Post by
sclarda on Nov 05, 2021 2:58am
ARG
In looking at the financial statements from the 3rd. quarter ARG had cashflow of $64.9 Million US in cash plus $6 million in restricted cash for a total of aprox. $70 million US in cash at the end of the third quarter. Debt was aprox. $34.2 million US leaving ARG with aprox. $36 million US more cash than debt.
In the third quarter ARG had cashflow of $14.1 million US after paying aprox. $3.2 million US in income tax. Average copper price for the quarter was $4.23 US ARG produced 16 million pounds of copper in the quarter and delivered 16.9 million pounds around 1 million pounds more than estimated.
If ARG is successful in the Dutch auction of buying back 20 million shares that would bring shares outstanding down to around 160 million. ARG is currently Free cashflowing after income taxes aprox. $56 million US or aprox. $70 million Cdn. per year. The 8 cent annual dividend will cost ARG aprox. $13 million Cdn. leaving aprox. $57 million Cdn or nearly $5 million Cdn. per month of Free cashflow after income taxes and dividend piling up in ARGs bank account that already holds aprox. $65 million US in cash.
ARG is being conservative in the dividend they are paying and that is good management. By the end of next year if copper prices stay around the same level Arg will have aprox. $110 million US in cash including the cost of the dutch auction. Two years from now they will have aprox. $155 million US in cash.
Sooner or later as the cash pile keeps building they will have to do something with all that cash such as increasing the dividend, share buybacks, buying or developing another property etc. All of which will benefit ARG shareholders.
Personally having bought quite a bit of ARG shares at considerably lower levels and then taking some profits along the way my remaining shares cost base with the current 8 cent annual dividend will be yielding me aprox. 10%. That is a very good yield and i am settling in for the long haul collecting that dividend which is only costing ARG aprox. 18% of Free cashflow.
With that kind of yield i have no problem waiting around as long as it takes for the other 82% of the cash to pile up and eventually lead to a much higher share price and dividend.
Good luck to all.