Fortuna Mining Q3 2026 Earnings Call Transcript

Fortuna Mining (NYSE:FSM) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://www.webcaster5.com/Webcast/Page/1696/54698

Summary

Fortuna Mining Corp. aims for approximately 60% growth in annual gold production to half a million ounces by mid-2028, supported by projects at Séguéla and Diamba Sud.

Third quarter production was 69,665 gold equivalent ounces, with adjusted EBITDA at $165 million, and adjusted attributable net income of $51 million, impacted by lower sales and higher costs.

Séguéla experienced a production shortfall due to artisanal miner blockades, but operational issues were resolved, and the mine is expected to meet the lower end of production guidance.

Major growth projects include the Séguéla plant expansion and Diamba Sud construction, with significant investments underway and expected completion by 2028.

The company maintains a strong balance sheet with $443 million in cash and plans to invest $750 million in growth and exploration over the next two years without issuing additional shares.

Operational achievements include the acquisition of the Bambadji concession in Senegal and advancements in exploration, notably a maiden resource estimate at Kabi West by year-end.

Management paused share buybacks to prioritize funding growth projects but plans to reassess buybacks based on future financial performance and market conditions.

Full Transcript

OPERATOR (Moderator)

Good day everyone and welcome to the Fortuna Mining Corp. third quarter 2026 financial and operational results call. At this time, all participants are placed on listen-only mode and we’ll open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Carlos Baca, Vice President, Investor Relations at Fortuna Mining. Sir, the floor is yours.

Carlos Baca (Vice President of Investor Relations)

Thank you, Matthew. Good morning everyone and welcome to Fortuna Mining’s third quarter 2026 financial and operational results conference call. Joining today’s call on behalf of Fortuna are Jorge Alberto Ganoza, Chief Executive Officer, Director and co‑founder; Kevin O’Reilly, Chief Financial Officer; Cesar Velasco, Chief Operating Officer, Latin America; and David Whittle, Chief Operating Officer, West Africa. Today’s webcast presentation and Q3 2026 results materials are available on our website at fortunamining.com. Before we begin, please note that the statements made during today’s call are subject to the reader’s advisories included in yesterday’s news release, the webcast presentation, our Management Discussion and Analysis, and the risk factors outlined in our Annual Information Form. All financial figures discussed today are in US dollars unless otherwise stated.

The technical information discussed on this call has been reviewed and approved by Eric Chapman, Fortuna’s Senior Vice President of Technical Services and a qualified person as defined under National Instrument 43‑101. Today’s remarks will provide a concise overview of our third quarter results and the priorities guiding the business through the balance of the year. With that, I’ll turn the call over to Jorge Alberto Ganoza.

Jorge Alberto Ganoza (Chief Executive Officer)

Thank you, Carlos, and good morning to all, and thank you for joining us. During the third quarter we made significant progress on the growth projects that underpin Fortuna’s next phase of growth. Led by the Séguéla plant expansion and the Diamba Sud construction, we’re positioned to deliver approximately 60% growth in annual gold production to the level of roughly half a million ounces per year starting from mid‑2028. This growth comes from projects that we control, ounces already in our mineral inventory, supported by technically straightforward development plans, proven teams, and the financial capacity to execute.

Operationally, the quarter was marked by a production shortfall at our Séguéla mine in July and August. These operating issues were contained within the quarter and corrective measures and actions taken by management have already delivered improved execution. Our priority is to sustain consistent operating performance while delivering this growth for shareholders. First, a word on safety. We recorded one lost time injury at our Séguéla mine in July involving a light vehicle accident. For year to date, total recordable injury frequency rate as of September 30th was 1.23, below our corporate target of 1.37. I want to commend our teams for achieving 1,950 days and 1,080 days respectively without lost time injuries. That’s basically close to five and three years lost time injury free. Their performance demonstrates the sustained commitment to safety we seek across all of our operations.

