Fortuna(FSM)2023-03-15 16:00Financial Performance and Results - Sales increased to 599.9 million in 2021, representing a 13.6% growth[33] - Net loss for the year was 59.4 million in 2021[33] - Cash and cash equivalents decreased to 107.1 million in 2021[38] - Total assets decreased to 2.02 billion in 2021[38] - Operating cash flow increased to 147.1 million in 2021[40] - Capital expenditures for mineral properties, plant, and equipment were 152.3 million in 2021[40] - Impairment of mineral properties, plant, and equipment amounted to 587.5 million in 2022 from 138.5 million in 2022 from 136.2 million in 2022, compared to a comprehensive income of 136.177 million, including a net loss of 271 thousand[41] Asset and Property Valuation - The carrying value of the Company's mineral properties, plant, and equipment was 182,842 thousand for the Yaramoko, Lindero, and San Jose cash-generating units (CGUs)[15] - The recoverable amounts of the CGUs are based on discounted cash flows and represent fair value less cost of disposal, using CGU-specific assumptions[15] - Significant assumptions for recoverable amounts include mineral reserves, metal prices, production costs, capital expenditures, and discount rates[16] - The Company's life of mine plans for Caylloma and San Jose include inferred resources, which are based on geological characteristics and historical conversion rates[19] - Inferred resources included in 2022 life-of-mine plans: San Jose 31%, Caylloma 41%, Yaramoko 8%[74] - Conversion factors for inferred resources in 2022 life-of-mine plans: San Jose 90%, Caylloma 90%, Yaramoko 100%[73] - Property, plant, and equipment are recorded at cost, net of accumulated depreciation and impairments[77] - Pre-production stripping costs are capitalized and amortized over the production life of the mine[82] - Borrowing costs for qualifying assets are capitalized until the assets are capable of operating as intended[90] - Mineral properties and property, plant, and equipment increased to 2,211,020 thousand in 2021, with additions of 26.4 million of exploration and evaluation assets in 2022, up from 43,439 thousand in 2022 from 51,923 thousand[175] Internal Controls and Auditing - The Company's internal control over financial reporting was effective as of December 31, 2022, based on the Internal Control – Integrated Framework (2013)[25] - The consolidated financial statements were audited by KPMG LLP, which expressed an unqualified opinion on their fairness and conformity with IFRS[9] - The Audit Committee oversees financial reporting and internal controls, ensuring proper accountability and performance[4] - The Company maintains a system of internal controls to safeguard assets, ensure proper transaction recording, and produce reliable financial information[3] - KPMG LLP has served as the Company's auditor since 2017[22] Shareholder and Equity Information - The company repurchased 2,201,404 common shares for 3.421 million[41] - The company's total equity decreased from 1.288696 billion in 2022[41] - In 2021, the company acquired Roxgold for 582.523 million in share capital and 10.2 million in 2022, compared to 3,468 thousand[197] - Outstanding Restricted Share Units (RSUs) increased from 1,859,139 in 2021 to 1,948,709 in 2022, with a fair value of 5.62[200] - The company has an unlimited number of common shares authorized for issue[201] Operations and Mining Activities - The company operates mines in Argentina, Burkina Faso, Mexico, Peru, and Côte d'Ivoire, including the Lindero, Yaramoko, San Jose, and Caylloma mines[44] - The company is developing the Séguéla gold mine in Côte d'Ivoire[44] - The company's subsidiaries include Minera Bateas S.A.C. (100% ownership, Caylloma Mine), Compania Minera Cuzcatlan S.A. de C.V. (100% ownership, San Jose Mine), and Mansfield Minera S.A. (100% ownership, Lindero Mine)[50] - The company's functional currency is US dollars, except for subsidiaries like Roxgold Inc. (CAD) and Fortuna Silver Mines Australia Pty Ltd. (AUD)[56] - The business operations comprise the mining and processing of gold, silver-lead, zinc, and silver-gold, and the sale of these products[136] Accounting Policies and Standards - Inventories are valued at the lower of average production cost and estimated net realizable value, with stockpiled ore not expected to be processed within 12 months classified as non-current[59] - Exploration and evaluation assets are capitalized until properties are developed, abandoned, sold, or impaired[63] - If no mineable ore body is discovered, previously capitalized costs are expensed[64] - Proceeds from the sale of exploration and evaluation assets are credited to the carrying value of mineral properties[65] - Capitalized costs of producing properties are amortized on a unit-of-production basis over proven and probable reserves[67] - Closure and reclamation provisions are adjusted for changes in expected cash flows and timing[98] - The initial recognition of assets or liabilities, not arising in a business combination, does not affect accounting or taxable income[100] - The ultimate cost of future site closure and reclamation could differ from the amounts provided due to uncertainties in environmental remediation[102] - Environmental disturbance restoration provisions (EDRP) costs are accrued and charged to earnings in the period the event occurs, with subsequent adjustments also charged to earnings[103] - Provisions are recognized when a present legal or constructive obligation exists, and an outflow of resources is probable and reliably estimable[104] - Share-based payment expenses for cash-settled awards are accrued and expensed over the vesting period based on the quoted market value of the company's common shares[107] - The company's stock option plan applies the fair value method, with compensation expense recognized based on the fair value of options at the grant date[109] - Deferred share units (DSU) compensation liability is accounted for based on the number of DSUs outstanding and the quoted market value of the company's common shares[110] - Revenue from concentrate sales is recorded based on the forward market price of the expected final sales price date[134] - Adoption of new accounting standards effective from January 1, 2023, including amendments to IAS 1 and IFRS Practice Statement 2, requiring more specific disclosures about accounting policies and judgments[137] - Deferred tax related to assets and liabilities arising from single transactions clarified by amendments to IAS 12, effective from January 1, 2023[139] Inventory and Cost Management - Inventory valuation includes work-in-process and heap leach ore, with assumptions on gold recovery and price realization[151] - Recognized a charge of 3.4 million related to depletion and depreciation[169] - Total inventories as of December 31, 2022, amounted to 481.5 million expensed to cost of sales during the year[168] Debt and Financing - Total debt increased to 157,489 thousand in 2021, with credit facility drawdowns of 200.0 million to 50.0 million accordion option introduced[184] - The company paid 5.00 per share, representing a conversion rate of 200 Common Shares per 56,112 thousand in 2021 to 51,128 thousand[195] - Reclamation and closure provisions estimated based on mine closure plans, subject to changes in laws and regulations[152] Revenue and Receivables - Revenue from metal in concentrate subject to provisional pricing adjustments based on market prices at the end of the quotational period[154] - Trade receivables from doré and concentrate sales totaled 3,310 thousand in 2021 to 19,577 thousand in 2022 from 7,042 thousand from 12,021 thousand in 2022 from 19 thousand from 111,896 thousand in 2022 from 72,571 thousand from 3.3 million of interest related to the construction of the Séguéla Mine in 2022[172]