Mr. Jorge Ganoza reports

FORTUNA REPORTS RECORD PRODUCTION AND FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2023

Fortuna Silver Mines Inc. has released its financial and operating results for the third quarter of 2023. All amounts are expressed in U.S. dollars, tabular amounts in-millions, unless otherwise stated.

Third quarter 2023 highlights

Financial:

• Net income of $27.5-million or nine cents per share, compared with $3.1-million or one cent per share in Q2 2023;
• Adjusted net income of $29.6-million or 10 cents per share, compared with $2.5-million or one cent per share in Q2 2023;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $104.6-million, compared with $44.4-million in Q2 2023;
• Net cash provided by operating activities of $106.5-million and free cash flow from continuing operations of $70-million, compared with $44.2-million and $9.5-million, respectively, in Q2 2023;
• Company paid down $40-million of its revolving credit facility. At the close of the quarter total net debt was $133.4-million and the total net debt to adjusted EBITDA ratio was 0.5;
• Liquidity as of Sept. 30, 2023, was $162.3-million, compared with $97.9-million at the end of Q2 2023.

Operational:

• Gold production of 94,821 ounces, compared with 64,348 ounces in Q2 2023;
• Silver production of 1,680,751 ounces, compared with 1,262,561 ounces in Q2 2023;
• Gold equivalent production of 128,671 ounces, compared with 93,454 ounces in Q2 2023;
• Consolidated cash costs per ounce of gold equivalent sold of $814, compared with $968 in Q2 2023;
• Consolidated all-in sustaining costs (AISC) per ounce of gold equivalent sold of $1,312, compared with $1,799 in Q2 2023;
• Year-to-date lost time injury frequency rate (LTIFR) of 0.38 and total recordable injury frequency rate (TRIFR) of 0.86.

Growth and development:

• The third quarter was the first full reporting period for the Seguela mine.
• The acquisition of Chesser Resources Ltd. and its Diamba Sud project was completed on Sept. 20, 2023 (refer to the news release dated Sept. 20, 2023).

Jorge A. Ganoza, president and chief executive officer, commented, "Fortuna has delivered record production and financial results for all its key metrics driven by the first full quarter contribution of our flagship Seguela gold mine." Mr. Ganoza continued, "Compared to the first half of the year, the reduction in our consolidated all-in sustaining cost to $1,312 is primarily the result of Seguela's industry-leading AISC of $788 per ounce, abating inflation, optimization initiatives across the business and higher gold production at the Yaramoko mine driven by new high-grade zones." Mr. Ganoza concluded: "As we shift from a two-year capital-intensive phase to strong free cash flow generation, we will prioritize strengthening our balance sheet through debt reduction and advancing high-value opportunities in our exploration portfolio. We currently maintain eleven drill rigs turning across our properties, including three at our newly acquired Diamba Sud gold project in Senegal."

Third quarter 2023 results

Net income attributable to Fortuna for the quarter was $27.5-million compared with an attributable net loss of $3.7-million in Q3 2022. After adjusting for non-cash and non-recurring items, adjusted attributable net income for the quarter was $29.6-million compared with $2.9-million in Q3 2022. The increase in net income and adjusted net income is explained mainly by increased gold sales volume, higher realized gold and silver prices, and lower cost of sales per gold equivalent ounce. Higher gold sales volume was primarily due to the contribution from the first quarter of commercial production at Seguela and higher grades at Yaramoko. This was partially offset by lower gold sales volume at Lindero related to lower grades, in line with the mine plan. The realized gold and silver prices were $1,925 and $23.7 per ounce, respectively, in Q3 2023 compared with $1,718 and $19.2 per ounce, respectively, in the prior year. The lower cash cost of sales per gold equivalent ounce was mainly due to the contribution of low-cost production from Seguela and lower cost of sales per ounce of gold at Yaramoko related to higher grades. This was partially offset by higher costs of sales per ounce at Lindero and San Jose. Other items impacting net income in the quarter were higher interest expenses of $5.7-million as a result of interest costs no longer being capitalized in the quarter, higher outstanding debt and increased interest rates; lower depletion at Seguela which is expected to increase in the coming quarters from depletion of the purchase price; and a low effective income tax rate in the quarter of 17.6 per cent as no income taxes were recorded at Seguela.

