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Transcript

🚨$1 Billion CEO🚨 "Can't MISS" SILVER & Gold Market Dialogue · SILVER / GOLD / $UFD Meme Coin Investing & Global Economics

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  From my perspective, what I need to provide investors with this
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  optionality because we all believe prices should be higher
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  but the big question is when will that happen And and the
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  investors sometimes get frustrated and tired with you
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  know when will this car come, when will this come.
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  And if you're going to invest in a mining company, you want to
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  make sure that that mining company can perform throughout
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  the precious metals price cycle and you can be a safe knowing
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  that your investment is, is is profitable and it's a business
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  that's viable in any price in the at any price in the cycle.
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  Today, we're going to get a unique perspective on the gold
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  and silver market. We're joined by Jorge Gunoza.
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  He's the CEO of Fortuna Silver Mines.
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  There are 1 billion market cap, global intermediate gold and
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  silver producer Jorge's built the company up over the last 10
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  years, so he has a thing or two to say.
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  And think about the gold and silver price.
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  His family's been in the mining industry for generations.
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  Jorge, welcome to Ron's basement.
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  Thank you, Ron. And just a minor correction
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  there, it's been for two next journey, it's been 18 years now.
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  Oh, 18 years? Well, I've I've only, I've only
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  been following for 10. So my my apologies seems like
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  I've imagined sometimes. That seems like only yesterday,
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  right? Yes, Yes, yes.
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  Tell me about it. Yeah.
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  Well, it's impressive what you've done, building the
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  company from, I know, Scratch with the help of some other
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  investors, up to a point now where you have 5 operating minds
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  that practically span the globe. And so I I would think that over
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  the last 18 years you've developed some observations on
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  the precious metals markets. Would you, you know, tell us
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  what you think now when you look at the silver price and gold
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  price? You know, I think as we were
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  talking before, before we jumped into the interview, a precious
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  metals investors are every so often put to the test, right.
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  I think you know, I share the, the view that you know, we
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  should be seeing significantly higher prices.
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  Why? I mean I'm not a, you know,
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  macroeconomic analyst nor nor anything like that.
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  But listen, you know a decade ago, 12 years ago, we were
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  selling or or gold and silver at prices that were very similar to
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  what we're seeing today. That's 12 years ago, right?
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  We were selling prices or or selling price for gold was
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  averaging what, 1900 dollars $19150.
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  Back in 2011, silver was hovering $30.
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  Today silver is closer to 24 and and and gold you know in the mid
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  to low 1900s, right. So you know I am of the view
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  that if if we we we still think of a gold and silver close to
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  record highs on nominal terms, yes.
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  But if we are just for inflation, the prices of the
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  precious metals are significantly lagging, right.
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  Therefore in our industry, in their mining industry what we
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  seen is really margin destruction over the last
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  decade, right. So you know with all that I see
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  out there with the the difficult situation the Fed change faces
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  and you know I I bullish on on on higher prices, when will
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  those materialize that is the the billion dollar question or
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  $10 billion question billion dollars the Fed has made is not
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  much these days, right, right. Come on.
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  We, we come on Jorge, we thought you were going to give us the
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  answer you know right. But you know I I I try to focus
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  more on the things I can manage from you know my cost, the type
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  of assets we get involved with and and things like that.
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  Of course we have a view on on metals, we have to budget every
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  year and we have to make assumptions on metal prices.
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  But when we plan for the business we try to be as
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  conservative as we can on metal prices.
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  Now we might have personal views on the metal and I think that's
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  what we're talking about here. I share the view that prices
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  have fundamentals to be much higher.
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  Why haven't they materialized? We can discuss about that.
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  Yeah, yeah. You know, I want to ask you
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  another question that I think you can offer a unique
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  perspective to our viewers on as well.
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  Your company now operates on 3 continents, is that correct?
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  North America, South America, Africa.
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  Do you bring mine here in Africa and South America?
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  North America? Considering Mexico?
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  Yes. When you're do you see a
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  different appreciation and perspective on precious metals?
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  Outside of the United States, I think in the United States were
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  somewhat discouraged into investing in precious metals.
