Latest / SILVER / GOLD / $UFD Meme Coin Investing & Global Economics / **Market OPPORTUNITY?** Fortuna Silver Mines STRONG AS EVER!... (Silver and Gold Price)

Transcript

**Market OPPORTUNITY?** Fortuna Silver Mines STRONG AS EVER!... (Silver and Gold Price) · SILVER / GOLD / $UFD Meme Coin Investing & Global Economics

• 0:00
  It sounds like a great deal. And is it, is it because of kind
• 0:03
  of where you've positioned the company now that you were
• 0:06
  actually able to do this? Absolutely, Ron.
• 0:09
  We are placing this note and this convertible and and and
• 0:14
  being able to do this effectively in the market
• 0:18
  because we're doing it a moment of strength.
• 0:25
  With a recent financing announcement by Fortuna Silver
• 0:28
  Mines, the market reacted with a quite a sharp downdraft in the
• 0:33
  stock price. Today, we're joined by Jorge
• 0:35
  Ginoza. He's the CEO of Fortuna Silver,
• 0:39
  and we want to clear a few things up.
• 0:42
  He's gonna share with us his insights into why they made the
• 0:46
  decision to do this financing and what the strategy behind it
• 0:50
  truly is. Jorge, welcome to Ron's
• 0:52
  basement. Ron, thank you once again for
• 0:55
  the opportunity to speak to your audience.
• 0:58
  So to to dig into your question, yes, we, we announced yesterday
• 1:07
  a placement of a convertible note.
• 1:13
  So what prompted us to do that? Well, we've been telegraphing
• 1:17
  the market and more than telegraphing, communicating
• 1:20
  directly that one of our capital allocation priorities, 1A big
• 1:28
  focus for us is strengthening the balance sheet.
• 1:32
  But even further, more than strengthening, we believe that a
• 1:36
  mining company at times like this needs to put together a
• 1:39
  fortress balance sheet. You know a balance sheet that
• 1:42
  sets you for the future, allows you to mitigate risks for the
• 1:46
  business, allows you to capture the opportunities that emerge in
• 1:50
  the jurisdictions where we operate as well.
• 1:53
  So what have we done with this? Well, effectively we have a
• 1:57
  corporate revolving credit facility for which we pay 7
• 2:05
  point almost 8% interest. No.
• 2:09
  And through this convertible, we are going to use the proceeds,
• 2:14
  the 150 million to pay down the entirety, not all of the bank
• 2:21
  credit facility and are exchanging almost 8% debt for
• 2:27
  375% no. So we are improving our, our,
• 2:36
  our cost of capital and the instrument we're using is a
• 2:40
  convertible note, which in five years could potentially be
• 2:45
  converted to shares of a company by the holders.
• 2:48
  Either we pay the principal or the notes are converted, which,
• 2:56
  you know, it's a flexible facility.
• 2:59
  It doesn't come with restrictive covenants.
• 3:03
  People need to understand, your audience needs to understand
• 3:07
  that, you know, a corporate facility like the one we had in
• 3:09
  place was quite restrictive in the covenants.
• 3:13
  No, it's really limits the company on for example, return
• 3:20
  to shareholders limits or liquidity at times of you know
• 3:30
  issues. I'll give you an example.
• 3:33
  Last year when our shares were trading at $2.70, we have a
• 3:40
  share buyback program in place and we were very keen to
• 3:44
  participate in the market and buyback or stock, which is a
• 3:48
  smart way to return to shareholders and we could not do
• 3:52
  it because the covenants of the facility restricted us from
• 3:57
  doing that. Right.
• 3:59
  So, so it was very painful for us to see the share price of
• 4:03
  $2.70 and not being able to do a repurchase of shares by the
• 4:10
  company. But you know, those are the type
• 4:13
  of missed opportunities that we had due to the restricted
• 4:17
  covenants in the facility. With this new convertible note,
• 4:22
  we're not only lowering the coupon the the interest rate on
• 4:26
  the money, but also getting rid of all of these restricted
• 4:33
  covenants that the banks put in place, right?
• 4:37
  OK. OK.
