Finance

Fortuna reports financial results for the second quarter of 2024


Fortuna Mining Corp.Fortuna Mining Corp.

Fortuna Mining Corp.

(All amounts are expressed in US dollars, tabular amounts in millions, unless otherwise stated)

VANCOUVER, British Columbia, Aug. 07, 2024 (GLOBE NEWSWIRE) — Fortuna Mining Corp. (NYSE: FSM | TSX: FVI) (“Fortuna” or the “Company”) today reported its financial and operating results for the second quarter of 2024.

Second Quarter 2024 highlights

Financial

  • Attributable net income of $40.6 million or $0.13 per share, compared to a $26.3 million or $0.09 per share in Q1 2024

  • Adjusted attributable net income1 of $30.4 million or $0.10 per share, compared to $26.7 million or $0.09 per share in Q1 2024

  • Generated $93.0 million (or $0.30 per share) of cash flow from operations before working capital changes, and free cash flow from ongoing operations1 of $38.6 million, compared to $84.3 million (or $0.28 per share) and $12.1 million, respectively, in Q1 2024

  • The Company issued Convertible Notes (the “2024 Notes”) for gross proceeds of $172.5 million which were partially used to pay in full the outstanding $125.0 million under its revolving credit facility. As at the end of the quarter total net debt1 was $66.5 million and the total net debt to adjusted EBITDA ratio1 was 0.2:1

  • Liquidity as of June 30, 2024 was $355.6 million, compared to $212.7 million at the end of Q1 2024

Operational

  • Gold equivalent3 production of 116,570 ounces, compared to 112,543 ounces in Q1 2024

  • Gold production of 92,716 ounces, compared to 89,678 ounces in Q1 2024

  • Silver production of 990,574 ounces, compared to 1,074,571 ounces in Q1 2024

  • Consolidated cash costs1 per ounce of gold equivalent sold of $988, compared to $879 in Q1 2024; adjusting for San Jose, which is mining its last year of Mineral Reserves, consolidated cash costs was $858

  • Consolidated all-in sustaining cash costs (AISC)1 per ounce of gold equivalent sold of $1,656, compared to $1,495 in Q1 2024; adjusting for San Jose, consolidated AISC was $1,584

  • The Company recorded zero lost time injuries and zero total recordable injuries in the quarter

Growth and Development

“Our business performed well in the quarter, generating strong net cash flow from operations of $93.0 million before working capital changes and free cash flow after sustaining capital of $38.6 million.” said Jorge Ganoza, Fortuna’s President and CEO. Mr. Ganoza continued, “We anticipate our free cash flow to increase further in the second half of the year as we conclude a heavy sustaining capex phase in the third quarter with the completion of the Lindero leach pad expansion project.” Mr. Ganoza added, “With the issue of $172.5 million of convertible notes we have significantly strengthened our balance sheet and liquidity while lowering our cost of capital. This added financial flexibility places the Company in an advantageous position to pursue strategic initiatives and emerging opportunities in our established regions.” Mr. Ganoza concluded “On the exploration front we continue creating value through discovery. At the recently identified Kingfisher prospect, at the Séguéla mine, we have drill defined gold mineralization over a strike length of two kilometers. Our drill program will continue non-stop with the aim of delivering a first resource for this exciting new discovery by year end.”

________________________
1 Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Excluding letters of credit
3 Au Eq includes gold, silver, lead and zinc and is calculated using the following metal prices: $2,334/oz Au, $29.1/oz Ag, $2,157/t Pb and $2,835/t Zn or Au:Ag = 1:80.19, Au:Pb = 1:1.08, Au:Zn = 1:0.82 for Q2 2024, and the following metal prices $2,087/oz Au, $23.4/oz Ag, $2,084/t Pb and $2,450/t Zn or Au:Ag = 1:89.8, Au:Pb = 1:1.0, Au:Zn = 0.85 for Q1 2024.


Second Quarter 2024 Consolidated Results

 

 

Three months ended June 30,

 

Six months ended June 30,

(Expressed in millions)

 

2024

 

2023

 

% Change

 

2024

 

2023

 

% Change

Sales

 

260.0

 

158.4

 

64

%

 

484.9

 

334.1

 

45

%

Mine operating income

 

79.9

 

31.9

 

150

%

 

149.8

 

72.3

 

107

%

Operating income

 

55.4

 

7.7

 

619

%

 

102.6

 

31.6

 

225

%

Attributable net income

 

40.6

 

3.1

 

1,210

%

 

66.9

 

14.0

 

378

%

Attributable income per share – basic

 

0.13

 

0.01

 

1,200

%

 

0.22

 

0.05

 

340

%

Adjusted attributable net income1

 

30.4

 

2.5

 

1,116

%

 

57.1

 

14.7

 

288

%

Adjusted EBITDA1

 

112.7

 

44.4

 

154

%

 

207.8

 

109.5

 

90

%

Net cash provided by operating activities

 

73.5

 

44.2

 

66

%

 

122.5

 

85.4

 

43

%

Free cash flow from ongoing operations1

 

38.6

 

9.5

 

306

%

 

50.7

 

17.6

 

188

%

Cash cost ($/oz Au Eq)1

 

988

 

968

 

2

%

 

934

 

940

 

(1

%)

All-in sustaining cash cost ($/oz Au Eq)1

 

1,656

 

1,799

 

(8

%)

 

1,577

 

1,648

 

(4

%)

Capital expenditures2

 

 

 

 

 

 

 

 

 

 

 

 

Sustaining

 

29.9

 

34.2

 

(13

%)

 

55.7

 

62.1

 

(10

%)

Non-sustaining3

 

17.6

 

0.9

 

1,856

%

 

26.5

 

2.0

 

1,225

%

Séguéla construction

 

 

23.0

 

(100

%)

 

 

48.1

 

(100

%)

Brownfields

 

2.9

 

2.4

 

21

%

 

9.5

 

7.3

 

30

%

As at

 

 

 

 

 

 

 

June 30, 2024

 

December 31, 2023

 

% Change

Cash and cash equivalents

 

 

 

105.6

 

128.1

 

(18

%)

Net liquidity position (excluding letters of credit)

 

 

 

 

 

 

 

355.6

 

213.1

 

67

%

Shareholder’s equity attributable to Fortuna shareholders

 

 

 

 

 

 

 

1,334.9

 

1,238.4

 

8

%

1 Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.

2 Capital expenditures are presented on a cash basis

 

3 Non-sustaining expenditures include greenfields exploration

 

Figures may not add due to rounding

 


Second Quarter 2024 Results

Attributable Net Income and Adjusted Attributable Net Income
Net income attributable to Fortuna for the quarter was $40.6 million compared to $3.1 million in Q2 2023. After adjusting for non-cash and non-recurring items, adjusted attributable net income for the quarter was $30.4 million compared to $2.5 million in Q2 2023. The large change between net income and adjusted net income for the quarter was primarily the result of a $12.0 million deferred tax recovery that was removed from adjusted attributable net income related to the issuance of the 2024 Notes.

The increase in net income and adjusted net income is explained mainly by increased gold sales volume and higher realized gold and silver prices. Higher gold sales volume was primarily due to contributions from Séguéla which was under construction in the comparable period. This was partially offset by lower silver production at San Jose as the mine exhausts its Mineral Reserves. The realized gold and silver prices were $2,334 and $29.10 per ounce respectively compared to $1,975 and $24.10 per ounce, respectively, for the comparable period in the prior year.

Adjusted net income for the quarter was also impacted by higher G&A of $7.8 million, primarily due to an increase of $4.7 million in share based compensation related to the increase of our share price in the period and the addition of Séguéla’s G&A. The higher interest expense of $3.4 million for the quarter is explained by $3.7 million of capitalized interest in the comparative period vs nil in Q2 2024.

Depreciation and Depletion
Depreciation and depletion for the second quarter of 2024 was $57.3 million compared to $39.9 million in the comparable period. The increase in depreciation and depletion was primarily the result of higher sales volume and the inclusion of $17.5 million in depletion of the purchase price related to the acquisition of Roxgold Inc in 2021. This was partially offset by lower depreciation and depletion at San Jose as a result of an impairment charge in the fourth quarter of 2023.

Adjusted EBITDA and Cash Flow
Adjusted EBITDA for the quarter was $112.7 million, a margin of 43% over sales, compared to $44.4 million a margin over sales of 28%, reported in the same period in 2023. The main driver for the increase in EBITDA was the contribution from Séguéla with an EBITDA margin of 62% in Q2 2024, partially offset by marginal EBITDA at San Jose. The prior period was also impacted by an illegal blockade of the San Jose Mine.

