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01/10 16:57
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with increased net income, cash flow, and a robust liquidity position. Despite increased costs at some mines, overall costs are trending lower, and production is consistent. The company's strategic focus on growth, exploration, and potential resumption of the share buyback program further supports a positive outlook. The Q&A session did not reveal any significant concerns, and management provided clear responses, reinforcing confidence in future performance. These factors suggest a positive stock price movement over the next two weeks.
Average Gold Price $3,467 per ounce, up 5% from the second quarter and up 20% from the first quarter of the year.
Attributable Net Income $123.6 million or $0.40 per share, driven by a $69 million impairment reversal at the Lindero mine.
Adjusted Net Income $0.17 per share, impacted by higher share-based compensation due to a rising share price and a $7.4 million foreign exchange loss in Argentina, which both together account to approximately $0.04 per share.
Free Cash Flow from Operations $73 million with net cash from operating activities before working capital changes at $114 million or $0.37 per share, surpassing analyst consensus of $0.36.
Liquidity Position $588 million with a growing net cash position of $266 million, benefiting from higher realized gold prices, improving margins, and strong cash generation.
Consolidated Cash Costs Remained below $1,000 per ounce.
All-in Sustaining Cost at Lindero Trending lower every quarter to the current $1,500 per ounce range, where it is expected to stabilize.
All-in Sustaining Cost at Séguéla Increased to $1,738 in the third quarter from $1,290 in the first quarter, driven mainly by timing of capital investments and the impact of higher gold price on royalty payments.
Gold Production at Lindero 24,417 ounces, a 4% rise from 23,550 ounces in the second quarter, driven by a 5% increase in gold grade and effective inventory recovery from the leach pad.
Cash Cost at Lindero $1,117 per ounce of gold compared to $1,148 per ounce in Q2, marking a 3% improvement due to higher ounces sold and stable operating conditions.
All-in Sustaining Cost at Lindero Decreased significantly to $1,570 per ounce from $1,783 per ounce in the second quarter, a notable 12% reduction, supported by lower costs, reduced sustaining capital, higher by-product credit and a 7.7% increase in ounces sold.
Gold Production at Séguéla 38,799 ounces, maintaining consistency with prior quarters and surpassing the mine plan.
Cash Cost at Séguéla $698 per ounce.
All-in Sustaining Cost at Séguéla $1,738 per ounce, primarily attributed to royalties on the higher gold price.
Net Income Attributable to Fortuna $123.6 million or $0.40 per share, including a $70 million noncash impairment reversal at the Lindero mine.
Adjusted Net Income Attributable to Fortuna $51 million or $0.17 per share, representing a 56% increase year-over-year and a 14% sequential increase over Q2, driven mainly by higher metal prices.
Cash Cost per Ounce $942, broadly aligned with the prior quarter and slightly above Q3 of 2024 as a result of higher mine stripping ratios at Lindero and Séguéla.
Free Cash Flow $73.4 million from ongoing operations, up from $57.4 million in the prior quarter, reflecting the effect of a higher gold price.
Net Cash Position Increased by $51 million after growth CapEx and other items, bringing the total liquidity to $588 million and net cash position to $266 million.
Séguéla Mine Expansion: Expanding the life of mine and boosting annual gold output through exploration success at Sunbird and Kingfisher deposits.
Diamba Sud Project: Advancing towards a construction decision in the first half of next year with strong economics and a net present value of $563 million.
Cerro Lindo Project: Offers an exciting exploration opportunity after being held privately for years.
Côte d’Ivoire and Argentina Elections: Pro-business policies in Côte d’Ivoire and improved business climate in Argentina following elections.
Strategic Investments in Awalé Resources and JV with DeSoto Resources: Positioning in gold prospects in the Siguiri Basin across Côte d’Ivoire and Guinea.
Safety Record: Achieved 318 days without a lost time injury and improved total recordable injury frequency rate to 0.86.
Cost Management: Consolidated cash costs below $1,000 per ounce and all-in sustaining costs within guidance.
Operational Efficiency at Lindero: Improved crushing circuit throughput by 8% and reduced all-in sustaining costs by 12%.
Organic Growth Path: Clear path for near- to mid-term growth driven by Diamba Sud and Séguéla expanded gold output.
Exploration and Early-Stage Projects: Advancing projects in Mexico, Peru, and Côte d’Ivoire to strengthen the pipeline.