• 4:37
  So I think it's important for our viewer and I'll reiterate it
• 4:41
  and repeat it. Essentially, and you correct me
• 4:43
  if I'm wrong, Jorge, you are replacing kind of high interest
• 4:48
  rate debt with a lot of restrictions attached to it.
• 4:51
  You're replacing that with a lower interest rate debt, almost
• 4:55
  half interest rate, 50% saving and it will allow you much more
• 5:01
  flexibility. Are you able to do this now?
• 5:07
  Because I mean, when I look back at the performance of Fortuna
• 5:11
  financially, operationally over the last nine months, 12 months,
• 5:17
  things have been going very well for the company, generating huge
• 5:20
  cash flow. There's a lot, you know you paid
• 5:23
  back. You paid off over $120 million
• 5:26
  in debt over the last nine months.
• 5:28
  I think it is. Is that given you this the
• 5:32
  platform from which now you were able to, I mean, to me this
• 5:36
  sounds like a great deal, right? I'm an accountant, I believe.
• 5:40
  And you know, limiting expenses, I think, yeah, that's kind of
• 5:43
  common sense for everybody. But it sounds like a great deal.
• 5:46
  And is it, is it because of kind of where you've positioned the
• 5:50
  company now that you were actually able to do this?
• 5:54
  Absolutely, we are placing this note and this convertible and,
• 5:59
  and, and being able to do this effectively in the market
• 6:03
  because we're doing it a moment of strength, right, not a moment
• 6:08
  of weakness right now. For, for note, we went to the
• 6:14
  market to raise $150 million in debt through the convertible and
• 6:21
  we had, we got $500 million of interest for the notes.
• 6:28
  So it was in the debt market, if you will.
• 6:33
  It's, it was a big success, you know, grossly oversubscribed.
• 6:40
  We got really good terms, the lower cost of capital and again
• 6:46
  we we're doing this at a moment of strength.
• 6:48
  Let me let me help you put a scenario in front of you so your
• 6:55
  audience perhaps can can understand better.
• 6:57
  Yes, we are generating very healthy cash flows and we've
• 7:00
  been paying every quarter about $40 million on on debt.
• 7:05
  We're not a highly debt leveraged company anymore or
• 7:07
  debt is 0.4 times EBITA. A typical covenants allow you to
• 7:15
  go as high as three times debt to EBITA.
• 7:20
  We're at 0.4. So you know, we're a company
• 7:26
  that generates almost a billion dollars in revenue this year.
• 7:31
  And we are you know, doing a, a, a debt restructuring for 150
• 7:37
  million and the shares in the market sold off as as if a
• 7:41
  tailings facility had failed. You know the type of market
• 7:46
  reaction was yesterday as if you know there was a fatal flow in
• 7:52
  the business, a catastrophic event that one of our minds that
• 7:57
  was the type of market reaction because a a company that
• 8:01
  generates a billion dollars in sales is changing 8% debt for
• 8:07
  375%. No, that's the that.
• 8:12
  Now let me let me paint a scenario.
• 8:17
  Currently 35% of our NAB is assigned to the Segala mine.
• 8:24
  And I think that mine will increase in its participation in
• 8:29
  our NAB over the coming 1224 months because we're doing
• 8:33
  really good at that mine. We're finding more ore, the
• 8:36
  plant is processing more so the the net asset value contribution
• 8:41
  of that mine to the net asset value of the entire business.
• 8:45
  I think we'll get probably closer to 40 or even 45% now.
• 8:52
  What happens if we have a clagmatic event flooding?
• 8:58
  What happens if we have a geopolitical event, a coup
• 9:02
  d'etat in Cote d'Ivoire? What happens if we have a
• 9:06
  technical operational failure, let's say or, or or bone mill or
• 9:11
  sack mill that brushes the rock, has a technical failure and is
• 9:18
  out of line for a month, two months.
• 9:21
  What happens? What happens first is that our
• 9:23
  cash flows will be impacted. Second, the shares will come
• 9:28
  down, will drop. And 3rd, our balance sheet will
• 9:35
  be impaired because the restrictive covenants of the
• 9:38
  facility that we've been working with will not allow us to tap
• 9:42
  into the the credit line will restrict us.
