Q2 2025 Fortuna Mining Corp Earnings Call

Speaker #1: Good day, Yone, and welcome to the Fortuna Mining Corp second quarter 2025 financial and operational results call. At this time, all participants are in listen-only mode.

Speaker #1: If ou 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.

Speaker #1: It is now my asure to turn the floor over to your host, Carlos Baca, Vice President, Investor Relations. Sir, the floor is yours.

Speaker #2: 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.

Speaker #2: Hosting today's call on behalf of FORTUNA are Jorge Durant, President, Chief Executive Officer and Co-founder; Luis Durant, Chief Financial Officer; Cesar Velasco, Chief Operating Officer, Latin America; and David Whittle, Chief Operating Officer, West Africa.

Speaker #2: 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 alamoco mines, accordingly results from these mines have been excluded from continuing operations for the quarter and year to date, along with comparative figures.

Speaker #2: Statements made during this call are subject to the reader advisories included in yesterday's news release. The webcast presentation on management discussion and analysis and risk factors outlined in our annual information form.

Speaker #2: All financial figures discussed today are in US 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 43101.

Speaker #2: I will now turn the call over to Jorge Durant, President, Chief Executive Officer, and Co-founder of FORTUNA Mining.

Speaker #3: Thank ou, Carlos, and good morning, everyone, and thank you for joining us. The second quarter reflects the strategic streamlining of our portfolio of assets.

Speaker #3: 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.

Speaker #3: Naturally, this reduces our near-term production. In 2024, we delivered a record 460 thousand ounces of gold equivalents, with the sale of these mines, our annualized production is now roughly 330 thousand ounces.

Speaker #3: 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.

Speaker #3: And those ounces will be higher margin, longer life, and lower risk than before. And here is why we're confident Seguela, our flagship asset, is on a clear growth path.

Speaker #3: A total of 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.

Speaker #3: The ambassador in Senegal is emerging as our next growth engine. In just six months, the indicated resource, as recently published, grew by 53 percent, and inferred resources grew by 93 percent.

Speaker #3: 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.

Speaker #3: All the exploration work that we've been doing over the past 18 months has really enhanced our understanding of the deposit, and our drilling and exploration are really yielding fruit here.

Speaker #3: And importantly, our robust balance sheet, with 536 million dollars in liquidity, and 215 million dollars in net cash, the risk any growth decision, we choose to make.

Speaker #3: So, with that growth vision in mind, let's move to our Q2 results highlights. On health and safety first, the safety of our personnel remains our top priority.

Speaker #3: 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.

Speaker #3: And our total recordable injury frequency rate was 0.87 for the second quarter, improvings from 0.98 in the first quarter. On highlights from our financial performance, the second quarter was another quarter of strengthening, even further the balance sheet of the company and delivering solid margins.

Speaker #3: 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.

Speaker #3: 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. Margins expanded, with higher gold prices; the average realized gold price was $3,306 per ounce, which is up 14 percent compared to what we averaged in the first quarter.

Speaker #3: Our EBITDA margin grew to a record 55 percent, up from 50 percent in Q1. And our operating margins stood at 36 percent, up from 28 percent in Q1.

Speaker #3: Net earnings from continued operations were $41 million, or 14 cents per share, compared to $33 million, or 11 cents per share in Q1.

Speaker #3: Our adjusted EPS of 14 cents includes a 17 million dollar withholding tax accrual related to the inaugural full year dividend declared in Côte d'Ivoire for our Seguela mine.

Speaker #3: Equivalent to 6 cents per share. In Q1, we achieved full payback on Séguéla's construction in 21 months, while also canceling all intercompany loans. Therefore, the dividend.

Speaker #3: Cash flow from operations before working capital changes was $97 million, or $0.32 per share. On operational performance, our consolidated gold equivalent production for the period was 75,950 ounces.

Speaker #3: When we look at it from continuing operations, gold production was 71 thousand 229 ounces, slightly above the previous quarter. And aligned with our full year guidance.

Speaker #3: Cash cost was 929 dollars per ounce, up marginally 7 percent from Q1, mainly due to the gold-to-base metal ratio at our Cayoma mine, which carries a significant base metal, let's say, component.

Speaker #3: In its production. Our consolidated ASIC was 1,932 dollars 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.

Speaker #3: 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 dollars per ounce throughout the second half of the year, and into 2026.

