TORONTO, Nov. 15, 2021
/CNW/ - Argonaut Gold Inc. (TSX: AR) (the "Company",
"Argonaut Gold" or "Argonaut") is pleased to announce its operating
and financial results for the third quarter ended
September 30, 2021. The Company reports quarterly
production of 58,777 gold equivalent ounces2 ("GEO" or
"GEOs"), cash flow from operating activities before changes in
non-cash operating working capital and other items of $39.6 million, net income of $15.0 million or earnings per basic share of
$0.05 and adjusted net
income3 of $17.4 million
or adjusted earnings per basic share2 of $0.06. All dollar amounts are expressed in
United States dollars, unless
otherwise specified (C$ refers to Canadian dollars).
Pete Dougherty, President and CEO
stated: "We generated nearly $40
million in cash flow during the third quarter in spite of
the usual productivity challenges we typically experience due to
the rainy season in Mexico. With $107
million of cash flow1 generated through the first
nine months of the year, we have already surpassed our target of
generating $100 million in cash flow
in 2021 and have three more months to add to that total. This
generation of cash flow is key for the Company, as we continue to
re-invest into the growth and diversification of the business
through the construction of the Magino project in Ontario, Canada. I'm very pleased with
the entire team effort in achieving this feat - particularly when
you consider the third quarter 2021 saw a 7% lower realized gold
price compared to the third quarter 2020, yet generated 37% more
cash flow when comparing the two periods. Overall, it was a
tremendous financial quarter with a 12% increase in net income and
an 43% increase in adjusted net income year-over-year."
1 "Cash
Flow" refers to "Cash flow from operating activities before changes
in non-cash operating working capital and other
items".
|
2 GEOs are based on a conversation
ratio of 85:1 for silver to gold for 2021 and 80:1 for 2020.
The silver to gold conversation ratio is based on the three-year
trailing average silver to gold ratios. These are the
referenced ratios for each year throughout the press
release.
|
3 Please refer to the section
entitled "Non-IFRS Measures" for a discussion of these Non-IFRS
Measures.
|
Key operating and financial statistics for the third quarter of
2021 are outlined in the following table:
|
3 Months
Ended
September
30
|
9 Months
Ended
September
30
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
Financial Data (in
millions except for earning per share)
|
|
|
|
|
|
|
Revenue
|
$108.6
|
$94.4
|
15%
|
$334.0
|
$218.9
|
53%
|
Gross
profit
|
$29.1
|
$31.6
|
(8%)
|
$96.5
|
$63.2
|
53%
|
Net income
(loss)
|
$15.0
|
$13.4
|
12%
|
$63.8
|
($3.8)
|
1779%
|
Earnings (loss) per
share - basic
|
$0.05
|
$0.05
|
—%
|
$0.21
|
($0.02)
|
1150%
|
Adjusted net
income1
|
$17.4
|
$12.2
|
43%
|
$49.6
|
$30.0
|
65%
|
Adjusted earnings per
share – basic1
|
$0.06
|
$0.04
|
50%
|
$0.16
|
$0.14
|
14%
|
Cash flow from
operating activities before changes in non-cash operating working
capital and other items
|
$39.6
|
$29.0
|
37%
|
$106.6
|
$55.5
|
92%
|
Cash and cash
equivalents
|
$167.6
|
$177.9
|
(6%)
|
$167.6
|
$177.9
|
(6%)
|
Gold Production
and Cost Data
|
|
|
|
|
|
|
GEOs loaded to the
pads2
|
111,584
|
120,392
|
(7%)
|
355,818
|
257,881
|
38%
|
GEOs projected
recoverable2,3
|
64,768
|
61,224
|
6%
|
199,088
|
125,613
|
58%
|
GEOs
produced2,4
|
58,777
|
48,951
|
20%
|
182,230
|
122,018
|
49%
|
GEOs
sold2
|
60,606
|
49,291
|
23%
|
185,372
|
125,691
|
47%
|
Average realized
sales price
|
1,789
|
1,915
|
(7%)
|
1,788
|
1,750
|
2%
|
Cash cost per gold
ounce sold1
|
$992
|
$1,008
|
(2%)
|
$955
|
$960
|
(1%)
|
All-in sustaining
cost per gold ounce sold1
|
$1,207
|
$1,401
|
(14%)
|
$1,234
|
$1,280
|
(4%)
|
1Please
refer to the section below entitled "Non-IFRS Measures" for a
discussion of these Non-IFRS Measures.
|
2GEOs 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.
|
3Expected
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 and processes
material not specifically defined in a technical report (for
example: low grade stockpile material or run-of-mine ore),
management uses its best estimate of recovery based on the
information available.
|
4Produced
ounces are calculated as ounces loaded to carbon.
|
Third Quarter 2021 and Recent Company Highlights:
- Corporate
-
- Generated $39.6 million of cash
flow from operating activities before changes in non-cash operating
working capital and other items.
