Fortuna Mining Corp

Good afternoon, everyone, and welcome to the Fortuna Mining Corporation Q1 2025 Financial and Operational Results Call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Carlos Baca, Vice President of Investor Relations. The floor is yours.

Thank you, Jenny. Good morning, ladies and gentlemen, and welcome to Fortuna Mining's first quarter 2025 Financial and Operational Results Conference Call. Hosting today's call on behalf of Fortuna are Jorge Alberto Ganoza, President, Chief Executive Officer and Co-Founder, Widerio Ganoza, Chief Financial Officer, Cesar Velasco, Chief Operating Officer, Latin America, Today's earning call presentation is available on our website at fortunamining.com. Before we begin, please note that statements made during this call are subject to the reader advisories included in yesterday's news release, the webcast presentation, our management discussion and analysis, and the risk factors set out in our annual information form. All financial figures discussed today are in U.S. dollars and as otherwise stated. Technical information in the presentation has been reviewed and approved by Eric Chapman, Fortuna's Senior Vice President of Technical Services and a qualified person as defined by National Instrument 43-101. I will now turn the call over to Jorge Alberto Ganosa, President and Chief Executive Officer and co-founder of Fortuna Mining.

Hello to everyone and thanks for joining us today. Q1 was another great quarter for us at Fortuna after a record Setting Q4, we kept the momentum going with a second straight quarter of record free cash flow from operations. We're making the most of strong gold prices, keeping our costs under control, and continuing to grow our margins. Cash flow was a standout again this quarter. Free cash flow from ongoing operations hit a record $111 million, beating our Q4 record of $96 million. That puts our free cash flow margin at 38%, up from 31% in Q4. Net cash from operations before working capital changes was $138 million, or 45 cents per share. If we adjust for the San Jose mine divestment, That jumps to $144 million or $0.48 per share. Another nice setup. What's driving this? Simply put, discipline on cost control in a strong bull price. We brought our cash cost per ounce down to $929 on a consolidated basis from $1,015 in Q4. And our consolidated OEM sustaining costs came in at $1,640 well below last quarter's $1,772. That kind of discipline is paying off. Net income from continued operations came in at a strong $61.7 million or $0.20 per share, a big jump from $11 million or $0.04 per share in Q4. That was mainly thanks to an 8% increase in gold prices and a lower effective tax rate as a result of the appreciation of the euro. We generated sales of $290 million and produced 103 gold equivalent ounces, right in line with our plans. This includes the impact of the sale of our San Jose mine, which had contributed about 11,000 gold equivalent ounces in Q4. All our mines stayed within production guidance in the quarter, and Seguela once again outperformed, coming in approximately 4,000 ounces above the midpoint of our guidance on previous quarter. This, thanks to higher processed ore and a drawdown of gold in circuit inventory. We continue to further improve our financial strength. Our net cash position more than doubled to $137 million, and total liquidity rose to $462 million, up from $381 million in the fourth quarter. That kind of financial strength gives us flexibility, whether that's for investing in growth, returning capital to shareholders, or navigating market shifts. On that note, we continued buying back shares. In Q1, we repurchased and canceled just over 900,000 shares at an average price of $4.53 U.S. On growth, capital, and exploration, we're staying focused on high-impact opportunities across the portfolio. We have budgeted $51 million for 2025 for exploration and new project programs. We're going strong with targeted work at the Kingfisher and Sandberg deposits at the Segueda mine. the Tongon North Prospect in northern Côte d'Ivoire, the Lian Basun Advanced Project in Senegal, and the Alizarro Gold Porphyry at the Lidero Mine in Argentina. These are exciting projects and prospects with long-term upside, and we're putting capital to work where it counts. In 2025, we're also advancing with key capital projects that will enable the Seguela mine to expand production in 2026 to approximately 180,000 ounces of annual production. David Whittle, our chief operating officer for West Africa, will expand on that later on the call. During the first quarter, we continued to actively optimize our asset portfolio, divesting of assets with high costs or limited life of mining. The sale of the San Jose mine in Mexico closed in April, marking a key step in streamlining our operations. San Jose had become our highest cost mine and was nearing the end of its mineral reserves, so this was a timely and strategic divestment. As for the Yaramuco mine in Burkina Faso, we announced its sale on April 11. Like San Jose, Yaramuco is approaching the end of its mine life, with mineral reserves expected to be depleted by early 2026. The decision to sell was driven by a compelling offer and gives us a prudent exit from a country where we are no longer investing in mineral exploration and where the business and security environment continues to present challenges. The sale provides for a cash consideration of $70 million and is subject to the payment of cash dividends by Rox Goldsano, owner of the Yaramuco mine, to Fortuna in the amount of $57.5 million prior to closing. We expect the sale to close in May. Taken together, these two sales allow us to reallocate approximately $50 million in capital and management focus away from mind closures and towards higher value opportunities that better align with our long-term strategic objectives. On the safety front, I'm pleased to report that we had zero loss time injuries in Q1, and our total recordable injury frequency rate improved to 0.98, down from 1.33 in the fourth quarter. That's a strong result. I want to thank our team for their continued vigilance and dedication to save work practices. However, this progress was overshadowed by a tragic incident in February at Seguela, where a subcontractor lost his life while performing ancillary activities. This is a heartbreaking reminder that safety must remain our highest priority always. Our commitment to zero harm workplace is unwavering. In Argentina, I'd like to comment that we continue to see positive economic policy changes The government has started easing capital exchange rate controls and introduced a managed floating exchange rate. This opens the door for us to repatriate 2025 dividends plus about $38 million dollars currently in country and we're targeting the second half of the year to begin that process. Q1 2025 was a strong quarter on all fronts. We hit back-to-back free cash flow records, improved margins, strengthened further our balance sheet, and continued to optimize the portfolio. We're in a great position to keep delivering for our shareholders, our people, and the communities we operate in. We'll now move on to an update from our Chief Operating Officer, who will start with West Africa.