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Argonaut Gold Announces Record Quarterly Production of 63,749 Gold Equivalent Ounces, Record Quarterly Revenue of $120.2 Million and Provides Second Quarter 2021 Operating and Financial Results

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Argonaut Gold Announces Record Quarterly Production of 63,749 Gold Equivalent Ounces, Record Quarterly Revenue of $120.2 Million and Provides Second Quarter 2021 Operating and Financial Results

 

 

 

 

 

Argonaut Gold Inc. (TSX: AR) is pleased to announce its operating and financial results for the second quarter ended June 30, 2021.  The Company reports record quarterly production of 63,749 gold equivalent ouncesi, record quarterly revenue of $120.2 million, cash flow from operating activities before changes in non-cash operating working capital of $39.3 million, net income of $21.8 million or earnings per basic share of $0.07 and adjusted net incomeii of $24.4 million or adjusted earnings per basic shareii of $0.08.  All dollar amounts are expressed in United States dollars, unless otherwise specified (C$ refers to Canadian dollars).

 

Pete Dougherty, President and CEO stated: “It was a tremendous operational and financial quarter for Argonaut Gold.  We set new quarterly records for GEO production and revenue and provided strong cash flow and earnings.  We also continued to advance the construction of the Magino project, which is tracking on schedule for first gold pour during the first quarter of 2023.  In terms of operational improvements, we expect to ramp up the new conveying and stacking system at Florida Canyon to design capacity during the third quarter and to start reaping the benefits of this investment during the fourth quarter.”

 

Key operating and financial statistics for the three months and six months ended June 30, 2021 are outlined in the following table:

 

 

3 Months Ended June 30, 2021 6 Months Ended June 30, 2021
2021 2020 Change 2021 2020 Change
Financial Data (in millions except for earnings per share)
Revenue $120.2 $58.0 107% $225.5 $124.5 81%
Gross profit $39.8 $17.7 125% $67.4 $31.6 114%
Net income (loss) $21.8 ($7.7) 383% $48.8 ($17.2) 383%
Earnings (loss) per share – basic $0.07 ($0.04) 275% $0.16 ($0.10) 268%
Adjusted net income1 $24.4 $8.5 186% $32.2 $16.9 90%
Adjusted earnings per share – basic1 $0.08 $0.05 72% $0.11 $0.09 16%
Cash flow from operating activities before changes in non-cash operating working capital $39.3 $11.8 234% $67.0 $26.5 153%
Cash and cash equivalents $216.0 $65.2 231% $216.0 $65.2 231%
Gold Production and Cost Data
GEOs loaded to the pads2 130,414 40,309 224% 244,235 137,489 78%
GEOs projected recoverable3 71,032 20,105 253% 134,319 64,389 109%
GEOs produced2,4 63,749 31,531 102% 123,452 73,067 69%
GEOs sold2 65,650 34,196 92% 124,768 76,400 63%
Average realized sales price $1,812 $1,713 6% $1,788 $1,642 9%
Cash cost per gold ounce sold1 $876 $885 (1%) $936 $929 1%
All-in sustaining cost per gold ounce sold1 $1,187 $1,080 10% $1,247 $1,213 3%
1 Please refer to the section below entitled “Non-IFRS Measures” for a discussion of these Non-IFRS Measures.
2 GEOs are based on a conversion ratio of 85:1 for silver to gold for 2021 and 80:1 for 2020. The silver to gold conversion ratio is based on the three-year trailing average silver to gold ratio.
3 Expected recoverable GEOs are based on the assumptions and parameters as set forth in the El Castillo Complex Technical Report dated March 27, 2018, the La Colorada Gold/Silver Mine Technical Report dated March 27, 2018 and the Florida Canyon Technical Report dated July 8, 2020.  In periods where the Company mines material not specifically defined in a technical report (for example: run-of-mine ore or low grade stockpile material), management uses its best estimate of recovery based on the information available.
4 Produced ounces are calculated as ounces loaded to carbon.

