Fortuna Mining Q1 Earnings Call Highlights

Key Points

• Fortuna Mining posted a record first quarter with sales of $342 million, adjusted net income of $111 million, and free cash flow from operations of $174 million. The company said strong precious metals prices and stable execution drove the results, while it maintained zero lost-time injuries for the fifth straight quarter.
• Growth plans are centered on West Africa, with Fortuna targeting about 60% annual gold production growth over the next 24 months to roughly 500,000 ounces. Key drivers are the Séguéla mine expansion in Côte d’Ivoire and the Diamba Sud project in Senegal, both of which are advancing toward permitting and feasibility milestones.
• The balance sheet remains strong, with $665.9 million in cash, $493 million in net cash and $816 million in total liquidity. Management also warned that about $140 million in taxes are expected in 2026, which should weigh on free cash flow in the second and third quarters.

Fortuna Mining NYSE: FSM reported what executives described as a record first quarter of 2026, citing higher realized precious metals prices, stable operating execution and strong cash generation across its mines in West Africa and Latin America.

President, Chief Executive Officer and Co-founder Jorge A. Ganoza said the company recorded zero lost-time injuries during the quarter, extending its run to five consecutive quarters without a lost-time injury. He said sales reached a record $342 million, while adjusted net income totaled $111 million, or $0.36 per share. Adjusted EBITDA was $219 million, and free cash flow from ongoing operations reached $174 million.

“These results underscore the quality of our asset base, disciplined operating execution, and strong leverage to the gold price environment,” Ganoza said on the call.

Fortuna produced 72,900 gold equivalent ounces during the quarter. Management said the company remains positioned to meet its full-year 2026 guidance based on year-to-date performance and current operating conditions.

Growth Plans Center on West Africa

Ganoza said Fortuna is targeting roughly 60% growth in annual gold production over the next 24 months, with the goal of reaching about 500,000 ounces of annual gold output. The company expects that growth to come from expanding the Séguéla mine in Côte d’Ivoire and bringing the Diamba Sud project in Senegal into production.

Ganoza emphasized that the growth plan is based on assets already in Fortuna’s portfolio rather than acquisitions or future exploration success. He said both projects are “technically straightforward,” have strong social acceptance and are financially de-risked.

The company expects to complete both the Diamba Sud feasibility study and the Séguéla expansion study in May. Fortuna also expects environmental approval for Diamba Sud imminently, followed by the final mining permit shortly thereafter. The company has budgeted $100 million for Diamba Sud early works in 2026.

Fortuna also highlighted a recently published reserve and resource update. Ganoza said proven and probable mineral reserves increased 15% year over year after depletion to 3 million gold ounces. Indicated mineral resources rose 56% to 2.1 million gold ounces, while inferred mineral resources increased 4% to 2.2 million gold ounces.

Séguéla Production Rises, Sunbird Advances

David Whittle, Fortuna’s Chief Operating Officer for West Africa, said Séguéla produced 42,016 ounces of gold in the first quarter, a 14% improvement from the previous quarter and ahead of the mine plan. The mine processed 430,000 tons of ore at an average gold grade of 3.21 grams per ton, with throughput averaging 212 tons per hour.

Production came primarily from the Antenna, Ancien and Koula pits, while waste mining advanced at the Sunbird pit. Séguéla reported cash costs of $679 per ounce and all-in sustaining costs of $1,760 per ounce.

Whittle said the six-megawatt solar power plant project at Séguéla is nearing completion and is expected to be commissioned this quarter. He said power from the solar plant is expected to provide about a 35% per-unit cost saving compared with grid power.

The company also announced progress at the Sunbird deposit, including a 34% increase in mineral reserves and a 55% increase in resources based on drilling completed through the end of the first quarter. Whittle said Fortuna has established a joint permitting committee with Côte d’Ivoire’s Ministry of Mines, with a goal of permitting the Sunbird underground mine by the end of 2026. Initial development is targeted for the first half of 2027.

Fortuna has decided to develop and operate the Sunbird underground mine on an owner-operator basis, with an incremental $25 million increase in budgeted capital spending. Whittle said accessing the underground mine from the southern section of the Sunbird pit, instead of through a dedicated box cut, is expected to reduce project costs by more than $7 million.

