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Mar 26, 2020 9:40 AM ET

Fortuna Updates Mineral Reserves and Mineral Resources


iCrowd Newswire - Mar 26, 2020

Fortuna Silver Mines, Inc. (NYSE: FSM) (TSX: FVI) is pleased to report updated Mineral Reserve and Mineral Resource estimates as of December 31, 2019 for the Caylloma Mine located in Peru and the San Jose Mine located in Mexico and reiterates the  Mineral  Reserve  and  Mineral  Resource  estimate  as  of  March  31,  2019 for the Lindero Project located in Argentina.

Jorge A. Ganoza, President and CEO, commented: “Our infill drill program at Caylloma was successful at replenishing the majority of Mineral Reserves mined in 2019 with higher grade mineralized material.” Mr. Ganoza continued, “At San Jose, upgrading through infill drilling proved more challenging, as mining is transitioning from the central Stockwork zone to the Trinidad North area where mineralization tends to be narrower and more variable in nature. As the mineralization style changes, the operation is implementing various initiatives, such as pillar recovery and narrow vein mining methods, to optimize mineral extraction.”

Highlights of Mineral Reserve and Mineral Resource Update

Mineral Reserves – Proven and Probable           Contained Metal
Property Classification Tonnes
(000)
Ag
 (g/t)
Au
 (g/t)
Pb
 (%)
Zn
 (%)
Ag (Moz) Au
(koz)
Silver
Mines
Caylloma,
Peru
Proven 99 101 0.34 2.19 3.09 0.3 1
Probable 2,361 80 0.20 2.41 3.86 6.1 15
Proven + Probable 2,460 81 0.21 2.41 3.83 6.4 16
San Jose, Mexico Proven 232 311 2.12 N/A N/A 2.3 16
Probable 3,704 239 1.58 N/A N/A 28.5 188
Proven + Probable 3,936 243 1.61 N/A N/A 30.8 204
Total Proven + Probable 6,396 181 1.07 N/A N/A 37.2 220
Gold
Mine
Lindero, Argentina Proven 25,352 N/A 0.76 N/A N/A 0.0 618
Probable 58,875 N/A 0.58 N/A N/A 0.0 1,096
Proven + Probable 84,226 N/A 0.63 N/A N/A 0.0 1,714
Total Proven + Probable 37.2 1,934

 

Mineral Resources – Measured and Indicated          Contained Metal
Property Classification Tonnes (000) Ag
 (g/t)
Au
 (g/t)
Pb
 (%)
Zn
 (%)
Ag (Moz) Au
(koz)
Silver
Mines
Caylloma,  Peru Measured 681 110 0.37 1.96 3.28 2.4 8
Indicated 1,671 104 0.31 1.56 2.96 5.6 17
Measured + Indicated 2,352 106 0.33 1.67 3.06 8.0 25
San Jose, Mexico Measured 17 104 0.80 N/A N/A 0.1 0
Indicated 538 105 0.70 N/A N/A 1.8 12
Measured + Indicated 555 105 0.70 N/A N/A 1.9 13
Total Measured + Indicated 2,907 106 0.40 N/A N/A 9.9 37
Gold
Mine
Lindero, Argentina Measured 2,092 N/A 0.55 N/A N/A 0.0 37
Indicated 16,774 N/A 0.49 N/A N/A 0.0 265
Measured + Indicated 18,866 N/A 0.50 N/A N/A 0.0 302
Total Measured + Indicated 9.9 339

 

Mineral Resources – Inferred           Contained Metal
Property Classification Tonnes (000) Ag
 (g/t)
Au
 (g/t)
Pb
 (%)
Zn
 (%)
Ag (Moz) Au
(koz)
Silver
Mines
Caylloma, Peru Inferred 4,056 112 0.37 2.58 4.00 14.6 48
San Jose, Mexico Inferred 3,889 131 0.96 N/A N/A 16.3 120
Total Inferred 7,945 121 0.66 N/A N/A 30.9 168
Gold
Mine
Lindero, Argentina Inferred 8,600 N/A 0.38 N/A N/A 0.0 106
Total Inferred 30.9 274