- Increased net income and adjusted net income 12% and 43%,
respectively, compared to the third quarter of 2020 (see Non-IFRS
Measures section).
- Acquired key mineral concessions surrounding the San Agustin mine for $5.75 million that more than quadruples the
mineral tenure in the San Agustin
district (see press release dated October
12, 2021).
- Strengthened the management team in Mexico with the appointment of Alfredo Phillips as Vice President, Corporate
Affairs & Country Manager. In this role, Mr. Phillips
will be responsible for leading government relations and ESG
strategy and execution in Mexico.
- On September 23, 2021, completed
a non-brokered private placement Quebec flow-through financing for gross
proceeds of C$1.8 million at a price
of C$3.85 per flow-through share ,
representing a 30% premium to the previous day closing price of
C$2.96 per
share.
-
- The proceeds will be used to fund Argonaut's portion of
eligible exploration expenditures for its 50/50 joint venture with
Troilus Gold Corp. on exploration properties within the Troilus
district of Quebec,
Canada.
- Social Responsibility
-
- Construction of water wells in communities near the El Castillo
Complex.
- Repair of roads and the maintenance of local sports stadiums in
the communities near the La
Colorada mine.
- Participated in a food drive initiative at the Tri-County Fair
in the community near the Florida Canyon mine.
- El Castillo Complex
-
- Third quarter production of 28,872 GEOs, an increase of 8%
compared to the third quarter of 2020.
-
- El Castillo production of
11,246 GEOs, an increase of 18% compared to the third quarter of
2020.
- San Agustin production of
17,626 GEOs, an increase of 2% compared to the third quarter of
2020.
- La Colorada
-
- Third quarter production of 15,802 GEOs, an increase of 44%
compared to the third quarter of 2020.
- Reduction in cash cost per gold ounce sold of 24% compared to
the third quarter of 2020 (see "Non-IFRS Measures" section).
- Continued to discover high-grade gold mineralization below the
El Crestón pit, including 4.6 metres at 51.9 g/t Au and 28.5 g/t Ag
(see press release dated September 13,
2021).
- Florida Canyon
-
- Third quarter production of 14,103 GEOs, an increase of 25%
compared to the third quarter of 2020.
- Reduction in cash cost per gold ounce sold of 16% compared to
the third quarter of 2020 (see "Non-IFRS Measures" section).
- Magino
-
- Construction
-
- All internal coffer dams are completed.
- Plant site construction is underway.
- Construction of the Tailings Management Facility ("TMF") has
commenced.
- Commenced and completed some sections of concrete pouring,
forms, and rebar.
- Completed final section of pre-shear drilling in open pit,
which allows for TMF material to be accessed and sourced.
- Completed TMF access roads.
- Completed detailed backfill for leach tanks.
- Completed main haul road section.
- Completed installation of 21 ground water monitoring
wells.
- Completed winterizing of crushing plant.
- Continued reverse circulation (RC) ore control drilling.
- Community & Permitting
-
- Monthly meetings to provide environmental updates to its
Indigenous partners: Michipicoten First Nation, Batchewana First
Nation, Missanabie Cree First Nation, Métis Nation of Ontario, Red Sky Métis Independent Nation, and
Garden River First Nation.
- Hosted a groundbreaking ceremony at Magino with members of
Indigenous communities, local mayors and Minister Greg Rickford, the Ontario Minister of Northern
Development, Mines, Natural Resources and Forestry.
- Hosted various site tours, including tours with the
Town of Dubreuilville, the Algoma
Workforce Investment Corporation and members of the Regional
Employment Help Centre.
- Site visit from the Ministry of the Environment, Conservation
and Parks with no issues identified.
- Wawa Chief Building Officer
inspector performed final walkthrough of 458-person camp.
- Groundwater monitoring well work has commenced.
- Completed the installation of the air monitoring station, which
is now operational.
