Argonaut Gold (AR.TO)

Gold in Mexico. Well-run with fine assets. He doesn't follow this closely nowadays. It's fallen off. He owns no gold.

If you've held it this long, then average down. He likes it. He has $5.75 target on it. There seems to be some judiciary issues about this stock. They operate in Mexico, which he likes. He has a buy rating on this.

You are getting fair value here. A mine they have been investing in is just coming on line. It is not overwhelming free cash flow. To break out of this range they need to take some action on their undeveloped asset.

Over the last year gold companies have had return on capital coming down, but that is obviously turning around. There is no reason to expect return on capital to do anything but improve.

A Mexican gold producer. Recently had a little guidance reduction on concerns of some of the costs. A pretty steady, staid producer of 130,000 ounces. The issue is, where is the next leg of growth. They have a couple of big projects, one in Canada and one in Mexico. Feels they have enough in terms of small expansions to bring on another small project, until they can get their Canadian project permitted and financed. He likes this, because he thought the street was over punitive on the name.

Hold or Sell? This has had a nice move. If you are underweight the whole gold complex you might want to keep it. If you are a trader, you have had a spectacular move in the last 4 months, you might want to take your initial capital out.

Like a lot of golds, this has recovered somewhat. Likes the company and management, but exited all of his golds about 3 years ago. They have 3 different Mexican mines as well as a project in Northern Ontario. If you like gold exposure, it is a decent play. They won’t hurt you or surprise you very much. Relatively cheap with an asset value of $4. It will pull back if the price of gold pulls back.

Sold his holdings a couple of years ago. It’s mostly in Mexico with a small part in Northern Ontario, which has been pushed out to 2018-2019. Good operators, but just didn’t like the macro view. Had some cost overruns a couple of times. Looks like there is value and it should be trading at $2.50-$3 to make it equal to the others, but there has been 2 years of lagging valuations. Not terrible, but it goes sideways and will only move up after seniors move and if gold went to $1400-$1500.

Latin America. Their guidance was artificially high and they were punished. He thinks they will play catch up aggressively. Seasoned management team and a good pipeline.