• 9:46
  No, those are. So you know what I want to say
• 9:50
  to you here is that when things are good, everything is rosy.
• 9:54
  But we as management need to place ourselves in every
• 9:58
  scenario and a scenario where the Segala mine has a an issue
• 10:04
  to contest with that will impact our cash flows, it will impact
• 10:09
  the share value of the company and will impact our credit
• 10:12
  facility. So we will be in a very
• 10:16
  difficult spot to contest with the challenge that we would be
• 10:21
  facing. And again, it could be a
• 10:23
  climatic event that your political event, a technical
• 10:26
  failure, you know and those are scenarios we face ourselves.
• 10:32
  So what we're doing right now is removing this restrictive
• 10:38
  covenant heavy great facility that is expensive, you know
• 10:42
  almost 8% and and renewing it for one that has almost an
• 10:48
  interest rate of 375, you know almost 1/2 of of that of what
• 10:54
  we're paying that right now and has no restrictions.
• 10:57
  We're not not restricted to use the cash at hand.
• 11:01
  So we're managing risk for your business.
• 11:06
  Yeah, protecting, protecting the capital of the company,
• 11:10
  protecting the capital of the shareholders as.
• 11:13
  Well and using the balance sheet, shielding the balance
• 11:16
  sheet, so in case there is any such events we can operate and
• 11:22
  deal with the issue, right. That's why it's important.
• 11:27
  You know mining is a capital intensive business.
• 11:31
  It's a complex business as I just described.
• 11:33
  We're exposed to all sorts of risks, operational, climatic,
• 11:40
  geopolitical, social and. Having a strong.
• 11:48
  Balance sheet, having a strong balance sheet is key and and we
• 11:54
  are coming out of a capital intensive phase and what we're
• 11:57
  doing is consistent with what we've been telling the market.
• 12:01
  We want to put in place a fortress balance sheet that will
• 12:05
  shield their business in case anything happens and also a
• 12:09
  balance sheet that will allow us to capture opportunities as they
• 12:13
  emerge. Yeah, Yeah, right, right.
• 12:16
  Yeah, No, that's, that's, I've been investing in mining
• 12:19
  companies for long enough to realize that all types of
• 12:23
  different things can happen. And while, while we don't want
• 12:26
  to think about the worst case scenarios unfolding right from
• 12:30
  time to time, they do. And you want to have a company
• 12:34
  that's not so leveraged or is, is not in a position where they
• 12:39
  can't adjust to, to whether you know any, any, any of the myriad
• 12:45
  of, of, of issues that could come up.
• 12:47
  But you all, like you said also, it also positions you to capture
• 12:52
  other opportunities as they come along as well.
• 12:54
  Yeah. Again, a a real example of what
• 13:00
  we've been dealing with. Last year, the shares were at
• 13:03
  $2.70. We had a share buyback program
• 13:07
  in place under which we could execute and we couldn't because
• 13:11
  of the lawsuits we had in Mexico.
• 13:14
  That by the way, never stop the mind for a day.
• 13:18
  The Mexican operation never lost one day of operations because of
• 13:22
  all of that nonsense and and the issues we dealt with with with
• 13:28
  the Mexican environmental authority.
• 13:31
  We have never lost one day of operations.
• 13:33
  But only the fact that we had a lawsuit that we had to contest
• 13:38
  with precluded us, precluded us from doing a share buyback and
• 13:44
  return to our shareholders at a moment where was a strategic to
• 13:48
  do it with the shares at $2.70. So, you know, that's just an
• 13:55
  example of an event that we have to contest with recently.
• 13:59
  Right, Yeah, yeah, yeah. And I, and I want to point out
• 14:02
  as well, you know, you've been building this company over
• 14:06
  almost 20 years now. And you, you brought up the
• 14:09
  example of Mexico for our viewers who aren't aware, but
• 14:12
  there were some permitting, permitting, I don't want to say
• 14:17
  issues, but just permitting challenges over maybe it was two
• 14:21
  years ago where Jorge, Jorge and I both got more Gray hair during
• 14:26
  the period because there were very just unbelievable issues
• 14:32
  that were brought up by, but you managed the company through
• 14:34
  that. And like you said, you never,
• 14:38
  you never shut down the mine for one day.