- Started biological fieldwork (sediment, benthic and fish tissue
sampling) as well as on-going hydrometric monitoring.
- Fish habitat compensation progressing with fish relocation crew
on site.
- Exploration
-
- Continue to discover high-grade gold mineralization,
including 7.0 metres at 13.3 g/t Au in the South Zone approximately
1.5 kilometres from the border between Magino and Island Gold (see
press release dated July 8,
2021).
- Monthly Newsletter
-
- Argonaut continues to issue a monthly newsletter to provide its
stakeholders with regular Magino project updates. To receive
monthly newsletters, please register your email at
www.argonautgold.com or to view recently issued newsletters, please
visit
https://www.argonautgold.com/English/assets/development/magino/default.aspx
- Cerro del Gallo
-
- Received notice from SEMARNAT, the federal environmental
regulatory agency in Mexico, that
the mandatory time in which it has to make an environmental permit
decision had expired. SEMARNAT also provided the Company with
requests for additional information within this notice, and the
Company is in the process of preparing a new permit application for
the project to provide more detail relating to the information
requests.
Financial Results – Third Quarter 2021
Revenue for the
third quarter of 2021 was $108.6
million, an increase from $94.4
million for the three months ended 2020. During the
third quarter of 2021, the Company sold 58,528 gold ounces at an
average realized price per ounce of $1,789, compared to 47,651 gold ounces sold at an
average realized price per ounce of $1,915 during the same period of 2020. Gold
ounces sold for the third quarter of 2021 increased 23% compared to
the same period in 2020 primarily due to increases in gold ounces
produced at all four mines, including higher gold grades at
La Colorada and higher recoveries
at El Castillo. During the third quarter of 2020, production
was reduced following a temporary suspension of mining activities
during the onset of the global COVID-19 pandemic at all three
Mexican operations. Production was 25% higher at the Florida
Canyon mine in the current quarter compared to the third quarter of
2020 due to higher gold grades and operational and productivity
improvements made since acquiring the mine effective July 1, 2020.
Net income for the third quarter of 2021 was $15.0 million or earnings per basic share of
$0.05, relatively in line with net
income of $13.4 million or earnings
per basic share of $0.05 for the
third quarter of 2020, representing a 12% increase in net
income.
Adjusted net income for the third quarter of 2021 was
$17.4 million or $0.06 per basic share, an increase from adjusted
net income of $12.2 million or
$0.04 per basic share for the third
quarter of 2020, representing an 43% increase in adjusted net
income (see "Non-IFRS Measures" section) primarily related to
foreign exchange losses, the impact of foreign exchange on deferred
income taxes and other non-operating expense partially offset by
unrealized gains on derivatives.
Cash flows from operating activities before changes in non-cash
operating working capital and other items totaled $39.6 million during the third quarter of 2021,
an increase from $29.0 million in the
third quarter of 2020, representing a 37% increase.
Financial Results – First Nine Months 2021
Revenue for
the first nine months of 2021 was $334.0
million, an increase from $218.9
million for the first nine months of 2020. During the
first nine months of 2021, gold ounces sold totaled 178,255 at an
average realized price per ounce of $1,788, compared to 120,527 gold ounces sold at
an average realized price per ounce of $1,750 during the same period of 2020. Gold
ounces sold for the nine months ended 2021 increased compared to
the same period in 2020 primarily due to the addition of the gold
ounces sold from the Florida Canyon mine (acquired July 1, 2020), increases in gold ounces produced
at the Mexican mines due to the temporary suspension in mining
activities during the second quarter of 2020 at the onset of the
global pandemic, the addition of the Merrill-Crowe recovery plant
in the fourth quarter of 2020 at San
Agustin and higher gold grades at La Colorada.
Net income for the nine months ended September 30, 2021 was
$63.8 million or earnings of
$0.21 per basic share, an increase
from net loss of $3.8 million or
$0.02 per basic share for the nine
months ended September 30, 2020, representing a 1779% increase
in net income primarily due to a $33.3
million increase in gross profit and a $37.5 million gain on derivatives.
Adjusted net income for the nine months ended September 30,
2021 was $49.6 million or
$0.16 per basic share, an increase
from adjusted net income of $30.0
million or $0.14 per basic
share for the nine months ended September 30, 2020,
representing an 65% increase in adjusted net income (see "Non-IFRS
Measures" section).