 

Second Quarter 2021 and Recent Company Highlights:

 

  • Corporate
    • Set a new record for quarterly GEO production – the third consecutive quarter of record quarterly production.
    • Set a new record for quarterly revenue – the second consecutive quarter of record quarterly revenue.
  • Social Responsibility
    • Delivered monthly student scholarship in communities near the El Castillo Complex.
    • Continued elementary student support with the Homework Club program, which is part of the Community Development Program in communities near Cerro del Gallo.
    • Continued sanitization campaigns in the community near La Colorada, which included the delivery of supplies to local business owners.
    • Sponsored the Color the Mucc race event hosted by the Humboldt Chamber of Commerce, which helps fund community youth scholarships in the communities near Florida Canyon.
  • El Castillo Complex
    • Second quarter production of 32,663 GEOs.
      • El Castillo production of 12,929 GEOs.
      • San Agustin production of 19,734 GEOs.
    • Completed construction of Phase 4 leach pad expansion at San Agustin on schedule and budget.
  • La Colorada
    • Second quarter production of 17,288 GEOs.
    • Reduction in cash cost per gold ounce sold of 48% compared to the second quarter of 2020 (see Non-IFRS Measures section).
    • Discovered high-grade gold veins below the El Créston open pit, including 12.2 metres at 98.9 g/t Au and 30.3 g/t Ag and 21.3 metres at 44.6 g/t Au and 274.9 g/t Ag (see press release dated April 26, 2021).
  • Florida Canyon
    • Second quarter production of 13,798 GEOs.
    • Reduction in cash cost per gold ounce sold of 24% from the previous quarter.
    • Received Air Quality Permit modification.
    • Completed the construction and installation of a new conveying and stacking system, which is expected to be ramped up to design capacity during the third quarter of 2021.
  • Magino
    • Construction
      • Completed critical path 2021 logging activities;
      • Initiated fish capture and relocation program in preparation for construction water treatment system commissioning;
      • Completed reverse circulation (RC) grade control drilling program;
      • Commenced open pit overburden stripping;
      • Mobilized crushing and screening plants;
      • Opened main office hub in Dubreuilville, Ontario;
      • Completed construction of 144-person onsite camp;
      • Completed construction of a 458-person camp;
      • Installed 12-metre communications tower, server and repeater;
      • Mobilized the concrete batch plant;
      • Commenced concrete mixing at the plant site;
      • Completed mobilization and installation of fuel attendant trailer at fuel bay;
      • Installed multiple sump systems at plant site and completed all high density polyethylene piping (HDPE) from plant site to historical tailings pond; and
      • Received the majority of pre-production mining equipment onsite.
    • Community & Permitting
      • Held ground breaking ceremony with members of the Provincial and Municipal governments and local Indigenous communities.
      • Initiated red spruce seedling grow program with Lakehead University Greenhouse;
      • Participated in an Information Session with Métis Nation of Ontario Education and Training Branch;
      • Participated in separate meetings with Missanabie Cree First Nation, Métis Nation of Ontario and Batchewana First Nation to provide project and environmental updates;
      • Participated in a virtual presentation hosted by the Société Économique de l’Ontario et Association Francophone du Nord Ouest de l’Ontario;
      • Hosted a site tour with three members of the Environmental Stewardship for Michipicoten First Nation; and
      • Assisted in community donations to support the Wawa hospital (Lady Dunn Health Centre) and the Town of Dubreuilville for training support.
    • Exploration
      • Continued to have exploration success at targeting high-grade gold mineralization below and adjacent to the planned open pit, including 7.0 metres at 13.3 g/t Au and 8.0 metres at 7.7 g/t Au (see press release dated July 8, 2021).
    • Monthly newsletter

 

Financial Results – Second Quarter 2021

Record quarterly revenue was $120.2 million for the second quarter of 2021, an increase from $58.0 million for the second quarter of 2020.  During the second quarter of 2021, the Company sold 63,000 gold ounces at an average realized price per ounce of $1,812, compared to 32,707 gold ounces sold at an average realized price per ounce of $1,713 during the same period of 2020.  Gold ounces sold for the second quarter of 2021 increased 93% compared to the same period in 2020, primarily due to increased production and gold sales at all Mexican operations due to a temporary two-month suspension of mining, crushing and stacking activities during the onset of the COVID-19 pandemic in response to the Mexican Federal Government decree during the second quarter of 2020 and the acquisition of the Florida Canyon mine on July 1, 2020.

 

Net income for the second quarter of 2021 was $21.8 million or earnings per basic share of $0.07, an increase from a net loss of $7.7 million or loss per basic share of $0.04 for the second quarter of 2020.

 

Adjusted net incomeii for the second quarter of 2021 was $24.4 million or $0.08 per basic share, an increase from adjusted net incomeii of $8.5 million or $0.05 per basic share for the second quarter of 2020.