1. Mineral Reserves and Mineral Resources are as defined by the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves
2. Mineral Resources are exclusive of Mineral Reserves
3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
4. Factors that could materially affect the reported Mineral Resources or Mineral Reserves include; changes in metal price and exchange rate assumptions; changes in local interpretations of mineralization; changes to assumed metallurgical recoveries, mining dilution and recovery; and assumptions as to the continued ability to access the site, retain mineral and surface rights titles, maintain environmental and other regulatory permits, and maintain the social license to operate
5. Mineral Resources and Mineral Reserves are estimated as of September 25, 2019 for the San Jose Mine and as of June 30, 2019 for the Caylloma Mine and reported for both mines as of December 31, 2019 taking into account production-related depletion for the period through December 31, 2019. Mineral Resources and Mineral Reserves for Lindero are estimated and reported as of March 31, 2019
6. Mineral Reserves for the San Jose Mine are based on underground mining within optimized stope designs using an estimated NSR break-even cut-off grade of US$64.54/t, equivalent to 138 g/t Ag Eq based on assumed metal prices of US$17/oz Ag and US$1,380/oz Au; estimated metallurgical recovery rates of 91 % for Ag and 90 % for Au and mining costs of US$33.24/t; processing costs of US$17.12/t; and other costs including distribution, management, community support and general service costs of US$15.18/t based on actual operating costs. Mining recovery is estimated to average 91% and mining dilution 11%. Mineral Resources are reported at a 110 g/t Ag Eq cut-off grade based on the same parameters used for Mineral Reserves and a 15% upside in metal prices. Proven and Probable Mineral Reserves include 2.36 Mt containing 20.4 Moz of silver and 124 koz of gold reported at a 142 g/t Ag Eq cut-off grade, in addition to Inferred Resources totaling 2.71 Mt containing 10.9 Moz of silver and 78 koz of gold reported at a 110 g/t Ag Eq cut-off grade, located in the Taviche Oeste concession and subject to a 2.5 % royalty
7. Mineral Reserves for the Caylloma Mine are reported above NSR breakeven cut-off values based on the proposed mining method for extraction including; mechanized (breasting) at US$ 85.26/t; mechanized (enhanced) at US$ 78.90/t; and semi-mechanized at US$ 86.03/t using assumed metal prices of US$17/oz Ag, US$1,380/oz Au, US$2,170/t Pb and US$2,590/t Zn; metallurgical recovery rates of 84 % for Ag, 25 % for Au, 91 % for Pb and 90 % for Zn with the exception of the Ramal Piso Carolina vein that uses a metallurgical recovery rate of 75 % for Au. Mining, processing and administrative costs used to determine NSR cut-off values were estimated based on actual operating costs incurred from July 2018 through June 2019. Mining recovery is estimated to average 93 % with mining dilution ranging from 10 % to 22 % depending on the mining methodology. Mineral Resources are reported at an NSR cut-off grade of US$65/t for veins classified as wide (Animas, Animas NE, Nancy, San Cristobal) based on the same parameters used for reserves, and a 15% upside in metal prices and US$135/t for veins classified as narrow (all other veins) based on narrow vein mining methods
8. Mineral Reserves for Lindero are reported based on open pit mining within a designed pit shell for variable gold cut-off grades and gold recoveries by metallurgical type. Met type 1 cut-off 0.27 g/t Au, recovery 75.4 %; Met type 2 cut-off 0.26 g/t Au, recovery 78.2 %; Met type 3 cut-off 0.26 g/t Au, recovery 78.5 %; and Met type 4 cut-off 0.30 g/t Au, recovery 68.5 %. Mining recovery is estimated to average 100% and mining dilution 0%. The cut-off grades and pit design are considered appropriate based on long term gold prices of US$1,320/oz, estimated mining costs of US$1.28 per tonne of material, total processing and process G&A costs of US$8.29 per tonne of ore, and refinery costs net of pay factor of US$6.90 per ounce gold. Lindero Mineral Resources are reported within the same conceptual pit shell above a 0.2 g/t Au cut-off grade based on the same parameters used for reserves and a 15% upside in metal prices
9. Eric Chapman, P. Geo. (APEGBC #36328) is the Qualified Person for Mineral Resources and Amri Sinuhaji (APEGBC #48305) is the Qualified Person for Mineral Reserves, both being employees of Fortuna Silver Mines Inc.
10. Totals may not add due to rounding procedures
11. N/A = Not Applicable

San Jose Mine, Mexico

As of December 31, 2019, the San Jose Mine has Proven and Probable Mineral Reserves of 3.9 Mt containing 30.8 Moz of silver and 204 koz of gold, in addition to Inferred Resources of 3.9 Mt containing a further 16.3 Moz of silver and 120 koz of gold.