General and administrative expenses for the quarter of $14.6-million were higher than the same period in 2022 as Seguela transitioned to operations and costs are no longer being capitalized.

Net cash generated by operations for the quarter increased $41.6-million to $106.5-million. The increase reflects higher EBITDA of $51.2-million offset by lower changes in working capital in Q3 2023 of $200,000 compared with a change in Q3 2022 of $11.5-million. Income tax paid in the quarter of $3.2-million was $5.6-million lower than in Q3 2022 as no income tax was paid at Seguela in Q3 2023. It is expected Seguela will start incurring current income taxes in Q4 2023 and paying income taxes in 2024.

In the third quarter of 2023 capital expenditures on a cash basis were $37-million consisting primarily of $30.6-million in sustaining capital, including brownfields exploration, and $4-million of non-sustaining exploration.

Free cash flow from continuing operations for the quarter was $70-million, compared with $34-million in Q3 2022. The increase of $36-million is the result of higher net cash generated by operations of $41.8-million partially offset by higher sustaining capex and brownfields exploration at the company's operating mines of $5.8-million in Q3 2023.

Consolidated all-in sustaining cost

Consolidated AISC per gold equivalent ounce (GEO) sold for the third quarter of 2023 was $1,312 per ounce compared with $1,431 per ounce for the comparable quarter in 2022. The lower AISC was driven by a decrease of $67 in cash cost of sales per gold equivalent ounce to $814 and lower capital costs per ounce driven by higher volume.

Liquidity

The company's total liquidity available as of Sept. 30, 2023, was $162.3-million comprising $117.8-million in cash and cash equivalents, and $44.5-million undrawn on the $250-million revolving credit facility (excluding letters of credit).

Quarterly operating and financial highlights

In the third quarter of 2023, a total of 1,467,578 tonnes of ore were placed on the heap leach pad, with an average gold grade of 0.62 gram per tonne, containing an estimated 29,068 ounces of gold. Gold production for Q3 2023 totalled 20,933 ounces. This represents a 30-per-cent decrease in total ounces to the comparable quarter of 2022. This decline in gold production can be primarily explained by the lower head grade of ore placed on the leach pad, in accordance with the mining sequence and the mineral reserves. Ore mined was 1.9 million tonnes, with a stripping ratio of 1.1:1. The stripping ratio in the third quarter is 59 per cent lower than the second quarter and is expected to continue declining through to the end of the year.

Higher stripping of waste in the first nine months of the year will allow improved access to higher-grade material scheduled in the mine plan for the fourth quarter. As a result, Lindero anticipates placing approximately 1.6 million tonnes of ore on the leach pad in Q4 2023 at a higher average grade of 0.67 g/t Au.

Cash cost per ounce of gold for the quarter ended Sept. 30, 2023, was $988 compared with $772 in the same period in 2022. Cash cost per ounce of gold was higher due to lower head grades in line with the mine plan, partially offset by lower processing costs.

All-in sustaining cash cost per gold ounce sold was $1,611 during Q3 2023 compared with $1,159 in the same period of 2022. All-in sustaining cash cost for the third quarter of 2023 was impacted by lower production described above and higher sustaining capital expenditures.

During the quarter, increased sustaining capital expenditures were primarily driven by the development of phase 2 of the leach pad and capitalized stripping. As of Sept. 30, 2023, the leach pad expansion project is approximately 13 per cent complete. The procurement construction and management (PCM) service has been awarded to Knight Piesold, the accommodation camp expansion and PCM offices for the project have been finalized, and PCM personnel are already on site. Mobilization of the contractor's personnel and equipment has commenced. The first shipments of geomembrane and geosynthetic clay liner are in transit, and the project remains on schedule for completion during the second half of 2024.

