IKN

Every why hath a wherefore

This thing isn’t like that thing, Fortuna Silver $FSM FVI.to edition

This Thing is the headline to today’s NR:

Fortuna Silver Increases Silver in Reserves by 26% and Silver in Inferred Resources by 67% at San Jose Mine, Mexico

That Thing comes as one of the fottnotes to the table in the very same NR (IKN highlights)

Mineral Reserves for San Jose are estimated using a break-even cut-off grade of 128 g/t Ag Eq based on assumed metal prices of US$21/oz Ag and US$1,260/oz Au; estimated metallurgical recovery rates of 89% for Ag and 89% for Au; and projected operating costs for year-end 2014. Mineral Resources are estimated at a Ag Eq cut-off grade of 100 g/t, with Ag Eq in g/t = Ag (g/t) + Au (g/t) * ((US$1,260/US$21) * (89/89))

Now for a confident prediction: Phone FVI, ask about this and they’ll reply that $21/oz Ag was where the price was at the time of the report cut-off date of June 30th (which is nearly true too, London Fix stood at $20.87). How fortunate that FVI was constrained by such a luckily timed date and price, how unfortunate that its collected data couldn’t be adjusted in the three months since then in order to better reflect the reality of a silver price 18% lower (!!) than its company assumptions. The saddest bit of all: This is one of the more transparent junior miners out there, which tells you all you need to know about the morality of the sector.

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