17 Year Mine Life to Average 150,000 Gold
Ounces of Production During Initial Five Years and Produce Nearly
Two Million Ounces of Gold
TORONTO, Nov. 8, 2017 /CNW/ - Argonaut Gold Inc.
(TSX: AR) (the "Company", "Argonaut Gold" or "Argonaut") is
pleased to announce the results of a feasibility study ("FS") for
its 100% owned Magino gold project ("Magino" or the "Project")
located 40 kilometres northeast of Wawa,
Ontario, Canada. A 10,000 tonne per day processing
facility was selected for the FS in order to significantly reduce
the initial capital requirement. This differs from the 30,000
tonne per day project presented in the January 2016 pre-feasibility study ("PFS") and
provides the Company with a scalable project, which it can fund on
a stand-alone basis, if a decision is made to proceed with the
Project. The Project is designed to allow future expansion
should economics warrant such a decision. A 30,000 tonne per day
scenario was also evaluated, is summarized in this press release
and will be described in summary in the Other Relevant Data
section of the National Instrument ("NI") 43-101 Technical Report
scheduled for filing within 45 days. All dollar amounts are
expressed in United States
dollars, unless otherwise specified (C$ refers to Canadian
dollars).
Pete Dougherty, President &
CEO stated: "We believe this FS demonstrates that Magino is a
strategic, long-life asset in an attractive mining jurisdiction,
Ontario. We have been able to appropriately scale the Project
to a manageable capital number while providing the optionality of
expanding the scale of the project in the future either through
operational cash flow during Magino's life or through a potential
joint-venture partnership. The 10,000 tonne per day project
reports an average grade of 1.4 g/t Au during the first five years
and 1.2 g/t Au during the 14 years of active mining. With a
strong cash position, zero debt and the expectation of solid cash
flow from our Mexican operations as we execute on our 60%
production growth plan between 2017 and 2019, we feel that the
$321 million initial capital estimate
is a manageable investment for the Company, at the right time,
given our ability to add debt capacity at either the corporate or
project level and the cash flow anticipated from our Mexican
operations. We have also been mindful when developing mine
plans and designing the process facility not to sterilize the ore
body and ensure proper space is available should economics warrant
an investment to expand the Project to 30,000 tonnes per day in the
future. Given our internal growth profile, we are focused in
the near term on that growth. Decisions on Magino will be made
when and if it is appropriate. The size, location, economics
and expandability of Magino give Argonaut significant flexibility
to explore options around the Project on its own or with
partners."
The FS assumed $1,250 gold and a
0.78:1 United States dollar to
Canadian dollar exchange rate. The FS yields average annual
production of approximately 116,000 gold ounces over a 17 year mine
life (including three years of ore processed from a low grade
stockpile), an average of 150,000 gold ounces during the first five
years and an average of 123,000 gold ounces during the 14 years of
active mining. Estimated cash costs and all-in sustaining
costs ("AISC") are $669/oz and
$711/oz respectively (see Non-IFRS
Measures section). The economic results of the FS are
presented in Table 1 below:
Table 1: Magino Feasibility Study Economic
Results
Parameter
|
Unit
|
|
