Fortuna reports consolidated financial results for the third quarter 2017
(Thomson Reuters ONE) -
VANCOUVER, British Columbia, Nov. 08, 2017 (GLOBE NEWSWIRE) -- Fortuna Silver
Mines Inc. (NYSE:FSM) (TSX:FVI) today reported net income of $10.3 million,
Adjusted EBITDA of $30.6 million, and revenue of $64.0 million in the third
quarter of 2017.
Jorge A. Ganoza, President and CEO, commented, "We have had yet another quarter
of strong operating and financial results at our operating mines in Peru and
Mexico, positioning the company well on track to meet our annual production
targets and financial objectives." Mr. Ganoza continued, "Having announced a
positive construction decision for our Lindero gold Project in Argentina, we
expect free cash flow from our operations to contribute significantly towards
the funding of the construction capital requirements."
Third quarter consolidated financial highlights
* Sales of $64.0 million, compared to $65.2 million in Q3 2016
* Net income of $10.3 million, compared to $10.2 million in Q3 2016
* Earnings per share of $0.06, compared to $0.08 in Q3 2016
* Adjusted net income of $13.1 compared to $10.0 million in Q3 2016
* Adjusted EBITDA of $30.6 million and Adjusted EBITDA margin over sales of
48%
* Cash flow from operations before changes in non-cash working capital of
$26.2 million, compared to $26.5 million in Q3 2016
* Cash position, including short term investments, and working capital as at
September 30, 2017 were $195.8 million and $197.6 million, respectively
* Silver and gold production of 2,009,362 and 13,412 ounces, respectively
* AISC(1) per ounce of payable silver was $6.1
Note
( 1) All-in sustaining cash cost is net of by-product credits for gold, lead
and zinc (Non-GAAP financial measure)
Third quarter consolidated financial results
+------------------------------------------------------------------------------+
| Q3 Q3 % YTD YTD % |
|Consolidated Financial Metrics 2017 2016 Change 2017 2016 Change|
| |
|Figures expressed in $ millions except per share information and AISC |
+------------------------------------------------------------------------------+
|Sales $ 64.0 $ 65.2 -2 % $ 192.8 $ 152.4 27 % |
| |
|Mine operating income 24.9 28.4 -12 % 74.3 59.9 24 % |
| |
|Operating income 18.9 21.2 -11 % 52.7 30.9 71 % |
| |
|Net income 10.3 10.2 1 % 32.2 11.3 185 % |
| |
| |
| |
|Earnings per share (basic) 0.06 0.08 -25 % 0.20 0.08 150 % |
| |
|Earnings per share (diluted) 0.06 0.07 -14 % 0.20 0.08 150 % |
| |
| |
| |
|Adjusted net income(1) 13.1 10.0 31 % 36.4 11.0 231 % |
| |
|Adjusted EBITDA(1) 30.6 30.6 0 % 87.3 53.5 63 % |
| |
|Cash provided by operating |
|activities 20.4 29.0 -30 % 41.2 26.9 53 % |
| |
|Cash generated by operating |
|activities before changes in |
|working capital 26.2 26.5 -1 % 61.3 39.6 55 % |
| |
|Capex (sustaining) 7.5 5.4 39 % 19.9 14.5 37 % |
| |
|Capex (non-sustaining) 6.1 3.6 69 % 11.2 21.0 -47 % |
| |
|Capex (Brownfield) 2.2 2.2 0 % 7.8 5.7 37 % |
| |
|All-in sustaining cash cost 6.1 7.5 -20 % 6.8 8.8 -23 % |
| |
|Cash, cash equivalents, and |
|short-term investments(2) 195.8 123.6 58 % 195.8 123.6 58 % |
| |
| |
| |
|Total assets(2) 652.9 387.7 68 % 652.9 387.7 68 % |
| |
|Non-current bank loan(2) 39.8 39.6 1 % 39.8 39.6 1 % |
| |
|Other liabilities(2) 1.3 4.8 -73 % 1.3 4.8 -73 % |
+------------------------------------------------------------------------------+
Note
( 1) refer to Non-GAAP Financial Measures
( 2) Comparative figures are as at December 31, 2016
Net income for the third quarter ended September 30, 2017 was $10.3 million or
$0.06 per share compared to a net income of $10.2 million or $0.08 per share for
the comparable quarter in 2016. The slightly higher net income was driven
mostly by lower income tax expense of $5.2 million as the effective tax rate for
the third quarter was 34.7% compared to 51.2% for the comparable quarter in
2016. Adjusted net income was $13.1 million compared to $10.0 million in 2016,
mostly after adjusting for a $2.2 million loss on financial instruments, net of
tax, in the current quarter.
