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Category: Mid-tier Producer
Rating: 2.50   (Likely 3 Bagger as of 03/02/2017)
Risk: Moderate
Fortuna Silver Mines Inc
www: www.fortunasilver.com     email: info@fortunasilver.com

Profile
Notes
Forum
Your Data

Price Data

Symbol Date Price Change 52 Wk Range Volume
NYSE:FSM 08/21/2017 USD 4.50 0.08 9.31 - 4.11 0
TSE:FVI 08/21/2017 CAD 5.6500 0.0900 11.9800 - 5.4400 413,585
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Don's Summary (from last analysis - 03/02/2017)

Fortuna Silver is a mid-tier producer in Mexico and Peru. Fortuna is very similar to First Majestic Silver and Endeavour silver. All of them performed very well in 2010 and 2011. They all have low cash costs, very little debt, and substantial cash. And all of them are growing. This is why none of them are very cheap. Fortuna is selling at a FD market cap of $772 million. They will produce 8 million oz of silver in 2017, plus 50,000 oz of gold. Their all-in costs should be around $14 per oz, making them profitable.

They have $175 million in cash, and are growing organically. Their only red flag, besides not being cheap, is future growth. With only 45 million oz of silver reserves (150 gpt), they need more resources to keep up their growth pace. They have 90 million oz of silver resources, which is low for their market cap.

The key for this company is going to be exploration, or perhaps acquisitions. They have 9 exploration projects on their two large properties: Caylloma in Peru and San Jose in Mexico. They have a new high grade discovery (Trinidad North) that looks exciting. They bought Goldrock Mines in 2016 and their 3 million oz Lindero gold project. This will give them an additional 100,000 oz of gold production at low cash costs under $700 per oz (starting in 2018).

They are giving guidance to produce about 20 million oz of silver equivalent in 2018 at about $16 per oz all-in costs (free cash flow). A portion of this is from base metals. 8 million oz is silver, plus 150,000 oz for gold (9 million oz silver equivalent at 60 to 1). If they hit their cost targets, I would expect Fortuna to do very well.

General Details

Financial 03/02/2017
Last
Analysis
Data

Current Data

Change
Item Value Value Updated Value
Mkt. Cap (Fully Diluted): $835.20M $720.00M 03/02/2017 $-115.20M
Total Assets: $392.00M $392.00M 03/02/2017 $0.00M
Total Liabilities: $114.00M $114.00M 03/02/2017 $0.00M
Current Assets: $175.00M $175.00M 03/02/2017 $0.00M
Current Liabilities: $25.00M $25.00M 03/02/2017 $0.00M
Total Debt: $40.00M $40.00M 03/02/2017 $0.00M
Cash: $175.00M $175.00M 03/02/2017 $0.00M
Enterprise Value: $700.20M $585.00M 07/15/1988 $-115.20M
Cash Flow: $27.24M $24.93M never $-2.32M
Cash Flow Multiple: 30.66 28.88 never -1.77
Net Debt to Cash Flow Ratio: n/a n/a never 0.00
Finance within 1 year: 03/02/2017 n/a
Tax Rate: (guess)  30.00% (default)  30.00% 03/02/2017 0.00%
Misc 03/02/2017
Last
Analysis
Data

Current Data

Change
Item Value Value Updated Value
Share Price: $5.220 $4.500 16:08 on 08/21/2017 $-0.72
Shares Outstanding: 159,000,000 159,000,000 03/02/2017 0
Shares Fully Diluted: 160,000,000 160,000,000 03/02/2017 0
Insider Ownership: n/a n/a never n/a
Company Type: Mostly Silver Mostly Silver never n/a
Production ETA: n/a n/a 03/02/2017 n/a
Production (Gold Eq Oz.): (guess) 
164,953
(guess) 
155,679
03/02/2017 -9,274
Production (Silver Eq Oz.): (guess) 
11,479,684
(guess) 
11,785,041
03/02/2017 305,357
Initial CapEx (Outstanding): n/a n/a 03/02/2017 n/a
Funding Option: n/a n/a 03/02/2017 n/a
Documentation: none PRODUCER 03/02/2017 n/a
Value Adjustment: 50% 50% never 0%

