UK 09:21 Saturday, 24 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Shares in Patagonia Gold (PGD) have more than halved today to 46.5p but the market is being kind. Today’s news is disastrous and things are likely to get far worse.
Gold stocks of all shapes and sizes look to be back in business currently, and it would appear that shares of Patagonia Gold (PGD) are no exception. The question now is, is Patagonia setting up for an achievable share price target?
Bill Humphries, entrepreneurial managing director of unloved Patagonia Gold (PGD), says he is talking to three banks about potential funding in the region of $20 million (£13 million) to help double gold production from its projects in southern Argentina’s Deseado Massif region to 60,000 oz. a year by 2017. According to Humphries, the Australian ex-boss of mining concern Brancote, the AIM quoted company expects a pre-feasibility study imminently on what he argues will become its flagship heap leach project at Cap Oeste and believes the study will confirm an increase on present resource estimates of 1.4 million oz., with 400,000 oz. in the near-surface oxide zone.
Ben Turney has just argued HERE that Marc Sale, the former Technical Director of Patagonia Gold (PGD) - who quit yesterday 24 hours after admitting to 17 undeclared share transactions- should be reappointed to the board. Ben, you are a tolerant and forgiving, nice guy but you could not be more wrong.
On Tuesday afternoon, twenty minutes before the market closed, Patagonia Gold (PGD) announced that its technical director, Marc Sale, had failed to disclose seventeen personal share transactions. These included fourteen market purchases of Patagonia stock and three sales. In the normal course of events, this might have been the sort of sensationalist fodder we thrive on. There is certainly an impression that calling for the scalps of rule breaking AIM directors is all we do. However, there was something not quite right about this story, not least because of the relatively small amounts involved.
When I first saw this morning’s RNS from Patagonia Gold (PGD), announcing the award of 4,000,000 options to the company’s Managing Director, Bill Humphries, at Friday’s close price of 7.875p, my immediate thought was “here we go again”. In fact Patagonia nearly made the debut of my new feature “The Trough”, but that dubious honour goes to Getech (GTC) instead. Awarding a sizeable chunk of options, priced marginally above a stock’s 52 week low, is generally (and rightly) viewed as very bad form. You can imagine the vitriol I was about to unleash on this company. That was until I discovered one fact. In 2013 the directors of Patagonia took over 90% of their fees in shares.
Bill Humphries, the seasoned mining veteran running Patagonia Gold (PGD), is determined to triple output from the company’s projects in southern Argentina’s Santa Cruz province to 80,000 oz. of gold a year by June 2015. He believes this expansion drive could start to generate annual revenues of $100 million (£62.5 million) from that date, assuming the gold price, now nearly $1,287 an ounce, stays at $1,200 or above.
The Patagonia Gold (PGD) story is not an unusual one in the small cap gold mining sector, however with some mild relief coming from the near $1300 oz price gold stocks have had a minor lift so far. With Patagonia there could be a lot more to come.
This is a shocker. The directors of Patagonia Gold are well paid. They have significant equity in the company but they want more. They want shareholders to reprice their share options in order to “incentivise” them. This has to be passed at an AGM. Shareholders should tell these fat swine to bugger off and vote no. And here is why.
Given the way that the gold price seems to be no less sickly this month that it was in April, and the way that gold stocks have been the a leading indicator of the metal to the downside, recommending any equities in the precious metals area would appear to be something of a thankless task.