Operating income for the third quarter ended September 30, 2017 was $18.9
million, 11% below the comparable quarter in 2016, attributable mostly to lower
financial results at our San Jose Mine related in turn to a lower realized
silver price of 14% and higher unit costs of 13%. These were partially offset
by stronger financial results at our Caylloma Mine driven by strong zinc and
lead prices and lower share based payments of $0.1 million, compared to $2.6
million in the third quarter of 2016.
A graph accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/78cdb59e-03c7-4d52-a704-
92e21d2c1bb3
Cash provided by operating activities in the third quarter of 2017 was $20.4
million, a $8.6 million decrease from $29.0 million in the comparable quarter of
2016. The decrease was due primarily to negative changes in working capital in
the third quarter of 2017 compared to positive changes in Q3 2016. The negative
changes in the current quarter are related to trade receivables and inventory.
Cash provided by operating activities before changes in working capital was
$26.2 million, a $0.3 million decrease from $26.5 million in the third quarter
of 2016.
Liquidity
At September 30, 2017, the Company had cash, cash equivalents, and short-term
investments of $195.8 million (December 31, 2016 - $123.6 million), an increase
of $7.8 million over the end of June 2017, and of $72.2 million since the
beginning of the year. The increase over year end 2016 was due primarily to a
bought deal equity financing in the first quarter of 2017 for net proceeds of
$70.9 million.
The Company is in the process of amending its existing credit facility with
Scotiabank from $40 million to $120 million. This will provide an additional
$80 million of liquidity on top of the $40 million which have been drawn as of
September 30, 2017 and completes our funding requirement for the construction of
the Lindero Project.
San Jose Mine, Mexico
YEAR TO DATE
QUARTERLY RESULTS RESULTS
--------------------- --------------------
Three months
ended, Nine months ended,
San Jose September 30, September 30,
-------------------------------------------------------------------------------
Mine Production 2017 2016 2017 2016
-------------------------------------------------------------------------------
t milled 263,697 268,242 799,420 632,432
Average t milled per day 3,038 3,056 3,054 2,425
Silver
Grade (g/t) 229 224 231 229
Recovery (%) 91 92 92 92
Production (oz) 1,774,556 1,780,825 5,454,793 4,296,125
Metal sold (oz) 1,739,066 1,761,101 5,392,495 4,270,370
Realized price ($/oz) 16.85 19.47 17.16 17.37
Gold
Grade (g/t) 1.71 1.76 1.74 1.73
Recovery (%) 91 92 91 92
Production (oz) 13,248 13,951 40,773 32,358
Metal sold (oz) 12,817 13,739 40,079 32,155
Realized price ($/oz) 1,280 1,327 1,251 1,268
Unit Costs
Production cash cost ($/oz Ag)(1) 1.53 0.73 1.29 1.74
Production cash cost ($/t) 62.23 54.83 60.31 57.69
Unit Net Smelter Return ($/t) 162.62 175.61 165.76 160.73
All-in sustaining cash cost ($/oz
Ag)(1) 7.75 6.94 7.35 7.95
(1) Net of by-product credits from
gold
The San Jose Mine produced 1,774,556 ounces of silver and 13,248 ounces of gold
in the third quarter, 4% and 7% higher than plan. Compared to the third quarter
of 2016 silver was slightly slower by 0.4% and gold was 5% lower. The decrease
in gold compared to 2016 was the result of lower head grades of 3% and lower
throughput of 2%.
