- It paid a penalty of around 590 million FCFA on overproduction
- 29,002 ounces of gold in the second trimester of 2023
- With an average grade of 6.51g/t,
- An increase of 18% compared with the same period in 2022
- Yaramoko records low gold production costs
- Future production expected to be higher
In April 2023, access to the underground mine at Yaramoko, located in Bagassi, was disrupted for 27 days due to a failure of the Armtec digging structure at the mine portal. This is according to the financial and operating results for the second trimester 2023 of the Yaramoko mine published by Fortuna Silver Mines Inc, the parent company, on 9 August 2023. “Throughout this period, processing operations were maintained by crushing surface ore stockpiles. Production from the underground mine resumed on 1 May”, the company said in a press release.
Yaramoko mine, highlights of the second trimester 2023
For Jorge A. Ganoza, President and Chief Executive Officer, the waiting costs incurred during the repair of the Armtec tunnel at the Yaramoko mine weighed on results for the second trimester. Despite these constraints, Fortuna generated free cash flow from ongoing operations.
The Yaramoko mine produced 29,002 ounces of gold in the second trimester of 2023 at an average grade of 6.51g/t, an 18% increase over the same period in 2022. Production benefited from higher grades extracted and an increase in tonnes milled. The higher-than-expected grades are due to the extension of the deposit beyond the current resource limit on the west side of Zone 55. Production from Yaramoko is expected to be at the high end of the annual guidance range. In light of recent successes in discovering extensions of mineralisation beyond the Zone 55 resource limit, the Company expects to provide an update on mineral reserves and resources before the end of the year.
Cash cost per ounce of gold sold for the trimester ended 30 June 2023 was 719$, compared to 928$ for the same period in 2022. Cash cost per ounce decreased due to higher production and head grades, lower overhead costs and lower mining costs related to lower shutdown and development costs.
Cash sustaining costs per ounce of gold sold were 1,626 dollars in the second trimester of 2023, compared to 1,565 dollars for the same period in 2022. This increase is due to the increase.
What about Fortuna’s results?
Overall, Fortuna’s net profit for the trimester was 3.5 million dollars, compared to 1.7 million dollars in the second trimester 2022. Adjusted for non-cash and non-recurring elements, adjusted net profit for the trimester was 2.9 million dollars, compared to 2.1 million dollars in the second trimester 2022. The slight increase in adjusted net profit is due to the lower income tax and effective tax rate in the second trimester 2023, which offsets the reduction in operating profit of 5.4 million dollars compared to the second trimester 222. The reduction in operating profit was primarily due to lower metal volumes sold at San Jose as a result of the 15-day work stoppage related to an illegal blockade at the mine, and lower volumes at Lindero related to the mine sequence. This impact was combined with an increase in the cash cost of sales per ounce of gold equivalent, mainly due to lower production rates and grades at San Jose, linked to the ramp-up process following the work stoppage at the mine, and higher input costs and lower grades at Lindero. These effects were partially offset by the lower cost of sales per ounce of gold at Yaramoko. Operating profit was also affected by non-recurring expenses of 7.3 million dollars, including 3.5 million dollars in standby charges at San Jose and Yaramoko, 2.8 million dollars relating to a new agreement with the workers’ union at San Jose, and an overproduction penalty of 1.0 million dollars (approximately 590 million FCFA), at Yaramoko payable to the Ministry of Mines. The positive impact of higher gold and silver prices in the second trimester of 2023 was offset by a sharp fall in zinc prices.
Séguéla mine in Côte d’Ivoire: first shipment in July
Fortuna operates the Séguéla mine in Côte d’Ivoire. The first gold was poured from the mine on 24 May 2023, and the first shipment of gold took place in July. The transaction to acquire Chesser Resources Limited continues to progress and is expected to be finalised in the third week of September. Jorge A. Ganoza, President and CEO, said: “The first pour and sale of gold at Seguela is an important milestone for the Company as our new flagship asset enters production and adds stable, high margin ounces to our portfolio. The ramp-up activities at the processing plant continue to progress and during July the processing plant reached and exceeded its design capacity and is expected to operate at a steady pace throughout the trimester,” he added: “At Seguela, although we produced over four thousand ounces in the days leading up to the end of the trimester, ahead of schedule, the first gold sale did not occur until early in the third trimester.” Ganoza concluded, “With Séguéla contributing its first full trimester of production in the third trimester, the return to normal operations has been very positive.”
Fortuna Silver Mines Inc. is a Canadian precious metals company with 5 operating mines in Argentina, Burkina Faso, Côte d’Ivoire, Mexico and Peru.
Elie KABORE
#Mines_Actu_Burkina
