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Argonaut Gold: Inflationary Pressures Weighing On Margins

Apr. 03, 2022 9:53 PM ETArgonaut Gold Inc. (ARNGF), AR:CA4 Comments
Taylor Dart profile picture
Taylor Dart


  • Argonaut Gold released its Q4 and FY2021 results last month, reporting annual production of ~244,200 gold-equivalent ounces [GEOs] at all-in sustaining costs of $1,311/oz.
  • While these production figures beat the guidance midpoint of ~230,000 GEOs, costs came in above guidance and are expected to increase meaningfully in FY2022.
  • The good news is that the updated Magino Report showed satisfactory economics, and Argonaut has a path to a more reasonable cost profile by 2024, assuming successful execution at Magino.
  • Having said that, with the stock more than 30% off its recent lows and trading only slightly below fair value, I see more attractive bets elsewhere in the sector currently.
Two trucks.

jasonbennee/iStock via Getty Images

We're nearing the end of the Q4 Earnings Season for the Gold Miners Index (GDX), and one of the first companies to report its results was Argonaut Gold (OTCPK:ARNGF). From an operational standpoint, the company had a solid

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Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AGI, KRRGF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one's portfolio.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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