Record Cash Flow Positions Fiore Well To Realize 150,000oz-A-Year Gold Production Target

By James Moore


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Momentum continues as this high-growth gold stock posts YET ANOTHER set of record results – Fiore Gold

Fiore Gold (TSX-V:FOTCQB:FIOGFFSE:2FO) continues its strong operational performance this year.

2020 has seen it break company record after company record.

Thanks to phenomenal progress at its Pan Mine in Nevada, Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) has become a cash-generating machine, standing out from its peers in the investment world’s most bullish sector.

As gold prices have soared, Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) has gone from strength to strength, generating substantial free cash flow that it can reinvest into its exciting portfolio of quality U.S. gold projects.

This stock’s time has come and with so much upside still in the pipeline, the future looks incredibly bright.

The latest update from Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) emphasizes the exceptionally strong position the company is in to break into the next tier of mid-cap firms.

The up-and-coming gold producer has just released another set of record quarterly financial results, revealing significant across-the-board improvements.

Thanks to record gold production at Pan in the three months to 30 June, Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) generated superb operating cash flows of US$10.5 million on revenues of US$22 million, and delivered adjusted net earnings of US$5.7 million, or adjusted Earnings per Share (EPS) of $US0.06.

That US$5.7 million is one figure to pay particular attention to.

Many mining companies have difficulty delivering positive EPS as initial investment and capital costs can be incredibly high either to acquire or build a new mine.

Not so for Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO), which acquired all three of its US assets for $US5 million in 2017.

To put this in context, the company’s stand-alone earnings in Q3 exceeded the original acquisition cost!

This really is an exceptional achievement for a company of this size, at such an early stage in its production lifecycle.

And of course, in mining, cash is king.

Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) generated $US10.5 million in operating cash flow and after capital investments, generated US$8.2 million in free cash flow. The high free cash flow yield again clearly distinguishes the company from its peers.

Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) is now perfectly positioned to realize its vision of becoming a 150,000oz-a-year gold producer within the next few years.

Debt-free and generating such strong free cash flow, Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) will move confidently into the remainder of 2020, as it now advances its Pan and Gold Rock projects in Nevada and Golden Eagle in Washington State,

Given Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) relatively low valuation and the strong gold price environment, the investment thesis looks stronger than ever.

The Pan mine – Fiore’s
(TSX-V:F │ OTCQB:FIOGF │ FSE:2FO) cash engine fuelling its aggressive growth targets


The financial highlights in Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) latest results all came from the excellent performance of Pan – its flagship producing project in east-central Nevada.

The producer revealed in July that Covid has not impacted operations at Pan in Q3 2020, as mining was declared as an essential business in Nevada. This allowed the Carlin-style, open-pit, heap-leach mine to deliver record quarterly gold production of more than 12,760 ounces (“oz.”).

This was already highly encouraging. Not only did it mark Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) second consecutive quarter of record production, but it also put the stock well on track for meeting annual output forecasts of 45-48,000oz – up from 41,191oz in 2019.

Now, Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) quarterly figures have once again confirmed that Pan is the critical cash engine driving this stock towards its ambitious growth targets.

Buoyant gold market conditions throughout the period enabled the company to sell the precious metal it produced from Pan at an average realized price of US$1,720/oz for revenues of US$22 million.

Alongside this, cash costs at the project fell by US$67/oz. to US$917/oz. as a result of reduced stripping ratios.

It should be noted that Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) achieved all of this while continuing to maintain it impeccable safety record, as it registered no reportable incidents and zero lost-time injuries in the quarter.

Together, rising sale prices and reduced production costs boosted Pan’s stand-alone operating cash flows and consolidated operating cash flows to US$11.8 million and US$10.5 million, respectively.

These represent two new company quarterly records, which, when looked at on an annualized basis, are extremely impressive for a stock with a market cap of US$111 million and two more sizeable U.S. gold projects on its books.

