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Fortuna Silver completes acquisition of Chesser Resources, owner of Diamba Sud gold project in Senegal

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(Kitco News) - Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) yesterday announced the completion of the previously announced acquisition of Chesser Resources (ASX: CHZ), owner of the preliminary economic assessment stage Diamba Sud gold project in Senegal.

Fortuna said it acquired 100% of the fully paid ordinary shares of Chesser in consideration for 0.0248 of one common share of Fortuna for each Chesser share held, adding that the scheme consideration represents a purchase price of approximately A$0.1421 for each Chesser share and values the transaction at approximately A$89.0 million.

Chesser owns the preliminary economic assessment stage Diamba Sud gold project in Senegal, one of the new and emerging gold discoveries in the region. Chesser holds tenements in Senegal covering approximately 872 km2 of prospective ground located close to tier one gold mines.

Chesser reported an indicated mineral resource estimate of 10.0 Mt averaging 1.9 g/t Au containing 625,000 ounces of gold and an inferred mineral resource estimate of 4.7 Mt averaging 1.5 g/t Au containing 235,000 ounces of gold prepared in accordance with the JORC Code.

The scoping study on Diamba Sud demonstrated that the project is a conventional open pit and CIL process design and has the potential to generate a post-tax NPV5% of US$218 million and 43% IRR over a 7.5-year mine life.

Diamba Sud itself comprises four open pitable high-grade gold deposits, along with numerous targets yet to be tested. Fortuna said it will prioritize exploration to expand the mineral resource before advancing Diamba Sud to development stage.

President and CEO Jorge A. Ganoza commented, “With the acquisition of Chesser, Fortuna continues to strengthen its presence in West Africa. Senegal is a mining friendly and highly prospective jurisdiction, and we are excited about the growth potential that Chesser’s Diamba Sud gold project provides.”

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

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