Fortuna Silver Mines Highlights Strong Q1 Gold, Silver Production Amid Precious Metal Surge – Fortuna Silver Mines (NYSE:FSM), Franco-Nevada (NYSE:FNV)

Fortuna Silver Mines (NYSE:FSM) reported strong first-quarter gold and gold equivalent production from its operations across West Africa and Latin America.

The company’s first-quarter report indicated a notable performance in both gold and silver production in a year that saw a significant rally for these precious metals.

Gold production hit 89,678 ounces, while silver reached 1.1 million ounces, or gold equivalent ounces totaling 112,543, including lead and zinc by-products.

The company reiterated its 2024 annual production guidance, expecting to produce between 343 to 385 thousand ounces of gold, 4.0 to 4.7 million ounces of silver, and between 457 and 497 thousand ounces of gold equivalent ounces.

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Breaking down the numbers further, Fortuna’s first quarter 2024 highlights included a repayment of $40 million on its credit facility, bringing the total repayment since the third quarter of 2023 to $121 million.

Additionally, the company repurchased 1,030,375 shares under its normal course issuer bid program that got reinstated in early January. At an average price of $3.42 per share, this totaled $3.52 million.

The company’s report also mentioned an increase in the Total Recordable Injury Frequency Rate, which jumped to 3.10, compared to 1.39 in the first quarter of 2023, indicating a higher injury frequency.

Looking at the short to medium-term outlook, comments from the latest earnings call provided insights into the company’s growth drivers.

While gold production increased by 49% year-over-year, silver production declined by 32%. Still, projects such as Diamba Sud in Senegal and the Séguéla mine in Côte d’Ivoire are expected to contribute significantly to Fortuna’s growth trajectory.

While the company aims to enhance its mineral deposits and expand its resource base, the management also exercised the right to acquire 50% of the 1.2% net smelter return at the Séguéla for $6.6 million as per royalty agreement with Franco Nevada Corp (NYSE:FNV) from 2021.

The company’s balance sheet remained improving. Year-over-year, the debt was reduced from $244 million to $206 million, and the cash reserves stood at around $128 million 

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