Argonaut Gold: Analysts Upgrade Price Targets Following Close Of Financing

Some analysts have recently updated their forecasts on Argonaut Gold (TSX: AR) after the closing of their C$26.5 million flow-through financings.

Argonaut Gold currently has eight analysts covering the company with a weighted 12-month price target of C$5.16. This is very slightly up from the average in January, which was C$5.08. Two analysts have strong buys while the other six have buy ratings.

First, BMO Capital Markets resumed their coverage on Argonaut gold yesterday. They increased their 12-month price target to C$4 from C$3.50 and resumed their outperform rating on the stock. Brian Quast, BMO’s analyst, writes, “We are resuming coverage of AR with an Outperform rating and C$4.00 target price following the closing of the company’s C$26.5M bought deal.”

The use of proceeds will be for development expenses at Magino, but Quast says that this deal bolsters the companies liquidity in a heavy investing period. They are now forecasting that the first quarter cash and debt is U$220 million and U$57 million, respectively. He writes, “improved liquidity can be attributed to Argonaut raising over US$110M in equity and generating an estimated US$161M in free cash flow during the period.”

Below you can see BMO’s updated estimates for 2021.

Onto Canaccord, Tom Gallo, their analyst, reiterated their buy rating on the company and raised his 12-month price target to C$4.25 from C$4. They have updated their 2021 estimates based on guidance but reiterated their fourth-quarter estimates of C$100 million in revenue and earnings per share of C$0.07.

For 2021, Gallo now estimates GEO production to come in at 320k ounces or a 28% increase year over year. He writes, “This will also be the first full year with production from Florida Canyon, which has struggled with recoveries in the first two-quarters of production under Argonaut’s operatorship, and we expect a more fulsome view of the asset in 2021.”

Gallo says that the Magino mine makes up roughly 45% of their net asset value and is “becoming the flagship for the company” and expects significant upside to Magino, which is not baked into their estimates. Below you can see Canaccord’s net asset value calculation.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One thought on “Argonaut Gold: Analysts Upgrade Price Targets Following Close Of Financing

  • February 19, 2021 9:15 PM at 9:15 pm

    The management at Florida canyon are too ego motivated to do what the company needs. It will get worse until management is replaced, or brought to their senses.


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