Allegations of Potential Non-Disclosure of Material Info In May 2023, the company raised C$17.5 million from CDE and CEE flow-through financing. Investor Relations emailed me saying the raise was to fund a portion of the reserve development and exploration program at Magino, and that C$5 million would be used to test deeper underground high-grade targets similar to our neighbors Alamos Gold.
The FQ4’23 results for year-end state that the company spent US$7.568 million on exploration expenses, which includes US$1.068 million at Magino, US$4.988 million at Florida Canyon, US$390 thousand at La Colorada, US$75 thousand at El Castillo, and US$1.047 million on Corporate and other. By the end of 2023, the company stated in their MDAQ4'23 that they had spent C$13 million on exploration at the Magino mine.
The company released their 2024 guidance which state they will be allocating an additional US$14 million to US$15 million for exploration at their Magino mine.
The FQ1’24 results for the three months ended March 31, state that the company spent US$870 thousand on exploration expenses.
In December 2023, during an interview that Richard Young had with Antonio, which is posted on YouTube, Richard stated, “This year, we will begin a program to convert resources to reserves within that pit. Some of the funds that we’re raising this week will continue with that program. We believe that ultimately, we can convert about 2 million of the 3 million ounces of gold that sit within that pit, outside of the current reserve envelope.” Richard also stated that he thought the analyst’s price target for their stock was incorrect. He then insinuated that the fair value is a multiple of a dollar and said that, depending on the gold price, the stock price could be at or above the conversion price (C$4.00) of the convertible debentures before their maturity date, which is November 30, 2025." Richard also said, "They produce a TSX30, which are the 30 top-performing stocks from any sector over a three-year period. We were the eighth best-performing stock over a four-year period on the TSX.” He was discussing his employment at a West African producer at that time. He added, “We are hoping to replicate that success here at Argonaut.” Richard also stated, “Today, this equity raise (C$85 million raised on Dec 12, 2012) that we’ve just completed will assist us as we look to refinance our current debt facility.”
The company stated in their Q3’23 MD&A, ‘The 63,000-metre reserve development drill program began on schedule on August 1 2023 and is expected to be completed by mid-2024.’
Argonaut Gold announced in a news release on December 18, 2023, that infill drill results and the initial findings of the 17.5k to 20k tonnes per day mill expansion would be incorporated into Technical Reports. The release of these reports is scheduled for March and the third quarter of 2024, with an update on resources and reserves in December 2024.
However, in March, the company didn’t release any results or reports. Instead they said they have completed approximately 27k metres of drilling for the mineral resources to mineral reserves program, the program is proceeding well, and the program is expected to be completed on time in June 2024.
The drill program at Magino commenced 9 months ago on schedule on August 1, 2023, and is expected to be complete by mid-2024. 9-months later, on April 30, 2024, Investor Relations told me they have no material information to present.
Investor Relations told me in April 2023 that Magino reserves were anticipated to increase by 2 million gold ounces, and then in December 2023 Richard Young stated the same thing in an interview with Antonio which is posted on Youtube. The company was confident enough to suggest an increase of reserves by 2 million gold ounces in April of 2023, but 1-year later tell investors they don’t have any material information to present, and they haven’t presented any drill results since 2022.
As for Florida Canyon, in the MDAQ3’23, the company stated, "The proof-of-concept drill program on the East sulfide resource began on schedule on August 1, with the 8,300-metre Phase II drill program expected to be completed by mid-November at a cost of US$4 million, with analysis work expected through the end of the year. Drilling concluded in the 1,250 metre West sulfide program in July and logging and analysis work is ongoing. An in-fill drill program is also underway on the oxide resources, which is expected to be completed by year end."
During the Q3'23 conference call, the company told investors they hired Owen Nicholls who has the experience and expertise to potentially successfully expose the 5 million ounce oxide deposit at Florida Canyon and were going to release an updated tech report for the mine. The company also said during the Q3’23 conference call, they would be doubling production at Florida Canyon. These statements are in the transcript of the call.
