Fortuna Mining (NYSE:FSM) said third-quarter production was disrupted by a temporary stoppage at its Séguéla mine, but maintained its annual production forecast and outlined plans to invest approximately $750 million in growth projects and exploration over the next two years.
The company produced 69,665 gold equivalent ounces during the quarter and remains on track for its full-year guidance of 281,000 to 305,000 ounces, Chief Executive Officer Jorge Alberto Ganoza said. Fortuna expects its growth projects to support an approximately 60% increase in annual gold production to roughly 500,000 ounces beginning in mid-2028.
Adjusted attributable net income was $51.2 million, or $0.17 per share, compared with $75.5 million in the second quarter, Chief Financial Officer Kevin O’Reilly said. Adjusted EBITDA was $165 million, while free cash flow from ongoing operations reached $90.8 million.
O’Reilly attributed the quarter-over-quarter earnings decline in part to higher noncash depreciation, depletion and share-based compensation. The latter totaled $10.9 million, compared with a $0.3 million recovery in the second quarter, following a 24% rise in Fortuna’s share price.
Séguéla disruption and cost pressures
Séguéla produced 33,744 ounces of gold in the quarter after a blockade by artisanal miners and reduced equipment availability at a mining contractor limited access to higher-grade ore, said David Whittle, chief operating officer for West Africa. Mining volumes returned to planned levels in September, and metallurgical recoveries returned to previous levels in October, he said.
In response to an analyst’s question, Ganoza said the blockade followed a July 10 police operation against illegal mining in the nearby village of Quebo that resulted in a fatal shooting. Protesters vandalized the plant entrance and blocked access for approximately 24 hours, he said. Fortuna delayed personnel rotations and partially demobilized its workforce; the total stoppage lasted about six days.
Whittle said Séguéla remains on track to reach the lower end of its annual production guidance and is expected to return to first-half production levels in the fourth quarter.
Companywide all-in sustaining cost rose to $2,286 per gold equivalent ounce from $2,157 in the second quarter. O’Reilly cited lower production at Séguéla and higher share-based compensation among the reasons for the increase.
For the full year, Fortuna expects all-in sustaining cost to finish 8% to 10% above the top end of its guidance, which is $1,975 per ounce. O’Reilly pointed to diesel prices, higher royalties and macroeconomic effects in Argentina. He expects costs to decline in the fourth quarter but remain about 5% above the guidance ceiling.
Expansion and funding plans
Fortuna approved a $109 million expansion of Séguéla’s processing plant in July. The project is expected to increase capacity by 30%, with completion and commissioning scheduled for the third quarter of 2028. Ganoza said the expansion targets annual production capacity of more than 200,000 ounces of gold at the mine.
At Diamba Sud in Senegal, Fortuna expects to obtain an exploitation permit in the fourth quarter and is targeting first gold in mid-2028. Whittle said major contracts and earthworks packages totaling $250 million are ready for execution, with full construction subject to the permit and final board approval.
Fortuna ended September with $443 million in cash, nearly $600 million in liquidity and a net cash position of $260 million. Ganoza said the decline in net cash from the previous quarter primarily reflected the $206 million acquisition of the Bambadji concession from Barrick and IAMGOLD.
The company plans to pause share buybacks as it begins the capital-intensive growth phase. It repurchased 10.8 million shares for $106 million earlier in the year but made no repurchases in the third quarter. Ganoza said Fortuna would assess future buybacks against project funding needs, liquidity, gold prices and business performance.
Exploration and Latin American operations
At Bambadji, Fortuna has mobilized six drill rigs and aims to deliver an initial resource estimate for the Kabewest prospect by year-end. Ganoza said Kabewest is about 2 kilometers from the planned Diamba Sud plant and that the company is discussing how to integrate the properties with Senegalese authorities.
In Argentina, Lindero produced 26,000 ounces of gold, up 25% from the second quarter, and remains on track for annual guidance of 92,000 to 102,000 ounces, said Cesar Velasco, chief operating officer for Latin America. At Caylloma in Peru, gold equivalent production rose to 9,900 ounces, leaving the operation positioned to exceed its annual guidance of 29,000 to 33,000 ounces, he said.
About Fortuna Mining (NYSE:FSM)
Fortuna Mining Corp. is a precious metals mining company that explores, develops and operates mines producing gold and silver. The company’s portfolio also includes polymetallic production, including lead and zinc concentrates from its Caylloma operation in Peru. Fortuna sells its metal production to international smelters and refiners.
Fortuna’s operating portfolio includes the Lindero gold mine in Salta, Argentina; the Séguéla gold mine in Côte d’Ivoire; the Yaramoko gold mine in Burkina Faso; and the Caylloma silver-polymetallic mine in Peru.
