Our San Jose Mine in the Taviche Mining District, Oaxaca, Mexico, produces silver and gold. The underground mine is operated by Compañia Minera Cuzcatlan S.A. de C.V., a Mexican subsidiary 100% owned by Fortuna. It is a low sulfidation epithermal vein deposit and based on reserves reported as of December 31 2022, the operation has a two and a half year mine life.
The San Jose Mine was commissioned in July 2011 and began commercial production in September 2011 at 1,000 tonnes per day. With strategic investment over many years, we increased the mill’s capacity to 3,000 tonnes per day by mid-2016. In 2022, the mine produced 5.8 million ounces of silver and 34,124 ounces of gold.
We recognize the role our San Jose Mine plays to support sustainable development in our areas of influence around the mine. As the largest employer in the area, we employed 410 local members and partnered with 70 suppliers from our local communities in 2022.
San Jose Mine Video
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Commodity
Silver, gold
Ownership
100%
Operation
3,000
tonnes per day
Claim block area
48,000
hectares
Deposit type
Low sulphidation
epithermal vein
deposit
epithermal vein
deposit
Mining method
Underground
cut-and-fill
cut-and-fill
OPERATING HIGHLIGHTS
|
20221 |
2023E1 |
|
|---|---|---|
|
Tonnes milled (000) |
1.03 |
1.03 |
|
Average milled (tpd) |
2,925 |
|
|
Silver production (Moz) |
5.8 |
5.3 - 5.8 |
|
Gold production (koz) |
34.1 |
34 - 37 |
|
AISC2,3,4,5 (US$/oz Ag Eq) |
- |
$14.7 - $16.2 |
Notes:
- Refer to Fortuna news release dated January 17, 2023, "Fortuna reports 2022 full year record production of 401,878 gold equivalent ounces and issues 2023 annual guidance.”
- Cash Cost and all-in sustaining cost (AISC) are non-GAAP financial measures which are not standardized financial measures under the financial reporting framework used to prepare the financial statements of the Company and might not be comparable to similar financial measures disclosed by other issuers. Refer to "Non-IFRS Financial Measures" in the Company’s 2022 management discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2022 dated November 9, 2022 (“Q3 MD&A 2022”), which is available under Fortuna's SEDAR profile, and the note regarding “Non-IFRS Financial Measures” on this Website.
- The following table provides the historical cash costs and historical AISC for the four operating mines for the year ended December 31, 2021, as follows:
-
Mine Cash Costa,b,c AISCa,b,c SILVER ($/oz AgEq) ($/oz AgEq) San Jose, Mexico 9.30 14.38 Caylloma, Peru 13.46 18.94 GOLD ($/oz Au) ($/oz Au) Lindero, Argentina 617 1,116 Yaramoko, Burkina Faso 739 1,317 - (a) Cash cost and AISC are non-IFRS financial measures; refer to the note under “Non-IFRS Financial Measures” below
- (b) Silver equivalent was calculated at metal prices of $1,789/oz Au, $25.16/oz Ag, $2,205/t Pb and $2,998/t Zn for the year ended December 31, 2021
- (c) Further details on the cash costs and AISC for the year ended December 31, 2021 are disclosed on pages 34, 35, 36, 38, and 39 (with respect to cash costs) and pages 34, 35, 37, and 40 (with respect to AISC) of the Company’s management discussion and analysis (“MD&A”) for the year ended December 31, 2021 dated as of March 23, 2022 (“2021 MD&A”) which is available under Fortuna's SEDAR profile at www.sedar.com and is incorporated by reference into our January 17, 2023 news release, and the note under “Non-IFRS Financial Measures” on this website.
-
- The most comparable financial measure to cash costs is cost of sales. Please see the condensed interim consolidated financial statements of the Company for the three and nine months ended September 30, 2022 and pages 32, 34 and 35 of the Q3 MD&A 2022 for a reconciliation.
- AISC includes production cash cost, commercial and government royalties, mining tax, export duties (as applicable), worker’s participation (as applicable), subsidiary G&A, sustaining capital expenditures, and Brownfields exploration and is estimated at metal prices of $1,700/oz Au, $21/oz Ag, $2,000/t Pb, and $3,200/t Zn. AISC excludes government mining royalty recognized as income tax within the scope of IAS-12
- The most comparable financial measure to AISC is cost of sales. Please see the condensed interim consolidated financial statements of the Company for the three and nine months ended September 30, 2022 and pages 33, 35 and 36 of the Q3 MD&A 2022 for a reconciliation.
- Totals may not add due to rounding.
