Fortuna Silver Has “a Lot of Tolerance” for Low Prices, Says CEO
“Of course we all like higher prices,” says Jorge Ganoza of Fortuna Silver Mines. “But … we try to focus on the things we can control.”
The silver price continues to face headwinds, leaving market watchers wondering when a turnaround may take place. But for Jorge Ganoza, president, CEO and director of Fortuna Silver Mines (TSX:FVI,NYSE:FSM), today’s low price environment isn’t a major issue.
“I get asked a lot about silver and gold, and of course we all like higher prices,” he said. “But I’ll say that we are a bit price agnostic — we try to focus on the things we control. We control our cost, we control the type of assets we decide to acquire and get involved with and develop.”
With that focus, the company has put itself in a position where it’s able to thrive — not just survive — when metals prices are low. “Fluctuations impact us, yes, but we have very healthy margins and we have a lot of tolerance in our business for depressed prices,” Ganoza explained.
Moving forward, Fortuna’s key upcoming milestone is the start of production at the Lindero gold project in Argentina. “Really that’s where we’re focusing our human resources, our human capital and our … financial resources [as well],” said Ganoza, adding, “that is the big catalyst for value.”
Lindero is scheduled to come into production by the end of 2019, and is expected to have a 15-year mine life with average annual gold recovered to dore of 96,000 ounces. Its after-tax NPV is pegged at $130 million at a 5-percent discount, while its after-tax IRR is set at 18 percent. The payback period is 3.6 years.
“I think there is a lot of value to be unlocked for Fortuna shareholders as we bring this mine into production,” Ganoza concluded.
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Editor’s note — this interview took place before Fortuna’s Q3 results were released. Click here to see the results on the company’s website.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.