Latin American Operations Deliver Stable Quarter

Cesar Velasco, Fortuna’s Chief Operating Officer for Latin America, said Lindero in Argentina produced 21,545 ounces of gold, a 12% increase from the fourth quarter of 2025. The mine placed 1.5 million tons on the leach pad at an average head grade of 0.62 grams per ton of gold.

Velasco said the key operational milestone at Lindero was completion of the primary crusher foundation replacement. He said the work was completed on time, within budget and with strong safety performance. Crushing operations resumed May 1 as planned.

Lindero generated $101.5 million in sales and an EBITDA margin of 69% of sales. Cash costs were $1,208 per ounce, and all-in sustaining costs were $1,783 per ounce. Velasco said costs were affected by temporary and non-recurring factors tied to the crusher project, equipment rentals, temporary crushing solutions, maintenance work and macroeconomic pressures in Argentina. He said the company expects all-in sustaining costs to move toward $1,300 per ounce by the fourth quarter.

At Caylloma in Peru, silver production reached 258,000 ounces, up 3.5% from the prior quarter. The mine also produced 11.5 million pounds of zinc and 8.2 million pounds of lead. Caylloma generated $34.6 million in sales and maintained an EBITDA margin of 62% of sales.

Balance Sheet Strengthens as Taxes Set to Rise

Chief Financial Officer Luis D. Ganoza said attributable net income was $111 million, up 64% from the prior quarter and 200% from the prior year. He said the quarter benefited from record metal prices, with costs per ounce in line with full-year guidance.

Fortuna’s average realized gold price was $4,884 per ounce, compared with $4,166 in the fourth quarter of 2025 and $2,884 in the first quarter of 2025. Cash cost per gold equivalent ounce was $951.

Luis Ganoza said the company has not seen a material impact on its cost structure from inflation to date, though it has observed higher input costs for some materials. Fuel prices have risen at the company’s Peruvian operations, but he said Argentina and Côte d’Ivoire have not yet seen meaningful pass-through from higher oil prices.

The company ended the quarter with $665.9 million in cash, net cash of $493 million and total liquidity of $816 million, including a fully undrawn $150 million revolving credit facility.

Management said Fortuna can fund about $330 million of exploration, sustaining and non-sustaining capital in 2026 from internal cash flow. Ganoza said 56% of that total is allocated to growth and exploration. He also said the company has returned $40 million to shareholders year to date through the repurchase of 4.2 million shares.

Luis Ganoza said Fortuna expects to pay about $140 million in taxes in 2026, with most payments occurring in the second and third quarters. He said that timing is expected to lower free cash flow over the next two quarters, all else being equal. He also said the consolidated effective tax rate is expected to rise to the high-30% range for the full year.

Management Discusses Costs, M&A and Exploration

During the question-and-answer portion, Whittle said Séguéla’s first-quarter cash cost performance reflected higher gold output, a lower quarterly strip ratio and accounting treatment related to stripping costs. He said Fortuna is not seeing material unit cost pressure in Côte d’Ivoire, though grinding media costs are beginning to increase.

Asked about acquisitions and operational technology diligence, Jorge Ganoza said Fortuna’s current M&A focus is more on pre-development stage opportunities, similar to its acquisition of Chesser Resources, which brought Diamba Sud into the portfolio.

Ganoza also discussed Fortuna’s recent entry into Guyana through the Quartzstone option agreement. He said the Guyana Shield has been on the company’s watch list and noted its geological similarities to West Africa. He said Fortuna is focused on Quartzstone and on expanding its presence in Guyana and Suriname, while likely reducing its presence in Mexico.

About Fortuna Mining NYSE: FSM

Fortuna Mining Corp. engages in the precious and base metal mining in Argentina, Burkina Faso, Mexico, Peru, and Côte d'Ivoire. It operates through Mansfield, Sanu, Sango, Cuzcatlan, Bateas, and Corporate segments. The company primarily explores for silver, lead, zinc, and gold. Its flagship project is the Séguéla gold mine, which consists of approximately 62,000 hectares and is located in the Worodougou Region of the Woroba District, Côte d'Ivoire. The company was formerly known as Fortuna Silver Mines Inc and changed its name to Fortuna Mining Corp.

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