Scotia Capital said Wednesday it has cut its stock price target for Argonaut Gold Inc
. (TSX: T.AR
, Stock Forum
) after an appeal of an earlier decision to reject the company’s environmental impact statement for the San Antonio project was denied by a Mexican Federal Court.
The ruling was handed down on April 10, 2014.
Scotia has cut its target to $6.50 from $8. “Argonaut continues to pursue approvals for San Antonio, but we believe it may be 12 months or longer before a resolution is obtained,’’ wrote Scotia analyst Ciara Sawicki in a research report.
On Wednesday, Argonaut shares were down 1.4% to $4.07, leaving a market cap of $627.3 million, based on 154.1 million shares outstanding. The 52-week range is $8.50 and $4.08.
San Antonio is an advanced gold exploration project, located in California Baja Sur, Mexico and hosting a resource of 1.73 million ounces.
In a research note, Canaccord Genuity
said its analyst Rahul Paul remains bullish on the stock. It said Paul continues to believe that the only means to secure environmental approval for San Antonio would be to successfully obtain a zoning amendment, which he remains optimistic will eventually be granted but acknowledges the potential for delays.
“Paul believes the risks are more than priced in and views the stock as oversold at current levels.’’