 | 180 | 3.1 | 1.71 | 29.4 |
San Vicente | Bolivia | Inferred | 2.9 | 249 | 23.3 | -- | -- |
Navidad | Argentina | Inferred | 45.9 | 81 | 119.4 | -- | -- |
Joaquin | Argentina | Inferred | 0.2 | 282 | 1.6 | 0.23 | 1.3 |
Escobal | Guatemala | Inferred | 1.9 | 180 | 10.7 | 0.90 | 53.7 |
Total Silver Segment (4) | 179.2 | 79 | 453.2 | 0.32 | 182.7 | ||
Gold Segment | |||||||
Dolores | Mexico | Inferred | 2.5 | 29 | 2.4 | 0.92 | 74.4 |
La Bolsa | Mexico | Inferred | 13.7 | 8 | 3.3 | 0.51 | 224.6 |
Pico Machay | Peru | Inferred | 23.9 | -- | -- | 0.58 | 445.7 |
La Arena | Peru | Inferred | 6.0 | -- | -- | 0.22 | 42.3 |
Shahuindo | Peru | Inferred | 14.6 | 8 | 3.7 | 0.41 | 194.5 |
Shahuindo | Peru | Inferred | 97.4 | 14 | 45.1 | 0.74 | 2323.3 |
Timmins | Canada | Inferred | 4.4 | -- | -- | 3.11 | 436.5 |
La Arena II | Peru | Inferred | 54.7 | -- | -- | 0.23 | 413.2 |
Whitney | Canada | Inferred | 0.8 | -- | -- | 5.34 | 141.4 |
Gold River | Canada | Inferred | 5.3 | -- | -- | 6.06 | 1027.4 |
Vogel | Canada | Inferred | 1.5 | -- | -- | 3.60 | 168.8 |
Total Gold Segment (4) | 224.8 | 13 | 54.5 | 0.76 | 5,492.2 | ||
Total Gold and Silver | Inferred | 404.0 | 51 | 507.7 | 0.73 | 5,674.9 | |
(1) See table below entitled "Metal price assumptions used to estimate mineral reserves and mineral resources as of June 30, 2022". | |
(2) Mineral resource estimates were prepared under the supervision of, or were reviewed by, Christopher Emerson, FAusIMM, Vice President Business Development and Geology, and Martin G. Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, each of whom are Qualified Persons as that term is defined in NI 43-101. | |
(3) This information represents the portion of mineral resources attributable to Pan American based on its ownership interest in the operating entity as indicated. | |
(4) Totals may not add up due to rounding. Total average grades of each element are with respect to those mines that produce the element. |
Metal price assumptions used to estimate mineral reserves and mineral resources as at June 30, 2022
Mine | Category | Ag US$/oz | Au US$/oz | Cu US$/t | Pb US$/t | Zn US$/t |
Huaron | All categories | 19.00 | 1,300 | 7,000 | 2,000 | 2,600 |
Morococha | All categories | 19.00 | 1,300 | 7,000 | 2,000 | 2,600 |
La Colorada | All categories | 19.00 | 1,300 | 7,000 | 2,000 | 2,600 |
La Colorada | Inferred | 18.50 | 6,500 | 2,200 | 2,600 | |
Dolores | Reserves | 19.00 | 1,600 | |||
Resources | 22.00 | 1,700 | ||||
La Bolsa | All categories | 14.00 | 825 | |||
Manantial | Reserves | 19.00 | 1,500 | |||
Resources | 22.00 | 1,700 | ||||
San Vicente | All categories | 19.00 | 1,300 | 7,000 | 2,000 | 2,600 |
Navidad | All categories | 12.52 | 1,100 | |||
Pico Machay | All categories | 700 | ||||
Joaquin | Reserves | 19.00 | 1,500 | |||
Resources | 22.00 | 1,700 | ||||
Escobal | All categories | 20.00 | 1,300 | 2,204 | 2,424 | |
Shahuindo | Reserves | 19.00 | 1,500 | |||
Resources | 22.00 | 1,700 | ||||
Shahuindo | Inferred Resource | 15.00 | 1,400 | |||
La Arena | Reserves | 19.00 | 1,500 | |||
Resources | 22.00 | 1,700 | ||||
La Arena II | All categories | 1,500 | 8,816 | |||
Timmins | All categories | 1,500 | ||||
Whitney | Resources | 1,200 | ||||
Gold River | All categories | 1,200 | ||||
Marlhill | All categories | 1,125 | ||||
Vogel | Inside pit | 1,150 | ||||
Below pit | 1,150 |
General Notes with Respect to Technical Information
Mineral reserves and mineral resources are as defined by the Canadian Institute of Mining, Metallurgy and Petroleum.
