Mining News
Argonaut Gold posts net income of $18.4 million in second quarter, flags inflationary pressures
(Kitco News) - Argonaut Gold (TSX: AR) announced yesterday that in Q2 2022, the company produced 59,192 gold equivalent ounces (GEO), which is 7% lower than the prior year quarter (Q2 2021: 63,750 GEO).
The company said that the 7% decrease in GEO production was primarily related to lower ore tonnes mined, lower grades in both gold and silver, and lower gold recoveries at the La Colorada mine.
Argonaut also reported Q2 2022 cash costs per gold ounce sold of $1,248 and all-in sustaining costs per gold ounce sold (AISC) of $1,474, compared to cash costs of $876 per gold ounce sold and an AISC of $1,203 during the second quarter 2021.
The company explained that higher cash costs were primarily related to higher mining rates at El Castillo, La Colorada and Florida Canyon due to higher strip ratios, higher key consumable costs across all operations and lower gold ounces sold.
Revenue for the second quarter of 2022 was $111.4 million, a decrease from $120.2 million in the second quarter of 2021. Net income for the second quarter of 2022 was $18.4 million or earnings per basic share of $0.06, compared with net income of $21.8 million or earnings per basic share of $0.07 for the second quarter of 2021.
Adjusted net income for the second quarter of 2022 was $7.3 million or $0.02 per basic share, a decrease from adjusted net income of $22.7 million or $0.07 per basic share for the second quarter of 2021.
Cash flows from operating activities before changes in non-cash operating working capital and other items totaled $23.3 million during the second quarter of 2022, a decrease from $39.3 million in the second quarter of 2021, primarily due to fewer gold ounces sold and higher operating costs, the company said.
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President and CEO Larry Radford stated, "We were slightly ahead of our operational budget in terms of GEO production during the second quarter, which yielded over 59,000 GEOs, albeit at a slightly higher cost than budgeted due to inflationary pressures on input costs. We recently put a financing package together that we believe fully finances the Magino construction project. We are also tracking well against our most recent Magino capital estimate to completion of C$920 million. With the financing behind us and what I believe to the right team now in place, I feel Argonaut is in a much better position to execute on our business plan."
Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production. Its primary assets are the El Castillo mine and San Agustin mine, which together form the El Castillo Complex in Durango, Mexico, the La Colorada mine in Sonora, Mexico and the Florida Canyon mine in Nevada, USA.
The company also holds the construction stage Magino project, the advanced exploration stage Cerro del Gallo project and several other exploration stage projects, all of which are located in North America.
