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Wednesday, August 12, 2020 - 3:40:20 PM
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Mining News Pro - North American intermediate gold producer Argonaut Gold, which last month closed the acquisition of Alio Gold, is forecasting significant free cash flow in the second half of the year, CEO Pete Dougherty said on Tuesday.
At $1 900/oz, the company would generate between $49-million and $79-million of free cash flow in the six months to December 2020.
“We are in a position to deliver significant free cash flow through the remainder of the year, which bodes well for the execution of our transition strategy of developing our lower-cost, longer-life pipeline of growth assets,” Dougherty said.
Argonaut experienced a large cash increase of $23-million during the second quarter, amid the two-month shutdown of mining, crushing and stacking activities in Mexico, owing to Covid-19 restrictions.
Production decreased sharply, with gold-equivalent ounces (GEOs) falling 22% year-on-year to 31 531. The average realised price achieved, however, rose sharply from $1 303/oz in the second quarter of 2019, to $1 713/oz in the quarter under review.
Dougherty reported that mining, crushing and stacking activities had ramped up well following the temporary shutdown of activities during April and May.
“We are getting the planned tonnes to the leach pads despite the heavy rains experienced recently in Mexico. These rains have the potential to dilute the solution on the leach pads and slow third-quarter recoveries, but any delay in recoveries is expected to be temporary and all operations are functioning to plan.”
The company’s adjusted net income surged 507% to $8.5-million, or $0.05 a share, in the quarter ended June.
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