Resource Data

GOLD 03/02/2017
Last Analysis
Data

Current Data

Change
Item Value Value Updated Value
O
U
N
C
E
S
T
O
T
A
L
Proven & Probable: 2.00M 2.00M 03/02/2017 0.00M
Measured & Indicated: 2.50M 2.50M 03/02/2017 0.00M
Inferred: 0.85M 0.85M 03/02/2017 0.00M
Reserves & Resources: 3.35M 3.35M never 0.00M
P
L
A
U
S
I
B
L
E
Proven & Probable: 1.70M 1.70M 03/02/2017 0.00M
Measured & Indicated: 2.04M 2.04M 03/02/2017 0.00M
Inferred: 0.36M 0.36M 03/02/2017 0.00M
Reserves & Resources: 2.40M 2.40M never 0.00M
C
U
R
R
E
N
T
Annual Production: (guess) 
50,000oz.
(CG) 
50,000oz.
03/02/2017 0oz.
Cash Cost: $700 $700 03/02/2017 $0.00
Extra Operating Cost: $350 $350 03/02/2017 $0.00
Average Grade: 1.00 g/t 1.00 g/t 03/02/2017 n/a
Recovery Rate: (CG)  85.00% (CG)  85.00% 03/02/2017 0.00%
F
U
T
U
R
E
Proven & Probable: 2.00M 2.00M 03/02/2017 0.00M
Annual Production: 150,000oz. 150,000oz. 03/02/2017 0oz.
Cash Cost: $800 $800 03/02/2017 $0
Extra Operating Cost: $400 $400 03/02/2017 $0
SILVER 03/02/2017
Last Analysis
Data

Current Data

Change
Item Value Value Updated Value
O
U
N
C
E
S
T
O
T
A
L
Proven & Probable: 45.00M 45.00M 03/02/2017 0.00M
Measured & Indicated: 53.00M 53.00M 03/02/2017 0.00M
Inferred: 37.00M 37.00M 03/02/2017 0.00M
Reserves & Resources: 90.00M 90.00M never 0.00M
P
L
A
U
S
I
B
L
E
Proven & Probable: 40.50M 40.50M 03/02/2017 0.00M
Measured & Indicated: 46.26M 46.26M 03/02/2017 0.00M
Inferred: 16.65M 16.65M 03/02/2017 0.00M
Reserves & Resources: 62.91M 62.91M never 0.00M
C
U
R
R
E
N
T
Annual Production: (guess) 
8,000,000oz.
(guess) 
8,000,000oz.
03/02/2017 0oz.
Cash Cost: $10 $10 03/02/2017 $0.00
Extra Operating Cost: $4 $4 03/02/2017 $0.00
Average Grade: 150.00 g/t 150.00 g/t 03/02/2017 n/a
Recovery Rate: (CG)  90.00% (CG)  90.00% 03/02/2017 0.00%
F
U
T
U
R
E
Proven & Probable: 80.00M 80.00M 03/02/2017 0.00M
Annual Production: 8,000,000oz. 8,000,000oz. 03/02/2017 0oz.
Cash Cost: $11 $11 03/02/2017 $0
Extra Operating Cost: $5 $5 03/02/2017 $0

Property

Last Analysis Data  (03/02/2017)
Stage Location Name Owned Size (Ha) Type Au Ag Cu Notes
Production Oaxaca, Mexico San Jose 100% n/a Underground show
4.5 million oz of production in 2015.

Including Trinidad North, 85 million oz deposit (150 gpt).
Production Arequipa, Peru Caylloma 100% n/a Underground show
2 million oz of production in 2015


44 million oz deposit (150 gpt)
Development Salta, Argentina Lindero 100% 3,500 Open Pit show
Production scheduled for Q1 2015 at 110,000 oz per year. Cash cost should be below $800. Forecasted to be $650. All-In Costs should be below $1200 and perhaps below $1000. 3 million oz deposit (.5 gpt).
Exploration Argentina Arizaro 100% (guess) n/a Open Pit show
Part of the Lindero property. Only 15% of the property has been explored. They will likely find more gold to extend the mine life.
Total Land Package Size (ha): 3,500  
Current Data
Stage Location Name Owned Size (Ha) Type Au Ag Cu Notes
Production Oaxaca, Mexico San Jose 100% n/a Underground show
4.5 million oz of production in 2015.

