ARD - Argent Minerals - Aussie Stock Forums

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  1. #1

    Join Date
    Feb 2008
    Adelaide, South Australia

    Post ARD - Argent Minerals

    Ann: Kempfield Resources Increased by 88% to 21.2

    Small number of shares on issue with big upside and plenty of asset in the ground. Should not take much to see this undiscovered stock move.. currently buyers out numbering sellers 10:1.
    Would like to hear other peoples views on this stock.
    Last edited by NitrosOxide; 23rd-March-2010 at 09:05 AM. Reason: incorrect name

  2. #2

    Default Re: ARD - Argent Minerals

    Bit unsure as to why my last post was removed, perhaps it wasn't appropriate to direct readers to the blog? Here are some recent thoughts of mine on ARD:

    Argent Minerals Limited (ASX: ARD) is a company I have been keeping tabs on for sometime. In July this year Argent purchased the Bullant Goldmine from Barrick Gold Corp. While it seemed like a reasonable price paid, it turned me away from Argent as I had been considering them a company predominantly exposed to Silver. However after an unattractive takeover offer from US Nickel (USN) Argent has since agreed to sell the Bullant Goldmine in a deal that looks quite good for ARD shareholders. This will also put Argent back in the position of a company heavily exposed to the price of Silver and they even say as much themselves in one of their recent announcements:

    "The new structure is intended to convert Argent into a pure silver “play.”"

    In September I mentioned that there were 3 "pure" Silver plays; providing the sale of the Bullant mine goes to plan (still requires shareholder approval, but boards of both USN and ARD unanimously agree) Argent could very well end up being the 4th "pure" Silver play.

    The 3 I've spoken of previously are:

    Cobar Consolidated Resources Limited (CCU)
    Silver Mines Limited (SVL)
    Alcyone Resources Limited (AYN)


    The structure of the Bullant Goldmine sale to USN looks like this:

    - 44,000,000 USN Shares to be distributed to Argent Shareholders
    - 19,500,000 ARD shares held by USN to be cancelled
    - US Nickel to withdraw current takeover offer

    Assuming the sale goes ahead as planned that would leave ARD with the following share structure:

    101,891,251 Listed shares - 19,500,000 USN held shares

    There are also 48,210,751 options (currently 20c strike, 30/06/11, ARDO), which the company has advised will have the exercise price reduced following the agreement:

    "Argent will adjust the exercise price of its listed 20 cent options to reflect the capital reduction envisaged by the Agreement."

    This likely means they will be reduced from a 20c exercise price to 16c (given the 20% reduction in shares, a 20% reduction in exercise price seems likely).

    In theory this news should have pushed the price of the listed options higher as the capital to turn them into full shares has been reduced, no such increase has been seen and I suspect this is mainly due to this information having being missed by the market in general.

    Following the sale of the mine there will be 44m USN shares distributed to ARD shareholders. I suspect option holders will convert to full shares to take advantage of this offer if given the opportunity, so assuming all convert (worst case) we will have 44m USN shares distributed amongst 130.6m ARD shares (or .34 of a USN share to be issued for each ARD share held). Potential for this fraction to be higher (for holders of ARD) if option holders don't convert or are not eligible. At USN's current share price (15c) this will add an additional 5.1c value (or more) to each ARD share and will allow ARD shareholders to maintain exposure to the Bullant Goldmine if they choose.

    In April this year a scoping study on the Kempfield Silver project was completed, confirming potential for a profitable mining operation. Cash costs (net of Gold and base metal credits) were estimated at AUD$10.27 (per ounce of Silver mined), however since that scoping study we have seen a significant rise in the price of Gold and the base metals which should allow for an even lower cash cost.

    Further to this, an announcement in November confirmed that due to improved economics of the Kempfield project (due to rising Silver, Gold and base metal prices) the resource was to be upgraded following a change to the cutoff grades. The Kempfield project now has a reported resource of 31.6m ounces of Silver. With Argent's stake in the project soon to increase to 70% this means their share of the Silver resource is approximately 22m ounces.

    The Kempfield Silver project has been very much overshadowed by the purchase and now sale of the Bullant Goldmine, but suspect as the sale is finalised early next year that both management and the market will be able to concentrate on the project which will make this company.

    Further to Kempfield, Argent also has the right to earn a 70% interest in West Wyalong as well as Sunny Corner (Sunny Corner has a JORC Silver/base metals resource) with set expenditure needing to occur by June 2013. Also they hold 100% interest in phosphate and base metals exploration licenses at Louth (Wanaaring).

    There are only a few stocks with serious exposure to the price of Silver on the ASX and even less that have a predominant focus on bringing a Silver mine to production. ARD will be one of the lucky few and that is bound to attract both investors and speculative traders in the short to medium term provided the price of Silver holds or continues to rise from here.
    Attached Images
    www.bullionbaron.com <- My blog on Gold, Silver, Stocks and Property

  3. #3
    sting's Avatar
    Join Date
    Apr 2007
    Nth of Brisbane

    Default Re: ARD - Argent Minerals

    Welcome news to those who hold esp those who are holding options, a 50% increase this morning. I expect this to double when the announcement regarding the option price correction.

    IMO the only concern with this stock is the price of silver, given that it is predominantly now a silver producing company after the gold sell off.

    Am interested in more learned opinions on the short to mid tem price of silver. Any opinions out there??

  4. #4

    Default Re: ARD - Argent Minerals

    I've been looking at silver stocks for awhile as part of the gold/inflation type theme and have chosen ARDO as my exposure. Large deposit which they have just moved to 100%% ownership of, the deposit is low grade but shallow so does not require much so the strip ratio is reasonable and is open at depth with previous drilling only done to about 60m with the deposit 3km long.
    Reason for investment 1) Silver price has doubled recently and share price has been flat over the period.
    2) Strike price of the options have been reduced they are in the money currently and represent huge leverage on any increase in the share price. The strike price was reduced as they sold of a gold deposit and did an in specie distribution of shares in the acquiree.
    3) Previous feasibility study was done at silver prices half what they are currently. Potential for a massive resource upgrade simply by accepting a lower cut off grade and from the additional drilling. An update is expected in June before option expiry, likely designed to keep them in the money as they will other.
    Initial scoping study was for a 600ktpa plant, with a 1000ktpa plant then modelled and the DFS expected to be completed in Dec11 is for a 1.5Mtpa plant, the timelines have slipped as the DFS was previously expected earlier

    I've only really found 4 pure silver plays, this is probably the furtherst from production, but hasn't been rerated like the other as it previously was developing a smallish gold mine cast off from Barrick in tandem with the silver exploration. I wish I had an order in yesterday to mop up the person who dumped his oppies, there was about 900k in the queue which got dumped at the close, was waiting for them to decrease their asking price before buying in. Don't know why they chose to work their order that way, there are only 40m oppies in total and 80m shares so they couldn't have expected that the liquidity could handle that, I probably need a broker so I can place a pyramid order, the difficulties of being a retail investor. Must have needed some cash quick.
    Big risk as the share price only has to drop 10% for the oppies to be OTM, but silver price has gone ballistic, which should eventually be reflected in the share price and resource upgrade is expected before option expiry date.

  5. #5

    Default Re: ARD - Argent Minerals

    trading halt - cap raising
    is it just me or is everyone going for the cash at the moment ?! must be lean times near price 0.255

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