Pan American reports mineral resources and mineral reserves separately. Reported mineral resources do not include amounts identified as mineral reserves. Mineral resources that are not mineral reserves have no demonstrated economic viability.
Pan American does not expect these mineral reserve and mineral resource estimates to be materially affected by metallurgical, environmental, permitting, legal, taxation, socio-economic, political, and marketing or other relevant issues.
The Company has undertaken a verification process with respect to the data disclosed in this news release. The mineral resource and mineral reserves databases compiling drilling and, in some cases, sampling, have been accumulated at each of Pan American mine sites by the qualified staff. Samples are analyzed at a variety of laboratories, including by in-house staff at the mine (San Vicente, Manantial Espejo, La Colorada ), mine laboratories operated by third party independent commercial labs (Huaron, Morococha), and commercial laboratories off-site (Shahuindo, La Arena, Timmins , Dolores). All the assay data used in the resource evaluation provided by each of the mines has been subjected to the industry standard quality assurance and quality control ("QA/QC") program including the submission of certified standards, blanks, and duplicate samples. The results are reviewed on a monthly basis by management. In general, the assay analytical technique for silver, lead, zinc and copper is acid digestion with either ICP or atomic absorption finish. The analytical technique for gold uses fire assay and a atomic absorption (AA) finish. A gravimetric finish would be used if the gold assay exceeds >10 g/t. The results of the QA/QC samples submitted for the resource databases demonstrate acceptable accuracy and precision. The Qualified Person is of the opinion that the sample preparation, analytical, and security procedures followed for the samples are sufficient and reliable for the purpose of this mineral resource and mineral reserve estimates. Pan American is not aware of any drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability of the data reported herein.
See the Company's Annual Information Form dated February 23, 2022 , available at www.sedar.com for further information on the Company's material mineral properties, including detailed information concerning associated QA/QC and data verification matters, the key assumptions, parameters and methods used by the Company to estimate mineral reserves and mineral resources, and for a detailed description of known legal, political, environmental, and other risks that could materially affect the Company's business and the potential development of the Company's mineral reserves and mineral resources.
Quantities and grades of contained metal are shown before metallurgical recoveries.
Technical information contained in this news release with respect to Pan American has been reviewed and approved by Christopher Emerson , FAusIMM., Vice President Business Development and Geology, and Martin Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, who are each Qualified Persons for the purposes of NI 43-101.
Pan American Silver Corp is authorized by The Association of Professional Engineers and Geoscientists of the Province of British Columbia to engage in Reserved Practice under Permit to Practice number 1001470.
About Pan American Silver
Pan American owns and operates silver and gold mines located in Mexico , Peru , Canada , Argentina and Bolivia . We also own the Escobal mine in Guatemala that is currently not operating. Pan American provides enhanced exposure to silver through a large base of silver reserves and resources, as well as major catalysts to grow silver production. We have a 28-year history of operating in Latin America , earning an industry-leading reputation for sustainability performance, operational excellence and prudent financial management. We are headquartered in Vancouver, B.C. and our shares trade on NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".
Learn more at panamericansilver.com .
For more information contact:
Siren Fisekci
VP, Investor Relations & Corporate Communications
Ph: 604-806-3191
Email: ir@panamericansilver.com
Cautionary Note Regarding Forward-Looking Statements and Information
Certain of the statements and information in this news release constitute "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 provincial securities laws. All statements, other than statements of historical fact, are forward-looking statements or information. Forward-looking statements or information in this news release relate to, among other things: the disclosure of estimated mineral reserve and mineral resource information; the expectation of the Company to provide an update relating to the La Colorada skarn mineral resources, and the timing and results of any such update; estimated mine life and any anticipated changes related thereto; the extent of, and success related to any future exploration or development programs, including with respect to the La Colorada skarn; estimated mineral reserves and mineral resources;; expectations that metallurgical, environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other issues will not materially affect estimates of mineral reserves and mineral resources.
These forward-looking statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include: the accuracy of our mineral reserve and mineral resource estimates and the assumptions upon which they are based; ore grades and recoveries are as anticipated; prices for silver, gold, and base metals remaining as estimated; currency exchange rates remaining as estimated; capital, decommissioning and reclamation estimates; prices for energy inputs, labour, materials, supplies and services (including transportation); all necessary permits, licenses and regulatory approvals for our operations are received in a timely manner; our ability to comply with environmental, health and safety laws; and that the COVID-19 pandemic, or other pandemics, do not materially impact underlying assumptions used in estimating mineral reserves and mineral resources, such as prices, the costs and availability of necessary labour, energy, supplies, materials and services, and exchange rates, among other things. The foregoing list of assumptions is not exhaustive.
