While Fortuna was hit quite hard due to the CV19 mandated shutdowns in Mexico [Its flagship San Jose mine was suspended for 54 days of the quarter], the company managed to produce a total of 1.274m oz. Ag and 7.1k oz. Au vs. 2.157m oz. Ag and 13.2k oz. Au in the comparable period in 2019. Further, lower grades at San Jose put more downward pressure on output; silver and gold grades of 220 g/t Ag and 1.42 g/t Au vs. 273 g/t Ag and 1.68 g/t Au in Q2 2019 at San Jose.
Caylloma operated uninterrupted but it is Fortuna's smallest asset. Soon Fortuna won't be so reliant on its San Jose mine in Mexico for cash flow generation as the company raised money to complete the build-out of the over-budget and much delayed Lindero gold project.
On March 19th, 2020, a period of national social isolation was declared by the government of Argentina in response to CV19. On April 3rd, 2020, the government of Argentina included mining and development activities as an essential business. On April 28th, the company resumed construction activities.
Prior to the CV19 related shutdown, Lindero achieved a mining rate of 40ktpd which is required to support design processing capacity of 18,750tpd. With Lindero nearing commercial production [targeted for Q3], Fortuna could more more than double operating and free cash flow generation as early as Q4.
Chief Mining Analyst with SilverSeek & GoldSeek. Previously he was the Senior Mining Equity and Economic Analysis at The Morgan Report. He was a Co-Founder and Director of Lemuria Royalties, before it was acquired in March 2018. He also co-authored The Silver Manifesto with David Morgan in 2015.
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