Net cash generated by operations for the quarter was $73.5 million compared to $44.2 million in Q2 2023. The increase of $29.3 million reflects higher adjusted EBITDA of $68.3 million offset by taxes paid of $17.4 million at Séguéla as two installment payments were made in the second quarter, with a third expected in September, and $19.4 million in negative working capital movements.

The negative change in working capital of $19.4 million consisted of the following:

  • An increase in receivables of $9.3 million driven by an increase in VAT receivables of $4.9 million at Séguéla and $4.3 million at Yaramoko

  • An increase of inventories of $13.5 million related to a $2.3 million increase in material and supplies and $2.6 million in metals inventory at Séguéla and a $1.5 million increase in materials and supplies and $4.5 million in metals inventory at Lindero

In the second quarter of 2024 capital expenditures on a cash basis were $50.4 million consisting primarily of $32.8 million in sustaining capital and $17.6 million of non-sustaining capital including $6.5 million to acquire one half of the 1.2% NSR royalty that was held by Franco Nevada at Séguéla.

Free cash flow from ongoing operations for the quarter was $38.6 million, compared to $9.5 million in Q2 2023. The increase in free cash flow from operations was primarily the result of contributions from Séguéla which was under construction in Q2 2023 and was offset by negative working capital changes and higher taxes paid as described above.

Cash Costs and AISC
Cash cost per equivalent gold ounce was $988, compared to $968 in the second quarter of 2023. The slightly higher cash cost per equivalent gold ounce was due to higher costs at San Jose, Lindero, and Yaramoko, partially offset by the contribution of low-cost production from Séguéla. Adjusting for San Jose, where previously capitalized costs are now expensed as the mine is in its last year of operations, cash costs per gold equivalent ounces was $858 for the current quarter.

All-in sustaining costs per gold equivalent ounce was $1,656 for the second quarter of 2024 compared to $1,799 for the second quarter of 2023. The decrease was primarily the result of higher gold sales and lower sustaining capital. Adjusting for San Jose, all-in sustaining cost per gold equivalent ounce was $1,584 for the current quarter.

General and Administrative Expenses
General and administrative expenses for the current quarter of $22.4 million were higher than the same period in 2023 as Séguéla transitioned to operations and costs are no longer being capitalized, and higher share-based compensation expenses due to an increase in the share price and the impact on the valuation of restricted share units expected to settle in cash. G&A is comprised of the following items:

 

 

Three months ended June 30,

 

Six months ended June 30,

(Expressed in millions)

 

2024

 

2023

 

% Change

 

2024

 

2023

 

% Change

Mine G&A

 

 

9.9

 

 

6.2

 

60

%

 

 

16.9

 

 

12.1

 

40

%

Corporate G&A

 

 

6.6

 

 

7.2

 

(8

%)

 

 

15.5

 

 

14.1

 

10

%

Share-based payments

 

 

5.8

 

 

1.1

 

427

%

 

 

8.0

 

 

3.3

 

142

%

Workers’ participation

 

 

0.1

 

 

 

0

%

 

 

0.2

 

 

0.1

 

100

%

Total

 

 

22.4

 

 

14.5

 

54

%

 

 

40.6

 

 

29.6

 

37

%


Liquidity

The Company’s total liquidity available as of June 30, 2024 was $355.6 million comprised of $105.6 million in cash and cash equivalents, and the fully undrawn $250.0 million revolving credit facility (excluding letters of credit).

Séguéla Mine, Côte d’Ivoire

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

    

 

2024

 

 

2023

 

 

2024

 

 

2023

Mine Production

 

 

 

 

 

 

 

 

 

 

 

 

Tonnes milled

 

 

318,457

 

 

109,605

 

 

713,294

 

 

109,605

Average tonnes crushed per day

 

 

3,461

 

 

1,611

 

 

3,898

 

 

1,611

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

3.47

 

 

1.56

 

 

3.09

 

 

1.32

Recovery (%)

 

 

94

 

 

90

 

 

94

 

 

77

Production (oz)

 

 

32,983

 

 

4,023

 

 

67,539

 

 

4,023

Metal sold (oz)

 

 

33,102

 

 

 

 

67,552

 

 

Realized price ($/oz)

 

 

2,332

 

 

 

 

2,211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

 

 

 

 

Cash cost ($/oz Au)1

 

 

564

 

 

 

 

511

 

 

All-in sustaining cash cost ($/oz Au)1

 

 

1,097

 

 

 

 

1,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000’s) 2

 

 

 

 

 

 

 

 

 

 

 

 

Sustaining

 

 

5,779

 

 

 

 

8,805

 

 

Sustaining leases

 

 

2,437

 

 

 

 

4,702

 

 

Non-sustaining

 

 

8,605

 

 

 

 

9,640

 

 

Brownfields

 

 

1,190

 

 

 

 

6,086

 

 

1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures. Refer to Non-IFRS Financial Measures.

2 Capital expenditures are presented on a cash basis

 

In the second quarter of 2024, mined material totaled 420,222 tonnes of ore, averaging 3.03g/t Au, and containing an estimated 40,912 ounces of gold from the Antenna, Ancien and Koula pits. Movement of waste during the quarter totaled 2,495,838 tonnes, for a strip ratio of 6:1.

Production was mainly focused on the Antenna pit which produced 364,491 tonnes of ore to provide higher grade feed to the processing plant during the power supply constraints detailed below. Mining at the Ancien and Koula pits provided the balance of ore production with 1,645,716 tonnes of the waste stripping occurring there.

Séguéla processed 318,457 tonnes in the quarter, producing 32,983 ounces of gold, at an average head grade of 3.47 g/t Au. During the quarter the mine experienced intermittent power outages from April to early July which resulted in the loss of 19 days of operating time for the mill. The loss of power was the result of power shedding from the national grid supplier due to failures at two power plants in Côte d’Ivoire. Since early July the mine has been receiving stable grid power. To guarantee mine power supply in the event of future outages the Company is sourcing expanded backup diesel power generation capabilities to support the entire process operation.

The potential impact to gold production from the intermittent power outages was largely mitigated by delivering higher grade feed to the mill and the benefits of operating efficiencies which have allowed the mill to operate at a throughput rate of 208 tonnes per hour compared to a name place capacity of 154 tonnes per hour. Séguéla’s 2024 production guidance of 126,000 to 138,000 oz Au remains unaffected.

Cash cost per gold ounce sold was $564, and all-in sustaining cash cost per gold ounce sold was $1,097 for Q2 2024. Both were below plan and guidance.

Yaramoko Mine, Burkina Faso

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

    

 

2024

 

 

2023

 

 

2024

 

 

2023

Mine Production

 

 

 

 

 

 

 

 

 

 

 

 

Tonnes milled

 

 

121,391

 

 

144,202

 

 

229,110

 

 

283,852

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

8.40

 

 

6.51

 

 

8.58

 

 

6.23

Recovery (%)

 

 

98

 

 

98

 

 

98

 

 

98

Production (oz)

 

 

31,447

 

 

29,002

 

 

58,624

 

 

55,439

Metal sold (oz)

 

 

31,455

 

 

25,946

 

 

58,627

 

 

55,476

Realized price ($/oz)

 

 

2,334

 

 

1,976

 

 

2,223

 

 

1,933

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

 

 

 

 

Cash cost ($/oz Au)1

 

 

896

 

 

719

 

 

830

 

 

772

All-in sustaining cash cost ($/oz Au)1

 

 

1,389

 

 

1,626

 

 

1,382

 

 

1,564

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000’s) 2

 

 

 

 

 

 

 

 

 

 

 

 

Sustaining

 

 

5,110

 

 

14,318

 

 

14,731

 

 

27,867

Sustaining leases

 

 

1,018

 

 

1,161

 

 

2,067

 

 

2,520

Non-sustaining

 

 

1,542

 

 

 

 

1,542

 

 

Brownfields

 

 

1,397

 

 

1,019

 

 

2,760

 

 

2,210

1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures; refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.

2 Capital expenditures are presented on a cash basis.

 

In the second quarter of 2024, 121,391 tonnes of ore were treated at an average head grade of 8.40 g/t, producing 31,447 ounces of gold. This represents a 29% increase in grade and an 8% increase in production, when compared to the same period in 2023. Higher gold production in the second quarter of 2024 was a result of higher head grades, offsetting lower tonnes milled. Processing operations at Yaramoko were also affected by intermittent power supply from the grid, however, our backup diesel generators mitigated the bulk of these constraints.

