Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fortitude Gold Corp (FTCO, Financial) reported a net income of $1.2 million, or $0.05 per share, for the first quarter of 2025.
- The company has a strong cash balance of $21.4 million as of March 31, 2025.
- FTCO produced 1,780 ounces of gold in the first quarter, maintaining its production levels.
- The company is advancing operations to access a new mineralized gold zone at the Isabella Pearl mine, potentially extending operations into 2026.
- FTCO continues to pay dividends, with $2.9 million paid out in the first quarter, demonstrating a commitment to returning cash to shareholders.
Negative Points
- The company has reduced its monthly dividend from $0.04 to $0.01 per share starting May 2025, due to cash conservation needs.
- FTCO faces delays in obtaining permits, impacting its ability to layer multiple mining operations and affecting its original business plan.
- The all-in sustaining cash cost per ounce of gold is high at $1,404, impacting profitability.
- The company anticipates a decreased cash balance through the end of 2025 due to investments in accessing deeper mineralization at Isabella Pearl.
- FTCO is experiencing challenges with residual leaching at the Isabella Pearl heap leach pad, making production forecasts variable and uncertain.
Q & A Highlights
Q: Is it fair to assume county line and golden mile must be approved this term?
A: Jason Reid, CEO, stated that the county line should be permitted this year, hopefully within the next six months. The Golden Mile might take longer, but they are optimistic about getting permits under the current administration.
Q: How should we look at East Camp regarding breaking ground? Five years?
A: East Camp is still in the exploration phase, with gold mineralization on both the north and south. It is years away from production, but the company aims to bring county line, Scarlett, and Golden Mile online first.
Q: Could the company acquire ore from another mine to offset revenue decrease?
A: Jason Reid explained that acquiring ore from another mine is not feasible due to logistical and business plan constraints.
Q: Why was the dividend cut aggressively instead of phased?
A: The decision was made to cut the dividend deeply and once, rather than gradually, to address cash flow needs due to permit delays and the need to fund the Pearl Deep mining project.
Q: Have you had any indication that the BLM is expanding their workforce for permit reviews?
A: Jason Reid noted that the BLM's attitude has improved since the new administration, and they are reportedly close to being fully staffed in their local office, which should help expedite permit reviews.
Q: What caused the increase in all-in sustaining costs year over year?
A: The increase is due to mining less and focusing on lower-grade areas as Isabella Pearl's mine life ends. Costs are also impacted by moving waste to access deeper mineralization.
Q: How is the company addressing long lead times for permits on other prospects like East Camp Douglas?
A: The company is submitting as many permits as possible under the current administration, anticipating faster processing times and hoping to avoid delays experienced under the previous administration.
Q: Are there any plans to restore the dividend if permits are received?
A: While the dividend could be adjusted based on cash flow and permit progress, there is no guarantee of restoration to previous levels. The company remains committed to balancing shareholder returns with operational needs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
