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Argonaut Gold Announces Record Quarterly Production of 56,986 Gold Equivalent Ounces and Annual Production of 203,483 Gold Equivalent Ounces; Provides 2021 Production, Cost and Capital Guidance

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Argonaut Gold Inc. (TSX: AR) is pleased to announce record quarterly production of 56,986 gold equivalent ounces1, representing a 16% increase over the previous quarter and a 20% increase over the same period the previous year.  Argonaut produced 203,483 GEOs in 2020 and had a cash balance of approximately $214 million at December 31, 2020.  The table below details fourth quarter and full year 2020 production results.  All dollar amounts are expressed in United States dollars, unless specified.

 

Fourth Quarter and Full Year 2020 GEO Production

 


Mine

Fourth Quarter 2020

Full Year 2020
2020 Production
Guidance1
El Castillo 12,568 46,182 43,000 – 47,000
San Agustin 18,622 63,866 63,000 – 67,000
La Colorada 14,502 46,371 46,000 – 50,000
Florida Canyon2 11,294 47,064 47,000 – 50,000
Consolidated2 56,986 203,483 200,000 – 215,000

 

1 As presented in the third quarter 2020 financial and operating results press release dated November 4, 2020.
2 Florida Canyon production during Q1 2020 and Q2 2020 was under Alio Gold Inc. prior to the closing of the merger between Alio Gold Inc. and Argonaut on July 1, 2020.  2020 GEO production guidance estimated the combined full year 2020 production from the El Castillo, San Agustin, La Colorada and Florida Canyon.

 

Pete Dougherty, President and CEO stated: “2020 was a spectacular year for Argonaut, as we completed a merger, saw the conclusion of Schedule 2 amendment and executed on a financing plan for Magino’s development and achieved record quarterly production in our most recent quarter.  As we look to 2021, we are taking a cautious approach to guidance when considering potential productivity challenges due to COVID-19 protocols and contact tracing, as the health and safety of our workforce is paramount.  Our focus is to deliver cash flow from the operating mines to fuel Argonaut’s growth through the construction of Magino, as we embark on the transition from a relatively high-cost junior producer with short mine life assets to an intermediate lower-cost producer with long life assets.”

 

___________________
1 GEOs are based on a conversion ratio of 80:1 silver to gold for 2020 and 85:1 for 2021.  The silver to gold ratio is based on the three-year trailing average silver to gold ratio.  These are the silver to gold ratios throughout this press release.

 

2021 Production and Cost Guidance

 

The Company anticipates it will produce between 210,000 and 250,000 GEOs during 2021 at a cash cost of between $950 and $1,050 per gold ounce sold and an all-in sustaining cost (“AISC”) of between $1,250 and $1,350 per gold ounce sold (see “Non-IFRS Measures” section).

 

2021 GEO Production and Cost Guidance

 


El
Castillo

San
Agustin

La
Colorada

Florida
Canyon

Consolidated
GEO production In 000s 40 – 50 65 – 75 55 – 65 50 – 60 210 – 250
Cash costs1 $ per oz Au 1,050 –  1,150 900 – 1,000 700 – 800 1,200 – 1,300 950 – 1,050
AISC1 $ per oz Au 1,250 – 1,350

 

1 See “Non-IFRS Measures” section.

 

2021 Capital Guidance

 

The Company plans to invest between $255 million and $275 million in capital expenditures during 2021 with approximately 80% being expansionary capital (primarily for the construction of the Magino Gold mine) and 20% being sustaining capital.

 

2021 Capital Estimate by Project and Category($M)1

 


El Castillo

San
Agustin

La
Colorada

Florida
Canyon

Magino

Cerro del
Gallo

Exploration

Consolidated
Sustaining 3 – 4 5 – 7 1 – 2 17 – 18 26 – 31
Stripping 6 – 7 19 – 20 25 – 27
Total Sustaining 9 – 11 5 – 7 20 – 22 17 – 18 51 – 58
Expansionary  11 – 12 180 – 190 3 – 4 10 – 11 204 – 217
Total 9 – 11 5 – 7 20 – 22 28 – 30 180 – 190 3 – 4 10 – 11 255 – 275

 

1 Assumes exchanges rates of MXN:USD of 20:1 and CAD:USD of 1.3:1.

 

Board Member Retirement

 

Effective December 31, 2020, Chris Lattanzi has retired from Argonaut’s board of directors.  Mr. Lattanzi has been an integral member of Argonaut’s board since the inception of the Company at the end of 2009.

 

Jim Kofman, Chairman of the board, commented: “The invaluable experience that Chris garnered throughout his 60 year career as a mining engineer and brought to the Argonaut board has been tremendously appreciated.  Quite simply, the amount of knowledge that Chris has shared with Argonaut’s board members and management to help inform the Company’s decisions has been indispensable and cannot be replaced.  On behalf the board, I want to wish Chris the absolute best during his well-earned retirement.  It has been a pleasure learning from and working with him over the years.”

 

Non-IFRS Measures

The Company has included certain non-IFRS measures including “Cash cost per gold ounce sold” and “All-in sustaining cost per gold ounce sold” in this press release to supplement its financial statements which are presented in accordance with International Financial Reporting Standards.  Cash cost per gold ounce sold is equal to production costs less silver sales divided by gold ounces sold.  All-in sustaining cost per gold ounce sold is equal to production costs less silver sales plus general and administrative, exploration, accretion and other expenses and sustaining capital expenditures divided by gold ounces sold.  The Company believes that these measures provide investors with an alternative view 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.

 

Qualified Person, Technical Information and Mineral Properties Reports

 

Technical information included in this release was supervised and approved by Brian Arkell, Argonaut’s Vice President, Exploration and a Qualified Person under National Instrument 43-101.  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
Complex
NI 43-101 Technical Report on Resources and Reserves, El Castillo Complex, Durango, Mexico dated March 27, 2018 (effective date of March 7, 2018)
La Colorada Mine NI 43-101 Technical Report on Resources and Reserves, La Colorada Gold/Silver Mine, Hermosillo, Mexico dated March 27, 2018 (effective date of December 8, 2017)
Florida Canyon
Gold Mine
NI 43-101 Technical Report on Mineral Resource and Mineral Reserve Florida Canyon Gold Mine Pershing County, Nevada, USA dated July 8, 2020 (effective date June 1, 2020)
Magino Gold
Project
Feasibility Study Technical Report on the Magino Project, Ontario, Canada dated December 21, 2017 (effective date November 8, 2017)
Cerro del Gallo Project Pre-Feasibility Study Technical Report on the Cerro del Gallo Project, Guanajuato, Mexico dated January 31, 2020 (effective date of October 24, 2019)

 

About Argonaut Gold

 

Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production.  Its primary assets are the El Castillo mine and San Agustin mine, which together form the El Castillo Complex in Durango, Mexico, the La Colorada mine in Sonora, Mexico and the Florida Canyon mine in Nevada, USA.  The Company also holds the development stage Magino project, the advanced exploration stage Cerro del Gallo project and several other exploration stage projects, all of which are located in North America.

 

Posted January 19, 2021

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