Speaker #3: Lindero's ASIC is trending downwards towards below $1,500 per ounce by Q4, following the completion of the leach pad expansion. Seguela's ASIC is expected to rise temporarily towards $1,800 per ounce in Q4, consistent with a planned peak in waste stripping in the second half of the year and timing its capital investments, but staying within the average for the year, within annual guidance.

Speaker #3: Seguela operated in the quarter with a very competitive cash cost per ounce of 670 dollars. And our 2025 capital budget of 78 million dollars at Seguela enables the expansion of production guided for 2026.

Speaker #3: 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 million and $70 million in savings over the next three years.

Speaker #3: 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 objective.

Speaker #3: Of annual production. And you know, in closing my comments, I want to revisit the strategic developments and look ahead. The sale of the San Jose and Yalamoco mines in the quarter was timely.

Speaker #3: 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 toward high-value growth opportunities, which are better aligned with our strategy.

Speaker #3: And looking forward, the Seguela expansion positioned us for strong growth in 2026, the ambassador continues to grow in scale and quality with a 2026 construction decision on the horizon.

Speaker #3: With this, the future, in the near-term, growth of the company is within our control. With a robust balance sheet, expanding margins, and a clear growth pipeline, our two mines are well positioned to rebuild and surpass the half-million-ounce-per-year target, with higher margins, higher quality ounces, and lower portfolio risk than ever before.

Speaker #3: In 20 years, I have never seen FORTUNA as strong as it is today. With that, I will ask David Whittle, our ief operating officer for West Africa, to discuss the results of his region.

Speaker #3: David? Thanks, Jorge. Seguela and Yalamoco delivered a strong second quarter, achieving solid results in both production and safety. Our commitment to safety and environmental performance remains unwavering, and we are steadily progressing toward our goal of zero harm across all our operations.

Speaker #3: I'm delighted to report that no injuries occurred at any of our West African operations during the quarter. During this period, we successfully completed the divestiture of our Yalamoco mine to Soleil Resources, a privately owned Mauritius-domiciled resources company, thereby concluding our operations in Burkina Faso.

Speaker #3: Fortune, I operated Yalamoco up until April the 14th, producing 4,721 ounces during this time. The decision to divest followed a compelling economic offer and aligned with our strategic priorities.

Speaker #3: At Seguela, we produced 38,186 ounces of gold, consistent with the prior quarter and exceeding the mine plan. This reinforces our expectations to achieve annual production at the higher end of guidance.

Speaker #3: Mining during the quarter totaled 340,000 tons of ore, at an average grade of 3.33 grams per ton of gold, along with 5.19 million tons of waste, resulting in a strip ratio of 15.3 to 1.

Speaker #3: The processing plant treated 429 thousand tons at an average grade of 3 grams per ton gold, with all primarily sourced from the antenna and CNN cooler pits.

Speaker #3: The plant operated at an average throughput rate of 210s per hour, 210 tons per hour, throughput in June was temporarily reduced due to a major segmental reline and other scheduled maintenance, which are now complete.

Speaker #3: This ensuring smooth operations through to the end of the year. The third lift of the tailing storage facility and eight and a half million dollar project remains on track for completion in third quarter.

Speaker #3: This will enhance our storage capacity through to 2029, supporting increased throughput and positioning Seguela to achieve the higher end of its 160 to 180 thousand ounces of annual production from 2026 onward.

Speaker #3: All other capital projects have progressed and within and are within budget. Seguela's performance resulted in a cash cost of 670 dollars per ounce, and an all in sustaining cost of 1,634 dollars per ounce.

Speaker #3: Both are aligning with our budget. The ASIC reflects higher royalty expenses driven by the increasing gold prices. Exploration drilling at the Sunbird and Kingfisher deposits yielded encouraging results.

Speaker #3: Our technical teams are actively working to incorporate these deposits into reserves and mine plans, with both remaining open, indicating potential for further resource expansion and bolstering our confidence in Seguela's long-term potential.

Speaker #3: At our de-ambassador project in Senegal, exploration and environmental permitting and feasibility activities made significant progress during the quarter. In addition to our $19 million 2025 budget, we approved an additional $17 million for early works, including ancillary facilities and infrastructure.

Speaker #3: INFIL and extension drilling continued at the main deposits with success, prompting an expansion of the exploration program further to the south and southeast of the Southern Arc prospect.

