NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
(All amounts in US$’000’s unless otherwise stated)
90
FORTUNA SILVER MINES INC. | 2014 ANNUAL REPORT
A summary of the Company’s long term liabilities are presented below:
At December 31, 2014
Discount rate
7.5%
General wage increase
Regular employees
5.0%
Unionized employees
4.5%
Increase in minimum wage
4.0%
Long term inflation rate
4.0%
Total seniority premium – December 31, 2012
$
19
Seniority premium expense
16
Foreign exchange differences
(1)
Cash payments
(7)
Total seniority premium – December 31, 2013
$
27
Less: current portion
–
Non current – December 31, 2013
$
27
Total seniority premium – December 31, 2013
$
27
Seniority premium expense
18
Foreign exchange differences
(5)
Cash payments
(2)
Total seniority premium – December 31, 2014
$
38
Less: current portion
–
Non current – December 31, 2014
$
38
11. Provisions
A summary of the Company’s provisions for other liabilities and charges is presented below:
Decommissioning and Restoration Liabilities
Caylloma Mine
San Jose Mine
Total
As at December 31, 2014
Anticipated settlement date to
2028
2026
Undiscounted value of estimated cash flow
$
8,113
$
6,727
$ 14,840
Estimated mine life (years)
7
9
Discount rate
6.19%
5.80%
Inflation rate
3.30%
4.08%
Total provisions – December 31, 2012
$
7,059
$
3,368
$ 10,427
Increase to existing provisions
103
424
527
Accretion of provisions
291
247
538
Foreign exchange differences
(600)
(19)
(619)
Cash payments
(95)
(44)
(139)
Total provisions – December 31, 2013
$ 6,758
$
3,976
$ 10,734
Less: current portion
(125)
(497)
(622)
Non current – December 31, 2013
$
6,633
$
3,479
$ 10,112
Total provisions – December 31, 2013
$
6,758
$
3,976
$ 10,734
Increase to existing provisions
695
1,863
2,558
Accretion of provisions
398
345
743
Foreign exchange differences
(553)
(613)
(1,166)
Cash payments
(111)
(60)
(171)
Total provisions – December 31, 2014
$
7,187
$
5,511
$ 12,698
Less: current portion
(256)
(553)
(809)
Non current – December 31, 2014
$
6,931
$ 4,958
$ 11,889
10. Other Liabilities (Continued)
b. Long Term Liabilities (Continued)
