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Jorge A. Ganoza President
CEO & Director
Fortuna Silver Mines Inc.

28 September 2023

Fortuna has a solid varied metals mining portfolio; what role do these resources play in the green transition?

At this point, 70% of Fortuna's total revenue is coming from gold, 20% from silver, and the remainder 10% from zinc and lead. We are a mid-sized producer and our sales today probably amount to $800 million a year, but we are not trying to squeeze ourselves into the category of critical metals that many other companies are striving to fit into these days. In a context where the central banks around the world have been purchasing gold at record rates over the last decade, and investors are using it to diversify their portfolios, we play a central role in sourcing this precious metal that acts as an anchor for the currencies of the world. If an ICE uses 25 kilograms of copper, an EV demands over 80 kilograms, and to fill the 4 million tonnes gap that we have by 2030, we should be opening one and a half world-class mines every year.


As a result, mining has become a central point of discussion in the green transition, but the precious metals sector needs to also lend a helping hand in stabilizing the global macroeconomics.


Today gold is trading close to historic price levels in nominal terms, and if it were to adjust its value to the inflation, we would get an even more striking result. 

What are the main challenges the mining industry has to face in this day and age? 

At this point in time, the mining industry is measured against very stringent standards, with society expecting and demanding much more from us, from environmental care disclosure to safety standards and supply chain monitoring. In light of all these changes, we are trying to find ways to use resources more efficiently, and, if in the past, the key topic was automation, the new concerns are revolving around reducing our footprint. A focus on underground mining instead of open-pit mining, and less water use and rock displacements are the main measures that can sustain both productivity and environmental standards. At the same time, it has become more difficult to obtain permits in countries with a long mining tradition such as the ones in Latin America, for example. Given these adversities, we have decided to expand our business with predilection to West Africa, where a mining project can be done in five years, and the local governments are interested in supporting foreign investments that act as catalysts for the economy. If we would draw a contour around the gold producing countries in West Africa, the resulting area would be the size of the state of Texas, but production wise it could surpass continental sized nations like China, Russia or the U.S. 

Latin America is known for its political swings; how much does this affect the stability of your operations?

Mining has always been a frontier business, and we operate in developing economies where the rule of law is not necessarily stable. In Argentina, for example, we have had success in the province of Salta, where we have a stability agreement for taxes, but since it was signed with the former administration, now we would have to sue the state to be able to enforce it further. A mining project is very dependent on government support, and when countries with long mining traditions, like Mexico, are changing the mining concessions law and are making permitting difficult, the success of any project is greatly challenged. In addition, all these new laws prevent us from using our mineral titles to obtain bank loans so we are not able to sustain the capital-intensive construction phase anymore. Finally, Mexico has reserved all open ground mineral operations for the state, so there will be no more private explorations there in the predictable future. 

How can mining change people's lives in the countries where you are deploying new projects?

Traditionally, mining operations are set in remote areas, where we are bringing infrastructure, employment opportunities, and overall better living standards. Unfortunately, the industry has not been able to communicate all this value on a large scale, but when we arrive in a new area, we begin by training the local workforce to be able to access high-paying jobs. Furthermore, we support the education and health sectors, and we offer social mobility to communities, allowing people to have a better chance at emigrating for educational or career related purposes. On a more practical level, we recently adopted the global industry standards for tailings management, and in one of our mines in Mexico, we are actually operating the sewage facility in exchange for their residual water, which was dumped into the Atoyac river before our arrival there.  

When you look at the future, what is the strategy of Fortuna to make the operations in West Africa the most efficient?

Fortuna is geographically dispersed, and, strategically, we aim to remain anchored in West Africa and Latin America because we believe we are capable of operating successfully in frontier jurisdictions, bringing an edge to the business. Tactically, we might move capital allocation depending on where the countries are more receptive to investment, with a special focus on West Africa, where we are looking to expand our presence more in the years to follow. Mining mainly depends on high grade deposits, and in Africa the average rate of open big mining is of 1,5 grams of gold per tonne versus the 0,8 grams in South America. 

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