Fortuna to add fifth mine to portfolio with construction of Seguela in Côte d’Ivoire

Fortuna Silver Mines (TSX: FVI; NYSE: FSM) says it will develop its Séguéla gold project in Côte d’Ivoire, which the company acquired in a merger with Roxgold earlier this year.

“With a nine year mine life in reserves, 130,000 ounces of annual gold production in the initial six years, and compelling economics, Séguéla is planned to become our fifth operating mine with first gold by mid-2023,” said Fortuna president and CEO Jorge A. Ganoza.

Ground-breaking at the plant site is scheduled for next month, and the accommodations camp should be finished in November.

Roxgold completed a feasibility study on Séguéla in May that outlined an 8.6-year open pit mine producing an average of 120,000 oz. of gold per year. Capital costs were estimated at US$173.5 million. Fortuna acquired the West Africa-focused gold producer in early July in a cash-and-stock deal valued at US$884 million.

The feasibility study projected an average life of mine all-in sustaining cost of US$832 per ounce. At a gold price of US$1,600 per oz. and a discount rate of 5%, the project’s net present value is estimated at US$380 million after taxes. Its internal rate of return was calculated at 49%.

“The decision to commence construction of the still growing Séguéla project marks an exciting milestone for the company,” said Paul Criddle, Fortuna’s COO, West Africa. “The team has further de-risked the project by advancing detailed design and commencing procurement of long lead items, including the SAG mill and the execution of critical path agreements including the EPC agreement with Lycopodium for the processing plant. This has allowed Séguéla’s critical path to be protected as well as managing the cost risk by locking in substantial components of the initial capex in fixed price contracts.”

Exploration drilling at Séguéla continues. Fortuna recently drilled a highlight of 30 metres grading 17.2 grams gold per tonne at the Sunbird prospect on the property.

Séguéla holds proven and probable reserves of 12.1 million tonnes grading 2.8 grams gold per tonne for 1.1 million ounces. The reserves are contained in five deposits: Antenna, Koula, Ancien, Agouti and Boulder. The government of Côte d’Ivoire holds a 10% interest in the project.

Fortuna holds four operating mines in four different jurisdictions: Caylloma (silver-gold-zinc-lead mine) in Peru; Lindero (gold) in Argentina; San Jose (silver and gold) in Mexico; and Yaramoko (gold) in Burkina Faso.