Speaker #3: Where newly discovered mineralization remains open. These results enhance our confidence in de-ambassador's potential, and we look forward to resuming drilling after the wet season in the second half of the year.

Speaker #3: Back to you, Jorge. Thank you, David. Now, Cesar Velasco, Chief Operating Officer for Latin America. We'll provide us with a highlights of his region.

Speaker #3: Cesar?

Speaker #4: Thank you, Jorge, and good morning, everyone. I am pleased to report a robust quarter for our Latin American operations, with both of our Lindero and Cayoma mines demonstrating strong safety, production, and financial performance.

Speaker #4: This bolsters our confidence in the strength and resilience of our regional portfolio. At our Lindero mine in Argentina, we achieved remarkable progress on all fronts.

Speaker #4: Lindero's operational performance has been a significant success, with costs decreasing and stable production leading to higher margins and strong free cash flow. Lindero produced 23,150 ounces of gold, marking a 16 percent increase over Q1.

Speaker #4: This aligns with our mining plan and keeps on track to meet our annual guidance. Our efficiency initiatives are yielding positive results. Our all in sustaining cost was 1,783 dollars per ounce, a notable reduction of 6.7 percent from the previous quarter.

Speaker #4: This improvement resulted from lower sustaining capital expenditures, as the leach pad expansion was under construction in the previous quarter. As Jorge mentioned, Lindero's ASIC is steadily progressing towards our target of $1,400 per ounce by year-end.

Speaker #4: Our operational efficiencies are also leading to strong outcomes. With crashing reaching a new record in June, averaging 1,100 tons per hour, and stacking achieving a monthly record of 642,000 tons.

Speaker #4: As such, Lindero's cash cost for the second quarter was 1,148 dollars per ounce. Financially, Lindero's net sales were 75.7 million dollars, a 42 percent increase from Q1, supported by a strong gold price of 3,293 dollars per ounce.

Speaker #4: Operating income for the quarter was 29.1 million dollars, nearly 66 percent higher than the previous quarter. And an adjusted EBITDA of 37.9 million up 34 percent versus the previous quarter.

Speaker #4: We generated free cash flow of 35 point 7 million dollars, reflecting strong operational execution and disciplined capital management. On the sustainability front, we commissioned our photovoltaic plant in Q2 which generated 1 million watts per hour in June.

Speaker #4: This supplied approximately 26 percent of Lindero's power needs, saved nearly $230,000 in diesel costs, and avoided an estimated 720 tons of CO2 emissions.

Speaker #4: These marks a significant advancement in our sustainability strategy. Moving to our Cayoma mine in Peru, it continued to perform reliably and efficiently. Cayoma exemplifies operational excellence, disciplined capital expenditure, and effective project execution.

Speaker #4: We successfully completed the new hydraulic paste backfill plant in April, with a total investment of $5.4 million. The new plant enables a more efficient and automated process at a lower cost per ton.

Speaker #4: It also reduces CO2 emissions by eliminating the need to transport the tricky material outside of the underground mine, thus eliminating related diesel consumption. Cayoma's results reflect this operational consistency.

Speaker #4: Net sales were $28.4 million, with operating income of $8.7 million and adjusted EBITDA of $11.3 million. Free cash flow was a notable $9 million, driven by cost discipline and operational consistency.

Speaker #4: The cash cost per silver equivalent ounce was 15 dollars and 16 cents, and ASIC of 21 dollars and 73 cents per ounce both within the lower range of our annual guidance.

Speaker #4: Overall, our Latin American operations continue to deliver strong and consistent results. We're firmly on track to meet our full-year guidance and continue generating long-term value for our stakeholders.

Speaker #4: Back to you, Jorge.

Speaker #3: Thank you, Cesar. And now, we will hear from your CFO. We'll share the highlights of the quarter on the financial side of things. Thank you, Jorge.

Speaker #3: I'll be discussing our financial results and all corresponding figures will be from our continuing operations only, unless explicitly stated. We're pleased to report a net income attributable to FORTUNA of 42.6 billion dollars, or 14 cents per share, after adjusting for non-cash, non-recurring items.

Speaker #3: This figure rises to 44.7 million, or $0.15 per share. Our adjusted results represent a remarkable 380 percent increase over Q2 2024, driven primarily by higher metal prices and an increase in gold sold.

