Argonaut Gold – Transforming for a Golden Future
Argonaut Gold is a Canadian gold company engaged in the exploration, mine development and production. Its primary assets are the El Castillo and San Agustin mines (which together form the El Castillo Complex in Durango, Mexico), the La Colorada mine in Sonora, Mexico and the production-stage Florida Canyon mine in Nevada, United States. With three construction-ready assets, the company is undergoing a transformation from a relatively short mine life, high-cost producer to long mine life, lower cost profile.
Advanced exploration projects include the Magino project in Ontario, Canada, the Cerro del Gallo project in Guanajuato, Mexico, and the Ana Paula project in Guerrero, Mexico. The company continues to hold the San Antonio advanced exploration project in Baja California Sur, Mexico and several other exploration-stage projects, all of which are located in North America.
“Argonaut Gold currently produces approximately 210-230k oz of gold per year; and has a development pipeline that can transform the company from a relatively short mine life high-cost producer to a long mine life lower cost profile in the near future; this is one of the factors differentiating it from many other companies in the sector,” says Pete Dougherty, the company’s President and Chief Executive Officer.
“We are both an exploration and exploitation company – we look for gold and we produce gold. Our business is to produce gold at a competitive margin, while investing in our communities, taking care of the environment, and exploring for the future.”
The next stage
He noted that the company has been going through rapid development, aiming high: “Things have been progressing very quickly in recent months. We added $23M in cash to the balance sheet from operations last quarter, and in the past month have completed an equity raise for $90M. Argonaut Gold has also completed the acquisition of Alio Gold bringing us another operation that will become our longest-life mine with the lowest cost operation and an exciting development asset in Mexico.”
Recent highlights also include receiving the last major permit for a large project in Canada that will become a cornerstone asset for the company in the future, with released recent exploration drill results highlighting potential higher grade deep mineralization.
“We have been known for our operating excellence in running open pit heap leach mines. We simply make money where others can’t and we do it through operational excellence. That separates us from many others,” says Mr Dougherty.
The company has three projects that at a high level are valued at nearly $1.5billion in a $1900 gold environment. These projects are advanced-stage projects, i.e. they have already received permits or will receive decisions on permits needed by the end of the year.
“We should be making decisions on these projects very soon, with one decision by the end of this year and the second next year. It is an exciting time for Argonaut, we have been nurturing these projects for a long time and are now ready to take the next step. It has been a slow and steady process to get to where we are but we are built for times like this,” Mr Dougherty affirms. “We are getting the debt financing together and getting ready to move into construction.”
Environmental compliance is a top priority at Argonaut Gold. The company remains firm in the promotion of policies and projects that favour the environment and the protection of natural resources, with a particular focus on the quality and availability of water and green energies.
“We have just received the ESR recognition from the Mexican government for the 8th consecutive year. This is given for environmentally socially responsible companies. ESR really is at the heart of everything we do. You have to do things in an environmentally and socially responsible manner, otherwise, you would not be able to move on to the next project. We truly believe in that. If you don’t do things right, you are not going to be invited back into the country again.”
He affirms that only through being respectful to every unique environment and exercising understanding and clear, constant communication, will the company establish strong relationships with its surrounding communities.
“It is important for us to support the development of individual businesses locally, so we work together to bring trades, and medical and essential services into these remote communities and form a bond between our stakeholders with the goal of creating long-lasting values. In a watered-down version, we change lives through the exploration and exploitation of gold, we change communities.”
Ready to go
Change is also a core internal concept for Argonaut Gold, as the company looks to transform into a 300-500k oz per year producer, basically doubling its value, with its four operating assets, and three moving rapidly forward, going into construction shortly.
“Exciting things are happening at the moment from construction decisions and major permits, through to new exploration developments at a few of our projects. This will continue for some time to come,” reflects Mr Dougherty, hinting that this time next year Argonaut Gold may be a totally different company.
“The amazing thing is that we don’t need to go out and buy our future, we already have the assets in hand. And with a clean balance sheet, $155M in cash, and $7M drawn on at a $50M revolving credit facility we are poised to take these next steps.”