RE:RE:Argonaut Gold Snubs Shareholders With Financing That Will Digeosan0 wrote
The link to thedeepdive.ca post says it all, management failed the current shareholders and although I cannot influence, in any way, voting at an annual meeting, ALL of the Board of Directors must be shown the door because they had a fiduciary duty to the sharehoders and they failed miserably.
Now, barring this happening, I am shocked that no gold company has stepped up to purchase the whole $195m share offering and take control of this turd and show everyone the door!!!
For those who heeded the warnings of some of us here and did not take a position in this disaster, now is your opportunity if you believe in the operational skills of the new CEO but be warned that the current management does not have your best interests in mind. The current valuation is a steal if you believe in competent management which I do not but like I said earlier I was waiting for the chance to average down and get my money out at $1.00 a share and I stand by that while I'm holding my nose.
Now for the risks that you will not find in any of the fundamentals. Ausenco took an equity position in AR when they signed on to do the work. That position is now forever underwater and if any have dealt with contractors, I don't know how motivated they will be to complete the work. Hope I am wrong. Second, AR promised improvements in the US operations that they acquired from Alio which have not materialized. Further, if you delve in the notes of the financial statements you will see that they are in legal disputes with the contractor who carried out that work.
This company is poorly run and not sure things will change quickly with the new CEO, but if this company experiences operational difficulties at start-up, this puppy is going to $0.00.
You have all been warned of the risk. As stated before, always do your own due diligeance and good luck to us all!!!!
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Okay thanks for the warning. And who exactly are you again? Another Stockhouse Master Investor. legend in his own mind.
With the new loans and shares being issued AR will be recieving aprox. $500 million Cdn. in cash. In the next year they should also generate aprox. $125 million Cdn. in Free Cashflow from existing operations. All totaled in 1 year from now when the new mine should be up and running AR will have recieved another $625 million Cdn. in cash to finish the work remaining estimated at aprox. $500 million Along with another aprox. $30 million Cdn. being generated every quarter so its hard to see this stock going to zero if there are some problems starting up the new mine which always happen with mine start ups.
Yes existing shareholders have taken a beating and should be angry as the cost of the new mine is not a little over budget but around 2.5 times the original estimat. At the same time the high cost payed by shareholders has also resulted in a lot of money being raised to finish the new mine. At todays shareprice of 54 cents multiplied by the aprox. 770 million shares that will be outstanding the market cap of the company today is aprox. $400 million.
If they can get the new mine into production and then double it in the next couple of year along with the existing mines some of which will not last long AR could be a 400 000 ounce year producer with a Free Cashflow at todays gold prices of aprox. $400 million Cdn. per year or aprox the current market cap.
It will take some time but the potential for an 8 to 10 bagger here in the next couple years seems realistic and the new financing albeit at giveway prices will help turn this company around.
The huge drop in shareprice has given investors a chance to make a lot of money here. It just takes time and patience something which is understandably in short supply with shareholders of this company.