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Fortuna Silver Mines (TSE:FVI)
TSX:FVI
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Fortuna Silver Mines
(TSX:FVI)71Outperform
Positive Factors
Exploration Potential
Potential for exploration to provide positive catalysts by extending mine lives or providing visibility on production growth.
Future Production Guidance
2025 production guidance was announced at 380-422koz AuEq, ahead of the 373koz forecast.
Negative Factors
Cost Guidance
2025 AISC guidance of $1,550-$1,680/oz AuEq is above the $1,437/oz estimate on higher sustaining capex.
Fortuna Silver Mines (FVI) vs. S&P 500 (SPY)
Market Cap
$1.94B
Dividend YieldN/A
Average Volume (3M)889.60K
Price to Earnings (P/E)57.6
Beta (1Y)2.09
Revenue Growth40.02%
EPS GrowthN/A
CountryCA
Employees2,490
SectorBasic Materials
Sector Strength56
IndustryMining
Share Statistics
EPS (TTM)0.11
Shares Outstanding313,330,840
10 Day Avg. Volume927,541
30 Day Avg. Volume889,600
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.33
Price to Cash Flow (P/CF)3.70
P/FCF Ratio7.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$8.24Price Target Upside33.08% Upside
Rating ConsensusHold
Number of Analyst Covering5
Fortuna Silver Mines Business Overview & Revenue Model
Company DescriptionFortuna Silver Mines, Inc. engages in the exploration, extraction and processing of precious and base metal in Latin America. It operates through the following segments: Bateas, Cuzcatlan, Mansfield, and Corporate. The Beates segment operates the Caylloma silver, lead, and zinc mine. The Cuzcatlan segment handles the San Jose silver-gold mine. The Mansfield segment is the development of the Lindero Gold project. The Corporate segment represents the corporate stewardship. The company was founded by Jorge A. Ganoza Durant, Simon T. P. Ridgway and Mario David Szotlender on September 4, 1990 and is headquartered in Vancouver, Canada.
How the Company Makes MoneyFortuna Silver Mines generates revenue primarily through the sale of precious metals, specifically silver and gold, extracted from its mines. The company sells these metals to various buyers, including smelters and refiners, under long-term contracts or on the spot market. Additionally, Fortuna produces and sells zinc and lead as by-products from its mining operations. The company's earnings are influenced by global commodity prices, production volumes, and operational efficiencies. Key partnerships with local communities and governments also play a significant role in facilitating smooth operations and ensuring access to mining sites.
Fortuna Silver Mines Financial Statement Overview
Summary
Fortuna Silver Mines demonstrates solid growth in revenue and improvement in operational efficiency over the TTM period. The balance sheet is strong with low leverage and a high equity ratio, though profitability as measured by ROE could be enhanced. Cash flow metrics are particularly strong, reflecting effective cash generation and management. Overall, the company is on a positive financial trajectory with opportunities for further profitability improvements.Income Statement
The company's revenue has shown a strong upward trajectory, with a notable revenue growth rate from 2022 to TTM (Trailing-Twelve-Months). The gross profit margin stands at 28.16%, reflecting efficient production processes. However, the net profit margin is low at 2.45%, indicating high operational costs or other expenses impacting profitability. The turnaround from a negative EBIT in 2023 to a positive EBIT margin of 9.54% in TTM is a positive sign of improving operational efficiency.75
Positive
Balance Sheet
The company maintains a stable financial position with an equity ratio of 68.17%, indicating strong equity funding relative to total assets. The debt-to-equity ratio of 0.13 reflects low leverage, which is favorable in a capital-intensive industry like mining. Return on equity is modest at 1.76%, suggesting room for improvement in generating returns for shareholders.70