• 14:41
  But what I want to point out to the viewers during that period,
• 14:43
  'cause I, I own the stock now and I owned it then, there were
• 14:47
  times when the, I think the market overreacted and the stock
• 14:51
  dropped significantly, right? But you, you know, based on your
• 14:57
  experience and your, your, your leadership and management
• 14:59
  abilities and your team as well were able to manage through that
• 15:03
  and manage that process. The other thing I I want to
• 15:05
  bring up regarding what I would call market misinterpretations,
• 15:11
  which I really feel like happened yesterday.
• 15:13
  The market misinterpreted what I think was a great thing, a great
• 15:17
  move by Fortuna was when you made the decision to acquire
• 15:20
  Rocks Gold almost three years ago and which turned out to be a
• 15:26
  fantastic decision for the company.
• 15:29
  But I, I, I distinctly remember that when the announcement was
• 15:32
  made, the market didn't quite understand it all.
• 15:36
  And there was a, there was a big drawdown in stock price, right?
• 15:40
  And now three years later, we look back and that's, I think,
• 15:44
  you know, unanimously everyone agrees was a great decision on
• 15:48
  on, on your part in the leadership of Fortuna.
• 15:52
  Thank you for that comment because you know, again it was
• 15:57
  June, July 20. No, the announcement was in
• 16:02
  April of 2021 at the stock of of the Rock School acquisition and
• 16:07
  the stock dropped as again we had a catastrophic failure.
• 16:11
  Well, we, we are used to taking the long term decision.
• 16:15
  So we knew to get out of the hole and get our stock price up
• 16:21
  again, we just needed to you know put our hard hats on and
• 16:24
  get to work at that mine and and do the integration and get to
• 16:28
  work. And there were some legitimate
• 16:31
  concerns at the time regarding our ability to integrate our W
• 16:35
  African business, our ability to build the Segala mine and all of
• 16:41
  those things. Well, we over the last three
• 16:43
  years that's exactly what we did.
• 16:45
  We did it on time, on budget, with success.
• 16:50
  And now people say, Oh yes, that was a great move.
• 16:53
  You know, I laughed. I laughed like you said inside
• 16:56
  of me. I laughed because a lot of those
• 16:58
  same people were tremendously critical.
• 17:02
  And now they say it was a good decision.
• 17:04
  And yesterday with something that makes the world of sense
• 17:08
  strategically, we have a Fortuna that's financially we achieved
• 17:14
  our objective of putting together a balance sheet.
• 17:16
  We have by the end of the year we'll have about $380 million of
• 17:21
  available liquidity to the company without many give us
• 17:29
  freedom to manage the complexities of the business and
• 17:32
  capture the opportunities that will emerge in the jurisdictions
• 17:35
  where we operate. And yesterday, the stock of the
• 17:38
  company unfortunately dropped 14%.
• 17:41
  At the end of the day, it was down as much as almost 20 and he
• 17:45
  rebounded, He closed it down close to 1314%, but traded as if
• 17:50
  there was a catastrophic event. That's what I'm saying.
• 17:52
  No, as we, you look at the share performance and say these guys
• 17:56
  had a tailings failure, you know, a mine collapsed, the pit
• 18:01
  wall collapsed, you know, something like that.
• 18:06
  You know, and, and again, I think there was some technical
• 18:10
  selling driven by the the hedge funds.
• 18:13
  There was momentum selling, there was emotional selling and
• 18:20
  then some guys who just don't know what they're doing and they
• 18:22
  just sell for selling. But there was a bit of
• 18:26
  everything yesterday. Yeah.
• 18:29
  And but today the stock is rebounding.
• 18:30
  And then I have no doubt that you know for two nights better
• 18:35
  and stronger after this and and the stock will will come back
• 18:41
  strongly. I don't have a.
