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Fortitude Gold Corp (FTCO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered net sales of $6.536M, net income of $1.249M, and diluted EPS of $0.05, with mine gross profit of $3.335M; year-over-year sales fell 20% while profitability improved versus near breakeven in Q1 2024 .
  • Costs rose sharply: total all‑in sustaining cost (AISC) increased to $1,404/oz from $777/oz; management cited lower grades, heavy waste movement, and the layback to access “Pearl Deep” as drivers .
  • Strategic pivot: monthly dividend reduced from $0.04 to $0.01 beginning May 2025 to fund the Pearl Deep access program (six-month ramp/layback) and bridge permitting delays; management targets extending Isabella Pearl operations into H1 2026 and expects cash to decline through 2025 before rebuilding thereafter .
  • Near-term catalysts: potential County Line permit in “~6 months,” boundary expansion to include Scarlet/Scarlet North, and Pearl Deep access milestones; realized gold price uplift ($2,861/oz) supports margin resilience despite lower volumes .
  • Street estimates were unavailable due to limited coverage; no formal 2025 production outlook given amid permitting uncertainty .

What Went Well and What Went Wrong

What Went Well

  • Profitability returned: $1.2M net income and $0.05 diluted EPS despite lower volumes; mine gross profit reached $3.335M .
  • Strategic mine life extension: “We are excited for the results of the recently completed analysis of the Pearl deep which is targeted to extend mining at Isabella Pearl well into the first half of 2026” — CEO Jason Reid .
  • Commodity tailwind: realized gold price averaged $2,861/oz, supporting price realization despite fewer ounces sold .

What Went Wrong

  • Volume and revenue compression: gold ounces sold declined to 2,336 from 3,970 YoY; net sales fell 20% YoY to $6.536M .
  • Cost inflation: AISC rose to $1,404/oz (from $777/oz YoY), with management attributing the increase to lower grades, greater waste movement, and the deep layback to access Pearl Deep .
  • Liquidity trajectory: operating cash flow was negative (-$2.371M) in Q1, and management guided to a cash draw through year-end 2025 before rebuilding as Pearl Deep ore is accessed .

Financial Results

Quarterly trend (Q3 2024 → Q4 2024 → Q1 2025)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD)$10.229M $9.370M*$6.536M
Net Income ($USD)$0.946M -$2.848M*$1.249M
Diluted EPS ($USD)$0.04 -$0.118*$0.05
Gross Profit Margin %62.33%*62.98%*64.60%*
EBITDA Margin %19.17%*20.12%*24.77%*
Net Income Margin %9.25%*-30.39%*19.11%*

Values marked with * retrieved from S&P Global (no document citation available).

Year-over-year comparison (Q1 2024 → Q1 2025)

MetricQ1 2024Q1 2025
Sales, net ($USD)$8.181M $6.536M
Net Income ($USD)-$2K $1.249M
Diluted EPS ($USD)$0.00 $0.05
Total Cash Cost after by-product ($/oz)$661 $1,033
Total AISC ($/oz)$777 $1,404
Gold Ounces Sold3,970 2,336
Realized Gold Price ($/oz)$2,072 $2,861

Operational KPIs (Q1 2025 focus with YoY where disclosed)

KPIQ1 2024Q1 2025
Gold Ounces Produced3,983 1,780
Silver Ounces Produced21,115 11,407
Mine Gross Profit ($USD)$4.165M $3.335M
Exploration Expense ($USD)$3.638M $1.382M
Dividends Paid ($USD)$2.896M $2.901M
Cash Balance ($USD)$41.870M $21.420M
Working Capital ($USD)—$30.7M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Monthly DividendStarting May 2025$0.04/month$0.01/monthLowered
2025 Production OutlookFY 2025Provided historicallyNo formal guidance due to permit timing uncertaintyMaintained “no guidance” stance
County Line Permitting2025Awaiting BLM permitsManagement expectation: permit “this year,” “hopefully within the next 6 months”Timing clarified (not formal guidance)
Isabella Pearl “Pearl Deep” Program2025–H1 2026Evaluating pit layback6 months to access mineralized zone; extends operations into H1 2026New operational plan
Exploration Program2025$12.9M in 2024Reduced drilling; focus on mapping/modeling while awaiting permitsLowered
Cash Balance Trajectory2025Stable in prior periodsCash to decrease through year-end 2025 before increasing upon accessing Pearl Deep oreNew guidance on liquidity path

