Fortuna Silver Mines Inc.
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September 19, 2022 at 11:20 AM (MDT)|Broadmoor Hotel & Resort
SAFE HARBOR STATEMENT
CAUTIONARY STATEMENT ON FORWARD LOOKING STATEMENTS
Fortuna Silver Mines’ corporate profile and the corporate presentation used at the Gold Forum Americas 2022 contains forward looking statements which constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “Forward-looking Statements”). All statements included in the corporate profile and the corporate presentation used at the Gold Forum Americas 2022, other than statements of historical fact, are Forward-looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward-looking Statements.
The Forward-looking Statements in the corporate profile and the corporate presentation used at the Gold Forum Americas 2022 include, without limitation, statements about the Company’s business strategy, outlook and plans; Fortuna's 2022 annual guidance, including expectations regarding the Company's production, cash costs and all-in sustaining costs (on a consolidated and on a segment basis); forecast metal production, mineral reserves, mineral resources, metal grades, recoveries, forecast total cash costs and all-in sustaining costs; the timing and extent of capital expenditures and exploration and drilling spending, as well as the expected benefits thereof; statements regarding the Company’s plans for the construction of an open pit mine at the Séguéla project in Cote d’Ivoire, including related development activities, approvals and funding in connection therewith, the economics for the construction of the mine at the Séguéla project as set out in the feasibility study, the estimated construction capital expenditures for the Séguéla project, the timelines and schedules for the construction and production of gold at the project; estimated reserves, production, costs and valuation metrics provided in respect of the Séguéla project; the potential impact of the COVID-19 pandemic on the Company’s business, operations and financial condition, including the Company's ability to operate or continue to operating at its sites; risks and challenges relating to potential future restrictions imposed in response to the COVID-19 pandemic that may impact the Company's operations; the ability of the Company to continue with its current operations, or to maintain its operations should additional changes not presently anticipated with the COVID-19 pandemic occur; increase in costs related to inflationary pressures, the Ukrainian – Russian conflict and COVID-19; the Company's liquidity and debt levels, future plans and objectives based on forecasts of future operational or financial results; the estimates of expected or anticipated economic returns from the Company’s mining operations including future sales of metals, concentrate or other products produced by the Company; uncertainties related to new mining operations such as the Lindero Mine and development projects such as the Séguéla project , including the possibility that actual capital and operating costs and economic returns will differ significantly from those estimated for such projects prior to production; anticipated approvals and other matters.
Often, but not always, these Forward-looking Statements can be identified by the use of words such as “estimated”, “potential”, “open”, “future”, “assumed”, “scheduled”, “anticipated”, “projected”, “used”, “detailed”, “has been”, “gain”, “planned”, “reflecting”, “will”, “containing”, “remaining”, “expected”, “to be”, or statements that events, “could” or “should” occur or be achieved and similar expressions, including negative variations.
The forward-looking statements in the corporate profile and the corporate presentation used at the Gold Forum Americas 2022 also include financial outlooks and other forward-looking metrics relating to Fortuna and its business, including references to financial and business prospects and future results of operations, including production, and cost guidance, anticipated future financial performance and anticipated production, costs and other metrics provided in respect of the Séguéla project. Such information, which may be considered future oriented financial information or financial outlooks within the meaning of applicable Canadian securities legislation (collectively, “FOFI”), has been approved by management of the Company and is based on assumptions which management believes were reasonable on the date such FOFI was prepared, having regard to the industry, business, financial conditions, plans and prospects of Fortuna and its business and properties. These projections are provided to describe the prospective performance of the Company's business and operations. Nevertheless, readers are cautioned that such information is highly subjective and should not be relied on as necessarily indicative of future results and that actual results may differ significantly from such projections. FOFI constitutes forward-looking statements and is subject to the same assumptions, uncertainties, risk factors and qualifications as set forth below.
Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others, changes in general economic conditions and financial markets; uncertainties related to new mining operations such as the Lindero Mine and development projects such as the Séguéla project including the possibility that actual capital and operating costs and economic returns will differ significantly from those estimated for such projects prior to production; risks relating to a global pandemic, including the COVID-19 pandemic, as well as risks associated with war and other geo-political hostilities such as the Ukrainian – Russian conflict, any of which could continue to cause a disruption in global economic activity and impact the Company’s business, operations, financial condition and share price; uncertainty of production, development plans and cost estimates for the Company’s mines; the ability of the Company to successfully challenge SEMARNAT’s notice which states that the extension to the term of the San Jose environmental impact authorization contained a typographical error and to reconfirm the 12-year extension period for the San Jose EIA granted by SEMARNAT; adverse changes in prices for gold, silver and other metals; technological and operational hazards in Fortuna’s mining and mine development activities; market risks related to the sale of the Company’s doré, concentrates and metals; future development risks, risks inherent in mineral exploration and project development and infrastructure; uncertainties inherent in the estimation of mineral reserves, mineral resources, and metal recoveries; the Company’s ability to replace mineral reserves; changes to current estimates of mineral reserves and resources; changes to production estimates; the Company’s ability to obtain adequate financing on acceptable terms for further exploration and development programs, acquisitions and opportunities; the risks associated with the completion of the Roxgold Acquisition, including the ability of the Company to successfully consolidate functions, integrate operations, procedures and personnel; the impact of rising inflation on the costs of production; fluctuations in currencies and exchange rates; the imposition of capital controls in countries in which the Company operates; governmental and other approvals; recoverability of value added tax and significant delays in the Company’s collection process; claims and legal proceedings, including adverse rulings in litigation against the Company; political or social unrest or instability in countries where Fortuna is active; labor relations issues; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy, government ownership requirements, adverse changes in environmental, tax and other laws or regulations and the interpretation thereof; environmental matters including obtaining or renewing environmental permits and potential liability claims; as well as those factors discussed under “Risk Factors” in the Company's Annual Information Form dated March 30, 2022 and filed on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward-looking Statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to expectations regarding the duration and impacts of the COVID-19 pandemic and other geo-political uncertainties on the Company's production, workforce, business, operations and financial conditions; mine production costs; expected trends in mineral prices and currency exchange rates; the accuracy of the Company’s current mineral resource and reserve estimates; the ability to successfully integrate the operations of Roxgold into the operations of the Company; that all required approvals, titles, licenses and permits will be obtained on acceptable terms, including that the Company will successfully challenge the alleged typographical error in the December 2021 extension to the San Jose EIA and will reconfirm the 12-year extension to the San Jose EIA; that there will be no significant disruptions affecting the Company's operations and other assumptions set out herein; market prices for and availability of fuel, electricity, parts and equipment and other key supplies remaining consistent with current levels and such other assumptions as set out herein. Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward-looking Statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that Forward-looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements.
FINANCIAL INFORMATION
All references to dollar amounts in the corporate profile and the corporate presentation used at the Gold Forum Americas 2022 are expressed in United States dollars unless otherwise indicated.
NON-IFRS FINANCIAL MEASURES
Fortuna's audited consolidated financial statements for the fiscal years ended December 31, 2021 and 2022 (“2021 Audited Financial Statements”) and the condensed interim consolidated financial statements for the three months ended March 31, 2022 and 2021 (the “Q1 2022 Financial Statements") which are referred to in the corporate presentation used at the Gold Forum Americas 2022 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board. However, the corporate presentation used at the Gold Forum Americas 2022 includes certain financial measures and ratios that are not defined under IFRS and are not disclosed in the 2021 Audited Financial Statements or the Q1 2022 Financial Statements, including but not limited to: adjusted net income, adjusted EBITDA, adjusted EBITDA margin, total net debt, total net debt to EBITDA ratio, cash cost per tonne of processed ore; cash cost per ounce of gold sold; all in sustaining costs per payable ounce of gold sold; and AISC per payable ounce of silver equivalent sold.
These non-IFRS financial measures and non-IFRS ratios are widely reported in the mining industry as benchmarks for performance and are used by management to monitor and evaluate the Company's operating performance and ability to generate cash. The Company believes that, in addition to financial measures and ratios prepared in accordance with IFRS, certain investors use these non-IFRS financial measures and ratios to evaluate the Company’s performance. However, the measures do not have a standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other companies. Accordingly, non-IFRS financial measures and non-IFRS ratios should not be considered in isolation or as a substitute for measures and ratios of the Company's performance prepared in accordance with IFRS.
Except as otherwise described in the corporate presentation used at the Gold Forum Americas 2022, the Company has calculated these non-IFRS financial measures and non-IFRS ratios consistently for all periods presented.