Au Price
|
US $/oz
|
1,250
|
Exchange
Rate
|
US:CDN
|
0.78
|
Production
|
Mine Life (from
start of commercial production)
|
Yrs
|
17
|
Au Payable
|
LOM k oz
|
1,964
|
Avg k
oz/yr
|
115.7
|
Life-of-mine ("LOM")
Net Sales Revenue (after royalties)
|
US$M
|
2,443
|
Operating
Costs
|
LOM US$M
|
1,313
|
US$/t
milled
|
22.27
|
Capital
Costs
|
Pre-Production
|
US$M
|
293
|
Sustaining &
Closure
|
US$M
|
84
|
Subtotal
|
US$M
|
377
|
Contingency
|
US$M
|
28
|
Total Capital
Costs
|
US$M
|
405
|
Operating Cash
Flow
|
US$M
|
1,142
|
Cash
Cost
|
US$/oz
|
669
|
All-in Sustaining
Cost
|
US$/oz
|
711
|
Economic
Results
|
After-Tax Free Cash
Flow
|
US$M
|
540
|
Avg
US$M/yr
|
32
|
Discount
Rate
|
%
|
5
|
Pre-Tax
NPV5%
|
US$M
|
408
|
Pre-Tax Internal
Rate of Return (IRR)
|
%
|
22.6
|
Pre-Tax
Payback
|
Yrs
|
3.8
|
After-Tax
NPV5%
|
US$M
|
288
|
After-Tax
IRR
|
%
|
19.5
|
After-Tax
Payback
|
Yrs
|
3.9
|
The Company has evaluated the net present value at a 5% discount
rate (NPV5%) of the Project at various sensitivities,
including gold price and foreign exchange rate. Table 2 below
illustrates the FS after-tax NPV5% sensitivity to
various gold price and foreign exchange rate assumptions:
Table 2: Magino Base Case After-Tax NPV at 5%
Discount Sensitivity to Gold Price & Exchange Rate ($M)
Exchange
Rate
(US$/C$)
|
Gold Price ($/oz)
|
$1,100
|
$1,150
|
$1,200
|
$1,250
|
$1,300
|
$1,350
|
$1,400
|
0.72
|
$183
|
$228
|
$273
|
$317
|
$362
|
$406
|
$451
|
0.74
|
$173
|
$218
|
$263
|
$307
|
$352
|
$397
|
$441
|
0.76
|
$163
|
$208
|
$253
|
$298
|
$342
|
$387
|
$432
|
0.78
|
$153
|
$198
|
$244
|
$288
|
$333
|
$378
|
$422
|
0.80
|
$143
|
$188
|
$234
|
$279
|
$323
|
$368
|
$413
|
0.82
|
$132
|
$178
|
$224
|
$269
|
$313
|
$358
|
$403
|
0.84
|
$122
|
$169
|
$214
|
$259
|
$304
|
$348
|
$393
|
Mineral Resource Estimate
A conceptual pit was generated in order to constrain the
tabulation of Mineral Resources. A gold price of $1,300 was used along with other cost, recovery
and slope parameters. Mineral Resources were estimated in the
conceptual pit using a 0.25 g/t gold cut-off grade. Table 3
tabulates undiluted Measured and Indicated Mineral Resources and
Inferred Mineral Resources at a 0.25 g/t gold cut-off grade.
Table 3: Mineral Resource Estimate
Resource
Category
|
Tonnes
(Mt)
|
Au
(g/t)
|
Contained Au
Ounces
(koz)
|
Measured
|
37.4
|
0.84
|
1,010
|
Indicated
|
106.6
|
0.93
|
3,187
|
Measured &
Indicated
|
144.0
|
0.91
|
4,197
|
Inferred
|
33.2
|
0.83
|
886
|
Note:
|
Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability. It is reasonably expected that the majority of the
Inferred Mineral Resources could be upgraded to Indicated Mineral
Resources with continued exploration. The Mineral Resources
tabulated in Table 3 are inclusive of Mineral Reserves.
|
|
Numbers may not total
due to rounding.
|
Mineral Reserve Estimate
The Mineral Reserve estimate for the Magino open pit was
constrained with estimates of gold price, mining dilution, process
recovery, operating costs, pit slope angles, and refining/transport
costs.
The Mineral Resource block model for the Magino deposit was then
used to determine optimal mining shells and pit phasing. Measured
and Indicated Mineral Resources were included in the pit
optimization process. Inferred Mineral Resources within the
designed open pit are treated as waste.
Detailed pit and phase designs were created based on the pit
optimization results. These designs incorporated geotechnical
parameters as well as ramp accesses and formed the basis of the
Mineral Reserve estimate.
