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Fortuna Silver reports net loss of $135.9 million in 2022 due to impairment charges

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(Kitco News) - Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) yesterday reported that for the full year 2022, the company produced 259,427 ounces of gold and 6,907,275 ounces of silver or record 401,878 gold equivalent ounces from its four operating mines in the Americas and West Africa.

In 2022, the company produced 259,427 ounces of gold, which is a 25% increase over 2021, while silver production of 6,907,275 ounces was down 8% over 2021. The company also produced 34,588,324 pounds of lead (up 5% over 2021) and 46,175,821 pounds of zinc (down 3% over 2021).

According to a press release, the company’s sales for the year were $681.5 million, an $81.6 million increase from the $599.9 million reported in 2021. The increase was explained mostly by the full contribution of Yaramoko in 2022 compared to six months in 2021 partially offset by a lower average silver price of 13.5%.

The company also reported a net loss of $135.9 million and adjusted net income of $42.6 million, or $0.15 per share for the full year 2022, compared to a net income of $59.4 million and adjusted net income of $100.6 million in 2021.

Fortuna said that the loss in 2022 is explained by impairment charges of $164.5 million ($182.8 million before tax) related to the Lindero, San Jose and Yaramoko mines.

In 2023, the company expects gold production of between 282 to 320 thousand ounces (a projected increase of between 9 to 23% over 2022) and silver production of between 6.3 to 6.9 million ounces (a projected decrease of up to 9% over 2022). Gold equivalent production is forecast to be between 412 to 463 thousand ounces in 2023 (a projected increase of between 3 to 15% over 2022).

President and CEO Jorge A. Ganoza commented, "Fortuna finished the year in line with production guidance, with only a slight miss in cost guidance at the Lindero mine in spite of strong inflationary pressures. Our business continued to generate healthy free cash flow from ongoing operations of $69.2 million and adjusted results of $245.5 million in Adjusted EBITDA, and adjusted net income of $42.6 million or $0.15 per share. 

"As we look forward to 2023 we expect to increase production and improve costs in the second half of the year as our new Séguéla flagship asset comes into production." 

Fortuna Silver Mines is a Canadian precious metals mining company with four operating mines in Argentina, Burkina Faso, Mexico and Peru, and a fifth mine under construction in Côte d'Ivoire.

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