Fortuna Reports 1Q 2008 Revenue of $6.83 million, Net Loss of
$0.64 million, and Working Capital of $57.91 million
May 22, 2008: Fortuna Silver Mines Inc. (TSX-V: FVI) has filed its
financial statements and MD&A for the three months ended March 31,
2008. The full documents are available on SEDAR and have also been
posted on the Company's website at www.fortunasilver.com.
First quarter 2008 highlights:
- Sales of $6.83 million ($5.74 million in the first quarter of 2007).
- Operating cash flow before stock-based compensation charge of $2.50
million ($2.40 million in the first quarter of 2007).
- Net loss of $0.64 million (net loss of $1.76 million in the first
quarter of 2007.)
- The Company's cash position and working capital as at March 31, 2008
were $50.40 million and $57.91 million respectively.
- Production of 140,239 oz of silver, 1,189 tonnes of lead and 2,079 tonnes
of zinc, representing an increase of 65%, 84%, and 77% respectively over
the first quarter of 2007.
Jorge Ganoza, the President and CEO of Fortuna, commented: "We are very
pleased with Caylloma's operating results for the quarter. Our
investment plan laid out a year ago for the Caylloma mine has been
successful in providing significant increases in throughput and metal
production. Concentrate production in the first quarter of 2008
increased by 76% over 2007, and we expect to see continued expansion of
production over the following quarters. We plan for increased silver
output towards the fourth quarter of 2008 as we bring into production
new silver rich zones."
During the first quarter of 2008 the Company generated $6.83 million of
sales compared to $5.74 million in the same period of 2007. Volume of
concentrate sold during the first quarter of 2008 was 70% larger
compared to the same period in 2007. This increase in sales volume was
not passed fully onto revenue due partially to significantly higher
smelter treatment charges compared to 2007. Realized metal prices
decreased 26% for zinc and increased 51% and 34% for lead and silver
compared to the same period. The compound effect of metal prices
weighted to a slightly positive effect of around 10%.
Mine operating income in the first quarter of 2008 was $2.31 million
compared to $1.71 million in the same period of 2007. Cost of sales
increased only 23% from 2007, where units of concentrate sold increased
by 70%. This is due to higher head grades, higher ore throughput, and
a lower depletion charge due to increase in life of mine estimates.
Operating income for the first quarter of 2008 was $0.19 million after
deducting $0.53 million of stock-based compensation charges, where
operating income solely for the Caylloma mine was $1.35 million.
After commencing production in late 2006 the 100% owned Caylloma mine
had its fifth consecutive quarter of continuous production growth in
the first quarter of 2008. This trend is explained by continuous
increments in throughput as well as head grades. Average throughput
rate for the first quarter of 2008 was 838 tpd, significantly above the
754 tpd achieved in the fourth quarter of 2007. An all time record of
900 tpd was achieved on May 5, 2008.
Cash production cost per tonne for the first quarter of 2008 was
US$49.97 and the corresponding unit net smelter return was US$97.70.
San Jose Project
Capital expenditures for the quarter in San Jose were US$2.0 million,
where 80% of this amount is comprised of surface exploration,
underground ramp development, engineering studies, and concession
Fortuna is a growth oriented, silver and base metal producer focused on
mining opportunities in Latin America. Principal assets include the
Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold
Project in Mexico. The Company is aggressively pursuing additional
acquisition opportunities. For more information, please visit our
website at www.fortunasilver.com.
The TSX Venture Exchange has not reviewed and does not take
responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD
Jorge Ganoza, President & CEO
Fortuna Silver Mines Inc.
Copyright (c) 2008 FORTUNA SILVER MINES INC. (FVI) All rights
reserved. For more information visit our website at
http://www.fortunasilver.com/ or send mailto:email@example.com