FoRtunA SIlVeR MIneS InC. | 2012 AnnuAl RepoRt
4
Chief executive officer’s letter
Dear shareholders,
I am pleased to report that Fortuna’s production, cash flow and earnings increased for the
sixth consecutive year in 2012—keeping us well on track to achieving our vision of building a
leading silver mining company in the Americas. to this end, we continue to focus our energy
and resources on operational excellence, brownfields exploration and implementing a
disciplined long-term growth strategy.
our current financial resources and talented management team ensure that we can face the
challenges of growing our business and creating sustainable value for our stakeholders.
For that reason, I remain confident in our ability to achieve our strategic objective of producing
at an annual rate of 14 million silver equivalent ounces by 2016, while maintaining cash
operating costs below the industry average.
Operational excellence
Consistent operational excellence at our mines over the past five years has positioned
Fortuna among the industry’s lowest-cost silver producers.
In 2012, our consolidated cash cost per ounce of silver was uS$5.96, net of by-product
credits, or 41 % below the industry average of approximately uS$10.04. throughout the year,
we continued to capitalize on opportunities to increase production at the San Jose Mine,
resulting in silver and gold production exceeding annual guidance by 8 % and 19 % respectively.
For 2013, we expect silver and gold production to continue to grow, as throughput capacity at
San Jose increases 50 % to 1,500 tpd upon completion of our mill expansion project. We
expect this project, which is scheduled for commissioning in the third quarter of 2013, to also
lower operating costs.
Recognizing that our stakeholders have a keen interest in our operational performance for the
coming year, we are, for the first time, providing cost and capital expenditure guidance for 2013.
Many of the cost pressures we face are the result of external forces. In peru and Mexico,
shortages of experienced technical staff and contract services have persisted for the past
four years, creating operating challenges throughout the entire industry. Recently however, we
have witnessed an easing of cost pressures associated with these shortages, and expect this
trend to continue in 2013. Within Fortuna, we have implemented our own initiatives to
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We are better
positioned than at
any time in the
company’s history to
face the challenges
of growing our
business and
creating sustainable
value for our
stakeholders.
Jorge A. Ganoza
President, CEO and
Co-founder