Operational Results – Third Quarter 2021
During the
third quarter 2021, the Company achieved production of 58,777 GEOs
at a cash cost of $992 per gold ounce
sold and all-in sustaining cost of $1,207 per gold ounce sold compared to 48,951
GEOs at a cash cost of $1,008 per gold ounce sold and an all-in
sustaining cost of $1,401 per gold
ounce sold ("AISC") during the third quarter 2020 (see "Non-IFRS
Measures" section). The 20% increase in GEO production was
primarily related to the increased production from all Mexican
operations due to the two month suspension for COVID-19 at the
onset of the global pandemic, higher gold grade and operational and
productivity improvements at the Florida Canyon mine following its
acquisition on July 1, 2020 and
higher gold grade at the La
Colorada mine.
THIRD QUARTER 2021 EL CASTILLO COMPLEX OPERATING
STATISTICS
|
3 Months
Ended
September
30
|
9 Months
Ended
September
30
|
|
2021
|
2020
|
%
Change
|
2021
|
2020
|
%
Change
|
Mining (in 000s
except waste/ore ratio)
|
|
|
|
|
|
|
Tonnes ore El
Castillo
|
2,143
|
2,874
|
(25%)
|
7,043
|
5,698
|
24%
|
Tonnes ore San
Agustin
|
2,598
|
2,573
|
1%
|
8,186
|
6,454
|
27%
|
Tonnes
ore
|
4,741
|
5,447
|
(13%)
|
15,229
|
12,152
|
25%
|
Tonnes waste El
Castillo
|
1,858
|
2,240
|
(17%)
|
7,468
|
6,424
|
16%
|
Tonnes waste San
Agustin
|
1,519
|
1,814
|
(16%)
|
5,031
|
4,267
|
18%
|
Tonnes
waste
|
3,377
|
4,054
|
(17%)
|
12,499
|
10,691
|
17%
|
Tonnes mined El
Castillo
|
4,001
|
5,114
|
(22%)
|
14,511
|
12,122
|
20%
|
Tonnes mined San
Agustin
|
4,117
|
4,387
|
(6%)
|
13,217
|
10,721
|
23%
|
Tonnes
mined
|
8,118
|
9,501
|
(15%)
|
27,728
|
22,843
|
21%
|
Tonnes per day El
Castillo
|
44
|
56
|
(22%)
|
53
|
44
|
21%
|
Tonnes per day San
Agustin
|
45
|
48
|
(7%)
|
49
|
39
|
25%
|
Tonnes per
day
|
88
|
104
|
(15%)
|
102
|
83
|
23%
|
Waste/ore ratio El
Castillo
|
0.87
|
0.78
|
12%
|
1.06
|
1.13
|
(6%)
|
Waste/ore ratio San
Agustin
|
0.58
|
0.71
|
(18%)
|
0.61
|
0.66
|
(8%)
|
Waste/ore
ratio
|
0.71
|
0.74
|
(4%)
|
0.82
|
0.88
|
(7%)
|
Leach Pads (in
000s)
|
|
|
|
|
|
|
Tonnes crushed to East
leach pads El Castillo
|
0
|
59
|
(100%)
|
0
|
337
|
(100%)
|
Tonnes crushed to West
leach pads El Castillo
|
0
|
0
|
–%
|
0
|
3
|
(100%)
|
Tonnes direct to leach
pads El Castillo
|
2,153
|
2,874
|
(25%)
|
7,043
|
5,509
|
28%
|
Tonnes crushed to leach
pads San Agustin
|
2,639
|
2,616
|
1%
|
8,583
|
6,540
|
31%
|
Tonnes to leach
pads
|
4,792
|
5,549
|
(14%)
|
15,626
|
12,389
|
26%
|
Production
|
|
|
|
|
|
|
Gold grade loaded to
leach pads El Castillo (g/t)1
|
0.28
|
0.36
|
(22%)
|
0.27
|
0.44
|
(39%)
|
Gold grade loaded to
leach pads San Agustin (g/t)1
|
0.30
|
0.31
|
(3%)
|
0.29
|
0.33
|
(12%)
|
Gold grade loaded to
leach pads (g/t)1
|
0.29
|
0.34
|
(15%)
|
0.28
|
0.38
|
(26%)
|
Gold loaded to leach
pads El Castillo (oz)2
|
19,455
|
34,281
|
(43%)
|
61,603
|
82,138
|
(25%)
|
Gold loaded to leach
pads San Agustin (oz)2
|
25,108
|
25,789
|
(3%)
|
81,299
|
69,653
|
17%
|
Gold loaded to leach