A gold cut-off grade of 0.41 g/t was used to calculate the
Mineral Reserve estimate for Magino. The FS Mineral Reserve
estimate is summarized in the Table 4:
Table 4: Mineral Reserve Estimate
Reserve
Class
|
Diluted Tonnage
(Mt)
|
Diluted Grade
g/t Au
|
Contained Gold
Au (koz)
|
Proven
|
24.2
|
1.03
|
804
|
Probable
|
34.7
|
1.19
|
1,332
|
Total Proven &
Probable
|
59.0
|
1.13
|
2,137
|
Notes:
|
Mineral Reserves are
based on the mine production schedule.
|
|
Mineral Reserves
include 3% ore loss and 20% dilution.
|
|
Cut-off grade varies
by year as per the production schedule (marginal cut-off is 0.41
g/t Au).
|
|
A gold price of
US$1,200/ounce and an exchange rate of US$0.78 to C$1.00 have been
assumed.
|
|
Numbers may not total
due to rounding.
|
Mineral Processing, Metallurgical Testing and Recovery
Methods
The metallurgical testing was completed at McClelland
Laboratories Inc. Recent work focused on optimizing processing
conditions and a further evaluation of ore variability within the
Magino deposit. The testing program included gravity
concentration and leach optimization testing.
Results from the program suggest an optimum grind size of
P80 75 microns, demonstrated gold recoveries ranging
from 90 to 94% from an average head grade sample of 1.31 g/t Au.
The work confirmed the basic flowsheet previously adopted in the
January 2016 PFS but resulted in some
optimization design criteria detail such as leach retention time
and reagent consumption data.
Flowsheet development and design criteria were based on
metallurgical test work results. The process plant was
designed on a throughput of 10,000 tonnes of ore per day with an
average gold head grade of 1.25 g/t and to achieve an overall 92.0%
gold recovery. The adopted flowsheet includes primary
crushing, single stage semi-autogenous grinding, a gravity recovery
circuit, cyanide leach and carbon-in-pulp gold adsorption circuit
with cyanide recovery and detoxification and thickening prior to
tailings discharge to a tailings facility. Table 5 summarizes
the process criteria selected for process design and Project
economics:
Table 5: Process Design Criteria
Summary
Criteria
|
Unit
|
Value
|
Overall Plant
Feed
|
t/d
|
10,000
|
Crushing Circuit
Throughput Rate
|
t/h
|
556
|
Grinding and Leach
Process Rate
|
t/h
|
453
|
Grinding Circuit
Product Size, 80% Passing
|
µm
|
75
|
Leach Circuit
Retention Time
|
h
|
36
|
Cyanide
Concentration, Leach Feed
|
ppm
|
750
|
Cyanide
Consumption1
|
kg NaCN/t
|
0.2 for shallow, mid
& deep ores
0.4 for deep-deep
ores
|
Lime Requirement,
CaO
|
kg/t
|
0.8 for shallow, mid
& deep ores
0.7 for deep-deep
ores
|
Detoxification
Method
|
|
SO2/Air
|
Detoxification Limit
(Discharge to TMF)
|
ppm
CNWAD
|
< 1.0
|
CIP Circuit Retention
Time-Design
|
h
|
1.9
|
Elution/stripping
Circuit Capacity
|
t
|
4
|
Gold Head Grade, LOM
Average
|
Au, g/t
|
1.25
|
Anticipated Gold
Recovery, Design
|
Au, %
|
92.0
|
Note 1: Values
include recirculation of cyanide from tailings wash
thickener.
|
Mine Plan and Production
Schedule
Open pit mining of the Magino deposit is intended to produce a
total of 59.0 million tonnes (Mt) of ore and 232.4 Mt of waste for
a 3.9:1 overall strip ratio, over a 15-year mine production life
(including one year of pre-production). The current life of mine
plan focuses on achieving consistent ore production rates, and
mining of higher value material, as well as balancing grade and
strip ratios. Lower grade material that is above the marginal
cut-off but below the operational cut-off will be stockpiled and
processed at the end of mine life (years 14 through 17). Table
6 summarizes the pit design ore tonnages and grades for the open
pit deposit:
Table 6: Proposed Mining Plan
Description
|
Unit
|
Value
|
Mine Production Life
(incl. pre-prod)
|
yr
|
15
|
Process Diluted Ore
Feed
|
Mt
|
59.0
|
Diluted Gold Grade
(head grade)
|
g/t
|
1.13
|
Contained
Gold
|
koz
|
2,137
|
Waste
|
Mt
|
232.4
|
Total
material
|
Mt
|
291.4
|
Strip
Ratio
|
t:t
|
3.9
|
Open pit mining operations will use a fleet comprised of 16
m3 front shovels, a 13 m3 front-end loader
and 140 t haul trucks. This fleet will be supplemented by
drills, graders, and track and rubber-tire dozers. A 5 metre
working bench height was selected for mining in ore and waste with
overall 10 metre effective bench height based on a double bench
configuration.
