VANCOUVER, Sept. 1, 2011 /CNW/ - Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI / www.fortunasilver.com) is pleased to announce that it began commercial production at its San
Jose silver-gold mine in Oaxaca, Mexico today. Construction of the
wholly-owned mine was initiated in March 2010 and was concluded on-time
and on-budget, with total construction capital investment of
approximately US$55 million.
San Jose is expected to produce 520,000 ounces of silver and 4,600
ounces of gold in 2011, and 1.7 million ounces of silver and 15,000
ounces of gold in 2012 at an estimated cash cost per silver ounce of
US$5.04, net of by-products.
"This is a milestone for Fortuna. Our entire organization, with a
special mention to our team at San Jose, has performed exceptionally
well by delivering the construction and commissioning of our second
mine on-time and on-budget. We now look forward to continue delivering
production growth through the expansion of San Jose to 1,500 tonnes per
day by third quarter of 2013. In addition, we are scoping production
expansion of our Caylloma mine for 2012." said Jorge A. Ganoza, Fortuna
President, CEO and Director.
Commissioning of the processing plant began on July 15th, 2011 treating low grade ore from development stock piles and was
completed on August 31st, 2011 with the mill and mine operating steadily at the initial design
rate of 1,000 tonnes per day (tpd). Metallurgical recoveries achieved
for silver and gold are 75% and 80% respectively, both within eighty
percent of design parameters. Management expects that recoveries will
continue to improve over the coming weeks to the targeted 88% recovery
for silver and 90% for gold, as the process continues to be fine tuned
and the plant is sourced with production ore. The San Jose mine
currently has approximately 51,000 tonnes in the coarse ore stockpile
and 5,000 tonnes in fine ore stockpile.
Production on stopes K, L and M is proceeding as scheduled to support
the initial design throughput rate of 1,000tpd. Mine and processing
plant ramp-up to design capacity of 1,500tpd is scheduled to be
concluded in the third quarter of 2013.
For 2011, Fortuna's consolidated production guidance is 2.4 million
ounces of silver, 7,530 ounces of gold plus approximately 38.4 million
pounds of combined lead and zinc production. For the first two quarters
of 2011, silver production at its Caylloma mine in Peru was 912,102
ounces, with 10.3 million pounds of lead and 11.9 million pounds of
zinc as by products. For 2012, the Company anticipates an increase in
production to 3.7 million ounces of silver, 18,041 ounces of gold and
approximately 39.8 million pounds of combined lead and zinc production.
Fortuna Silver Mines Inc.
Established in 2004, 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 mine in Mexico. The Company is selectively pursuing
additional acquisition opportunities. For more information, please
visit our website at www.fortunasilver.com.
ON BEHALF OF THE BOARD
President, CEO and Director
Fortuna Silver Mines Inc.
Symbol: TSX: FVI / Lima Stock Exchange: FVI
Certain statements in this press release constitute forward-looking
statements and as such are based on an assumed set of economic
conditions and courses of action. These include estimates of the time
of commencement, commissioning and full production, future production
levels, expectations regarding mine production costs, expected trends
in mineral prices and statements that describe Fortuna's future plans,
objectives or goals. There is a significant risk that actual results
will vary, perhaps materially, from results projected depending on such
factors as 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, the timing and availability of financing,
governmental and other approvals, political unrest or instability in
countries where Fortuna is active, labor relations and other risk
SOURCE Fortuna Silver Mines Inc.
For further information:
Management Head Office: Carlos Baca- Tel: +51.1.616.6060, ext. 2
Corporate Office: Ralph Rushton - Tel: +1.604.484.4085