IKN

full of sound and fury, Signifying nothing

Your gold mining Rorschach test of the week, courtesy of Argonaut (AR.to) and True Gold (TGM.v)

First the scenario: The world has offered up two interesting projects NR this morning:

1) The pre-feas of the large-ish Magino project, owned by Argonaut Gold (R.to), with a post-tax 18% IRR using $1,250/oz gold. Lots more details here.

2) The PEA (scoping study) of the smallish Karma project, owned by True Gold (TGM.v), with a post-tax 43.1% IRR using $1,250/oz gold. Again, mull over the details at the company NR, here.

It’s interesting that both these projects have tipped their hats to the prevailing market atmosphere and used U$1,250/oz gold for their headline numbers. It’s also interesting that they’ve managed to return mining plans that return either acceptable economics for a large project or strong economics for a small project (though earlier stage). I’d contend that in a decent market, these are the type of fundamentally good NRs that bring positive movement to the stocks and get them re-ratings.

And so to the test: We discount immediate reaction (eg this morning) and set the clock for, say, Thursday evening. Right now AR.to is priced at $5.43 and TGM.v is 38.5c, so let’s see how those prices sit at the end of three days of market because if these projects can’t bring love to these stocks, gawd help us all.

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