Speaker #3: Specifically, we realized gold prices that were nearly 1,000 dollars per ounce higher than the prior year, and sold 13 percent more gold. Our cash cost per ounce for the quarter was 929 dollars, about 88 dollars higher than Q2 2024, and this is consistent with our mine plans which contemplate higher stripping ratio at both Lindero and Seguela.

Speaker #3: Comparing our results to the first quarter of 2025, our adjusted net income grew by 25 percent. This was driven by gold prices that were $420 per ounce higher and an 8 percent increase in gold sold.

Speaker #3: On a quarter-over-quarter basis, our cash cost per ounce increased by $63, which is mainly attributable to the planned progression of waste stripping at our mines.

Speaker #3: One item to note, that impacted our Q2 results as Jorge mentioned was the recognition of, h, the 17 million dollar charge for withholding taxes this, relates to the first dividend declared at our CDI subsidiary.

Speaker #3: These taxes will be paid over the next few months, and as we, as we repatriate funds, and again, as Jorge emphasized, this represents 6 cents per share, impact to our quarterly results.

Speaker #3: Moving to our cash flow statement, we generated $92.7 million in net cash from operating activities. It is important to highlight that a large portion of our annual tax payments are concentrated in the second quarter.

Speaker #3: We paid $36 million, which represents over 40 percent of what we anticipate paying for all of 2025. Our capital expenditures for the quarter totaled $47 million. Of this, we classify $15 million as gross CapEx, which primarily consists of investments in the de-ambassador project and our exploration activities.

Speaker #3: Our anticipated capital expenditures for the full year are $180 million, consisting of $120 million for sustaining and $16 million for gross CapEx.

Speaker #3: This includes close to $30 million allocated to de-ambassador. In terms of free cash flow, we generated $57.4 million from ongoing operations.

Speaker #3: This is a slight decrease from Q1 2025 due to the timing of tax payments and higher sustaining CapEx on a quarter-over-quarter basis. With respect to our discontinued operations, the cash flow statement discloses a net cash contribution of $70.6 million for the full year, across the operating, investing, and financing sections.

Speaker #3: This figure includes gross proceeds of $83.8 million from asset sales. Turning to the balance sheet, we've been experiencing delays in collecting our VAT at our Ivory Coast operations. At this stage, we believe this is an issue related to the electoral cycle and expect collections to start normalizing toward the end of the year.

Speaker #3: At the end of the quarter, we held $37 million in VAT receivables, which represent approximately 17 months outstanding. On a very positive note regarding repatriation-related matters in Argentina, a favorable change in local prevailing conditions has allowed us to restart repatriation with over $40 million in the month of July, subsequent to the end of the quarter, without any significant friction on foreign exchange costs.

Speaker #3: Finally, I want to reinforce Jorge's message regarding our all in sustaining costs, with the exception of factors tied to metal prices, such as royalties and fair value adjustments to share base payments, we are maintaining a revised guidance range for the year.

Speaker #3: For the second half of the year, we expect Q3 ASIC to remain at similar levels to Q2 before coming down in the fourth quarter.

Speaker #3: Looking beyond 2025 and considering our expanded production guidance for Seguela, we are targeting consolidated ASIC levels in the range of 1750 per ounce in the current metal price environment.

Speaker #3: Back to you, Jorge. Thank you. And with that, we can open the floor for questions, Carlos.

Speaker #2: Thank you, Jorge. Please Matthew, go head and prompt or our audience for questions.

Speaker #1: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time.

Speaker #1: We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press *1 on your phone.

Speaker #1: Your first question is coming from Thomas Beslanovitz. Your line is live.

Speaker #5: Yes, today I see the stock really has gotten hammered pretty good. But I stepped up to the plate and I bought quite a bit.

Speaker #5: I bought roughly 50,000 dollars worth. I I would assume that everything's running exactly the way you want, and I hope you would do the same thing.

Speaker #5: And support the stock price? Thank you very much for your time.

Speaker #3: Thank you for your comments there, Sir. And as stated, through the call and as ou can see in our financial results, the company has never been stronger.

Speaker #3: The fact that we have a headline EPS that missed against analyst consensus is related to the timing of our withholding taxes. If we adjust for those six cents, we're above analyst consensus for earnings per share.

Speaker #3: And with respect to our elevated ASIC, for example, which has been an issue of topical discussion, it has to do with the fact that we are investing in the business.

