FSM - Fortuna Silver: Another Disappointing Reserve Update

2023-04-02 02:31:37 ET

Summary

• Fortuna Silver Mines continues to be one of the worst-performing stocks sector-wide, up a mere 3% year-to-date vs. a 5% gain for the Silver Juniors Index.
• I attribute this underperformance to continued disappointments regarding reserve replacement and rising costs across its portfolio, which have overshadowed strong exploration results from Seguela.
• Obviously, bringing Seguela online will be positive for the company, but if San Jose or Yaramoko can't extend their mine lives, this no longer translates to meaningful company-wide growth.
• At a current share price of US$3.85, I continue to see no margin of safety in Fortuna Silver, and I see far more attractive bets elsewhere in the sector from a relative valuation standpoint.

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