VANCOUVER, Jan. 18 /CNW/ - Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI) is pleased to provide an update on construction activities at its 100%
owned San Jose silver-gold Project in Oaxaca, Mexico. Construction
activities to date are on budget and commissioning of the mine is
scheduled for the third quarter of 2011.
To the end of December 2010, US$ 23.5 million invested in construction
or 42% of CAPEX
Foundation work for crushers, milling and flotation areas is complete.
Mounting and installation of major plant equipment has been initiated
this month, starting with the 13' x 19.5' ball mill.
Tailings dam construction is 91% advanced and scheduled for completion
The 8MW power substation has been completed; commissioning is in process
The main access ramp has reached the 1400 meter level, where the first
production level will be developed
Production stope K is being developed on the Trinidad, Fortuna and
Bonanza veins on sub-level 1430. On production stope L, a cross-cut
from the main access ramp intersected the Trinidad and Bonanza veins on
Water pipeline installation to the mine site is 87% advanced
Jorge Ganoza, President and CEO, commented, "We are extremely pleased
with the advancement of construction at San Jose where our engineering
team continues to deliver an on-time and on-budget project. With
Caylloma and the San Jose project in operation, the Company will be in
a position to grow annual silver production organically from its
existing reserves to seven million ounces of silver equivalent by
2013*. In addition, this month we will be starting an ambitious 30,000
meter drill program around our two key assets, Caylloma and San Jose,
to continue exploring the resource expansion potential of each
*All equivalency estimates in this release are based on Ag = US$
23.60/oz, Au = US$ 1,350/oz and metallurgical recoveries of 88% and 90%
for silver and gold respectively.
Once San Jose is in operation in the third quarter of 2011, Management
anticipates that Fortuna's operations at Caylloma and San Jose should
produce a total of 2.4 million ounces of silver and 7,530 ounces of
gold or 2.8 million silver equivalent ounces plus base metal credits in
2011. San Jose's contribution will be 500,000 ounces of silver and
4,580 ounces of gold. The Company is executing plans to reach 7 million
ounces of silver equivalent annual production from existing reserves by
In 2012, its first full year of production, the San Jose Mine is
scheduled to produce 1.77 million ounces of silver and 16,120 ounces of
gold or 2.75 million silver equivalent ounces. At full design capacity,
planned for 24 months from the start of operations, the San Jose Mine's
annual production forecast is 3.2 million ounces of silver, 24,220
ounces of gold or 4.6 million silver equivalent ounces. The technical
report of the San Jose Project is available on the Company's website at
www.fortunasilver.com and on SEDAR at www.sedar.com.
Processing Plant and Ancillary Facilities
Site preparation and foundation work for the 1,500 tpd processing plant
have been completed for major equipment. Mounting and installation work
for the ball mill is currently taking place, to be followed over the
coming three months by installation of other major equipment including
the flotation cells and crushing plant.
The processing plant has no long lead items on critical path. Purchase
orders for all plant equipment have been placed with on-site equipment
arriving according to schedule.
Construction of the tailings dam is 91% advanced and scheduled to be
completed during January. The tailings dam is currently prepared to
store water for the commissioning of the processing plant.
Underground Mine Development
In December, the main access ramp reached the 1400 meter elevation - the
first production level - allowing for the development of production
stopes K, L and M for start-up of production at an initial mining rate
of 1,000 tpd in the third quarter of 2011.
Vein widths and grades for the Trinidad, Fortuna and Bonanza veins cut
on level 1400 and sublevel 1430 are in line with the geologic resource
With the onsite arrival of new underground equipment during late 2010,
mine development is advancing according to plan.
The Ocotlan grey water treatment plant is fully operational and the
quality of the water obtained is within design parameters.
The pipeline to carry water from the grey water treatment plant to the
Project site is 87% complete. Negotiations with the community are
taking place to install the remaining two kilometers of the pipeline.
Construction of the transformer and switching stations has been
completed. Commissioning is currently taking place and connection to
the national power grid is scheduled for mid-February.
Mr. Thomas Kelly, Fellow AusIMM, is the Company's Qualified Person as
defined by the NI 43-101 and has verified the technical information in
this news release.
Fortuna Silver Mines Inc.
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
Project 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 COMPANY
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 calculation 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