Argonaut Gold Inc. (TSX:AR) (the "Company", "Argonaut Gold" or
"Argonaut") is pleased to announce its financial and operating
results for the first quarter ended March 31, 2013. All dollar
amounts are expressed in United States dollars unless otherwise
specified.
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1st Quarter
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2013 2012 Change
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Financials (000s)
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Revenue $ 43,080 $ 24,353 up 77%
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Net income $ 11,615 $ 7,260 up 60%
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Income per share - basic $ 0.08 $ 0.08 N/A
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Cash flow from operating activities
before changes in non-cash
operating working capital and other
items $ 19,351 $ 8,141 up 138%
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Cash and cash equivalents $ 168,514 $ 17,779 up 848%
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Gold production and cost:
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Gold ounces loaded to pads 39,786 44,169 down 10%
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Gold ounces produced 28,907 20,884 up 38%
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Gold ounces sold 25,441 14,498 up 75%
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Average realized sales price $ 1,622 $ 1,677 down 3%
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Cash cost per gold ounce sold $ 594 $ 639 down 7%
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FIRST QUARTER 2013 & RECENT HIGHLIGHTS
-- Capital expenditures of $18.8 million on mineral properties, plant and
equipment
-- El Castillo operations:
-- Pad 8 construction well under way with stacking of ore and leaching
-- Argonaut is now operating all mining internally, having assumed
prior contractor mining activities in March 2013
-- Over 360,000 gold ounces were added to the in-pit resources relating
to sulphide mineralization
-- La Colorada operations:
-- Pad construction initiated in 2012 continues to progress well and we
have now begun loading and leaching
-- Crushing circuit expansion continues and is scheduled to be
completed and operational in the third quarter of 2013
-- Updated resource for the Veta Madre deposit added 110,000 inferred
gold ounces, with potential for further expansion
-- San Antonio and Magino permitting process underway
CEO Commentary
Pete Dougherty, President and CEO of Argonaut Gold stated "2013
will see a substantial investment in both the El Castillo and La
Colorada operations as we bring forward our capital expansion
programs. At El Castillo, the addition of the new heap leach pads
and west side crusher/overland conveyor is aimed at reducing
operating costs and providing production growth; both should be
fully functional in the third quarter of this year. At La Colorada,
the Company continues to open the ore body and construct the new
crusher; both are anticipated to provide improved production in the
second half of the year. Overall operations are showing steady
improvement toward our 2013 goals and objectives and we are poised
to make our guidance provided earlier."
Financial Results - First Quarter 2013
During the first quarter of 2013, revenue was $43.1 million from
gold sales of 25,441 ounces, compared to $24.4 million from gold
sales of 14,498 ounces in the first quarter of 2012. Cash cost per
gold ounce sold in the quarter was $594, compared to $639 in the
same period of the prior year (cash cost per gold ounce sold is a
non-IFRS measure, see note below).
During the first quarter of 2013, gross profit was $21.0
million, compared to $12.3 million in the first quarter of 2012.
During the quarter, profit from operations was $17.2 million,
compared to $9.7 million in the same period of the prior year. Net
income for the period was $11.6 million, or $0.08 per basic share,
versus $7.3 million, or $0.08 per basic share, in the first quarter
of 2012.
Cash and cash equivalents was $168.5 million at March 31, 2013.
Capital expenditures in the first quarter were $18.8 million
primarily as a result of infrastructure improvements at the El
Castillo and La Colorada mines.
This press release should be read in conjunction with the
Company's unaudited interim condensed consolidated financial
statements for the quarter ended March 31, 2013 and associated
management's discussion and analysis ("MD&A") which are
available from the Company's website, www.argonautgold.com, in the
"Investors" section under "Financial Filings", and under the
Company's profile on SEDAR at www.sedar.com.
El Castillo Operating Statistics
Q1 2013 Q1 2012 Change
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Tonnes ore 3,172,772 3,050,527 up 4%
Tonnes waste 3,013,605 2,914,397 up 3%
Tonnes mined 6,186,377 5,964,924 up 4%
Waste/ore ratio 0.95 0.96 down 1%
Tonnes ore direct to leach pad 1,729,396 2,183,893 down 21%
Tonnes crushed 1,431,686 838,378 up 71%
Average grams per tonne of gold to
leach pad 0.35 0.36 down 3%
Gold loaded to leach pad (oz) 36,023 35,283 up 2%
Gold produced (oz) 23,125 17,799 up 30%
Gold ounces sold 19,509 14,498 up 35%
Silver ounces sold 8,687 1,410 up 516%
Cash cost per gold ounce sold $ 702 $ 639 up 10%
Summary of Production Results at El Castillo
As of mid-March, we assumed the day to day mining operations at
El Castillo from the former mining contractor. We hope to bring
further efficiencies to the mining process through this investment.
