42
FORTUNA SILVER MINES INC. | 2014 ANNUAL REPORT
YEAR TO DATE RESULTS
Years ended December 31,
2014
2013
Sales and Realized Prices
Caylloma
San Jose
Consolidated
Caylloma
San Jose
Consolidated
Provisional Sales
67,461,129 108,562,070 176,023,198 75,434,322 71,421,250 146,855,572
Adjustments*
(1,407,018)
(610,307) (2,017,325) (3,128,808)
(6,332,971) (9,461,779)
Sales
66,054,110 107,951,763 174,005,873 72,305,514 65,088,279 137,393,793
Silver
Provisional Sales (oz)
2,209,690
4,484,861
6,694,552 2,160,783
2,451,608
4,612,391
Realized Price ($/oz)**
19.01
18.85
18.90
23.69
23.31
23.49
Net Realized Price ($/oz)***
16.46
16.92
16.77
20.71
21.19
20.97
Gold
Provisional Sales (oz)
1,828
33,930
35,758
2,247
18,750
20,997
Realized Price ($/oz)**
1,275.25
1,259.65
1,260.44
1,399.42
1,394.37
1,394.91
Net Realized Price ($/oz)***
907.40
962.61
959.79
1,052.19
1,039.11
1,040.51
Lead
Provisional Sales (000’s lb)
16,244
–
16,244
18,170
–
18,170
Realized Price ($/lb)**
0.95
–
0.95
0.97
–
0.97
Net Realized Price ($/lb)***
0.71
–
0.71
0.72
–
0.72
Zinc
Provisional Sales (000’s lb)
27,471
–
27,471
25,259
–
25,259
Realized Price ($/lb)**
0.98
–
0.98
0.87
–
0.87
Net Realized Price ($/lb)***
0.65
–
0.65
0.61
–
0.61
* Adjustments consists of mark to market and final price adjustments, and final assay adjustments
** Based on provisional sales before final price adjustments
*** Net after payable metal deductions, treatment, and refining charges
Treatment charges are allocated to the base metals in Caylloma and to gold in San Jose
Cost of sales
for the year ended December 31, 2014, increased 19% to $113.8 million (2013: $95.6 million), driven by
a 58% higher tonnage of concentrate sold. Direct mining costs increased $10.7 million to $85.4 million (2013: $74.7
million). Depletion and depreciation increased $3.6 million to $22.7 million (2013: $19.1 million).
Workers’ participation for San Jose increased $3.5 million to $3.6 million (2013: $0.1 million).
(Refer to non-GAAP financial measures for the reconciliation of cash cost to the cost of sales.)
Expressed in $ millions
Years ended December 31,
2014
2013
Caylloma
San Jose
Total
Caylloma
San Jose
Total
Direct mining costs
1
$ 42.1
$ 43.3
$ 85.4
$ 42.4
$ 32.3
$ 74.7
Workers’ participation
0.7
3.6
4.3
1.0
0.1
1.1
Depletion and depreciation
7.4
15.3
22.7
9.6
9.5
19.1
Royalty expenses
0.9
0.5
1.4
0.7
–
0.7
$ 51.1
$ 62.7 $ 113.8
$ 53.7
$ 41.9
$ 95.6
1
Direct mining costs includes salaries and other short term benefits, contractor charges, energy, consumables and production related
costs.
Selling, general and administrative expenses
for the year ended December 31, 2014, increased 28%, or $5.4 million, to
$25.2 million (2013: $19.8 million). The main driver for the increase was higher share-based payments to $6.7 million
compared with the prior year, mostly related to mark-to-market effects, in particular the increase in share price, compared
to the prior year.
Also explaining the increase were higher general and administrative expenses of $0.9 million and higher workers’
participation of $0.8 million.
General and administrative expenses consist primarily of corporate office and subsidiary expenses, such as salaries
and payroll-related costs for executives and management. These expenses include administrative, legal, financial,
information technology, and human and organizational development, procurement, and professional service fees. General
and administrative expenses for the year ended December 31, 2014, increased 6% to $17.6 million (2013: $16.7
million).