During the quarter, 89,991 tonnes of ore were mined averaging 7.81 g/t Au from 55 Zone, and 21,361 tonnes of ore averaging 8.89 g/t Au from QV Prime, totaling 111,352 tonnes averaging 8.02 g/t Au. In May, a rock burst occurred in the deeper levels of the 55 Zone, which interrupted production for a period of 10 days. No injuries or loss of property occurred as a result of the seismic event. Changes to the stoping sequence and design of underground excavations have been implemented based on a geotechnical evaluation.

The cash cost per ounce of gold sold for the quarter ended June 30, 2024, was $896, compared to $719 in the same period in 2023. The increase for the quarter is mainly attributed to the reallocation of fixed mining costs from capital to operating expenses, lower processed ore and higher energy costs from the use of diesel generators to offset constrained grid supply. This was partially offset by higher ounces sold in the period.

During the quarter power sourced from the grid was restricted to 45% with the balance coming from diesel power generation. This increased the cost per kilowatt hour with diesel generation costing $0.42/kwh compared to $0.24/kwh for grid power. The impact on total cost was mostly offset by lower energy consumption at the mine. Through the month of July availability of power from the grid was at 95%.

The all-in sustaining cash cost per gold ounce sold was $1,389 for the quarter ended June 30, 2024, compared to $1,626 in the same period of 2023. The change in the quarter was primarily due to higher volume of ounces sold, lower sustaining capital expenditure and lower sustaining lease expenses in 2024. This was partially offset higher by royalty costs due to higher metal prices and a change in the royalty regime in Burkina Faso which increased the royalty rate from 5% to 7% when the gold price is over $2,000 per ounce.

Drilling and development operations continued to extend the mining boundaries to the east and west of 55 Zone and demonstrate wider mineable widths than expected. In the third quarter, drilling will also focus on testing the potential for further strike extensions of 55 Zone, as well as testing the strike extensions that we currently see in QV Prime.

Lindero Mine, Argentina

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

    

 

2024

 

 

2023

 

 

2024

 

 

2023

Mine Production

 

 

 

 

 

 

 

 

 

 

 

 

Tonnes placed on the leach pad

 

 

1,408,791

 

 

1,503,323

 

 

2,956,114

 

 

2,981,471

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

0.61

 

 

0.62

 

 

0.60

 

 

0.83

Production (oz)

 

 

22,874

 

 

25,456

 

 

46,136

 

 

50,714

Metal sold (oz)

 

 

21,511

 

 

25,140

 

 

43,230

 

 

51,952

Realized price ($/oz)

 

 

2,335

 

 

1,975

 

 

2,201

 

 

1,879

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

 

 

 

 

Cash cost ($/oz Au)1

 

 

1,092

 

 

878

 

 

1,050

 

 

884

All-in sustaining cash cost ($/oz Au)1

 

 

2,033

 

 

1,686

 

 

1,832

 

 

1,550

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000’s) 2

 

 

 

 

 

 

 

 

 

 

 

 

Sustaining

 

 

16,151

 

 

13,337

 

 

25,958

 

 

21,082

Sustaining leases

 

 

587

 

 

599

 

 

1,185

 

 

1,197

Non-sustaining

 

 

195

 

 

136

 

 

349

 

 

323

1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures; refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.

2 Capital expenditures are presented on a cash basis.

 

Quarterly Operating and Financial Highlights
During the second quarter of 2024, total mined ore was 1.8 million tonnes at a stripping ratio of 0.7:1. A total of 1,408,791 tonnes of ore was placed on the heap leach pad at an average gold grade of 0.61 g/t, containing an estimated 27,663 ounces of gold. Gold production for Q2 2024 totaled 22,874 ounces, a 10% decrease from the second quarter of 2023, primarily due to a planned eight-day maintenance shutdown of the high-pressure grinding rolls (HPGR) and the agglomeration plant, coupled with a period of lower mechanical availability of front-end loaders.

The cash cost per ounce of gold for the quarter ended June 30, 2024 was $1,092 compared to $878 in the same period of 2023. The increase in cash cost per ounce of gold was primarily related to low mechanical availability of front-end loaders, higher maintenance costs due to the eight-day maintenance shutdown in the quarter and higher ounces sold in the comparable period.

The all-in sustaining cash cost per gold ounce sold during the second quarter of 2024 was $2,033, an increase from $1,686 in the second quarter of 2023. The increase for the quarter was primarily due to higher cash costs as described above and higher sustaining capital to support the expansion of the heap leach pad. The leach-pad project accounts for approximately $400 per ounce in the all-in sustaining cost for 2024.

As of June 30, 2024, the $51.8 million leach pad expansion project ($41.7 million capital investment in 2024) was approximately 58% complete. The construction of the project commenced in January 2024, with contractors on site undertaking earthworks and construction of the impulsion line, and liner deployment. Procurement is 96% complete, with critical path items onsite. Pump manufacturing for the new impulsion line was completed on schedule and arrived on site in July. Liner installation has commenced and contracts for the major mechanical works have been executed. The Company expects to start placing ore on the leach pad expansion in the fourth quarter of 2024.

San Jose Mine, Mexico

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

    

 

2024

    

 

2023

    

 

2024

    

 

2023

Mine Production

 

 

 

 

 

 

 

 

 

 

 

 

Tonnes milled

 

 

176,214

 

 

194,887

 

 

357,317

 

 

441,623

Average tonnes milled per day

 

 

1,980

 

 

2,633

 

 

2,077

 

 

2,760

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver

 

 

 

 

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

140

 

 

168

 

 

143

 

 

186

Recovery (%)

 

 

87

 

 

91

 

 

88

 

 

91

Production (oz)

 

 

684,176

 

 

957,265

 

 

1,443,287

 

 

2,260,577

Metal sold (oz)

 

 

666,218

 

 

942,671

 

 

1,412,825

 

 

2,271,004

Realized price ($/oz)

 

 

29.33

 

 

24.09

 

 

26.24

 

 

23.20

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

1.09

 

 

1.02

 

 

0.99

 

 

1.13

Recovery (%)

 

 

85

 

 

90

 

 

86

 

 

90

Production (oz)

 

 

5,269

 

 

5,778

 

 

9,802

 

 

14,009

Metal sold (oz)

 

 

5,010

 

 

5,695

 

 

9,470

 

 

14,050

Realized price ($/oz)

 

 

2,344

 

 

1,973

 

 

2,218

 

 

1,929

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

 

 

 

 

Cash cost ($/oz Ag Eq)1,2

 

 

24.91

 

 

15.79

 

 

23.34

 

 

13.16

All-in sustaining cash cost ($/oz Ag Eq)1,2

 

 

27.55

 

 

24.07

 

 

25.77

 

 

19.01

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000’s) 3

 

 

 

 

 

 

 

 

 

 

 

 

Sustaining

 

 

 

 

3,593

 

 

 

 

7,366

Sustaining leases

 

 

216

 

 

214

 

 

477

 

 

376

Non-sustaining

 

 

2,313

 

 

524

 

 

5,790

 

 

793

Brownfields

 

 

 

 

788

 

 

 

 

1,875

1 Cash cost per ounce of silver equivalent and All-in sustaining cash cost per ounce of silver equivalent are calculated using realized metal prices for each period respectively.

2 Cash cost per ounce of silver equivalent, and all-in sustaining cash cost per ounce of silver equivalent are non-IFRS financial measures, refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.

3 Capital expenditures are presented on a cash basis

 

In the second quarter of 2024, San Jose produced 684,176 ounces of silver and 5,269 ounces of gold, 29% and 9% decreases respectively, at average head grades for silver and gold of 140 g/t and 1.09 g/t, a 17% decrease and 7% increase respectively, when compared to the same period in 2023. The decrease in silver and gold production, when compared to the first quarter of 2023, is explained by lower tonnes extracted and lower grades for silver, which is consistent with the annual plan and guidance. During the second quarter, the processing plant milled 176,214 tonnes at an average of 1,980 tonnes per day, in line with the plan for the period.

The cash cost per silver equivalent ounce sold for the three months ending June 30, 2024, was $24.91, an increase from $15.79 in the same period of 2023. The San Jose Mine has less operational flexibility in 2024 compared to 2023, due to the reduced and more dispersed Mineral Reserves associated with the Trinidad deposit, which also increased mine costs. Ore processed decreased by 10% due to lower tonnes mined.

The all-in sustaining cash cost per payable silver equivalent ounce sold for the three months ended June 30, 2024, increased by 14% to $27.55. This compares to $24.07 per ounce for the same period in 2023. These increases were mainly driven by higher cash costs and lower production and partially offset by lower capital expenditure. Management conducts regular assessments and trade-offs between maintaining operations at the mine or putting it on care and maintenance.

