BMO Capital Rates Argonaut Outperform with $9 Target

Andrew Kaip, BMO Capital Markets: “We are initiating coverage of Argonaut Gold Inc. with an Outperform rating and a CAD $9.00 target price:

1.) The company is an emerging intermediate gold producer that provides investors with exposure to an attractive combination of internally funded growth driven by a proven management team,

 2.) Deposit and processing similarities between the company’s El Castillo mine and the San Antonio and La Colorada projects mitigates capital and development risk,

3.) Management has a track record of making strategic acquisitions; we expect this strategy to support future production growth to 300–500 Koz. gold annually, raising Argonaut to intermediate producer status. Since acquiring the Castillo mine in Q309, the company has increased production threefold through low-cost expansion. . .unlike other emerging producers within our coverage universe, Argonaut provides an attractive combination of low required capital per ounce of new and total production. . .the company looks to have one of the highest production growth rates among junior and intermediate gold producers within our research universe.”

Here is our interview with Argonaut Gold CEO Pete Dougherty: