1Refer to Non -IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statemen ts filed on
NEWS RELEASE
1Refer to Non -IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statemen ts filed on
SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Excluding letters of credit
3 Au Eq includes gold, silver, lead and zinc and is calculated using the following metal prices: $2,334/oz Au, $29.1/oz Ag, $2,157/t Pb and $2,835/t Zn or Au:Ag =
1:80.19, Au:Pb = 1:1.08, Au:Zn = 1:0.82 for Q2 2024, and the following metal prices $2,087/oz Au, $23.4/oz Ag, $2,084/t Pb and $2,450/t Zn or Au:Ag = 1:89.8,
Au:Pb = 1:1.0, Au:Zn = 0.85 for Q1 2024.
Fortuna reports financial results for the second quarter of 2024
(All amounts are expressed in US dollars, tabular amounts in millions, unless otherwise stated)
Vancouver, August 7, 2024: Fortuna Mining Corp. (NYSE: FSM | TSX: FVI) (“Fortuna” or the “Company”)
today reported its financial and operating results for the second quarter of 2024.
Second Quarter 2024 highlights
Financial
• Attributable net income of $40.6 million or $0.13 per share, compared to a $26.3 million or $0.09
per share in Q1 2024
• Adjusted attributable net income1 of $30.4 million or $0.10 per share, compared to $26.7 million
or $0.09 per share in Q1 2024
• Generated $93.0 million (or $0.30 per share) of cash flow from operations before working capital
changes, and free cash flow from ongoing operations1 of $38.6 million, compared to $84.3 million
(or $0.28 per share) and $12.1 million, respectively, in Q1 2024
• The Company issued Convertible Notes (the “2024 Notes”) for gross proceeds of $172.5 million
which were partially used to pay in full the outstanding $125.0 million under its revolving credit
facility. As at the end of the quarter total net debt 1 was $66.5 million and the total net debt to
adjusted EBITDA ratio1 was 0.2:1
• Liquidity as of June 30, 2024 was $355.6 million, compared to $ 212.7 million at the end of Q 1
2024
Operational
• Gold equivalent3 production of 116,570 ounces, compared to 112,543 ounces in Q1 2024
• Gold production of 92,716 ounces, compared to 89,678 ounces in Q1 2024
• Silver production of 990,574 ounces, compared to 1,074,571 ounces in Q1 2024
• Consolidated cash costs1 per ounce of gold equivalent sold of $988, compared to $879 in Q1 2024;
adjusting for San Jose, which is mining its last year of Mineral Reserves, consolidated cash costs
was $858
• Consolidated all -in sustaining cash costs (AISC) 1 per ounce of gold equivalent sold of $1,656,
compared to $1,495 in Q1 2024; adjusting for San Jose, consolidated AISC was $1,584
• The Company recorded zero lost time injuries and zero total recordable injuries in the quarter
Fortuna | 2
Growth and Development
• At the newly discovered Kingfisher prospect at the Séguéla Mine the Company intersected 23.7
g/t gold over 17.8 meters. For full details refer to the News Release “ Fortuna intersects 23.7 g/t
gold over 17.8 meters from the Kingfisher Prospect at the Séguéla Mine” dated June 20, 2024
• Exploration continued at the Diamba Sud exploration project with an intersect of 31.3 g/t gold
over 12.0 meters at the Karakara prospect. For full details r efer to the News Release “ Fortuna
intersects 31.3 g/t gold over 12.0 meters from the Karakara Prospect at the Diamba Sud Gold
Project” dated June 25, 2024
"Our business performed well in the quarter, generating strong net cash flow from operations of $93 .0
million before working capital changes and free cash flow after sustaining cap ital of $38.6 million.” said
Jorge Ganoza, Fortuna’s President and CEO. Mr. Ganoza continued, “We anticipate our free cash flow to
increase further in the second half of the year as we conclude a heavy sustaining capex phase in the third
quarter with the completion of the Lindero leach pad expansion project.” Mr. Ganoza added, “With the
issue of $172.5 million of convertible notes we have significantly strengthened our balance sheet and
liquidity while lowering our cost of capital. This added financial flexibility place s the Company in an
advantageous position to pursue strategic initiatives and emerging opportunities in our established
regions.” Mr. Ganoza concluded “On the exploration front we continue creating value through discovery.
