Fortuna produces record AuEq ounces in 2023, but faces silver decline, higher costs
Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) is coming off a record year of gold production across its five operating mines, driven mainly by the Séguéla mine in Côte d’Ivoire which came online towards the end of the second quarter.
Total gold production in 2023 was 326,638 oz., a 26% increase on 2022. This includes 78,617 oz. coming from Séguéla during the second half of 2023. The biggest contributor was Yaramoko in Burkina Faso at 117,711 oz., followed by Lindero in Argentina at 101,238 oz.
In addition, base metals byproducts also reached record highs, with approximately 55.1 million lb. of zinc and 40.9 million lb. of lead, representing yearly increases of 19% and 18% respectively.
Silver production, however, saw a 15% decline to 5.9 million oz. due to decreased production at the San Jose mine Mexico following an illegal union blockade in the second quarter and operational challenges thereafter. In the end, silver output was 7% below the lower end of the 2023 guidance.
Still, on a gold-equivalent basis, Fortuna’s company-wide production including the base metal byproducts was a record 452,389 oz.
Looking ahead, the precious metals miner is expecting gold-equivalent production of between 457,000-497,000 oz. in 2024, for a projected increase of between 1-10% over last year.
The 2024 guidance comprises 343,000-385,000 oz. of gold, for a projected increase of between 5-18%, and 4.0-4.7 million oz. of silver, for a projected decrease of between 32-21%.
Cash cost is expected to rise by about 6-20% over the 2023 figures to between $935-$1,055/oz. gold-equivalent.
By midday Thursday, Fortuna’s stock plunged by 14.1% to C$4.12 apiece, for a market capitalization of C$1.2 billion ($920m).