On most conventional valuation metrics, like Price to Earnings (P/E) and Price to Cash Flow (P/CF), Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) looks modestly valued.


Pan’s strong production also helped Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) to deliver those all-important adjusted net earnings of US$5.7 million (adjusted net EPS of US$0.06).

This was largely possible because Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) acquired Pan – as well as Gold Rock and Golden Eagle – for just US$5 million in an asset sale from an operator facing bankruptcy.

With upward of US$100 million having already being invested into these assets, Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) expert management team was able quickly to bring Pan into production and optimize mining here.

Now that the project is generating millions of dollars a quarter in free cash flow, the firm and its investors are free to reap the rewards.

But how will the company build on this momentum?

Fiore Gold
(TSX-V:F │ OTCQB:FIOGF │ FSE:2FO) – fully funded to push forward and deliver yet more value at Pan and Gold Rock


The impressive free cash flow generated by Pan throughout Q3 2020 has greatly strengthened Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) financial position.

The company’s cash balance sat at US$17.3 million, while its net working capital had hit US$34.1 million.

As explained by chief executive Tim Warman in Fiore’s (TSX-V:FOTCQB:FIOGFFSE:2FO) update, these sums open up a world of opportunities for the firm.

First, work can continue aimed at extending Pan’s mine life.

The company has already completed more than 71,000 feet of drilling across 183 holes to expand the property’s existing oxide resources both at depth and laterally beyond current reserve boundaries.

This has been very encouraging to date, with highlight intersections including 48.8ms of 0.4 grams per tonne (“g/t”) gold and 16.8ms of 1.03g/t gold.

Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) now plans to release a resource update and new life of mine plan for Pan in September ahead of further drilling on its most high-priority targets to define a mineable resource.

Perhaps the most exciting development for investors, however, is that Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) is now fully funded to complete a feasibility study at its Gold Rock project based eight miles away from Pan.

This marks the beginning of a transformational period for the miner.

A Preliminary Economic Assessment released earlier this year put Gold Rock’s initial mine life at 6.5 years, during which total gold production will average 55,800 oz. annually.

At US$1,700/oz. gold (significantly below current prices), this returns a post-tax Net Present Value (5%) (“NPV5%”) of US$99.4 million and a post-tax Internal Rate of Return (“IRR”) of 39.1%.

Fiore’s exceptional operating track record – a strong indicator of things to come


With federal permitting and infrastructure already in place, Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) expects to complete its Gold Rock feasibility study work by 2021 and bring the asset into production by 2023.

At this point, the company’s annual gold production in Nevada could potentially more than double to pass 100,000oz a year.

It would also put it well on its way to annual production of 150,000ozs – a goal that can be achieved by acquiring an additional producing or near-producing U.S. mine. The company has indicated that it is actively pursuing targets and hopes to pull the trigger on an acquisition in the not too distant future.

Reaching this production threshold will more than likely capture the interest of institutional investors, putting a considerable re-rating within reach for Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO).

When it comes to executing on these sorts of plans, the company’s management already boasts an exceptional track record, achieved over a short period:

  • It has brought the distressed Pan mine into production and completed the first round of resource expansion drilling

  • It has federally permitted Gold Rock, completed a Preliminary Economic Assessment, and started a program of resource expansion, metallurgical, geotechnical and condemnation drilling to enhance project economics for its feasibility study.

  • It has delivered a 2Moz Measured and Indicated resource for Golden Eagle in Washington State and is working on spinning the asset out with two large neighbours.

Given the strength of its latest financial figures, all the signs are in place that Fiore (TSX-V:FOTCQB:FIOGFFSE:2FO) will continue to execute successfully at both Pan and Gold Rock moving forward to create many catalysts for value.

With the added momentum from bullish gold prices and strong jurisdictional support from Nevada, this promises to be exciting for investors.

It is time to buckle in and enjoy the ride.



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Author: James Moore

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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