Speaker #3: Our Seguela mine, our flagship asset, carries today about 78,000,000 dollars worth of capital. That enables the mine to expand production into the next year.

Speaker #3: So all of those are positive. There is no free lunch. You need to invest the money to capture the opportunities, that's what we're ing.

Speaker #3: All of this with a very strong balance sheet that backs the company, right? We have been very careful in putting together a forged fortress balance sheet and we are very comfortable that we can move our business forward, capture the growth opportunities that we have in our portfolio.

Speaker #3: Yeah, so as I said in the call, I've never seen FORTUNA as strong and better positioned as I see it today, Sir.

Speaker #1: Thank you. Your next question is coming from Eric Windmill from Scotiabank. Your line is live.

Speaker #6: Oh, hi, good ning, Jorge and team. Thanks taking my estion. Just wondering if there's anything additional you can share on some of the investments that you've made, you know, on a wallet and some of the others.

Speaker #6: And maybe just sort of strategically, do you see yourself making some more of these investments and ultimately maybe as a way of, you know, gaining additional projects for the pipeline?

Speaker #6: Thanks.

Speaker #3: Yes. Thank you, Eric. Here, what I would like to say first is that, you know, the investments that we have been making over the past 24 months are bearing fruit, right?

Speaker #3: We have been able to advance de-ambassador. You've seen the recent publication of our resources, and the near future of the company, with respect to expanding ounces, is under our control.

Speaker #3: And that's a key message. We have clear opportunities at Seguela, and we're delivering clear opportunities at de-ambassador for growth. On top of that, we are very active across the regions where we work.

Speaker #3: The wallet investment, a wallet that sits on a regional structural trend, a base in margin. In the beginning, that is very intriguing to us.

Speaker #3: We like the team at the wallet. They are frugal, and they are technically capable. They are steadily advancing with their work, and we like their approach.

Speaker #3: And so, you ow, and they are positioned in an area that is, again, intriguing to us. So we've been we have invested in the company, and look forward to see how their progress advances.

Speaker #3: We have other initiatives in Argentina, as well, for early-stage projects. So we're populating the pipeline of earlier-stage opportunities. We see a lot of value there.

Speaker #3: Some of these opportunities might bear, you know, higher geologic risk in exchange for lower financial risk to the company because some of them, a lot of them are early stage.

Speaker #3: But again, that's where we are finding a value. And we're actively putting together either investments, like a wallet, or option agreements that might lead to joint ventures.

Speaker #3: And we're active there in Cotigua, in Mexico, and in Argentina, as well, there.

Speaker #6: Okay, great. Thank you for that. I really appreciate it. Maybe just one more, if you don't mind, shifting gears. In Senegal, what's your experience to date in permitting? And, you know, as that project moves forward, I assume you feel pretty confident being able to get the necessary approvals for development?

Speaker #3: Yes. Yes. You know, I have met personally with the Minister of Mines and his team on several occasions by now. What I see is a government that's quite supportive of new developments.

Speaker #3: And we recently hosted government officials from the Ministry of Mines and local authorities from Senegal and around De-Ambassador at our Séguéla mine in Cotigua.

Speaker #3: It was a very good visit. I think the project is being, has been, and is being continued to be well socialized with authorities and key stakeholders.

Speaker #3: And we're finding a lot of support. We're finding a lot of support. And, yeah, so far, we are well advanced with our environmental impact statement approval.

Speaker #3: We're ready to submit in the month of September, and we expect to have an environmental approval early next year.

Speaker #6: All right, fantastic. Thank you. Really appreciate that. I'll hop back in the futures.

Speaker #1: Thank you. Your next question is coming from Mohamed Sidid from National Bank Financial. Your line is live.

Speaker #7: Hi, Jorge and team, and thanks for taking my question. Maybe it's just to follow up on Senegal and the experience in permitting there. For de-ambassador specifically, with the expectation of the environmental approval early next year, could you maybe walk us through the key milestones for de-ambassador in terms of TEA by the end of the year? Then you get the environmental approval, and what are the next steps?

Speaker #7: Do we go towards the TSS, or do you start assessing the potential to take this into construction if you have the right permits in place?

Speaker #7: Thank ou.

Speaker #3: Yes. Let me start by saying that this recent publication of a million-ounce resource, between indicated and inferred, is a game changer for our view of the project.