 

Cash flows from operating activities before changes in non-cash operating working capital totaled $39.3 million during the second quarter of 2021, an increase from $11.8 million in the second quarter of 2020.  The 234% increase in cash flow compared to the same period last year was primarily related to increased production and gold sales from all Mexican operations due to the two month suspension for COVID-19 during the second quarter of 2020, the acquisition of the Florida Canyon mine on July 1, 2020 and a higher average realized gold price.

 

Financial Results – First Half 2021

 

Revenue for the six months ended June 30, 2021 was $225.5 million, an increase from $124.5 million for the six months ended June 30, 2020.  During the first half of 2021, gold ounces sold totaled 119,727 at an average realized price per ounce of $1,788, compared to 72,876 gold ounces sold at an average realized price per ounce of $1,642 during the same period of 2020. Gold ounces sold for the six months ended June 30, 2021 increased 64% compared to the same period in 2020 primarily due to increased production and gold sales at all Mexican operations due to the two month suspension for COVID-19 during the second quarter of 2020 and the acquisition of the Florida Canyon mine on July 1, 2020.

 

Net income for the six months ended June 30, 2021 was $48.8 million or earnings per basic share of $0.16, an increase from a net loss of $17.2 million or loss per basic share of $0.10 for the six months ended June 30, 2020.

 

Adjusted net incomeii for the six months ended June 30, 2021 was $32.2 million or adjusted earnings per basic shareii of $0.11, an increase from adjusted net incomeii of $16.9 million or adjusted earnings per basic shareii of $0.09 for the six months ended June 30, 2020.

 

Cash flows from operating activities before changes in non-cash operating working capital totaled $67.0 million in the six months ended June 30, 2021, an increase from $26.5 million in the six months ended June 30, 2020.  The 153% increase in cash flow compared to the same period last year was primarily related to increased production and gold sales from all Mexican operations due to the two month suspension for COVID-19 during the second quarter of 2020, the acquisition of the Florida Canyon mine on July 1, 2020 and a higher average realized gold price.

 

Operational Results – Second Quarter 2021

 

During the second quarter 2021, the Company achieved record quarterly production of 63,749 GEOs at a cash cost of $876 per gold ounce sold and all-in sustaining cost of $1,187 per gold ounce sold compared to 31,531 GEOs at a cash cost of $885 per gold ounce sold and AISC of $1,080 per gold ounce sold during the second quarter 2020 (see “Non-IFRS Measures” section).  The 102% increase in GEO production was primarily related to increased production from all Mexican operations due to the two month suspension for COVID-19 during the second quarter of 2020 and the acquisition of the Florida Canyon mine on July 1, 2020.  Cash costs per gold ounce sold were relatively flat compared to the same period in 2020.  The 10% increase in AISC compared to the same period in 2020 is primarily related to the increased sustaining capital spend at the Florida Canyon mine, which was acquired on July 1, 2020.

 

SECOND QUARTER 2021 EL CASTILLO COMPLEX OPERATING STATISTICS

 