Sustaining capital expenditures have decreased as we near the anticipated closure of the mine. Drilling in 2024 was higher due to the drilling campaign at the Yessi vein, which was discovered in the third quarter of 2023. Exploration at the Yessi vein is ongoing.

Caylloma Mine, Peru

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

    

 

2024

 

 

2023

 

 

2024

 

 

2023

Mine Production

 

 

 

 

 

 

 

 

 

 

 

 

Tonnes milled

 

 

136,543

 

 

137,004

 

 

273,639

 

 

262,999

Average tonnes milled per day

 

 

1,552

 

 

1,539

 

 

1,546

 

 

1,494

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver

 

 

 

 

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

83

 

 

84

 

 

85

 

 

83

Recovery (%)

 

 

84

 

 

83

 

 

83

 

 

81

Production (oz)

 

 

306,398

 

 

305,296

 

 

621,858

 

 

588,362

Metal sold (oz)

 

 

267,569

 

 

336,086

 

 

593,051

 

 

599,656

Realized price ($/oz)

 

 

28.55

 

 

24.13

 

 

25.69

 

 

23.30

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

 

 

 

 

 

 

 

 

 

 

Grade (g/t)

 

 

0.11

 

 

0.12

 

 

0.11

 

 

0.16

Recovery (%)

 

 

30

 

 

16

 

 

29

 

 

40

Production (oz)

 

 

143

 

 

89

 

 

293

 

 

255

Metal sold (oz)

 

 

60

 

 

 

 

123

 

 

22

Realized price ($/oz)

 

 

2,351

 

 

 

 

2,179

 

 

1,895

 

 

 

 

 

 

 

 

 

 

 

 

 

Lead

 

 

 

 

 

 

 

 

 

 

 

 

Grade (%)

 

 

3.83

 

 

3.72

 

 

3.66

 

 

3.27

Recovery (%)

 

 

91

 

 

91

 

 

91

 

 

87

Production (000’s lbs)

 

 

10,525

 

 

10,207

 

 

20,055

 

 

19,716

Metal sold (000’s lbs)

 

 

9,422

 

 

11,419

 

 

19,247

 

 

20,201

Realized price ($/lb)

 

 

0.98

 

 

0.96

 

 

0.96

 

 

0.99

 

 

 

 

 

 

 

 

 

 

 

 

 

Zinc

 

 

 

 

 

 

 

 

 

 

 

 

Grade (%)

 

 

4.80

 

 

5.18

 

 

4.63

 

 

4.14

Recovery (%)

 

 

90

 

 

90

 

 

90

 

 

89

Production (000’s lbs)

 

 

13,040

 

 

14,037

 

 

25,223

 

 

27,088

Metal sold (000’s lbs)

 

 

12,710

 

 

13,986

 

 

25,175

 

 

27,800

Realized price ($/lb)

 

 

1.29

 

 

1.23

 

 

1.20

 

 

1.34

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit Costs

 

 

 

 

 

 

 

 

 

 

 

 

Cash cost ($/oz Ag Eq)1,2

 

 

13.94

 

 

14.35

 

 

12.66

 

 

13.60

All-in sustaining cash cost ($/oz Ag Eq)1,2

 

 

19.87

 

 

19.18

 

 

18.38

 

 

18.12

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures ($000’s) 3

 

 

 

 

 

 

 

 

 

 

 

 

Sustaining

 

 

2,794

 

 

2,943

 

 

6,171

 

 

5,753

Sustaining leases

 

 

974

 

 

957

 

 

1,880

 

 

1,813

Brownfields

 

 

333

 

 

336

 

 

691

 

 

540

1 Cash cost per ounce of silver equivalent and All-in sustaining cash cost per ounce of silver equivalent are calculated using realized metal prices for each period respectively.

2 Cash cost per ounce of silver equivalent, and all-in sustaining cash cost per ounce of silver equivalent are non-IFRS financial measures, refer to non-IFRS financial measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.

3 Capital expenditures are presented on a cash basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

In the second quarter, the Caylloma Mine produced 306,398 ounces of silver, which was in line with the second quarter of 2023, at an average head grade of 83 g/t Ag.

Lead and zinc production for the quarter were 10.5 million pounds of lead, and 13.0 million pounds of zinc. Lead production increased 3% and zinc production decreased by 7% compared to the same period in 2023. Head grades averaged 3.83%, and 4.80%, a 3% increase and 7% decrease, respectively, when compared to the second quarter of 2023.
The cash cost per silver equivalent ounce for the three months ended June 30, 2024 was $13.94, a 3% decrease compared to the comparable period in 2023. This was primarily due to lower energy and maintenance costs in the plant.

The all-in sustaining cash cost per ounce of payable silver equivalent for the three months ended June 30, 2024, was $19.87 compared to $19.18 for the same period in 2023. The higher all-in sustaining cash cost per ounce was the result of higher silver prices on the calculation of silver equivalent ounces.

Qualified Person

Eric Chapman, Senior Vice President of Technical Services, is a Professional Geoscientist of the Engineers and Geoscientists of British Columbia (Registration Number 36328), and is the Company’s Qualified Person (as defined by National Instrument 43-101). Mr. Chapman has reviewed and approved the scientific and technical information contained in this news release and has verified the underlying data.

Non-IFRS Financial Measures

The Company has disclosed certain financial measures and ratios in this news release which are not defined under the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, and are not disclosed in the Company’s financial statements, including but not limited to: cash cost per ounce of gold sold; all-in sustaining cash cost per ounce of gold sold; all-in sustaining cash cost per ounce of gold equivalent sold; all-in cash cost per ounce of gold sold; production cash cost per ounce of gold equivalent; cash cost per payable ounce of silver equivalent sold; all-in sustaining cash cost per payable ounce of silver equivalent sold; all-in cash cost per payable ounce of silver equivalent sold; free cash flow from ongoing operations; adjusted net income; adjusted attributable net income; adjusted EBITDA and working capital.

These non-IFRS financial measures and non-IFRS ratios are widely reported in the mining industry as benchmarks for performance and are used by management to monitor and evaluate the Company’s operating performance and ability to generate cash. The Company believes that, in addition to financial measures and ratios prepared in accordance with IFRS, certain investors use these non-IFRS financial measures and ratios to evaluate the Company’s performance. However, the measures do not have a standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other companies. Accordingly, non-IFRS financial measures and non-IFRS ratios should not be considered in isolation or as a substitute for measures and ratios of the Company’s performance prepared in accordance with IFRS. The Company has calculated these measures consistently for all periods presented.

To facilitate a better understanding of these measures and ratios as calculated by the Company, descriptions are provided below. In addition see “Non-IFRS Financial Measures” in the Company’s management’s discussion and analysis for the three and six months ended June 30, 2024 (“Q2 2024 MDA”), which section is incorporated by reference in this news release, for additional information regarding each non-IFRS financial measure and non-IFRS ratio disclosed in this news release, including an explanation of their composition; an explanation of how such measures and ratios provide useful information to an investor; and the additional purposes, if any, for which management of the Company uses such measures and ratio. The Q2 2024 MD&A may be accessed on SEDAR+ at www.sedarplus.ca under the Company’s profile.

Except as otherwise described in the Q2 2024 MD&A, the Company has calculated these measures consistently for all periods presented.