At the recently identified Kingfisher prospect, at the Séguéla mine, we have drill defined gold
mineralization over a strike length of two kilometers. Our drill program will continue non -stop with the
aim of delivering a first resource for this exciting new discovery by year end.”
Second Quarter 2024 Consolidated Results
Three months ended June 30, Six months ended June 30,
(Expressed in millions) 2024 2023 % Change 2024 2023 % Change
Sales 260.0 158.4 64% 484.9 334.1 45%
Mine operating income 79.9 31.9 150% 149.8 72.3 107%
Operating income 55.4 7.7 619% 102.6 31.6 225%
Attributable net income 40.6 3.1 1,210% 66.9 14.0 378%
Attributable income per share - basic 0.13 0.01 1,200% 0.22 0.05 340%
Adjusted attributable net income1 30.4 2.5 1,116% 57.1 14.7 288%
Adjusted EBITDA1 112.7 44.4 154% 207.8 109.5 90%
Net cash provided by operating activities 73.5 44.2 66% 122.5 85.4 43%
Free cash flow from ongoing operations1 38.6 9.5 306% 50.7 17.6 188%
Cash cost ($/oz Au Eq)1 988 968 2% 934 940 (1%)
All-in sustaining cash cost ($/oz Au Eq)1 1,656 1,799 (8%) 1,577 1,648 (4%)
Capital expenditures2
Sustaining 29.9 34.2 (13%) 55.7 62.1 (10%)
Non-sustaining3 17.6 0.9 1,856% 26.5 2.0 1,225%
Séguéla construction - 23.0 (100%) - 48.1 (100%)
Brownfields 2.9 2.4 21% 9.5 7.3 30%
As at June 30, 2024 December 31, 2023 % Change
Cash and cash equivalents 105.6 128.1 (18%)
Net liquidity position (excluding letters of credit) 355.6 213.1 67%
Shareholder's equity attributable to Fortuna shareholders 1,334.9 1,238.4 8%
1 Refer to Non-IFRS Financial Measures section at the end of this news release and to the MD&A accompanying the Company’s financial statements filed
on SEDAR+ at www.sedarplus.ca for a description of the calculation of these measures.
2 Capital expenditures are presented on a cash basis
3 Non-sustaining expenditures include greenfields exploration
Figures may not add due to rounding
Fortuna | 3
Second Quarter 2024 Results
Attributable Net Income and Adjusted Attributable Net Income
Net income attributable to Fortuna for the quarter was $40.6 million compared to $3.1 million in Q2 2023.
After adjusting for non -cash and non -recurring items, adjusted attributable net income for the quarter
was $ 30.4 million compared to $2.5 million in Q 2 2023. The large change between net income and
adjusted net income for the quarter was primarily the result of a $12.0 million deferred tax recovery that
was removed from adjusted attributable net income related to the issuance of the 2024 Notes.
The increase in net income and adjusted net income is explained mainly by increased gold sales volume
and higher realized gold and silver prices. Higher gold sales volume was primarily due to contribution s
from Séguéla which was under construction in the comparable period . This was partially offset by lower
silver production at San Jose as the mine exhausts its Mineral Reserves. The realized gold and silver prices
were $2,334 and $29.10 per ounce respectively compared to $1,975 and $24.10 per ounce, respectively,
for the comparable period in the prior year.
Adjusted net income for the quarter was also impacted by higher G&A of $7.8 million, primarily due to an
increase of $4.7 million in share based compensation related to the increase of our share price in the
period and the addition of Séguéla’s G&A. The higher interest expense of $3.4 million for the quarter is
explained by $3.7 million of capitalized interest in the comparative period vs nil in Q2 2024.
Depreciation and Depletion
Depreciation and depletion for the second quarter of 2024 was $57.3 million compared to $39.9 million
in the comparable period. The increase in depreciation and depletion was primarily the result of higher
sales volume and the inclusion of $17.5 million in depletion of the purchase price related to the acquisition
of Roxgold Inc in 2021. This was partially offset by lower depreciation and depletion at San Jose as a result
of an impairment charge in the fourth quarter of 2023.