Yaramoko mine complex, Burkina Faso

The Yaramoko mine produced 34,036 ounces of gold in the third quarter of 2023 with an average gold head grade of 7.72 g/t, 25-per-cent and 24-per-cent increases when compared with the same period in 2022. Increased production resulted from higher average grades and greater widths of mineralization encountered in development headings, which contributed 42 per cent of total mill feed.

As a result of the aforementioned higher grades in development and production zones within the mine plan, the company has revised Yaramoko's annual gold production guidance upward to 110,000 to 120,000 ounces from the original guidance of 92,000 to 102,000 ounces, an increase of approximately 14 per cent. Gold production for the first nine months of 2023 totalled 89,476 ounces.

Cash cost per ounce of gold sold for the quarter ended Sept. 30, 2023, was $752 compared with $934 in the same period in 2022. Cash cost per ounce decreased due to higher production, improved head grades of ore processed, reduced mining costs related to ore development and decreased transportation costs.

All-in sustaining cash cost per gold ounce sold was $1,211 for Q3 2023, compared with $1,630 for the same period in 2022. This decrease was as a result of higher production, and cash cost savings described above.

Sustaining capital for Q3 2023 was higher due to more intensive mine development. Brownfields expenditure was primarily related to diamond drilling. Drilling focused on infill grade control and exploring for extensions beyond the mineralized resource envelope in the deeper eastern portion of zone 55. During the fourth quarter, drilling will continue on the western portion of zone 55, testing for up- and down-dip continuity of the recently discovered extensions to the resource boundary.

Seguela mine, Ivory Coast

From Seguela's first gold pour on May 24 to the successful completion of the processing plant performance test in August, the operation is now exceeding nameplate capacity. Seguela is well positioned to achieve the midpoint of its gold production guidance of 60,000 to 75,000 ounces for the second half of 2023.

In the third quarter of 2023, mine production totalled 502,326 tonnes of ore, averaging 3.48 g/t Au, and containing an estimated 56,136 ounces of gold from the Antenna pit. Movement of waste during the quarter totalled 1,156,540 tonnes, for a strip ratio of 2.3:1.

Cash cost per gold ounce sold was $397 for Q3 2023, which was below plan, primarily higher due to head grades and lower energy and diesel consumption.

All-in sustaining cash cost per gold ounce sold was $788 for Q3 2023, which was below plan, primarily due to lower cash cost, lower capital expenditures and higher sale volume.

Sustaining capital for Q3 2023 consisted primarily of mine development. The first stage of grade control drilling was completed at the Ancien deposit during the third quarter, with results currently being processed. Construction of the access road continued as planned, with stripping and initial mining of oxide material scheduled to begin this quarter.

At the Koula deposit, initial grade control drilling started and should be completed early this quarter.

San Jose mine, Mexico

In the third quarter of 2023, the San Jose mine produced 1,372,530 ounces of silver at an average head grade of 189 g/t Ag and 8,205 ounces of gold at an average head grade of 1.14 g/t Au, 11 per cent and 10 per cent lower, respectively, when compared with the same period in 2022. The decrease in silver and gold production for the third quarter of 2023, when compared with the third quarter of 2022, is explained by the declining grade profile of mineral reserves in the mine plan. The processing plant milled 247,542 tonnes at an average of 2,845 tonnes per day during the third quarter, in line with the plan for the period.

Gold production is expected to fall slightly below the annual guidance range of 34,000 to 37,000 ounces, resulting from lost production days in the second quarter due to the illegal union blockade, and gold head grade reconciliation to reserves in the low end of range. The San Jose mine remains positioned to deliver annual silver production within the guidance range of between 5.3 million and 5.8 million ounces.

The cash cost per tonne for the three months ended Sept. 30, 2023, was $103.47 compared with $79.37 in the same period in 2022. The increase was primarily due to higher use of contractors to make up for lost production in the second quarter of 2023 related to the illegal blockade, higher maintenance and indirect costs, and the appreciation of the Mexican peso.

All-in sustaining cash cost of payable silver equivalent for the three months ended Sept. 30, 2023, increased 26 per cent to $18.04 per ounce, compared with $14.23 per ounce for the same period in 2022. The increase was driven by higher cash cost, lower production and lower equivalent silver ounces per gold ounce. This was offset slightly by lower capital expenditures and lower workers' participation costs.

