Fortuna(FSM) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved record free cash flow from operations of $19.6 million in Q4 2024, a 69% increase compared to Q3 2024 [7] - Net cash from operations before changes in working capital reached a record$ 142 million or $0.46 per share, exceeding analysts' consensus of$ 0.40 [7] - For the full year 2024, sales surpassed $1 billion for the first time [7] - The average gold price realized in Q4 was$ 2,660, a 7% increase quarter-over-quarter, contributing to a 10% increase in revenue to $302 million [8] - Cash costs per ounce decreased by 4%, leading to an expansion of operating cash flow margin from 33% to 50% [8] Business Line Data and Key Metrics Changes - Seguela mine produced 35,244 ounces of gold in Q4 2024, a 1% improvement from the previous quarter, and delivered 137,781 ounces in its first full year [17] - Yaramoko mine produced 29,576 ounces of gold in Q4 2024, a 6% improvement from the previous quarter, totaling 116,206 ounces for the year [17] - Lindero mine produced 26,806 ounces of gold in Q4 2024, a 10% improvement over the previous quarter [27] - Caylloma mine produced 249,238 ounces of silver in Q4 2024, with zinc and lead production totaling 13.9 million pounds and 9.5 million pounds respectively [32] Market Data and Key Metrics Changes - The company reported a cash cost of$ 653 per ounce for Seguela in Q4, outperforming guidance at $584 per ounce for the year [20] - Yaramoko's cash cost was$ 812 per ounce for Q4 and $860 per ounce for the year, also outperforming guidance [23] - Lindero's cash cost was$ 1,063 per ounce with an AISC of $1,873 per ounce in Q4, reflecting a 5% decrease in AISC compared to the previous quarter [30] Company Strategy and Development Direction - The company plans to divest its non-core San Jose mine in Mexico to refocus capital on high-value opportunities [13] - The Seguela mine is expected to reach gold production of 160,000 to 180,000 ounces by 2026 at an AISC of$ 1,260 to $1,390 per ounce [13] - The company is investing$ 51 million in 2025 for exploration and development projects across various regions [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in expanding margins and generating strong cash flow due to stable costs and rising gold prices [6] - The company anticipates stable to lower cash costs in 2025, with a range of $895 to$ 1,015 per ounce [8] - Management acknowledged a tragic accident at the Seguela mine but reaffirmed commitment to a zero-harm work environment [15] Other Important Information - The company returned $30.5 million to shareholders via share buybacks in Q4 2024 [11] - Total liquidity at the end of the quarter was$ 381 million, down from $430 million in the prior quarter [49] - The company recorded a foreign exchange loss of$ 12.6 million for the full year, primarily due to the devaluation of the euro against the U.S. dollar [43] Q&A Session Summary Question: What is the outlook for the San Jose mine? - The San Jose mine has been placed in care and maintenance as the company engages in the sale process [26] Question: How is the company managing costs in light of currency fluctuations? - The company noted that cash costs and AISC are aligned with annual guidance, despite the appreciation of the Argentine peso [42] Question: What are the expectations for production in 2025? - The company is optimistic about production growth, particularly in West Africa, and expects to enhance production further [24]