Cash cost per tonne of processed ore for the third quarter ended September
30, 2017 was $62.2, which includes approximately $0.6 per tonne of non-recurring
items mainly related to mine support works due to a major earthquake in
September and $0.70 per tonne due to the appreciation of the Mexican Peso
against the US dollar. Excluding non-recurring items and exchange rate effects
the increase compared to budget was 4% and was related to higher mine support
cost and local inflation on the cost of energy and materials. Cash cost per
tonne of processed ore for the quarter was 13% higher than the $54.8 cash cost
for the comparable quarter in 2016. Cash cost for 2017 is expected to remain
within 5% of annual guidance (see Fortuna news release dated January 11, 2017).
All-in sustaining cash cost per payable ounce of silver, net of by-product
credits, was $7.4 for the first nine months of 2017 and was below the annual
guidance of $8.4 as a result of higher gold credits.
Caylloma Mine, Peru
YEAR TO DATE
QUARTERLY RESULTS RESULTS
--------------------- --------------------
Three months
ended, Nine months ended,
Caylloma September 30, September 30,
-------------------------------------------------------------------------------
Mine Production 2017 2016 2017 2016
-------------------------------------------------------------------------------
t milled 133,726 132,558 395,069 379,707
Average t milled per day 1,486 1,473 1,480 1,417
Silver
Grade (g/t) 66 87 66 93
Recovery (%) 83 83 84 85
Production (oz) 234,806 308,680 704,624 963,994
Metal sold (oz) 226,155 309,813 691,659 980,418
Realized price ($/oz) 16.89 19.56 17.19 16.91
Lead
Grade (%) 2.87 2.71 2.77 3.22
Recovery (%) 91 94 91 94
Production (000's lbs) 7,650 7,452 22,031 25,383
Metal sold (000's lbs) 7,291 7,454 21,454 25,826
Realized price ($/lb) 1.06 0.85 1.03 0.80
Zinc
Grade (%) 4.26 4.09 4.16 4.32
Recovery (%) 90 89 90 89
Production (000's lbs) 11,241 10,606 32,670 32,198
Metal sold (000's lbs) 10,867 10,600 32,512 32,504
Realized price ($/lb) 1.35 1.02 1.26 0.89
Unit Costs
Production cash cost ($/oz Ag)(1) (39.53 ) (8.49 ) (31.22 ) (4.41 )
Production cash cost ($/t) 76.00 71.83 78.12 72.16
Unit Net Smelter Return ($/t) 170.37 134.17 159.86 123.59
All-in sustaining cash cost ($/oz
Ag)(1) (18.79 ) 3.27 (11.23 ) 5.14
(1) Net of by-product credits from gold, lead
and zinc
Silver production at the Caylloma Mine for the third quarter of 2017 was
234,806 ounces, 24% lower than the comparable period in 2016. Lead and zinc
production were 7.7 million and 11.2 million pounds, respectively; 3%, and 6%
higher than the comparable quarter in 2016. Lower silver production for the
third quarter was due to lower head grades of 25%. Higher lead production of
3% was the result of higher head grades of 6% partially offset by lower recovery
of 4%, while higher zinc production of 6% was the result of higher head grade of
4%. Compared to plan silver and lead production were 6% and 3% below budget,
while zinc production was 5% above budget.
Cash cost per tonne of processed ore for the third quarter ended September
30, 2017 was $76.0, which was 6% higher than the $71.8 cash cost for the
comparable quarter in 2016 and 1% higher than budget. The increase over the
third quarter of 2016 was mainly due to higher energy, ground support and labour
costs. Cash cost for full year 2017 is expected to remain within 5% of annual
guidance (see Fortuna news release dated January 11, 2017).
All-in sustaining cash cost per payable ounce of silver, net of by-product
credits, was a negative $11.2 for the first nine months of the year and was
significantly below the annual guidance of $10.8 due primarily to higher by-
product credits.
The financial statements and MD&A are available on SEDAR and have also been
posted on the Company's website
at http://www.fortunasilver.com/s/financial_reports.asp.
