Explanation for Burgers
I drop by this board on ocassion to see what's shakin' and noticed plenty of hand-wringing about the share price. It's been pointed out by others that the industry is down, plenty of others are wondering out loud if the merger is to blame. The numbers tell us that both factors are relevant to explain un-Fortuna-te's decline.
As of this morning, FVI was down 37% over the last 3 months. Compare that to -16% from Agnico and -15% from Barrick over the same 3 months. So the precious metal industry headwind as explained by large institutional favourites is at least -15%.
When you look at the numbers for small to intermediate players, you get an interesting dichotomy.
There are the obvious train-wrecks like Iamgold -32%, Kinross -23%, Equinox -28%, and New Gold -41%. These companies reported problems of one sort or another (increased costs, lower than expected production) or did a deal like Equinox which wasn't too popular. Put un-Fortuna-te into this category, where the price damage is at least partially self-inflicted.
On the other hand, over the 3 months you have winners who did significantly better than average. Endeavour Mining (EDV) is UP 2 or 3%, Skeena is up 4%, Kirkland is down a modest 5%, Argonaut down only 3%, SSR Mining down 9 or 10%
Then there's the closer to average category: Alamos -13%, Oceana -12%, Sabina -16%, B2 -21%, Marathon -14%.
To repeat, FVI's decline is mostly in the self-inflicted category. In my opinion, the takeover of Roxgold was a very poor deal, for both sets of shareholders. FVI can no longer pretend to have much to do with silver, which used to keep the price as high as 9 or 10, justified or not. Roxgold shareholders were deprived of an opportunity to see the company grow to a 300,000 annual ounces producer (ballpark) and are now weighed down by a stock that's transitioning from a premium silver valuation to run-of-the-mill mid-tier gold.