This document corrects and replaces that which was sent on January 20th, 2014 at
8:55 AM ET.
Argonaut Gold Inc. ("Argonaut", "Argonaut Gold" or the "Company") (TSX:AR)
announced today that it had production of 28,648 gold equivalent ounces during
the 4th quarter ended December 31, 2013. This included 20,848 ounces at its 100%
owned El Castillo Mine ("El Castillo") located in the State of Durango, Mexico
and 7,800 gold equivalent ounces at its 100% owned La Colorada Mine ("La
Colorada") located near Hermosillo, Mexico.
FOURTH QUARTER 2013 HIGHLIGHTS:
El Castillo
-- Q4 production of 20,848 gold ounces; full year production of 94,804 gold
ounces,
-- During Q4, 39,269 gold ounces loaded on the pad,
-- West side crusher and overland conveyor project was completed and
1.3 million tonnes was moved during the fourth quarter,
-- New south waste dump is operational.
La Colorada
-- Q4 production of 7,017 gold ounces and 47,759 silver ounces, for 7,800
gold equivalent ounces (at 61:1 conversion),
-- Full year production of 22,544 gold ounces and 169,673 silver ounces,
for 25,420 gold equivalent ounces (at 59:1 conversion),
-- During Q4, 9,799 gold ounces and 136,476 silver ounces loaded on the
pad,
-- La Colorada pit is now fully opened, and the average life of mine grade
was achieved in December.
Magino
-- Announced prefeasibility study on Magino indicating an after-tax
internal rate of return ("IRR") of 18% and an after-tax net present
value ("NPV") of $199 million incorporating 40% of the current mineral
resource estimate.
San Agustin
-- Completed purchase of the San Agustin gold-silver project from Silver
Standard Resources Inc.,
-- Provided first cash payment of $15 million for the asset, together with
agreed share consideration. Purchase completion also requires IVA (VAT)
payment of $6.5 million.
2014 GUIDANCE
-- Gold production of 135-150,000 gold equivalent ounces (at a 60:1
conversion),
-- El Castillo - 90-100,000 gold ounces at cash costs of $775-
$800/ounce sold,
-- La Colorada - 45-50,000 gold equivalent ounces at cash costs of
$640-$665/ounce sold,
-- Cash cost per ounce sold of $750-$775,
-- Sustaining capital program of $6 million, and $11 million on capitalized
stripping at La Colorada,
-- Expansion capital program of $70 million,
-- Exploration program of $5 million for in-fill and step-out drilling
primarily focused at San Agustin and La Colorada,
-- Total anticipated spending by project:
-- El Castillo - $11 million, split 60% sustaining and 40% expansion,
-- La Colorada - $3 million expansion capital and $11 million on
capitalized stripping,
-- San Antonio - $56 million capital expansion subject to permits being
granted,
-- San Agustin - $3 million expansion capital,
-- Magino - $4 million expansion capital.
Pete Dougherty, Argonaut Gold's President & CEO said, "Overall, 2013 was a
tremendous year at Argonaut. The Company announced the results of a
prefeasibility study on Magino with a positive after-tax IRR of 18%,
incorporating 40% of the resource. Potential upside in terms of exploration and
economics for the project, may exist at Magino based on the pending surface land
acquisition.
In terms of resources, ounces were added at both La Colorada and El Castillo.
Exploration drilling added 110,000 ounces at La Colorada's Veta Madre discovery.
At El Castillo, additional metallurgical work conducted added 360,000 in-pit
gold ounces.
In terms of improving efficiencies, capital projects aimed at decreasing the
production costs at both El Castillo and La Colorada were implemented. Total
gold equivalent production of almost 95,000 ounces at El Castillo and 26,000
ounces at La Colorada resulted in a gold equivalent ounce production increase of
7% year over year. Additionally, at La Colorada, the Company acquired the
outstanding royalty providing full ownership of the project.
Lastly, Argonaut expanded our near term development projects by acquiring the
San Agustin project located 10 km from El Castillo, and by increasing our land
position at the Magino project. The San Agustin projects proximity and likeness
to the El Castillo mine allows us to leverage our understanding and regional
strength to undertake timely exploration and development. A surface and mining
rights expansion agreement with Richmont Mines Ltd. ("Richmont") was signed.
This provides a key strategic initiative for the Company as now the full Magino
resource envelope (an additional 60% of the resource) at Magino may be exploited
while allowing for additional exploration upside on the Richmont ground.
As an organization, we have made great accomplishments, and we look forward to
the challenges and opportunities 2014 bring as we embark upon continuing the
development of the Company in the future."
FOURTH QUARTER 2013 El CASTILLO OPERATING STATISTICS
----------------------------------------------------------------------------
3 Months Ended December 31 12 Months Ended December 31
2013 2012 % Change 2013 2012 % Change
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Mining (Tonnes 000s)
Total tonnes mined 7,574 6,695 +13% 26,997 24,052 +12%
Total ore tonnes
mined 3,764 3,321 +13% 13,621 11,962 +14%
Heap Leach Pad
(Tonnes 000s)
Tonnes ore direct to
leach pad 1,045 2,034 -49% 6,352 7,561 -16%
Tonnes crushed 1,407 1,282 +10% 5,736 4,555 +26%
Tonnes overland
conveyor 1,312 1,486
Production
Gold grade (g/t) 0.32 0.37 -13% 0.35 0.39 -9%
Gold loaded to leach
pad (oz) 39,269 39,329 0 154,581 151,462 +2%
Gold produced (oz) 20,848 25,805 -19% 94,804 87,712 +8%
Gold sold (oz) 20,620 23,595 -13% 92,675 89,881 +3%
(1) "g/t" is grams
per tonne
(2) "oz" means troy
ounce
Richard Rhoades, Chief Operating Officer of Argonaut Gold, said, "At El
Castillo, during the fourth quarter, production results were lower than
anticipated, due to the processing of some transitional material which resulted
in lower recovery. It is anticipated that the Company will progress through this
material and by second quarter of this year we should see more traditional oxide
ores and recovery improve. During 2014, the Company aims to deliver record ore
tonnes to the pad, while lower ore grades are expected. The increase in tonnage
should offset the lower grades and recoveries early in the year and we
anticipate producing between 90-100 thousand ounces of gold.
At the La Colorada mine, the La Colorada pit has reached life of mine grades as
the pit has been opened. During December, we were able to achieve average life
of mine grade from the pit. While this is very encouraging, we are still
experiencing lower than projected crusher throughput. We have brought additional
crushing equipment to the site and believe that further increases can be made."
FOURTH QUARTER 2013 LA COLORADA OPERATING STATISTICS
----------------------------------------------------------------------------
3 Months Ended December 31 12 Months Ended December 31
2013 2012 % Change 2013 2012 % Change
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Mining (Tonnes 000s)
Total tonnes mined 4,536 2,945 +54% 16,335 7,174 +128%
Total ore tonnes
mined 434 923 -53% 1,747 3,332 -48%
Heap Leach Pad
(Tonnes 000s)
Crushed ore tonnes
to pad 669 623 +7% 1,919 2,895 -34%
Production
Gold grade (g/t) 0.41 0.43 -4% 0.34 0.43 -21%
Gold loaded to leach
pad (oz) 9,799 8,845 +11% 21,928 40,180 -45%
Gold produced (oz) 7,017 6,195 +13% 22,544 20,369 +11%
Silver produced (oz) 47,759 47,890 0 169,673 132,805 +28%
Gold equivalent
ounces produced 7,800 7,097 +10% 25,420 22,828 +11%
Gold sold (oz) 6,298 5,907 +7% 22,234 19,900 +12%
Silver sold (oz) 40,800 54,108 -25% 173,751 116,717 +49%
(1) "g/t" is grams
per tonne
(2) "oz" means troy
ounce
(3) Conversion ratios used: Q4 2012 at 53:1, Q4 2013 at 61:1, full year 2012
at 54:1, and full year 2013 at 59:1
2014 Development and Growth
Peter Dougherty said, "In 2014, we anticipate a production increase at La
Colorada as the pit is opened up, higher tonnes are being processed and the
grade continues to increase on the main ore zone. At El Castillo, we anticipate
lower grade in 2014 and higher tonnes, as we move from the southeast side of the
pit back to the main zone.
In terms of advancing projects, at San Antonio, we anticipate that we will be
able to provide a third quarter update in regards to the zoning issue at the
project. Currently, our hope is that this issue can be resolved to benefit all
parties, paving the way for construction. Capital expenditures at San Antonio
are subject to the permitting process.
At the newly acquired San Agustin property, a reverse circulation drill program
totaling 14,000 meters (approx. 150 holes) and a core drill program totaling
1,000 meters (12-15 holes) is scheduled for completion during the first half of
2014. Further metallurgical test work is also planned for the San Agustin
project. At Magino, permitting-related activities will continue."
Argonaut Gold Q4 Financial Results Conference Call and Webcast - March 25, 2013:
The Q4 financial results call is scheduled to take place on March 25, 2014 at
8:30 am ET. Details for the call-in participation are:
Q4 and Year End Conference Call Information for March 25, 2014:
Toll Free (North America): 1-866-696-5910
International: 1-416-340-2217
Webcast: www.argonautgold.com
Q4 and Year End Conference Call Replay:
Toll Free Replay Call (North America): 1-905-694-9451
International Replay Call: 1-800-408-3053
Passcode: 4950688
The conference call replay will be available from 11:30 a.m. ET on March 25,
2014 to April 8, 2014.
