I had the opportunity to connect with the CEO of a fast growing Latin American silver producer yesterday, Jorge A. Ganoza, President, CEO, Director and co-founder of Fortuna Silver Mines Inc. Jorge has taken the company from a $30 million market cap, to over $500 million where it stands today.
During our interview, Jorge shared insight into the social & governmental environment in which the company is operating. At a time when other companies around the world are losing assets and production to nationalization and socioeconomic unrest, Fortuna appears to be bucking that trend.
According to Jorge, most locals surrounding the company's two mines either raise Alpaca for a living, or they face severe water supply challenges. By creating solutions (ie. by providing fresh water, & health/education opportunities) the company is able to build and maintain positive community relationships.
I asked Jorge about the prospect of growth for the company and the value to be had in the junior resource space. He indicated that, “We are aggressively looking at new growth opportunities. There are two avenues for growth, one is organic…[however] today we feel that our assets are close to optimum rates of capacity. On the inorganic growth side, M&A, we are aggressively out there in the market looking for opportunity, and we intend to focus our research on the post-discovery development stage opportunities where we can deploy our capital.”
He further added that, “Today I think there’s more room to find value with the exploration companies that have a resource, a discovery, and are struggling to fund."
In speaking to the acquisition “war chest” Jorge said that, “Fortuna has a robust treasury, we have in cash over $60 million, and we have a credit facility of $20 million that we’re extending to $40 million. So that gives us a cash availability of roughly $100 million---plus we expect cash from operations of around $70 million next year.”
Lastly, when asked about potential acquisition deal sizes being in the range of $80-$150 million, Jorge said,“Yes[that's correct], and even more. We are open to larger acquisitions, we can use our equity as a means of payment…we’re open to bigger opportunities as well…we have the cash and the paper to do it.”…
This was a powerful interview with one of Latin America’s fastest growing silver producers. To listen to the full interview on BullMarketThinking.com, visit the link below:
Interview with Fortuna Silver Mines CEO, Jorge A. Ganoza
Best,
Tekoa Da Silva
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