Our responsibility remains unchanged: ensuring that everyone goes home safely. We produced 69,665 gold equivalent ounces in the third quarter and remain on track to meet our annual production guidance in the range of 281,000 and 305,000 ounces. Financially, adjusted EBITDA of $165 million and adjusted attributable net income of $51 million, or $0.17 per share, both were lower than in the previous quarter reflecting lower sales and lower volumes, realized metal prices, higher costs, and higher share‑based compensation. The latter was a non‑cash expense driven by the 24% rise in our share price during the quarter.

Despite these pressures, including the Séguéla production shortfall, we generated $90.8 million in free cash flow from ongoing operations through the first nine months. Fortuna generated $954 million in sales, $585 million in adjusted EBITDA, and $350 million in free cash flow from ongoing operations. Adjusted attributable net income was approximately $238 million, or $0.79 per share. This cash generation is a financial foundation for the growth program I’ll now discuss.

We’re focused on delivering on our next phase of growth, so at Séguéla and Diamba Sud we’re moving that strong growth strategy forward through concrete execution milestones. Engineering and procurement are advancing for the approved Séguéla expansion, while at Diamba Sud we’re progressing the remaining approvals and preparing for construction. At Séguéla we made the final investment decision in July for the $109 million plant expansion, which will increase processing capacity by 30%.

Completion and commissioning are scheduled for the third quarter of 2028, targeting an annual production capacity of over 200,000 ounces of gold at this mine. At Diamba Sud, the government has issued on November 2 the important notice of admissibility confirming that the government has reviewed our application for the exploitation permit and all documentation met the legal and technical requirements for the approval process. We expect to obtain the exploitation permit in the fourth quarter. Mining Convention negotiations are also in the final stages, with the convention adopting the 2016 Mining Code alongside provisions that will restabilize for a decade.

We’re advancing preparations to secure the project schedule, targeting first gold in mid‑2028. To support the schedule, the Board of Directors has authorized management to proceed with contract awards totaling $250 million, with execution spread across the construction timeline. We’re also working with the Office of the President of Senegal and the Office of the Minister of Mines to arrange an on‑site ceremony marking the formal start of construction in late November.

The large and prospective Bambadji concession adds further exploration upside to our Senegal platform. The acquisition closed during the quarter for $206 million. This is a property we acquired from Barrick, and we have already mobilized six drill rigs which are conducting infill programs across the Kabi West, Wadi, and Latifah prospects. Our immediate focus is to produce the first resource estimate for Kabi West by year end. This prospect is located just 2 km from the planned Diamba Sud plant site.

We enter this investment phase, or growth projects, with a strong balance sheet. At the end of September, we held $443 million in cash, close to $600 million in total liquidity, and a net cash position of $260 million, down approximately $160 million from the previous quarter, the decline in net cash coming primarily from the Bambadji acquisition. Over the next two years, we expect to invest approximately $750 million in growth and mineral exploration.

Our available liquidity and free cash flow from the business position us to fund these programs without issuing additional shares or over‑leveraging our balance sheet. This is growth designed to benefit and add significant value to our shareholders, backed by a clear funding plan. We did not repurchase shares during the third quarter. Year to date, we have returned $106 million to shareholders through the repurchase of 10.8 million shares. As we launch the growth capital projects and advance on their execution, we will pause share buybacks. Growth is our first capital allocation priority, followed by shareholder returns through opportunistic buybacks. While preserving balance sheet strength, we will assess opportunities to resume repurchases against project funding needs and available liquidity.

As we move through the fourth quarter, our growth projects and exploration programs are gaining significant momentum. We look forward to reporting further milestones achieved as we advance the projects while maintaining the operational and financial discipline that underpins our production and business. With that, I’ll turn the call over to Kevin, our CFO, to take us through the highlights of the quarter.

Luis Ganoza (Chief Financial Officer)

Thank you, Jorge. Starting with the income statement, adjusted attributable net income for the quarter was 51.2 million, or $0.17 per share, in line with the 51 million in the third quarter of 2025 and down 47% from the 75.5 million in the second quarter of 2026. Quarter over quarter, the key change I want to highlight for net income is the impact of non-cash costs, specifically depreciation, depletion, and share-based compensation. Depreciation and depletion increased to $866 per ounce compared to $609 per ounce in the prior quarter.

