The potential for PROFIT at MaginoThe calculations are based on the data provided in the interview with Richard Young on Dec 5 2023 titled
“5 Gold Mines, +$400M Revenue Potential, $333M Market Cap | Argonaut Gold CEO Interview”
(you can watch it on YouTube.)
I wanted to discuss the tremendous opportunity for PROFIT at Magino, and that I don't understand any logic of going forward with the sale to Alamos. I'll unpack some of the other issues from that and other videos in subsequent posts, but I want to focus on profit right now
I want to unpack 3 scenarios, particularly tpd throughput at Magino
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Scenario 1, Magino runs at 10,000 tpd (2023)
Nov 1, 2023, Magino reaches commercial production
Magino processing roughly 10,000 tons/day at 1.2 gpt equals 148,000 oz per year.
At 92% recovery Magino will be producing 136,000 oz
At 10,000 tpd the cost per oz at Magino was roughly $1,750/oz
At today’s gold price of (USD$2,400/oz)
PROFIT per oz = USD $650/oz or
PROFIT per year (at 10,000 tpd) = USD $88.5 Million
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Scenario 2: let’s consider 17,500 tpd
IMPORTANT POINT, according to RY the cost per oz at 17,000 tpd drops to around USD$1,000 to $1,100/oz (10:25 into video)
I will use the higher cost of the two, so USD $1,100
At 92% recovery Magino will be producing 238,000 oz/year
At today’s gold price of ($2,400/oz)
PROFIT per oz = USD $1,300/oz
PROFIT per year = USD $309.7 Million
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Scenario 3, Magino increases to 20,000 tpd (2024)
(The financing for expanding to 20,000 tpd has been in place since Dec 4th 2023. (Recall the CDN $80 million equity raise, 50% allocated for FC and 50% allocated for Magino)) ( also 8:30 to 14:00 of video, and 37:30 of video)
Roughly at 20,000 tpd at 1.2 gpt equals 296,000 oz/year
At 92% recovery that’s 272,000 oz of AU at Magino per year
HOWEVER
At 20,000 tpd the cost per oz drops to between $1,000 and $1,100 per oz. (according to RY at 10:25 into the video)
At today’s gold price of ($2,400/oz)
PROFIT per oz = USD $1,350/oz or
PROFIT per year = USD $367.6 Million
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It seems apparent to me that Magino alone is a cash cow capable of delivering massive profits, and with FC delivering 70,000 to 85,000 oz per year, why are they selling?
What am I missing, please someone explain or correct my math
IMO, it makes no sense to vote yes to this deal