Fortuna Silver Mines Inc. (TSX:FVI)(NYSE:FSM) will be expanding its San Jose Mine throughput capacity from 2,000 tons per day to 3,000 tpd in 2015. “With the approval of these two key projects, we are positioning our company to increase annual consolidated production to the range of 12 to 14 million ounces of silver equivalent while maintaining our low cost producer status.” Says Jorge Ganoza, president and chief executive officer of Fortuna. “Key at these times as well is our ability to self-fund growth from operating cash flows and cash-on-hand.” The capital cost estimate for the plant expansion to 3,000 tpd is $30 million with $12.6 million budgeted in 2015 and the balance to be spread out in 2016. At 3,000 tpd, the mine is expected to reach annual production rates between 6.7 and 8.3 million ounces of silver and 52.0 – 56.7 thousand ounces of gold, or 9.8 – 11.7 million silver equivalent ounces, at all-in sustaining cash costs between $8 and $9 per silver ounce, net of by-product gold. After-tax internal rate of return runs at 36%, with payback expected in two years using $16 silver and $1,200 gold prices, they say.
