Financial services company CIBC has increased its price target for Fortuna Mining (FSM, Financial) from C$7 to C$8. Despite this upward revision, the firm maintains an Underperformer rating for the stock. This adjustment reflects a reassessment of the company's valuation while indicating a cautious stance on its future performance.
FSM Key Business Developments
Release Date: May 08, 2025
- Free Cash Flow: Record $111 million, up from $96 million in Q4, with a free cash flow margin of 38%.
- Net Cash from Operations: $138 million or $0.45 per share, adjusted to $144 million or $0.48 per share after San Jose mine divestment.
- Cash Cost per Ounce: Reduced to $929 from $1,015 in Q4.
- All-in Sustaining Cost: $1,640, down from $1,770 in Q4.
- Net Income from Continued Operations: $61.7 million or $0.20 per share, up from $11 million or $0.04 per share in Q4.
- Sales: $290 million with production of 103,000 gold equivalent ounces.
- Net Cash Position: More than doubled to $137 million.
- Total Liquidity: Increased to $462 million from $381 million in Q4.
- Share Buyback: Over 900,000 shares repurchased at an average price of $4.53.
- Exploration and Project Budget: $51 million allocated for 2025.
- Gold Production at Seguela: 38,500 ounces, a 9% improvement over the previous quarter.
- Gold Production at Yaramoko: 33,073 ounces, a 12% improvement over the prior quarter.
- Cash Cost at Seguela: $650 per ounce.
- All-in Sustaining Cost at Seguela: $1,290 per ounce.
- Cash Cost at Yaramoko: $1,059 per ounce.
- All-in Sustaining Cost at Yaramoko: $1,411 per ounce.
- Gold Production at Lindero: 20,320 ounces.
- Cash Cost at Lindero: $1,147 per ounce.
- All-in Sustaining Cost at Lindero: $1,911 per ounce.
- Silver Production at Caylloma: 243,000 ounces.
- Cash Cost at Caylloma: $12.80 per silver equivalent ounce.
- All-in Sustaining Cost at Caylloma: $18.74 per silver equivalent ounce.
- Average Realized Gold Price: $2,880 per ounce.
- Effective Tax Rate: 25%, down from 34% in 2024.
- Cash Position: $309 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fortuna Mining Corp (FSM, Financial) achieved a record free cash flow from operations of $111 million, surpassing the previous quarter's record of $96 million.
- The company successfully reduced its cash cost per ounce to $929 from $1,015 in the previous quarter, demonstrating effective cost control.
- Net cash from operations before working capital changes was $138 million, or $0.45 per share, indicating strong operational performance.
- Fortuna Mining Corp (FSM) improved its net cash position to $137 million, with total liquidity rising to $462 million, providing financial flexibility.
- The company reported zero lost time injuries in Q1, with an improved total recordable injury frequency rate, highlighting a strong safety performance.
Negative Points
- The sale of the San Jose mine, which contributed about 11,000 gold equivalent ounces in Q4, impacted production figures.
- The tragic incident at the Seguela mine, where a subcontractor lost his life, overshadowed the company's safety achievements.
- The Lindero mine in Argentina experienced a 24% decrease in gold production compared to the previous quarter due to reduced ore grade and timing of leach kinetics.
- The appreciation of the Argentine peso increased the cash cost per ounce at the Lindero mine, affecting cost management.
- The company's stock price experienced a significant drop, trading down nearly 12%, despite strong quarterly results, indicating market volatility and potential investor concerns.