The Company cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in silver, gold and base metal prices; fluctuations in prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in currency markets (such as the Canadian dollar, Peruvian sol, Mexican peso, Argentine peso and Bolivian boliviano versus the U.S. dollar); operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); employee relations; relationships with, and claims by, local communities and indigenous populations; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations and government practices in the jurisdictions where we operate, including environmental, export and import laws and regulations; legal restrictions relating to mining, including in Chubut, Argentina , and in Guatemala ; risks relating to expropriation; diminishing quantities or grades of mineral reserves as properties are mined; increased competition in the mining industry for equipment and qualified personnel; and those factors identified under the caption "Risks Related to Pan American's Business" in the Company's most recent form 40-F and Annual Information Form filed with the United States Securities and Exchange Commission and Canadian provincial securities regulatory authorities, respectively. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are cautioned against undue reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand management's current views of our near and longer term prospects and may not be appropriate for other purposes. The Company does not intend, nor does it assume any obligation to update or revise forward-looking statements or information, whether as a result of new information, changes in assumptions, future events or otherwise, except to the extent required by applicable law.
Cautionary Note to US Investors Regarding References to Mineral Reserves and Mineral Resources
Unless otherwise indicated, all mineral reserve and mineral resource estimates included in this news release have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining, Metallurgy and Petroleum classification system. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (the "SEC"), and reserve and resource information included herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, this news release uses the terms "measured resources," "indicated resources" and "inferred resources." U.S. investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. The requirements of NI 43-101 for the identification of "reserves" are also not the same as those of the SEC, and reserves reported by Pan American in compliance with NI 43-101 may not qualify as "reserves" under SEC standards. Under U.S. standards, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. investors are cautioned not to assume that any part of a "measured resource" or "indicated resource" will ever be converted into a "reserve." U.S. investors should also understand that "inferred resources" have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of "inferred resources" exist, are economically or legally mineable or will ever be upgraded to a higher category. Under Canadian rules, estimated "inferred resources" may not form the basis of feasibility or pre-feasibility studies except in rare cases. In addition, disclosure of "contained ounces" in a mineral resource is permitted disclosure under Canadian regulations. However, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place tonnage and grade, without reference to unit measures. Accordingly, information concerning mineral deposits set forth in this news release may not be comparable with information made public by companies that report in accordance with U.S. standards.
The SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"). These amendments became effective February 25, 2019 (the "SEC Modernization Rules") with compliance required for the first fiscal year beginning on or after January 1, 2021 . Under the SEC Modernization Rules, the historical property disclosure requirements for mining registrants included in Industry Guide 7 under the U.S. Securities Act of 1933, as amended, will be rescinded and replaced with disclosure requirements in subpart 1300 of SEC Regulation S-K. Following the transition period, as a foreign private issuer that is eligible to file reports with the SEC pursuant to the multi-jurisdictional disclosure system (the "MJDS"), Pan American is not required to provide disclosure on its mineral properties under the SEC Modernization Rules and will continue to provide disclosure under NI 43-101. If Pan American ceases to be a foreign private issuer or loses its eligibility to file its annual report on Form 40-F pursuant to the MJDS, then Pan American will be subject to the SEC Modernization Rules, which differ from the requirements of NI 43-101.
As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of "measured mineral resources", "indicated mineral resources" and "inferred mineral resources." In addition, the SEC has amended its definitions of "proven mineral reserves" and "probable mineral reserves" to be "substantially similar" to the corresponding standards under NI 43-101. While the SEC will now recognize "measured mineral resources", "indicated mineral resources" and "inferred mineral resources", U.S. investors should not assume that any part or all of the mineralization in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralization described using these terms has a greater amount of uncertainty as to its existence and feasibility than mineralization that has been characterized as reserves. Accordingly, U.S. investors are cautioned not to assume that any measured mineral resources, indicated mineral resources, or inferred mineral resources that Pan American reports are or will be economically or legally mineable. Further, "inferred mineral resources" have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, U.S. investors are also cautioned not to assume that all or any part of the "inferred mineral resources" exist. Under Canadian securities laws, estimates of "inferred mineral resources" may not form the basis of feasibility or pre-feasibility studies, except in rare cases. While the above terms are "substantially similar" to the standards under NI 43-101, there are differences in the definitions under the SEC Modernization Rules. Accordingly, there is no assurance any mineral reserves or mineral resources that Pan American may report as "proven mineral reserves", "probable mineral reserves", "measured mineral resources", "indicated mineral resources" and "inferred mineral resources" under NI 43-101 would be the same had Pan American prepared the reserve or resource estimates under the standards adopted under the SEC Modernization Rules.
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SOURCE Pan American Silver Corp.
View original content: http://www.newswire.ca/en/releases/archive/August2022/10/c9318.html
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