Alamos Gold: The Argonaut Gold Acquisition Will Boost Production And Deliver Substantial Synergies

Summary

  • Alamos Gold is acquiring Argonaut Gold to gain the Magino mine, increasing its annualized production volume above 600Koz of gold.
  • The acquisition will provide Alamos Gold with a long reserve life, a new mill, significant synergies, and a tax pool in Canada.
  • The addition of Magino will increase Alamos Gold's consolidated AISC in 2024, but Magino’s costs will be closer to the other Alamos Gold assets from 2025 and onward.
  • This idea was discussed in more depth with members of my private investing community, Off The Beaten Path. Learn More »

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Overview

Alamos Gold (NYSE:AGI) is a North-American mid-size gold mining company, with producing assets in Canada and Mexico. A few weeks ago, the company announced a friendly acquisition of Argonaut Gold (OTCPK:ARNGF) to get

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This article was written by

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Bang for the Buck has a Bsc and Msc in Financial Economics, manages a small investment company, and runs the investing group Off The Beaten Path. He primarily invests in turnaround stories and is currently focused on natural resource industries due to monetary and fiscal policies together with underinvestments and very attractive valuations.

The investing group focuses on companies with quality characteristics that are trading at depressed valuations, which allows investors to participate in the upside of natural resource investing, without experiencing the more extreme drawdowns, that are otherwise so prevalent in natural resource investing. Learn more

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ARNGF 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.

I am long Argonaut Gold and expect to keep most of my Alamos Gold shares provided the acquisition goes through.

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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