This drove an increased cost of $15 million. Higher depletion was primarily due to planned mining sequencing at Séguéla and Lindero, as we saw greater amortization of previously capitalized stripping costs. This trend is expected to continue in the fourth quarter as Séguéla continues to source ore from the Ancien and Koula pits. The other major non-cash charge was share-based compensation expense of 10.9 million in the third quarter compared to a recovery of 0.3 million in the second quarter due to a 24% rise in the share price and the associated mark-to-market adjustments.

The impact of non-cash costs in the quarter helps to explain adjusted earnings per share of $0.17 compared to relatively robust operating cash flow per share of $0.43. Looking at the other parts of the income statement, sales are lower quarter over quarter due to lower production and a lower realized gold price of $4,281 per ounce versus $4,447 per ounce in the second quarter. Cash costs were higher as well quarter over quarter due to higher processing costs at Lindero from higher consumption of cyanide to improve leach kinetics and rental costs, and higher waste movement at Séguéla, but partially offset by lower royalties.

A foreign exchange loss of 2.5 million in the quarter was primarily driven by purchases of U.S. dollars to repatriate funds from Argentina, and the effective tax rate of 47% was broadly in line with the previous quarters, with the factors affecting our effective tax rate being those discussed in our second quarter update, namely deferred tax accruals in Argentina and withholding taxes. Cash costs increased to $1,244 per gold equivalent ounce from $1,034, and consolidated AISC was $2,286 per GEO, up $129 from $2,157 in the previous quarter. Quarter over quarter, the increase primarily reflected lower production at Séguéla, which would normally contribute lower-cost ounces, and higher share-based compensation of $10.9 million compared to the recovery we mentioned in the second quarter. Share-based compensation on its own contributed $160 per GEO to the increase in AISC.

When we look at AISC in the quarter compared to our guidance, I want to emphasize the continued impact of external factors relative to the assumptions underlying our annual guidance. External factors added $220 per GEO to the third quarter AISC. This primarily reflected $116 from share-based compensation, $42 from higher consumable prices, mainly diesel, and $45 from macroeconomic factors impacting peso-denominated costs at Lindero. The temporary stoppage at Séguéla also contributed approximately $45 per GEO to AISC.

Looking at consumables, similar to our peers, we’ve been seeing inflationary pressures in the cost of consumables and materials. However, the impact to our cost structure has not been experienced equally across all of our sites. Inflationary pressures have been the most acute at Lindero, where diesel makes up around 10% of costs for mobile equipment and power generation. Relative to the assumptions in our guidance, we’ve seen diesel costs increase in the range of 60%, and explosives have been another factor at around 30% increases relative to guidance.

Inflation has been more muted at Séguéla, where government price controls over diesel have limited the increase in fuel prices, but we have seen some pressures in mining costs, which rise and fall with our mine contractors, increase through the year. In the quarter, looking at inflationary pressures of about $42 an ounce, Lindero accounted for roughly 85% of that and Séguéla the other 15. We expect AISC to trend down in the fourth quarter as Séguéla moves past its third quarter issues and Lindero maintains its performance.

However, due to the external factors we’ve discussed, we still see an AISC that tracks above the top end of our guidance by about 5%. Stepping back and looking at the full year, the impact of persistent diesel price pressures, higher royalty cost, and macroeconomic impacts in Argentina are expected to push us 8 to 10% above the top end of guidance. If we stripped out the impact of external factors, AISC would finish the year at or just above the top end of our guidance of $1,975 an ounce.

Moving to cash flow, despite the challenges we faced in the quarter, the business continued to demonstrate the ability to generate cash flow with $90.8 million in free cash flow from operations and 126.7 million, or $0.43 per share, in net cash from operating activities before working capital changes. Free cash from operations increased from the 85.7 million in the second quarter primarily due to the timing of tax payments at Séguéla and lower sustaining capital expenditures.