• 18:44
  Doubt. Yeah, when I and I think it you,
• 18:46
  you mentioned something earlier that I thought was really
• 18:48
  interesting #1 the, the, the interest rate on these
• 18:53
  convertible notes is really low, 3.75%.
• 18:57
  But what you said was that there was almost a a 1/2 billion
• 19:03
  dollars, $500 million in interest in these notes
• 19:08
  oversubscribed. I'm not an expert and you know
• 19:11
  debt issuance or anything like that.
• 19:13
  But but I would think that that are, are we correct in kind of
• 19:19
  connecting the dots and reading between the lines that the, your
• 19:23
  ability to secure such a low rate on the debt coupled with
• 19:28
  that, you know, half billion dollars in interest of of people
• 19:32
  that wanted to buy that, that indicates that the market
• 19:36
  perceives Fortuna also as being strong.
• 19:39
  Does that make, it wasn't like it was under subscribed, it was
• 19:41
  vastly oversubscribed and you were granted a, a what I think
• 19:45
  is a a low competitive rate. We are granted a very
• 19:50
  competitive rate and the oversubscription, you know, I, I
• 19:53
  spent with our CFO 3 days of, of, you know, back-to-back
• 19:58
  meetings with investors interested in, in purchasing the
• 20:05
  notes. And you know, after that the
• 20:11
  outcome was that we were, you know, tremendously
• 20:15
  oversubscribed. We went to raise a, you know,
• 20:18
  and of course the backers were saying why don't we upsize that
• 20:21
  and take more money. And we were saying no, what we
• 20:23
  need is $150 million. And that is what we believe is
• 20:27
  right for us because we could have taken 203 hundred, we could
• 20:31
  have upsized it as much as we wanted.
• 20:33
  There was $500 million worth of interest.
• 20:36
  And I think that's a big word of confidence on the on the
• 20:40
  fundamental strength of the company.
• 20:42
  At the same time, as I say, the market was selling off as there
• 20:46
  was a a catastrophic thing. Right, right.
• 20:51
  And there and there, I know there are and it's not an area
• 20:54
  that I honestly completely understand.
• 20:56
  But I know that when these financings go through and
• 20:59
  they're convertible to shares at some point potentially in the
• 21:03
  future, sometimes there's interest in, in certain entities
• 21:07
  shorting the stock. And I know there was huge volume
• 21:10
  yesterday. So you know.
• 21:12
  Yeah. Yes, there was yes.
• 21:15
  And, and when you place instruments like this, it is not
• 21:18
  uncommon to see particularly hedge funds that take place in
• 21:23
  the in the placement shorting the stock to lock their, their,
• 21:30
  their pricing. But there was certainly we, we,
• 21:36
  we placed what, $20 million worth of, of notes.
• 21:41
  No, we traded $100 million yesterday.
• 21:49
  You know, so there was certainly the hedge funds can hedge, but
• 21:54
  not $100 million, they'll hedge, I don't know, 20-30.
• 21:58
  So there was certainly, you know, I think momentum traders,
• 22:03
  you know, when they see momentum, they just can't
• 22:07
  emotional trading guys looking at the stock coming down and
• 22:11
  they're just getting out and you know, things like that.
• 22:14
  But you know what, it would be ill advised to run a mining
• 22:20
  company or any company to that end, looking at the share price
• 22:24
  on a day. No, I, I again, or, or what we
• 22:30
  think wrong is what are the risks of the business?
• 22:34
  How do we mitigate the risks for the business?
• 22:37
  What, how, how risk averse are we?
• 22:40
  Are we for, for some of the risks?
• 22:43
  How, how you know how much risk appetite we have for some things
• 22:48
  and the opportunities out there for us to create more value,
• 22:53
  fundamental value and then and then strategically act upon
• 22:59
  them. And as I said, putting together
• 23:02
  a fortress balance sheet is important for a company like us
• 23:05
  who operates in five, 6 distinct jurisdictions with their own
• 23:10
  sets of challenges, right from geopolitical to, to operational
• 23:18
  to climatic, all sorts of risks, right?