The company then released their Q4'23 MD&A which states, at Florida Canyon, 'Drilling concluded on the 1,250-metre West sulphide program in mid-2023, drilling concluded on the 7,520-metre East sulphide program in late 2023, and a 3,760-metre in-fill drill program was also conducted in the oxide resources in late 2023. Analysis and modelling of the drilling results is ongoing and expected to be complete in early 2024.'
The drill program at Florida Canyon commenced 9 months ago on schedule on August 1, 2023, and is expected to be complete by the end of 2023. The Analysis and modelling of the results is expected to be complete in early 2024, but 9-months later, on April 30, 2024, Investor Relations told me they have no material information to present.
The company has spent millions of shareholder capital funding the drill programs at Magino and Florida Canyon. They significantly diluted shareholders. Meanwhile, the stock price fell to an all-time low, even as Gold traded at an all-time high.
The debt and equity raises the company issued to fund the drill programs diluted existing shareholder value. Argonaut Gold's shareholders funded the drill programs and they own the data. If there is any material information pertaining to the drill programs and studies, they should be released promptly and before the closing of the acquisition.
Evidence of the potential misconduct:
In a news release from May 2023, it was announced that the company raised C$17.5 million from CDE and CEE through flow-through financing: https://www.argonautgold.com/English/news-and-events/news-releases/news-release-details/2023/Argonaut-Gold-Announces-Closing-of-C17.5-Million-Bought-Deal-Private-Placement-of-Flow-Through-Shares/default.aspx.
According to the MDAQ4’23 results on page 31 under ‘Flow through-shares’, C$13 million was spent on exploration at Magino: https://s22.q4cdn.com/115151820/files/doc_financials/2023/q4/Argonaut-Gold-Inc-MDA-Q4-2023-FINAL.pdf.
The FQ4’23 year-end results on page 46 indicate that US$7.568 million was spent on exploration: https://s22.q4cdn.com/115151820/files/doc_financials/2023/q4/Argonaut-Gold-Inc-FS-Q4-2023-Final.pdf.
Argonaut Gold 2024 guidance: https://s22.q4cdn.com/115151820/files/doc_news/2024/02/26/ar-press-release-guidance-2024_v22_final.pdf.
According to the FQ1’24 results on page 2, US$870 thousand was spent on exploration: https://s22.q4cdn.com/115151820/files/doc_financials/2024/q1/Argonaut-Gold-Inc-FS-Q1-2024-May-15.pdf
Screenshot of the email I received from investors relations on April 27, 2023: https://cdn-ceo-ca.s3.amazonaws.com/1j4hu2q-scandal.png.
Pages 3 to 4 of the Q3’23 MD&A pertain to the drill programs and expansion, at Magino and Florida Canyon: https://s22.q4cdn.com/115151820/files/doc_financials/2023/q3/Argonaut-Gold-Inc-MDA-Q3-2023-FINAL.pdf.
Richard Young had an interview with Antonio, which was posted on YouTube: https://www.youtube.com/watch?v=g2Z1WA8hQxg&t=569s.
The news release from December 18, 2023, on pages 1, 2, and 3, includes Magino drill results, expansion, and updated tech reports: https://s22.q4cdn.com/115151820/files/doc_news/2023/12/18/ar-press-release-magino-update-final.pdf.
This is the transcript of the Q3’23 conference call: https://seekingalpha.com/article/4651671-argonaut-gold-inc-arngf-q3-2023-earnings-call-transcript.
Pages 3 to 4 of the MDAQ4’23 results pertain to the drill programs, expansion and updated tech reports, at Magino and Florida Canyon - https://s22.q4cdn.com/115151820/files/doc_financials/2023/q4/Argonaut-Gold-Inc-MDA-Q4-2023-FINAL.pdf.