Total tonnes mined in the first quarter 2013 were up 4 percent,
compared to the first quarter of 2012. Of note, the 1.4 million
tonnes crushed in the first quarter was a new record for El
Castillo and represented a 71 percent increase in crushed tonnes,
over the first quarter of 2012. The total ounces loaded to the
leach pad were 36,023 in the first quarter of 2013, a 2 percent
increase over the first quarter of 2012. The stripping ratio of
waste to ore remained relatively consistent between periods.
The 2013 production guidance at El Castillo is expected to be
between 90,000-100,000 ounces with a cash cost between $700 and
$725 per gold ounce sold.
La Colorada Operating Statistics
Q1 2013 Q1 2012 Change
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Tonnes ore 556,637 - N/A
Tonnes waste 3,798,625 - N/A
Tonnes mined 4,355,262 - N/A
Waste/ore ratio 6.82 - N/A
Tonnes moved 4,355,262 678,310 up 542%
Tonnes ore direct to leach pad - - N/A
Tonnes crushed 402,548 680,396 down 41%
Average grams per tonne of gold to
leach pad 0.27 0.41 down 34%
Gold loaded to leach pad (oz) 3,763 8,886 down 58%
Gold produced (oz) 5,782 3,085 up 87%
Gold ounces sold 5,932 - N/A
Silver produced (oz) 44,879 17,182 up 161%
Silver ounces sold 54,269 - N/A
Cash cost per gold ounce sold $ 240 $ - N/A
Summary of Production Results at La Colorada
Overburden removal began in the fourth quarter of 2012; we have
now increased the daily mining rate to roughly 50,000 tonnes per
day. During removal of the overburden we have encountered some
marginally mineralized material at 0.27 g/t for the first quarter.
We are on schedule to have the pit opened to ore in the third
quarter. As a result, we anticipate mineralization to increase
during the second half of the year.
The 2013 production guidance at La Colorada is between
30,000-40,000 ounces, back loaded to the second half of the year,
with a cash cost between $450 and $475 per gold ounce sold.
Expansion Projects for 2013
The Company plans on investing a total of between $64 million to
$74 million on capital expenditures and exploration initiatives in
2013. Major capital expenditures in 2013 are expected to include
approximately $25 million at El Castillo, $19 million at La
Colorada, $6 million at Magino, between $5 million and $11 million
at San Antonio and between $2 million and $3 million for other
capital expenditures. Exploration expenditures in 2013 are expected
to amount to between $7 million and $10 million.
Non-IFRS Measures
The Company included the non-IFRS measure "Cash cost per gold
ounce sold" in this press release to supplement its financial
statements which are 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.
Qualified Person, 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, a
qualified person as defined by National Instrument 43-101. Mr.
Alberto Orozco, Argonaut's Mexico Exploration Manager also
supervised the drill programs and on-site sample preparation
procedures at La Colorada. Bret Swanson of SRK of Denver, CO, who
is an "Independent Qualified Person" as defined by NI 43-101 and
the lead person responsible for completing the updated Veta Madre
resource has reviewed this press release as it relates to Veta
Madre.
For further information on the Company's properties please see
the reports as listed below on the Company's website or on
www.sedar.com:
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El Castillo NI 43-101 Technical Report on Resources and Reserves, Argonaut
Mine Gold Inc., El Castillo Mine, Durango State, Mexico dated
November 6, 2010
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La Colorada NI 43-101 Preliminary Economic Assessment La Colorada Project,
Mine Sonora, Mexico dated December 8, 2011
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Magino Gold NI 43-101 Technical Report and Mineral Resource Estimate on
Project the Magino Gold Project, Ontario, Toronto, Canada dated
October 4, 2012
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San Antonio NI 43-101 Technical Report and Mineral Resource Estimate on
Gold Project the San Antonio Gold Project, Baja California Sur, Mexico
dated October 10, 2012
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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 Baja California Sur, 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 news release contains forward-looking statements that
involve risks and uncertainties that could cause results to differ
materially from management's current expectations. Actual results
may differ materially due to a number of factors. Except as
required by law, Argonaut Gold Inc. assumes no obligation to update
the forward-looking information contained in this news release.
Contacts: Argonaut Gold Inc. Nichole Cowles Investor Relations
Manager (775) 284-4422 x 101nichole.cowles@argonautgold.com
www.argonautgold.com
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