Argonaut Gold Inc. (TSX: AR): A Gold Producer in Mexico with Three Operating Mines; Interview with Pete Dougherty, CEO
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 4/28/2019
At PDAC2019, we learned from Pete Dougherty, CEO of Argonaut Gold Inc. (TSX: AR), that they are a producer in Mexico, with three operating mines: the El Castillo mine and San Agustin mine in Durango, and the La Colorada mine in Sonora. The company is advancing and growing its production profile. Last quarter they hit 50,000 ounces of production and are on track for producing 200,000 ounces a year. Additionally, Argonaut has three development projects: two in Mexico and one in Canada. With nearly 8 million gold ounces in resources, an extremely experienced management team and simple open pit mines, Argonaut Gold is able to extract a greater value out of its assets.
Pete Dougherty, CEO of Argonaut Gold Inc at PDAC 2019
El Castillo mine
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, here at PDAC 2019, interviewing Pete Dougherty, who is the CEO of Argonaut Gold. Could you give our readers/investors an overview of your Company?
Peter Dougherty: Thank you, Allen, for interviewing Argonaut Gold for Metals News. Argonaut Gold is a producer in Mexico, with three operating mines today. Last quarter we hit 50,000 ounces of production, so a 200,000 ounces a year run rate. We also have three development projects, two in Mexico and an additional one up here in Ontario, Canada as well. We just received our federal EA (Environmental Assessment) for the Canadian project and are excited because this starts to open the door to permitting at this project.
As we look at the Company as a whole today, we are advancing and growing our production profile. We have grown since 2017 through the end of 2018 by 65%. And we anticipate having one more step-up here, this coming year, as we invest in our San Agustin mine’s operating capacity. We're a gold producer in the Americas with Management that has been in this business a long time with, three development projects and the opportunity to advance the production forward through nearly 8 million ounces in resources. We have a bright future ahead of ourselves and we continue to add and build on the Company itself.
Peter Dougherty: When talking about my background and my experience, I come from the accounting side. My technical training and background is all on the accounting side. I've been in this business for over 30 years, with three companies, had the experience and the pleasure of being involved in two of the best projects ever built in this gold mining sector. First, the Paradise Peak project in Nevada, and secondly, the El Penon project in Chile. Both discoveries by the companies, with which I was working at the time, and both producing gold for under a hundred dollars per ounce net of by-product credits. We haven't found that project yet in this Company, but we continue to search and look as we move towards the future. It's an exciting time to be part of Argonaut, as we expand that production base from where we have been in the past around the 120,000oz per annum run rate to where we are today at a 200,000oz per annum rate.
Dr. Allen Alper: Could you say a little bit about your share and capital structure?
Peter Dougherty: Today when we look at the capital structure for the Company, we have about 178 million shares outstanding. And today they're trading somewhere around a C$1.80 to C$2.00 a share right now. We have been historically a Company that is very leveraged to gold with over 8 million ounces in resources. So when we see a rise in the gold price, like we've seen recently, our stock tends to outperform the market because of that leverage to gold that we provide investors. We are unhedged, so our investors can take full advantage of any rise that we might see in the gold environment.
Dr. Allen Alper: That sounds excellent. What would you say are the primary reasons our readers/investors should consider investing in your Company?
Peter Dougherty: When we look at mining, we have an opportunity to be in a race. And in a race, do we always pick the horse or do we pick the jockey? We cannot change what Mother Nature puts in the ground. All we can do is try and find the right management and the right team, or the jockey, to get that horse across the line. Our team has a great deal of experience, and they've run mines, not only here in North America, but also in South American and Africa. So they have a vast knowledge from experience. We currently run some of the simplest mines possible. They're all open pit, heap leach right now. In our view, these mines are the simplest operations in the sector. That leads to the ability to get more scales of economy and to deploy our experience and knowledge to extract a greater value out of those projects.
Dr. Allen Alper: That sounds excellent! I enjoyed talking with you. It sounds like your experience has a very good chance of paying off. We’ll publish your press releases as they come out so our readers/investors can follow your progress.
Peter Dougherty: Thank you, Allen.
Dr. Allen Alper: Thank you, Peter.
https://www.argonautgold.com
9600 Prototype Court
Reno, NV 89521
Telephone: (775) 284 4422
Facsimile: (775) 284 4426
Email: info@argonautgold.com
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