RE:RE:RE:Stock Price Guess Q1 EarningsGreat Post my thoughts exactly. I believe in the conference call they had $30 million cash as of the call.
sclarda wrote: Cranium wrote
If copper can hold above $4 ARG will be debt free by the end of the yr. If they renegotiate the debt they can start a div and buyback before then. I agree that value fundamentals are out of favour, but at 2x EBITDA and with a strong multi yr outlook for copper it's only a matter of time before ARG has a strong move.
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Exactly. With copper at aprox. $4.20 right now ARG is cashflowing around $85 plus million CDN. With a current market cap. of aprox. $165 million that equals a shareprice of under 2 times cashflow or near 50%. At 8 times cashflow the ARG shareprice would be worth aprox. $3.75 CDN.
At the end of 2020 ARG had aprox. $54 million US in debt and aprox. $14 million US in cash for a total net debt of aprox. $40 million US. At the current rate of aprox. $5.5 million US per month in cashflow i calculate that ARG would be net cash positive by the end of june of this year. By the end of the year if current copper prices hold ARG would be debt free and have aprox. $26 million US in cash in the bank.
The reason i like ARG a lot is that the debt is quite small for a 60 million pound producer and the resources are long lasting. Also many of the other small copper miners have more production but a lot more debt than ARG and are also doing expansions and or new projects all which take a lot of money and most of which wont do anything to increase cashflow for years.
ARG is in the enviable position of likely being debt free within 4 months from now and have already done their expansion just in time for the currently soaring copper prices. That means at todays copper prices which i would start hedging if i were them ARG could start paying a dividend in six months which would equal a 50% yield at todays shareprice.
Having watched and invested in many, many junior mining stocks such as this one over the years while there was always potential there was usually always a problem such as missing good metal prices while waiting years trying to finance and build a mine, cost overrunns not being able to produce as expected or low metal prices etc, etc.
For whatever reason likely mostly luck ARG has everything going for it right at the time when Copper prices are soaring. It may take awhile for all of this to be realized by the markets and be reflected in the shareprice but that day will come and it could result in some violent moves upward in the shareprice as has been happening in many other junior copper stocks the last while. While other junior copper stocks have been soaring ARG hasnt participated as much which still gives a chance for investors to buy shares at good prices.
If the returns on this stock both in potential dividend and shareprice are anything like i and others here have calculated this stock could be a life changer for those who have loaded up especially those who bought in at the much lower prices of last year.
Good luck to all.