Commodities

Commodities

Silver, gold, zinc, lead

Ownership

Ownership

100%

Land Package

Land Package

35,000 hectares

Operation

Operation

1,430 tpd underground operation

Deposit Type

Deposit Type

Intermediate sulphidation epithermal deposit

Mining Method

Mining Method

Overhand cut-and-fill

Highlights

  • 2016 silver production at 1.3 million ounces
  • 2016 lead and zinc production at 32.7 million pounds and 43.2 million pounds, respectively

The silver- and base metal-rich epithermal deposits of the Caylloma Mining District of southern Peru have been mined intermittently for over 500 years since the times of the Inca Empire. Located within one of the most important metallogenic provinces of the Andes, past production is estimated at more than 200 million ounces of silver.

Fortuna purchased a 100% interest in the Caylloma Mine and related mining concessions in 2005. Following significant expansion and modernization of the mill, the mine resumed production in the final quarter of 2006. The mill is currently operating at a rate of 1,430 tpd with production sourced primarily from the silver-polymetallic Animas Vein.

Location

Callyoma is located approximately 225 kilometers northwest of Arequipa, Peru at an elevation of 4,500 meters (Latitude: 15° 12’ 15” S, Longitude: 71° 51’ 40” W). The mine, processing plant and related infrastructure are located in the Caylloma Mining District, 14 kilometers northwest of the town of Caylloma. The mine is connected to the national power grid and water is locally available.

Geology and Mineralization

The silver-base metal rich epithermal vein deposits of the Caylloma Mining District are hosted by Tertiary calc-alkaline andesitic pyroclastic tuffs and tuff breccias, flows and laharic deposits that unconformably overlie a folded marine sequence of quartzite, shale and limestone of the Jurassic Yura Group. More than 15 major mineralized veins have been identified within the district with the veins typically trending northeasterly and dipping moderately to steeply to the southeast or northwest.

The veins range from 1 to 25 meters in width and range up to 4 kilometers in length. Ore grade shoots are generally subvertical in orientation within the plane of the vein, having lengths of tens to hundreds of meters and extending to more than 300 meters in a downdip direction. Principal ore minerals include sphalerite, galena, chalcopyrite and tetrahedrite with subordinate polybasite, stephanite, argentite, native silver, pyrargyrite, miargyrite, chalcocite, native gold, and other Pb and Ag sulfosalts. Principal gangue minerals are quartz, manganese-rich silicates (dominantly rhodonite), rhodocrosite, and calcite with variable quantities of adularia, illite and barite present locally (Echavarria et al, 2006)

2017 Production and Cost Guidance

Silver Production
(Moz)

1.0

Gold Production
(koz)

0.5

Lead Production
(Mlbs)

30.0

Zinc Production
(Mlbs)

41.0

Cash Cost
(US$/t)

75.5

AISC
(US$/oz Ag)

10.8

Notes:

  1. Cash cost per tonne includes all on-site direct and indirect production costs, community relations expenses, concentrate transportation and corporate management fees. It excludes government royalties and workers participation.
  2. All-in sustaining cash cost (AISC) per ounce of silver is net of by-products gold, lead and zinc

Exploration

Brownfields exploration program budget for 2017 at the Caylloma Mine is $3.9 million, which includes 22,000 meters of diamond drilling. Drilling will focus on testing extensions of the principal Animas vein both northeast and southwest from current underground operations. Exploration drilling is in progress on extensions of ore-shoots immediately beneath current operations at the Animas vein.

Reserves and Resources

Mineral Reserves - Proven and Probable

PropertyClassificationTonnes
(000)
Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Contained Metal
Ag
(Moz)
Au
(koz)
Caylloma Mine, Peru
Silver VeinsProven27740.350.140.240.00.0
Probable985200.830.040.081.62.6
Proven + Probable1005250.820.050.081.72.6
Polymetallic VeinsProven1501120.411.722.710.52.0
Probable1,346770.222.643.543.39.6
Proven + Probable1,496810.242.553.453.911.6
Combined-All VeinsProven1521200.411.702.680.62.0
Probable1,4451080.262.463.305.012.2
Proven + Probable1,5961090.282.393.245.614.2

Mineral Resources - Measured and Indicated

PropertyClassificationTonnes
(000)
Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Contained Metal
Ag
(Moz)
Au
(koz)
Caylloma Mine, PeruMeasured565820.351.162.421.56.4
Indicated1,449890.341.232.264.215.6
Measured + Indicated2,014870.341.212.315.622.1

Mineral Resources - Inferred

PropertyClassificationTonnes
(000)
Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Contained Metal
Ag
(Moz)
Au
(koz)
Caylloma Mine, PeruInferred3,0031280.691.672.9612.366.4

Notes:

  1. Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves
  2. Mineral Resources are exclusive of Mineral Reserves
  3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
  4. There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources or Mineral Reserves at Caylloma
  5. Mineral Resources and Mineral Reserves are estimated as of June 30, 2016 and reported as of December 31, 2016 taking into account production-related depletion for the period through December 31, 2016
  6. Mineral Reserves for Caylloma are estimated using break-even cut-off grades based on estimated NSR values using assumed metal prices of US$19/oz Ag, US$1,140/oz Au, US$2,150/t Pb and US$2,300/t Zn; metallurgical recovery rates of 85% for Ag, 22% for Au, 94% for Pb and 90% for Zn; and projected operating costs. Caylloma Mineral Resources are reported based on estimated NSR values using the same metal prices and metallurgical recovery rates as detailed for Mineral Reserves; and an NSR cut-off grade of US$50/t for veins classified as wide (Animas, Animas NE, Nancy, San Cristobal) and US$100/t for veins classified as narrow (all other veins)
  7. Totals may not add due to rounding procedures
Technical Report

Technical Report

Effective Date: August 31, 2016

Maps and Sections

Maps and Sections

Photo Gallery

Photo Gallery

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