Fortuna Silver Reports Results for 3Q22
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Fortuna Silver Reports Results for 3Q22

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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Mon, 11/14/2022 - 11:27

Fortuna Silver Mines reported its financial and operating results for 3Q22. The company produced 66,344oz of gold, an 11 percent year-over-year increase. Moreover, it registered a production of 1,837,506oz of silver, 7 percent more than in 3Q21. 

Gold equivalent production reached 101,840oz. In addition, Fortuna reported that cash costs per oz of gold were US$772/oz for the Lindero Mine and US$934/oz for the Yaramoko mine, while cash costs per silver equivalent oz of payable silver sold of $9.7/oz for the San Jose Mine and $11.32/oz for the Caylloma mine.

These results validate the company’s annual production estimates, Fortuna said. It expects to produce between 6.2 and 6.9 million oz of silver and between 244,000 and 280,000 oz of gold. Jorge A. Ganoza, CEO and President, Fortuna Silver, confirmed that the company’s four mines had steady production of gold and silver in the quarter.

Furthermore, “Price inflation on key consumable products has driven cost at our operations to the upper range of annual cost guidance, but at this stage in the year, we anticipate that the risk for significant cost deviations beyond guidance has diminished. Free cash flow for the period remained strong, underpinned by robust production performance at our operating sites.”

Additionally, free cash flow from ongoing operations stood at US$34 million after operating mine capital, corporate overhead, taxes and interest paid compared to US$29.1 million in 3Q21. As of Sept 30, 2022, the company had available liquidity of US$125.9 million. Moreover, Fortuna Silver reported a net loss for the period of US$4.1 million compared to a net income of US$0.2 million in 3Q21. Operating income was US$5.7 million in comparison to US$21.8 million in the same period last year. Higher cash costs quarter-over-quarter were approximately $16 million due to continued inflationary pressures and higher processed tons at Yaramoko and San Jose.

Fortuna Silver Mines is a Canadian gold and silver operator and one of the most important silver producers in Mexico. Since Minera Cuzcatlán, a subsidiary of Fortuna Silver, started operations in Oaxaca 11 years ago, it has invested US$400 million in the state. Luis Camargo, Country Head, Minera Cuzcatlán, mentioned that the investment has mostly been allocated to the operation of the San José mine and generated 1,200 direct jobs, of which more than 70 percent of the workers are inhabitants of the San José del Progreso municipality. “More than 5,000 indirect jobs were created. Additionally, 600 suppliers around the country have benefitted from our work, of which 20 percent are in the state of Oaxaca.”

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