Argonaut Gold Inc. ("Argonaut Gold" or the "Company") (TSX:AR),
announced today that the Company achieved record gold production of
32,000 ounces during the 4th quarter ended December 31, 2012. This
included 25,805 ounces at its 100% owned El Castillo Mine ("El
Castillo") in Durango, Mexico and 6,195 ounces at its 100% owned La
Colorada Mine ("La Colorada") in Sonora, Mexico. All dollar amounts
are in US dollars except as otherwise noted.
FOURTH QUARTER 2012 HIGHLIGHTS:
El Castillo
-- Record production of 25,805 gold ounces (+31% improvement over Q4 2011)
-- 39,329 gold ounces loaded on the pad (+30% improvement over Q4 2011)
-- West Side Pad 8 construction moving forward; first cell to be loaded
starting in Q2 of 2013
La Colorada
-- Production of 6,195 gold ounces and 47,890 silver ounces
-- 8,845 gold ounces and 815,219 silver ounces loaded on the pad
-- Phase 2 pad construction is 65% complete
-- Crushing circuit relocated and fully operational
-- Final crushing circuit expansion scheduled for early in Q2 of 2013
-- Overburden removal commenced in the La Colorada/Gran Central pit
Financial
-- Year-end cash balance was $191 million as of December 31, 2012, of which
C $115 million for warrant exercises was included
-- Fourth Quarter sales of 29,500 ounces of gold and 70,910 ounces of
silver
Full year 2012
-- Total production of 108,081 ounces of gold (+50% over 2011)
-- El Castillo 87,712 ounces (+22% over 2011)
-- La Colorada 20,369 ounces
El Castillo In Pit Sulphide Mineralization
-- Over 360,000 gold ounces have been added to El Castillo's in-pit
resources. The additional sulfide mineralization is divided into two
categories including non-silicified sulphides and silicified sulphides;
this provides 22.6 million tonnes at a grade of 0.504 g/t. The majority
of the mineralization falls in the non-silicified category which has an
average grade of 0.47 g/t with recoveries ranging from 25% to over 50%.
The smaller silicified zone of mineralization is mainly confined to a
higher grade breccia pipe averaging 0.80 g/t. yielding recoveries of 11%
to 28%.
-- Results encompass approximately 5,000 meters of core drilling for 32
holes completed in multiple programs over the last three years. All
metallurgical testing was completed by Kappes, Cassidy & Associates
("KCA") in Reno, Nevada.
Measured and Indicated Resource Table
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Sulphide non-silicified Sulphide silicified
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Cutoff Tonnes Au g/t Au oz cont. Tonnes Au g/t Au oz cont.
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0.15 24,032,586 0.428 330,392 2,801,142 0.717 64,590
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0.20 22,639,932 0.443 322,310 2,599,320 0.759 63,388
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0.25 20,200,020 0.469 304,655 2,415,744 0.799 62,064
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0.30 17,337,720 0.501 279,379 2,085,348 0.882 59,127
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0.40 10,978,344 0.589 208,000 1,680,330 1.013 54,715
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For economic evaluation, the non-silicified sulphide zone is based upon 30%
recovery; the silicified sulphide zone is based upon 17% recovery.
-- Global Sulphide Resource:
-- El Castillo's global measured and indicated ("M&I") sulphide
resource shows 1.5 million ounces of gold at an average grade of
0.296 g/t; it lies below the oxide and transitional gold resource at
El Castillo. It is the Company's current interpretation that the
silicified sulphides make up a relatively low percentage of the
total sulfides and is largely limited to the silicified breccia
pipe.
Please visit www.argonautgold.com for a full table of
metallurgical results and images related to the sulphides.
FOURTH QUARTER 2012 El CASTILLO OPERATING RESULTS
Fourth quarter 2012 operating statistics showed improvement over
fourth quarter 2011 results. Ore production is now at an annualized
rate of approximately 13 million tonnes.
