ARNGF - Argonaut Gold: Inflationary Pressures Weighing On Margins

• Argonaut Gold released its Q4 and FY2021 results last month, reporting annual production of ~244,200 gold-equivalent ounces [GEOs] at all-in sustaining costs of $1,311/oz.
• While these production figures beat the guidance midpoint of ~230,000 GEOs, costs came in above guidance and are expected to increase meaningfully in FY2022.
• The good news is that the updated Magino Report showed satisfactory economics, and Argonaut has a path to a more reasonable cost profile by 2024, assuming successful execution at Magino.
• Having said that, with the stock more than 30% off its recent lows and trading only slightly below fair value, I see more attractive bets elsewhere in the sector currently.

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