Adjusted EBITDA and Cash Flow
Adjusted EBITDA for the quarter was $112.7 million, a margin of 43% over sales, compared to $44.4 million
a margin over sales of 28%, reported in the same period in 2023. The main driver for the increase in
EBITDA was the contribution from Séguéla with an EBITDA margin of 62% in Q 2 2024, partially offset by
marginal EBITDA at San Jose. The prior period was also impacted by an illegal blockade of the San Jose
Mine.
Net cash generated by operations for the quarter was $73.5 million compared to $44.2 million in Q2 2023.
The increase of $29.3 million reflects higher adjusted EBITDA of $68.3 million offset by taxes paid of $17.4
million at Séguéla as two installment payments were made in the second quarter, with a third expected
in September, and $19.4 million in negative working capital movements.
The negative change in working capital of $19.4 million consisted of the following:
Fortuna | 4
• An increase in receivables of $9.3 million driven by an increase in VAT receivables of $4.9 million
at Séguéla and $4.3 million at Yaramoko
• An increase of inventories of $13.5 million related to a $2.3 million increase in material and
supplies and $2.6 million in metals inventory at Séguéla and a $1.5 million increase in materials
and supplies and $4.5 million in metals inventory at Lindero
In the second quarter of 2024 capital expenditures on a cash basis were $50.4 million consisting primarily
of $32.8 million in sustaining capital and $17.6 million of non-sustaining capital including $6.5 million to
acquire one half of the 1.2% NSR royalty that was held by Franco Nevada at Séguéla.
Free cash flow from ongoing operations for the quarter was $38.6 million, compared to $9.5 million in Q2
2023. The increase in free cash flow from operations was primarily the result of contributions from
Séguéla which was under construction in Q2 2023 and was offset by negative working capital changes and
higher taxes paid as described above.
Cash Costs and AISC
Cash cost per equivalent gold ounce was $988, compared to $968 in the second quarter of 2023. The
slightly higher cash cost per equivalent gold ounce was due to higher costs at San Jose, Lindero, and
Yaramoko, partially offset by the contribution of low -cost production from Séguéla. Adjusting f or San
Jose, where previously capitalized costs are now expensed as the mine is in its last year of operations,
cash costs per gold equivalent ounces was $858 for the current quarter.
All-in sustaining costs per gold equivalent ounce was $1,656 for the second quarter of 2024 compared to
$1,799 for the second quarter of 2023. The decrease was primarily the result of higher gold sales and
lower sustaining capital. Adjusting for San Jose, all-in sustaining cost per gold equivalent ounce was $1,584
for the current quarter.
General and Administrative Expenses
General and administrative expenses for the current quarter of $22.4 million were higher than the same
period in 2023 as Séguéla transitioned to operations and costs are no longer being capitalized, and higher
share-based compensation expenses due to an increase in the share price and the impact on the valuation
of restricted share units expected to settle in cash. G&A is comprised of the following items:
Three months ended June 30, Six months ended June 30,
(Expressed in millions) 2024 2023 % Change 2024 2023 % Change
Mine G&A 9.9 6.2 60% 16.9 12.1 40%
Corporate G&A 6.6 7.2 (8%) 15.5 14.1 10%
Share-based payments 5.8 1.1 427% 8.0 3.3 142%
Workers' participation 0.1 — 0% 0.2 0.1 100%
Total 22.4 14.5 54% 40.6 29.6 37%
Liquidity
The Company’s total liquidity available as of June 30, 2024 was $355.6 million comprised of $105.6 million
in cash and cash equivalents, and the fully undrawn $250.0 million revolving credit facility (excluding
letters of credit).
Fortuna | 5
Séguéla Mine, Côte d’Ivoire
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
Mine Production
Tonnes milled 318,457 109,605 713,294 109,605
Average tonnes crushed per day 3,461 1,611 3,898 1,611
Gold
Grade (g/t) 3.47 1.56 3.09 1.32
Recovery (%) 94 90 94 77
Production (oz) 32,983 4,023 67,539 4,023
Metal sold (oz) 33,102 - 67,552 -
Realized price ($/oz) 2,332 - 2,211 -
Unit Costs
Cash cost ($/oz Au)1 564 - 511 -
All-in sustaining cash cost ($/oz Au)1 1,097 - 1,021 -
Capital Expenditures ($000's) 2
Sustaining 5,779 - 8,805 -
Sustaining leases 2,437 - 4,702 -
Non-sustaining 8,605 - 9,640 -
Brownfields 1,190 - 6,086 -
1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures. Refer to Non-IFRS Financial Measures.
