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Cash flow boosts Argonaut balance sheet

Argonaut Gold has reported a return to net profit for the first time in a year and its best quarter for several years as it posted net income of US$13.4 million for the September quarter on revenue of $94.3 million.
Cash flow boosts Argonaut balance sheet Cash flow boosts Argonaut balance sheet Cash flow boosts Argonaut balance sheet Cash flow boosts Argonaut balance sheet Cash flow boosts Argonaut balance sheet

Argnonaut Gold's Magino in Ontario, Canada

The company reported quarterly production of 48,951 gold-equivalent ounces, a 9.5% increase from the 44,712oz in the prior year period as it brought in production from the Florida Canyon mine in Nevada, USA. Its all-in sustaining cost increased 23.5% year-on-year to $1,401/oz.

With no debt and higher gold prices, the company saw its cash position balloon to $177.9 million from $65.2 million in the June quarter, while its working capital increased to $196 million from $66.1 million.

Building cash is timely as the company recently announced it aims to move its Magino project in Ontario, Canadam towards construction early in 2021.

To this end, Argonaut recently completed a C$11.5 million flow-through financing to fund exploration at Magino and closed a convertible debenture financing for $57.5 million, while expanding and extending its revolving credit facility to up to $125 million.

Magino is expected to produce an average 150,000oz over the first five years of a 17-year mine. Initial capex had been put at $321 million in a 2017 study but was recently estimated at $360-$380 million, including contingency and inflation.

During the September quarter, the company completed its merger with Alio Gold, a C$126.5 million equity financing and entered into an agreement for the sale of the Ana Paula project in Mexico. 

Shares in Argonaut Gold are trading at C$2.67, valuing the company at $784 million.