Fortuna Silver Mines (FSM) Misses Q3 EPS by 4c, Revenues Beat

Fortuna Silver Mines (NYSE: FSM) reported Q3 EPS of $0.07, $0.04 worse than the analyst estimate of $0.11. Revenue for the quarter came in at $61.3 million versus the consensus estimate of $67 million.

Jorge A. Ganoza, President and CEO, commented, “On the strength of our two operating mines and improved metal prices, we generated adjusted EBITDA of $19.2 million with strong free cash flow from ongoing operations of $10.6 million in the third quarter of 2019. These financial metrics are in spite of a challenging quarter from an operating perspective as our mine sequencing at San Jose yielded lower grades and we experienced a peak in our quarterly cash cost for the year. Both our production and costs are expected to be aligned with our plan in Q4 and we confirm our full-year production and cost guidance.” Mr. Ganoza continued, “In Argentina, the lower Peso created an unrealized foreign exchange loss of $8.3 million relating to our VAT construction receivable. This was a key factor in our net loss of $7.7 million for the quarter.” Mr. Ganoza further indicated, “As of the end of October, Lindero overall construction is 81 percent complete, with 99 percent of direct capital expenditures committed, and over 85 percent of the total projected construction capital spent.” Mr. Ganoza concluded, “Pre-production mining at Lindero commenced in early September and placing of ore on the leach pad is scheduled to commence in December 2019.”

Third quarter 2019 highlights

• Sales of $61.3 million, compared to $59.6 million in Q3 2018
• Net loss of $7.7 million, compared to net income of $6.9 million in Q3 2018
• Adjusted net income1 of $1.9 million, compared to $9.6 million in Q3 2018
• Adjusted EBITDA1 of $19.2 million, compared to $24.2 million in Q3 2018
• Free cash flow from ongoing operations1 of $10.6 million, compared to $13.6 million in Q3 2018
• Silver and gold production of 1,937,293 ounces and 11,436 ounces, respectively
• AISC2 per silver equivalent ounce of payable silver was $13.2

For earnings history and earnings-related data on Fortuna Silver Mines (FSM) click here.

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