Fortuna Silver Mines relaunches suspended projects as economy improves
Company emphasizes Peruvian roots and family-run qualities to navigate the complexities of the Latin American mining world
It was a dark patch, but the hardships of the past year, in particular the impact of the financial crisis, have been gentler than anticipated, said Luis Dario Ganoza Durant, chief financial officer of Vancouverbased Fortuna Silver Mines, which placed second on Business BC’s list of the province’s fastest-growing companies this year, up from fourth in 2008.
“We were all in crisis mode. Everything that was not an immediate need was shut down,” Ganoza Durant said.
“It’s safe to say that most companies were contemplating a contingency plan in terms of a potential shutdown of operations. We went through all of that. You had to run those types of exercises.
“We adjusted budgets both for our assets and the corporate budget to reflect a very tough year in terms of metal prices. No one knew how long the recovery would take,” Ganoza Durant said.
But a few months into 2009, the road started to turn, allowing the company to re-examine its tightened spending plan, he said. “I think that [metal] prices have reacted much faster than everyone thought they would. That has meant that we have been able to put force back into our plans and are relaunching many projects that we had put on hold. Since the end of the second quarter, we have been loosening up a bit on budgets and capital expenditures.”
Fortuna, which mines silver and gold in Latin America, has two main assets: The Caylloma silver-zinc-lead mine in the southern highlands of Arequipa, Peru, and the San José silvergold project in Mexico.
The company has often touted its family-run roots and its native insight for navigating the Latin American mining world. Ganoza’s brother, Jorge Ganoza Durant, is the company’s CEO and president, and their father, Jorge Ganoza Acairdi, is a mine chief operating officer and a fourth-generation Peruvian miner.
In April of this year, this feel for the local environment — all the nuances and the invisible hoops — was tested when the San José mine was subjected to a twomonth-long road blockade.
“ We were subject to a twomonth protest that was perpetuated by people from outside the town where the mine is located,” Ganoza Durant said. “ They claimed to be anti-miners. There were accusations of industrial contamination, which just were untrue.”
Looking ahead, Ganoza Durant said the company hopes to relaunch so-called brownfields exploration (basically searching around a known deposit for further ones) in the area around its San José mine. This work was suspended last year at the height of the financial crisis and is slated to start again in early 2010.
Fortuna Silver Mines CFO Luis Dario Ganoza Durant (right) with director Mario Szotlender in Vancouver last week.