In the fourth quarter, we do expect sustaining capital expenditures to trend back up to around $30 million to $34 million, and we also expect higher growth CapEx as work continues to advance at the Diamba Sud and Séguéla expansion. To finish off and look at our balance sheet, echoing Jorge’s earlier comments, we see ample capacity to fund our $750 million growth program over the next two years based on a strong liquidity position of just 100600 million and underpinned by a robust business that generated $350 million in free cash flow year to date. This provides a platform to allow us to organically fund our growth and support a target of a 60% increase in annual production by mid-2028.

Back to you, Jorge.

Jorge Alberto Ganoza (Chief Executive Officer)

Thank you, sir. David, please give us an update on the West African business.

David Whittle (Chief Operating Officer – West Africa)

Thanks, Jorge. Before turning to our operating results, I want to reaffirm that the safety and well-being of our employees and contractors remains our foremost responsibility. Our focus is on managing critical risks, reinforcing safe work practices, and ensuring that effective controls are consistently applied across all our operations and projects. At Séguéla, third quarter operations were affected by a temporary site-wide stoppage caused by a blockade by artisanal miners in early July, and by reduced equipment availability of one of our mining contractors. These disruptions reduced mining volumes and limited access to higher-grade areas within the pits. We implemented several initiatives to address these issues, and mining volumes were back to planned levels in September. Mining was primarily carried out at the Antenna, Ancien, Koula, and Sunbird pits, with 6.5 million tonnes of waste and 340,000 tonnes of ore mined for a strip ratio of 19.1.

A further 623,000 tonnes of waste were also mined at Sunbird South to provide access to the underground portal area. Séguéla produced 33,744 ounces of gold during the quarter, processing 402,000 tonnes at an average grade of 2.67. Lower metallurgical recoveries associated with the Koula ore feed have been addressed, with the recoveries returning to previous levels. In October, Séguéla reported a cash cost of $947 and an all-in sustaining cost of $1,917 per ounce of gold for the quarter.

Year to date, cash cost and AISC stand at $754 and $1,807 per ounce of gold. With mining volumes, access to higher-grade ore, and recoveries restored, we expect a strong finish to the year and a return to first half production levels in the fourth quarter. Séguéla remains on track to achieve the lower end of its 2026 production guidance. During the quarter, we also made significant progress on all three of our major growth projects. At Séguéla, we received the environmental permit for the underground project and submitted all requested documentation to support the mining permit application. This application has now been referred for ministerial approval, and permitting remains on track for completion this year. The project team has been recruited, orders for mining equipment have been placed, and development remains on schedule to begin in the second quarter of 2027.

The significant expansion of the Séguéla processing plant was approved and is progressing on schedule. Detailed engineering is underway, with layout being redesigned and constructed around the existing plant, and the owner’s project team is 75% onboarded. Vendors have been selected for key equipment and infrastructure packages, and work on supporting infrastructure is ongoing. In Senegal, early works continued at Diamba Sud. The owner’s construction team is fully onboarded, with its core largely from the team that built Séguéla on time and on budget. The site access road is complete, and construction of the 329-person accommodation camp is progressing, with completion scheduled for the first quarter of 2027. Tenet has been selected as the project’s EPCM contractor and has received a limited order to proceed with early works.

Orders have been placed for long-lead mechanical equipment, including the SAG mill and primary crusher, protecting the overall project schedule. Manufacturing of the HFO power station generators continues, while the other five generators have passed factory acceptance testing and are being shipped. The process plant and power station EPCM contracts and the awarded bulk earthworks packages total $250 million, or about 60% of total project capex, and are ready for execution upon the final investment decision.

This positions us to move swiftly from early works into full construction, subject to the receipt of the exploitation permit and final board approval. With regard to exploration, Jorge has already touched on the Bambadji acquisition. Exploration also continued at Diamba Sud, with drilling at Southern Arc continuing to deliver positive results outside the current designs. These results will inform our year-end mineral resource and mineral reserve. At Séguéla, after a highly successful drilling campaign at Sunbird Underground and Kingfisher, the drill rigs have been reallocated to the underground potential at Pansium, splay extensions of Antenna, and additional generative targets.

Supported by a solid mineral reserve and mineral resource base, Diamba Sud and Séguéla form the production foundation for the West Africa platform. Together, these assets underpin Fortuna Mining’s target of approximately 60% growth in annual production to an annualized rate of 500,000 ounces of gold equivalent from mid-2021. With that, I’ll hand back to you. Thank you.

