logo-loader

Fortuna Silver advances on record Q1 revenue, strong production

Published: 04:32 13 May 2014 AEST

silverbar350_53711403e8a8e

Shares of Fortuna Silver Mines (NYSE:FSM) (TSE:FVI), which has an operating mine in Mexico and Peru, climbed Monday after the precious metals miner reported record revenue in the first quarter, underpinned by strong production and cost performance. 

Net profit still fell year-over-year, however, on account of the sharp decline in precious metals prices since the first quarter of last year, with average realized prices falling 33% for silver and 21% for gold. 

For the three months to March 31, the company recorded net income of $4.9 million, or 4 cents per share, down from $6.7 million, or 5 cents per share, in the year earlier period. 

But as production accelerated, sales grew 12% to $45.5 million, a record figure for the company. The company said it sold 57% more silver and 87% more gold during the latest quarter. 

Silver production totaled 1.5 million ounces, up 55% from the first quarter of 2013, while gold output climbed 81% to 8,150 ounces, with both figures exceeding the company's budget for the first quarter due to the commissioning of its San Jose plant expansion in Mexico last September.

"We are pleased with our results for the first quarter of 2014 and look forward to a second quarter that reflects the ramp-up at San Jose delivered in April from 1,800 to 2,000 tonnes per day," said president and CEO Jorge A. Ganoza. 

Fortuna said the impact of lower metal prices on gross margins was offset to a large extent by significantly lower unit cash costs, as well as higher head grades and metals recovery.

All-in sustaining cash costs decreased to $16.52 per ounce of silver from $27.39 in the first quarter of last year, as a result of lower sustaining capital and brownfields exploration expenses. 

Cash flow from operations before changes in non-cash working capital, a key metric in the industry, came to $16.9 million, or 13 cents per share, up 4% from a year earlier. 

The company reaffirmed its guidance to produce 7.9 million silver equivalent ounces in 2014.

The stock advanced 5.4% on Monday, to C$4.52 this afternoon, pushing year-to-date gains to over 48%. 

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

8 hours, 30 minutes ago