What motivated Fortuna Silver Mines to acquire West African producer, Roxgold on July 2, 2021?
In this industry, a company can create value by identifying quality assets and deploying financial and operational discipline in developing them. West Africa has always been an attractive destination for us, and there is no other region in the world to have expanded gold reserves and production volumes quite like it. After China, West Africa is the world’s second-largest gold producer, spreading over a surface half the size of Peru or Texas. Though West Africa comes with its risks, this is a ground characterized not only by rich geological prospects, but also supportive governments.
With Yaramoko already in production in Burkina Faso, Séguéla in late-stage development in Côte d'Ivoire, and an exciting exploration pipeline in both of these countries, Roxgold presented us with the opportunity to acquire a platform for doing business, more than just assets. We were also drawn to a sound and experienced team of mining professionals with the skills and expertise to manage local relationships at both government and community levels. To some, a Latin American, silver-focused producer going into the African gold space certainly created some noise, but from our perspective, we couldn’t have found a better place to be mining than West Africa.
How is the integration process progressing?
Integration has been very smooth specifically thanks to an aligned strategy. Our teams started working collaboratively right off the bat, we did not lose any personnel, and the people are very committed, but also comfortable in this transaction.
Séguéla will be Fortuna Silver’s fifth mine to be brought into production. What are your expectations from this mine?
Séguéla stood out immediately in our assessments. In September 2021, we announced to proceed with the construction of the open-pit mine right away for a capital investment of US$173.5 million and a production schedule to mid-2023 for the first gold pour. By bringing Séguéla under our umbrella, we financially de-risked the project, showing that together we can grow bigger and faster. What I am most excited about is not necessarily the high-grade profile of the project, but its formidable exploration potential. In two years, the project has grown from a 400,000 oz gold deposit to over 1 million ounces of gold and growing. Each new drilling reveals new resources. With its 10 years´ LOM and expected growing gold production at low costs, I strongly believe Séguéla will be a cornerstone asset for Fortuna Silver.
How do you think the pandemic impacted gold sentiment?
Although I am an eternal bull on precious metals, gold is a cyclical commodity and some years will be better than others. What we can do is to ensure our businesses perform throughout the different price cycles to have a sound business in any price environment, even at below US$1,200/oz Au.
What defines Fortuna Silver’s sustainability approach?
At large, society overwhelmingly recognizes the importance of taking greater care of the environment and people. These are principles we have fully embraced, and it has always been a part of our ways of thinking. The challenge, I believe, is to bring these perspectives into the corporate management systems and echo them by actions through the full value chain of the business, including our stakeholders, to further increase the benefits to society. In our corporate meetings, we don’t simply discuss production and financial metrics, but also how we are hitting the marks on gender diversity, or how we can increase the rational use of natural resources and energy. By incorporating these questions into our daily, monthly and annual decision-making, we will achieve the five-year sustainability goals to which the Board has committed. The process starts with acknowledging where we stand and understanding the expectations of our stakeholders. We have improved our sustainability standards, performance and reporting by learning to be more critical of ourselves and listening to changing aspirations. Much is yet to be learned, as the ESG standards, stakeholder’s expectations and society needs are evolving continuously. Our diversity, our capacity of adapting and reinventing ourselves bodes well for Fortuna to be among the best in the industry.