Fortuna Silver Mines’ (TSX:FVI,NYSE:FSM) Lindero gold project in Argentina has hit construction delays, but commercial production is still scheduled to begin in Q3 2019, the company announced on Tuesday (August 7).
Building delays at the site have limited Fortuna’s ability to start certain contracts, and that has shifted the planned start time for commercial operations from early to late in the third quarter.
“With a large portion of our major contracts awarded, our project team is working on opportunities to further optimize the sequencing of concrete, electromechanical and piping installations to streamline the project’s schedule,” said Jorge A. Ganoza, president, director and CEO of Fortuna.
“Mass earth movement and leach pad construction, one of the initial and largest field activities, is at full gear now after a slow start and is advancing according to plan for completion in [Q2] 2019,” he added.
Ganoza noted that detailed engineering is between 70 and 100 percent complete for all project areas, which has enabled the start of construction on all scheduled fronts. Additionally, the procurement of all key equipment and major construction contracts is progressing according to the project’s timetable.
“As of the end of July, we estimate we have awarded contracts and purchase orders that represent about 71 percent of the project‘s direct capital costs,” Ganoza stated.
Construction highlights
In its release, the company also lays out construction highlights at Lindero so far. They include:
- Initial on-site delivery of Komatsu mine equipment began in mid-July when two graders and a dozer arrived on site. There are currently 11 additional pieces of equipment that are on schedule to be delivered in September.
- Mine development activities are scheduled to start in December, with drilling and blasting to start in March of next year.
- As of June 30, total cash spent on construction at Lindero in 2018 has amounted to approximately US$38 million, of which US$31 million was spent during the second quarter.
- An infill drill program at Lindero was successfully completed in June, with a focus on enhancing the geometallurgical model for the year-one production plan. The drill rig has been moved for a 2,000-meter program to test the Arizaro satellite gold/copper target, located some 3 kilometers from the site of Lindero’s ore-processing facility.
Once Lindero is in its first year of full production, Fortuna’s consolidated precious metals annual production should increase in 2020 to approximately 190,000 ounces of gold and 9 million ounces of silver; that equates to 328,000 gold equivalent ounces.
As of 1:09 p.m. EST on Wednesday (August 8), Fortuna was down 1.98 percent, trading at C$6.42.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
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