Fortuna Delivers PEA for Diamba Sud Gold Project With After-Tax IRR of 72% & NPV of $563 million

Key Concepts

Preliminary Economic Assessment (PEA): An early-stage study that provides a conceptual overview of a mining project's potential economic viability.
Internal Rate of Return (IRR): A metric used in capital budgeting to estimate the profitability of potential investments. It is a discount rate at which the net present value (NPV) of all cash flows from a particular project equals zero.
Net Present Value (NPV): The difference between the present value of cash inflows and the present value of cash outflows over a period of time. It is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.
All-in Sustaining Cost (ASIC): A comprehensive measure of the cost of producing gold, including mining, processing, site administration, royalties, and sustaining capital expenditures.
Life of Mine (LOM): The total period during which a mine is expected to operate and produce minerals.
Inferred Resources: That part of a mineral resource for which quantity and quality are estimated on the basis of limited geological evidence and sampling.
Indicated Resources: That part of a mineral resource for which quantity, grade, bulk density, shape, and other geological characteristics have been estimated on the basis of appropriate geological evidence and sampling.
Measured Resources: That part of a mineral resource for which quantity, grade, bulk density, shape, and other geological characteristics have been estimated with a high level of confidence.
Definitive Feasibility Study (DFS): A comprehensive study that provides a detailed technical and economic assessment of a mining project, typically used to support a construction decision.
Environmental and Social Impact Assessment (ESIA): A study that assesses the potential environmental and social impacts of a proposed project and outlines mitigation measures.

Fortuna Mining's Diamas Gold Project PEA Highlights

Fortuna Mining has released a Preliminary Economic Assessment (PEA) for its Diamas gold project in Sagal, presenting strong economic indicators and outlining a clear development path.

Project Economics and Financial Metrics

After-Tax IRR: The PEA projects an impressive 72% after-tax Internal Rate of Return.
After-Tax NPV: The project boasts an after-tax Net Present Value of $563 million at a 5% discount rate.
Gold Price Assumption: These figures are based on a conservative gold price of $2,750 per ounce.
Current Gold Price: As of the recording, the market gold price is $4,353 per ounce, indicating a significant margin.

Production and Cost Structure

Initial Production: During the first three years of production, Diamas is projected to deliver 147,000 ounces of gold per year.
All-in Sustaining Cost (ASIC): The projected ASIC is $904 per ounce.
Operating Costs: Operating costs are anticipated at $516, which translates to $1,81 per ounce of gold sold.
Payback Period: The estimated payback period for the project is approximately 10 months.

Capital Costs and Liquidity

Capital Construction Cost: The estimated capital construction cost is $283 million.
Contingency: This includes $46.4 million for contingency.
Capital Closure Cost: $4 million is allocated for capital closure costs.
Sustaining Capital: Sustaining capital is estimated at $40 million, along with $8 million in closure costs over the current 8.1-year Life of Mine (LOM).
Fortuna's Liquidity: Fortuna Mining benefits from strong liquidity, with over $537.3 million in cash and a net cash position of $214.8 million.

Project Development Timeline and Milestones

Construction Decision: Fortuna remains on track to make a construction decision in the first half of 2026.
Environmental and Social Impact Assessment (ESIA): The ESIA has been filed, marking a significant step forward.
Early Works Budget: A $17 million budget has been approved for early construction works and planning.
Definitive Feasibility Study (DFS): The DFS is expected to be completed near the end of the second quarter.
Construction Start: If a positive construction decision is made, construction could commence in the fourth quarter of 2026.
First Gold Pour: The target for the first gold pour is the second quarter of 2028.

Exploration Upside and Resource Expansion

Ongoing Drilling: Five drill rigs are actively working on expanding open areas of mineralization.
Resource Conversion: The goal is to upgrade inferred mineral resources to measured and indicated by the end of the year.
Recent Drilling Success: Since the PEA cut-off, 125 holes totaling 15,794 meters have been drilled, including a notable intercept of 22.7 g/t over 21.6 meters in August.
Exploration Focus: The current exploration program targets infill drilling at Area AD Car Mundi and Southern Arc, step-out drilling at Southern Arc for resource expansion, and testing prospective targets at Fortuna's Bandala properties.
Life of Mine Extension: Management believes that with exploration success, the LOM could be extended beyond a decade.

Operational Plan and Infrastructure

Processing Facility: The PEA outlines a plan for multiple deposits to feed a central gold processing facility.
Current LOM: The current LOM is 8.1 years, with ongoing exploration aimed at increasing this.
Concurrent Development: The plan anticipates concurrent development of multiple deposits, with no more than three pits mined simultaneously.
Initial Throughput: The initial target throughput is 2.5 million tons per annum (mtpa) for the first three years, transitioning to 2 million mtpa.
Mining Method: The project envisions conventional open-pit mining.
Tailings Management: The tailings facility is designed to accommodate 7.8 million tons of tailings.
Water Management: A water storage dam will serve as the main facility for clean, raw, and processed water, with raw water sourced from a pipeline from the Phalam River.
Power Generation: An on-site fuel oil power plant is planned for Dombasud.
Material Handling: An estimated 2.3 million tons of waste and 90 kilotons of potentially mineralized material will be mined.

Management Commentary

Jorge Ginosza's Statement: Jorge Ginosza highlighted that the PEA "highlights the strong value Damasud brings to the portfolio." He also emphasized that with permitting and the DFS underway, they are "still online to make a construction decision in the first half of 2026."
Track Record: The speaker noted Fortuna's consistent follow-through on plans, even during market criticism, which builds confidence in their execution.

Technical Report

A technical report is being prepared and will be available on Cedar within 45 days.

Conclusion

The PEA for Fortuna Mining's Diamas gold project demonstrates significant economic potential with strong IRR and NPV figures, supported by a conservative gold price assumption. The company has a clear development roadmap, robust liquidity, and a proven track record of execution. Ongoing exploration efforts are crucial for expanding the resource base and potentially extending the project's LOM, further enhancing its value. The project is progressing through key milestones, including ESIA filing and DFS completion, with a construction decision anticipated in the first half of 2026.