CORRECTION FROM SOURCE: Argonaut Gold Announces Full Year 2013 Gold
Production of 120,224 Gold Equivalent Ounces
2014 guidance of 135-150,000 gold equivalent ounces of
production at cash cost of $750-$775
TORONTO, ONTARIO--(Marketwired - Jan 20, 2014) -
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 Agustín
- Completed purchase of the San Agustín 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 Agustín 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 |
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 Agustín property, a reverse
circulation drill program totaling 14,000 meters (~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 Agustín 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 |
Magino Gold Project |
NI 43-101 Technical Report and Mineral Resource Estimate on the
Magino Gold Project, Ontario, Toronto, Canada dated October 4,
2012 |
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 |
Argonaut Gold Inc.Nichole CowlesInvestor Relations Manager(775)
284-4422 x
101nichole.cowles@argonautgold.comwww.argonautgold.com
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