Including Trinidad North, 85 million oz deposit (150 gpt).
Production Arequipa, Peru Caylloma 100% n/a Underground show
2 million oz of production in 2015


44 million oz deposit (150 gpt)
Development Salta, Argentina Lindero 100% 3,500 Open Pit show
Production scheduled for Q1 2015 at 110,000 oz per year. Cash cost should be below $800. Forecasted to be $650. All-In Costs should be below $1200 and perhaps below $1000. 3 million oz deposit (.5 gpt).
Exploration Argentina Arizaro 100% (guess) n/a Open Pit show
Part of the Lindero property. Only 15% of the property has been explored. They will likely find more gold to extend the mine life.
Total Land Package Size (ha): 3,500  

Profitability (by resource)

Proven &
Probable
03/02/2017
Last Analysis
Data

Current Data

Change
Item Value Value Updated Value
Percentage Gold: 75.57% 77.09% n/a 1.52%
Percentage Silver: 24.43% 22.91% n/a -1.52%
Total (Gold Eq. Oz.): 2.65M 2.59M n/a -0.05M
Total (Silver Eq. Oz.): 184.19M 196.40M n/a 12.21M
P

L

A

U

S

I

B

L

E
Gold Eq. Oz.: 2.28M 2.24M n/a -0.05M
Silver Eq. Oz.: 158.81M 169.19M n/a 10.38M
Maximum Profit (Gold): $327.01M $420.19M n/a $93.18M
Maximum Profit (Silver): $158.19M $126.72M n/a $-31.47M
Total Maximum Profit: $485.21M $546.91M n/a $61.71M
Max Profit / Current MCap: 0.581 0.760 n/a 0.179
Max Profit Per Share (Gold): $2.04 $2.63 n/a $0.58
Max Profit Per Share (Silver): $0.99 $0.79 n/a $-0.20
Total Max Profit Per Share: $3.03 $3.42 n/a $0.39
Total Free Profit Per Share: $0.00 $0.00 n/a $0.00
FD Mkt. Cap / Gold Eq.: $366.00 $322.15 n/a $-43.86
FD Mkt. Cap / Silver Eq.: $5.26 $4.26 n/a $-1.00
FD Mkt. Cap / Per Metal
as % Spot Price:
29.68% 25.06% n/a -4.62%
Measured &
Indicated
03/02/2017
Last Analysis
Data

Current Data

Change
Item Value Value Updated Value
Percentage Gold: 76.65% 78.12% n/a 1.47%
Percentage Silver: 23.35% 21.88% n/a -1.47%
Total (Gold Eq. Oz.): 3.26M 3.20M n/a -0.06M
Total (Silver Eq. Oz.): 226.98M 242.25M n/a 15.27M
P

L

A

U

S

I

B

L

E
Gold Eq. Oz.: 2.70M 2.65M n/a -0.05M
Silver Eq. Oz.: 188.23M 200.69M n/a 12.46M
Maximum Profit (Gold): $392.41M $504.23M n/a $111.81M
Maximum Profit (Silver): $180.69M $144.75M n/a $-35.94M
Total Maximum Profit: $573.11M $648.97M n/a $75.87M
Max Profit / Current MCap: 0.686 0.901 n/a 0.215
Max Profit Per Share (Gold): $2.45 $3.15 n/a $0.70
Max Profit Per Share (Silver): $1.13 $0.90 n/a $-0.22
Total Max Profit Per Share: $3.58 $4.06 n/a $0.47
Total Free Profit Per Share: $0.00 $0.00 n/a $0.00
FD Mkt. Cap / Gold Eq.: $308.79 $271.59 n/a $-37.21
FD Mkt. Cap / Silver Eq.: $4.44 $3.59 n/a $-0.85
FD Mkt. Cap / Per Metal
as % Spot Price:
25.04% 21.13% n/a -3.91%