Mining will begin at the Project in the year preceding full
operations to provide waste rock for general construction, as well
as construction of the first lift of the containment structure at
the tailings facility. This will also enable the stockpiling of
higher grade ore prior to the start of mill processing. Mill
processing will commence in year 1. Open pit mining will be
completed in the first half of year 14. Mill processing of lower
grade material will continue until the first quarter of year
17. Table 7 summarizes the life of mine material movement by
year for both the mine and the processing facility:
Table 7: Mine Production Schedule
Year
|
Ore Tonnes
Mined
(M tonnes)
|
Waste
Tonnes
Mined (M
tonnes)
|
Tonnes
Processed
(M tonnes)
|
Strip
Ratio
|
Gold Grade
Processed
(g/t)
|
Gold
Recovered
(000s oz)
|
Pre-
Production
|
0.4
|
9.1
|
N/A
|
20.6
|
N/A
|
N/A
|
1
|
4.9
|
13.5
|
3.40
|
2.7
|
1.43
|
144
|
2
|
6.1
|
14.4
|
3.65
|
2.4
|
1.43
|
155
|
3
|
4.7
|
17.3
|
3.65
|
3.7
|
1.14
|
123
|
4
|
5.8
|
16.7
|
3.65
|
2.9
|
1.52
|
165
|
5
|
4.8
|
19.7
|
3.65
|
4.1
|
1.50
|
162
|
6
|
4.1
|
22.9
|
3.65
|
5.6
|
1.21
|
131
|
7
|
3.6
|
23.4
|
3.65
|
6.4
|
1.06
|
114
|
8
|
3.6
|
23.4
|
3.65
|
6.4
|
0.96
|
103
|
9
|
3.6
|
23.4
|
3.65
|
6.4
|
1.12
|
121
|
10
|
3.6
|
20.5
|
3.65
|
5.6
|
1.19
|
128
|
11
|
3.6
|
11.1
|
3.65
|
3.0
|
1.31
|
142
|
12
|
3.6
|
5.7
|
3.65
|
1.6
|
1.24
|
133
|
13
|
3.6
|
5.7
|
3.65
|
1.6
|
1.15
|
124
|
14
|
2.6
|
5.8
|
3.65
|
2.2
|
1.04
|
113
|
15
|
N/A
|
N/A
|
3.65
|
N/A
|
0.45
|
49
|
16
|
N/A
|
N/A
|
3.65
|
N/A
|
0.45
|
49
|
17
|
N/A
|
N/A
|
0.81
|
N/A
|
0.45
|
11
|
Total
|
59.0
|
232.4
|
59.0
|
3.9
|
1.13
|
1,966
|
Capital Costs
The capital cost estimate includes the costs required to
develop, sustain, and close the operation for a planned 17-year
mine life, which includes three years of processing low grade,
stockpiled material. Major construction at site is expected to take
place over a 24-month period. The sustaining capital is
carried over operating years one through 16 and closure costs are
projected over years 17 to 22. Table 8 details the high-level
capital cost estimate:
Table 8: Summary of Life of Mine Capital
Costs
Description
|
Estimate
(US$M)
|
Mining
|
42.2
|
On-Site
Development
|
39.8
|
Mineral
Processing
|
107.8
|
Infrastructure
|
36.0
|
Project
Indirects
|
24.1
|
EPCM
|
30.5
|
Owner's
Cost
|
12.1
|
Contingency
|
28.4
|
Total Initial
Capital
|
320.9
|
Sustaining
Capital
|
67.3
|
Closure
Cost
|
16.9
|
Total
Sustaining/Closure Capital
|
84.2
|
Total Capital
Costs
|
405.0
|
Operating Costs
The FS operating cost estimate includes the costs required to
mine, handle and transport ore to the mill, mill and process the
ore to doré, general and administrative expenses, as well as water
treatment plant operating costs. The life of mine operating costs
and unit costs are summarized in Table 9:
Table 9: Life of Mine Total Operating Cost and
Unit Cost Estimate
Description
|
Estimate
(US$M)
|
Unit
Cost
(US$/tonne)
|
Unit
Cost
(US$/payable
oz)
|
Mining
|
652.9
|
11.07
|
332
|
Re-handle
|
11.0
|
0.19
|
6
|
Equipment
Lease
|
44.4
|
0.75
|
23
|
Processing
|
451.5
|
7.66
|
230
|
G&A
|
141.5
|
2.40
|
72
|
Refining
|
9.8
|
0.17
|
5
|
Royalties
|
1.8
|
0.03
|
1
|
Total Operating
Costs
|
1313.01
|
22.27
|
669
|
Environmental Assessment and Permitting
The Company submitted its Environmental Impact Statement in
January 2017 and the environmental
permitting process is well underway. Federal and provincial
regulators have completed their conformity review and held
Indigenous and public sessions. Currently, the Company is
responding to technical comments and continues its substantive
