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Argonaut Gold Produces 34,384 and 122,097 Gold Equivalent Ounces During the Fourth Quarter and Year Ended 2016 Respectively and Provides 2017 Guidance
January 16, 2017
Toronto, Ontario – (January 16, 2017) Argonaut Gold Inc. (TSX: AR) (the “Company”, “Argonaut Gold” or “Argonaut”) announces gold equivalent ounce1 (“GEO” or “GEOs”) production of 34,384 during the fourth quarter ended December 31, 2016 (“Q4”) and 122,097 during the year ended December 31, 2016 (“YE”). During Q4, production was 16,747 GEOs at its 100% owned El Castillo Mine (“El Castillo”) located in the State of Durango, Mexico and 17,637 GEOs at its 100% owned La Colorada Mine (“La Colorada”) located near Hermosillo, Mexico. During 2016, El Castillo and La Colorada GEO production totaled 62,766 and 59,331, respectively. Management expects YE consolidated cash costs2 to be below the lower end of the range of revised 2016 guidance of $825 to $875 per gold ounce sold. At YE, the Company had a cash balance of $42 million and $30 million available on an undrawn corporate revolver. All dollar amounts are expressed in United States dollars unless otherwise specified.
Pete Dougherty, President & CEO stated: “Production at El Castillo normalized during the fourth quarter after a challenging third quarter, while La Colorada provided consistent production throughout 2016. The 34,384 GEOs of production during the fourth quarter represents our strongest quarter of the year and also is the largest quarterly production total since the second quarter of 2015. I’m also pleased to report that construction at San Agustin is advancing on schedule and on budget. With first gold production from San Agustin targeted for the third quarter of this year and the following ramp up, we expect our highest quarterly production and lowest costs during the fourth quarter of 2017. Looking forward in terms of operations, we remain focused on operating in a safe and environmentally conscious manner while providing production growth over the next several years as we construct and ramp up operations at San Agustin.”
2017 Guidance
The Company anticipates it will produce between 115,000 to 130,000 GEOs during 2017 at a cash cost2 of between $725 to $775 per gold ounce sold and an all-in sustaining costs (“AISC”)2 of between $910 to $960 per gold ounce sold. Due to the anticipated start up at San Agustin during the third quarter 2017 and the following ramp up, the Company expects the fourth quarter 2017 to provide the strongest production and lowest costs during 2017. Table 1 below illustrates the 2017 production and cost guidance:
Table 1 – 2017 Production and Cost Guidance
El Castillo/San Agustin(1) Complex
La Colorada
Consolidated
GEO Production
In 000s
70 – 80
45 – 50
115 – 130
Cash costs(2)(3)
$ per ounce
760 - 810
675 - 725
725 – 775
AISC(2) (3)
$ per ounce
910 – 960
(1) San Agustin guidance reflects full year expected production and cost guidance. Production and costs prior to declaration of commercial production will be capitalized on the balance sheet.
(2) Assumes a MXN:USD exchange rate of 19:1.
(3)Please refer to section “Non-IFRS Measures” below for a discussion of these non-IFRS measures.
The Company plans to invest $75.8 million in capital expenditures during 2017, primarily in the areas of construction at San Agustin ($34.0 million) and capitalized stripping at the El Creston pit at La Colorada ($18.7 million). Table 2 below illustrates the projected capital expenditures for 2017:
Table 2 – 2017 Capital Estimate ($M)(1)
El Castillo
San Agustin
La Colorada
Magino, San
Antonio &
Other
Consolidated
Sustaining
3.7
1.0
1.9
0.0
6.6
Expansion
3.4
34.0
3.4
5.5
46.3
Stripping
2.6
0.3
18.7
0.0
21.6
Exploration
0.0
0.2
0.4
0.7
1.3
Total
9.7
35.5
24.4
6.2
75.8
(1) Assumes exchanges rates of MXN:USD of 19.1 and CAD:USD of 1.3:1.
Over the next three years, the Company expects production at the El Castillo pit to decrease annually and production at San Agustin to ramp up resulting in overall production growth at a lower cost at the El Castillo/San Agustin Complex. At La Colorada, the Company is investing in a significant capital stripping program to open the El Creston pit during 2017 with the goal of increasing annual production at La Colorada over the next several years. The Company is currently updating its life of mine plans and intends to publish these during the first quarter 2017 in conjunction with the filing of its Annual Information Form.
The Company advises that it will no longer pre-release its first, second and third quarter production results, unless there is a material change which would require such an announcement, and will publish its operating results with its quarterly financial disclosure.
Argonaut Gold Fourth Quarter and Year End Financial Results Conference Call and Webcast
The Company anticipates releasing its fourth quarter and year end financial results before market open on March 13, 2017 and will host a conference call and webcast on March 13, 2017 at 8:30 am EDT to discuss the results.
Fourth Quarter and Year End Conference Call Information for March 13, 2017:
Toll Free (North America):
1-888-231-8191
International:
1-647-427-7450
Webcast:
www.argonautgold.com
Fourth Quarter and Year End Conference Call Replay:
Toll Free Replay Call (North America):
1-855-859-2056
International Replay Call:
1-416-849-0833
Passcode:
54191629
The conference call replay will be available from 11:30 am EDT on March 13, 2017 to March 27, 2017.
