Alio Gold Is Banking On The Future by Fun Trading

in #syndication2 years ago (edited)


via @leo.syndication



  • Revenues were $27.01 million in 3Q'19. Net loss was $127.14 million or $1.50 per share due to impairment charges related to the San Francisco Mine and Ana Paula project.
  • Alio Gold closed a 3-year $15 million loan facility with Sprott to fund the construction of the new Phase II leach pad at Florida Canyon.
  • ALO is an excellent tool for short term trading based on the price of gold.

Image: Florida Canyon mine. Alio Gold

Investment Thesis

The Canadian-based Alio Gold (ALO) - formerly known as Timmins Gold - is a small mid-tier gold and silver producer which operates two mines in Mexico and Nevada, US. Also, the company owns one development project in Guerrero, Mexico, called Ana Paula and one exploration project called Ejutla.

Note: Alio Gold and Rye Patch Gold merged on March 25, 2018.

The investment thesis is quite straightforward with this small gold producer.

I do not recommend the stock as a long term investment, for different apparent weaknesses that I will explain later in my article. However, it is a perfect candidate for a short term trading strategy based on the price of gold.

Furthermore, the company presents a clear opportunity for a possible M&A down the road. After looking at the location of the assets, a merger could eventually make sense with another miner specialized in the same regions like Gold Resources (GORO).

Source: ALO Presentation

Alio Gold - 3Q'19 Financial and history - The raw numbers

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