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01/10 16:33
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with record free cash flow, improved cost management, and a positive net cash position. The optimistic guidance and strategic divestments further strengthen the outlook. Despite a tragic safety incident and unclear management responses, the overall sentiment remains positive, supported by a robust shareholder return plan and strategic focus on high-value opportunities. Given the small-cap nature of the company, these factors suggest a positive stock price movement in the short term.
Free Cash Flow from Operations $111 million, up from $96 million in Q4, driven by strong gold prices and cost control.
Free Cash Flow Margin 38%, up from 31% in Q4, reflecting improved operational efficiency.
Net Cash from Operations $138 million, or $0.45 per share, adjusted for San Jose Mine divestment to $144 million, or $0.48 per share, due to disciplined cost control.
Net Income from Continued Operations $61.7 million, or $0.20 per share, up from $11 million, or $0.04 per share in Q4, attributed to an 8% increase in gold prices and a lower effective tax rate.
Sales $290 million, consistent with production plans.
Cash Cost per Ounce $929, down from $1,015 in Q4, due to cost control measures.
All-in Sustaining Costs $1,640, down from $1,772 in Q4, reflecting improved cost management.
Net Cash Position $137 million, more than doubled from previous quarter.
Total Liquidity $462 million, up from $381 million in Q4.
Cash Cost per Ounce at Lindero Mine $1,147, up from $1,063 in Q4, due to appreciation of the Argentine peso.
All-in Sustaining Cost at Lindero Mine $1,911, slightly up from $1,873 in Q4, due to capital investment for leach pad expansion.
Cash Cost per Silver Equivalent Ounce at Caylloma Mine $12.80, down from $16.53 in Q4, reflecting consistent cost savings.
All-in Sustaining Cost per Ounce of Payable Silver Equivalent at Caylloma Mine $18.74, down from $28.10 in Q4, due to lower capital investments.
Depreciation and Depletion $61 million, including $18.5 million related to Roxgold acquisition.
General and Administration Expenses $25.3 million, an increase of $8.5 million year-over-year, mainly due to stock-based compensation.
Effective Tax Rate 25%, down from 34% in Q1 2024, due to euro appreciation.
Cash Position $309 million, with a net cash position after financial debt of $137 million.
Total Liquidity $459 million, including undrawn $150 million revolving credit facility.
Exploration Budget: $51 million budgeted for exploration and new project programs in 2025.
Leach Pad Expansion: Completion of the leach pad expansion project at Lindero at a total cost of $51.8 million.
Solar Plant Project: Solar plant project at Lindero is 97% complete, expected to reduce diesel consumption by 42%.
San Jose Mine Sale: Sale of the San Jose mine closed in April, allowing reallocation of approximately $50 million in capital.
Yaramoko Mine Sale: Sale of Yaramoko mine announced on April 11, providing cash consideration of $70 million.
Economic Policy Changes in Argentina: Positive changes in Argentina's economic policy, easing capital exchange rate controls.
Free Cash Flow: Record free cash flow from operations of $111 million, up from $96 million in Q4.
Production Guidance: All mines stayed within production guidance; Séguéla outperformed by 4,000 ounces.
Safety Performance: Zero lost time injuries in Q1, total recordable injury frequency rate improved to 0.98.
Asset Portfolio Optimization: Divesting high-cost or limited life mines to focus on higher value opportunities.
Capital Projects: Advancing key capital projects to expand Séguéla mine production to 180,000 ounces in 2026.
Regulatory Issues: The company is navigating economic policy changes in Argentina, including easing capital exchange rate controls, which may impact operations and dividend repatriation.
Supply Chain Challenges: The business and security environment in Burkina Faso presents challenges, leading to the decision to divest from the Yaramoko mine.
Competitive Pressures: The divestment of high-cost mines like San Jose and Yaramoko is a strategic move to focus on higher value opportunities amid competitive pressures.
Economic Factors: The appreciation of the euro has positively impacted the effective tax rate, but fluctuations in currency exchange rates could pose future risks.
Operational Risks: A tragic incident at Séguéla highlights ongoing safety risks, emphasizing the need for stringent safety measures.
Free Cash Flow: Free cash flow from ongoing operations hit a record $111 million, beating the previous record of $96 million in Q4.
Cost Control: Cash cost per ounce decreased to $929 from $1,015 in Q4, and all-in sustaining costs came in at $1,640, down from $1,772.
Exploration Budget: $51 million budgeted for exploration and new project programs in 2025.
Mine Expansion: Advancing key capital projects to expand Séguéla mine production to approximately 180,000 ounces annually by 2026.
Asset Optimization: Divested high-cost assets, including the San Jose mine and Yaramoko mine, reallocating approximately $50 million towards higher value opportunities.
Safety Performance: Achieved zero lost time injuries in Q1 and improved total recordable injury frequency rate to 0.98.
Production Guidance: All mines stayed within production guidance; Séguéla outperformed by approximately 4,000 ounces.
Future Tax Rate: Expect effective tax rate to be in the 28% to 30% range and current tax rate to be in the 32% to 35% range.
Future Free Cash Flow: Expect somewhat lower free cash flow in the next two quarters due to tax payments.
Lindero ASIC Guidance: Anticipate all-in sustaining costs to improve towards $1,400 by the end of the year.
Dividends Repatriation: The government has started easing capital exchange rate controls and introduced a managed floating exchange rate, allowing for the repatriation of 2025 dividends plus about $38 million.
Share Buyback Program: In Q1, Fortuna repurchased and canceled just over 900,000 shares at an average price of US$4.53.
The company's earnings call reveals strong financial metrics, including record free cash flow and a significant increase in net income. Despite an EPS miss, the company has optimistic guidance with planned investments and expansion projects. The Q&A section highlights positive interactions with government bodies and strategic investments. While there are concerns over elevated ASIC, the overall sentiment is positive, with a focus on growth and a strong balance sheet. Given the market cap and the optimistic outlook, a 2% to 8% stock price increase is anticipated.
The earnings call highlights strong financial performance with record free cash flow, improved cost management, and a positive net cash position. The optimistic guidance and strategic divestments further strengthen the outlook. Despite a tragic safety incident and unclear management responses, the overall sentiment remains positive, supported by a robust shareholder return plan and strategic focus on high-value opportunities. Given the small-cap nature of the company, these factors suggest a positive stock price movement in the short term.
The company demonstrated strong financial performance with record sales, significant debt reduction, and robust shareholder returns. Positive net cash position and increased liquidity enhance financial stability. Despite some concerns in Q&A about exchange losses and unclear timelines, the overall outlook with stable/lower costs and continued investment in high-value projects is favorable. Given the market cap and recent achievements, a positive stock price movement of 2% to 8% is expected.
The company demonstrated strong financial performance with record free cash flow, net debt reduction, and surpassing $1 billion in sales for the first time. Positive shareholder returns through buybacks and strategic divestment of non-core assets enhance focus on high-value opportunities. Despite some risks, like regulatory and supply chain challenges, the stable to lower guidance for cash costs and ASIC, along with a strong cash position, suggest a positive outlook. Given the market cap, the stock is likely to react positively, with a predicted price increase of 2% to 8%.
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