Positive
Cash Flow
The operating cash flow to net income ratio is robust at 12.78, indicating strong cash conversion from earnings. The free cash flow has grown significantly, with a free cash flow growth rate of 59.17% from 2023 to TTM. The free cash flow to net income ratio is high at 5.05, showcasing effective cash management despite capital expenditures.80
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.03B | 842.43M | 681.49M | 599.85M | 278.97M | 257.19M | Gross Profit |
| 288.62M | 190.03M | 146.80M | 205.48M | 110.22M | 84.58M | EBIT |
| 97.83M | -407.00K | 85.69M | 136.88M | 57.24M | 53.28M | EBITDA |
| 358.64M | 230.79M | 59.05M | 277.76M | 106.62M | 91.77M | Net Income Common Stockholders |
| 25.07M | -50.84M | -135.91M | 57.88M | 21.55M | 23.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 163.33M | 128.15M | 80.57M | 107.51M | 132.96M | 83.40M | Total Assets |
| 786.52M | 1.97B | 1.88B | 2.02B | 1.06B | 936.07M | Total Debt |
| 78.07M | 264.25M | 240.52M | 186.89M | 178.11M | 170.41M | Net Debt |
| -12.44M | 136.10M | 160.03M | 79.80M | 46.22M | 87.01M | Total Liabilities |
| 183.71M | 679.74M | 587.53M | 592.35M | 329.57M | 300.64M | Stockholders Equity |
| 602.80M | 1.24B | 1.24B | 1.38B | 725.77M | 635.43M |
| Cash Flow | Free Cash Flow | ||||
| 126.72M | 79.59M | -56.99M | -5.15M | -20.94M | -161.13M | Operating Cash Flow |
| 320.44M | 296.91M | 194.25M | 147.14M | 93.39M | 63.01M | Investing Cash Flow |
| -185.15M | -216.88M | -255.33M | -118.50M | -113.65M | -145.21M | Financing Cash Flow |
| -72.94M | -32.72M | 38.47M | -51.42M | 68.91M | 75.13M |
Fortuna Silver Mines Technical Analysis
Negative
6.19
Price Trends
6.63
Negative
6.71
Negative
6.74
Negative
Market Momentum
-0.17
Positive
40.20
Neutral
18.25
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FVI, the sentiment is Negative. The current price of 6.19 is below the 20-day moving average (MA) of 6.92, below the 50-day MA of 6.63, and below the 200-day MA of 6.74, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 40.20 is Neutral, neither overbought nor oversold. The STOCH value of 18.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FVI.
Fortuna Silver Mines Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Performance Comparison
TSE:FVI
Fortuna Silver Mines
6.41
2.05
47.02%
EXK
Endeavour Silver
3.96
2.05
107.33%
MAG
MAG Silver
15.04
5.89
64.37%
PAAS
Pan American Silver
24.51
10.76
78.25%
WPM
Wheaton Precious Metals
70.20
26.43
60.38%
Fortuna Silver Mines Earnings Call Summary
Earnings Call Date: Nov 7, 2024 | % Change Since: -3.43% | Next Earnings Date: Mar 5, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements including record sales, robust financial performance, and successful operational outcomes in West Africa. However, it also addressed challenges such as VAT recovery issues in Burkina Faso, the progressive closure of the San Jose Mine, and higher costs in Argentina. Overall, the positive aspects of the call outweigh the challenges.Highlights
Record Sales and Earnings
Fortuna Mining reported record sales of $275 million and earnings of $50.5 million, with earnings per share of $0.16, surpassing analysts' consensus of $0.11.
Strong EBITDA and Cash Flow
The company achieved an EBITDA of $131 million, representing a 48% margin over sales, and generated a strong free cash flow of $56 million from ongoing operations.
West African Operations Exceed Targets
Seguela and Yaramoko mines exceeded production targets with no lost time injuries, contributing significantly to the company's performance.
Successful Capital Projects Management
Capital projects are tracking well against guidance, with the Lindero leach pad expansion on time and budget, supporting the mine for a decade.
Increased Exploration Budget
The exploration budget increased from $37 million to $44 million to expand drill programs at the Seguela Mine.