3 Months Ended June 30 6 Months Ended June 30
2021 2020 %
Change
2020 2019 %
Change
Mining (in 000s except waste/ore ratio)
Tonnes ore El Castillo 2,496 902 177% 4,900 2,824 74%
Tonnes ore San Agustin 2,718 1,172 132% 5,588 3,881 44%
Tonnes ore 5,214 2,074 151% 10,488 6,705 56%
Tonnes waste El Castillo 2,473 770 221% 5,610 4,184 34%
Tonnes waste San Agustin 1,738 584 198% 3,512 2,453 43%
Tonnes waste 4,211 1,354 211% 9,122 6,637 37%
Tonnes mined El Castillo 4,969 1,672 197% 10,510 7,008 50%
Tonnes mined San Agustin 4,456 1,756 154% 9,100 6,334 44%
Tonnes mined 9,425 3,428 175% 19,610 13,342 47%
Tonnes per day El Castillo 55 18 203% 58 39 50%
Tonnes per day San Agustin 49 19 158% 51 35 44%
Tonnes per day 104 37 180% 109 74 47%
Waste/ore ratio El Castillo 0.99 0.85 16% 1.14 1.48 (23%)
Waste/ore ratio San Agustin 0.64 0.50 28% 0.63 0.63
Waste/ore ratio 0.82 0.68 21% 0.89 1.06 (16)%
Leach Pads (in 000s)
Tonnes crushed to East leach pads El Castillo 0 64 (100%) 0 278 (100%)
Tonnes crushed to West leach pads El Castillo 0 0 0 3 (100%)
Tonnes direct to leach pads El Castillo 2,488 903 176% 4,890 2,635 86%
Tonnes crushed to leach pads San Agustin 2,962 1,191 149% 5,944 3,924 51%
Tonnes to leach pads 5,450 2,158 153% 10,835 6,840 58%
Production
Gold grade loaded to leach pads El Castillo (g/t)1 0.25 0.43 (42%) 0.27 0.51 (47%)
Gold grade loaded to leach pads San Agustin (g/t)1 0.32 0.33 (3%) 0.29 0.35 (17%)
Gold loaded to leach pads (g/t)1 0.29 0.37 (22%) 0.28 0.42 (33%)
Gold loaded to leach pads El Castillo (oz)2 19,973 13,386 49% 42,149 47,857 (12%)
Gold loaded to leach pads San Agustin (oz)2 30,280 12,609 140% 56,190 43,864 28%
Gold loaded to leach pads (oz)2 50,253 25,995 93% 98,339 91,721 7%
Projected recoverable GEOs loaded El Castillo4 10,859 5,547 96% 20,596 18,619 11%
Projected recoverable GEOs loaded San Agustin4 21,454 8,951 140% 40,342 31,732 27%
Projected recoverable GEOs loaded4 32,313 14,498 123% 60,939 50,351 21%
Gold produced El Castillo (oz)2,3 12,723 9,151 39% 24,695 23,586 5%
Gold produced San Agustin (oz)2,3 18,105 13,403 35% 35,376 26,238 35%
Gold produced (oz)2,3 30,828 22,554 37% 60,071 49,824 21%
Silver produced El Castillo (oz)2,3 17,445 19,547 (11%) 39,240 43,092 (9%)
Silver produced San Agustin (oz)2,3 138,470 69,242 100% 280,901 144,746 94%
Silver produced (oz)2,3 155,915 88,789 76% 320,141 187,838 70%
GEOs produced El Castillo3 12,929 9,394 38% 25,157 24,123 4%
GEOs produced San Agustin3 19,734 14,268 38% 38,681 28,047 38%
GEOs produced3 32,662 23,662 38% 63,837 52,170 22%
Gold sold El Castillo (oz)2 12,614 11,008 15% 26,216 24,634 6%
Gold sold San Agustin (oz)2 18,829 14,293 32% 35,495 27,754 28%
Gold sold (oz)2 31,443 25,301 24% 61,711 52,388 18%
Silver sold El Castillo (oz)2 19,093 19,547 (2%) 40,211 43,092 (7%)
Silver sold San Agustin (oz)2 144,867 71,042 104% 273,788 156,179 75%
Silver sold (oz)2 163,960 90,589 81% 313,999 199,271 58%
GEOs sold El Castillo 12,838 11,253 14% 26,689 25,173 6%
GEOs sold San Agustin 20,534 15,181 35% 38,716 29,706 30%
GEOs sold 33,372 26,434 26% 65,405 54,879 19%
Cash cost per gold ounce sold El Castillo5 $1,109 $862 29% $1,077 $988 9%
Cash cost per gold ounce sold San Agustin5 $801 $756 6% $804 $769 5%
Cash cost per gold ounce sold5 $924 $802 15% $920 $872 6%
1“g/t” is grams per tonne.
2“oz” means troy ounce.
3Produced ounces are calculated as ounces loaded to carbon.
4Expected recoverable GEOs are based on the assumptions and parameters as set forth in the El Castillo Complex Technical Report dated March 27, 2018.  In periods where the Company mines material not specifically defined in a technical report (for example: run-of-mine ore or low grade stockpile material), management uses its best estimate of recovery based on the information available.
5Please refer to the section below entitled “Non-IFRS Measures” for a discussion of this Non-IFRS Measure.

 

Summary of Production Results at the El Castillo Complex – Second Quarter 2021

 

During the second quarter of 2021, the El Castillo Complex produced 38% more GEOs at a cash cost per gold ounce sold 15% higher than during the second quarter of 2020.  GEO production was higher at both the El Castillo and San Agustin mines, primarily related to increased production due to the two month suspension for COVID-19 during the second quarter of 2020.  Cash cost per gold ounce sold were higher, as there were no costs associated with mining, crushing and stacking for two months during the second quarter of 2020 in response to the Mexican Federal Government decree.

