- 26,437 ounces of gold produced in the first trimester of 2023
- 28% of the Fortuna Group’s production
- With an average feed content of 5.94 grams per tonne,
- A decrease of 6%, compared to the first trimester of 2022
- Related increase in operating expenses
- Lower operating margins due to lower grades
Fortuna Silver Mines, which operates the Bagassi mine in Burkina Faso, has released its financial and operating results for the first trimester of 2023.
At the operating level, Fortuna Silver Mines produced 94,110 ounces in the first trimester of 2023. Silver production is estimated at 1,586,378 ounces. Consolidated cash costs per ounce of gold equivalent sold were $916.
Fortuna Silver Mines: production and profit in the first trimester of 2023
Net profit for the trimester after adjusting for non-cash and non-recurring items was 11.9 million dollars, compared to 27.0 million dollars in the first trimester of 2022. It is 20.1 million dollars lower than in the first trimester of 2022. The decrease in adjusted net profit was primarily due to higher operating expenses primarily related to higher input costs across our operations and lower operating margins at Yaramoko related to lower grades. This impact was combined with a slight decrease in sales of 6.7 million dollars, primarily due to lower silver prices of 22.52 $ per ounce in the first trimester 2023 versus 24.18 $ per ounce in the first trimester 2022. These effects were partially offset by lower general and administrative expenses of 2.0 million dollars compared to the first trimester 2022.
Net cash provided by operations for the trimester was 41.8 million dollars, or 0.14 $ per share, compared to $33.2 million dollars, or 0.11 $ per share, in the first trimester of 2022.
Free cash flow from ongoing operations for the trimester was 8.5 million dollars, compared to 9.6 million dollars in the first trimester 2022. The decrease is the result of an increase in net cash generated from operations of 8.6 million dollars compared to the first trimester 2022, offset by an increase in sustaining and brownfields exploration expenditure at our operating mines of 12.3 million dollars in the first trimester 2023
In terms of growth and development, on 8 May 2023, Fortuna announced a definitive agreement to acquire Chesser Resources Ltd. in an all-share transaction for a total consideration of 89.0 million Australian dollars (80.6 million Canadian dollars). Upon completion of the acquisition, the former shareholders of Chesser will hold approximately 5.1% of Fortuna’s shares.
These results prompted Jorge A. Ganoza, President and CEO, to comment: “First trimester production and total cost per ounce were broadly in line with expectations, resulting in net earnings per share of 0.04 $ and free cash flow from operations of 8.5 million $. Commissioning activities at Seguela are well underway and on schedule for the first gold pour in May, giving us a higher level of confidence in a smooth ramp-up to design capacity”. Mr. Ganoza continued, “The announced transaction for Chesser meets our strategic objective of expanding our portfolio of high value assets in the countries where we operate or in neighbouring countries.” Mr. Ganoza concluded, “The acquisition of Chesser provides an exciting advanced exploration opportunity, extending our West African presence into Senegal, a favourable mining jurisdiction, and into the heart of the Senegal-Mali shear zone, one of the most prolific gold belts in the West African region.”
The Yaramoko mine produced one third of the Fortuna group’s output
The Yaramoko mine produced 26,437 ounces of gold in the first trimester of 2023 at an average head grade of 5.94 grams per tonne, a decrease of 6%, compared to the first trimester of 2022. This production represents one third (28.09%) of the Fortuna Group’s production.
The increase in the plant’s throughput contributed positively to the operation, offset by reduced mining time due to planned maintenance and lower head grade. Production in the trimester was in line with the mining sequence and mineral reserve estimate.
The cash cost per ounce of gold sold in the first trimester 2023 was 819$, compared to 705$ in the first trimester 2022. Cash cost per ounce increased due to higher processing costs resulting from increased maintenance costs and the impact of inflation on key consumables and mining costs. Processing costs were also higher due to processing more tonnes at lower grades.
Sustaining capital expenditure in the first trimester 2023 increased due to increased mine development. Brownfields expenditure was mainly higher due to an increase in diamond drilling metres.
Fortuna Silver Mines is looking forward to the first gold pour at the Seguela mine in Côte d’Ivoire in May 2023.
As a reminder, Fortuna Silver Mines Inc. is a Canadian precious metals company with four operating mines in Argentina, Burkina Faso, Mexico and Peru, and a fifth mine under construction in Côte d’Ivoire.
Elie KABORE
#Mines_Actu_Burkina
