Argonaut Gold Inc T.AR

OLDCO

[Tim2Agami]

The fat lady has not sung yet – that will be as the result of a shareholder’s meeting and vote – but she knows the tune and she’s with the program.

However,  until she’s on stage in the late spring or summer, Argonaut, thanks to AGI having harpooned the great White Whale Moby Wawa (or great white elephant) and brought the carcass alongside the dock on the Island to keep it afloat by the barb of its new 15% holdings, is still a going concern, (no covenants having been breached) and is still an operating company and daily producing gold (a portion of which may be at just sub $2400)

And while we wait for the fat lady to come on stage, it’s producing gold from the Mexican Assets – even if in run off,-- and some from Florida Canyon, even though, as Sclara has noted quite rightly,  these assets can be defined as “the worthless clapped out Mexican junk and the .3 gram per tonne gravel pit of Florida Canyon”

As the last Q report had indicated “The Company will require an additional waiver from its current lenders on or about March 8, 2024, to avoid a breach of covenants, and anticipates the current constructive refinancing process to continue thereafter. An unremedied breach of covenants can have an adverse impact on the Company’s liquidity and solvency.”

Well, that problem was dealt with, even if it cost “the deal” with Alamos to keep Argonaught from sinking until the takeover. So AR remains a going concern, and we should wait to see 2024 Q1 results – probably its last quarter before the rebrand, and, subtracting the Magino results, see what’s left over from the run off of the agave fields.

Although there has been a lot of bandying about of the merits of the fairness of the .0185g AGI + “Spinco” or “Newco”, in reality, the remnants of the company once known as Argonaut will be simply a version of the pre-Magino Argonaut as it once existed, but with a change of pants; in effect, the company  will by neither Spinco or Newco, but just Oldco, a refurbished company as it was five years ago, before everything from the Mexican Mines (and smelter returns to Franco Nevada) was poured into the bottomless pit and mined out highgrade stopes of the Prodigy properties.

And before the gold prodiced from the Mexican mines was "lost" through the “bankruptcy” of Imperial Smelting. At the time, AR was trading at  about $3.80 a share.

The last quarter of Argonaught reports:

Q4: “Both the Florida Canyon mine and our Mexican mines had a strong year, exceeding the upper end of production guidance on a combined basis by 9%. Notably, Florida Canyon achieved its highest production total in 19 years”.

Revenues for the year ended December 31, 2023 of [$312.5 million ex Magino] were 4% lower than the $388.3 million from the prior year as a result of the planned lower production from the Company’s three Mexican mines - La Colorada, San Agustin and El Castillo.

In 2023, Florida Canyon reported its highest production total in 19 years. • For 2024 production, material movement and grades are expected to be similar to 2023. Ore placed on the leach pad is expected to be approximately 20% lower than last year but ounce production is expected to be only marginally lower benefiting from the additional process capacity being added in 2024 as part of the construction of the third leach pad, which will allow the drawdown of inventory which built up in 2023 due to limited processing capacity.

The Auditor’s report for Q4 states: The Company’s work-in-process inventory balance amounted to $80.9 million as at December 31, 2023, of which $72.7 million was related to the inventory on leach pads at Florida Canyon, La Colorada, San Agustin and El Castillo mines. Inventories are stated at the lower of weighted average cost and net realizable value.

So if we go back and review the company profile before the Magino stumble, we read in the annual report of 2020, and edit that paragraph to anticipate what the new version of Oldco will look like, then it should read as:

Argonaut Oldco is a Canadian public company listed on the Toronto Stock Exchange (“TSX”) and engaged in gold mining, mine development, and mineral exploration activities at gold-bearing mineral properties in North America. As at December 31, 2021, December 31, 2024 the Company owned the producing barely producing El Castillo and San Agustin mines (which together form the El Castillo mining complex) in the State of Durango, Mexico, the producing La Colorada mine in the State of Sonora, Mexico, the producing Florida Canyon mine in Nevada, USA, the advanced exploration stage Cerro del Gallo project in the State of Guanajuato, Mexico, the advanced exploration stage Ana Paula project in the State of Guerrero, Mexico, and the construction stage Magino project in the Province of Ontario, Canada. … The Ana Paula project was a disposal group classified as assets held for sale as at December 31, 2020 [see the Heliostar transaction]

Or to read what’s on this site for the lyrics of the Fat Lady’s chorus

Argonaut Gold Inc. Oldco is a gold producer with a portfolio of operations in North America. The Company’s operating mines include Florida Canyon, Magino, La Colorada and San Agustin. The Florida Canyon Gold Mine area is situated in northwestern Nevada within the Basin and Range physiographic province. The Magino mine property is a past producing underground gold mine located 40 kilometers (km ) northeast of Wawa, Ontario, approximately 14 kilometers southeast of the town of Dubreuilville. The property consists of seven patented mining claims, four leased mining claims and 69 unpatented mining claims totaling 2,204.495 hectares. The past producing La Colorada gold-silver mine property is located approximately 40 km southeast of Hermosillo, Sonora State, Mexico. The San Agustin property consists of four mineral claims totaling 1,065 ha and is located in the northern San Lucas de Ocampo Mining District.

And who knows? Maybe AGI will give throw off its Mulatos mine in Sonora State, Mexico to Oldco as a tonic (and because it is in a sketchy Tier-0 jurisdiction). The mezcal is already a bitter swallow, with far too many worms at the bottom of the glass, reprising The Other Side in Dubreuilville

https://www.youtube.com/watch?v=Atyyr6d7-u8

[merlinboy]

This is a done deal as  Alamos and GMT and libra  hold over 50 % as long as the two other ok with the deal and getting a better company .

[Lifexprt]

Question is, what is the value of refined OldCo because it's definitely higher than $60M