About Argonaut Gold
Argonaut Gold is a Canadian gold company engaged in exploration, mine
development and production activities. Its primary assets are the production
stage El Castillo Mine in Durango, Mexico, and the La Colorada Mine in Sonora,
Mexico. Advanced exploration stage projects are the San Antonio project in Baja
California Sur, Mexico, and the Magino project in Ontario, Canada. The recently
acquired San Agustin project is the primary exploration target for Argonaut in
2014. The Company also has several exploration stage projects, all of which are
located in North America.
Cautionary Note Regarding Forward-looking Statements
This press release contains certain "forward-looking statements" and
"forward-looking information" under applicable Canadian securities laws
concerning the proposed transaction and the business, operations and financial
performance and condition of Argonaut Gold Inc. ("Argonaut" or "Argonaut Gold").
Forward-looking statements and forward-looking information include, but are not
limited to, statements with respect to estimated production and mine life of the
various mineral projects of Argonaut; synergies and financial impact of
completed acquisitions; the benefits of the development potential of the
properties of Argonaut; the future price of gold, copper, and silver; the
estimation of mineral reserves and resources; the realization of mineral reserve
estimates; the timing and amount of estimated future production; costs of
production; success of exploration activities; and currency exchange rate
fluctuations. Except for statements of historical fact relating to Argonaut,
certain information contained herein constitutes forward-looking statements.
Forward-looking statements are frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions "may" or "will"
occur. Forward-looking statements are based on the opinions and estimates of
management at the date the statements are made, and are based on a number of
assumptions and subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ materially from
those projected in the forward-looking statements. Many of these assumptions are
based on factors and events that are not within the control of Argonaut and
there is no assurance they will prove to be correct.
Factors that could cause actual results to vary materially from results
anticipated by such forward-looking statements include changes in market
conditions, variations in ore grade or recovery rates, risks relating to
international operations, fluctuating metal prices and currency exchange rates,
changes in project parameters, the possibility of project cost overruns or
unanticipated costs and expenses, labour disputes and other risks of the mining
industry, failure of plant, equipment or processes to operate as anticipated.
Although Argonaut has attempted to identify important factors that could cause
actual actions, events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause actions,
events or results not to be anticipated, estimated or intended. There can be no
assurance that forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated in such
statements. Argonaut undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions should change
except as required by applicable securities laws. The reader is cautioned not to
place undue reliance on forward-looking statements. Statements concerning
mineral reserve and resource estimates may also be deemed to constitute
forward-looking statements to the extent they involve estimates of the
mineralization that will be encountered if the property is developed.
Comparative market information is as of a date prior to the date of this
document.
Qualified Person, Technical Information and Mineral Properties Reports
Technical information included in this release was supervised and approved by
Thomas Burkhart, Argonaut Gold's Vice President of Exploration, and a Qualified
Person under NI 43-101.
Non-IFRS Measures
The Company included the non-IFRS measure "Cash cost per gold ounce sold" in
this press release to supplement its regular financial statement reporting which
is presented in accordance with International Financial Reporting Standards
("IFRS"). Cash cost per gold ounce sold is equal to production costs less silver
sales divided by gold ounces sold. The Company believes that this measure
provides investors with an improved ability to evaluate the performance of the
Company. Non-IFRS measures do not have any standardized meaning prescribed under
IFRS. Therefore they may not be comparable to similar measures employed by other
companies. The data is intended to provide additional information and should not
be considered in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. Please see the MD&A for full disclosure on
non-IFRS measures.
For further information on the Company's material properties, please see the
reports as listed below on the Company's website or on www.sedar.com:
----------------------------------------------------------------------------
El Castillo Mine NI 43-101 Technical Report on Resources and
Reserves, Argonaut Gold Inc., El Castillo Mine,
Durango State, Mexico dated November 6, 2010
----------------------------------------------------------------------------
La Colorada Mine NI 43-101 Preliminary Economic Assessment
La Colorada Project, Sonora, Mexico dated December
30, 2011
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Magino Gold Project NI 43-101 Technical Report and Mineral Resource
Estimate on the Magino Gold Project, Ontario,
Toronto, Canada dated October 4, 2012
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San Antonio Gold Project NI 43-101 Technical Report and Mineral Resource
Estimate on the San Antonio Gold Project, Baja
California Sur, Mexico dated October 10, 2012
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FOR FURTHER INFORMATION PLEASE CONTACT:
Argonaut Gold Inc.
Nichole Cowles
Investor Relations Manager
(775) 284-4422 x 101
nichole.cowles@argonautgold.com
www.argonautgold.com
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