SILVER STOCKS NEWS Silver stocks advanced Tuesday, as the Global X Silver Miners ETF (SIL) climbed $0.48 to $23.75 per share. Todays rally in silver stocks came as golds sister precious metal rose $0.57 to $28.89 per ounce amid a 0.5% drop in the U.S. Dollar Index to 79.03. Silver stocks have come under pressure in recent weeks as the price of silver has tumbled 7.6% from its 30-year high of $31.275, reached on January 3, 2010.
Silver stocks making headlines Tuesday included Fortuna Silver Mines (FVI.TSX), which announced that construction activities to date at its San Jose silver-gold Project are on budget and commissioning of the mine is scheduled for the third quarter of 2011. As of December 31, 2010, Fortuna reported that it has invested $23.5 million, or 42% of capital expenditures, in the construction of San Jose. FVI.TSX was one of the top performing silver stocks today, surging 4.6% to as high as C$4.33 per share.
Fortuna Silver Mines also reported that it has completed foundation work for crushers, milling, and flotation areas, and has begun the process of mounting and installing major plant equipment. Tailings dam construction is 91% advanced and expected to be complete by the end of this month. An 8 mega-watt power substation has been finished, and commissioning is ongoing. The main access ramp has reached the 1,400 meter level, the location of the first level of production. Production stope K is being developed on the Trinidad, Fortuna and Bonanza veins on sub-level 1430, and a cross-cut from the main access ramp intersected the Trinidad and Bonanza veins on level 1400 on production stope L. The installation of the water pipeline to the mine site is 87% completed.
Jorge Ganoza, President and CEO of Fortuna Silver Mines, stated that We are extremely pleased with the advancement of construction at San Jose where our engineering team continues to deliver an on-time and on-budget project. With Caylloma and the San Jose project in operation, the Company will be in a position to grow annual silver production organically from its existing reserves to seven million ounces of silver equivalent by 2013*. In addition, this month we will be starting an ambitious 30,000 meter drill program around our two key assets, Caylloma and San Jose, to continue exploring the resource expansion potential of each operation.
Located in Oaxaca, Mexico, San Jose is expected to produce 500,000 silver ounces and 4,580 gold ounces once in operation in 2011. In 2012, its first full year of production, San Jose is forecasted to generate 1.77 million silver ounces and 16,120 gold ounces. At full design capacity, expected by the third quarter of 2013, San Jose is expected to annually producer 3.2 million and 24,220 ounces of silver and gold, respectively.
Other notable silver stocks posting gains Tuesday included Hecla Mining (HL), Pan American Silver (PAAS), and Silver Wheaton (SLW). In afternoon trading, HL, PAAS, and SLW rose 1.4%, 3.6%, and 3.1%, respectively.