• 23:22
  So that's if, if the share drops on a day and sometimes we have
• 23:29
  to do a better job communicating.
• 23:30
  And that's a criticism that I can take.
• 23:33
  But I think we've been saying very clearly we're looking to
• 23:37
  strengthen our balance sheet and this is a move in that
• 23:39
  direction. And I, and I and, and, and right
• 23:42
  now today you're communicating. I know you talked with Chris
• 23:47
  Marcus and Dave Cransler earlier.
• 23:49
  I think it's great that you are willing to get out there and
• 23:52
  communicate with the market as to what the strategy behind this
• 23:56
  move is and why it makes sense. Because you know, if we want to
• 24:01
  talk about something that I think will make us full smile
• 24:03
  right now is, you know, the precious metals prices are way
• 24:07
  up and I would imagine that's benefiting the company as well.
• 24:13
  You know we were selling gold in at the end of last year or
• 24:17
  average price for that last quarter of the year was
• 24:19
  $1990.00. In the first quarter of 2024, we
• 24:25
  realized 2000 and 8487 dollars. Today gold is trading strongly
• 24:33
  about $2300 not 2324. So yes, we are in a great
• 24:40
  position to benefit from from from the race rising in in metal
• 24:44
  prices. Our business is doing well.
• 24:48
  Mines are performing along in line with our expectations.
• 24:53
  So our three capital allocation priorities is balance sheet.
• 24:58
  We have just I believe achieve putting together that fortress
• 25:02
  balance sheet harvesting the portfolio or organic growth
• 25:08
  opportunities. We have this year our largest
• 25:13
  exploration budget on record forty $142,000,000.
• 25:17
  I just spent almost 15 days in Africa visiting our our our
• 25:22
  mines or exploration project and we're coming out of that and
• 25:29
  looking to expand our exploration budget by another
• 25:32
  five, $6 million. We have a very exciting
• 25:35
  discovery at the Seguela Mine. It's named Kingfisher.
• 25:40
  We already had an announcement on that.
• 25:42
  It's a public announcement and a news release, but I believe
• 25:46
  Kingfisher has the potential to be a very significant resource
• 25:52
  and eventually reserve. We're going to continue
• 25:56
  drilling. We're extending our budget,
• 25:58
  expanding our budget so we can continue drilling Kingfisher
• 26:01
  with two rigs all the way into year end with the aim of
• 26:05
  producing the first resource estimate at this one deposit.
• 26:09
  So it's a new blind discovery. We're very excited about it and
• 26:14
  I believe it can potentially have a meaningful contribution
• 26:18
  to production eventually successful exploration, but it's
• 26:23
  looking very good and just lots of opportunities there.
• 26:28
  And, and and that's the the capital that supports all of
• 26:32
  that. It's a priority.
• 26:35
  Last opportunistic M&A, opportunistic participation in
• 26:41
  the market on share buybacks. That's the instrument we have
• 26:45
  today at hand to return to our shareholders.
• 26:49
  But again, you know, I, I, I don't follow, you know, Twitter.
• 26:55
  I have a Twitter account by the way, but I don't, but you know,
• 26:58
  I'm not very active there. But it's funny to see with the
• 27:02
  drop in the share price, there was some people saying, you
• 27:06
  know, that we were buying shares and now we're selling shares.
• 27:12
  And I'm like, you know, some, some, some guys just don't get
• 27:16
  it right. We were buying shares when the
• 27:19
  share price was at $3. Yes, that's what you should do.
• 27:24
  Yeah, good, Good move. Certainly we we were buying our
• 27:27
  stock back at 3 dollars, $3 from 3 to $3.40.
• 27:33
  We were very active in the market.
• 27:35
  We bought a million shares. I would have liked to buy more
• 27:38
  as I said when the stock was at 2270.
• 27:41
  But, and nevertheless, and then we are issuing this note with a
• 27:47
  strike price or or conversion price of $6.60 and you know, in
• 27:57
  five years and we have the option to pay it down, you know.
• 28:07
  So you know, and then, then some guys also saying that there is
• 28:13
  management doing an equity placement or raising money to
• 28:19
  pay salaries to pay their salaries.
