7
DRIVING GROWTH FROM WITHIN
Dear Shareholders,
Our ongoing focus on initiatives to improve
productivity and prioritize capital spending on high-
return projects paid off in 2014. We increased silver
production 42%, reduced all-in sustaining cash costs
29% and raised contained silver in inferred resources
31%. Our decision in late 2014 to expand the San
Jose Mine to 3,000 tpd by mid-2016 underscores
our long-term improvements at the mine. Post
expansion, San Jose will rank among the 15 largest
primary silver producers in the world and in the lower
quartile in production cost.
Silver prices declined for the fourth consecutive year
in 2014. From a peak of $41.99 per ounce in 2011,
our average realized price fell to $19.01 per ounce in
2014. As I write this letter, silver and gold prices are
hovering around $16 and $1,200 per ounce,
respectively. Despite this price environment, I am
pleased to report that the strength of our mines and
balance sheet and the resolve and ingenuity of our
team have positioned Fortuna to continue to thrive
and grow.
Production to continue to rise
Precious metals sales in 2014 accounted for 83% of
revenue, of which 64% was from silver and 19% from
gold. We surpassed our 2014 guidance for silver and
gold production by 10% and 9%, respectively,
following the expansion of San Jose in April to 2,000
tpd from 1,800 tpd.
For 2015, we expect production to be similar to
2014 as we further expand San Jose to 3,000 tpd,
the third expansion since the mine was
commissioned in 2011. We expect to complete the
latest expansion in mid-2016, at which time we will
be able to annually produce approximately 9 million
ounces of silver and 55,000 ounces of gold from the
San Jose and Caylloma mines.
The Caylloma Mine continues to operate at a steady
state, annually contributing approximately 2 million
ounces of silver and 2,000 ounces of gold, plus 28
million pounds of zinc and 20 million pounds of lead.
Jorge A. Ganoza – President,
CEO and Co-founder
CEO’s Letter
The strength of r y cal sets and balance eet
and the resolve and ingenu y of r team have
po tioned Fortuna to continue to thrive and grow.