 

SECOND QUARTER 2021 LA COLORADA OPERATING STATISTICS

 

 

3 Months Ended June 30 6 Months Ended June 30
2021 2020 %
Change
2020 2019 %
Change
Mining (in 000s except for waste/ore ratio)
Tonnes ore 1,150 506 127% 2,377 1,453 64%
Tonnes waste 2,173 1,737 25% 6,187 6,420 (4%)
Tonnes mined 3,323 2,243 48% 8,564 7,873 9%
Tonnes per day 37 25 46% 48 43 11%
Waste/ore ratio 1.89 3.43 (45%) 2.60 4.42 (41%)
Leach Pads (in 000s)
Tonnes crushed to leach pads 1,247 518 141% 2,513 1,484 69%
Production
Gold loaded to leach pads (g/t)1 0.76 0.42 81% 0.65 0.38 71%
Gold loaded to leach pads (oz)2 30,320 7,048 330% 52,411 18,070 190%
Projected recoverable GEOs loaded4 24,101 5,607 330% 41,735 14,038 197%
Gold produced (oz)2,3 16,721 7,537 122% 32,615 19,886 64%
Silver produced (oz)2,3 48,145 26,554 81% 101,057 80,869 25%
GEOs produced3 17,288 7,869 120% 33,804 20,897 62%
Gold sold (oz)2 16,721 7,406 126% 31,329 20,488 53%
Silver sold (oz)2 53,153 28,410 87% 97,591 82,608 18%
GEOs sold 18,324 7,762 136% 32,477 21,521 51%
Cash cost per gold ounce sold5 $608 $1,169 (48%) $676 $1,074 (37%)
1 “g/t” refers to grams per tonne.
2 “oz” refers to troy ounce.
3 Produced ounces are calculated as ounces loaded to carbon.
4 Expected recoverable GEOs are based on the assumptions and parameters as set forth in the La Colorada Gold/Silver Mine Technical Report dated March 27, 2018.  In periods where the Company mines material not specifically defined in a technical report (for example: run-of-mine ore or low grade stockpile material), management uses its best estimate of recovery based on the information available.
5 Please refer to the section below entitled “Non-IFRS Measures” for a discussion of this Non-IFRS Measure.

 

Summary of Production Results at La Colorada – Second Quarter 2021

 

During the second quarter of 2021, the La Colorada mine produced 120% more GEOs at a cash cost per gold ounce sold 48% less than during the second quarter of 2020 (see “Non-IFRS Measures” section).  Higher GEO production was primarily due to an 81% increase in gold grade and due to the two month suspension for COVID-19 during the second quarter of 2020.  Lower cash cost per gold ounce sold was primarily due to the increase in gold grade, a 45% reduction in strip ratio and 126% more gold ounces sold.

 

SECOND QUARTER 2021 FLORIDA CANYON OPERATING STATISTICS

 

 3 Months Ended
June 30, 2021
6 Months Ended
June 30, 2021
Mining (in 000s except for waste/ore ratio)
Tonnes ore 2,496 4,699
Tonnes waste 3,194 6,422
Tonnes mined 5,690 11,121
Tonnes per day 61 60
Waste/ore ratio 1.28 1.37
Leach Pads (in 000s)
Tonnes crushed to leach pads 1,796 3,591
Tonnes direct to leach pads 711 1,123
Production
Gold grade loaded to leach pads (g/t)1 0.31 0.32
Gold loaded to leach pads (oz)2 25,313 49,228
Projected recoverable GEOs loaded4 14,619 31,646
Gold produced (oz)2,3 13,726 25,654
Silver produced (oz)2,3 6,117 13,349
GEOs produced3 13,798 25,811
Gold sold (oz)2 13,954 26,884
Silver sold (oz)2 8,217 16,752
GEOs sold 13,954 26,884
Cash cost per gold ounce sold5 $1,110 $1,279
1 “g/t” refers to grams per tonne.
2 “oz” refers to troy ounce.
3 Produced ounces are calculated as ounces loaded to carbon.
4 Expected recoverable GEOs are based on the assumptions and parameters as set forth in the Florida Canyon Mine Technical Report dated July 8, 2020.  In periods where the Company mines material not specifically defined in a technical report (for example: run-of-mine ore or low grade stockpile material), management uses its best estimate of recovery based on the information available.
5 Please refer to the section below entitled “Non-IFRS Measures” for a discussion of this Non-IFRS Measure.