pads (oz)2
|
44,563
|
60,070
|
(26%)
|
142,902
|
151,791
|
(6%)
|
Projected recoverable
GEOs loaded El Castillo4
|
10,260
|
13,259
|
(23%)
|
30,856
|
31,878
|
(3%)
|
Projected recoverable
GEOs loaded San Agustin4
|
18,397
|
19,350
|
(5%)
|
58,740
|
51,081
|
15%
|
Projected
recoverable GEOs loaded4
|
28,657
|
32,609
|
(12%)
|
89,596
|
82,959
|
8%
|
Gold produced El
Castillo (oz)2,3
|
11,123
|
9,329
|
19%
|
35,818
|
32,915
|
9%
|
Gold produced San
Agustin (oz)2,3
|
16,258
|
16,192
|
—%
|
51,634
|
42,430
|
22%
|
Gold produced
(oz)2
|
27,381
|
25,521
|
7%
|
87,452
|
75,345
|
16%
|
Silver produced El
Castillo (oz)2,3
|
10,448
|
12,875
|
(19%)
|
49,688
|
55,967
|
(11%)
|
Silver produced San
Agustin (oz)2,3
|
116,309
|
80,414
|
45%
|
397,210
|
225,160
|
76%
|
Silver produced
(oz)2,3
|
126,757
|
93,289
|
36%
|
446,898
|
281,127
|
59%
|
GEOs produced El
Castillo3
|
11,246
|
9,492
|
18%
|
36,403
|
33,615
|
8%
|
GEOs produced San
Agustin3
|
17,626
|
17,198
|
2%
|
56,307
|
45,245
|
24%
|
GEOs
produced3
|
28,872
|
26,690
|
8%
|
92,710
|
78,860
|
18%
|
Gold sold El Castillo
(oz)2
|
10,473
|
9,318
|
12%
|
36,689
|
33,952
|
8%
|
Gold sold San Agustin
(oz)2
|
17,611
|
14,312
|
23%
|
53,106
|
42,066
|
26%
|
Gold sold
(oz)2
|
28,084
|
23,630
|
19%
|
89,795
|
76,018
|
18%
|
Silver sold El Castillo
(oz)2
|
11,835
|
12,875
|
(8%)
|
52,046
|
55,967
|
(7%)
|
Silver sold San Agustin
(oz)2
|
121,993
|
70,368
|
73%
|
395,781
|
226,547
|
75%
|
Silver sold
(oz)2
|
133,828
|
83,243
|
61%
|
447,827
|
282,514
|
59%
|
GEOs sold El
Castillo
|
10,612
|
9,479
|
12%
|
37,301
|
34,652
|
8%
|
GEOs sold San
Agustin
|
19,046
|
15,191
|
25%
|
57,762
|
44,897
|
29%
|
GEOs
sold
|
29,658
|
24,670
|
20%
|
95,063
|
79,549
|
20%
|
Cash cost per gold
ounce sold El Castillo5
|
$ 1,173
|
$ 894
|
31%
|
$ 1,105
|
$ 963
|
15%
|
Cash cost per gold
ounce sold San Agustin5
|
$ 1,011
|
$ 821
|
23%
|
$ 873
|
$ 787
|
11%
|
Cash cost per gold
ounce sold5
|
$
1,072
|
$
775
|
38%
|
$
967
|
$
865
|
12%
|
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 El Castillo
Complex Technical Report dated March 27, 2018. In periods
where the Company mines and processes material not specifically
defined in a technical report (for example: run-of-mine ore),
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 the El Castillo
Complex
During the third quarter of 2021, the El Castillo
Complex produced 8% more GEOs at a cash cost per gold ounce sold
38% higher than during the third quarter of 2020 (see "Non-IFRS
Measures" section). GEO production was 18% higher at the
El Castillo mine, primarily
related to higher recoveries due processing primarily oxide
ore. GEO production at the San
Agustin mine was 2% higher, relatively in line with the same
period in 2020. Cash cost per gold ounce sold were higher,
primarily due to increased costs associated with scheduled mobile
equipment maintenance and higher levels of reagents used during the
well-above-average rainy season in Durango in the third quarter of
2021.
