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Fortuna Reports Net Income Of $2.39 Million, Revenue Of $7.85
Million, And Operating Cash Flow Of $4.14 Million For 2Q 2008.
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August 18, 2008 - Fortuna Silver Mines Inc. (TSX-V: FVI / Lima
Exchange: FVI) reports it has filed its financial statements for the
six months ended June 30, 2008. The financial statements are available
on SEDAR and have been posted on the Company's website at
www.fortunasilver.com.
Second quarter 2008 highlights:
- Net income of $2.39 million, operating income of $ 0.71 million, and
mine operating income of $2.89 million.
- Revenue of $7.85 million for the quarter and $14.68 million for the
semester.
- Quarterly operating cash flow of $4.14 million.
- Working capital US$ 55.76 million and cash position of US$ 46.61
million.
- Metal production: 186,276 oz of silver, 2,629 MT of zinc, and 1,633 MT
of lead. Up 56%, 64%, and 72% respectively over the same period of 2007.
- The Caylloma mine already operating at permitted capacity of 1,050
tonnes per day, with an increase in throughput of 26% over the same period
of 2007.
- 33,000 meter drill program underway at San Jose.
Financial Results
During the second quarter of 2008 the Company generated $7.85 million
of sales compared to $8.80 million in the same period of 2007. With
respect to the first semester of 2008 the Company generated $14.68
million compared to $14.54 million in the same period of 2007. In US
dollar terms however, which is the currency under which sales take
place, there was an increase of 13.5% in sales for the semester
compared to the previous year. Higher concentrate tonnage sales of 65%
with respect to the same period of 2007 were weighted down in terms of
sales value by a combination of lower realized zinc prices and an
increment in smelter treatment charges.
Operating income for the first semester of 2008 was $1.03 million after
deducting $0.63 million of stock-based compensation charges, where
operating income solely for the Caylloma mine was $3.04 million.
Positive cash settlements from the Company's base metal hedging
programme for the first semester of 2008 amounted to US$0.73 million.
Net cash provided from operating activities before changes in working
capital for the first semester of 2008 amounted to $4.80 million. The
Company's cash position and working capital as at June 30, 2008 stands
at $46.61 million and $55.76 million respectively.
Operating Results
During the second quarter of 2008, the Company's Caylloma mine had its
sixth consecutive quarter of production growth achieving 186,276 oz of
silver production, which yields an increase of 33% and 56% with respect
to the previous quarter and the same period in 2007 respectively.
Silver production for the third quarter of 2008 is expected to be above
200,000 oz. Record throughput above 1,000 tpd was achieved early in
July 2008 and the Company expects to maintain the full permitted
average capacity for the plant of 1,050 tpd from August 2008 onwards.
The polymetallic Animas vein currently sources almost all mill feed.
Development and preparation on four silver rich veins (San Cristobal,
Bateas, Soledad, and Silvia) is currently underway with the objective
of providing a high silver grade component of around 20% to the overall
mine feed. Mining at San Cristobal is planned to commence sourcing the
mill in September 2008 at a rate of 500 tonnes per month with grades of
12 oz/t with a later ramp up to 2,000 tonnes per month beginning April
2009. The mine plan for the other three structures will be laid out in
the coming months as continued mine development allows the conversion
from resources to reserves.
Cash production cost per tonne for the second quarter of 2008 was
US$46.92 and the corresponding unit net smelter return (NSR) was
US$97.79.
Mexico - San Jose Silver-Gold Project
A 33,000 meter drill program was initiated in the month of June.
Currently there are two drill rigs working on the project with two
additional rigs expected to arrive on the property by early September.
The Company expects to provide a comprehensive project update in the
coming weeks.
Background
Fortuna is a growth-oriented silver and base metal producer focused on
mining opportunities in Latin America. The Company's primary assets are
the Caylloma Silver-Base Metals Mine in southern Peru and the San Jose
Silver-Gold Project in Mexico. The Company is aggressively pursuing
additional acquisition opportunities. For more information, please
visit our website at www.fortunasilver.com.
The TSX Venture Exchange has not reviewed and does not take
responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD
Jorge Alberto Ganoza Durant
President, CEO and Director
Fortuna Silver Mines Inc.
Symbol: TSX-V: FVI / Lima: FVI
Investor Relations:
Lima office: Carlos Baca - Tel: 511-616-6060
Vancouver office: Erin Ostrom - Tel: 604-484-4085
Associated File:
http://www.fortunasilver.com/i/pdf/Aug18.pdf
44 KB in size, approx. 9 seconds to download at 56.6Kbps
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Copyright (c) 2008 FORTUNA SILVER MINES INC. (FVI) All rights
reserved. For more information visit our website at
http://www.fortunasilver.com/ or send mailto:news@goldgroup.com
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