Fortuna cuts down debt using cash generated from Séguéla mine

Canadian precious metals miner Fortuna Silver (NYSE: FSM; TSX: FVI) announced Wednesday it has paid down an additional US$41 million in debt using cash on hand, which would be reflected in its fourth quarter and year-end 2023 results.

This debt repayment, Fortuna says, is expected to bring down its leverage ratio (total net debt to adjusted EBITDA), which is commonly used to measure a company's inherent financial risk, below 0.5. This measure was previously reported in the third quarter of 2023.

It is expected that Fortuna's total outstanding debt balance will stand at approximately US$165 million on its credit facility, and US$46 million of convertible notes, for an estimated total net debt, after cash and cash equivalents, of US$83 million.

This, according to the company, would represent a reduction of approximately US$50 million in total net debt in the period, reflecting the strong cash flow contributions from the Séguéla gold mine its second full quarter of production.

The Séguéla mine located in Côte d’Ivoire officially entered production in May 2023, and subsequently ramped up to normal rate of production during the third quarter. For the calendar year, it is expected to produce 60,000 to 75,000 oz. of gold.

Shares of Fortuna Silver Mines gained 3.8% by 2:00 p.m. ET following the debt repayment announcement. The company has a market capitalization of $1.5 billion.

THIS ARTICLE WAS ORIGINALLY POSTED ON MINING.COM