(Kitco News) – Gold may be struggling to get back to its record highs as it has been unable to break recent resistance at $1,800. However, the market’s best days still lie ahead, according to one gold mining executive.
In an interview with Kitco News, Peter Dougherty, CEO of Argonaut Gold Inc. (TSX: AR), said that he expects demand for tangible assets like real estate and gold to continue to grow as the world faces uncertainty as it tries to move past the COVID-19 pandemic.
“I have more faith in gold’s future than in any other asset,” he said.
Dougherty’s outlook on gold comes as the U.S. is starting to see slowing momentum in its economic recovery. Although gold is struggling in the current environment as investors focus on rising interest rates and record equity valuations, Dougherty said that he doesn’t see gold going to pre-pandemic levels in the $1,500 to $1,600.
“Gold future looks pretty darn bright,” he said.
Dougherty’s optimistic outlook is not just reserved for gold. He said that he looks forward to seeing future growth within his company Argonaut Gold. Last week the junior gold producer reported a record quarterly production of 63,749 gold equivalent ounces for the second quarter. This is the third consecutive quarter of record quarterly production. At the same time, the company saw a record revenue of $120.2 million.
“Second quarter was great for us, but we are still not where we want to be,” he said. “This company has the potential to be a 300,000 plus ounce producer.”
Dougherty said that the company had seen strong production from its three producers; El Castillo mine, La Colorada and Florida Canyon. However, he said that he is excited about the growing potential around the Magino project, which is currently under construction.
“The trademark of the type of company we want to create relies upon Magino project. That will get us to about 150,000 ounces,” he said. “We can see a pathway where Magino can potentially become a 300,000 ounce a year producer alone, regardless of anything else in the portfolio.”
The company said that it is on track to see its first gold pour at Magino by the fourth quarter of 2022 and be in full production by the third quarter of 2023.
Not only is the company excited about Magino, but Dougherty said that they have a robust exploration program and are confident they can reach their long-term production target with their pipeline of projects.
“I’m looking forward to seeing where we are going,” he said.
While Dougherty is optimistic on gold and his company’s prospects, the mining sector, as a whole, continues to struggle with attracting investor capital. Compared to the overall market with record valuations, the mining sector is significantly undervalued.
Dougherty said that companies focusing on generating shareholder value would eventually attract investors. However, he added that companies need to show steady management.
“Being able to attract investors come down to constantly delivering on what you say you are going to do,” he said.