Conference call details:
Date: Thursday, November 9, 2017
Time: 9:00 a.m. Pacific | 12:00 p.m. Eastern
Dial in number (Toll Free): +1.888.567.1603
Dial in number (International): +1.404.267.0368
Replay number (Toll Free): +1.877.481.4010
Replay number (International): +1.919.882.2331
Replay Passcode: 10434
Playback of the conference call will be available until November 23, 2017 at
11:59 p.m. Eastern. Playback of the webcast will be available until February
9, 2018. In addition, a transcript of the call will be archived in the
company's website:
https://www.fortunasilver.com/investors/financials/2017/.
About Fortuna Silver Mines Inc.
Fortuna is a growth oriented, precious metal producer focused on mining
opportunities in Latin America. The Company's primary assets are the Caylloma
silver mine in southern Peru, the San Jose silver-gold mine in Mexico and the
Lindero gold project in Argentina. The Company is selectively pursuing
acquisition opportunities throughout the Americas and in select other areas.
ON BEHALF OF THE BOARD
Jorge A. Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.
Trading symbols: NYSE: FSM | TSX: FVI
Investor Relations:
Carlos Baca- T (Peru): +51.1.616.6060, ext. 0
Forward looking Statements
This news release contains forward looking statements which constitute "forward
looking information" within the meaning of applicable Canadian securities
legislation and "forward looking statements" within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995
(collectively, "Forward looking Statements"). All statements included herein,
other than statements of historical fact, are Forward looking Statements and are
subject to a variety of known and unknown risks and uncertainties which could
cause actual events or results to differ materially from those reflected in the
Forward looking Statements. The Forward looking Statements in this news release
include, without limitation, statements about the Company's plans for its mines
and mineral properties; the Company's business strategy, plans and outlook; the
merit of the Company's mines and mineral properties; the future financial or
operating performance of the Company; and proposed expenditures. Often, but not
always, these Forward looking Statements can be identified by the use of words
such as "estimated", "potential", "open", "future", "assumed", "projected",
"used", "detailed", "has been", "gain", "planned", "reflecting", "will",
"containing", "remaining", "to be", or statements that events, "could" or
"should" occur or be achieved and similar expressions, including negative
variations.
Forward looking Statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any results, performance or
achievements expressed or implied by the Forward looking Statements. Such
uncertainties and factors include, among others, 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;
governmental and other approvals; political unrest or instability in countries
where Fortuna is active; labor relations issues; as well as those factors
discussed under "Risk Factors" in the Company's Annual Information Form.
Although the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in Forward looking Statements, there may be other factors that cause
actions, events or results to differ from those anticipated, estimated or
intended.
Forward looking Statements contained herein are based on the assumptions,
beliefs, expectations and opinions of management, including but not limited to
expectations regarding the Company's plans for its mines and mineral properties;
mine production costs; expected trends in mineral prices and currency exchange
rates; the accuracy of the Company's current mineral resource and reserve
estimates; that the Company's activities will be in accordance with the
Company's public statements and stated goals; that there will be no material
adverse change affecting the Company or its properties; that all required
approvals will be obtained; that there will be no significant disruptions
affecting operations and such other assumptions as set out herein. Forward
looking Statements are made as of the date hereof and the Company disclaims any
obligation to update any Forward looking Statements, whether as a result of new
information, future events or results or otherwise, except as required by law.
There can be no assurance that Forward looking Statements will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, investors should not place undue
reliance on Forward looking Statements.
This news release also refers to non-GAAP financial measures, such as cash cost
per tonne of processed ore; cash cost per payable ounce of silver; total
production cost per tonne; all-in sustaining cash cost; all-in cash cost;
adjusted net (loss) income; operating cash flow per share before changes in
working capital, income taxes, and interest income; and adjusted EBITDA. These
measures do not have a standardized meaning or method of calculation, even
though the descriptions of such measures may be similar. These performance
measures have no meaning under International Financial Reporting Standards
(IFRS) and therefore, amounts presented may not be comparable to similar data
presented by other mining companies.
The photo is also available at Newscom, www.newscom.com, and via AP
PhotoExpress.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Fortuna Silver Mines Inc. via GlobeNewswire
Datum: 08.11.2017 - 22:59 Uhr
Sprache: Deutsch
News-ID 567321
Anzahl Zeichen: 25767
contact information:
Town:
Vancouver
Kategorie:
Business News
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