Shares in Nevada-based gold mining company Fortitude Gold (OTCQB: FTCO) traded up 2.5% after the miner reported strong third quarter results and provided updates on the permitting of the projects in its pipeline.
Fortitude’s net sales increased to $21.3 million in Q3 2023 from $16.12m in the same three-month period in 2022 while net income grew to $5.7m from $1.7m last year. Translated into per share income this was $0.24 per share from $0.07 in 2022. At the end of the quarter the company’s cash balance was a very healthy $52 which will allow Fortitude to go ahead with its expansion plans for its Golden Mile and County Line mines.
The company produced 11,122 gold ounces during the reporting quarter and is on track to reach its target production level for this year of 40,000 oz (or a range of between 36,000 to 40,000 oz).
Two the key factors behind the strong results have been lower production costs combined with higher realised average gold price. Fortitude sold 11,042 gold ounces from its Isabella Pearl mine, produced at a total cash cost of $547/oz after by-product credits, and an all-in-sustaining-cost per ounce of $651. The production costs this year are materially lower than in 2022. Realized metal prices during the quarter averaged $1,931 per ounce gold.
“We are on pace to reach our annual production goals and continue with an aggressive drill program which has discovered additional mineralization on the Isabella Pearl trend as we await assay results from our recent East Camp Douglas drill campaign,” said Jason Reid, CEO and President of Fortitude Gold. The company expects to have results soon.
Fortitude Gold shares are trading up at $6.07
The company took advantage of the gold price during the quarter to add to its metal bullion holding as part of its treasury diversification programme. It now holds both gold and silver bullion in its treasury. Its cash holdings are invested in US Treasury bonds and generate a little over 5% return.
Fortitude Gold has submitted plans for further development to the Bureau of Land Management for its County Line and Golden Mile projects and currently awaits regulatory feedback.
Both County Line and Golden Mile are located in the Walker Lane mineral belt in Nevada, not far from Fortitude Gold’s operating Isabella Pearl mine and processing facility. The Golden Mile property covers an area of 9,300 acres consisting of 451 unpatented and five patented claims while County Line stretches over 2,400 acres and covers 116 unpatented lode mining claims and 6 unpatented placer mining claims.
The response from the regulators has been slower than initially expected because of internal issues within the BLM, but the company is financially in a good place to proceed once the permits are in place. The priority will be the County Line project, with Golden Mile plans further in the future.
“We expect the County Line questions from the regulators back any day. Unfortunately, they are taking a little longer than we would like,” said Reid.
At County Line the company is not building the project from scratch but rather plans to use the mine like an aggregate. The project won’t require a heap leach or a processing plant because the dore will be transported to the nearby Isabella Pearl facility. In that respect, regulators have less to review at County Line. The plans for Golden Mile were submitted later and the response from the regulator is likely to take longer.
