IKN

saucy doubts and fears

Fortuna Silver (FVI.to) (FSM) 4q14 financials

NR here and I’m impressed that despite silver’s drop (along with gold, zinc, lead) FVI takes no impairments or write-offs on its mineral properties, even though it assumed U$22.66/oz Ag for 2015 this time last year. FVI now assumes U$17.98/oz for the year ahead of us. And U$1.00/lb lead. And U$1.07/lb zinc. And U$1,248/oz gold. But no need to impair asset value, says the company. 
Which means FVI currently runs a 2.22X price/book value ratio.
Even though it made just $0.057m in profits in 4q14. Sales at $37.8m were down, though COGS at $27.77m was a good result that shaved nearly $2m from the previous quarter and turned what would have been a modest loss into that minor profit.
It’s now up to you to decide whether you’re willing to pay 2.2X book for what’s basically breakeven miner (or a forex-adjusted 1.85X, which isn’t quite as bad but still…)

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