2021 was a rough year for Fortuna Silver Mines (NYSE:FSM), taking into consideration the royalty payment settlement it made to the Mexican Government, the environmental permit issue with the SEMARNAT, and the disruptions to the ramp-up of Lindero from the virus crisis, among other likely non-recurring issues.
In addition, FSM incurred the costs of merging with Roxgold. All of these issues took its toll on the stock price, compounded by the fact that the entire sector was in a downtrend for most of 2021. Going forward FSM management will be able to focus on managing its operating mines, advancing Seguela to production and resource exploration and replacement.
The challenges confronted by Fortuna were compounded Thursday when Stockwatch erroneously (or was it?) released a headline in pre-market reporting that Fortuna lost $59.4 million in 2021. Fortuna generated $59.4 of net income in 2021.
It was an inexcusable mistake but the damage to the stock was done by the time Stockwatch ungraciously corrected the error, as hedge fund algos relentlessly sold (and likely shorted) shares based on Stockwatch’s fictional headline, driving the stock down as much as 7.2% At the very least Stockwatch should issue an apology.
The biggest factor that will benefit FSM’s stock price going forward, and which the market fails to "see" is the upside potential of FSM’s existing mine properties and, even more so, the enormous upside potential of FSM’s exploration properties.
Arcadia Economics (Chris Marcus) and I discussed with Fortuna’s CEO, Jorge Gonoza, the Company’s Q4 performance as well the many factors in play that make Fortuna in incredible investment opportunity: