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FORTUNA SILVER MINES INC. | 2014 ANNUAL REPORT
Chairman’s Letter
To our shareholders
and employees,
Driving growth from within is the theme of our 2014
annual report. This theme, however, has underpinned
our strategy since the formation of Fortuna in 2005.
Focusing on internal or organic growth has enabled
us to effectively manage technical risk and control
costs while steadily expanding our operations. Our
approach recognizes that precious metal and capital
markets are both inherently cyclical. We must,
therefore, make decisions with a focus on the
long-term.
By following this strategy we have built a sound,
successful business, one capable of withstanding
the inevitable swings in precious metal prices. Our
core assets – the San Jose Mine in Mexico and
Caylloma Mine in Peru – cover 98,000 hectares.
By actively exploring and developing these highly
prospective mineral concessions, we have kept
discovery costs low and increased production year-by-
year. At the same time, we have improved operational
and capital efficiency to maximize cash flow.
In 2014, we posted strong operating and financial
performance despite the ongoing weakness in silver
and gold prices. We also reported a gratifying
increase in proven and probable reserves. The
results speak to the strength of our underlying
assets and to management’s ability to effectively
allocate capital and deliver sustainable value.
Indeed, while other mining companies are pulling in
their horns because of low metal prices and
challenging capital markets, we are expanding.
Fortuna is one of the world’s fastest growing primary
silver producers. When the latest expansion at the
San Jose Mine is completed in 2016, Fortuna will be
catapulted to a new league as one of the leading and
lowest cost silver miners in the industry.
A proactive, responsible approach to sustainability
and community relationships has also been key to
our growth. Here again, we take a long-term
approach, looking beyond our core operations to find
ways to improve lives and the quality of life in local
communities. Our goal is to strengthen communities
and provide direct benefits to residents by funding or
lending our expertise to healthcare, education and
business projects. Importantly, all of our work is
conducted under formal agreements with local,
state and federal authorities.
We continued to make great strides strengthening
local communities in 2014. From providing scholarships
to help students start a career, to supporting a local
trout farming cooperative and bringing electricity to
remote households, Fortuna worked alongside
residents of small communities in Mexico and Peru
to help them cope with poverty and isolation.
Year after year, management has followed a
disciplined approach, creating value through the
growth of reserves and production while maintaining
efficient operations and a commitment to safety,
social and environmental responsibility. In other
words, we’ve stayed true to our mission.
In closing, I applaud our management team for
aligning employees and contractors with our values
and vision. I also thank our employees for their
contributions to building a leading silver miner.
And I thank my fellow shareholders for their trust
and support. I am confident that together we can
continue to deliver growth from within for years
to come.
Simon Ridgway
Chairman of the Board
