The Gold Report
Notable Quotes
"ICG has closed a CA$2.5M flow-through placement." (12/24/15) Integra Gold Corp. - Thibaut Lepouttre, Caesars Report More >
"The exploration upside at MAG's Juanicipio project is substantial." (12/23/15) MAG Silver Corp. - Gwen Preston, Resource Maven More >
"AKG's management continues to deliver on its development milestones." (12/22/15) Asanko Gold Inc. - Nana Sangmuah, Clarus Securities More >
"We are initiating coverage on KDX with a Buy rating." (12/21/15) Klondex Mines Ltd. - Don Blyth, Paradigm Capital More >
"VIT's Eagle is a shovel-ready, fully permitted, prefinanced gold project." (12/17/15) Victoria Gold Corp. - Tom Hayes, Edison Investment Research More >
AR: Pediment Acquisition Complete
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CRAIG WEST, GMP Securities LP.
(01/28/2011)
"Yesterday, Argonaut Gold announced completion of its acquisition of Pediment Gold. The friendly, all-stock transaction valued at $137M adds an advancing development-stage project (San Antonio) and promising exploration asset (La Colorada) to Argonaut's portfolio. We resume coverage following a period of research restriction due to our role as financial advisor to Argonaut. The acquisition of Pediment almost doubles Argonaut's total M&I resources to >3.8 Moz. We expect San Antonio will also meaningfully add to total P&P reserves, once development plans there are finalized. . .Argonaut's El Castillo operation continues to ramp-up, already approaching the planned +75 Koz./yr. run rate. While we see some potential for further growth there, the acquisition of San Antonio provides another incremental growth avenue with potential to come online in 2013 push annual production to over 160 Koz. by 2014. . .On an impressive operating performance and news of this accretive acquisition, Argonaut's stock has started to outperform. We believe view the stock still trades at a discount (0.6x NAV) to gold-producing peers (0.75-1.1x) and see further re-rating potential as share liquidity continues to improve and as growth plans are defined. Target increased to C$8.25; upgrade to FOCUS BUY: Under our assumptions, the Pediment acquisition is accretive to NAV by ~$0.85, resulting in a further increase to $7.20. We derive our CAD$8.25 target (previously CAD$6.25) by applying a 1.25x P/NAV multiple (previously 1.2x) to our operating NAV of US$4.66 (previously US$4.98), plus other net assets totaling US$2.54 (previously US$0.91)." |
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