Leagold advances on insider buying news

The Los Filos Mine located 230 km south of Mexico City. Source: Leagold Mining Corp.

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Leagold Mining Corp. [LMC-TSX; LMCNF-OTCQX] shares advanced on Monday July 22 amid reports that a group of insiders led by Chairman Frank Giustra have been actively buying shares in the company.

Giustra, for example, recently acquired 572,000 shares between July 3, 2019, and July 11, 2019 at prices ranging from $2.00 to $2.04, according to CanadianInsider.

On Monday, Leagold shares were up 3.77% or $0.08 to $2.20 on volume of 549,099. The shares trade in a 52-week range of $1.28 to $2.65.

Leagold is establishing itself as a mid-tier gold producer with a focus on opportunities in Latin America.

Its key asset is the Los Filos Mine, which is located 230 km south of Mexico City. The open pit mine started commercial production in 2008.

In May 2018, Leagold completed the acquisition of Brio Gold Inc. [BRIO-TSX], an established Canadian mining company with significant gold producing, development, and exploration-stage projects in Brazil. The company’s portfolio includes three operating gold mines, and a fully-permitted, fully-constructed mine (Santa Luz) that was on care and maintenance and currently is in line for construction to restart in early 2021.

With the addition of Leagold’s Bermejal Underground project at the Los Filos Mine and the restart of Brio’s Santa Luz Mine, the combined operations have the potential to produce over 700,000 ounces of gold annually.

With the diversification benefit from multiple jurisdictions, Leagold will have a strong platform to expand within both Mexico and Brazil, the company has said.

Leagold is taking a phased project development approach beginning with a restart of development for Bermejal Underground project at Los Filos in July, 2019, and pre-stripping at the Guadalupe section of the Bermjal open pit to start in the fourth quarter of 2019.

Los Filos CIL plant construction is targeted to start in mid-2020 and the Santa Luz construction start is planned in 2021. The capex for Bermejal Underground and the 4,000 tonne-per-day carbon in leach plant is expected to be $180 million.

The net cash investment requirement is now mostly self-financed from operations at current gold prices. However, as a result of the greater proportion of ore being heap leached due to the deferral of the CIL plant, the estimated life-of-mine gold production is approximately 1.5% lower than the 3.2 million ounces estimated in the March 2019 feasibility study.

Meanwhile, in a July 4, 2019 news release, Leagold said its consolidated gold production in the second quarter of 2019 was 91,285 ounces, bringing year to date 2019 production to 197,234 ounces, an amount that was in line with the company’s previous forecasts.

The company has said it expects to produce between 380,000 ounces and 420,000 ounces of gold this year.

Leagold is scheduled to release its latest financial results on August 1, 2019.


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