Speaker #3: Right? Just as a big small recap, when we acquired Cesar, they had a historic resource of about 800,000 ounces. We saw some risks there.

Speaker #3: And we decided to go in, drill, and rebuild the geologic model. As an outcome of that, the resource shrunk to 600,000 ounces. So we went back and we've been drilling, enhancing our knowledge of the deposit.

Speaker #3: Our original expectation was that we would be where we're standing today by year-end 2025. So this result, this million ounces that we've been able to produce, with clear opportunities to continue expanding it, is a significant change in our approach to the project.

Speaker #3: So, to go straight to your question, we are aiming to submit, along with exploration, we've been carrying a lot of parallel activities and permitting engineering.

Speaker #3: So we are ready to present our environmental permits for review and approval in the coming month. We expect to have an approval of that environmental document early in 2026.

Speaker #3: We expect to publish a PEA in October, probably late October or early November. We will have a PEA out. But all of the process design and ancillary facilities of that PEA are really carried at a feasibility level.

Speaker #3: No? We are at the feasibility level. So, our view is that we will transition quickly into a feasibility study early in 2026. That's where we are setting our sights.

Speaker #3: Into a feasibility study in early 2026 and, consistent with that, a construction decision. We are advancing capital for early works. We have approved a $17 million budget already for some early works.

Speaker #3: Because, you know, as the project advances and we are breaching this million-ounce threshold, with clear opportunities to continue expanding the resource, we're getting more courageous in our view of a viable project, right?

Speaker #3: So that is the timeline for us now. I would say, you know, environmental approval early next year, submission this year, early next year approval, PEA by late October, feasibility study in, you know, H1.

Speaker #3: No, middle of H1 2026. Those are roughly the timelines we're seeing for de-ambassador.

Speaker #7: Thanks a lot for that, Jorge. That's very helpful. And then my second question relates to, I guess, the cadence for CapEx and maybe more for Luis.

Speaker #7: Into the second half of the year, could you maybe help us know if there's a CapEx spend between Q3 and Q4 that will likely be equal, or if it's more weighted to Q3 or Q4?

Speaker #3: There should be a slightly more weighing into the second half of the year, particularly we expect in Q3. And again, coming slightly down in Q4, which is part of the driver for the projected lower ASIC in the latter part of the year.

Speaker #3: But the message here is that we have one of our mines, Mindero, trending down on ASIC from a high ASIC at the beginning of the year towards a low ASIC at the end of the year.

Speaker #3: And Seguela is trending in the opposite direction. Our ASIC at the beginning of the year at Seguela was low, you know, under $1,200. Sorry.

Speaker #3: And under $1,300 per ounce. And, you know, as investments are picking up and stripping is picking up according to plan, well, that ASIC is going to gravitate higher, right?

Speaker #3: So and again, Seguela is a mine that the mine that is expanding into next year. It's expanding production into next year. So therefore, the capital buildup throughout the year, right?

Speaker #7: Yeah. No, that's great. And just to clarify that Q4 ASIC that Luis talked about, the $1,750 per ounce level? Was that just more of a comment on the overall year?

Speaker #3: So the comment on the 750 was related to 2026, and it would represent a decrease in ASIC with respect to our guidance for 2025.

Speaker #3: So the key message is that ASIC is going to be somewhat higher in Q2 and Q3 of this year, coming down towards Q4. We anticipate an even lower ASIC into 2026.

Speaker #7: That is levels. Okay, that's great. Thank you so much.

Speaker #1: Thank you. Your next question is coming from Adrian Day from Adrian Day Asset Management. Your line is live.

Speaker #8: Oh, thank you. Yeah, good afternoon. Yeah, you discussed your pipeline quite a bit. That was interesting. But I wonder if you could quantify a little more the specifically the greenfields, the number of projects, the geographies, how much you're spending, you know, this year, next year, and how the spend compares on a historic basis.

Speaker #8: Geo, greenfields, exploration.

Speaker #3: Hello, Adrian.

Speaker #8: Hello.

Speaker #3: And first, geography. We currently have on the greenfield side three opportunities being pursued. One, of course, is a wallet through our investment. I'm not sure if you follow Wallet, but they have a commanding land position in a most intriguing geologic setting.

Speaker #3: They already have made a significant discovery. They have a joint venture, and that discovery with Newmont. But outside of that joint venture, there is a significant land package that continues to offer, we believe, very good potential, and that's what's intriguing to us.

