Wednesday, September 16, 2015

Fortuna Silver Mines Inc. - FVI.t

Fortuna Silver Mines Inc. - FVI.t operates two key producing mines. The San Jose Mine is located in southern Oaxaca, Mexico and the Caylloma Mine is located in the southern highlands of Arequipa, Peru.

The company's production forecast for 2015 is 6.5 million ounces of silver and 35,300 ounces of gold.

On August 7, 2015 the company released Numbers

Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) today reported sales of $38.9 million and net income of $0.2 million in the second quarter of 2015.

Jorge A. Ganoza, President and CEO, commented, "We continue to focus on cost control, productivity and margins. Mine plan flexibility at Caylloma and strong performance at San Jose continue to sustain our operating and financial results in spite of a challenging metal price environment." Mr. Ganoza continued, "Key capital projects remain on schedule as we look forward to the commissioning of the San Jose Mine expansion from 2,000 to 3,000 tpd in mid-2016."

Second quarter consolidated financial highlights:
• Sales of $38.9 million
• Net income of $0.2 million
• Cash flow from operations before changes in non-cash working capital of $6.8 million and cash flow per share of $0.05
• EBITDA of $12.4 million
• Cash position, including short term investments, and working capital as at June 30, 2015 were $110.0 million and $122.5 million, respectively
• Silver and gold production of 1,671,309 and 9,032 ounces, respectively
• Cash cost per ounce of payable silver, net of by-product credits was $4.08
• AISCC* per ounce of payable silver was $14.47

* All-in sustaining cash cost is net of by-product credits for gold, lead and zinc

Second quarter consolidated financial results

Net income amounted to $0.2 million, down from $2.9 million a year ago, resulting in basic earnings per share of $nil (Q2 2014: $0.02). Net income was affected by a 12% reduction in sales as a result of 17% lower realized silver price compared to Q2 2014. The negative effect from metal prices was partially offset by lower unit costs at both mines and by lower selling, general and administrative expenses of 36%. Net income was also affected by a higher deferred income tax provision as a result of the devaluation of the Mexican peso and the Peruvian nuevo sol. As a result of this the effective tax rate for the quarter was 95%. Without the impact of the foreign exchange devaluation the estimated effective tax rate would be 71%.