Fortuna reports production for 1Q20

The company produced 1.8 million oz of silver and 10 101 oz of gold, plus base metal by-products. Government-mandated constraints on business to curb the spread of COVID-19 in the countries that host its operations have resulted in reduced production at the Caylloma Mine during 1Q20, and subsequent to the end of the quarter, have resulted in the suspension of operations at the San Jose Mine. Due to the uncertainties related to the impact of these constraints on the company's business and operations, it has withdrawn its production and cost guidance for 2020 until further notice.

1Q20 production highlights include:

• Silver production of approximately 1.82 million oz; 19% decrease over 1Q19.
• Gold production of 10 101 oz; 24% decrease over 1Q19.
• Lead production of approximately 7.72 million lbs; 8% increase over 1Q19.
• Zinc production of approximately 11.82 million lbs; 5% increase over 1Q19.
• Cash cost for San Jose is US$71.1/t, in line with 1Q20 budget.
• Cash cost for Caylloma is US$80.8/t, in line with 1Q20 budget.

San Jose Mine, Mexico

The San Jose Mine produced approximately 1.57 million oz of silver and 9630 oz of gold in 1Q20, 11% and 16% below budget respectively. Average head grades for silver and gold were 216 g/t and 1.33 g/t, 6% and 12% below budget respectively.

Lower silver and gold production in the first quarter was attributed to a decrease in processed tonnes and to a variation in head grades. The decrease in processed tonnes is due to a stoppage in mining and processing operations caused by illegal road blockades in the vicinity of the mine, including access to the mine. The variation in head grades is related to a planned modification in the mining sequence to allow preparation work to be conducted for pillar recovery. This restricted access to high-grade material and resulted in mining more variable peripheral stopes during the quarter. The decrease in metal production due to the modification of the mining sequence is planned to be recovered throughout the remainder of the year, once government-imposed restrictions on the mining industry are lifted and production at the mine recommences.

Caylloma Mine, Peru

The Caylloma Mine produced 249 111 oz of silver in 1Q20, 17% above budget. Average head grade for silver was 70 g/t, 17% above budget.

Lead and zinc production for 1Q20 was approximately 7.72 million lbs and approximately 11.82 million lbs, 17% and 3% above budget respectively. Average head grades for lead and zinc were 2.96 % and 4.58 %, 19% and 6% above budget respectively.

On 15 March 2020, the government of Peru introduced a series of measures to contain the rapid spread of COVID-19. The company, in compliance with the regulatory framework issued by the Ministerio de Energía y Minas and the Ministerio del Interior, proceeded to demobilise non-critical personnel and continued to operate, using essential personnel at Caylloma, by drawing ore from its coarse ore stockpiles. In the first quarter, 86% of treated ore was sourced from the Animas vein grading 70 g/t Ag, 2.95% Pb and 4.57 % Zn and 14% was sourced from coarse ore stockpiles grading 71 g/t Ag, 2.91% Pb and 4.65 % Zn.

Lindero Project, Argentina

Mining activity ramped up in 1Q20 with a total of 718 000 t of mineralised material and approximately 1.77 t of waste mined until 19 March 2020, when operations were suspended due to a government declared period of mandatory national social isolation in relation to COVID-19. Prior to the shut-down, the operation had successfully achieved a mining rate of 40 000 tpd which is required to support full production.

Since the start of pre-production in September 2019, mining has focused on extracting medium to low-grade material for stockpiling and preparing the mine through additional waste stripping, while actively avoiding high-grade zones so that this material will be available as direct feed upon plant commissioning.

Read the article online at: https://www.globalminingreview.com/finance-business/15042020/fortuna-reports-production-for-1q20/