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Investing.com - Scotiabank raised its price target on Fortuna Silver Mines (NYSE:FSM) to $8.50 from $8.00 on Thursday, while maintaining a Sector Perform rating on the stock. The company, which has achieved a perfect Piotroski Score of 9 according to InvestingPro, has seen its shares surge 124% year-to-date, currently trading near its 52-week high of $9.81.
The price target increase follows Fortuna’s release of a Preliminary Economic Assessment (PEA) for its Diamba Sud project in Senegal. The PEA outlines average production of 147,000 ounces of gold per year at an average all-in sustaining cost (AISC) of $904 per ounce during the first three years of operation. With a strong current ratio of 2.71 and more cash than debt on its balance sheet, the company appears well-positioned to fund its development plans.
The project has an initial capital expenditure requirement of $283 million with an after-tax NPV5% of $563 million and an internal rate of return (IRR) of 72% at a gold price of $2,750 per ounce. At $3,750 per ounce, the NPV5% increases to $1.0 billion.
The PEA is based on indicated mineral resources of 14.2 million tonnes supporting a mine life of 8.1 years. Fortuna is currently conducting exploration with five drill rigs focused on expanding mineralization areas and upgrading resources by the end of 2025.
Fortuna expects to complete a definitive feasibility study by the end of the second quarter of 2026, with construction potentially starting in the fourth quarter of 2026 and first gold pour targeted for the second quarter of 2028. Discover 17 additional key insights and comprehensive analysis about Fortuna Silver Mines through InvestingPro’s exclusive research report, helping investors make informed decisions about this rapidly growing mining company.
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