engagement activities with the federal and provincial governments,
as well as Indigenous communities, local municipalities and other
community stakeholders.
The Company anticipates providing responses to technical
comments during the fourth quarter of 2017, which would target
final environmental assessment and closure plan approvals during
2018. This, in turn, will allow the Company to apply for and
receive necessary permits to begin construction of all major
infrastructure.
Formal agreements have been signed with the Missanabie Cree
First Nation and the Red Sky Métis Independent Nation. The
Company continues to consult with and work towards agreements with
other Indigenous communities.
30,000 Tonne Per Day Opportunity
While the FS offers a strong economic result, represents the
preferred option and is expected to be the best use of the
available Mineral Resources considering the current market
conditions and Company profile, an increased throughput option at a
processing rate of 30,000 tonnes per day was also evaluated
("30ktpd Case"). The Company believes that 30,000 tonnes per
day throughput provides interesting project optionality for the
future on a stand-alone basis should economics support such a
decision. The Company also sees a path whereby the 30ktpd Case
could be fully evaluated and pursued as a preferred development
scenario for the Project should Magino become part of a
joint-venture agreement with a third party that provides greater
value for Argonaut shareholders than the FS.
The 30ktpd Case is preliminary in nature and is based on the
same Measured and Indicated Mineral Resources as stated in the FS,
does not support Mineral Reserve estimation and should not be
considered an update or replacement for the FS. The 30ktpd
Case is only intended to show the potential of an increased
throughput should market conditions change or an alternative
commercial structure that potentially provides greater value to
Argonaut shareholders than the FS is successfully
negotiated.
Mine Plan Comparison
The 30ktpd Case used a lower cut-off grade than the FS to
account for the decreased unit operating costs associated with
higher production rates. In general, the marginal cut-off grade
used was 0.34 g/t Au. Only Measured and Indicated Mineral
Resources from the FS were used in the 30ktpd Case conceptual mine
plan. Mineral Resources that are not Mineral Reserves do not
have demonstrated economic viability.
The total mineralized material that is above the marginal
cut-off grade in the 30ktpd Case is approximately double that in
the FS. However, due to higher plant throughput, the grade is
approximately 0.2 g/t lower and the mine life is approximately six
years shorter. Contained gold is increased by approximately
1.1 million ounces. The conceptual tonnes, grade and ounces of the
30ktpd Case compared to the FS is summarized in Table 10:
Table 10: Mine Plan Comparison
Description
|
Unit
|
30ktpd
Case*
|
FS
|
Total Mineralized
Material Mined
|
Mt
|
112
|
59
|
Total Waste
Mined
|
Mt
|
423**
|
232
|
Total
Mined
|
Mt
|
535
|
291
|
Average Gold
Grade
|
g/t
|
0.9
|
1.1
|
Processing
Rate
|
t/d
|
30,000
|
10,000
|
Production
life
|
years
|
11
|
17***
|
Total Contained
Gold
|
Moz
|
3.2
|
2.1
|
Notes:
|
*Conceptual estimates
ONLY
|
|
**Waste material for
increased throughput case includes lower grade material
|
|
***Production life
for FS includes 2.25 years of processing lower grade material at
end of mine life
|
Economic Analysis
The economic results for the 30ktpd Case utilized the same
assumptions as the FS ($1,250 gold
and 0.78:1 USD:CAD exchange rate).