Reconciliation of Debt to total net debt and net debt to adjusted EBITDA ratio for June 30, 2024

(Expressed in millions except Total net debt to Adjusted EBITDA ratio)

 

 

As at June 30, 2024

Convertible senior note

 

$

172.5

 

Convertible debenture

 

 

45.7

 

Debt

 

 

218.2

 

Less: Cash and Cash Equivalents

 

 

(105.6

)

Less: Restricted cash

 

 

(46.1

)

Total net debt1

 

$

66.5

 

Adjusted EBITDA (last four quarters)

 

$

432.8

 

Total net debt to adjusted EBITDA ratio

 

 

0.2:1

 

1 Excluding letters of credit

 

 

 


Reconciliation of net income to adjusted attributable net income for the three and six months ended June 30, 2024 and 2023

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

(Expressed in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net income attributable to shareholders

 

 

40.6

 

 

 

3.2

 

 

 

66.9

 

 

 

14.0

 

Adjustments, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Community support provision and accruals1

 

 

(0.1

)

 

 

 

 

 

(0.3

)

 

 

(0.1

)

Unrealized loss (gain) on derivatives

 

 

 

 

 

(1.3

)

 

 

 

 

 

(0.3

)

Income tax, convertible debentures

 

 

(12.0

)

 

 

 

 

 

(12.0

)

 

 

 

Inventory adjustment

 

 

1.9

 

 

 

0.7

 

 

 

1.9

 

 

 

0.7

 

Accretion on right of use assets

 

 

0.9

 

 

 

0.5

 

 

 

1.8

 

 

 

1.1

 

Other non-cash/non-recurring items

 

 

(0.9

)

 

 

(0.6

)

 

 

(1.2

)

 

 

(0.7

)

Adjusted attributable net income

 

 

30.4

 

 

 

2.5

 

 

 

57.1

 

 

 

14.7

 

1 Amounts are recorded in Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 


Reconciliation of net income to adjusted EBITDA for the three and six months ended June 30, 2024 and 2023

 

 

Three months ended June 30,

 

 

Six months ended June 30,

Consolidated (in millions of US dollars)

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income

 

43.3

 

 

 

3.5

 

 

 

72.4

 

 

 

15.3

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Community support provision and accruals

 

(0.1

)

 

 

 

 

 

(0.4

)

 

 

(0.1

)

Inventory adjustment

 

2.6

 

 

 

1.0

 

 

 

2.6

 

 

 

0.9

 

Foreign exchange loss, Séguéla Mine

 

 

 

 

(0.2

)

 

 

 

 

 

(0.1

)

Net finance items

 

6.9

 

 

 

3.5

 

 

 

13.1

 

 

 

6.1

 

Depreciation, depletion, and amortization

 

57.2

 

 

 

39.8

 

 

 

107.5

 

 

 

84.2

 

Income taxes

 

7.7

 

 

 

1.0

 

 

 

22.2

 

 

 

9.0

 

Other non-cash/non-recurring items

 

(4.9

)

 

 

(4.2

)

 

 

(9.6

)

 

 

(5.8

)

Adjusted EBITDA

 

112.7

 

 

 

44.4

 

 

 

207.8

 

 

 

109.5

 

Figures may not add due to rounding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Reconciliation of net cash from operating activities to free cash flow from ongoing operations for the three and six months ended June 30, 2024 and 2023

 

 

Three months ended June 30,

 

 

Six months ended June 30,

(Expressed in millions)

2024

 

 

2023

 

 

2024

 

    

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

73.5

 

 

 

44.2

 

 

 

122.5

 

 

 

85.4

 

Séguéla, working capital

 

 

 

 

4.4

 

 

 

 

 

 

4.4

 

Additions to mineral properties, plant and equipment

 

(32.8

)

 

 

(36.2

)

 

 

(65.2

)

 

 

(66.5

)

Gain on blue chip swap investments

 

2.5

 

 

 

 

 

 

5.1

 

 

 

 

Right of use payments

 

(5.6

)

 

 

(2.9

)

 

 

(10.6

)

 

 

(5.8

)

Other adjustments

 

1.0

 

 

 

 

 

 

(1.1

)

 

 

0.1

 

Free cash flow from ongoing operations

 

38.6

 

 

 

9.5

 

 

 

50.7

 

 

 

17.6

 

Figures may not add due to rounding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Reconciliation of cost of sales to cash cost per ounce of gold equivalent sold for the three and six months ended June 30, 2024 and 2023

Cash Cost Per Gold Equivalent Ounce Sold – Q2 2024

    

Lindero

    

Yaramoko

    

Séguéla

    

San Jose

    

Caylloma

    

GEO Cash Costs

Cost of sales

 

36,010

 

 

50,839

 

 

51,430

 

 

25,524

 

 

16,239

 

 

180,044

 

Inventory adjustment

 

(228

)

 

(2,852

)

 

 

 

443

 

 

 

 

(2,637

)

Depletion, depreciation, and amortization

 

(11,580

)

 

(13,784

)

 

(27,130

)

 

(573

)

 

(3,358

)

 

(56,425

)

Royalties and taxes

 

(116

)

 

(6,009

)

 

(5,629

)

 

(867

)

 

(229

)

 

(12,850

)

By-product credits

 

(704

)

 

 

 

 

 

 

 

 

 

(704

)

Other

 

 

 

 

 

 

 

6

 

 

(350

)

 

(344

)

Treatment and refining charges

 

 

 

 

 

 

 

743

 

 

2,287

 

 

3,030

 

Cash cost applicable per gold equivalent ounce sold

 

23,382

 

 

28,194

 

 

18,671

 

 

25,276

 

 

14,589

 

 

110,112

 

Ounces of gold equivalent sold

 

21,409

 

 

31,455

 

 

33,102

 

 

12,670

 

 

12,858

 

 

111,495

 

Cash cost per ounce of gold equivalent sold ($/oz)

 

1,092

 

 

896

 

 

564

 

 

1,995

 

 

1,135

 

 

988

 

Gold equivalent was calculated using the realized prices for gold of $2,334/oz Au, $29.1/oz Ag, $2,157/t Pb, and $2,835/t Zn for Q2 2024.

Figures may not add due to rounding

Cash Cost Per Gold Equivalent Ounce Sold – Q2 2023

    

Lindero

    

Yaramoko

    

Séguéla

 

    

San Jose

    

Caylloma

    

GEO Cash Costs

Cost of sales

 

40,280

 

 

38,353

 

 

 

 

29,366

 

 

18,543

 

 

126,542

 

Inventory adjustment

 

 

 

(827

)

 

 

 

 

 

 

 

(827

)

Depletion, depreciation, and amortization

 

(11,873

)

 

(15,788

)

 

 

 

(8,532

)

 

(3,405

)

 

(39,598

)

Royalties and taxes

 

(3,850

)

 

(3,086

)

 

 

 

(1,040

)

 

(519

)

 

(8,495

)

By-product credits

 

(2,486

)

 

 

 

 

 

 

 

 

 

(2,486

)

Other

 

 

 

 

 

 

 

267

 

 

(483

)

 

(216

)

Treatment and refining charges

 

 

 

 

 

 

 

1,113

 

 

5,257

 

 

6,370

 

Cash cost applicable per gold equivalent ounce sold

 

22,071

 

 

18,652

 

 

 

 

21,174

 

 

19,393

 

 

81,290

 

Ounces of gold equivalent sold

 

25,130

 

 

25,946

 

 

 

 

16,382

 

 

16,536

 

 

83,994

 

Cash cost per ounce of gold equivalent sold ($/oz)

 

878

 

 

719

 

 

 

 

1,293

 

 

1,173

 

 

968

 

Gold equivalent was calculated using the realized prices for gold of $1,973/oz Au, $24.1/oz Ag, $2,115/t Pb, and $2,713/t Zn for Q2 2023

Figures may not add due to rounding

Cash Cost Per Gold Equivalent Ounce Sold – Year to Date 2024

    

Lindero

    

Yaramoko

    

Séguéla

    

San Jose

    

Caylloma

    

GEO Cash Costs

Cost of sales

 

70,059

 

 

85,790

 

 

96,640

 

 

49,248

 

 

33,344

 

 

335,083

 

Inventory adjustment

 

(228

)

 

(2,852

)

 

 

 

455

 

 

 

 

(2,625

)

Depletion, depreciation, and amortization

 

(23,160

)

 

(23,999

)

 

(51,046

)

 

(964

)

 

(7,182

)

 

(106,351

)

Royalties and taxes

 

(369

)

 

(10,302

)

 

(11,101

)

 

(1,571

)

 

(583

)

 

(23,926

)

By-product credits

 

(1,127

)

 

 

 

 

 

 

 

 

 

(1,127

)

Other

 

 

 

 

 

 

 

 

 

(681

)

 

(681

)

Treatment and refining charges

 

 

 

 

 

 

 

1,717

 

 

3,518

 

 

5,235

 

Cash cost applicable per gold equivalent ounce sold

 

45,175

 

 

48,637

 

 

34,493

 

 

48,885

 

 

28,416

 

 

205,606

 

Ounces of gold equivalent sold

 

43,037

 

 

58,627

 

 

67,552

 

 

24,719

 

 

26,156

 

 

220,091

 

Cash cost per ounce of gold equivalent sold ($/oz)

 

1,050

 

 

830

 

 

511

 

 

1,978

 

 

1,086

 

 

934

 

Gold equivalent was calculated using the realized prices for gold of $2,213/oz Au, $26.1/oz Ag, $2,120/t Pb, and $2,644/t Zn for Year to Date 2024.

