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FORTUNA SILVER MINES INC. | 2014 ANNUAL REPORT
2014 Highlights
Full Year Financial and Operating Highlights
Net income for the year ended December 31, 2014 (“2014”) improved to $15.6 million compared with a $19.1 million
net loss for the year ended December 31, 2013 (“2013”), resulting in basic earnings per share of $0.12 (2013: loss
$0.15).
For the year ended December 31, 2014, the Company’s adjusted net income was $15.7 million (2013: $9.4 million)
related to the non-cash impairment of inventories of $0.1 million (refer to non-GAAP financial measures).
Silver sold increased 45% to 6,694,552 ounces, while the realized silver price decreased 20% to $18.90 per ounce,
from the prior year. Gold sold increased 70% to 35,758 ounces, while the realized gold price decreased 10% to $1,260.44
per ounce, from the prior year. Sales comprised 64% silver and 19% gold, compared with 65% and 14%, respectively, in
the prior year.
Cash flow from operations, before changes in working capital, increased 46% to $59.8 million (2013: $40.9 million),
reflecting a 27% higher sales and improved margins, from the prior year. Operating cash flow per share, before changes
in working capital items, increased to $0.47 (2013: $0.33) (refer to non-GAAP financial measures). Cash and cash
equivalent and short term investments increased $28.1 million (57%) to $77.3 million (2013: $49.1 million).
Silver production increased 42% to 6,599,300 ounces (2013: 4,631,264 ounces), and gold production increased 66%
to 35,316 ounces (2013: 21,242 ounces).
Consolidated all-in sustaining cash cost per payable ounce of silver, net of by-product credits, was $14.48 and below our
annual guidance of $17.14 for 2014 (refer to non-GAAP financial measures).
San Jose’s all-in sustaining cash cost per payable ounce of silver, net of by-product credits, was $12.07 and below the
annual guidance of $14.43 for 2014 (refer to non-GAAP financial measures).
Caylloma’s all-in sustaining cash cost per payable ounce of silver, net of by-product credits, was $14.13 and below our
annual guidance of $17.01 for 2014 (refer to non-GAAP financial measures).
Fourth Quarter 2014 Financial Highlights
Fourth quarter 2014 net income amounted to $0.1 million (Q4 2013: loss $14.9 million), resulting in basic earnings per
share of $nil (Q4 2013: loss $0.12). Net income in Q4 2014 was negatively affected by restructuring and severance
costs of $1.1 million and higher mark-to-market effects on share-based compensation to $1.4 million compared to Q4
2013. Silver sold increased 16% to 1,611,313 ounces while the realized silver price decreased 21% to $16.33 per
ounce from the same period in the prior year.
2015 Guidance and Outlook
2015 Production Guidance
For 2015, the production and cash cost guidance is noted in the below table.
Silver
Gold
Investments
Cash Cost
AISCC**
Mine
(Moz)
(koz)
($ millions)
($/t)
($/oz Ag)
San Jose, Mexico
4.3
33.3
56.5
62.71
16.27
Caylloma, Peru
2.2
1.9
14.0
90.29
12.78
Total
6.5
35.3
70.6
** All-in sustaining cash cost (“AISCC”) per ounce of silver is net of by-products gold, lead and zinc
All-in sustaining cash cost calculated using Au = $1,200/oz, Pb = $2,000/t and Zn = $2,200/t.
All-in sustaining cash cost is a non-GAAP financial measure
Total figures may not add due to rounding.
• The 2015 San Jose Mine AISCC of $16.27/oz Ag includes $5.96/oz Ag or $24.5 million attributed as sustaining
capital investments related to the filter facility and dry stack tailings deposit
• Consolidated AISCC of $16.61, refer to the table below for details
• Caylloma Mine zinc and lead production forecast of 28.8 million pounds and 19.4 million pounds, respectively
