Fortuna Begins Commercial Production
at San Jose Mine, Mexico
Vancouver, September 1, 2011 - Fortuna Silver Mines Inc. (TSX: FVI /
Lima Stock Exchange: FVI / www.fortunasilver.com) is pleased to announce that it began commercial
production at its San Jose silver-gold mine in Oaxaca, Mexico today.
Construction of the wholly-owned mine was initiated in March 2010 and was
concluded on-time and on-budget, with total construction capital investment
of approximately US$55 million.
San Jose is expected to produce 520,000 ounces of silver and 4,600 ounces
of gold in 2011, and 1.7 million ounces of silver and 15,000 ounces of gold
in 2012 at an estimated cash cost per silver ounce of US$5.04, net of
by-products.
"This is a milestone for Fortuna. Our entire organization, with a
special mention to our team at San Jose, has performed exceptionally well
by delivering the construction and commissioning of our second mine on-time
and on-budget. We now look forward to continue delivering production growth
through the expansion of San Jose to 1,500 tonnes
per day by third quarter of 2013. In addition, we are scoping production
expansion of our Caylloma mine for 2012."
said Jorge A. Ganoza, Fortuna President, CEO and
Director.
Commissioning of the processing plant began on July 15th, 2011 treating low
grade ore from development stock piles and was completed on August 31st,
2011 with the mill and mine operating steadily at the initial design rate
of 1,000 tonnes per day (tpd).
Metallurgical recoveries achieved for silver and gold are 75% and 80%
respectively, both within eighty percent of design parameters. Management
expects that recoveries will continue to improve over the coming weeks to
the targeted 88% recovery for silver and 90% for gold, as the process
continues to be fine tuned and the plant is
sourced with production ore. The San Jose mine currently has approximately
51,000 tonnes in the coarse ore stockpile and
5,000 tonnes in fine ore stockpile.
Production on stopes K, L and M is proceeding as
scheduled to support the initial design throughput rate of 1,000tpd. Mine
and processing plant ramp-up to design capacity of 1,500tpd is scheduled to
be concluded in the third quarter of 2013.
For 2011, Fortuna's consolidated production guidance is 2.4 million ounces
of silver, 7,530 ounces of gold plus approximately 38.4 million pounds of
combined lead and zinc production. For the first two quarters of 2011,
silver production at its Caylloma mine in Peru
was 912,102 ounces, with 10.3 million pounds of lead and 11.9 million
pounds of zinc as by products. For 2012, the Company anticipates an
increase in production to 3.7 million ounces of silver, 18,041 ounces of
gold and approximately 39.8 million pounds of combined lead and zinc
production.
Fortuna Silver Mines Inc.
Established in 2004, Fortuna is a growth-oriented, silver and base metal
producer focused on mining opportunities in Latin America. Our primary
assets are the Caylloma silver mine in southern
Peru and the San Jose silver-gold mine in Mexico. The Company is
selectively pursuing additional acquisition opportunities. For more
information, please visit our website at www.fortunasilver.com.
ON BEHALF OF THE BOARD
Jorge Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.
Symbol: TSX: FVI / Lima Stock Exchange: FVI
Investor Relations:
Management Head Office: Carlos Baca- Tel: +51.1.616.6060, ext. 2
Corporate Office: Ralph Rushton - Tel: +1.604.484.4085
Forward-Looking Statements
Certain statements in this press release constitute forward-looking
statements and as such are based on an assumed set of economic conditions
and courses of action. These include estimates of the time of commencement,
commissioning and full production, future production levels, expectations regarding mine production costs, expected
trends in mineral prices and statements that describe Fortuna's future
plans, objectives or goals. There is a significant risk that actual results
will vary, perhaps materially, from results projected depending on such
factors as changes in general economic conditions and financial markets,
changes in prices for silver and other metals, technological and
operational hazards in Fortuna's mining and mine development activities,
risks inherent in mineral exploration, uncertainties inherent in the
estimation of mineral reserves, mineral resources, and metal recoveries,
the timing and availability of financing, governmental and other approvals,
political unrest or instability in countries where Fortuna is active, labor
relations and other risk factors.
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