Fortuna Silver Announces US$27 Million Net Income for 1Q22By Fernando Mares | Tue, 05/17/2022 - 19:31
Fortuna Silver Mines announced its 1Q22 results and reported a significant increase in gold production though silver production decreased considerably. The company reported a net income of US$27 million.
Gold and silver production stood at 66,800oz and 1,600,000oz respectively, which represented an increase of 93 percent in gold production and a decrease of 13 percent in silver production compared to 1Q21. The company said that all mine operations performed in line with Fortuna’s annual projections.
The company reported a US$27 million net income compared to the US$26.4 million reported in 1Q21. “Our net income in the quarter of US$27 million and adjusted EBITDA of US$80.3 million with margins of 44 percent attest to the strong performance of our mines. We are running a thriving business in a US$1,800/oz gold price environment and are confident in the resiliency of our assets,” said Jorge Ganoza, President and CEO, Fortuna Silver Mines.
The San Jose Mine, located in the state of Oaxaca, Mexico lowered its gold and silver production with a decrease of 20 and 18 percent respectively compared to 1Q21. The mine produced over 1Moz of silver and 8,000oz of gold. According to the company, the decrease was a consequence of lower average head grades of 15 percent and 17 percent for silver and gold.
Operative incomes of over US$40 million from the Lindero and Yaramoko mines helped offset the performance of the San Jose mine.
Minera Cuzcatlan, the Mexican subsidiary of Fortuna Silver Mines, faced legal challenges when the Mexican Ministry of the Environment and Natural Resources (SEMARNAT) made a typo in the company’s Environmental Impact Assessment (EIA). This led to the reduction of the time the company can develop its activities, dropping from a 12 years extension to only two years added. Luis Camargo, Representative, Fortuna Silver Mexico said that since there are no anomalies at the facilities, the company still expects to reach a suitable agreement with the Mexican government.
The company has also faced resistance from local associations. In 2021, authorities denied permits for a facility upgrade because of pressure from the organization Front for No Mining for a Future for All (FNMFT) and Services for an Alternative Education (SEDUCA), although this issue was rapidly resolved.
Fortuna Silver Mines is a Canadian gold and silver producer. It is one of the most important silver producers in Mexico. According to the company, its San Jose Mine is the largest employer in the area where it operates, providing work for over 500 people in San Jose del Progreso, Oaxaca.