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Permitting / BLM staffingElection optimism; plan to “permit everything” under new administration “Light switch” change in BLM attitude; nearing full staff Local BLM staffing improving; leadership appointment pending; fast-track hopes (28-day process) Improving tone; process clarity still evolving
County Line timelineAwaiting approval; leveraging Isabella Pearl facilities Advanced through permitting; potential reduced capex (aggregate-style mining) Expect permit within ~6 months; production could be ~20–40k oz/yr depending on phasing More specific timing; sizing still TBD
Isabella Pearl Deep (pit layback)Evaluating layback to access oxide/transitional ore Modeling layback; no updated TRS 6-month ramp/layback; expect cash draw before rebuild; operations into H1 2026 From evaluation to execution plan
Dividend policyYield focus; dividend questioned by investors Stated dividend cannot be guaranteed Cut to $0.01/month to prioritize cash for Pearl Deep and County Line; could be modified in future Defensive posture; flexibility emphasized
Cost dynamics (AISC)Low costs (Q3 AISC: $990/oz) AISC increased YoY in 2024; residual leach uncertainty AISC up to $1,404/oz; driven by lower grades and waste movement for layback Cost pressure intensifies near mine life end
Exploration cadenceCut back drilling to conserve cash Focus on mapping/modeling; reduced 2025 budget Minimal drilling near term; target Scarlet drilling upon permitting Reduced spend until permits improve

Management Commentary

  • “We are excited for the results of the recently completed analysis of the Pearl deep which is targeted to extend mining at Isabella Pearl well into the first half of 2026” — Jason Reid, CEO .
  • “These drivers necessitated the decrease in monthly dividends… from $0.04 per month to $0.01 per month beginning in May 2025… targeted to eventually construct County Line with our own cash” .
  • On AISC increase: “We’re now going after the Isabella Pearl Deep… we’re moving a tremendous amount of waste to get to this future zone of mineralization… that will impact our cost negatively because we’re not putting gold on, we’re just moving waste” .
  • On permitting cadence: “County Line should… be permitted this term… hopefully within the next 6 months” .
  • Liquidity path: “Pearl Deep… is going to drain our cash through year-end until we can reach that mineralization and then we expect it to increase cash” .

Q&A Highlights

  • BLM staffing and leadership: Local offices are “close to fully staffed”; federal BLM lead not yet instated; fast-track permitting references surfaced, with management aiming to be included .
  • Cost drivers: AISC increase explained by end-of-mine-life dynamics, lower grades (Civet Cat area) and significant waste movement to reach Pearl Deep mineralization .
  • County Line production potential: Range dependent on mining pace (~40k oz if mined in one year; ~20k oz/year over two-plus years); plan likely to sequence County Line after Pearl Deep to conserve cash .
  • Dividend: Rationale for a single, deeper cut versus phased reductions; dividend remains modifiable and not guaranteed .
  • Drilling plans: Minimal near-term drilling; Scarlet (700m from Isabella Pearl) targeted for next drill program subject to permit approvals .

Estimates Context

  • Consensus estimates were unavailable for Q1 2025 EPS and revenue due to limited analyst coverage; actual revenue printed $6.536M and diluted EPS $0.05 .
  • Without Street anchors, estimate revisions are likely to focus on cost trajectory (AISC), timing of County Line permits, and Pearl Deep execution, rather than near-term volume recovery .
MetricQ1 2025 ConsensusActual Q1 2025Surprise
Revenue ($USD)Unavailable$6.536MN/A
Diluted EPS ($USD)Unavailable$0.05N/A

Key Takeaways for Investors

  • Execution over volume: The near-term thesis hinges on delivering the Pearl Deep layback on time and budget; expect cash to decline through 2025 and rebuild as ore access is achieved .
  • Permitting is the swing factor: A County Line permit in ~6 months would reset the medium-term production and cash outlook; watch for boundary expansion to include Scarlet/Scarlet North .
  • Cost inflection likely near mine-life end: Elevated AISC should persist until Pearl Deep ore is accessed; realized gold pricing provides partial offset .
  • Dividend policy now defensive: The cut preserves balance sheet flexibility; future adjustments (up or down) remain possible as permitting and Pearl Deep progress .
  • Limited Street coverage: With estimates unavailable, price discovery will track operational updates, permitting milestones, realized prices, and cost metrics .
  • Trading implications: Near-term volatility around permit headlines and Pearl Deep milestones; medium-term upside if permits arrive on schedule and Pearl Deep ore meets expectations .
  • Monitor liquidity and working capital: CFO was negative in Q1 and management flagged a cash draw; strong discipline over exploration/drilling spend until permits improve .

S&P Global disclaimer: Values marked with * in tables above were retrieved from S&P Global.