Year-over-year, Mineral Reserves decreased 24 percent in terms of tonnes and 21 percent in contained silver and gold ounces after net changes resulting from production-related depletion and the upgrading and conversion of Inferred Resources to Mineral Reserves due to a limited infill drill program focused primarily on the Stockwork zones. Silver grade increased 3 percent and gold grade increased 4 percent to 243 g/t and 1.61 g/t, respectively due to an increase in the break-even cut-off grade from 134 g/t to 138 g/t Ag Eq.

Measured and Indicated Resources tonnes exclusive of Mineral Reserves increased slightly year-over-year from 0.3 Mt to 0.5 Mt due primarily to the change in the breakeven cut-off grade for reserves.

Year-over-year, Inferred Resources increased 61 percent in terms of tonnes and 7 percent in contained silver and gold ounces. Silver and gold grades decreased by 33 percent. The net variation is due to reductions resulting from the upgrading of high-grade Inferred Resources related to infill drilling in the Stockwork zones counteracted by exploration drilling discovering new resources in the Victoria mineralized zone.

Caylloma Mine, Peru

As of December 31, 2019, the Caylloma Mine has Proven and Probable Mineral Reserves of 2.5 Mt containing 6.4 Moz of silver and 16 koz of gold, in addition to Inferred Resources of 4.1 Mt containing 14.6 Moz of silver and 48 koz of gold.  

Year-over-year, Mineral Reserve tonnes decreased by 6 percent, while silver grade increased 5 percent to 81 g/t, lead grade increased 14 percent to 2.41%, and zinc grade increased 4 percent to 3.83%. Changes are primarily due to mining related depletion and the upgrading and conversion of Inferred Resources to Mineral Reserves due to a successful infill drill program focused primarily on the Animas NE vein.

Measured and Indicated Resource tonnes, exclusive of Mineral Reserves, increased by 9 percent year-over-year to 2.4 Mt.

Inferred Resources tonnes decreased by 1.3 Mt or 24 percent year-over-year. Silver, lead, and zinc grades increased 10 percent, 8 percent, and 4 percent, respectively. The decrease in Inferred Mineral Resources is primarily due to a successful infill drill program of the Animas NE vein resulting in the upgrading of Inferred Mineral Resources to Mineral Reserves coupled with an increase in cut-off value from US$50/t to US$65/t for the reporting of resources in wide veins.

Lindero Project, Argentina

The Lindero Project has Proven and Probable Mineral Reserves of 84.2 Mt containing 1.7 Moz of gold, in addition to Inferred Resources of 8.6 Mt containing 106 koz of gold (refer to Fortuna news release dated April 4, 2019).

Qualified Person

Mr. Eric Chapman is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (Registration Number 36328) and has reviewed and approved the scientific and technical information contained in this news release.

About Fortuna Silver Mines Inc.

Fortuna is a growth oriented, precious metals producer focused on mining opportunities in Latin America.  Our primary assets are the Caylloma silver Mine in southern Peru, the San Jose silver-gold Mine in Mexico and the Lindero gold mine, currently under construction, in Argentina.  The Company is selectively pursuing acquisition opportunities throughout the Americas and in select other areas.  For more information, please visit our website at www.fortunasilver.com.

ON BEHALF OF THE BOARD

Jorge A. Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.

Trading symbols: NYSE: FSM | TSX: FVI

Investor Relations:

Carlos Baca- T (Peru): +51.1.616.6060, ext. 0



Contact Information:

Carlos Baca- T (Peru): +51.1.616.6060, ext. 0








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