Figures may not add due to rounding

Cash Cost Per Gold Equivalent Ounce Sold – Year to Date 2023

    

Lindero

    

Yaramoko

    

Séguéla

 

    

San Jose

    

Caylloma

    

GEO Cash Costs

Cost of sales

 

82,005

 

 

83,216

 

 

 

 

61,889

 

 

34,651

 

 

261,761

 

Inventory adjustment

 

15

 

 

(827

)

 

 

 

 

 

 

 

(812

)

Depletion, depreciation, and amortization

 

(25,065

)

 

(33,156

)

 

 

 

(18,444

)

 

(6,888

)

 

(83,553

)

Royalties and taxes

 

(7,776

)

 

(6,448

)

 

 

 

(2,297

)

 

(685

)

 

(17,206

)

By-product credits

 

(3,284

)

 

 

 

 

 

 

 

 

 

(3,284

)

Other

 

 

 

 

 

 

 

250

 

 

(955

)

 

(705

)

Treatment and refining charges

 

 

 

 

 

 

 

1,837

 

 

10,762

 

 

12,599

 

Cash cost applicable per gold equivalent ounce sold

 

45,895

 

 

42,785

 

 

 

 

43,235

 

 

36,885

 

 

168,800

 

Ounces of gold equivalent sold

 

51,893

 

 

55,418

 

 

 

 

39,511

 

 

32,712

 

 

179,535

 

Cash cost per ounce of gold equivalent sold ($/oz)

 

884

 

 

772

 

 

 

 

1,094

 

 

1,128

 

 

940

 

Gold equivalent was calculated using the realized prices for gold of $1,930/oz Au, $23.2/oz Ag, $2,174/t Pb, and $2,954/t Zn for YTD 2023

Figures may not add due to rounding


Reconciliation of cost of sales to all-in sustaining cash cost per ounce of gold equivalent sold for the three and six months ended June 30, 2024 and 2023

AISC Per Gold Equivalent Ounce Sold – Q2 2024

    

Lindero

    

Yaramoko

    

Séguéla

    

San Jose

    

Caylloma

    

Corporate

    

GEO AISC

 

Cash cost applicable per gold equivalent ounce sold

 

23,382

 

28,194

 

18,671

 

25,276

 

14,589

 

 

110,112

 

Inventory net realizable value adjustment

 

 

1,777

 

 

 

 

 

1,777

 

Royalties and taxes

 

116

 

6,009

 

5,629

 

867

 

229

 

 

12,850

 

Worker’s participation

 

 

 

 

 

472

 

 

472

 

General and administration

 

3,281

 

182

 

2,603

 

1,590

 

1,406

 

12,338

 

21,400

 

Stand-by

 

 

 

 

 

 

 

 

Total cash costs

 

26,779

 

36,162

 

26,903

 

27,733

 

16,696

 

12,338

 

146,611

 

Sustaining capital1

 

16,738

 

7,525

 

9,406

 

216

 

4,101

 

 

37,986

 

All-in sustaining costs

 

43,517

 

43,687

 

36,309

 

27,949

 

20,797

 

12,338

 

184,597

 

Gold equivalent ounces sold

 

21,409

 

31,455

 

33,102

 

12,670

 

12,858

 

 

111,495

 

All-in sustaining costs per ounce

 

2,033

 

1,389

 

1,097

 

2,206

 

1,617

 

 

1,656

 

Gold equivalent was calculated using the realized prices for gold of $2,334/oz Au, $29.1/oz Ag, $2,157/t Pb, and $2,835/t Zn for Q2 2024.

Figures may not add due to rounding

1 Presented on a cash basis

AISC Per Gold Equivalent Ounce Sold – Q2 2023

    

Lindero

    

Yaramoko

    

Séguéla

    

San Jose

    

Caylloma

    

Corporate

    

GEO AISC

 

Cash cost applicable per gold equivalent ounce sold

 

22,071

 

18,652

 

 

21,174

 

 

19,393

 

 

81,290

 

Inventory net realizable value adjustment

 

 

334

 

 

 

 

 

 

334

 

Royalties and taxes

 

3,850

 

3,086

 

 

1,040

 

 

519

 

 

8,495

 

Worker’s participation

 

 

 

 

(333

)

 

501

 

 

168

 

General and administration

 

2,507

 

609

 

 

1,722

 

 

1,290

 

8,312

 

14,440

 

Stand-by

 

 

2,999

 

 

4,084

 

 

 

 

7,083

 

Total cash costs

 

28,428

 

25,680

 

 

27,687

 

 

21,703

 

8,312

 

111,810

 

Sustaining capital1

 

13,936

 

16,498

 

 

4,595

 

 

4,236

 

 

39,265

 

All-in sustaining costs

 

42,364

 

42,178

 

 

32,282

 

 

25,939

 

8,312

 

151,075

 

Gold equivalent ounces sold

 

25,130

 

25,946

 

 

16,382

 

 

16,536

 

 

83,994

 

All-in sustaining costs per ounce

 

1,686

 

1,626

 

 

1,971

 

 

1,569

 

 

1,799

 

Gold equivalent was calculated using the realized prices for gold of $1,973/oz Au, $24.1/oz Ag, $2,115/t Pb, and $2,713/t Zn for Q2 2023

Figures may not add due to rounding

1 Presented on a cash basis

AISC Per Gold Equivalent Ounce Sold – Year to Date 2024

    

Lindero

    

Yaramoko

    

Séguéla

    

San Jose

    

Caylloma

    

Corporate

    

GEO AISC

 

Cash cost applicable per gold equivalent ounce sold

 

45,175

 

48,637

 

34,493

 

48,885

 

28,416

 

 

205,606

 

Inventory net realizable value adjustment

 

 

1,777

 

 

 

 

 

1,777

 

Royalties and taxes

 

369

 

10,302

 

11,101

 

1,571

 

583

 

 

23,926

 

Worker’s participation

 

 

 

 

 

889

 

 

889

 

General and administration

 

6,160

 

732

 

3,771

 

3,048

 

2,625

 

22,987

 

39,323

 

Stand-by

 

 

 

 

 

 

 

 

Total cash costs

 

51,704

 

61,448

 

49,365

 

53,504

 

32,513

 

22,987

 

271,521

 

Sustaining capital1

 

27,143

 

19,558

 

19,593

 

477

 

8,742

 

 

75,513

 

All-in sustaining costs

 

78,847

 

81,006

 

68,958

 

53,981

 

41,255

 

22,987

 

347,034

 

Gold equivalent ounces sold

 

43,037

 

58,627

 

67,552

 

24,719

 

26,156

 

 

220,091

 

All-in sustaining costs per ounce

 

1,832

 

1,382

 

1,021

 

2,184

 

1,577

 

 

1,577

 

Gold equivalent was calculated using the realized prices for gold of $2,213/oz Au, $26.1/oz Ag, $2,120/t Pb, and $2,644/t Zn for Year to Date 2024.

Figures may not add due to rounding

1 Presented on a cash basis

AISC Per Gold Equivalent Ounce Sold – Year to Date 2023

    

Lindero

    

Yaramoko

    

Séguéla

    

San Jose

    

Caylloma

    

Corporate

    

GEO AISC

 

Cash cost applicable per gold equivalent ounce sold

 

45,895

 

42,785

 

 

43,235

 

 

36,885

 

 

168,800

 

Inventory net realizable value adjustment

 

 

334

 

 

 

 

 

 

334

 

Royalties and taxes

 

7,776

 

6,448

 

 

2,297

 

 

685

 

 

17,206

 

Worker’s participation

 

 

 

 

(312

)

 

1,018

 

 

706

 

General and administration

 

4,499

 

1,498

 

 

3,524

 

 

2,434

 

17,081

 

29,036

 

Stand-by

 

 

2,999

 

 

4,084

 

 

 

 

7,083

 

Total cash costs

 

58,170

 

54,064

 

 

52,828

 

 

41,022

 

17,081

 

223,165

 

Sustaining capital1

 

22,279

 

32,597

 

 

9,617

 

 

8,106

 

 

72,599

 

All-in sustaining costs

 

80,449

 

86,661

 

 

62,445

 

 

49,128

 

17,081

 

295,764

 

Gold equivalent ounces sold

 

51,893

 

55,418

 

 

39,511

 

 

32,712

 

 

179,535

 

All-in sustaining costs per ounce

 

1,550

 

1,564

 

 

1,580

 

 

1,502

 

 

1,648

 

Gold equivalent was calculated using the realized prices for gold of $1,930/oz Au, $23.2/oz Ag, $2,174/t Pb, and $2,954/t Zn for YTD 2023