2 Capital expenditures are presented on a cash basis
In the second quarter of 2024, mined material totaled 420,222 tonnes of ore, averaging 3.03g/t Au, and
containing an estimated 40,912 ounces of gold from the Antenna, Ancien and Koula pits. Movement of
waste during the quarter totaled 2,495,838 tonnes, for a strip ratio of 6:1.
Production was mainly focused on the Antenna pit which produced 364,491 tonnes of ore to provide
higher grade feed to the processing plant during the power supply constraints detailed below. Mining at
the Ancien and Koula pits provided the balance of ore production with 1,645,716 tonnes of the waste
stripping occurring there.
Séguéla processed 318,457 tonnes in the quarter, producing 32,983 ounces of gold, at an average head
grade of 3.47 g/t Au. During the quarter the mine experienced intermittent power outages from April to
early July which resulted in the loss of 19 days of operating time for the mill. The loss of power was the
result of power shedding from the national grid supplier due to failures at two power plants in Côte
d’Ivoire. Since early July the mine has been receiving stable grid power. To guarantee mine power supply
in the event of future outages the Company is sourcing expanded backup diesel power generation
capabilities to support the entire process operation.
The potential impact to gold production from the intermittent power outages was largely mitigated by
delivering higher grade feed to the mill and the benefits of operating efficiencies which have allowed the
mill to operate at a throughput rate of 2 08 tonnes per hour compared to a name place capacity of 154
tonnes per hour. Séguéla’s 2024 production guidance of 126,000 to 138,000 oz Au remains unaffected.
Cash cost per gold ounce sold was $564, and all-in sustaining cash cost per gold ounce sold was $1,097 for
Q2 2024. Both were below plan and guidance.
Fortuna | 6
Yaramoko Mine, Burkina Faso
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
Mine Production
Tonnes milled 121,391 144,202 229,110 283,852
Gold
Grade (g/t) 8.40 6.51 8.58 6.23
Recovery (%) 98 98 98 98
Production (oz) 31,447 29,002 58,624 55,439
Metal sold (oz) 31,455 25,946 58,627 55,476
Realized price ($/oz) 2,334 1,976 2,223 1,933
Unit Costs
Cash cost ($/oz Au)1 896 719 830 772
All-in sustaining cash cost ($/oz Au)1 1,389 1,626 1,382 1,564
Capital Expenditures ($000's) 2
Sustaining 5,110 14,318 14,731 27,867
Sustaining leases 1,018 1,161 2,067 2,520
Non-sustaining 1,542 – 1,542 –
Brownfields 1,397 1,019 2,760 2,210
1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures; refer to non-IFRS financial measures section at the end of this news
release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the
calculation of these measures.
2 Capital expenditures are presented on a cash basis.
In the second quarter of 2024, 121,391 tonnes of ore were treated at an average head grade of 8.40 g/t,
producing 31,447 ounces of gold. This represents a 29% increase in grade and an 8% increase in
production, when compared to the same period in 2023. Higher gold production in the second quarter of
2024 was a result of higher head grades, offsetting lower tonnes milled. Processing operations at
Yaramoko were also affected by intermittent power supply from the grid, however, our backup diesel
generators mitigated the bulk of these constraints.
During the quarter, 89,991 tonnes of ore were mined averaging 7.81 g/t Au from 55 Zone, and 21,361
tonnes of ore averaging 8.89 g/t Au from QV Prime, totaling 111,352 tonnes averaging 8.02 g/t Au. In May,
a rock burst occurred in the deeper levels of the 55 Zone, which interrupted production for a period of 10
days. No injuries or loss of property occurred as a result of the seismic event. Changes to the stoping
sequence and design of underground excavations have been implemented based on a geotechnical
evaluation.