• 28:21
  I mean, I, this just, I have, I, I, they humor me with those
• 28:27
  things. Fortuna, it's a company that
• 28:29
  generates revenues of about a billion dollars a year.
• 28:33
  We operate with a EBITDA margin of 42% today.
• 28:38
  We certainly do not need a $150 million of debt placement to
• 28:45
  fund the salaries of management by any means.
• 28:49
  Right, right. And I, I think you brought up a
• 28:55
  great point because I'd, I'd been several people reached out
• 28:58
  to me as well like, well, why were they buying back stock?
• 29:01
  And now they're issuing stock. And correct me if I'm wrong on
• 29:04
  this, but the, the, it's the, the, the new stock won't be
• 29:08
  issued unless it's converted. And that would be at some point
• 29:12
  in the future. And like you said you were
• 29:15
  Fortuna was buying back stock at $3 per share and and the
• 29:21
  potential if the stock even does get issued, it would be at more
• 29:26
  than twice that level. So I think that's a pretty good.
• 29:30
  Very simple. Shepherding of shareholder
• 29:32
  capital, right? Very simple.
• 29:35
  You just explain it better than that.
• 29:39
  No, we were buying stock at $3 and and cancelling the stock,
• 29:44
  you know creating value for shareholders through that
• 29:49
  instrument. And then under the current note
• 29:57
  in five years in 2029, those notes could be converted no to
• 30:06
  shares or depending on scenarios, we can pay the
• 30:13
  principal and and cancel them right without the conversion.
• 30:19
  So but you buy shares when you believe you are undervalued.
• 30:26
  From the perspective of NAV, no, we don't trade.
• 30:31
  I look at NAV, I said I do not NAV assessment and net asset
• 30:35
  value assessment when I decide to to do these things and we as
• 30:39
  a company, we decide to do these things and at $3, we saw a lot
• 30:45
  of value and at $6.60, I believe we should be comfortable with
• 30:51
  taking the risk that five years from now perhaps we can convert
• 30:56
  or pay it down depending on the scenario.
• 30:59
  Yeah, yeah. And, and, and in the interim,
• 31:01
  I'll repeat one more time, reducing your interest rate that
• 31:06
  you're paying on debt by almost 50% or maybe even a little more
• 31:11
  than than 50%. You always, I followed the
• 31:14
  company for years and years. I always believe that you're,
• 31:19
  you, you have the courage and, and the rest of the management
• 31:22
  team as well to make good strategic long term decisions.
• 31:29
  I think often times in a, in a world in which we live where
• 31:33
  everything is managed week by week or quarter by quarter, that
• 31:37
  can sometimes not be appreciated by the market.
• 31:40
  But I I believe that in the long run, that's what wins the race
• 31:46
  and and you've proven that over and over.
• 31:48
  You you touch a very important subject.
• 31:50
  I think I find one of the most difficult aspects of my job as
• 31:58
  ACEO Chief Executive officer of a company and is balancing the
• 32:05
  long term decisions that you need to make with the, you know,
• 32:09
  short term pressures of the market.
• 32:12
  And, and I respect our our, our shareholders.
• 32:15
  I respect your investors and I do know that, you know they are
• 32:19
  very sensible to quarterly performance, quarterly share
• 32:25
  performance. They're fund managers that are
• 32:27
  measured quarter by quarter. But we are in the middle having
• 32:33
  to make those long term decisions and sometimes you know
• 32:37
  balancing the those short term market pressures and that's a
• 32:41
  very difficult thing to do. And, and, and sometimes we, we
• 32:47
  you know you cannot please everybody all the time, but
• 32:50
  sometimes we have to make the strategic long term decisions
• 32:54
  and be willing to take some short term pain.
• 32:57
  You just described the Rock School acquisition.
• 32:59
  I think that has set up the company for the future.
• 33:03
  They half of our production comes from Africa, but more like
• 33:08
  70% of our cash flows come from Africa.
• 33:11
  Yeah, yeah. And let and let me interject.