 

Summary of Production Results at Florida Canyon

As Argonaut did not own nor operate the Florida Canyon mine during the three and six months ended June 30, 2020, it is not making comparisons to the same period last year.  Florida Canyon produced 13,798 GEOS, a 15% increase in GEO production compared to the previous quarter.  Cash cost per gold ounce sold of $1,110 represent a 24% decrease compared to the previous quarter (see “Non-IFRS Measures” section).  Higher GEO production and lower cash cost per gold ounce sold compared to the previous quarter are primarily related to a 13% reduction in strip ratio and higher recoveries partially offset by a 9% reduction in gold grade.

 

Argonaut has identified potentially significant operating cost savings once it can eliminate the re-handle on the back end of the secondary crushing by switching to a conveying and stacking system to transport crushed ore to the leach pads.  All necessary regulatory approvals, including a modification to the existing Air Quality permit, to allow for the construction, installation and operation of a new conveying and stacking system were received during the second quarter of 2021 (see press release dated April 28, 2021), and the construction and installation of the new conveying and stacking system was completed by the end of July 2021.  It is estimated that the new system will be ramped up to design capacity during the third quarter of 2021.  The capital associated with the convey and stack project was included in Argonaut’s 2021 capital guidance (see press release dated January 19, 2021).

 

Pete Dougherty commented: “All three mines in Mexico have met or exceeded our expectations over the first half of the year, leading to record quarterly production and revenue, as well as strong cash flow and earnings in the second quarter.  We experienced improvements in both production and operating costs at Florida Canyon quarter-over-quarter and believe these improvements will continue as we ramp up the new conveying and stacking system to design capacity over the next couple months.  We believe this new system will significantly reduce operating costs at Florida Canyon once it is ramped up to design specifications and, given the recovery cycle at Florida Canyon, we should start to see the benefits of this investment during the fourth quarter of this year.  On a consolidated basis, we are well on our way to achieving our production and cost guidance.”

 

Outlook

 

Argonaut is on track to achieve its 2021 consolidated production, cost and capital guidance.  The table below outlines the first half of 2021 production and cost actuals compared to full year 2021 guidance:

 

2021 PRODUCTION AND COST GUIDANCE

 

First Half 2021 Actuals Full Year 2021 Guidance
GEO production 123,452 210,000 – 250,000
Cash cost per gold ounce sold1 $936 $950 – $1,050
AISC per gold ounce sold1 $1,247 $1,250 – $1,350
1 Please refer to the section below entitled “Non-IFRS Measures” for a discussion of this Non-IFRS Measure.

 

The Magino construction project is tracking on schedule.  During the three and six months ended June 30, 2021, the Company incurred $64.0 million and $103.2 million in costs, respectively, related to the construction of the Magino project that were capitalized to assets under construction.  Of this amount incurred, the majority was for securing long lead time components for the mineral processing plant and for site development, camp construction and earthworks.

 

While the Magino construction project remains on schedule, Argonaut is currently reviewing the impacts of COVID-19, foreign currency exchange rates, contingencies, potential adjustments to the development plans and cost inflation to certain inputs related to the initial capital estimate (excluding ramp-up capital) which it believes will likely exceed the 15% last disclosed in the press release dated May 4, 2021.

 

Argonaut is currently working to optimize its life-of-mine plans.  Following this work, the Company anticipates publishing updated National Instrument (“NI”) 43-101 Technical Reports for the the El Castillo Complex (El Castillo and San Agustin mines) and the La Colorada mine by the end of 2021.

 

Argonaut also believes there is a potential opportunity to reduce the near term sustaining capital requirement at its La Colorada mine, primarily by deferring some of the capitalized stripping of the Veta Madre pit.  While this evaluation is ongoing, early indications illustrate a mine plan that is generally neutral in terms of net present value but provides additional cash flow during 2021 and 2022.  More information regarding a new mine plan at La Colorada will be provided concurrent with the publication of an updated NI 43-101 Technical Report, which is expected by the end of 2021.

 

Full year 2021 capital guidance has not changed.  However, Argonaut now expects to invest approximately an additional $10 million at the Magino construction project and decrease capital spending at La Colorada by approximately $10 million during 2021.  Updated 2021 capital guidance is provided below:

 

Updated 2021 Capital Guidance

 

First Half 2021 Accruals Original Full Year 2021 Guidance Updated Full Year 2021 Guidance
Capital (including exploration and excluding Magino construction capital)1 $33.4 million $75 million – $85 million $65 million – $75 million
Magino construction capital1 $103.7 million $180 million – $190 million $190 million – $200 million
1 Assumes exchanges rates of MXN:USD of 20:1 and CAD:USD of 1.25:1.

 

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 construction 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 August 11, 2021

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