The cash cost per ounce of gold sold for the quarter ended June 30, 2024, was $896, compared to $719 in
the same period in 2023. The increase for the quarter is mainly attributed to the reallocation of fixed
mining costs from capital to operating expenses, lower processed ore and higher energy costs from the
use of diesel generators to offset constrained grid supply. This was partially offset by higher ounces sold
in the period.
During the quarter power sourced from the grid was restricted to 45% with the balance coming from
diesel power generation. This increased the cost per kilowatt hour with diesel generation costing
$0.42/kwh compared to $0.24/kwh for grid power. The impact on total cost was mostly offset by lower
energy consumption at the mine. Through the month of July availability of power from the grid was at
95%.
Fortuna | 7
The all -in sustaining cash cost per gold ounce sold was $1,389 for the quarter ended June 30, 2024,
compared to $1,626 in the same period of 2023. The change in the quarter was primarily due to higher
volume of ounces sold, lower sustaining capital expenditure and lower sustaining lease expenses in 2024.
This was partially offset higher by royalty costs due to higher metal prices and a change in the royalty
regime in Burkina Faso which increased the royalty rate from 5% to 7% when the gold price is over $2,000
per ounce.
Drilling and development operations continued to extend the mining boundaries to the east and west of
55 Zone and demonstrate wider mineable widths than expected. In the third quarter, drilling will also
focus on testing the potential for further strike ex tensions of 55 Zone, as well as testing the strike
extensions that we currently see in QV Prime.
Fortuna | 8
Lindero Mine, Argentina
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
Mine Production
Tonnes placed on the leach pad 1,408,791 1,503,323 2,956,114 2,981,471
Gold
Grade (g/t) 0.61 0.62 0.60 0.83
Production (oz) 22,874 25,456 46,136 50,714
Metal sold (oz) 21,511 25,140 43,230 51,952
Realized price ($/oz) 2,335 1,975 2,201 1,879
Unit Costs
Cash cost ($/oz Au)1 1,092 878 1,050 884
All-in sustaining cash cost ($/oz Au)1 2,033 1,686 1,832 1,550
Capital Expenditures ($000's) 2
Sustaining 16,151 13,337 25,958 21,082
Sustaining leases 587 599 1,185 1,197
Non-sustaining 195 136 349 323
1 Cash cost and All-in sustaining cash cost are non-IFRS financial measures; refer to non-IFRS financial measures section at the end of this news
release and to the MD&A accompanying the Company’s financial statements filed on SEDAR+ at www.sedarplus.ca for a description of the
calculation of these measures.
2 Capital expenditures are presented on a cash basis.
Quarterly Operating and Financial Highlights
During the second quarter of 2024, total mined ore was 1.8 million tonnes at a stripping ratio of 0.7:1. A
total of 1,408,791 tonnes of ore was placed on the heap leach pad at an average gold grade of 0.61 g/t,
containing an estimated 27,663 ounces of gold . Gold production for Q2 2024 totaled 22,874 ounces, a
10% decrease from the second quarter of 2023, primarily due to a planned eight -day maintenance
shutdown of the high-pressure grinding rolls (HPGR) and the agglomeration plant, coupled with a period
of lower mechanical availability of front-end loaders.
The cash cost per ounce of gold for the quarter ended June 30, 2024 was $1,092 compared to $878 in the
same period of 2023. The increase in cash cost per ounce of gold was primarily related to low mechanical
availability of front-end loaders, higher maintenance costs due to the eight -day maintenance shutdown
in the quarter and higher ounces sold in the comparable period.
The all-in sustaining cash cost per gold ounce sold during the second quarter of 2024 was $2,033, an
increase from $1,686 in the second quarter of 2023. The increase for the quarter was primarily due to
higher cash costs as described above and higher sustaining capital to support the expansion of the heap
leach pad. The leach-pad project accounts for approximately $400 per ounce in the all -in sustaining cost
for 2024.
As of June 30, 2024, the $51.8 million leach pad expansion project ($41.7 million capital investment in
2024) was approximately 58% complete. The construction of the project commenced in January 2024,
with contractors on site undertaking earthworks and construction of the impulsion line, and liner
deployment. Procurement is 96% complete, with critical path items onsite. Pump manufacturing for the
new impulsion l ine was completed on schedule and arrive d on site in July. Liner installation has