Figures may not add due to rounding

1 Presented on a cash basis


Reconciliation of cost of sales to cash cost per payable ounce of silver equivalent sold for the three and six months ended June 30, 2024 and 2023

Cash Cost Per Silver Equivalent Ounce Sold – Q2 2024

    

San Jose

    

Caylloma

    

SEO Cash Costs

Cost of sales

 

25,524

 

 

16,239

 

 

41,763

 

Inventory adjustment

 

443

 

 

 

 

443

 

Depletion, depreciation, and amortization

 

(573

)

 

(3,358

)

 

(3,931

)

Royalties and taxes

 

(867

)

 

(229

)

 

(1,096

)

Other

 

6

 

 

(350

)

 

(344

)

Treatment and refining charges

 

743

 

 

2,287

 

 

3,030

 

Cash cost applicable per silver equivalent sold

 

25,276

 

 

14,589

 

 

39,865

 

Ounces of silver equivalent sold1

 

1,014,526

 

 

1,046,393

 

 

2,060,919

 

Cash cost per ounce of silver equivalent sold ($/oz)

 

24.91

 

 

13.94

 

 

19.34

 

1 Silver equivalent sold for Q2 2024 for San Jose is calculated using a silver to gold ratio of 79.9:1. Silver equivalent sold for Q2 2024 for Caylloma is calculated using a silver to gold ratio of 82.4:1, silver to lead ratio of 1:29.2 pounds, and silver to zinc ratio of 1:22.2 pounds.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

Figures may not add due to rounding

Cash Cost Per Silver Equivalent Ounce Sold – Q2 2023

    

San Jose

    

Caylloma

    

SEO Cash Costs

Cost of sales

 

29,366

 

 

18,543

 

 

47,909

 

Inventory adjustment

 

 

 

 

 

 

Depletion, depreciation, and amortization

 

(8,532

)

 

(3,405

)

 

(11,937

)

Royalties and taxes

 

(1,040

)

 

(519

)

 

(1,559

)

Other

 

267

 

 

(483

)

 

(216

)

Treatment and refining charges

 

1,113

 

 

5,257

 

 

6,370

 

Cash cost applicable per silver equivalent sold

 

21,174

 

 

19,393

 

 

40,567

 

Ounces of silver equivalent sold1

 

1,341,320

 

 

1,352,522

 

 

2,693,842

 

Cash cost per ounce of silver equivalent sold ($/oz)

 

15.79

 

 

14.35

 

 

15.06

 

1 Silver equivalent sold for San Jose for Q2 2023 is 81.9:1.Silver equivalent sold for Caylloma for Q2 2023 is calculated using a silver to gold ratio of 0.0:1, silver to lead ratio of 1:28.2 pounds, and silver to zinc ratio 1:19.6.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

Figures have been restated to remove Right of Use

Figures may not add due to rounding

Cash Cost Per Silver Equivalent Ounce Sold – Year to Date 2024

    

San Jose

    

Caylloma

    

SEO Cash Costs

Cost of sales

 

49,248

 

 

33,344

 

 

82,592

 

Inventory adjustment

 

455

 

 

 

 

455

 

Depletion, depreciation, and amortization

 

(964

)

 

(7,182

)

 

(8,146

)

Royalties and taxes

 

(1,571

)

 

(583

)

 

(2,154

)

Other

 

 

 

(681

)

 

(681

)

Treatment and refining charges

 

1,717

 

 

3,518

 

 

5,235

 

Cash cost applicable per silver equivalent sold

 

48,885

 

 

28,416

 

 

77,301

 

Ounces of silver equivalent sold1

 

2,094,621

 

 

2,244,876

 

 

4,339,497

 

Cash cost per ounce of silver equivalent sold ($/oz)

 

23.34

 

 

12.66

 

 

17.81

 

1 Silver equivalent sold for Year to Date 2024 for San Jose is calculated using a silver to gold ratio of 84.5:1. Silver equivalent sold for Year to Date 2024 for Caylloma is calculated using a silver to gold ratio of 84.8:1, silver to lead ratio of 1:26.7 pounds, and silver to zinc ratio of 1:21.4 pounds.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

Figures may not add due to rounding

Cash Cost Per Silver Equivalent Ounce Sold – Year to Date 2023

    

San Jose

    

Caylloma

    

SEO Cash Costs

Cost of sales

 

61,889

 

 

34,651

 

 

96,540

 

Inventory adjustment

 

 

 

 

 

 

Depletion, depreciation, and amortization

 

(18,444

)

 

(6,888

)

 

(25,332

)

Royalties and taxes

 

(2,297

)

 

(685

)

 

(2,982

)

Other

 

250

 

 

(955

)

 

(705

)

Treatment and refining charges

 

1,837

 

 

10,762

 

 

12,599

 

Cash cost applicable per silver equivalent sold

 

43,235

 

 

36,885

 

 

80,120

 

Ounces of silver equivalent sold1

 

3,284,402

 

 

2,711,988

 

 

5,996,390

 

Cash cost per ounce of silver equivalent sold ($/oz)

 

13.16

 

 

13.60

 

 

13.36

 

1 Silver equivalent sold for Year to Date 2023 for San Jose is calculated using a silver to gold ratio of 83.1:1. Silver equivalent sold for Year to Date 2023 for Caylloma is calculated using a silver to gold ratio of 81.3:1, silver to lead ratio of 1:23.6 pounds, and silver to zinc ratio of 1:17.4 pounds.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

Figures have been restated to remove Right of Use

Figures may not add due to rounding


Reconciliation of all-in sustaining cash cost and all-in cash cost per payable ounce of silver equivalent sold for the three and six months ended June 30, 2024 and 2023

AISC Per Silver Equivalent Ounce Sold – Q2 2024

    

San Jose

    

Caylloma

    

SEO AISC

Cash cost applicable per silver equivalent ounce sold

 

25,276

 

14,589

 

39,865

Royalties and taxes

 

867

 

229

 

1,096

Worker’s participation

 

 

472

 

472

General and administration

 

1,590

 

1,406

 

2,996

Stand-by

 

 

 

Total cash costs

 

27,733

 

16,696

 

44,429

Sustaining capital3

 

216

 

4,101

 

4,317

All-in sustaining costs

 

27,949

 

20,797

 

48,746

Silver equivalent ounces sold1

 

1,014,526

 

1,046,393

 

2,060,919

All-in sustaining costs per ounce2

 

27.55

 

19.87

 

23.65

1 Silver equivalent sold for Q2 2024 for San Jose is calculated using a silver to gold ratio of 79.9:1. Silver equivalent sold for Q2 2024 for Caylloma is calculated using a silver to gold ratio of 82.4:1, silver to lead ratio of 1:29.2 pounds, and silver to zinc ratio of 1:22.2 pounds.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

3 Presented on a cash basis

AISC Per Silver Equivalent Ounce Sold – Q2 2023

    

San Jose

    

Caylloma

    

SEO AISC

Cash cost applicable per silver equivalent ounce sold

 

21,174

 

 

19,393

 

40,567

Royalties and taxes

 

1,040

 

 

519

 

1,559

Worker’s participation

 

(333

)

 

501

 

168

General and administration

 

1,722

 

 

1,290

 

3,012

Stand-by

 

4,084

 

 

 

4,084

Total cash costs

 

27,687

 

 

21,703

 

49,390

Sustaining capital3

 

4,595

 

 

4,236

 

8,831

All-in sustaining costs

 

32,282

 

 

25,939

 

58,221

Silver equivalent ounces sold1

 

1,341,320

 

 

1,352,522

 

2,693,842

All-in sustaining costs per ounce2

 

24.07

 

 

19.18

 

21.61

1 Silver equivalent sold for San Jose for Q2 2023 is 81.9:1.Silver equivalent sold for Caylloma for Q2 2023 is calculated using a silver to gold ratio of 0.0:1, silver to lead ratio of 1:28.2 pounds, and silver to zinc ratio 1:19.6.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

3 Presented on a cash basis

AISC Per Silver Equivalent Ounce Sold – Year to Date 2024

    

San Jose

    

Caylloma

    

SEO AISC

Cash cost applicable per silver equivalent ounce sold

 

48,885

 

28,416

 

77,301

Royalties and taxes

 

1,571

 

583

 

2,154

Worker’s participation

 

 

889

 

889

General and administration

 

3,048

 

2,625

 

5,673

Stand-by

 

 

 

Total cash costs

 

53,504

 

32,513

 

86,017

Sustaining capital3

 

477

 

8,742

 

9,219

All-in sustaining costs

 

53,981

 

41,255

 

95,236

Silver equivalent ounces sold1

 

2,094,621

 

2,244,876

 

