Fortuna Silver Mines Inc. announced that the Board of Directors of the Company made a positive construction decision for the 100% owned Lindero gold Project located in the Province of Salta. In July 2016, Fortuna completed the acquisition of Goldrock Mines Corp. whose principal asset was the Lindero Project. Lindero has an approved environmental impact study and has been granted all major permits for the construction of an 18,750 tpd open pit, heap leach gold mine.
Jorge Ganoza, President, CEO and Director, commented, «With a base case IRR (Internal Rate of Return) of 18% and a 3.6 year payback, we have delivered a strong project greatly derisked technically and financially that will contribute low cost gold production over its 15 years of operation. Initial capital of $239 million is going to be comfortably funded from our approximately $190 million cash position, available lines of credit and projected cash flows. We do not envision accessing equity capital markets or having to take hedge positions for this project.» Mr. Ganoza continued, «The optimization work conducted over the past year has captured opportunities for improved metallurgical recovery and reduced leach time. At the same time, technical risks have been mitigated on the process side by bringing in a SART (Sulphidization-Acidification-Recycle-Thickening) plant, ore agglomeration and a conveyor stacking system to year one.» Mr. Ganoza added, «Under our construction plan, detailed engineering and site activities are expected to commence next month with commissioning expected in the second quarter of 2019.» Mr. Ganoza concluded, «In the first year of full production, Lindero will take Fortuna’s annual production to approximately 9 million ounces of silver and 190,000 ounces of gold or 340,000 gold equivalent (Gold equivalent ounces calculated using a gold to silver ratio of 1 to 60) ounces.»
| Life of Mine Highlights | ||
| Production | ||
| Mine life (years)1 | 15 | |
| Annual ore placed in leach pad (Mt) | 6.75 | |
| Strip ratio (waste to ore) | 1.2 | |
| Head grade (g/t) | 0.62 | |
| Recovery (%) | 75 | |
| Gold recovered to doré (Moz) | 1.3 | |
| Average annual gold recovered to doré (koz)2 | 96 | |
| Peak annual gold recovered to doré (koz) | 138 | |
| AISC ($/oz Au) 3 | 802 | |
| Initial capital ($M) | 239 | |
| Sustaining capital ($M) | 105 | |
| Base Case Economics | ||
| Gold price ($) | 1,250 | |
| Exchange rate (ARS:USD)4 | 17.80 | |
| After-tax NPV @ 5% ($M)5 | 130 | |
| After-tax IRR (%)6 | 18 | |
| Payback period (years)7 | 3.6 | |
1 Includes 20 months of heap rinsing of gold inventory
2 Average over years 1 – 13. Does not include gold from heap rinsing.
3 All-In Sustaining Cash Cost
4 Argentine Peso
5 Net Present Value; considers initial capital in one single annual period; excludes High-Pressure-Grinding-Roller (HPGR) acquired upon the acquisition of Goldrock Mines Corp.
6 Considers initial capital in one single annual period; excludes High-Pressure-Grinding-Roller (HPGR) acquired upon the acquisition of Goldrock Mines Corp.
7 Payback based on undiscounted cash flow