Jorge Alberto Ganoza (Chief Executive Officer)

Thank you. Thank you. Cesar, do you want to share your performance on LATAM, please?

Cesar Velasco (Chief Operating Officer Latin America)

Yes, indeed. Thank you, Jorge, and good afternoon everyone in Latin America. As Jorge has indicated before, both Lindero and Caylloma continue to deliver solid safety performance during the third quarter. Moving to the operational results in Argentina, Lindero produced 26,000 ounces of gold, a 25% increase over the second quarter. This is consistent with our expectation that production would be weighted towards the second half of the year. Production for the first nine months totaled 68,400 ounces. The operation remains on track to achieve annual production guidance of 92,000 to 102,000 ounces. The quarter’s performance reflected the operating improvements anticipated following the primary crusher reliability work completed earlier in the year.

Lindero placed approximately 1.9 million tonnes of ore on the leach pad, about 19% more than in the second quarter, at an average gold grade of 0.63 grams per tonne. This represented approximately 37,800 contained gold ounces placed on the pad, an 18% increase quarter over quarter. The improvement was driven by higher mechanical availability across the processing circuit and stronger crushing and stacking rates. During the first nine months, Lindero placed approximately 99% of the gold ounces planned for the period on the leach pad.

This performance, together with the normal timing of leach pad recovery, supports our expectation of stronger production for the remainder of the year. Cash cost was $1,449 per ounce of gold, slightly lower than in the second quarter, while AISC decreased 18.5% quarter over quarter. The decrease in AISC primarily reflected higher production, lower sustaining capital expenditures, and the absence of the concentrated crusher-related expenditures recorded in the second quarter.

External cost pressures and macroeconomic factors, as indicated by Kevin, including appreciation of the Argentine peso and higher diesel and explosives costs, continue to partly offset the benefits of improved plant reliability, higher stacking rates, and increased gold production. Exploration and resource development at Lindero also delivered encouraging results. The 2026 infill drilling program was expanded from an initial 6,000 meters to 8,500 meters across 31 diamond drill holes after several early holes encountered higher-than-expected mineralization. Results included 0.96 grams per tonne of gold over 350 meters in hole LDH-272 and confirm that mineralization extends below the current reserve pit design. An updated block model and pit design are targeted for completion by year end, supporting a revised life-of-mine plan and updated mineral resource and mineral reserve estimates planned for the first quarter of 2027.

Moving to Peru, at Caylloma throughput remained consistent while higher silver grades and recovery drove strong production. Silver output rose 7% quarter over quarter to 247,400 ounces. Lead production reached 8.4 million pounds and zinc production totaled 11.4 million pounds. Gold-equivalent production increased to 9,900 ounces, bringing year-to-date output to 28,900 gold-equivalent ounces. Caylloma, as you can see, is well positioned to exceed its annual guidance of 29,000 to 33,000 gold-equivalent ounces.

Costs remained contained. Cash cost declined to $26.12 per silver-equivalent ounce, a 6% decrease quarter over quarter, while AISC decreased to $43.19 from $44.19. Despite higher treatment charges and capital spending, the Tailings No. 3 expansion was 71% complete as of October 31st and remains on schedule for completion by year end. Back to you, Jorge.

Jorge Alberto Ganoza (Chief Executive Officer)

Thank you, and we can move on to Q&A.

OPERATOR (Moderator)

Certainly, everyone, at this time we 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. We do ask that while posing your question, please pick up your handset if you’re listening on speakerphone to provide optimum sound quality. And once again, if you have any questions or comments, please press star 1 on your phone. Please hold while we poll for questions. Thank you.

Your first question is coming from Eric Winmill from Scotiabank. Your line is live.

Eric Winmill (Analyst)

Hi there, Jorge and team. Thanks for taking my question. Just wanted to ask about Bambaji. Obviously it’s great to see the resource coming out on Kavi West end of this year. Any thoughts in terms of some of the other targets and the timing we might expect there on the drilling? And then I guess maybe the secondary question, what about exploration ongoing here at Diemba as well? Thank you.

