Fortuna plans video updates from gold project

By Peter Kennedy

Fortuna Silver Mines Inc. [FVI-TSX; FSM-NYSE] has published its first video, documenting its construction progress at the Lindero gold project in Argentina.

The company now says it expects to publish a new episode every month until the company declares commercial production at the project in the first quarter of 2020.

“I believe that investors and the market is watching, watching us deliver,” said Fortuna President and CEO Jorge Ganoza.

Ganoza said Lindero marks an important milestone for Fortuna, a fast-growing precious metals producer, operating two low-cost mines in Peru and Mexico.

The San Jose Mine in Mexico is located in Oaxaca. It produced 8.0 million ounces of silver and 53,517 ounces of gold in 2018.

The Caylloma Mine in Peru, produced 911,309 ounces of silver in 2018.

This year, the company is forecasting consolidated production of up to 9.0 million ounces of silver, up to 54,000 ounces of gold, up to 29 million bounds of lead, and up to 44 million pounds of zinc.

Lindero will be the company’s third mine and the first in Argentina.

The project is a gold-rich porphyry system located in the Argentinian puna at an elevation of approximately 3,500 to 4,000 metres and 260 km west of Salta City. It takes about 7.5 hours to drive over a road distance of 420 km to the mine city from Salta City.

Lindero is an open pit, heap leach gold project with a completed feasibility study that has received all environmental and other major permits necessary for development. It has been designed as an 18,750 tonne per day owner-operated open pit mine with a pit life of 13 years, based on existing reserves.

Power will be generated on site, through an eight megawatt power plant, operated by a local contractor. More than 1,000 people are currently working on construction at the mine site.

For the first year of commercial production, Lindero’s mine plan has been optimized so that the operation will benefit from mining the higher grade mineralization out-cropping that was identified through infill drilling completed in 2018.

As a result, gold doré bar production for Lindero’s first year of commercial production is estimated at between 145,000 ounces and 160,000 ounces.

The feasibility study is based on a measured and indicated resource of 18.9 million tonnes, grading 0.50 g/t gold, 0.11% copper or 302,000 ounces of contained gold. On top of that is an inferred resource of 8.6 million tonnes, grading 0.38 g/t gold and 0.10% copper, or 106,000 ounces of contained gold.

Proven and probable reserves stand at 1.7 million ounces gold.

“Our mission is to be valued by our stakeholders, our shareholders, our workers and the community as a leading mining company in the world,” said Ganoza.

“The fact that it brings 13 years of reserves, 15 years of gold production and exploration upside, added to that the healthy margins that it has makes it a perfect strategic fit for us,” Ganoza said.  The initial capital cost was estimated at US$239 million and development is fully funded through to completion.

The project’s remote location has presented a unique set of challenges that have been addressed and overcome. The climate is generally dry and windy. Snow is not uncommon. Getting the necessary experienced personnel is among the challenges that has had to be addressed.

Once construction is complete, Lindero will represent the first precious metals mine in the Province of Salta. Ganoza said the aim is to establish a strategic partnership with local communities.

The company says it plans to showcase via video its construction progress as it moves towards commercial production early next year. The first video can be accessed at the company’s website: https://www.fortunasilver.com/

On Friday, Fortuna shares rose 0.95% or $0.04 to $4.25. The 52-week range is $4.04 and $7.77.