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Fortuna Silver's (FSM) Gold & Silver Output Up Y/Y in Q3

Fortuna Silver Mines Inc. FSM reported gold production of 66,344 ounces in third-quarter 2022, reflecting year-over-year growth of 1.4%. The upside was driven by 30,032 ounces of contribution from the Lindero Mine and 27,130 ounces from the Yaramoko Mine.

Silver production was 1,837,506 ounces in the quarter, up 7.3% from the prior-year quarter’s level, driven by higher tonnage treated at the San Jose Mine. Total production was 101,840 gold-equivalent ounces (GEOs) in the quarter under review.

For the first nine months of 2022, silver and gold production totaled 5,160,529 ounces and 195,315 ounces, respectively. FSM reported 301,649 GEOs in the first nine-month period of 2022. Management reiterates production guidance for the current year. FSM expects silver production between 6.2 million and 6.9 million ounces and gold production between 244 thousand and 280 thousand ounces. GEOs for 2022 are anticipated to be 369,000-420,000 ounces.

Mine Details

At the Lindero mine in Argentina, second-quarter gold production was 30,032 ounces, up 14.5% year over year. The San Jose mine in Mexico produced 1.55 million ounces of silver and 9,091 ounces of gold, up 7.6% and 2% year over year, respectively. The mine delivered its highest silver production in the quarter. The Caylloma mine in Peru produced 292,096 ounces of silver in the September quarter, up 6.1% year over year.

Zinc production for the quarter was 11.9 million pounds, down 4.4% year over year, impacted by lower head grades, partially offset by higher mill throughput and recovery. Lead production improved 10.2% year over year to 9.1 million pounds, aided by higher head grades, recovery and mill throughput. The Yaramoko mine in Burkina Faso produced 27,130 ounces of gold in the third quarter of 2022.

For both San Jose and Caylloma mines, Fortuna Silver expects silver production for the year at the upper end of the earlier guided range. The Lindero operation continues delivering higher productivity gains and demonstrating a stable production performance. FSM believes that it is on track to meet the annual guided production range.

Price Performance

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Shares of Fortuna Silver have declined 31.6% in the past year compared with the industry’s fall of 28.5%.

Zacks Rank & Stock to Consider

Fortuna Silver currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the basic materials space are Albemarle Corporation ALB, ATI Inc. ATI and Brigham Minerals MNRL, each currently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle has a projected earnings growth rate of 427% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 19% upward in the past 60 days.

ALB’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 24.2%. The stock has gained around 27% in the past year.

ATI, currently flaunting a Zacks Rank of 1, has an expected earnings growth rate of 1,454% for the current year. The consensus estimate for ATI’s current-year earnings has been revised 23% upward in the past 60 days.

ATI’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 130.4%. ATI has gained around 66% over the past year.

Brigham Minerals has a projected earnings growth rate of 151% for the current year. The Zacks Consensus Estimate for MNRL’s current-year earnings has been revised 8% upward in the past 60 days.

Brigham Minerals has a trailing four-quarter earnings surprise of 13.9%. MNRL has rallied roughly 35% in a year’s time.


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