Fortuna Mining bets on West Africa to fuel gold growth

[Ben Graham]

Fortuna Mining (TSX: FVI) (NYSE: FSM) is hunting mid-tier gold assets and pushing ahead with new projects to restore its 500,000-ounce annual output target after divesting mines in Burkina Faso and Mexico

The Canadian precious metals miner sold its Yaramoko mine in Burkina Faso and the San Jose operation in Mexico this year, exiting short-life, high-cost assets but cutting production in the process.

It has since moved to rebuild its pipeline through new partnerships, including a joint venture with DeSoto for exploration in Guinea and a larger stake in Awalé Resources, a West Africa-focused explorer operating in Ivory Coast, as rising gold prices spur dealmaking across the sector.

“These deals are part of a long-term growth plan,” David Whittle, Fortuna’s chief operating officer for West Africa, said in an interview with Reuters. He said the company has a clear organic path to regain its 500,000-ounce target through expansions at Séguéla in Côte d’Ivoire and Diamba Sud in Senegal, while also closely watching acquisition opportunities to accelerate growth.

Fortuna is targeting mid-sized mines producing 100,000 to 200,000 ounces a year with at least 10 years of mine life, Whittle said, adding that any transaction must add value rather than simply boost volumes. The company prioritizes countries where it already operates and has about $400 million in net cash to deploy if the right opportunity emerges.

Séguéla, which poured first gold in 2023, sits at the centre of that strategy. The company reported last month an 11% increase in contained reserve ounces, a doubling of indicated resources and a 15% rise in inferred ounces compared with a December 2024 resource.

The mine is on track to beat its 2025 guidance, with output expected to exceed 150,000 ounces. Fortuna has awarded Lycopodium (ASX: LYL) an option study to lift plant throughput to 2 to 2.5 million metric tonnes a year, up from about 1.7 to 1.75 million metric tonnes.

Deals bonanza

West Africa has seen a wave of gold sector transactions this year, including Atlantic Group’s purchase of Barrick Mining’s (TSX: ABX)(NYSE: B) Tongon mine in northern Côte d’Ivoire and the merger of Australia’s African Gold (ASX: A1G) and Montage Gold (TSX: MAU) last month.

Perseus Mining’s (ASX, TSX: PRU) A$2.1 billion ($1.4 billion) bid for Predictive Discovery (ASX: PDI) lapsed last week after Canada’s Robex Resources (CVE: RBX)(ASX: RXR) tabled a superior offer for the Guinea-focused explorer, underscoring a broader global consolidation drive fuelled by record gold prices.

(With files from Reuters)