Tis rigor and not law

Argonaut Gold (AR.to) 1q16: A three charts and a few words

The numbers are out, I’ll leave all the El Castillo 2017 fun and games to the Very Serious Suited People and the ConfCall, AR.to is giving it the rah-rah about the thinnish looking 3c EPS, we at IKN are fuddyduddies and prefer balance sheet items to get the real idea of what’s going on.
Assets look like this and even with the impairment in 4q15, this company still hasn’t bowed to the bleedin’ reality and written down the carry of Magino (who they think they’re fooling is beyond me).

Liabilities show little change. The tax break from the write-down is the big change in 4q15, not a massively material thing, the other side of the assets value loss coin.
Working cap breaks down like this. 
As $54m of the non-cash current assets are inventories (if you don’t have them you don’t have a going concern), the real number here is the change in cash. AR.to getting all trumpety about its rise to $46.6m in the NR (in fact it’s $46,583…details…details), IKN considers the longer-term decadence and wonders just why, if it has that cash cushion, the company decided to take out a $30m loan last week. 
Bottom line: Another quarter of mediocrity, it’s still difficult to take a company that can’t be straight about Magino’s true value seriously, plus with the 2017 production shortfall now a shadow, there’s no reason to own this stock at such an expensive level. Ha dicho, adios

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