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  It's not a a regular subject matter with most investment
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  advisors but when you're other places in the world do you see a
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  different level of appreciation for for the precious metals?
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  Yes. And and and I mean I don't have
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  to get the to to imaginative to to see where that appetite is.
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  If we look at the public records for central bank purchases, we
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  see that the central banks have been acquiring gold at record
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  base this past month, right. So absolutely.
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  And even if you go to Europe, right, I was attending a
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  European precious metals focused conference in in Munich in in a
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  few months ago and the amount of interest and an appetite from
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  the Europeans, the Germans mainly was very surprising to
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  me. Right now they have a war right
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  next to to their their their back door right.
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  So you know I think gold in in is is serving its purpose for
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  that crowd right. And the central banks again, the
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  central bank buying has been notably high and close to not
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  close record highs in terms of bank purchases over the last
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  months. And I think and you mentioned
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  this earlier geopolitically in the world right now we're
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  experiencing change like at least in my lifetime we've I've
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  not seen. I I want to get one last
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  comment, general comment on gold and silver, your commentary on
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  this when I look at the bricks and we're hearing about the
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  potential for a gold back currency.
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  If you just take the ick out of bricks, the eye and the sea,
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  India and China combined they have 2.8 billion people which is
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  like 8 times the population of the United States.
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  They also have growing economies.
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  They also have growing middle class and they have, I know in
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  both of those countries, like a huge appetite for silver and
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  gold. It just feels like the move in
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  the world is more towards appreciation or a higher
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  appreciation of silver and gold. Yes.
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  And again, we have to look at the signs on the wall, right?
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  And I think the signs are there. But you know what, this is not
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  new. I've been in this industry long
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  enough. I seen a couple of cycles at
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  least and you know including the one that I believe is brewing
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  right now and I remember in 2002 thousand and one we were, you
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  know in the business mining and gold was trading at $300.00.
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  Perhaps that was misery. That was miserable.
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  And there was complete capitulation with respect to the
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  industry, the sector I mainstream media lambasted gold
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  and and the concept of this archaic relic that gold was, and
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  it was better to to store water than than, you know, store gold
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  to preserve value, right. And I remember all of this and
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  sure enough, there came a moment when gold played its role and
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  and we saw a tremendous bull run from the early 2000s up to the
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  peak in 2011, right. And and it was a tremendous bull
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  market for the sector in those days, right.
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  And today the floor from where we are having these discussions
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  is completely different, right. Again, we're trading at nominal
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  highs close to nominal highs. So I believe that you know there
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  is potential for significant appreciation and we're far from
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  what I seen as as a as a really bad market if you will.
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  But from from my perspective what I need to provide investors
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  with this optionality because we all believe prices should be
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  higher. But the big question is when
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  will that happen and and investors sometimes get
• 11:26
  frustrated and tired with you know when will this car come,
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  when will this come. And if you're going to invest in
• 11:34
  a mining company, you want to make sure that that mining
• 11:36
  company can perform throughout the precious metals price cycle.
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  And you can be safe knowing that your investment is, is is
• 11:48
  profitable and it's a business that's viable in any price in
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  the at any price in the cycle. So when the theory does
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  materialize and we see this, this run in the metal, the
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  miners serve their purpose and provide that big leverage to the
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  investors the and that's why you invest in that in, in in mining
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  equities, right, looking for that leverage against if if you
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  know gold price moves 10/15/20 percent today minors I think are
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  going to just go through the roof, right.
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  Yeah, Yeah, you you've accomplished a lot in your 18
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  years. I have a whole page of notes
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  here regarding you know past and now just even current updates
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  with the company. You just put out your production
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  results for Q2 93,400 gold equivalent Oz.
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  It feels like you have positioned the company.
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  To benefit right from this potential future price
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  appreciation that we might get in gold.
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  But even in the current environment, it feels like to me
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  that you've built a a machine or an enterprise that that even in
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  today's prices can can do well, it's generating cash flow.
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  I mean are there any highlights that you want to want to touch
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  on with what's going on currently?