Prospero ano Nuevo - Happy New Year - Bonne Annee
Hears hoping that 2017 is a much better year for Argonaut permit and share price wise. Have a healthy, happy and prosperous New Year.
Doc
Prospero ano nuevo, Bonne Annee, Happy New Year, Let us hope that 2017 is a much, much better year for Win than was 2016. Perhaps all of these license deals will eventually show up in our beleagured bottom line.
Vaya con Dios, Hasta el ano nuevo,Shalom
Have a happy, healthy and prosperous new year.
Doc
Argonaut Gold Announces Positive Initial Drill Results from 2016 Program at Magino
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Argonaut Gold Announces Positive Initial Drill Results from 2016 Program at Magino
Toronto, Ontario - (December 5, 2016) Argonaut Gold Inc. (TSX: AR) (the “Company”, “Argonaut Gold” or “Argonaut”) is pleased to release assay results for the first 227 reverse-circulation (“RC”) holes of a 350-hole program completed at its 100%-owned Magino project in Ontario. These results represent 59% of the total 39,447 metres drilled during July to November 2016. Remaining results will be released once all assay data has been compiled. The RC drilling program was designed to reclassify reserves from Probable to Proven within the proposed starter pit at Magino. These drill results, along with the remaining 123 holes and assays, will be incorporated into a feasibility study, which is expected to be completed during the second half of 2017.
Tom Burkhart, Vice President of Exploration stated: “The drill results to date support the current block model and the interpreted geometry of the mineralization. The work is providing valuable data for the definition of higher-grade gold deposition and confirming continuity of overall mineralization. The Magino gold deposit contains a series of parallel shear zones hosting low to moderate grade mineralization. Within these relatively continuous shear zones there exists high-grade gold hosted in quartz veins and lenses of varying magnitudes. Generally, these are multi-gram occurrences and are significant to the economics of the Magino deposit. The current definition drilling was mainly designed to convert Probable reserves to Proven reserves within a central starter pit to help drive cash flow and de-risk the first two to three years of production at Magino.”
Pete Dougherty, President and CEO commented: “We liken the Magino deposit to a large river of low-grade mineralization with higher-grade fish swimming within it. In keeping with this analogy, by tightening the drill spacing to 10 to 12 metres we have been able to define additional high-grade fish. This continues to strengthen our understanding of the initial starter pit within the deposit, which reduces uncertainty and increases our confidence in the project’s economics.”
Plan View Map of Key Highlight Hole Locations
Table 1 below illustrates key highlight holes from the drill program:
Table 1: Key Highlight Holes
Hole
Azimuth
Dip
From
To
Length
Grade
(metres)
(metres)
(metres)
(g/t Au)
MA16-RC-013
159.79
-67.44
Interval
64
91
27
2.80
Including
86
89
3
20.10
MA16-RC-017
349.65
-53.83
Interval
24
49
25
4.04
Including
30
37
7
10.46
MA16-RC-021
352.81
-66.92
Interval
74
124
50
1.23
MA16-RC-087
163.9
-60.52
Interval
48
105
57
1.51
Including
84
90
6
7.07
MA16-RC-093
165
-50
Interval
79
96
17
4.74
MA16-RC-100
165
-50
Interval
23
94
71
1.03
MA16-RC-117
164.34
-48.34
Interval
93
105
12
5.86
MA16-RC-122
163.57
-48.45
Interval
42
84
42
2.36
Including
46
50
4
4.43
Including
53
57
4
14.78
MA16-RC-143
166.91
-50.59
Interval
28
72
44
1.41
MA16-RC-171
164.49
-60.68
Interval
6
22
16
4.37
To view a table of all drill results and cross sections, please visit:
http://www.argonautgold.com/gold_operations/drill_results/
Qualified Person Comments / Quality Control Procedures
The preparation of this Press Release was supervised and approved by Thomas Burkhart, Argonaut Gold’s Vice President of Exploration and a Qualified Person under NI 43-101. Mr. Burkhart also reviewed the reverse circulation and on-site sample preparation procedures at Magino.
For sample analysis the Company utilizes a system of Quality Assurance/Quality Control that includes insertion and verification of standards, blanks and duplicates consistent with industry standards.
Samples from the Magino RC drilling program are collected by Argonaut’s geologic personnel every one metre and transported by truck to either Activation Laboratories or Bureau Veritas with analytical facilities in Timmins, Ontario for sample preparation and assaying. All samples are analyzed for gold using a 50g fire assay charge with an atomic absorption finish. Samples that exceed 5 g/t Au are further processed using a standard metallic screen analysis designed to identify and analyze for coarse gold.
Please see below under the heading "cautionary note regarding forward-looking statements" for further details regarding risks facing Argonaut.
For further information on the Magino project please see the report listed below on the Company’s website www.argonautgold.com or on www.sedar.com:
Magino Gold project
Preliminary Feasibility Study Technical Report on t
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