• 33:14
  We're we are now 2/3 of the way through the second quarter here
• 33:18
  of 2024. Hypothetically when you report
• 33:22
  your, your second quarter results will be seeing the
• 33:26
  benefits of what at the time was a difficult long term decision
• 33:32
  three years ago when you decided you know that that over time if
• 33:36
  the all those decisions you know solid long term strategic
• 33:40
  decisions while you are balancing the short term with
• 33:43
  the long term. But over time they accrue and
• 33:47
  add up and result in a company that can that can be successful
• 33:52
  for 20 year, almost 20 years as you have now, but continue to be
• 33:55
  successful for another 20 years as well.
• 33:59
  We're trying to build a business sustainable over time, Yeah, no.
• 34:07
  And good assets, good people, solid balance sheet optionality
• 34:14
  in the business business that can perform throughout the
• 34:18
  precious metals price cycle, you know, in, in higher price
• 34:23
  environment with the benefits in a lower price environment still
• 34:26
  be a viable, you know, attractive business.
• 34:30
  So you know that that's what we're trying to do for our
• 34:36
  shareholders. I am an important, very
• 34:39
  important part of my net worth is in Fortuna.
• 34:43
  I am a long term shareholder. You know, I think long term to.
• 34:47
  Is it painful to for me to see the shares drop 14% in a day
• 34:53
  after, you know, something that we believe is good?
• 34:57
  Yes, it is. But you know what, I'm willing
• 34:59
  to look beyond because I know fundamentally the business is
• 35:03
  stronger and it's a sound decision.
• 35:10
  So as an investor, I am perfectly fine with it.
• 35:14
  You know now if you like to to trade the stock or you bought
• 35:18
  the shares on Monday, well, you know you have to take some pay.
• 35:23
  There, right. That's right, Jorge, it's been
• 35:27
  great talking to you. I really appreciate you taking
• 35:29
  the time to communicate with with me, with my audience.
• 35:32
  A lot of my followers are, are keenly interested in Fortuna as
• 35:36
  well. I think you provided us with a
• 35:40
  clear vision as to the strategy behind this decision.
• 35:44
  And it really is exciting to think about the company where
• 35:48
  you've positioned it now and what we can look forward to in
• 35:52
  the coming quarters, years, you know, and, and decades as well.
• 35:56
  Is there anything I forgot to ask you?
• 35:58
  Any any parting words before we say goodbye?
• 36:02
  Just a note, an observation because yesterday we traded over
• 36:06
  $100 million worth of stock and, and today market is not closed,
• 36:15
  but we are already we have traded more than more than $100
• 36:29
  million again worth of stock going up.
• 36:32
  You know, we're up what almost four or five percent, No 4% with
• 36:43
  over $100 million worth of stock trading.
• 36:50
  So you know, there's been, yeah, significant, I'm pushing the
• 36:55
  stock up again. I think longer term I'm very
• 36:58
  comfortable that medium term, short term more comfortable that
• 37:02
  we'll be in a good spot. Again, yeah, I think when
• 37:05
  there's kind of dramatic reactions like yesterday, it was
• 37:09
  probably a combination of some shorting combined with people
• 37:13
  who were, I'm going to say weak holders, but not necessarily
• 37:17
  convicted to the long term. And, and now when people come
• 37:22
  back and I mean, in some ways it's actually good because it
• 37:25
  washes out the the weak holders of the stock and provides a
• 37:29
  strong platform from which potentially things can continue
• 37:33
  to grow from here. And as the company continues to
• 37:35
  grow and, and perform, you know, we'll, we'll be optimistic that
• 37:40
  that that will be the case. Thank you for the opportunity to
• 37:44
  speak to your audience, Ron. Well, Jorge, it's always a
• 37:47
  pleasure and and again on behalf of myself and our viewer who
• 37:51
  joined us today, you know, as the CEO of a of a over $1
• 37:55
  billion market cap company, we, you know, it's a big honor to
• 37:59
  get to hear directly from you and we'll keep supporting
• 38:03
  Fortuna and look forward to talking to you next time.
• 38:06
  Thank you, all the best.