Yessi Vein to Determine Fortuna Silver’s Operation Continuity

Canada-based Fortuna Silver Mines announced that the future of its San Jose mine in Oaxaca hinges on the production potential of its Yesssi vein. This decision follows the company's previous announcement in March 2024 of an anticipated mine closure.

On March 11, 2024, MBN reported on Fortuna Silver’s decision to cease operations in 2024, six months ahead of schedule, as the company was planning to close operations by mid-2025. The company said this decision was made due to the increasing costs and depleted reserves. “At San Jose, our exploration continues pursuing the discovery of new resources with the aim of extending production beyond 2024,” said Jorge Ganoza, CEO, Fortuna Silver Mines, referring to the exploration campaign at the Yessi vein. 

As exploration continued, Ganoza expressed excitement about the Yessi vein’s results with a notable discovery of 1kg of AgEq with an estimated width of 8.1m, reinforcing the potential for identifying mineral-rich columns. However, Ganoza emphasized it needs to prove economic viability, a milestone yet to be achieved. "Yessi has to transition from being a fascinating discovery to being a fascinating reserve of resources for processing. We have not reached that point, yet," he said during the 1Q24 company results conference call, adding that the company expects to determine viability by 3Q24.

Fortuna continues active drilling as management plans an extended mine closure and monitoring program. Ganoza outlined three scenarios: continuing exploitation if the project is successful, placing the mine on care and maintenance while continuing Yessi exploration, or exhausting reserves this year and implementing a progressive closure plan. 

In the past, the company has expressed that the political environment would be a factor to consider for continuing operations in Mexico. “We continue to see Mexico as a country where we would like to be operating and doing business for many more years, but we need to see a change in the government's attitude toward the industry,” Ganoza said. 

The company noted that the closure of the San Jose mine puts at risk the livelihoods of 5,800 direct and indirect employees in San Jose del Progreso municipality. During the conference call, Ganoza said the company is engaging with presidential candidates Claudia Sheinbaum and Xóchitl Gálvez, expressing hope for improved mining investment conditions following the June 2 elections. 

San Jose's production during 1Q24 stood at 759,111oz of silver and 4,533oz of gold marking a 42% and 45% decrease, respectively, from the same period in 2023 due to lower tonnage extraction and declining ore grades.