Jorge Alberto Ganoza (Chief Executive Officer)

Eric. Yeah, as noted through the call, we have been quite prompt to mobilize drill rigs. We’re basically done with the drilling at Kavi West, and our rigs—we have five core drill rigs and one RC—working on the property. So the rigs have moved from Kavi West to Wadi and Latifah, which are the next targets on our priority list. These are targets that have received prior drilling by Barrick over the years, and we’re basically, in some cases, infilling and pursuing open ends of mineralization outlined by that previous Barrick drilling.

Right. So lots of work ahead, but the focus is for us to be able to show ounces soon. This was a significant acquisition. As you know, there was no mineral inventory reported. It is through our assessment of the drilling done that there is a lot of low-hanging fruit to produce ounces quickly, and that is what’s mobilizing us. Right. So Kavi West first, Wadi-Latifah second. And the team continues moving and generating drill targets. There are at least eight priority areas identified for first pass.

So Kavi West, Wadi, and Latifah are the first three, and then we’ll continue prioritizing. So lots of work. And that’s for the Bambaji drill program. We approved an initial $8 million for this fourth quarter, and we will certainly be looking forward to a very substantial exploration budget for 2027 here. With respect to—I understand—Seguela drilling, I think David mentioned we are done drilling Sunbird. Drilling at Sunbird has been very rewarding for the company. We have built Sunbird over the last two years into our largest resource and reserve at Seguela, over a million ounces of gold, between the open pit and underground. Mineralization remains wide open at depth, but it’s deep. So we are making a pause now. Mineralization remains open at depths in excess of 900 meters to a kilometer from surface with very good grades—very high grades—but it’s inefficient to continue drilling from surface.

So we’ll wait for the underground infrastructure to be developed in 2027 to go back and start drilling from underground. So drills are moving out of Sunbird into other targets that we have there. As you know, we have multiple targets as well. We have a large property package. We control 35 kilometers on the belt where we have multiple targets to test. So the focus at Seguela is advancing some of those early-stage targets that we have, but also pursuing open mineralization on some of the existing pits, and pursuing opportunities for underground mining.

We will now have an underground anchor for operations—for underground operations—at this Sunbird deposit, and that will allow us to be able to tackle perhaps smaller resources that we can mine underground at some of the other nearby deposits like Ancien, even Antenna, even Koula. So right now we have some rigs testing new targets and some others exploring for deep extents of mineralization below pit bottoms with the idea of producing resources that we can mine from the underground.

So that’s the focus for Seguela.

Eric Winmill (Analyst)

Okay, fantastic. Thank you. Really appreciate the detail there. And maybe just one more if you don’t mind. But just on the buybacks, do you have sort of internal thresholds or thinking about what you want to see in place on the balance sheet before you get more aggressive and resume the buybacks?

Luis Ganoza (Chief Financial Officer)

Yeah, you know, with the buybacks, really, as you know, we are going to—we’re starting a very capital-intensive phase. As noted through the call, we’re going to start deploying over the next two years—we’re going to deploy close to $750 million on our growth projects and exploration. So we want to be cautious. We want to be cautious. So in the fourth quarter, Q1 2027, Q2 2027, you will see us being cautious with the share buyback. Our priority is ensuring that we can fund the growth organically and at the same time preserve the strength in our balance sheet.

And as we advance with the deployment of that capital and looking at gold prices and the performance of the business over the next two to three quarters, we will certainly re-engage in our share buyback program. No, but more than a set target today on an amount of shares, what’s driving our decision is just to be cautious as we initiate the capital deployment—or the more significant portion of the capital deployment—and prioritizing that and managing, balancing that with retaining a strong balance sheet through the capital phase.

Right. So we will always be opportunistic with the share buybacks, but I think we’ll be particularly cautious over the next two quarters, I would say, at the very least with the share buybacks.

Eric Winmill (Analyst)

Okay, great. Thank you. I really appreciate that. And yeah, sounds like lots of exciting developments to come. Look forward to seeing the news. I’ll back in the queue. Cheers.

