Fortuna Silver Mines (FVI) $3.25 -0.17 Silver $14.685 -0have to paraphrase here, "For a long time we have heard that the disadvantage of holding gold was that it didn't pay anything

David Pescod 780.932.5183 Debbie Lewis 780.499.3933 June 10, 2019

Fortuna Silver Mines (FVI) $3.25 -0.17Silver $14.685 -0.346

Technical analyst Ross C l a r k o f ChartsandMarkets.com is someone we have been following over the last while because some of the calls he's made have been pretty darn good...it's not as if he can walk on water, but he is a pretty darn good water skier. With his r e c e n t c a l l o n t h e correction in the price of oil (more of that later)

his suggestion of roughly a month ago about watching silver has attracted our attention as silver is suddenly attracting the notice of a lot of other technical analyst-types on BNN over the last day or two.One stock in particular that attracted Clark's attention was Fortuna Silver. So we thought it might be a little bit of fun to check up on this story and find out whatever surprises might be existing there... and there have been a few.Let's start way back in January where BMO reveals its 24-top Canadian stock picks for 2019. Of their three growth stock recommendations - the first one Boyd Group Income Fund has done quite well. The second pick in order was Fortuna Silver Mines for a company that might have growth, which they wrote, "Vancouver-based Fortuna is a silver producer with its Caylloma silver mine in southern Peru, its San Jose silver-gold mine in Mexico and the Lindero gold project in Argentina. The company is advancing its Lindero gold project with commercial production expected to begin later this year, at the end of the third-quarter.Analyst Ryan Thompson has an “outperform” recommendation and target price of $7.75. The analyst suggests that the stock is trading, “At one of the most compelling valuation multiples in the group on 2020 cash flow estimates.”

[email protected] [email protected] �1

Fortuna Silver Mines

mailto:[email protected]


http://chartsandmarkets.com/


Again, that art ic le was published back on January 14 of this year and there have been a few surprises. But first we should mention that on May 24 in an article by the Globe and Mail, they wrote an article on Fortuna Silver about insider trading and wrote, "On May 16th, the Company's President and Chief Executive Officer Jorge Gonoza invested over US $440,000 in shares of the company. He acquired 1 7 0 , 0 0 0 s h a r e s a t a n average price per share of approximately US $2.59, raising his account holdings to 661,245 shares.Well, insiders usually know something, or at least think they know something right? They probably know more than you and I do, but in between the pick by BMO that was going to be

a story of the year, and executives of the company buying in, came one itty-bitty surprise. Actually it was a big wet one. Their Lindero project which is currently being built in Argentina was hit with huge amounts of rain over the last couple of months and the project which could dramatically affect the production numbers of this company, have been delayed by six months. Some people suggest it might be a little longer. So the results people were expecting in possibly the third or fourth quarter this year, are now probably the first or second quarter next year.The importance of this Lindero Project is rather significant for a small cap/medium cap stories such as Fortuna as they hope/expect that by early 2020 to be a producer of 190,000 ounces of gold and 9 million ounces of silver. And some suggest it might even be better numbers than that.


While information and opinions expressed in this publication are believed to have been gathered from reliable sources, we accept no liability for actions that you might take in response to the material presented. Because the use of the information presented is

relevant to the facts of your personal situation, you should seek the advice and services of a qualified professional who will take your personal situation into consideration in guiding

your actions.




But what used to be considered mainly a silver producer, suddenly sees it very much more attracting attention as one of the gold producers.Meanwhile, we try and catch up with what the analysts are currently thinking on the Fortuna story seeing as they all do expect a significant increase in production in the coming two or three quarters, and RD sends us updated reports and it looks as if BMO Capital Markets still has a $7.50 target on this story, while ScotiaBank according to his data, has a $8.11 target, which has recently been upgraded.Meanwhile on the downside, Pacific International has changed their target from $7.00 to $6.70 and National Bank on May 16th to $6.50. On May 15th and May 16th, CIBC Capital Markets has kept their target at $6.25 while Canaccord Genuity has dropped their target slightly to $6.25.From its current level of $3.40-ish where we saw the insiders buying significantly, that would produce returns of somewhere between 80% and 130%...should those analysts be right...and we know that doesn't happen all that frequently.The other thing to be aware of is that summertime is historically not generous for precious metal stocks of any type, but we pick some up anyway so we can follow the story with a little dedication and incentive.


Fortuna Silver Mines has greenlit construction of an open-pit heap leach mine at its 100% owned Lindero porphyry gold project, 260 km west of the city of Salta, in northwestern Argentina




Crude Oil $53.30 -0.69

Well we might as well stick with Ross Clark and some of his current thoughts...and being an Alberta boy, we certainly didn't appreciate his expectations that the price of oil would correct dramatically, possibly close to $50.00 when it was in the mid-$60's. Again, as we said, he doesn't walk on water, but lately his water skiing has been of exhibition calibre.So what next for the price of oil? He is still talking about $80+ early next year, which we think would be delightful for us Alberta folks that have been so hurt for the last few years. But we also still wonder, how the heck can oil go that high? It seems like Russia and the Saudi's are cutting back on production. Demand has been going up every year over year, but aren't electric cars going to cut into that? And isn't the world economy weakening? Well we are going to look into this over the coming weeks because we would so like to see higher oil prices for our beaten down oil stocks, but we thought this chart that he just sent out, "Crude Oil - Potential Seasonal Low" and take a peek at the chart that he says is that significant.Clark writes in his note, "There is a strong chance that the seasonal low is in place..."Well now that would be nice, wouldn't it? Now if there were just a few pipelines in Alberta...





Gold $1332.30 -13.80

One of our favourite commentators over the decades has been Don Coxe, the C h i c a g o - b a s e d a n a l y s t w h o s e monthly report we used to always look forward to...in the good old days.On BNN on Friday, we thought some of the suggestions he made were kind of i n t e r e s t i n g , i n t r i g u i n g . . . a n d

scary! His thoughts were mainly on the very different world we live in today, where suddenly you see Russian warships bumping into American ships and the Chinese looking as if they are suddenly one of the dominant forces in the world's military operations. And he also looks at the American government which is full of dislike...and words that are much stronger than that.He points to Nancy Pelosi, recently suggesting that Donald Trump should be in prison. Well, personally we think Nancy Pelosi should have been sent to an old folks home decades ago and maybe Trump sent there as well (and maybe Trudeau, who has never had a job in his life, could be sent to work there as some sort of assistant). But the line that caught our attention was and we will have to paraphrase here, "For a long time we have heard that the disadvantage of holding gold was that it didn't pay anything. There was no dividends, there was no advantage in holding it a n d s o f o r t h . . . n o w suddenly in areas of the wor ld suc h as l a rge chunks of Europe and Japan, where you have negative interest rates, the argument against owning gold is gone.






Deb’s Ditty:

Stopped at a roadside stand that said “lobster tails $2.00”. So I gave him $2.00 and he says, once upon a time

there was this lobster…



Documents

Fortuna Silver Mines (FVI) $3.25 -0.17 Silver $14.685 -0have to paraphrase here, "For a long time we have heard that the disadvantage of holding gold was that it didn't pay anything