In the third quarter of 2023, sustaining capital expenditures were higher than the same period in 2022. This increase was primarily due to the execution of development metres, which had been postponed from Q2 2023 because of the blockade. Brownfields expenditures were in line with the plan. Expenditures are, however, expected to increase, due to the emergent drilling campaign at the Yessi vein.

Infill drilling at the San Jose mine during the quarter led to the discovery of the Yessi vein, a blind structure, located 200 horizontal metres from existing underground infrastructure. The discovery hole SJOM-1387 intersected 1,299 g/t silver equivalent over 9.9 metres, and drill hole SJOM-1391 intersected 621 g/t Ag Eq over five metres (refer to the news release filed on SEDAR+ on Sept. 5, 2023, for full details of the drilling program). Additional drilling is currently under way from both surface and underground to define the extent and geometry of this discovery. Mineralization remains open along strike to the north and south, and at depth.

Caylloma mine, Peru

The Caylloma mine produced 308,221 ounces of silver, 10.3 million pounds of lead and 14 million pounds of zinc during the third quarter of 2023. Silver production was 6 per cent higher compared with the same quarter in 2022. Lead and zinc production rose by 14 per cent and 18 per cent, respectively, compared with the same period in 2022. Increased production was the result of positive grade reconciliation to the reserve model in levels 16 and 18 of the Animas vein. Increased recoveries for lead and zinc were also driven by the higher grades. Gold production totalled 149 ounces with an average head grade of 0.13 g/t.

The cash cost per tonne of processed ore for the three months ended Sept. 30, 2023, increased 7 per cent to $99.25 compared with $93.12 in the same period in 2022. This increase was primarily due to higher processing and indirect costs.

The all-in sustaining cash cost per ounce of payable silver equivalent for the three months ended Sept. 30, 2023, increased 35 per cent to $21.14, compared with $15.66 for the same period in 2022. The increase was driven by higher cash cost and the impact of metal prices on the calculation of silver equivalent ounces.

Capital costs for the period mainly consisted of underground development in mine levels 15, 16 and 18. The increase in brownfields expenditures is primarily attributable to additional long hole drilling.

Additional information regarding the company's financial results and activities under way is available in the company's unaudited condensed interim consolidated financial statements for the three and nine months ended Sept. 30, 2023, and accompanying Q3 2023 management's discussion and analysis, which are available for download on the company's website, on SEDAR+ and on EDGAR.

Conference call and webcast

A conference call to discuss the financial and operational results will be held on Thursday, Nov. 9, 2023, at 9 a.m. Pacific Time/12 p.m. Eastern Time. Hosting the call will be Mr. Ganoza, president and CEO, Luis D. Ganoza, chief financial officer, Cesar Velasco, chief operating officer -- Latin America, and David Whittle, chief operating officer -- West Africa.

Shareholders, analysts, media and interested investors are invited to listen to the live conference call by logging onto the webcast or over the phone by dialling in just prior to the starting time.

Conference call details

Date: Thursday, Nov. 9, 2023

Time: 9 a.m. Pacific Time/12 p.m. Eastern Time

Dial-in number (toll-free): 1-888-506-0062

Dial-in number (international): 1-973-528-0011

Access code: 101879

Replay number (toll-free): 1-877-481-4010

Replay number (international): 1-919-882-2331

Replay passcode: 49330

Playback of the earnings call will be available until Thursday, Nov. 23, 2023. Playback of the webcast will be available until Saturday, Nov. 9, 2024. In addition, a transcript of the call will be archived on the company's website.

About Fortuna Silver Mines Inc.

Fortuna Silver Mines is a Canadian precious metals mining company with five operating mines in Argentina, Burkina Faso, Ivory Coast, Mexico and Peru. Sustainability is integral to all the company's operations and relationships. Fortuna produces gold and silver and generates shared value over the long term for its stakeholders through efficient production, environmental protection and social responsibility.

We seek Safe Harbor.