Fortuna Silver Mines Inc. is engaged in silver mining and related activities, including exploration, extraction, and processing. It operates the Caylloma copper/zinc/lead/silver mine in southern Peru and is developing the San Jose silver/gold project in Mexico.
I was able to pickup 1400 shares earlier this week at what I believe is a decent price (2.48). Goldman Sachs’ induced general market weakness helped provide this opportunity. If the price is to fall further, I might consider adding to this position since this company is on the right track to become a leading silver miner.
Operational Profile:
2010 forecasted Silver Production: 1.7m oz of silver from Peru
Strong cash on hand: 72M$ reported in April.
High grade Silver/Gold mine under construction in Mexico. (Q2 2010)
O/S: 118 million FD,
Debt: 0 $
NI43-101 Proven and Probable reserves: 20.3M Ag oz in Peru and 37.6M Ag eq. oz in Mexico.
Observations
The share price has almost tripled from the lows of last summer however this company has proved that they can execute on their plans. Just as they brought the mine in Peru to production, I am looking forward to bringing the San Jose mine in Mexico to production smoothly by Q3 2010.
Once their second mine starts production, the success will be reflected in the share price and the company would be on its way to double its 2010 production in a relatively short period of time. Fortuna is targeting 5M oz Silver eq. by 2012. All their production is currently unhedged.
This is the type of low risk company I like to invest in. If in the short term the price languishes, I know that in the long term it will improve based on the fundamentals of this company. Last time I sold FVI at 2.59, the plan now is to hold until the price breaks 2.80 at least.
Disclaimer:
I am currently a shareholder of Fortuna Silver Mines. I was not paid any fees to feature this stock. I am just sharing my research. Please do your own due diligence before buying or selling any security.
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