$100 silver, $4,000 gold

To estimate the potential stock price of Fortuna Mining based on a predicted silver price of $100 per ounce, we can follow a systematic approach, focusing on their silver production and how the higher silver price could impact their revenue.

Key Financial Metrics

1. Current Production:
   • Gold Production: 325,000 oz
   • Silver Production: 6.5 million oz
   • Total Production for 2024: 475,000 oz AUEQ
2. Revenue Contribution:
   • Approximately 2/3 of revenue comes from gold and 1/3 from silver.

Step 1: Revenue Estimation

Silver Revenue

1. Estimated Silver Production for 2024:Silver Production≈13×475,000≈158,333 oz\text{Silver Production} \approx \frac{1}{3} \times 475,000 \approx 158,333 \, \text{oz}Silver Production≈31​×475,000≈158,333oz
2. Projected Revenue from Silver:
   • With a projected silver price of $100/oz:
   Silver Revenue=158,333 oz×100 USD/oz=15.8333 million USD\text{Silver Revenue} = 158,333 \, \text{oz} \times 100 \, \text{USD/oz} = 15.8333 \, \text{million USD}Silver Revenue=158,333oz×100USD/oz=15.8333million USD

Gold Revenue

1. Estimated Gold Production for 2024: Gold Production≈23×475,000≈316,667 oz\text{Gold Production} \approx \frac{2}{3} \times 475,000 \approx 316,667 \, \text{oz}Gold Production≈32​×475,000≈316,667oz
   • Assuming a gold price of $4,000/oz:
   Gold Revenue=316,667 oz×4,000 USD/oz=1.26667 billion USD\text{Gold Revenue} = 316,667 \, \text{oz} \times 4,000 \, \text{USD/oz} = 1.26667 \, \text{billion USD}Gold Revenue=316,667oz×4,000USD/oz=1.26667billion USD

Step 2: Total Revenue for 2024

1. Total Revenue: Total Revenue=Gold Revenue+Silver Revenue\text{Total Revenue} = \text{Gold Revenue} + \text{Silver Revenue} Total Revenue=Gold Revenue+Silver Revenue Total Revenue≈1.26667 billion+15.8333 million≈1.2825 billion USD\text{Total Revenue} \approx 1.26667 \, \text{billion} + 15.8333 \, \text{million} \approx 1.2825 \, \text{billion USD}Total Revenue≈1.26667billion+15.8333million≈1.2825billion USD

Step 3: Calculate Market Capitalization

Assuming Fortuna Mining trades at an EV/Revenue multiple of around 5x (typical for mid-tier gold producers):

1. Estimated Market Cap: Market Cap=Total Revenue×5\text{Market Cap} = \text{Total Revenue} \times 5 Market Cap=Total Revenue×5 Market Cap=1.2825 billion×5≈6.4125 billion USD\text{Market Cap} = 1.2825 \, \text{billion} \times 5 \approx 6.4125 \, \text{billion USD}Market Cap=1.2825billion×5≈6.4125billion USD

Step 4: Estimate Stock Price

Assuming Fortuna Mining has around 200 million shares outstanding:

1. Stock Price Calculation: Stock Price=Market CapShares Outstanding\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}} Stock Price=Shares OutstandingMarket Cap​ Stock Price=6.4125 billion200 million≈32.06 USD\text{Stock Price} = \frac{6.4125 \, \text{billion}}{200 \, \text{million}} \approx 32.06 \, \text{USD}Stock Price=200million6.4125billion​≈32.06USD

Conclusion

Based on a projected silver price of $100 per ounce and gold at $4,000 per ounce, the estimated stock price for Fortuna Mining could be approximately $32.06 per share.

Additional Considerations

1. Debt Management: Continued reduction of debt will enhance cash flow and shareholder value.
2. Future Production Growth: The contributions from Seguela and other projects will be essential in sustaining revenue growth.
3. Market Conditions: Overall economic conditions and investor sentiment towards precious metals will influence the stock price.

This estimation highlights the potential upside for Fortuna Mining under optimistic scenarios regarding silver and gold prices.