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Fortuna Silver Mines Notes Steep Silver and Gold Production Decrease in Q1 2020

JP Buntinx
April 14, 2020

The coronavirus measures have affected the production of precious metals in some unexpected ways. The decreasing supply of ore and metals can have an interesting price impact down the line. Fortuna Silver Mines Inc. has now reported its production for Q1 2020, which paints an interesting picture.

Fortuna Silver Mines Inc Report

As one of the many mining companies active in Mexico, the figures shared by Fortuna Silver Mines Inc. are very interesting to keep an eye on. It also paints an interesting picture as to how the coronavirus measures have affected this particular operation throughout the first quarter of 2020.

As is to be expected, the company has been able to maintain a degree of gold and silver production throughout the first three months. As of right now, the operations in Mexico have been suspended completely, a countermeasure that may remain in place until the end of Q2 2020. 

When looking at the numbers, Fortuna Silver Mines Inc has had a decent quarter. Nearly 10 fewer tonnes of processed ore were milled compared to Q1 2019. 

Recovery rates for silver are up slightly, yet its overall production has decreased by over 420,000 ounces. A very tough situation, albeit it is to be expected due to the spreading of COVID-19. 

As far as gold is concerned, the recovery percentage is down slightly as well, and production decreased by over 3,000 ounces. It is evident that the San Jose mine in Mexico is very beneficial to this company under normal circumstances, thus resuming the momentum will only become more important moving forward. Unfortunately, the coronavirus crisis may hamper those expectations for some time to come. 

Caylloma Results are Equally Promising

Fortuna Silver Mines Inc also operates a mine in Caylloma, Peru. That venture is, due to the ongoing coronavirus crisis, on a reduced production rate. How long that situation will remain in place, will primarily depend on how the coronavirus situation evolves in Peru and the rest of Latin America.

In terms of this mine’s silver operations, there is a minor decrease in recovery percentage, albeit the production increased by roughly 15,000 ounces. A somewhat unexpected turn of events, and one that highlights what the future may hold for this operation.

On the gold side of the spectrum, there is a definite decrease in recovery percentage – 46.39% is still far from ideal – as well as production, which decreased by over 100 ounces. Once the situation returns to normal, it will be interesting to see how all of these figures evolve throughout the quarters to come.

Metal By-products Production Increases

It is interesting to note that the Caylloma mine allows Fortuna Silver Mines Inc to increase its metal by-products production. More specifically, the production of both lead and zinc has increased by 8% and 5% respectively. This is a somewhat unexpected “bonus” for this mining operation.

As such, it is evident that even mining operators need to be aware of the diversified production at their disposal. While it will not help much in terms of gold and silver production, these figures go to show that not all hope is lost during the coronavirus crisis. 

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