FVI's Strong Balance Sheet

WAYNE HEWGILL, Regulus Resources Inc. (12/02/2009)
"Based on our revised metal prices we are increasing our target price on Fortuna Silver (V-FVI) to $3.45. While we feel very bullish on short to medium term gold and silver prices, we feel more cautious on lead and zinc as we feel these metals could be affected if we see a return to a recessionary period. To account for the base metal price risk, we have applied a 0.90x NAV multiple.

. . .With a strong cash balance and no debt, Fortuna continues to boast a strong balance sheet. As at Sept 30, 2009 Fortuna had a cash balance of $33.7M and no debt.

Management has given a positive outlook for the balance of 2009, and has indicated that the company is in a position to generate upwards of $45M in revenues for FY2009. We are maintaining our revenue forecasts of $49.4M for FY2009 increasing to $75.3M for FY2010 with the strong metals market.

We believe Fortuna gives investors an opportunity for steady growth in the silver business. Management continues to produce consistent results from their Caylloma Mine. With Caylloma now operating near full capacity, a clear mine plan to 2015 with a least 18 months of development in front of them, the focus is now on San Jose—the key area of organic growth for the company."

 PRINT THIS PAGE   EMAIL THIS PAGE

Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.

Related Quotes: