Quality Mining Company Selling at a Depressed Price
Source: Adrian Day for Streetwise Reports 04/06/2019 Money manager Adrian Day discusses a company that he believes offers a great buying opportunity. Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE, US$3.42–3.43) is a quality silver mining company, currently developing a gold mine in Argentina, which will almost double its production. A couple of recent stumbles—though modest by miner’s standards—and market concerns have given us a great opportunity to buy this solid company at a great price. Fortuna currently is currently producing from two mines: Caylloma, a 500-year old, silver, zinc, lead underground vein mine in Peru; and San Jose, one of the top 12 primary silver mines in the world, in Oaxaca State. Fortuna has been a solid operator, with “all-in sustaining costs” (AISC) comfortably below $10/ounce. The company is currently developing the Lindero project in Salta Province, Argentina, a gold mine that will almost double its production but maintain the same high-margin profile. Lindero will have a 15-year mine life, with high grades in the early years for a quick pay back. The first year of commercial production is expected to produce between 145,000 and 160,000 ounces. In addition, Fortuna is exploring, in joint venture, silver properties in Mexico and a gold property in Serbia. Two stumbles hit stock price Recently, Fortuna announced an increase in the anticipated capital required to bring on Lindero, and a delay in the production start date by a quarter. The market reacted badly, given many other projects have seen repeated cost overruns and … Continue reading →
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