OPERATOR (Moderator)

Thank you. And once again, everyone, if you have any questions or comments, please press star then 1 on your phone. Your next question is coming from Mohammad Faribi from National Bank. Your line is live.

Mohammad Faribi (Analyst)

Good morning, Jorge and team, and thanks for taking my question. Maybe if I could start at Seguela. I just wanted to get a little bit more color on the site-wide stoppage you mentioned from the blockade by artisanal miners. Can you give us some color on what triggered this? And now that you’re back and producing, what has changed with, I guess, the local community or maybe the authorities to kind of reduce this risk in the future? Thank you.

Jorge Alberto Ganoza (Chief Executive Officer)

Yes. Well, on July 10, a police task force that’s a national task force to combat illegal mining carried out an operation in the village of Cuego. Cuego is located a couple kilometers from our mine site, and it’s a village that hosts a large population of migrant artisanal miners. As I said, the government of Côte d’Ivoire has a national police task force to combat not necessarily artisanal mining, but illegal mining. They had this operation carried out in the village of Cuego, which unfortunately resulted in a fatal shooting.

This triggered protests by the artisanal miners at Cuego, who mobilized at our site and vandalized the entrance of our plant site, entered parts of our premises, and blockaded access for approximately 24 hours before the gendarme dispersed the blockade. Management, with good judgment, then delayed personnel rotations and partially demobilized the workforce while we assessed the situation and resumed dialogue. We were not informed by the police or authorities of this operation they were carrying in Cuego, so all of this came as a surprise to us, to be honest.

Our priority was the safe restart of operations and maintaining a healthy, long‑term relation with the artisanal mining community. We do not have any quarrels with the artisanal miners. There are no large artisanal mining fields in the vicinity of our mine. There is a lot of scattered workings where you see groups of five to twenty artisanal miners in relatively small diggings, and our relationship all these years has been good, very manageable. So this was a bit of a surprise and, again, ignited by this operation carried by the national task force to combat illegal mining.

So, operations resumed. From the start of the blockade until when we resumed full operations, we were able to remobilize the workforce and continue with our normal rotations. That was about six days down after the incident. So that’s the color I can give you, Mohammed.

Mohammad Faribi (Analyst)

That is very helpful, Jorge. Thanks a lot for that. And then maybe my second question on Bombadji again. You know, good exploration update, and we know we’re getting an updated resource, or a maiden resource, at Kabi West at year‑end. Can you remind us, in terms of integrating deposits from Bombadji into Diamba Sud, what it takes at the permitting level and how you’re envisioning, maybe at a high level, how that could work out? Any color there is appreciated.

I know that we remain at the early stages there, but thank you.

Jorge Alberto Ganoza (Chief Executive Officer)

Yes. What I can tell you is that we have already brought this up with the Minister of Mines because, you know, we see Bombadji as one with Diamba Sud. The Kabi West deposit, where we look to produce this first resource, is located only 2 km away from the Diamba Sud plant site. So it just makes a world of sense to integrate everything with respect to the permitting and, more importantly, the mining convention. We already brought this up with the Minister of Mines, and we are engaged in those discussions right now. In conversations I have had personally with him, he does acknowledge that Bombadji ore will be processed at the Diamba Sud plant. We just need to make sure that we can get a proper alignment on something that makes sense for the long term and makes the operation of the deposits in both properties feasible and sensible, right? It’s been raised with the authorities, and we’re working on it.

Mohammad Faribi (Analyst)

Great. Thanks a lot for that color, and thanks for taking my questions.

OPERATOR (Moderator)

Thank you. That concludes our Q&A session. I’ll now hand the conference back to management for closing remarks. Please go ahead.

Carlos Baca (Vice President of Investor Relations)

If there are no further questions, we’ll conclude today’s call. Thank you for joining us and for your continued interest in and support for Fortuna Mining. We appreciate your questions and engagement and look forward to updating you on our progress next quarter. Have a great day.

OPERATOR (Moderator)

Thank you, everyone. This concludes today’s event. You may disconnect at this time and have a wonderful day. Thank you for your participation.

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