All dollar amounts are expressed in US
dollars, unless otherwise specified
TORONTO, Nov. 14, 2017 /CNW/ - Argonaut Gold Inc. (TSX:
AR) (the "Company", "Argonaut Gold" or "Argonaut") is pleased
to announce its has reached an agreement with Primero Mining Corp.
("Primero") whereby it will acquire the Cerro del Gallo project
("CDG" or the "Project") through the purchase of all of the issued
and outstanding shares of the Primero subsidiary San Anton Resource
Corporation for cash consideration of $15
million, which is payable upon closing. Argonaut
expects to be able to recover approximately $1.7 million of value added tax, which reduces
the total purchase price to $13.3
million. The Company expects the transaction to close on or
before November 30,
2017.
Pete Dougherty, President &
CEO stated: "We view the acquisition of the CDG as a low risk, high
reward investment for Argonaut shareholders. CDG is a project in
our own backyard where we have the ability to leverage our existing
operations and projects team's skill sets. We view CDG as a
pipeline project that fits well within our portfolio of Mexican
assets. This acquisition is an opportunity to acquire a
project within a well-known jurisdiction with known mineral
reserves, upside resource potential, excellent infrastructure and
at a reasonable investment. With $37
million in cash at September 30,
2017, projected cash flow from operations and an undrawn
$30 million corporate revolver,
Argonaut will remain in a strong financial position after
completing the transaction."
About CDG
The CDG deposit is located in the state of Guanajuato in central Mexico, approximately 270 kilometres northwest
of Mexico City in an active mining
district. The property is accessible by road, rail and air
services. Additionally, there is availability of a skilled
local workforce, grid power, water, sealed roads, equipment
suppliers and established transport routes.
A Definitive Feasibility Study ("DFS") for CDG was completed in
May 2012. The DFS outlines an initial 7.2 year mine life,
which could be extended to 14 years through a Second Stage
Carbon-in-Leach (CIL)/Heap Leach mill expansion. The Project
has been planned as conventional open-pit truck and shovel
operation coupled with a 4.5 million tonne per annum processing
plant. The flow sheet design is broadly based upon a
conventional cyanide heap leach and gold on carbon recovery
technologies but will incorporate a SART processing stage to
facilitate copper removal prior to gold recovery. The plant
design is based on the treatment of both fully and partially
oxidised ores, producing an average of 95,000 ounces of gold
equivalent annually at estimated cash costs of US$700/oz.
For more information on CDG, please see the National Instrument
43-101 Technical Report dated June 29,
2012 (effective May 11, 2012)
and available at www.primeromining.com or at
www.sedar.com.
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.
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 financial impact of proposed
acquisitions; the benefits of the development potential of the
properties of Argonaut; synergies; the ability to obtain permits
for operations; the ability to obtain tax refunds; the realization
of mineral reserve estimates; the timing and amount of estimated
future production; and success of exploration activities. 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
risks relating to the availability and timeliness of permitting and
governmental approvals and processes; variations in ore grade or
recovery rates; risks relating to international operations;
fluctuating metal prices and currency exchange rates; 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.
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.
SOURCE Argonaut Gold Ltd.