Reserves &
Resources
03/02/2017
Last Analysis
Data

Current Data

Change
Item Value Value Updated Value
Percentage Gold: 72.15% 73.81% n/a 1.66%
Percentage Silver: 27.85% 26.19% n/a -1.66%
Total (Gold Eq. Oz.): 4.64M 4.54M n/a -0.10M
Total (Silver Eq. Oz.): 323.14M 343.60M n/a 20.46M
P

L

A

U

S

I

B

L

E
Gold Eq. Oz.: 3.31M 3.23M n/a -0.07M
Silver Eq. Oz.: 230.02M 244.69M n/a 14.66M
Maximum Profit (Gold): $461.90M $593.52M n/a $131.61M
Maximum Profit (Silver): $245.73M $196.85M n/a $-48.88M
Total Maximum Profit: $707.63M $790.36M n/a $82.73M
Max Profit / Current MCap: 0.847 1.098 n/a 0.250
Max Profit Per Share (Gold): $2.89 $3.71 n/a $0.82
Max Profit Per Share (Silver): $1.54 $1.23 n/a $-0.31
Total Max Profit Per Share: $4.42 $4.94 n/a $0.52
Total Free Profit Per Share: $0.00 $0.44 n/a $0.44
FD Mkt. Cap / Gold Eq.: $252.69 $222.75 n/a $-29.94
FD Mkt. Cap / Silver Eq.: $3.63 $2.94 n/a $-0.69
FD Mkt. Cap / Per Metal
as % Spot Price:
20.49% 17.33% n/a -3.16%

Future Valuation (Cash Flow & Totals)

Totals 03/02/2017
Last
Analysis
Data

Current Data

Change
Item Value Value Updated Value
C
U
R
R
E
N
T
R & R Valuation: $611.40M $623.22M n/a $11.82M
Mkt. Cap: $835.20M $720.00M n/a $-115.20M
Annual Gold Production: (guess) 
50,000oz.
(CG) 
50,000oz.
03/02/2017 0oz.
Annual Silver Production: (guess) 
8,000,000oz.
(guess) 
8,000,000oz.
03/02/2017 0oz.
F

U

T

U

R

E
FD Mkt. Cap: $2,925.00M $2,925M n/a $0M
FD Mkt. Cap Growth: 250% 306% n/a 56%
Annual
Production
Gold: 150,000 oz. 150,000 oz. n/a 0 oz.
Silver: 8,000,000 oz. 8,000,000 oz. n/a 0 oz.
Current FD
Mkt. Cap /
Gold Eq. Reserves: 160.62 138.46 n/a -22.15
Silver Eq. Reserves: 6.42 5.54 n/a -0.89
Gold Eq. Production: 1,777.02 1,531.91 n/a -245.11
Silver Eq. Production: 71.08 61.28 n/a -9.80
P&P
Reserves
(oz.)
Gold: 2.00M 2.00M 03/02/2017 n/a
Silver: 80.00M 80.00M 03/02/2017 n/a
Gold Eq.: 5.20M 5.20M 03/02/2017 n/a
Silver Eq.: 130.00M 130.00M 03/02/2017 n/a
P&P Reserves
per FD
Share (oz.)
Gold: 0.013 0.013 n/a n/a
Silver: 0.500 0.500 n/a n/a
Gold Eq.: 0.033 0.033 n/a n/a
Silver Eq.: 0.813 0.813 n/a n/a
Cash Flow 03/02/2017
Last
Analysis
Data

Current Data

Change
Item Value Value Updated Value
Current: $27.24M $24.93M n/a $-2.32M
Current Multiple: 30.66 28.88 n/a -1.77
F
U
T
U
R
E
@ current prices: $16.87M $18.59M n/a $1.72M
Multiple @ current prices: 49.52 38.74 n/a -10.78
Growth @ current prices: -38.09% -25.44% n/a 0.13
@ future prices: $780.30M $780.30M n/a $0.00M
Multiple @ future prices: 1.07 0.92 n/a -0.15
Growth @ future prices: 3,030.34% 3,030.34% n/a 2.66

Defaults

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