Fortuna Silver Mines Inc. (NYSE:FSM)(TSX:FVI)(BVLAC:FVI)(FRANKFURT:F4S) is pleased to announce updated Mineral Reserve and Mineral Resource estimates as of June 30, 2014 for the San Jose Mine located in Oaxaca, Mexico. The Mineral Reserve estimate is based on San Jose's latest Mineral Resource estimate (see Fortuna news release dated August 27, 2014).
Highlights of Resource and Reserve Update
Manuel Ruiz-Conejo, Vice President of Operations for Fortuna, commented, "Despite lower metal prices, the updated reserve estimate reports increases in the reserve tonnes and contained silver and gold ounces. The stockwork zone in the central part of the Trinidad deposit contributed significantly to these results." Mr. Ruiz-Conejo continued, "For the first time, reserves have been reported for the Trinidad North discovery area confirming the potential of the northern extension of the Trinidad deposit. The significant expansion of the Inferred Resources in the Trinidad North area and the open exploration potential to the north and to depth bode well for the future of the San Jose Mine."
San Jose Mine Resource and Reserve Update
Details of the mineral resource estimate have been previously provided in the Fortuna Silver news release of August 27, 2014.
Key economic and operational factors used in the conversion of the Mineral Resources to Mineral Reserves are detailed in note 6 of the Mineral Resource and Mineral Reserve table. A mining dilution factor of 12.2 percent has been applied based on historical operating data. Mining recovery loss due to pillars and bridges is estimated at 18.5 percent. A projected year-end operating cost of US$69.34/t was utilized for the break even cutoff analysis in the June 30, 2014 reserve estimate.
San Jose Mine, Mexico
As of June 30, 2014, the San Jose Mine had Proven and Probable Mineral Reserves of 4.3 Mt containing 31.2 Moz of silver and 242.6 koz of gold.
Year-over-year, the San Jose Mineral Reserves increased 9 percent in tonnes, 26 percent in contained silver and 13 percent in contained gold after production-related depletion and metal price reductions of 13 percent and 10 percent for silver and gold, respectively.
Average Mineral Reserve grades increased by 15 percent to 225 g/t for silver and by 3 percent to 1.75 g/t for gold relative to the July 4, 2013 estimate.
The largest gain in reserves for the San Jose Mine is located in the Stockwork zone in the central part of the Trinidad deposit, where 1.1 Mt were upgraded to Measured and Indicated Resources through infill drilling and mine development activities. These upgraded resources have been converted to Mineral Reserves partially offset by production-related depletion.
Maiden Mineral Reserves are reported for the Trinidad North discovery located in the northern extension of the Trinidad deposit based on a limited infill drill program. In this zone, Probable Reserves of 0.2 Mt with an average grade of 255 g/t Ag and 1.72 g/t Au (358 g/t Ag Eq) are reported for the Bonanza North Vein and 0.2 Mt with an average grade of 478 g/t Ag and 3.07 g/t Au (662 g/t Ag Eq) are reported for the Trinidad North Vein.
Measured and Indicated Resources exclusive of Mineral Reserves decreased 10 percent year-over-year to 0.8 Mt reflecting an improvement in the conversion of resources to reserves.
Inferred Resources total 7.1 Mt containing an estimated 58.9 Moz silver and 401 koz gold, reflecting increases of 31 percent in tonnes, 67 percent in contained silver ounces and 47 percent in contained gold ounces relative to the July 4, 2013 resource and reserve estimate. The increase in Inferred Resources resulted from step-out drilling of the Trinidad North discovery with the mineralized zone remaining open to the north and to depth. Continuation of the step-out drilling from new underground drill chambers has been initiated and will test the resource potential of an additional 250 to 300 meter strike extension of the Trinidad system with results to be released periodically during the final quarter of 2014 and the first half of 2015.
The Mineral Resources estimates have been prepared under the supervision of Eric Chapman of Fortuna Silver Mines Inc. The Mineral Reserve estimate and the Mineral Resource estimate exclusive of Mineral Reserves were prepared under the supervision of Boris Caro, Corporate Technical Services Manager for Fortuna Silver Mines Inc.
E. Chapman and B. Caro are Qualified Persons as defined by the National Instrument 43-101. Mr. Caro is a Registered Member of Australasian Institute of Mining and Metallurgy (Membership No. 305462) and is a Registered Member of the Chilean Mining Commission (Comisión Calificadora de Competencias en Recursos y Reservas Mineras, Registered Member No. 0229) and is responsible for ensuring that the information contained in this news release is an accurate summary of the original reports and data provided to or developed by Fortuna Silver Mines.
Fortuna Silver Mines Inc.
Fortuna is a growth-oriented, silver, gold 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 exploration and development 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.
Trading symbols: (NYSE:FSM)(TSX:FVI)(BVLAC:FVI)(FRANKFURT:F4S)
This news release contains forward-looking statements which constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (collectively, "Forward-looking Statements"). All statements included herein, other than statements of historical fact, are Forward looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward-looking Statements. The Forward-looking Statements in this news release include, without limitation, statements about the Company's plans for its mines and mineral properties; the Company's business strategy, plans and outlook; the merit of the Company's mines and mineral properties; mineral resource and reserve estimates; timelines; the future financial or operating performance of the Company; expenditures; approvals and other matters. Often, but not always, these Forward looking Statements can be identified by the use of words such as "estimate", "estimates", "estimated", "potential", "open", "future", "assumed", "projected", "used", "detailed", "has been", "gain", "upgraded", "offset", "limited", "contained", "reflecting", "containing", "remaining", "to be", "periodically", or statements that events, "could" or "should" occur or be achieved and similar expressions, including negative variations.
Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others, 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; governmental and other approvals; political unrest or instability in countries where Fortuna is active; labor relations issues; as well as those factors discussed under "Risk Factors" in the Company's Annual Information Form. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward looking Statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to expectations regarding mine production costs; expected trends in mineral prices and currency exchange rates; the accuracy of the Company's current mineral resource and reserve estimates; that the Company's activities will be in accordance with the Company's public statements and stated goals; that there will be no material adverse change affecting the Company or its properties; that all required approvals will be obtained; that there will be no significant disruptions affecting operations and such other assumptions as set out herein. Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward looking Statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that Forward looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements.
Appendix: San Jose Mine Mineral Resources and Mineral Reserves as of June 30, 2014
San Jose Mine Mineral Reserve Update
Mineral Reserves – Proven and Probable
Mineral Resources – Measured and Indicated
Mineral Resources – Inferred