The more I look at Fortuna Silver, the more I like it. They are one of the few profitable miners and are set for a big catalyst in the next year.
They generate about $100 million in ebidta and are set to double that number in the next few qtrs as they bring on their third mine, Lindero. Lindero is a heap leach gold mine producing 100+K oz/yr for the next 13 years. The first few years are scheduled to produce the most at around 120-30K/yr, gradually tapering to around 100K.
They have taken on modest debt to build the mine and will have a 1:1 debt to equity ratio, so very conservative. They will start to load the ore in October and pour their first gold in December. The mine should be commercial in Q1 2020. There is a satellite deposit that is not included in any reserve reports. They plan to release those results in early 2020. The deposit is only 3 miles from the Lindero mine so could easily boost production even more in a couple of years.
Fortuna is a low cost producer, with a track record of building mines within budget and on time. They have been conservative managers and are undervalued by the market. I expect the stock to double from here if silver and gold remain at current levels.