The 30ktpd Case yields average annual production of approximately
269,000 gold ounces over an 11 year mine life (including one and a
half years of ore processed from a low grade stockpile) and an
average of 319,000 gold ounces during the first five
years. Estimated cash costs and AISC are $664/oz and $721/oz
respectively (see Non-IFRS Measures section). Table 11
summarizes the economic results of the 30ktpd case:
Table 11: Summary of Economic Results from
30ktpd Case
Parameter
|
Unit
|
30ktpd
Case
|
Au Price
|
US $/oz
|
1,250
|
Exchange
Rate
|
US:CDN
|
0.78
|
Production
|
Mine Life (from
start of commercial gold production)
|
Yrs
|
11
|
Au Payable
|
LOM k oz
|
2,960
|
Avg k
oz/yr
|
269.1
|
LOM Net Sales Revenue
(after royalties)
|
US$M
|
3,686
|
Operating
Costs
|
LOM US$M
|
1,967
|
US$/t
milled
|
17.63
|
Capital
Costs
|
Pre-Production
|
US$M
|
561
|
Sustaining &
Closure
|
US$M
|
167
|
Subtotal
|
US$M
|
727
|
Contingency
|
US$M
|
49
|
Total Capital
Costs
|
US$M
|
776
|
Operating Cash
Flow
|
US$M
|
1,733
|
Cash
Cost
|
US$/oz
|
664
|
All-in Sustaining
Cost
|
US$/oz
|
721
|
Economic
Results
|
After-Tax Free Cash
Flow
|
US$M
|
701
|
Avg
US$M/yr
|
64
|
Discount
Rate
|
%
|
5
|
Pre-Tax
NPV5%
|
US$M
|
588
|
Pre-Tax Internal
Rate of Return (IRR)
|
%
|
23.2
|
Pre-Tax
Payback
|
Yrs
|
4.3
|
After-Tax
NPV5%
|
US$M
|
399
|
After-Tax
IRR
|
%
|
18.9
|
After-Tax
Payback
|
Yrs
|
4.4
|
Capital and Operating Costs
Capital and operating costs for the 30ktpd Case are shown in
Tables 12 and 13:
Table 12: Summary of Capital Costs – 30ktpd
Case
Description
|
Estimate
(US$M)
|
Mining
|
124.3
|
On-Site
Development
|
61.4
|
Mineral
Processing
|
236.7
|
Infrastructure
|
56.9
|
Project
Indirects
|
39.1
|
EPCM
|
31.3
|
Owner's
Cost
|
11.0
|
Contingency
|
48.8
|
Total Initial
Capital
|
609.5
|
Sustaining
Capital
|
149.1
|
Closure
Cost
|
17.6
|
Total
Sustaining/Closure Capital
|
166.7
|
Total Capital
Costs
|
776.2
|
Table 13: Summary of Operating Costs – 30ktpd
Case
Description
|
Estimate
(US$M)
|
Unit
Cost
(US$/tonne)
|
Unit
Cost
(US$/pay
oz)
|
Mining
|
951.4
|
8.52
|
321
|
Re-handle
|
30.0
|
0.27
|
10
|
Equipment
Lease
|
135.4
|
1.21
|
46
|
Processing
|
708.6
|
6.35
|
239
|
G&A
|
124.6
|
1.12
|
42
|
Refining
|
14.8
|
0.13
|
5
|
Royalties
|
2.4
|
0.02
|
1
|
Total Operating
Costs
|
1,967.3
|
17.63
|
664
|
Bill Zisch, Chief Operating
Officer, commented: "We are fortunate that the Magino deposit is an
ore body that lends itself to scalability. Having the ability
to right size the Project, in terms of initial capital, for our
size of company and current market conditions while maintaining
optionality for the future is a significant benefit to the
organization. We will continue through the Environmental
Assessment process and permitting and then gauge market conditions
and all available options for Magino to best unlock value for our
shareholders."