El Castillo Operating Statistics
3 Months Ended Year End
12/31/2012 12/31/2011 Change 12/31/2012 12/31/2011 Change
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Mining (000)
Total tonnes mined 6,695 5,437 23% 24,052 20,009 20%
Tonnes ore 3,321 2,912 14% 11,962 11,145 7%
Heap Leach Pad
(000)
Direct ore tonnes
to leach pad 2,033 2,098 -3% 7,561 8,114 -7%
Crushed Ore tonnes
to pad 1,282 839 53% 4,555 3,041 50%
Production
Gold grade (g/t) 0.37 0.32 15% 0.39 0.33 18%
Gold loaded to pad
(oz) 39,329 30,162 30% 151,462 117,939 28%
Gold loaded to
carbon(oz) 25,805 19,698 31% 87,712 72,049 22%
Gold sold (oz) 23,595 20,468 15% 89,881 66,521 35%
1 "g/t" is grams per tonne
2 "oz" means troy ounce
Richard Rhoades, Chief Operating Officer of Argonaut Gold said
"Year-end production at El Castillo of 87,712 gold ounces came in
above increased guidance of 85,000 ounces for the year. The team at
El Castillo team delivered yet another quarter of continued
improvement, providing a 10% increase over the initial 2012
guidance. In addition to exceeding guidance expectations, the
Company has seen dramatic improvement in crushing at the operation.
The operation is now crushing at a rate of approximately 5 million
tonnes per year."
Production has approached a near steady state at El Castillo.
Higher grade material during the fourth quarter of 2012 provided
for production of over 25,000 ounces against to guidance of
21-22,000 ounces for the quarter. In 2013, the operation
anticipates lower grades, offset by higher volumes of material, for
an estimated 5-10% increase over total 2012 production.
FOURTH QUARTER 2012 LA COLORADA OPERATING RESULTS
Overburden removal continues at La Colorada in preparation for
full scale mining. During the fourth quarter, the crusher was
relocated with a minimal impact to the production plan. Fourth
quarter production provided 6,195 ounces of gold, for a total 2012
production of 20,369 ounces. Final production exceeded expectations
due to higher than anticipated recoveries from the reprocessing of
material and positive grade reconciliation.
La Colorada Operating Statistics
3 Months Ended Year Ended
12/31/2012 12/31/2012
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Mining (000)
Total Tonnes mined 2,945 7,173
Tonnes ore 922 3,332
Heap Leach Pad (000)
Crushed ore tonnes to pad 623 2,895
Production
Gold grade (g/t) 0.43 0.43
Gold loaded to pad (oz) 8,845 40,180
Gold loaded to carbon(oz) 6,195 20,369
Silver loaded to carbon (oz) 47,890 132,805
Gold sold (oz) 5,907 19,900
Silver sold (oz) 54,108 116,717
1 "g/t" is grams per tonne
2 "oz" means troy ounce
In discussing the Company's fourth quarter and year end
highlights, Mr. Pete Dougherty, President and CEO said "2012 has
been a year of significant accomplishments for Argonaut Gold's
employees. The Company has delivered on operational production
expectations and added an important project, Magino, for future
growth and development.
The El Castillo production rate has shown continual improvement
quarter over quarter. La Colorada has exceeded initial expectations
while forming the foundation for the future. There is still more
work to be done to elevate the Company to the status of a mid-tier
producer and I am grateful for what has been accomplished so
far."
Argonaut Gold Q4 and Year End Financial Results Conference Call
and Webcast:
The Q4 and year end financial results call is set to take place
on March 26, 2013 at 8:30 am ET. Details for the call in
participation are included below:
Q4 and Year-End Conference Call Information:
Toll Free (North America): 1-866-226-1792
International: 1-416-340-2216
Webcast: www.argonautgold.com
Q4 and Year End Conference Call Replay:
Toll Free Replay Call (North America): 1-800-408-3053
International Replay Call: 1-905-694-9451
Passcode: 7979249
The conference call replay will be available from 10:30 a.m. ET
on March 26, 2013 until April 2, 2013.
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, the advanced exploration stage
San Antonio project in Mexico, the recently acquired advanced
exploration stage Magino project in Ontario, Canada and several
exploration stage projects, all of which are located in North
America.
Creating Value Beyond Gold
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"). 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.
Technical Information and Mineral Properties Reports
The technical information contained in this document has been
prepared under supervision of, and reviewed and approved by Mr.
Thomas H. Burkhart, Argonaut's Vice President of Exploration, and a
qualified person as defined by National Instrument 43-101 ("NI
43-101"). For further information on the Company's properties
discussed herein please see the reports as listed below on the
Company's website or on www.sedar.com:
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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
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La Colorada Mine NI 43-101 Preliminary Economic Assessment La Colorada
Project, Sonora, Mexico dated December 8, 2011
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Contacts: Argonaut Gold Inc. Nichole Cowles Investor Relations
Manager (775) 284-4422 x 101nichole.cowles@argonautgold.com
www.argonautgold.com
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