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Fortuna Reports Record Revenue of US$ 13.23 Million and Mine Operating Income of US$ 7.07 Million in Q3 of 2009
November 12, 2009: Fortuna Silver Mines Inc. (TSX.V: FVI / Lima Exchange: FVI) -- is pleased to announce that it has filed its financial statements and MD&A for the three months ended September 30, 2009. The full documents are available on SEDAR and have also been posted on the Company's website at www.fortunasilver.com.
Third quarter 2009 highlights:
- Mine operating income of US$ 7.07 million compared to US$ 1.73 million in Q3 2008
- Historic record sales of US$ 13.23 million compared to US$ 7.49 million in Q3 2008
- Cash flow from operations before changes in non-cash working capital of US$ 2.66 million, compared to US$2.58 million in Q3 2008
- Net loss of US$ 0.56 million compared to net loss of US$ 0.30 million in Q3 2008
- Adjusted net income (*) of US$ 1.22 million compared to US$ 0.23 million in Q3 2008
- Cash position and working capital as at September 30, 2009 were US$ 33.68 million and US$ 34.86 million respectively
(*) Adjusted net income is a non-GAAP (Generally Accepted Accounting Principles) measure. Read below for reconciliation with the net loss in the consolidated statement of operations. For more detail, refer to the MD&A document filed on SEDAR.
Jorge Ganoza, President, CEO and Director, commented, "The Company reported record breaking sales of US$ 13.23 million. The average realized price of silver in the third quarter was US$ 14.70. Fortuna is well positioned to continue capitalizing on this bull trend in silver and base metals."
A conference call has been scheduled for Monday, November 16, at 11:00 a.m. EST / 8:00 a.m. PST to discuss the quarterly results. Details of the call are available at the end of this release.
Financial Results
During the third quarter of 2009, the Company generated record quarterly sales of US$13.23 million compared to US$7.49 million in the same period of 2008; an increase of 77%.
The Company recorded a net loss in the current quarter of US$0.56 million which was due primarily to negative mark-to-market movements on our commodity hedge book. The Company's base metal price protection program generated a loss on commodity contracts of US$3.47 million during the third quarter of 2009 compared to a gain of US$0.69 million for the same period of 2008.
Adjusting for the mark-to-market effect on derivatives, the third quarter of 2009 resulted in adjusted net income of US$1.22 million compared to US$0.23 million for the same period of 2008. The increase of US$0.99 million is primarily a result of record mine operating income of US$7.07 million compared to US$1.73 million in the same period of 2008.
Summary of financial results (US$):
| |
Expressed in '000's |
| Three months ended September 30, |
Nine months ended September 30, |
| 2009 |
2008 |
2009 |
2008 |
| Revenue |
$ 13,230 |
$ 7,492 |
$ 35,072 |
$ 22,072 |
| Mine operating income |
7,074 |
1,734 |
17,534 |
6,886 |
| Operating income |
4,388 |
(383) |
8,820 |
636 |
| Adjusted net income (loss) |
1,224 |
231 |
1,849 |
(302) |
| Cash flow from operations before changes in non-cash working capital items |
2,658 |
2,577 |
10,909 |
(7,659) |
| Cash cost per Ag oz net of by-product credits (US$/oz) |
(5.34) |
- |
- |
- |
Reconciliation of adjusted net income to net income in the consolidated statement of operations (US$):
| |
Expressed in '000's |
| Three months ended September 30, |
Nine months ended September 30, |
| 2009 |
2008 |
2009 |
2008 |
| NET (LOSS) INCOME FOR THE PERIOD |
$ (556) |
$ (297) |
$ (414) |
$ 1,558 |
| Items of note: |
|
|
|
|
Mark-to-Market effect on
derivatives |
1,780 |
528 |
2,263 |
(1,860) |
| ADJUSTED NET INCOME (LOSS) FOR THE PERIOD(1) |
1,224 |
231 |
1,849 |
(302) |
Operating Results
The mine continues to be on target to achieve its silver production forecast of 1.6 million ounces for 2009. Silver production reached 438,186 ounces in the third quarter of 2009, an 80% increase over the same period in 2008.
Cash cost per ounce of payable silver net of by-product credits at Caylloma was negative US$5.34 for the third quarter of 2009 compared to negative US$2.98 for second quarter of 2009. This reduction in cash cost is due to higher credits from by-products. Cash cost per tonne of treated ore for the third quarter of 2009 was US$45.09 compared to US$44.43 for the corresponding quarter of 2008.
San Jose Project
Management plans to have all the engineering and permits required to initiate construction at San Jose concluded by year end. Project staffing for the construction phase is being conducted and the Company has initiated selective searches for long lead equipment.
Conference Call to Review Quarterly Financial Results
The Company will hold a conference call to discuss the financial results on Monday, November 16, 2009, at 11:00 a.m. EST / 8:00 a.m. PST. Hosting the call will be Jorge Ganoza, President, Chief Executive Officer and Director, and Luis Dario Ganoza, Chief Financial Officer.
Shareholders, analysts, media and interested investors are invited to listen to the live conference call by logging onto the webcast at the Investor Calendar website or over the phone by dialing just prior to the starting time.
Conference call details:
Date: Monday, November 16, 2009
Time: 11:00 a.m. EST / 8:00 a.m. PST
Dial in number (Toll Free): 877-407-8035
Dial in number (International): 201-689-8035
Replay number (Toll Free): 1-877-660-6853
Replay password (International): 1-201-612-7415
Replay Passcodes (both are required for playback):
Account: # 286
Conference ID: # 337303
Playback of the webcast will be available until February 17, 2010. Playback of the conference call will be available until 11:59 p.m. EST on November 30, 2009. In addition, the call will be archived in the Company's website.
Stock Option Cancellation
The Company advises that it has cancelled 1,075,000 incentive stock options which were exercisable at $3.22 per share.
Fortuna Silver Mines Inc.
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 Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at www.fortunasilver.com.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD
Jorge Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.
Symbol: TSX.V: FVI / Lima Exchange: FVI
Investor Relations:
Lima office: Carlos Baca - Tel: 51.1.616.6060
Vancouver office: Erin Ostrom - Tel: 604.484.4085
- Associated File: http://www.fortunasilver.com/i/pdf/NR/Nov122009.pdf
- 63 KB in size, approx. 13 seconds to download at 56.6Kbps
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Share Transfer Agent
Olympia Trust Company
925 West Georgia Street, Suite 1900
Vancouver, BC V6C 3L2
Tel: 604-484-8637
Fax: 604-484-8638
Investor Relations:
Carlos Baca
Erin Ostrom
TSX-V: FVI
Lima Exchange: FVI |