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Fortuna Silver posts lower adjusted net income in Q1 due to higher operating expenses

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(Kitco News) - Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) announced on Monday that in Q1 2023, the company produced 94,110 gold equivalent ounces, down 9% compared to Q1 2022 (103,098 gold equivalent ounces).

The company said that its Q1 2023 gold production was 60,092 ounces, down 10% over Q1 2022 (66,800 ounces), primarily due to a decrease in head grades at the Lindero and Yaramoko mines albeit in line with the mining sequence and mineral reserves.

Silver production of 1,586,378 ounces was 5% lower compared to Q1 2022 (1,670,128 ounces) with marginally lower tonnage and head grades milled at the San Jose and Caylloma mines.

The company also reported that net income for the quarter was $11.9 million compared to $27.0 million in Q1 2022. After adjusting for non-cash and non-recurring items, adjusted net income of $13.2 million for Q1 2023 was $20.1 million lower than Q1 2022.

In a news release, Fortuna explained that the decrease in adjusted net income was primarily due to higher operating expenses related mainly to higher input costs across its operations and lower operating margins at Yaramoko and Lindero related to lower head grades.

President and CEO Jorge A. Ganoza commented, "Production and total cost per ounce for the first quarter were overall on plan, resulting in net earnings per share of $0.04 and free cash flow from operations of $8.5 million. Commissioning activities at Séguéla are well advanced and tracking according to plan for first gold pour in May, giving us a higher level of confidence in a smooth ramp-up process towards design capacity."

"The announced Chesser transaction meets our strategic objective of expanding our asset portfolio of high value opportunities in countries where we operate or near neighbors," he said. "Chesser Resources' Diamba Sud project in Senegal expands our advanced exploration pipeline in West Africa."

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 Ivory Coast.

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