Fortuna Mining Corp. Q3 FY2024 earnings call

• Financial performance: Record sales of $275 million, earnings of $50.5 million, EPS $0.16, EBITDA $131 million (48% margin), free cash flow from ongoing operations $56 million. Cash cost per gold equivalent ounce was $10.59 in Q3, $9.77 YTD.
• Mine performance: West African operations (Seguela and Yaramoko) drove performance; Lindero leach pad expansion on track. San Jose mine to start progressive closure in Q1 2025.
• Capital projects: Global sustaining capital budget $130 million, $98 million spent YTD; Yaramoko accelerating 2025 underground development with $11 million additional budget; Lindero leach pad expansion $42 million project on track.
• Exploration: Increased global exploration budget to $44 million; Seguela’s Kingfisher discovery and Sunbird underground project drilling ongoing; aim to update Seguela resource estimate by year-end.
• Balance sheet: Net cash position, reduced and restructured credit lines, $350 million liquidity, debt-to-EBITDA ratio under 0.2x.

West African operations: Seguela mined 484,000 tons of ore in Q3 with an average grade of 2.48 grams per ton, producing 34,998 ounces of gold for the quarter (total 102,537 ounces YTD); cash cost $6.55 per ounce, AISC $11.76 per ounce. Yaramoko mined 102,000 tons at an average grade of 7.75 grams per ton, producing 25,589 ounces of gold for the quarter (total 86,631 ounces YTD); cash cost $9.74 per ounce, AISC $13.73 per ounce. Argentina: Lindero was about 10% above guidance for the year due to lagging currency evaluation against inflation. San Jose mine: Initiating progressive mine closure starting Q1 2025, with continued mining at a reduced rate for initial 18-months while developing closure plan.

• Sales tracking to over $1 billion for the year.
• AISC guidance range $935 to $1,055, currently tracking on upper end due to Yaramoko underground development and Lindero costs.
• Seguela on track to achieve annual production guidance of 126,000–138,000 ounces; Yaramoko on track for 105,000–190,000 ounces.
• Lindero leach pad expansion project scheduled for completion in January-February 2025.

• Argentina FX restrictions: Uncertainty around lifting FX controls, affecting cash surplus management at Lindero.
• VAT recovery in Burkina Faso: Challenges in collecting VAT, with $40–$50 million in VAT receivables building up.
• Mining code changes: Dialogue with governments in Burkina Faso and Cote d’Ivoire regarding proposed mining code changes, but no immediate impact seen on current operations.

Q: Can you quantify the financial implications of potentially having to repatriate U.S. dollars into Argentina and convert to pesos?

A: Cash surpluses from Lindero will either be kept in country or need alternative management; subject to current FX restrictions in Argentina with government signaling lifting but no date.

Q: What's the impact of proposed mining code changes in Burkina Faso and Cote d’Ivoire on Yaramoko, Seguela, or Diamba Sud?

A: In close dialogue with governments; no dramatic impact seen on current operations in Burkina Faso; Cote d’Ivoire process orderly with draft mining code being consulted.

Q: How does the VAT recovery issue in Burkina Faso affect cash flow?

A: Included as negative change in working capital; delays in collecting VAT impact free cash flow.

Q: What's the status of San Jose mine closure and residual mining?

A: Initiating progressive closure in Q1 2025; residual mining to offset some closure costs; provision for closure expected to increase as final plan is developed.