Shares of Fortuna Mining Corp. (FSM Quick QuoteFSM - Free Report) , formerly Fortuna Silver Mines, have performed brilliantly over the past year, gaining 109.3%. The company engages in precious and base metal mining, primarily in Argentina, Burkina Faso, Mexico, Peru and Cote d'Ivoire. Owing to this solid rally, shares of Fortuna Mining have easily surpassed the Zacks Mining - Miscellaneous industry’s 52.4% growth. FSM’s shares have also outperformed those of fellow industry players Rio Tinto (RIO Quick QuoteRIO - Free Report) and BHP Group Limited (BHP Quick QuoteBHP - Free Report) .

1-Year Price Comparison

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Given FSM’s impressive rally, investors might wonder if the opportunity to add this high-flying stock to their portfolio has passed. However, we believe FSM has a lot going in its favor, and this rally is far from over. In fact, the stock holds substantial upside potential. FSM currently has a Momentum Score of B. Technical indicators suggest continued strong performance for FSM. The stock trades above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in FSM’s prospects.

50-Day Moving Average Data of FSM Stock

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Reasons for Staying Bullish on FSM Stock

High Gold Prices: As a predominantly gold-focused producer, the Canadian company is benefiting significantly from the strong upward momentum in gold prices and sustained demand. Gold has climbed sharply in 2026 following a record-setting performance in 2025. Rising geopolitical tensions in the Middle East and potential U.S. trade tariff threats have reinforced gold’s status as a safe-haven asset, further driving demand. Fortuna Mining, which divested the San Jose and Yaramoko assets in 2025, produced 65,130 gold equivalent ounces (“GEO”) from continuing operations in the fourth quarter of 2025.

For the full year, the company generated 317,001 GEOs, successfully meeting its annual production guidance. Gold prices are currently around $5,184 per ounce amid ongoing geopolitical uncertainties. In addition, structural supply limitations — including declining production from aging mines and a lack of major new discoveries — are expected to provide continued support for gold prices.

Strong Performance at the Séguéla Mine: During the fourth quarter of 2025, the Séguéla mine processed 410,014 tons of ore and produced 36,942 ounces of gold at an average head grade of 3.16 g/t Au. Compared with the year-ago quarter, ore processed declined 5%, while the average head grade improved 7%. Total gold production from Séguéla reached 152,426 ounces in 2025, surpassing the company’s annual guidance.

The 11% year-over-year increase in gold output was mainly driven by throughput optimization initiatives implemented through 2024 that boosted ore processing volumes, along with the absence of a 19-day operational disruption experienced in 2024 due to power shedding from the national grid supplier.

Diamba Sud Project — A Key Growth Catalyst: Last month, the company released an updated Mineral Resource estimate for the Diamba Sud Gold Project in Senegal, effective Jan. 16, 2026. Indicated Mineral Resources now total 1.25 million ounces of gold, representing an increase of 530,000 ounces from the previous estimate and highlighting the project’s continued resource expansion potential.

The 73% increase in indicated gold ounces, with 94% of the total resource now classified as indicated, marks a significant milestone for the Diamba Sud project. According to CEO Jorge A. Ganoza, the updated estimate provides a strong basis for the project’s feasibility study, which is expected to be completed by mid-2026.

A Robust balance sheet: The company ended 2025 with a solid liquidity position exceeding $700 million. Fortuna Mining also maintained a strong net cash position of more than $380 million. Its current ratio has steadily improved, reaching 2.98 at the end of 2025. A rising current ratio typically reflects a company’s strengthening ability to meet short-term obligations, indicating lower insolvency risk and enhanced operational stability. This strong financial position places the company in a favorable position to fund future projects and navigate potential market volatility.

Compelling Valuation: From a valuation perspective, Fortuna Miningis still trading cheaper than the industry. Going by its price/earnings ratio, the company is trading at a forward earnings multiple of 6.22, much lower than the industry average.

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The company has a Value Score of B. Rio Tinto and BHP Group Limited currently have Value Scores of C and A, respectively.FSM stock is trading at a discount compared with Rio Tinto and BHP Group Limited.

FSM Still a Smart Buy for Investors

FSM remains well-positioned for sustained growth. The company continues to benefit from higher gold prices, solid output from the Séguéla mine, a strong balance sheet and encouraging development prospects at the Diamba Sud project. The divestiture of the San Jose and Yaramoko mines last year enabled Fortuna Miningto shed assets with shorter reserve lives and concentrate on higher-margin operations with longer mine lives.

With many positives driving the stock, FSM presents a compelling investment opportunity now. This Zacks Rank #1 (Strong Buy) undervalued stock is an ideal candidate for addition to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here.