Speaker #3: In the north of Barracks, Tongon Mine, we have a joint venture and also an option agreement for a joint venture in northern Cotigua. That's the Tongon North project.

Speaker #3: It's a project where we've currently been drilling. This first half of the year, drilling has stopped due to rains, and we look to resume in the second half of the year.

Speaker #3: But we're testing major structures in the meridian, with the identified gold in auger, and big structures, long trends. We're drilling. You know, and we look forward to reporting when we find something that merits reporting, right?

Speaker #3: We're finding gold. We're finding gold in the structures. We need to see where those structures blow up, right? And offer opportunity for sites and tonnage and grade.

Speaker #3: And we have an early discovery, I would say, in the Orguiglio property in Cotigua as well, in the south, where we have identified a very large five-kilometer gold-in-soil anomaly in a concession that's owned 100% by us.

Speaker #3: And that is one. Cotigua, and you see we’re very active, not only on brownfields but in greenfields. We’re looking at opportunities in Guinea, right?

Speaker #3: As well. Moving on to at in Senegal, we're right now very much focused on the land package we control, around De-Ambassador, which is sizable.

Speaker #3: So, we have a program where we're drilling the main core property of De-Ambassador. But also, within the larger property package, we're doing a lot of generative work.

Speaker #3: Across the Atlantic in Mexico, we currently have two to three active joint ventures for early-stage opportunities. In Argentina, we just executed an option agreement with a local party to explore what I would categorize as one of the largest in-heated anomalies in the province of Salta, up near the Chilean border.

Speaker #3: And that's early stage. It's an option agreement. After the winter, we look forward to initiating our first drilling campaigns. Our exploration budget for greenfields right now sits at about $11 million.

Speaker #3: And that does not include any of the work we're doing at De-Ambassador. No, that's excluding De-Ambassador. The budget is $11 million. Our global exploration budget, including now De-Ambassador, stands at about $51 million.

Speaker #3: Total exploration budget. That's up from $41 million in 2024. So we have increased our global budget for brownfields and greenfields. All that is under the concept of exploration and new project development has gone up from $41 million in 2024 to $51 million in 2025.

Speaker #3: But we feel we're well-funded, and we have clear opportunities in front of us.

Speaker #7: That's excellent. Thank ou.

Speaker #3: We do not talk a lot about this early or talk enough. Perhaps we don't talk enough about these early-stage opportunities. Because again, what we expect is to produce something that we can meaningfully share with the market.

Speaker #3: You know how it is with early-stage opportunities. We're testing ideas, testing anomalies. It's a bit of a hit and miss. But you know we're going through the process, generating the ideas, and testing the targets, right?

Speaker #7: Okay. Super. Thank ou.

Speaker #1: Thank you. Once again, everyone, if you have any questions or comments, please press star, then one on your phone. Your next question is coming from Thomas Beslanovitz.

Speaker #1: Your line is live.

Speaker #5: Yes. I was wondering if you're actively looking to buy another company or possibly merge. Maybe you can't talk about that stuff now, but I was just curious.

Speaker #3: Yes. The answer to that, sir, is that when we think of acquisitions, they are answering the needs for growth mainly, right? We are very comfortable and calm that we have a very robust, clear opportunity for growth within our control, in our portfolio.

Speaker #3: So, that would be growth that we can deliver at the lowest cost and dilution to our shareholders. Right? The most equitable growth we can provide our shareholders is organic growth.

Speaker #3: And that's under our control. As I spoke during the call already, De-Ambassador and Seguela right now offer clear opportunities for that. You know, and we're always paying attention to value opportunities, but I would characterize it as this.

Speaker #3: We have no need to chase ounces. We are chasing value. And if we see value out there, you'll see us very aggressively. We have the balance sheet to pursue big opportunities.

Speaker #3: But our search is for value, not ounces. We can produce the ounces organically, and that's the cheapest and most value we can deliver to our shareholders: advancing what's ready in the portfolio.

Speaker #3: And that is our primary focus.

Speaker #5: Thank you very much.

Speaker #1: Thank you. There are no further questions in the queue.

Speaker #7: Thank you, Matthew. If there are no further questions, I'd like to thank everyone for joining us today. We appreciate your continued support and interest in Fortuna Mining.

Speaker #7: Have a great day.