Lowlights
Challenges with VAT Recovery in Burkina Faso
The company is experiencing delays in VAT recovery at its Yaramoko operations, with VAT receivables increasing by $2.6 million in Q3 and $12 million year-to-date.
San Jose Mine Progressive Closure
A decision was made to initiate a progressive closure of the San Jose Mine starting in Q1 2025, with closure costs expected to increase.
Higher Costs in Argentina
Lindero operations in Argentina are about 10% above guidance due to lagging currency devaluation against inflation, affecting overall cost management.
Company Guidance
In the Q3 2024 earnings call for Fortuna Mining, the company reported record sales of $275 million, contributing to a projected annual sales figure of over $1 billion. Key financial metrics highlighted included earnings of $50.5 million, or $0.16 per share, surpassing analyst expectations of $0.11, and a robust EBITDA of $131 million with a 48% margin over sales. The company maintained disciplined cost management, achieving a cash cost of $1,059 per gold equivalent ounce for the quarter, while the all-in sustaining costs (AISC) were $1,695 for the quarter and $1,618 for the first nine months. Fortuna's exploration budget increased from $37 million to $44 million to expand drilling programs, and strategic investments were emphasized in various projects, including the Seguela Mine and the Diamba Sud project. The company's liquidity position was strong, closing the quarter with $181 million in cash and total liquidity of $431 million.Fortuna Silver Mines Corporate Events
Business Operations and StrategyFinancial Disclosures
Fortuna Reports Record 2024 Production, 2025 Outlook Reveals Potential Decline
Neutral
Jan 21, 2025
Fortuna Mining Corp. announced a record production of 455,958 gold equivalent ounces for 2024, driven by substantial gold and silver yields, although silver output fell below guidance. The company forecasts a decline in gold equivalent production for 2025, reflecting potential challenges in maintaining its current production levels, which could influence its market positioning and shareholder value.
Fortuna Mining Corp. Sells San Jose Mine to Focus on Core Assets
Jan 15, 2025
Fortuna Mining Corp. has announced the sale of its non-core asset, the San Jose Mine in Mexico, to Minas del Balsas S.A. de C.V., a private Mexican company. This transaction, valued at up to $17 million, allows Fortuna to concentrate on higher value opportunities within its portfolio, while retaining a 1% net smelter royalty on San Jose Mine’s production for five years. The completion of the sale is expected in the first quarter of 2025, and it is seen as a strategic move to optimize Fortuna’s asset base and benefit local stakeholders.
Fortuna Silver Mines Reports Promising Drilling Results
Dec 16, 2024
Fortuna Silver Mines has made significant progress at their Séguéla Mine in Côte d’Ivoire, with recent drilling at the Kingfisher deposit revealing high gold grades over substantial widths. The Sunbird deposit also shows promise, with mineralization extending further than previously defined, indicating potential for resource expansion.
Fortuna Silver Mines Reveals New Gold Discoveries
Dec 10, 2024
Fortuna Silver Mines has announced a significant update at its Séguéla Mine in Côte d’Ivoire, revealing over 500,000 ounces of new gold Inferred Resources. The company’s exploration efforts have expanded Inferred Resources to 677,000 ounces, with plans for further drilling and expansion in 2025. These discoveries are expected to help replace production depletion and bolster the mine’s reserves.
Fortuna Silver Mines Advances Share Buyback Strategy
Dec 3, 2024
Fortuna Mining Corp. has repurchased over 6.4 million shares on the New York Stock Exchange as part of its share buyback program, amounting to over $30 million. With strong earnings and high gold prices, the company aims to balance returning capital to shareholders while pursuing growth opportunities.
Fortuna Silver Mines Reports Record Q3 2024 Earnings
Nov 7, 2024
Fortuna Silver Mines reported record earnings for Q3 2024, driven by rising metal prices and effective cost management, resulting in $50.5 million in attributable earnings. The company also achieved a positive net cash position and increased its liquidity, further enhancing financial flexibility by resizing its credit facility.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.