Foreign Exchange Loss in Argentina: The company experienced a $7.4 million foreign exchange loss in Argentina during Q3, primarily due to the sharp 14% devaluation of the peso. This has been an ongoing issue, with a total FX loss of $10 million for the first 9 months of the year.
Increased All-In Sustaining Costs at Séguéla: The all-in sustaining cost at Séguéla mine increased to $1,738 per ounce in Q3, up from $1,290 in Q1. This rise is attributed to the timing of capital investments and higher royalty payments due to increased gold prices.
Mechanical Issues at Lindero Mine: An unexpected shutdown of the primary crusher at Lindero mine occurred in late September due to mechanical issues, causing operational disruptions. Although mitigation strategies were implemented, this highlights potential risks in equipment reliability.
Higher Share-Based Compensation: The company faced higher share-based compensation expenses of $6.3 million in Q3, driven by a rising share price. This represents a one-time increase but impacts financial results.
Repatriation Withholding Taxes: The company incurred $13.5 million in withholding taxes related to the repatriation of $118 million from Argentina and Côte d’Ivoire. This adds a financial burden to the company's cash flow management.
Increased Costs at Caylloma Mine: The all-in sustaining cost at Caylloma mine increased to $25.17 per silver equivalent ounce in Q3, up from $21.73 in Q2. This rise is due to lower silver production and higher realized silver prices, impacting margins.
Regulatory and Political Risks: While the business climate in Argentina and Côte d’Ivoire has improved, the company remains exposed to potential regulatory and political risks in these jurisdictions, which could impact operations and strategic plans.
Séguéla Mine Expansion: The company plans to expand Séguéla's annual gold output to 160,000-180,000 ounces by 2026. All-in sustaining costs are expected to stabilize in the range of $1,600-$1,700 per ounce as key investments are completed.
Diamba Sud Project: The project in Senegal is advancing towards a construction decision in the first half of 2026. It is expected to add 150,000 ounces of gold annually for the first three years of operations. The after-tax internal rate of return is projected at 72%, with a net present value of $563 million at a 5% discount rate.
Exploration and Resource Expansion: Ongoing exploration at Sunbird and Kingfisher deposits in Côte d’Ivoire aims to expand the life of mine and boost gold output. Drilling at Diamba Sud and other projects is expected to enhance resource bases and support feasibility studies.
Capital Expenditures: Anticipated capital expenditures for 2025 have been adjusted upwards to approximately $190 million, primarily due to increased exploration activities at Séguéla and Diamba Sud.
Underground Mining at Séguéla: Engineering studies and permitting activities for the Sunbird underground deposit are ongoing, with underground mining operations expected to commence in 2027.
Market Conditions in Key Jurisdictions: Argentina's business climate is improving with structural economic reforms, while Côte d’Ivoire is expected to continue pro-business policies under President Alassane Ouattara's leadership.
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The earnings call highlights strong financial performance with increased net income, cash flow, and a robust liquidity position. Despite increased costs at some mines, overall costs are trending lower, and production is consistent. The company's strategic focus on growth, exploration, and potential resumption of the share buyback program further supports a positive outlook. The Q&A session did not reveal any significant concerns, and management provided clear responses, reinforcing confidence in future performance. These factors suggest a positive stock price movement over the next two weeks.
The earnings call presents a mixed picture. Financial performance and product development show positive trends with increased revenues and U-Box growth. However, there are concerns about rising expenses, competitive intensity, and inconsistent transaction volumes. The Q&A highlights management's optimism but also reveals uncertainties, particularly in competitive strategy and cost management. Without strong guidance or new partnerships, and given the market's competitive landscape, the sentiment remains neutral.
The earnings call reveals strong financial performance with increased EBITDA, equipment rental, and storage revenues. U-Box's growth potential is promising, and management is optimistic about its future. Despite some concerns over rising operating expenses and flat transaction volumes, the overall sentiment is positive due to strategic investments and revenue growth. The Q&A highlights management's confidence in U-Box and storage margins, further supporting a positive outlook. Adjustments for potential risks are minimal, resulting in a positive sentiment rating.
The earnings call reveals several concerning factors: a significant quarterly loss, increased operating expenses, supply chain challenges, and economic pressures. Despite some positive signs like EBITDA growth and increased self-storage revenue, these are overshadowed by the overall financial decline and lack of a share repurchase program. Additionally, the Q&A section highlights management's vague responses on critical issues, further adding to investor uncertainty. The absence of any new partnership announcements or positive guidance adjustments also contributes to a negative sentiment, likely leading to a stock price decline in the coming weeks.
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