IKN

Argonaut
Gold (AR.to) puts in a permit application for its San Antonio project

Normally a mining company would
consider it a proud moment and make plenty of noise about its reaching a
significant milestone in the permitting process of any given project, so at
first sight the attitude of Argonaut Gold (AR.to) not advertising or making a
big fuss its application to the Mexican authorities for the key “change of use
of terrain” (cambio de uso de suelo) permit at its San Antonio mine in Baja
California Sur last week (17) looks a little odd.

However, once the history of the
project, also known as “La Pitalla” from the name of AR.to’s wholly owned local
subsidiary, is recalled it makes more sense. This is the same project AR
obtained in its 2009 buyout of Pediment Gold when it paid far too much for a
controversial project. Local opposition to the project has always been strong
and when in 2012 AR tried to push for permitting (via the same Change of Use
permit) it came up against an environmental lobby which pushed back so hard
that the company, rather than face the inevitable denial, decided to withdraw
its application. There are several aspects of San Antonio that have come under
fire over the years, not least the fact that it is located at a important
juncture in the underground water table and due to that, so say its detractors,
would threaten water supply to the nearby agricultural land and towns if going
ahead (and for what it’s worth, although the NGOs and anti-mining lobbies can
push their objections to extremes on occasions, at this project they do have a
good point and one backed up by several academic level studies as well as
Mexico’s environmental authority Semarnat.

On news of the application by
AR.to, local opposition to the project hit the media channels and made it known
to one and all that the application this time was scarcely different to the one
back in 2012, that their opposition hadn’t changed an inch, that the corrupt
governments that gave the original concessions were no more, that AMLO and his
people would never let this become a mine, that they would fight to their last
breath to stop the mine, etc etc (18), (and plenty more examples of news
reports where they came from). AR.to may want to keep you people up North from
hearing about this process, but it’s going to have a tough time keeping the lid
on locally. Also, as San Antonio
is carried by AR.to at U$114m (U$0.64/share, approx CAD$0.80, it is hardly
insignificant for a company with a share price of CAD$1.82 this weekend. Its
overall price/book ratio (which also includes such mediocrity as the Magino
project) runs at just over 0.5X, so if we go with that as our guide San Antonio would account
for 40c of that $1.82 share price. Frankly, not odds I would play.