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  Yes. And and the main one is that
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  over the last two years we've been working hard at seeding for
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  tunas growth for the next decade or two and that is or Segala
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  project or Segala mine in the second quarter of this year or
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  or new mine only contributed 4000 ounces of gold to that
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  figure that you just shared with the audience 93,000 no.
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  So almost you know less than 5% of of the oz, 4% of the oz were
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  contributed by our new mine which in the third quarter
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  should have a more more stable production and we should benefit
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  from more weeks or first gold. And this mine was poured on May
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  24th, so we had only what five weeks of ramp up and and a bit
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  of production in the quarter. So the third quarter should be
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  much stronger and the 4th one even even better, right.
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  And and so we've been investing over the last two years and it's
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  only now that we're starting to harvest and Segela is a
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  magnificent project with you know ticks all the boxes, low
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  cost, meaningful production, long life of reserves, exciting
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  exploration upside. So it's it's our flagship asset
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  and it's only coming to production now.
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  The average only sustaining cost, these are figures that the
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  World Goal Council produced just recently in the first quarter.
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  That's the latest figures we have from the World Goal Council
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  for Q 1/20/23. The average the the median gold
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  production. The average gold production came
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  in at almost $1400 per oz. No.
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  Of all global gold mine supply. Half of global mine supply you
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  know came at around 1500 fourteen $100.
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  Segela will produce gold that you know.
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  We expect that one stable at around $1000.
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  You know I want to circle back to something you said earlier.
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  When you were talking about the growth of the company and you
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  said the last two years, you've been seating the company for the
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  next 10 years of growth. And I and I had a little
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  internal chuckle like, oh, you mean you know, of course you
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  watched the quarter by quarter numbers, but that's the feeling
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  I get about Fortuna and I am a investor myself and the company
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  is that you are making longterm decisions.
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  And I feel like the acquisitions, the Rocks Gold
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  acquisition which brought you the Seguela mine and the Burkina
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  Faso operations that and even this most recent announcement of
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  the acquisition of Chesser Resources and Senegal that that
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  that you put a high focus on quality that these are longterm,
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  you have a longterm vision for the company.
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  To continue to grow over the next 18 years, is that, is that
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  a safe assumption? You know, yes, all of the minds
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  that over the last 18 years we have wired and brought into
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  production are still in production today.
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  Interesting. Yeah.
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  All of the minds that we acquired and brought into
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  production are still in production today.
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  I think in an ever depleting business, that's something,
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  right? We make mistakes.
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  Yes, we do. You know, every time we make a
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  judgment on an asset or whatever, we make mistakes,
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  sometimes we do. We just try to make our
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  mistakes, keep our mistakes small, right?
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  But you know all of our minds are in production and all of
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  them still offer exploration opportunities potential.
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  And again I think the future looks bright for us and and we
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  see a lot of optionality in our portfolio, right, particularly
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  in West Africa these days. I'm quite excited.
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  You know by no means we giving up on Latin America, no, by no
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  means. We're still very committed
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  exploring looking for opportunities.
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  But we open the field, we open the field for us going to West
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  Africa and I I see a lot of organic brownfields type
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  opportunities in the portfolio and and a lot of Greenfield
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  opportunities as well. Interesting.
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  Interesting. You always.
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  Talk about the people 5500 employees at Fortuna.
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  Is that part of your of your secret?
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  Because I want a point. I want to give you a big
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  compliment. I think I've.
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  I've done this couple times in the past, but it bears
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  repeating. You know, a lot of silver mining
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  companies that I follow very closely over the last 5-10 years
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  have attempted to move into gold mining, to diversify into gold
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  mining and almost all of them have been met with.
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  Severe challenges, I'll put it that way.
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  And I don't want to name any names of these other companies
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  you have delivered time after time, even when at one point I
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  know when the Rocks Gold acquisition was announced, there
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  was some skepticism in the market.
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  But now we're seeing Seguela come to fruition.
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  I guess I want to ask you, you know is there is is there a
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  secret or is there what what would you attribute you and and
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  and with the help of the 5500 employees you have there,
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  Fortuna to your ability to consistently deliver.
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  Yeah they they work for six 5500 a lot of those over half of that
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  is, is contractors you know that work at our minds which we
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  should view as our partners right.
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  We, we, but we manage a workforce 5500 and yeah, you
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  know, absolutely people is everything.
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  This is a complex risky business and you know.
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  In a in a company like Fortuna today, I think or or or first
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  job is to to develop the strategy.
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  No, that's my responsibility. Develop the strategy.
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  And with that then make sure that we have the right people in
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  the right place. Right.
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  And I am what's my secret? What's the company secret?
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  It's good people, no good committed people.
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  You know we our business is complex is finding funding,
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  developing, permitting operating minds in developing regions.
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  So the geopolitical complexity of those regions is, is, is
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  high. So we not only need good mining
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  engineers, good explorers, but also people who can deliver in
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  those complex geopolitical environments, right.
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  And I think that's what I do. I focus a lot of my time on that
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  on on who should we be working with and I'm fortunate to to be
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  you know together working with a with a senior executive team of
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  seasoned professionals committed who share the long term view of
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  the company and and contribute to the strategy every day and
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  the short term delivery as well, right.
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  So yeah, people is is keen. Also today we have in our team
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  Peruvians, Canadians, US Nationals, Australians,
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  Ivorians, working Navies, Argentinians, Mexicans like
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  diverse. The United Nations, right?
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  Yeah, it's. But, you know it's so rich.
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  It's a diverse team. We've been working hard to
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  expand the the the presence of women in the in the workforce.
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  So today your board has almost 40% women in the composition of
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  the board or management team in in the management team across
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  the company we have about 19 close to 20% female
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  participation and that also you know and and and it's not just
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  females female from different jurisdictions coming here
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  through different walks of life bringing all of that experience.
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  So. So it's very rich very diverse
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  and and that that's something I'm particularly proud of right
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  and and and we try to keep it keep everybody humble and and
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  and try to keep politics to them very minimum.
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  So yeah, all of that's working well and you know.
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  Keep your heads down and like you said, have a longterm
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  strategy. You always strike me as A and
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  this is our fifth or sixth conversation as a very humble
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  person. I also want to mention, you
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  know, I interact with other people at the company, Carlos
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  Bacas, Adam Sherkus, Sylvia, who I think works with you and
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  everybody I deal with is just strikes me as being very high
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  quality, very responsive. Very high quality people and you
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  know that's that's an intangible factor, but to me that means a
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  lot that that these these people you can just sense care about
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  the company and and do a great job.
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  So you know on behalf of my viewers and everybody who joined
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  us today, Jorge, you know you shared a great deal of
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  information with us, your view of the overall precious metals
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  market, but I think gave us a good inside glimpse of.
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  Of where Fortuna has been and where they're heading.
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  Is there anything else that I that I forgot to ask you about
• 24:24
  that you want to mention? I know the second quarter
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  earnings are coming up. Any any anything I forgot to to
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  bring up? No, no, I think we touched on
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  the main things and and I think we all look with a lot of
• 24:38
  anticipation to to what's coming in the near future.
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  You know on Fortuna because what we have in the pipeline and you
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  know with what's happening with the macroeconomics and and and
• 24:55
  the perspective for the underlying commodities that we
• 24:58
  mind silver and gold right. And I think we are all looking
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  with a lot of anticipation to what is unfolding there.
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  That's outstanding. We'll look forward to hearing
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  from you more in the future. I almost forgot if I could ask
• 25:14
  you one small favor. I have a gentleman who helps me
• 25:17
  a lot with the channel. He's very smart, he's very
• 25:20
  analytical and he really likes you.
• 25:23
  And he must have asked me 10 times to make sure that I tell
• 25:25
  you that coin shop Chris says hello to Carlos and he he gives
• 25:29
  you a big thumbs up. I'll let him know.
• 25:32
  Thank you for that. Yes, yes.
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  Well, Carlo, I'm sorry, Jorge, I apologize.
• 25:38
  Thanks for your time, Okay, and we'll look forward to talking to
• 25:42
  you again in the future.