Fortuna Mining Corp

Welcome to the Fortuna Silver Mines fourth quarter and full year 2022 financial and operational results call. At this time, all participants are in a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I will now turn the conference over to your host, Mr. Carlos Baca, Director of Investor Relations. Please go ahead.

Thank you, Ali. Good morning, ladies and gentlemen. I would like to welcome you to the Fortuna Silvermine's fourth quarter and full year 2022 financial and operational results call. Hosting the call today on behalf of Fortuna will be Jorge Alberto Ganosa, President and Chief Executive Officer, Luis Darío Ganosa, Chief Financial Officer, Cesar Velasco, Chief Operating Officer, Latin America, David Whittle, Chief Operating Officer, West Africa, and Paul Whedon, Senior Vice President, Exploration. Today's earnings call presentation will be available on our website, fortunasilver.com. As a reminder, statements made during this call are subject to the reader advisories included in yesterday's news release and in the earnings call presentation. Financial figures contained in the presentation and discussed in today's call are presented in U.S. dollars unless otherwise stated. Before I turn over the call to Jorge, I would like to indicate that this earnings call contains forward-looking information that is based on the company's current expectations, estimates and beliefs. This forward-looking information is subject to a number of risks, uncertainties and other factors. Actual results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast, or projection in the forward-looking information and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information is contained in the company's annual information form and MD&A, which are publicly available on CEDAR. The company assumes no obligation to update such forward-looking information in the future, except as required by law. I would now like to turn the call over to Jorge Alberto Ganosa, President, Chief Executive Officer, and co-founder of Fortuna.

Thank you, Carlos, and greetings to all. Safety first. We close the year. with a strong trend of improvement on key safety performance indicators, which year over year continue coming down as a result of multiple initiatives implemented across the business. Our KPI for total recordable injury rate closed the year at 2.3, down from 3.2 in 2021, and below the industry average of 2.9. Lost time injury rate also showed a strong improvement ending the year at 0.39, down from 0.53 in 2021. We recorded five lost time injuries in the year, down from six in 2021. However, all this work was tainted by a fatal accident at Orlindero Mine in January 2022. Safety is a precondition for business. and we remain firmly committed to a zero-harm work environment. On December 21st, we made public our position statement on the adoption of the Global Industry Standard for Tailings Management. Our commitment to generate shared value over the long term for our stakeholders involves adapting strategically our business practices and standards, enabling us to better cope with risks, opportunities, and heightened expectations. We consider tailings management to be paramount to responsible mining, and the adoption of GIFTM allows us to refine our approach to safe tailings management in a way to ensure operational excellence. On March 14th, we informed of positive news coming from Mexico with the court granting a permanent injunction to our San Jose mine effectively protecting the 12-year environmental impact authorization of the mine. Cesar, our chief operating officer for LATAM, will expand on this later on the presentation. Our business generated adjusted net income of $7.2 million, or $0.02 per share, in the fourth quarter, in line with analyst consensus. And for the full year, 42.4 million, or 15 cents per share, slightly ahead of the analyst consensus of 14 cents. Net income, however, was negatively impacted by non-cash impermanent charges, net of taxes adding to $164 million, coming from Oyaramoco, Lindero, and San Jose mines. Luis, our CFO, will expand on the impermanent analysis drivers later in the presentation. We generated free cash flow from ongoing operations of 4.4 million in Q4 and a healthy 69.1 million for the year. This after servicing sustaining CAPEX and corporate expense. Production for the year was well within the range provided in our 2022 guidance. We delivered 259,000 ounces of gold and 6.9 million ounces of silver or 402,000 ounces of gold equivalent. Measured against 2021, Fortuna is on an exciting growth path. We have grown our gold equivalent production from 305,000 ounces of gold to 402,000 ounces in 2022, and this year we anticipate further growth to approximately 450,000 ounces in our guidance. Despite persistent inflationary pressures throughout 2022, all of our mines performed within the ASIC range provided in our annual guidance. The only exception was the Lindero mine, which recorded ASIC of $1,142 per ounce of gold, marginally above guidance. Main consumables such as diesel, cyanide, cement, and explosives have experienced increased costs to varying degrees depending on the mine and locations. For example, at our Lindero mine in Argentina, year-over-year, cyanide costs increased by an average of 34%, and at our Yaramoco mine in Burkina Faso, 44%. At our Cayoma mine in Peru, year-over-year, diesel costs increased by an average of 60%, and at our Lindero mine, 34%. While we have observed easing of inflationary pressures thus far, conditions remain challenging. Annualized cost increments at our mines over the past two to three years range from 6% at Cayoma to 8% at San Jose, 12% at Lindero, and 17% at Yaramoco. As per World Gold Council figures up to Q3 2022, margin compression for the industry can be observed, showing an 11% annualized increase in ASIC inflation since 2020. In Q3 2022, 50% of global mine supply was produced at an all-in sustaining cost of approximately $1,300 per ounce. Only eight, seven quarters ago, that figure was $1,100. Our flagship Segela mine construction in Cote d'Ivoire, West Africa, remains a primary focus for management. For the second half of 2023, we have provided production guidance for Seguela of 60,000 to 70,000 ounces of gold at an all-in sustaining cost ranging from $880 to $1,080 per ounce. That's all in. David will further expand on Seguela later on the presentation. And on the exploration front, I would highlight our success with the delivery of growth in resources at the Sandberg deposit, one of six deposits making the Seguela mineral inventory. On December 5th, we reported a new Sandberg open pit resource estimate of 279,000 gold ounces at an average grade of 2.66 grams per ton in indicated category. plus half a million ounces of gold at an average grade of 3.7 grams per ton in the inferred category. On Monday 13th, we reported fresh results from the Sunbird infill program. Paul Whedon, our SVP Exploration, is here with us and can provide an exploration update. So, Paul, do you want to go ahead, please?