Fortuna Silver Mines Business Model Canvas

Secure transport, export agents and ISO/IEC 17025 certified assay labs maintain chain-of-custody and accurate settlement for Fortuna; coordinated shipping with regional logistics partners reduces transit time and can cut demurrage (often exceeding USD 100 per container/day) while independent assays validate payables and materially lower contractual disputes and payment adjustments.

Partnerships with smelters/refiners secure doré/concentrate markets via 2024 long-term offtakes and QA/QC; OEMs and service contracts in 2024 cut reactive downtime ~20% raising fleet availability; logistics, assay labs and community agreements reduce demurrage (>USD 100/container/day), settlement disputes and social/regulatory risk.

Crushing, grinding, flotation, leaching and ADR circuits at Fortuna produce concentrates or doré, with 2024 process programs focused on reagent optimization and recovery monitoring to lift metal yields. Tailings and water management systems meet regulatory compliance while improving water reuse and operational efficiency. Continuous improvement projects in 2024 targeted reduced energy intensity per ounce through mill upgrades and process control enhancements.

Systematic exploration and resource-to-reserve conversion drive mine planning and capital allocation, with 2024 drilling and metallurgical programs focused on grade control and recovery improvements. Mine construction and operations sustain output via ventilation, backfill, short-interval control and preventive maintenance. Processing and tailings management aim to lift metal yields and water reuse while ESG, permitting and community programs protect social license and cost predictability.

Experienced geologists, engineers and operators at Fortuna drive operational performance, supported by a strong safety culture that in 2024 helped sustain productivity and retention across sites. Local talent pipelines at San Jose, Caylloma and Lindero strengthen workforce resilience and community relations, with the company employing over 1,500 people in 2024. Leadership expertise directs capital allocation and risk management to optimize returns.

Fortuna’s 2024 key resources: 29.6 Moz Ag and 1.1 Moz Au Proven & Probable reserves, three operating mines (San José, Caylloma, Lindero) and ~1,500 employees underpin multi-year cash flows. 2024 guidance targets ~100–130 koz Au and 6–8 Moz Ag; on-site mills, infrastructure and permits support operating continuity. Cash, credit lines and hedging frameworks back execution and reduce volatility.

Fortuna Silver Mines, listed on TSX and NYSE American, leverages robust ESG practices to reduce operational and reputational risk and publishes audited sustainability reports with third‑party assurance to support buyer traceability requirements. Traceability and independent verification align with major customer and lender standards, enhancing offtake and financing access. Targeted community investment programs fund local infrastructure and training, creating shared value while clear, regular reporting meets investor and customer disclosure expectations.

Fortuna operates three mines (San Jose, Caylloma, Lindero) across Mexico, Peru and Argentina (2024), delivering diversified silver/gold volumes with processing recoveries typically above 85%. 2024 AISC target ~12.30/oz AgEq (≈10% reduction), improving margins and cash flow. Rigorous QA/QC, traceability and third‑party ESG assurance secure offtake and financing access.

Shared assay data and reconciliations are published to counterparties to build trust, with moisture, penalties and payables reported clearly on consolidated statements. Dispute mechanisms are predefined and efficient, with escalation paths and service-level expectations. Digital portals provide 24/7 real-time access to contracts, assays and reconciliation documents, improving transparency across Fortuna Silver Mines operations in 2024.

Fortuna maintains multi-year offtake agreements to stabilize volumes and cash flows, with periodic contract reviews for price and quality alignment. Dedicated account managers deliver a 48-hour initial-response SLA and weekly/monthly alignment meetings to synchronize forecasts and maintenance. Shared assays, 24/7 digital portals and predefined dispute paths increase transparency and shorten resolution times.

Structured offtake and streaming agreements bundle financing with committed metal deliveries, providing upfront capital tied to future ounces and aligning capex schedules with production ramp-ups. Clear covenants in these contracts set operational milestones and payment tranches to mitigate execution risk. For Fortuna, they diversify funding beyond spot sales and traditional loans, stabilizing cash flow and preserving balance-sheet liquidity.

Direct sales to smelters/refiners via bilateral contracts remain primary channel, with metallurgy/logistics coordination and long-term allocations for feed certainty. Traders/bullion banks provided liquidity and prepayments, supporting offtake and price discovery amid 2024 average silver ~30 USD/oz. Spot tenders fetched premiums up to 5%, complementing structured offtake and streaming funding.

Electronics, solar and minting end-users depend on refined silver and gold from producers like Fortuna, driving steady indirect demand. Preference for responsible sourcing—from traceability to ESG audits—increasingly shapes procurement and forces upstream contract terms. Indirect demand influences price, volume and delivery clauses, while accredited responsible-sourcing certifications can unlock buyer premiums and wider market access.

Global smelters/refiners, bullion banks/traders, end-use industries (electronics/solar/mints), jewelers and streaming/royalty partners underpin Fortuna’s ~6.2M oz AgEq 2024 sales; priorities: consistent quality, ESG traceability, 3–5yr offtakes, prepay liquidity and long-dated streams for cashflow stability.

Drilling, geophysics and studies feed Fortuna’s resource pipeline, with a 2024 exploration budget of about US$19m staged by technical milestones to control early-stage spend. Metallurgical testing in 2024 refined flowsheet design for processing routes at target deposits. Successful programs reduced discovery cost per silver ounce by improving hit rates and conversion ratios versus prior campaigns.

Labour, reagents, energy and maintenance drive site opex; small recovery gains cut cash cost per payable ounce. 2024 sustaining/growth capex ~US$86.5M; exploration US$19M; corporate SG&A US$28.1M. Taxes/royalties (Peru 29.5%, Mexico 30%) and environmental/community costs materially compress margins.

By-product credits from lead, zinc and other base metals materially lower Fortuna Silver Mines unit cash costs and contribute incremental revenue, as recoveries of these metals are captured in concentrates. Payables are determined by payable rates tied to grade and impurity profiles in each mill feed. Net treatment and refining charges vary with market conditions and concentrate specifications. Strategic blending of ore domains and stockpiles can maximize payable metal content and credits.

Primary revenue tied to realized silver (~26.9 USD/oz 2024) and 2024 silver production (~7.4 Moz) with payable rates and offtake terms affecting netbacks. Gold sales and by-product credits (lead, zinc) materially offset unit costs; streaming provides upfront, non-dilutive funding. Selective hedges and options smooth cash flow and lock portions of value.