LONDON (Alliance News) - Patagonia Gold PLC saw its shares fall on Monday despite telling the market it expects to benefit from upcoming fiscal and policy changes following the recent change in government in Argentina.
Patagonia shares were trading down 9.5% to 1.81 pence per share on Monday morning.
The gold and silver miner is named after the Patagonia region of Argentina, where its operations are located, and the miner is currently focused on exploration work in the Santa Cruz province of the region.
In Argentina's presidential election in late November, opposition leader Mauricio Macri become president after beating opposition Daniel Scioli, who had been hand-picked by the then president Cristina Fernandez de Kirchner, who was not allowed to run for another term by law.
Winner Macri is of the conservative Cambiemos (Let's Change) coalition, beating Scioli's left-wing Front for Victory party after 12 years of the party being in charge under Kirchner and her late husband Nestor.
Patagonia Monday said the new fiscal and policy changes that are to be implemented by the new government will benefit the company and assist in its planned expansion.
Specifically, the "restricted and complicated" procedure for importing goods and services into Argentina is set to be scrapped at the end of this month, which Patagonia said will expedite the process of importing necessary machinery and spare parts as well as services for the company. This is expected to improve efficiencies and have a positive impact on production.
In addition, the new government has lifted exchange controls and allowed the Argentinian peso to float freely as a currency, allowing the company to make a "nominal improvement" in margins, it said.
"The directors are confident that these new measures will have a positive impact on Patagonia Gold's business in Argentina and will open new opportunities for expanding our operations in the country," said Patagonia.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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