FSM - Fortuna Silver: Production Growth Overshadowed By Cost Creep

• Fortuna Silver released its Q4 and FY2021 results last month, reporting record production of ~207,200 ounces of gold, pushing annual gold-equivalent ounce production north of the 300,000-ounce mark.
• However, while output and sales were up sharply year-over-year, this was not all organic growth, and the company did see ~58% growth in its fully diluted share count.
• Meanwhile, costs were up sharply at nearly every operation, including the newly acquired Yaramoko Mine, which has a much less attractive outlook going forward with lower production at higher costs.
• At a share price of ~US$4.00, I still don't see enough margin of safety to invest in Fortuna at current levels, and I continue to see more attractive bets elsewhere in the sector.

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