To facilitate a better understanding of these measures and ratios as calculated by the Company, descriptions are provided in the corporate presentation used at the Gold Forum Americas 2022, in the “Non-IFRS Financial Measures” in the Company’s management’s discussion and analysis for the year ended December 31, 2021 and for the three months ended March 31, 2022. The 2021 Audited Financial Statements and Q1 2022 Financial Statements and the related may be accessed on SEDAR at www.sedar.com under the Company’s profile, Fortuna Silver Mines Inc.
TECHNICAL INFORMATION
Except as otherwise set out herein, the scientific and technical information contained in the corporate profile and the corporate presentation used at the Gold Forum Americas 2022 relating to: the Caylloma, San Jose and Lindero mines has been reviewed and approved by Eric N. Chapman, P.Geo, M.Sc., Senior Vice-President of Technical Services for the Company, a qualified person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), and for each of the Yaramoko Mine, and the Séguéla Project has been reviewed and approved by Paul Criddle, F.AusIMM, Chief Operating Officer - West Africa for the Company, a qualified person under NI 43-101. The qualified persons have verified the information disclosed herein and the underlying data and are not aware of any significant risks and uncertainties that could be expected to affect the reliability or confidence in the information discussed herein. Paul Weedon, Senior Vice President of Exploration for the Company, is a Qualified Person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects, being a member of the Australian Institute for Geoscientists (Membership #6001). Mr. Weedon has reviewed and approved the exploration and scientific information contained in the corporate profile and the corporate presentation used at the Gold Forum Americas 2022 for the Séguéla Project and the Boussoura Project. Mr. Weedon has verified the data disclosed, and the sampling, analytical and test data underlying the information or opinions contained herein by reviewing geochemical and geological databases and reviewing diamond drill core. There were no limitations to the verification process.
CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATES OF RESERVES AND RESOURCES
Reserve and resource estimates included in the corporate profile and the corporate presentation used at the Gold Forum Americas 2022 have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for public disclosure by a Canadian company of scientific and technical information concerning mineral projects. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Reserves.
Canadian standards, including NI 43-101, differ significantly from the requirements of the Securities and Exchange Commission, and mineral reserve and resource information included on this website may not be comparable to similar information disclosed by U.S. companies.
ANALYST CONSENSUS FORECASTS
Fortuna’s corporate presentation used at the Gold Forum Americas 2022 contain information summarizing consolidated analyst consensus forecasts sourced from S&P Global as at May 16, 2022. This information is intended to provide an “order of magnitude” indication for comparison purposes only, and is not intended to be, and should not be treated as, a forecast, estimate or guidance made, adopted, confirmed or endorsed by Fortuna.
INTEGRATION OF ROXGOLD INC. (“Roxgold”)
On July 2, 2021, the Company completed the business combination with Roxgold, whereby the Company acquired all of the issued and outstanding shares of Roxgold (the “Transaction”). Roxgold was a publicly traded precious metals mining company which owned the Yaramoko Mine in Burkina Faso, the Séguéla Project an advanced development project in Cote D’Ivoire, the Boussoura advanced exploration project in Burkina Faso and a portfolio of exploration assets in West Africa. The Company now operates four producing mines as a result of the Transaction. All production, operating and financial results of the Yaramoko Mine (including cash costs and AISC) and included in the Company’s consolidated financial results, reflect only the results from July 2, 2021 onwards.
NOTICE
The Denver Gold Group does not make any express or implied condition, representation, warranty or other term as to the accuracy, validity, reliability, timeliness or completeness of any information or materials in general or in connection with any particular use or purpose presented at the Gold Forum. Denver Gold Group cannot accept responsibility for sourcing variances, mistakes, errors or omissions or for any action taken in reliance thereon. Use of this data is governed by Denver Gold Group's Terms of Use.
The Denver Gold Group does not represent or endorse the accuracy or reliability of any third party advice, opinion, statement, information or materials received during the Gold Forum.
INVESTMENT ADVICE - NO OFFER OR RECOMMENDATION
The Gold Forum and the information and materials presented at the Gold Forum do not, and shall not be construed as, making any recommendation or providing any investment or other advice with respect to the purchase, sale or other disposition of any regulated gold related products or any other regulated products, securities or investments, including, without limitation, any advice to the effect that any gold related transaction is appropriate or suitable for any investment objective or financial situation of a prospective investor. A decision to invest in any regulated gold related products or any other regulated products, securities or investments should not be made in reliance on any of the information or materials presented or obtained during the Gold Forum. Before making any investment decision, prospective investors should seek advice from their financial, legal, tax and accounting advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.
