(All amounts expressed in U.S. Dollars unless
otherwise stated)
TORONTO, Aug. 26, 2019 /CNW/ - Argonaut Gold Inc.
(the "Company", "Argonaut" or "Argonaut Gold") (TSX: AR) announces
the Company has entered into a series of zero-cost collar option
contracts, which were approved by the Board of Directors. The
contracts cover a total of 145,500 ounces of gold through mid-2022.
The floor price of the monthly gold collars has been set at
$1,450/oz with the ceiling price of
the collars ranging from $1,630/oz in
the fourth quarter ("Q4") of 2019 to $1,760/oz for the first half ("H1") of
2022. The Company will realize the actual gold sales price if
the price of gold remains within the range of the collars.
Pete Dougherty, President and CEO
stated: "By initiating a zero-cost collar gold price protection
program on a portion of El
Castillo's estimated remaining life-of-mine production, we
ensure profitability and are able to extend the mine life at our
highest cost operation. Through either exploration success or
a higher gold price, there may be potential to continue to extend
the life of the El Castillo mine
beyond mid-2022. With a strong portfolio of development
assets, we felt prudent to lock in cash flow certainty at the
El Castillo mine to help fund our
development projects while also continuing to maintain exposure to
an increasing gold price for our shareholders. This is an
opportunity to ensure cash flow at an attractive price protection
point. When looking at the total amount of Argonaut's mineral
resource base, this zero-cost collar program represents a very
small percentage of total gold ounces."
The contracts cover a total of 145,500 ounces of gold between Q4
2019 and the first half of 2022 at an average floor price of
$1,450/oz and a weighted average
ceiling price of $1,706/oz.
Summary of gold price collars (Q4 2019 through H1
2022)
Period
|
Gold Sales
(ounces)
|
Floor Price
($ per ounce)
|
Ceiling Price
($ per ounce)
|
Q4
2019
|
17,100
|
$1,450
|
$1,630
|
2020
|
58,800
|
$1,450
|
$1,693
|
2021
|
51,600
|
$1,450
|
$1,728
|
H1
2022
|
18,000
|
$1,450
|
$1,760
|
Total
(1)
|
145,500
|
$1,450
|
$1,706
|
|
|
(1)
|
Represents total gold
ounces covered by options contracts to date as well as weighted
average floor and ceiling gold prices.
|
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 free cash flow
estimates; mine life of the various 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; 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; 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", "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
access to water to meet planned solution flow rates, estimates of
future capital and operating costs, 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
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.
These factors are discussed in greater detail in Argonaut's most
recent Annual Information Form and in the most recent Management's
Discussion and Analysis 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.
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
("NI 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 State, Mexico dated March 27, 2018 (effective date of March
7, 2018)
|
La Colorada
Mine
|
NI 43-101 Technical
Report on Resources and Reserve, La Colorada
Gold/Silver Mine, Hermosillo, Mexico dated March 27, 2018
(effective date of
December 8, 2017)
|
Magino Gold
Project
|
Feasibility Study
Technical Report on the Magino Project, Ontario, Canada
dated December 21, 2017 (effective date November 8,
2017)
|
San Antonio Gold
Project
|
NI 43-101 Technical
Report on Resources, San Antonio Project, Baja
California Sur, Mexico dated October 10, 2012 (effective date of
September 1, 2012)
|
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 and the La Colorada
mine in Sonora, Mexico.
Advanced exploration projects include the San Antonio project in Baja California Sur, Mexico, the Cerro del
Gallo project in Guanajuato,
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 Inc.