Contribution, Work and Qualified Persons
Table 14 details the Qualified Persons ("QP") and their
respective area of responsibility in the FS.
Table 14: Qualified Persons
QP
|
Company
|
Report Section(s)
of Responsibility
|
Mr. Michael
Makarenko, P. Eng.
|
JDS Energy &
Mining
|
Introduction,
Reliance on others, Description/Location,
Accessibility/climate, History, Infrastructure: (road access,
foundations,
power, plant site, ancillary, sewage treatment), Market studies,
Cap-ex cost
estimates, Op-ex estimates, Project execution, Economic
analyses,
Adjacent properties, Other relevant data, Interpretations /
Conclusions,
References, Units, Abbreviations etc.
|
Mr. Dino Pilotto, P.
Eng.
|
JDS Energy &
Mining
|
Mining reserve
estimate, Mining methods, Mining Cap-ex and Op-ex
estimate
|
Mr. Michael Lechner,
P. Geo.
|
Resource Modeling
Inc.
|
Geological setting,
Mineralization, Deposit types, Exploration, Drilling,
Sample preparation, Data verification, Mineral resource
estimate
|
Mr. Luiz Castro, P.
Eng.
|
Golder
Associates
|
Geotechnical criteria
(open pit)
|
Ms. Sindy Cheng, P.
Eng.
|
Lycopodium
Limited
|
Mineral processing,
Metallurgical test work interpretation and Process Cap-ex
and Op-ex estimates
|
Dr. Ian Hutchison,
PhD., PE
|
SLR
Consulting
|
Other significant
factors and risks, Infrastructure: Public by-pass road, Site
geotechnical conditions, Water management, Mine waste and
tailings
management, Environmental considerations
|
Technical information included in this release was supervised
and approved by Michael Makarenko,
an independent QP under NI 43-101. For further information on
the Magino project, please see the reports as listed below on the
Company's website or on www.sedar.com:
Magino Gold
Project
|
Preliminary
Feasibility Study Technical Report on the Magino Project, Wawa,
Ontario, Canada dated February 22, 2016 (effective date January 18,
2016)
|
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,
which are presented in accordance with International Financial
Reporting Standards ("IFRS"). Cash cost per gold ounce sold is
equal to production costs divided by gold ounces sold. All-in
sustaining cost per gold ounce sold is equal to production costs
plus general and administrative expenses, exploration expenses,
accretion of reclamation provision and sustaining capital
expenditures divided by gold ounces sold. The Company believes that
these measures provide 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 most recent management's discussion and
analysis for full disclosure on non-IFRS measures.
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 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 mineral projects of Argonaut; the ability to obtain permits for
operations; synergies; the realization of mineral reserve
estimates; the timing and amount of estimated future production;
costs of production; 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; success
of exploration activities; currency exchange rate fluctuations; and
financial impact of completed acquisitions. 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", "should" 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
variations in ore grade or recovery rates, changes in market
conditions, risks relating to the availability and timeliness of
permitting and governmental approvals; risks relating to
international operations, fluctuating metal prices and currency
exchange rates, changes in project parametres, 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.
These factors are discussed in greater detail in Argonaut's most
recent Annual Information Form and in the most recent MD&A
filed on SEDAR, which also provide additional general assumptions
in connection with these statements. Argonaut cautions that the
foregoing list of important factors is not exhaustive. Investors
and others who base themselves on forward-looking statements should
carefully consider the above factors as well as the uncertainties
they represent and the risk they entail. Argonaut believes that the
expectations reflected in those forward-looking statements are
reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements
included in this press release should not be unduly relied upon.
These statements speak only as of the date of this press
release.
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.
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 and San
Agustin mine, which together form the El Castillo Complex in
Durango, Mexico and the production
stage La Colorada mine in
Sonora, Mexico. Advanced
exploration stage projects include the San Antonio project in Baja California Sur, Mexico, and the Magino
project in Ontario, Canada.
The Company also has several exploration stage projects, all of
which are located in North
America.
SOURCE Argonaut Gold Ltd.