Fortuna Mining Corp

Good day, everyone, and welcome to the Fortuna Mining Corp's second quarter 2025 financial and operational results call. At this time, all participants are on a listen-only mode. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Sir, the floor is yours.

Thank you, Matthew. Good morning, ladies and gentlemen, and welcome to Fortuna Mining's conference call to discuss our financial and operational results for the second quarter of 2025. Hosting today's call on behalf of Fortuna are Roberto Ganosa, President, Chief Executive Officer and Co-Founder, Luis Darío Ganosa, Chief Financial Officer, Cesar Velasco, Chief Operating Officer, Latin America, and David Whittle, Chief Operating Officer, West Africa. Today's earnings call presentation is available on our website at FortunaMining.com. Before we begin, please note that during the quarter, Fortuna completed the sale of the San Jose and Yaramoto mines. Accordingly, results from these mines have been excluded from continuing operations for the quarter and year to date, along with comparative figures. 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 risk factors outlined in our annual information form. All financial figures discussed today are in U.S. dollars unless otherwise indicated. Technical information presented has been reviewed and approved by Eric Chapman, Fortuna Senior Vice President of Technical Services, and a qualified person as defined by National Instrument 4343. I will now turn the call over to José Alberto Ganosa, President, Chief Executive Officer, and co-founder of Fortuna Mining.

Thank you, Carlos, and good morning, everyone, and thank you for joining us. The second quarter reflects the strategic streamlining of our portfolio of assets. Early in the quarter, we completed the sale of two mines with short life of mineral reserves each with less than a year in mining left. Naturally, this reduces our near-term production. In 2024, we delivered a record 460,000 ounces of gold equivalents, With the sale of these mines, our annualized production is now roughly 330,000 ounces. But the key message today is this, rebuilding production to half a million ounces per year, which is strategically where we want to be positioned, is fully under our control. And those ounces will be higher margin, longer life, and lower risk than before. And here is why we're confident. Ceguera, our flagship asset, is on a clear growth path. 140,000 ounces of gold have been guided for 2025, and 170,000 to 180,000 ounces of gold have been guided for 2026 as our expansion plan comes online. The ambasude in Senegal is emerging as our next growth engine. In just six months, the indicated resource, as recently published, grew by 53%, and inferred resources by 93% for a combined one million ounces. We continue to drill to expand and upgrade the resource and advance permitting and engineering towards a 2026 construction decision. All the exploration work that we've been doing over the past 18 months have really enhanced our understanding of the deposit and our drilling and exploration is really yielding fruit here. And importantly, a robust balance sheet with $537 million in liquidity and $215 million in net cash, the risk, any growth decision we choose to make. So with that growth vision in mind, let's move to our Q2 result highlights. On health and safety first, Safety of our personnel remains our top priority, and I am proud to report that we continue to improve. We recorded 7.2 million work hours without any lost time injury. That's a record for the company up from 6.7 million work hours in the prior record. And our total recordable injury frequency rate was 0.87 for the second quarter, improving from 0.98 in the first quarter. One highlight from our financial performance the second quarter was another quarter of strengthening even further the balance sheet of the company and delivering solid margins. Liquidity again at $537 million, up $76 million from the previous quarter, driven by $84 million in proceeds from the mine sales. Net cash was $215 million at the end of the period, up from $137 million at the end of Q1 2025. Free cash flow from operations was a strong $57.5 million compared to $66 million in Q1, primarily due to the timing of tax payments. Our margins expanded with higher gold prices. Average realized gold price was... $3,306 per ounce, which is up 14% with respect to what we averaged in the first quarter. Our EBITDA margin grew to a record 55%, up from 50% in Q1, and our operating margin stood at 36%, up from 28% in Q1. Net earnings from continued operations were $41 million, or 14 cents per share, compared to $33 million or $0.11 per share in Q1. Our adjusted EPS of $0.14 includes a $17 million withholding tax accrual related to the inaugural full-year dividend declared in Cote d'Ivoire for Orseguelamide, equivalent to $0.06 per share. In Q1, we achieved full payback on Seguela's construction in 21 months while also canceling all intercompany loans and therefore the dividend. Cash flow from operations before working capital changes was 97 million or 32 cents per share. On operational performance, our consolidated gold equivalent production for the period was 75,950 ounces. When we look at it from continuing operations, gold production was 71,229 ounces, slightly above the previous quarter, and aligned with our full-year guidance. Cash cost was $929 per ounce, up marginally 7% from Q1, mainly due to the gold-to-base metal ratio at our Cayoma mine, which carries a significant base metal lead sink component in its production. Our consolidated ASIC was $1,932 per ounce, up from $1,750 in Q1. Here I want to reinforce that all our mines continue to track well to meet annual guidance. However, the elevated consolidated ASIC I just mentioned, is a temporary and timing effect related to capex and waste stripping at Lindero and Seguela. These mines ASICs will gravitate towards a range of $1,500 per ounce throughout the second half of the year and into 2026. Lindero's ASIC is trending downwards towards below $1,500 per ounce by Q4, following the completion of the leach pad expansion. And Seguela's ASIC is expected to rise temporarily towards $1,800 per ounce in Q4, consistent with planned peak in waste stripping in the second half of the year and timing of its capital investments, but staying in the average for the year within annual guidance. Seguela operated in the quarter with a very competitive cash cost per ounce of $670.00. And our 2025 capital budget of $78 million at Seguela enables the expansion of production guided for 2026. We have a series of operational excellence and productivity initiatives that aim to drive margin improvements and cost discipline. Across the business, our portfolio of optimization and productivity initiatives is expected to generate between $50 and $70 million in savings over the next three years. These programs span process optimization, equipment utilization, supply chain efficiencies, and energy management at our mines. They will enhance cash flow, supporting our cost-competitive half a million ounce strategic object of annual production. And, you know, on closing of my comments, I want to revisit the strategic developments and looking ahead. The sale of the San Jose and Yaramuco mines in the quarter was timely. It not only generated $84 million in gross proceeds, but it also freed approximately $50 million in capital and management bandwidth away from mine closure projects towards high-value growth opportunities, which are better aligned with our strategy. And looking forward, the Seguel expansion position us for strong growth in 2026, The AMBA suit continues to grow in scale and quality with a 2026 construction decision on the horizon. With this, the near future growth of the company is within our control. With a robust balance sheet, expanding margins, and clear growth pipeline, Fortuna is well positioned to rebuild and surpass half a million ounces per year target with higher margins, higher quality ounces, and lower portfolio risk than ever before. In 20 years, I have never seen Fortuna as strong as it is today. With that, I will ask David Whittle, our Chief Operating Officer for West Africa, to discuss the results of his region. David?