4,339,497

All-in sustaining costs per ounce2

 

25.77

 

18.38

 

21.95

1 Silver equivalent sold for Year to Date 2024 for San Jose is calculated using a silver to gold ratio of 84.5:1. Silver equivalent sold for Year to Date 2024 for Caylloma is calculated using a silver to gold ratio of 84.8:1, silver to lead ratio of 1:26.7 pounds, and silver to zinc ratio of 1:21.4 pounds.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

3 Presented on a cash basis

AISC Per Silver Equivalent Ounce Sold – Year to Date 2023

    

San Jose

    

Caylloma

    

SEO AISC

Cash cost applicable per silver equivalent ounce sold

 

43,235

 

 

36,885

 

80,120

Royalties and taxes

 

2,297

 

 

685

 

2,982

Worker’s participation

 

(312

)

 

1,018

 

706

General and administration

 

3,524

 

 

2,434

 

5,958

Stand-by

 

4,084

 

 

 

4,084

Total cash costs

 

52,828

 

 

41,022

 

93,850

Sustaining capital3

 

9,617

 

 

8,106

 

17,723

All-in sustaining costs

 

62,445

 

 

49,128

 

111,573

Silver equivalent ounces sold1

 

3,284,402

 

 

2,711,988

 

5,996,390

All-in sustaining costs per ounce2

 

19.01

 

 

18.12

 

18.61

1 Silver equivalent sold for Year to Date 2023 for San Jose is calculated using a silver to gold ratio of 83.1:1. Silver equivalent sold for Year to Date 2023 for Caylloma is calculated using a silver to gold ratio of 81.3:1, silver to lead ratio of 1:23.6 pounds, and silver to zinc ratio of 1:17.4 pounds.

2 Silver equivalent is calculated using the realized prices for gold, silver, lead, and zinc. Refer to Financial Results – Sales and Realized Prices

3 Presented on a cash basis

 

 

 

 

 

 

 

Additional information regarding the Company’s financial results and activities underway are available in the Company’s unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2024 and 2023 and accompanying Q2 2024 MD&A, which are available for download on the Company’s website, www.fortunamining.com, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar.

Conference Call and Webcast

A conference call to discuss the financial and operational results will be held on Thursday, August 8, 2024, at 9:00 a.m. Pacific time | 12:00 p.m. Eastern time. Hosting the call will be Jorge A. Ganoza, President and CEO, Luis D. Ganoza, Chief Financial Officer, Cesar Velasco, Chief Operating Officer – Latin America, and David Whittle, Chief Operating Officer – West Africa.

Shareholders, analysts, media and interested investors are invited to listen to the live conference call by logging onto the webcast at: https://www.webcaster4.com/Webcast/Page/1696/50903 or over the phone by dialing in just prior to the starting time.

Conference call details:

Date: Thursday, August 8, 2024
Time: 9:00 a.m. Pacific time | 12:00 p.m. Eastern time

Dial in number (Toll Free): +1.888.506.0062
Dial in number (International): +1.973.528.0011
Access code: 793245

Replay number (Toll Free): +1.877.481.4010
Replay number (International): +1.919.882.2331
Replay passcode: 50903

Playback of the earnings call will be available until Thursday, August 22, 2024. Playback of the webcast will be available until Friday, August 8, 2025. In addition, a transcript of the call will be archived on the Company’s website.

About Fortuna Mining Corp.

Fortuna Mining Corp. is a Canadian precious metals mining company with five operating mines in Argentina, Burkina Faso, Côte d’Ivoire, Mexico, and Peru. Sustainability is integral to all our operations and relationships. We produce gold and silver and generate shared value over the long-term for our stakeholders through efficient production, environmental protection, and social responsibility. For more information, please visit our website.

ON BEHALF OF THE BOARD

Jorge A. Ganoza
President, CEO, and Director
Fortuna Mining Corp.

Investor Relations:

Carlos Baca | info@fmcmail.com | www.fortunamining.com | X | LinkedIn | YouTube

Forward-looking Statements

This news release contains forward-looking statements which constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (collectively, “Forward-looking Statements”). All statements included herein, other than statements of historical fact, are Forward-looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward-looking Statements. The Forward-looking Statements in this news release include, without limitation, statements about the Company’s plans for its mines and mineral properties; the Company’s anticipated financial and operational performance in 2024; estimated production and costs of production for 2024, including grade and volume of metal produced and sales, revenues and cashflows, and capital costs (sustaining and non-sustaining), and operating costs, including projected production cash costs and all-in sustaining costs; the Company’s expectations and proposed timing for the delivery of a first resource for the Kingfisher prospect; the ability of the Company to mitigate the inflationary pressures on supplies used in its operations; estimated capital expenditures and estimated exploration spending in 2024, including amounts for exploration activities at its properties; statements regarding the Company’s liquidity, access to capital; the impact of high inflation on the costs of production and the supply chain;  the Company’s expectation regarding the timing for the completion of the leach pad expansion project at the Lindero Mine; statements regarding the anticipated closure of the San Jose Mine and statements relating to exploration at the Yessi Vein; the Company’s plans regarding the mill at the Séguéla Mine; the Company’s expectations for its performance in the second half of 2024; the Company’s expectations regarding the power plant failures in Côte D’Ivoire and that Séguéla’s 2024 production guidance remains unchanged; the Company’s business strategy, plans and outlook; the merit of the Company’s mines and mineral properties; mineral resource and reserve estimates, metal recovery rates, concentrate grade and quality; changes in tax rates and tax laws, requirements for permits, anticipated approvals and other matters. Often, but not always, these Forward-looking Statements can be identified by the use of words such as “estimated”, “expected”, “anticipated”, “potential”, “open”, “future”, “assumed”, “projected”, “used”, “detailed”, “has been”, “gain”, “planned”, “reflecting”, “will”, “containing”, “remaining”, “to be”, or statements that events, “could” or “should” occur or be achieved and similar expressions, including negative variations.

Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others, changes in general economic conditions and financial markets; uncertainty relating to new mining operations such as the Séguéla Mine, including the possibility that actual capital and operating costs and economic returns will differ significantly from those estimated for such projects prior to production; risks associated with war or other geo-political hostilities, such as the Ukrainian – Russian and the Israel – Hamas conflicts, any of which could continue to cause a disruption in global economic activity; fluctuation in currencies and foreign exchange rates; increases in the rate of inflation; the imposition or any extension of capital controls in countries in which the Company operates; any changes in tax laws in Argentina and the other countries in which we operate; changes in the prices of key supplies; technological and operational hazards in Fortuna’s mining and mine development activities; risks related to water and power availability; risks inherent in mineral exploration; uncertainties inherent in the estimation of mineral reserves, mineral resources, and metal recoveries; changes to current estimates of mineral reserves and resources; changes to production and cost estimates; the possibility that the appeal in respect of the ruling in favor of Compania Minera Cuzcatlan S.A. de C.V. reinstating the environmental impact authorization at the San Jose Mine (the “EIA”) will be successful; changes in the position of regulatory authorities with respect to the granting of approvals or permits; governmental and other approvals; changes in government, political unrest or instability in countries where Fortuna is active; labor relations issues; as well as those factors discussed under “Risk Factors” in the Company’s Annual Information Form. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward-looking Statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.

Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including, but not limited to, the accuracy of the Company’s current mineral resource and reserve estimates; that the Company’s activities will be conducted in accordance with the Company’s public statements and stated goals; that there will be no material adverse change affecting the Company, its properties or changes to production estimates (which assume accuracy of projected ore grade, mining rates, recovery timing, and recovery rate estimates and may be impacted by unscheduled maintenance, labor and contractor availability and other operating or technical difficulties); geo-political uncertainties that may affect the Company’s production, workforce, business, operations and financial condition; the expected trends in mineral prices and currency exchange rates; that the Company will be successful in mitigating the impact of inflation on its business and operations; that the appeal filed in the Mexican Collegiate Court challenging the reinstatement of the EIA will be unsuccessful; that all required approvals and permits will be obtained for the Company’s business and operations on acceptable terms; that there will be no significant disruptions affecting the Company’s operations, the ability to meet current and future obligations and such other assumptions as set out herein. Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward-looking Statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that these Forward-looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements.

Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources 

Reserve and resource estimates included in this news release have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for public disclosure by a Canadian company of scientific and technical information concerning mineral projects. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Reserves. Canadian standards, including NI 43-101, differ significantly from the requirements of the Securities and Exchange Commission, and mineral reserve and resource information included in this news release may not be comparable to similar information disclosed by U.S. companies.



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