LOCATION
|
Our San Jose Mine is located in the Taviche Mining District in central Oaxaca, southern Mexico (Latitude 16° 41’ 40” N, Longitude: 96° 42’ 00” W). Mining occurs year-round. Many of our workers and suppliers come from the nearest city, Oaxaca, a 47-kilometre drive to the north, and the nearby communities of San Jose del Progreso and Ocotlán de Morelos. Oaxaca is the nearest international airport, and the mine is less than one kilometre from Federal Highway 175, the major highway between Oaxaca and Puerto Angel on the Pacific coast. |
GEOLOGY AND MINERALIZATION
The San Jose deposit is a low sulfidation epithermal vein system characterized by mineralized multiphase quartz-carbonate-sulphide veins, hydrothermal breccias and stockwork veining. The mineralized system is hosted in a sequence of Tertiary andesitic volcanic and volcaniclastic rocks.
MINERAL RESERVES
2.1 million tonnes
averaging 172 g/t Ag and 1.16 g/t Au containing 11.8 Moz Ag and 80 koz Au
Refer to Mineral Reserves and Resources table below for full disclosure
BROWNFIELDS EXPLORATION
The Brownfields exploration program budget for 2023 at the San Jose Mine is $3.3 million, which includes 5,500 meters of diamond drilling, focused on extensions to the Magdalena, Trinidad and Victoria systems, as well as work along the Taviche corridor.
Mineral Reserves and Resources
|
Mineral Reserves - Proven and Probable |
Contained Metal |
|||||
|---|---|---|---|---|---|---|
|
Property |
Classification |
Tonnes (000) |
Ag (g/t) |
Au (g/t) |
Ag (Moz) |
Au (koz) |
|
San Jose, Mexico |
Proven |
184 |
208 |
1.45 |
1.2 |
9 |
|
Probable |
1,957 |
168 |
1.14 |
10.6 |
72 |
|
|
Proven + Probable |
2,140 |
172 |
1.16 |
11.8 |
80 |
|
|
Mineral Resources - Measured and Indicated |
Contained Metal |
|||||
|---|---|---|---|---|---|---|
|
Property |
Classification |
Tonnes (000) |
Ag (g/t) |
Au (g/t) |
Ag (Moz) |
Au (koz) |
|
San Jose, Mexico |
Measured |
72 |
135 |
0.98 |
0.3 |
2 |
|
Indicated |
839 |
107 |
0.70 |
2.9 |
19 |
|
|
Measured + Indicated |
911 |
109 |
0.72 |
3.2 |
21 |
|
|
Mineral Resources - Inferred |
Contained Metal |
|||||
|---|---|---|---|---|---|---|
|
Property |
Classification |
Tonnes (000) |
Ag (g/t) |
Au (g/t) |
Ag (Moz) |
Au (koz) |
|
San Jose, Mexico |
Inferred |
2,524 |
118 |
0.83 |
9.6 |
67 |
-
Notes:
- Mineral Reserves and Mineral Resources are as defined by the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves
- Mineral Resources are exclusive of Mineral Reserves
- Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
- Factors that could materially affect the reported Mineral Resources or Mineral Reserves include; changes in metal price and exchange rate assumptions; changes in local interpretations of mineralization; changes to assumed metallurgical recoveries, mining dilution and recovery; and assumptions as to the continued ability to access the site, retain mineral and surface rights titles, maintain environmental and other regulatory permits, and maintain the social license to operate
- San Jose Mineral Resources and Reserves are reported as of July 31, 2022 and reported as of December 31, 2022 taking into account production related depletion as of this date
- Mineral Reserves for the San Jose Mine are based on underground mining within optimized stope designs using an estimated NSR break-even cut-off grade of US$68.7/t to US$74.0/t equivalent to 119 -133 g/t Ag Eq based on assumed metal prices of US$21/oz Ag and US$1,600/oz Au; estimated metallurgical recovery rates of 91% for Ag and 90% for Au and mining costs of US$35.37/t cut and fill (C&F) - US$30.00/t sub-level stoping (SLS); processing costs of US$16.76/t; and other costs including distribution, management, community support and general service costs of US$21.91/t based on actual operating costs. Average mining recovery is estimated to 92% (C&F) and 93% (SLS) and average mining dilution 11% (C&F) and 17% (SLS). Mineral Resources are reported at a 110 g/t Ag Eq cut-off grade based on the same parameters used for Mineral Reserves and a 15% upside in metal prices
- Eric Chapman, P. Geo. (EGBC #36328) is the Qualified Person for resources and Raul Espinoza (FAUSIMM (CP) #309581) is the Qualified Person for reserves, both being employees of Fortuna Silver Mines Inc.
- Totals may not add due to rounding procedures
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