Past year: ▲ 25%(11.59 – 18.64 CAD)
Each one in plain English, with the numbers worked through for a shareholder.
16 Aug 2021business combination● NeutralMajor
The formal acquisition report: the Roxgold deal closed on 2 July 2021, its holders taking 0.283 Fortuna shares plus C$0.001 each, so their equity carried into Fortuna rather than being cashed out. Roxgold became a wholly-owned subsidiary and was amalgamated into a Fortuna company under the same name.
21 June 2021business combination▲ Good
ISS and Glass Lewis both told shareholders of each company to vote for the Roxgold combination ahead of the 28 June meetings.
7 May 2021business combination● Neutral
The signed arrangement agreement with Roxgold dated 26 April 2021, covering meetings, court process, incentive award treatment and an acquiror loan facility. Mechanics rather than new commercial terms.
26 Apr 2021business combination● NeutralMajor
Agreed to buy Roxgold for 0.283 Fortuna shares plus C$0.001 per share, leaving Fortuna holders with 64.3% and Roxgold's with 35.7%. It takes Fortuna from Latin America into West Africa - the producing Yaramoko mine in Burkina Faso, the Séguéla project in Côte d'Ivoire and Boussoura exploration - and is put at about 450,000 gold-equivalent ounces a year at roughly US$950 an ounce all-in sustaining cost. Fortuna's stated reason for the deal includes funding Séguéla's construction.
29 Mar 2021resource reserve update▼ BadMajor
Reserves and resources at all three mines fell at the end of 2020: combined proven and probable reserves at Caylloma and San Jose came to 5.3 million tonnes holding 28.8 million ounces of silver and 170,000 ounces of gold, both down 23% year on year, with inferred resources of 28.5 million ounces of silver. Management attributed it to mining depletion plus the suspension of the 2020 exploration programs under Covid restrictions, and promised a US$16 million brownfields budget and over 53,000 metres of drilling now that Lindero's capital spending was finished.
20 May 2020capital raising announcement● NeutralMajor
Raised US$69 million by issuing 23,000,000 shares at US$3.00, including the full over-allotment, through a Scotiabank and BMO-led syndicate, to finish building Lindero and for working capital. The 2017 promise to build the mine without touching equity markets did not survive the pandemic, and the price was well below the US$5.00 conversion price on the debentures sold eight months earlier.
6 May 2020debt default or forbearance● NeutralMajor
With Caylloma cut back and San Jose suspended under Peruvian and Mexican pandemic orders, Fortuna's lenders agreed in principle to loosen the covenants on its US$150 million facility: total net debt to earnings moves from 3:1 to 4.5:1 through the first quarter of 2021 before stepping back to 4:1, and a new senior secured test of 3:1 falling to 2:1. This is relief obtained before any breach - the ratio was 1.7:1 at the end of 2019 - not a tightening.
8 Oct 2019debt financing● Neutral
The underwriters - CIBC, Scotiabank and BMO - took up the full US$6 million over-allotment on the same 4.65% terms, bringing the debenture issue to US$46 million.
2 Oct 2019capital raising announcement● Neutral
Closed the US$40 million of 4.65% convertible debentures due 31 October 2024, convertible at US$5.00 a share, 200 shares per US$1,000. They cannot be called before October 2022 and then only subject to a share price test.
11 Sept 2019capital raising announcement● NeutralMajor
Agreed a bought deal of US$40 million of senior subordinated unsecured convertible debentures at 4.65%, maturing October 2024 and convertible at US$5.00 a share, with a US$6 million over-allotment option. Having said in 2017 it would build Lindero without touching equity markets, Fortuna was now raising money in a form that converts into shares if it works.
28 Mar 2019resource reserve update● Neutral
Technical report on the San Jose silver-gold mine in Oaxaca, Mexico, effective 22 February 2019.
28 Mar 2019resource reserve update● Neutral
Technical report on the Caylloma silver-lead-zinc mine in Peru, effective 8 March 2019, filed the same day as the San Jose report.
6 Sept 2018drilling progress report▲ Good
Infill drilling at Lindero to firm up the first year's ore met or beat the block model in 44 of 61 holes, and found gold in a diorite porphyry in the centre of the deposit previously mapped as barren. Fortuna said it would rework the mine plan but that the resource estimate would not change materially. Commercial production was still planned for late in the third quarter of 2019 at about 137,000 ounces in the first full year.
7 Nov 2017resource reserve update● Neutral
The technical report on the Lindero property, effective 31 October 2017, filed behind September's construction decision.
11 Oct 2017drilling progress report▲ Good
Further drilling on the Animas NE vein at Caylloma kept supporting a high-grade shoot still open in two directions - 235 grams of silver a tonne with 6.51% lead and 6.50% zinc over 6.6 metres true width, 160 grams with 4.98% lead and 7.19% zinc over 5.7 metres. The update also covered early-stage work in Argentina and Serbia, some of it through equity stakes and option agreements with Prospero Silver in Mexico and Medgold Resources in Serbia.
21 Sept 2017production update▲ GoodMajor
The board approved construction of the Lindero heap-leach gold mine in Salta, Argentina, the asset Fortuna picked up when it bought Goldrock Mines in July 2016, with all major permits already in hand. Initial capital of US$239 million was to come from about US$190 million of cash, existing credit lines and operating cash flow, with the company explicitly ruling out an equity raise or hedging. It is an 18,750 tonne a day open pit over 15 years, with a base-case 18% return and 3.6-year payback - modest economics that depend on the gold price.
21 July 2017auditor change● Neutral
Changed auditors effective July 2017, with Deloitte confirming it had no disagreement with the company's account of the change. Routine, with no reportable event.
18 May 2017drilling progress report▲ Good
Nineteen step-out holes below the current workings on the Animas NE vein at the Caylloma silver mine in Peru confirmed high-grade silver, lead and zinc continuing at depth - 566 grams of silver a tonne with 2.1% lead and 2.7% zinc over 3.6 metres true width, 220 grams with 16.8% lead over 5.2 metres - across 400 metres of strike and 250 metres down dip beyond the estimated resource. The vein is still open at depth and to the north-east.
