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Fortuna Reports Restart of Construction Activities at Lindero Gold Project

Fortuna Silver Mines, Inc. reports about the restart of its construction activities at the Lindero Gold Project, situated in the Province of Salta, Argentina.

On March 19th, 2020, the Government of Argentina announced a period of compulsory national “social isolation” due to COVID-19, until March 31st, 2020. Furthermore, this isolation period has been prolonged until May 10th, 2020.

At Lindero, the construction has been halted temporarily and a decreased task force stays on-site to sustain crucial activities such as environmental and security tracking over the extended isolation period.

On April 3rd, 2020, the Government of Argentina included mining and associated activities to the list of necessary industries and services allowed to function at the time of the mandatory social isolation period. To restart operations, companies must submit a Minimum Emergency Operations Program (MEOP) to the provincial authorities.

On April 28th, 2020, the Fortuna submitted and obtained permission to restart operations under its MEOP. The construction plan has been changed to execute sanitary protocols for the prevention and treatment of COVID-19 cases, including a reduced on-site workforce to support social distancing efforts.

Mobilization to the project site is scheduled to happen during the second half of May 2020 to restart the construction activities. Fortuna has altered its construction and commissioning plans to reduce the influence on the timeline and budget related to a decreased workforce, restrictions on local travel, and limited foreign vendor support.

On March 19th, 2020, the Lindero demobilization date, the project was 94% complete.

The latest commissioning and construction plans give priority to the completion of ADR, solution handling, and SART plants with the goal of generating the first doré in Q3 of 2020.

Commissioning of the primary and secondary crushing circuits is in the advanced phase, and thus it is planned that crushed coarse ore will be placed on the leach pad for cyanide irrigation by July. This plan involves by-passing the tertiary HPGR agglomeration and crushing circuits temporarily for four months, until Q4 of 2020.

Even though the pre-commissioning of HPGR has been completed successfully, commissioning will take a longer time since the company will be making use of the remote assistance from the foreign vendor.

The crushed coarse ore from the primary and secondary crushers that will be placed on the leach pad at the time of the ramp-up phase is only around 12% of the estimated ore planned to be placed on the leach pad in a normal year of complete production.

Initial metallurgical column test outcomes for the coarse ore shows gold recoveries of 45% to 50%, compared to predictions of the feasibility study of 78% recovery for tertiary crushed ore across a 90-day period.

In July 2020, open-pit mining is scheduled to resume slowly. Between July and December 2020, plans have been made to place an estimated 1.7 to 1.9 million tons of ore on the leach pad, with an average gold grade of 1.00 g/t to 1.10 g/t. The predicted stripping ratio during this time is 0.68 to 0.75.

During the period of September to December 31st, 2020, 25,000 to 28,000 ounces of gold doré are scheduled to be produced. It is anticipated that commercial production will begin in Q1 of 2021, obtaining an AISC of US$520/oz to $620/oz Au.

For the Lindero Project construction, the Company emphasizes a capex forecast of US$314 to $320 million. This translates to an increase of 28% from the September 2017 feasibility estimate.

As of March 31st, 2020, Fortuna predicts that funds of US$75 to $80 million will be needed to complete the project, which includes working capital, VAT, and pre-production expenditures, up to the start of commercial production in Q1 of 2021. As of March 31st, 2020, Fortuna possesses US$88.5 million of available liquidity.

Source: https://www.fortunasilver.com/

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