Section1: Company Overview and Fundamental Insights

1.1 Company Overview:

Fortuna Silver Mines Inc (TSX: FVI) is a Canada-based precious metals producer. Its business operations comprised of mining and related activities in Latin America, including exploration, extraction, and processing of silver- lead, zinc, and silver-gold and the sale of these products. Kalkine’s Resource Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

      

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~23.13% of the total shareholding. Van Eck Associates Corporation and Mirae Asset Global Investments (USA) LLC hold a maximum stake in the company at ~­­­10.28% and ~2.50%, respectively.

1.4 Key Metrics:

The company reported a decent rise in its net income in Q2 2023, which is a key positive. Furthermore, the group reported the highest contribution from gold in its sales in the reported period followed by other commodities. Additionally, despite the headwinds the company posted a rising liquidity ratio and stable free cash from operating activities.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of its recent activities, here the company shared information on Séguéla Project and the acquisition of Chesser Resource Ltd.

2.2 Insights on Q2 2023 Financial Performance:

Section 3: Key Risks, Company Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed an upside of ~6.21% in 1 week and a downside of ~14.93% over the last 1 month. Moreover, the stock is trading below the average of 52-week high price of CAD 5.61 and 52-week low price of CAD 2.82 providing an opportunity to accumulate the stock.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 24, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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Disclaimer

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