THIRD QUARTER 2021 LA COLORADA OPERATING STATISTICS
|
3 Months
Ended
September
30
|
9 Months
Ended
September
30
|
|
2021
|
2020
|
%
Change
|
2021
|
2020
|
%
Change
|
Mining (in 000s
except for waste/ore ratio)
|
|
|
|
|
|
|
Tonnes ore
|
1,224
|
1,203
|
2%
|
3,601
|
2,656
|
36%
|
Tonnes waste
|
1,974
|
3,909
|
(50%)
|
8,161
|
10,329
|
(21%)
|
Tonnes mined
|
3,198
|
5,112
|
(37%)
|
11,762
|
12,985
|
(9%)
|
Tonnes per
day
|
35
|
56
|
(38%)
|
43
|
47
|
(8%)
|
Waste/ore
ratio
|
1.61
|
3.25
|
(50%)
|
2.27
|
3.89
|
(42%)
|
Leach Pads (in
000s)
|
|
|
|
|
|
|
Tonnes crushed to
leach pads
|
1,255
|
1,242
|
1%
|
3,768
|
2,726
|
38%
|
Production
|
|
|
|
|
|
|
Gold loaded to leach
pads (g/t)1
|
0.67
|
0.46
|
46%
|
0.66
|
0.42
|
57%
|
Gold loaded to leach
pads (oz)2
|
27,009
|
18,332
|
47%
|
79,420
|
36,402
|
118%
|
Projected recoverable
GEOs loaded4
|
22,066
|
14,548
|
52%
|
63,801
|
28,586
|
123%
|
Gold produced
(oz)2,3
|
15,360
|
10,409
|
48%
|
47,975
|
30,295
|
58%
|
Silver produced
(oz)2,3
|
37,590
|
45,060
|
(17%)
|
138,647
|
125,929
|
10%
|
GEOs
produced3
|
15,802
|
10,972
|
44%
|
49,606
|
31,869
|
56%
|
Gold sold
(oz)2
|
15,332
|
10,283
|
49%
|
46,661
|
30,771
|
52%
|
Silver sold
(oz)2
|
35,408
|
39,932
|
(11%)
|
132,999
|
122,540
|
9%
|
GEOs sold
|
15,749
|
10,782
|
46%
|
48,226
|
32,303
|
49%
|
Cash cost per gold
ounce sold5
|
$ 696
|
$ 910
|
(24%)
|
$ 683
|
$ 1,020
|
(33%)
|
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: 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
During the third quarter of 2021, the
La Colorada mine produced 46% more
GEOs at a cash cost per gold ounce sold 24% less than during the
third quarter of 2020 (see "Non-IFRS Measures" section).
Higher GEO production and lower costs were primarily related to a
46% increase in gold grade and a 50% reduction in strip
ratio.
THIRD QUARTER 2021 FLORIDA CANYON OPERATING
STATISTICS
|
3 Months
Ended
September
30
|
|
2021
|
2020
|
%
Change
|
Mining (in 000s
except for waste/ore ratio)
|
|
|
|
Tonnes ore
|
1,931
|
2,095
|
(8%)
|
Tonnes
waste
|
3,165
|
2,847
|
11%
|
Tonnes
mined
|
5,096
|
4,942
|
3%
|
Tonnes per
day
|
55
|
53
|
3%
|
Waste/ore
ratio
|
1.64
|
1.36
|
21%
|
Leach Pads (in
000s)
|
|
|
|
Tonnes crushed to
leach pads
|
1,673
|
1,925
|
(13%)
|
Tonnes direct to
leach pads
|
270
|
228
|
18%
|
Production
|
|
|
|
Gold grade loaded to
leach pads (g/t)1
|
0.34
|
0.29
|
17%
|
Gold loaded to leach
pads (oz)2
|
21,409
|
19,757
|
8%
|
Projected recoverable
GEOs loaded4
|
14,045
|
14,067
|
—%
|
Gold produced
(oz)2,3
|
14,030
|
11,204
|
25%
|
Silver produced
(oz)2,3
|
6,173
|
6,798
|
(9%)
|
GEOs
produced3
|
14,103
|
11,289
|
25%
|
Gold sold
(oz)2
|
15,112
|
13,738
|
10%
|
Silver sold
(oz)2
|
7,355
|
8,067
|
(9%)
|
GEOs sold
|
15,199
|
13,839
|
10%
|
Cash cost per gold
ounce sold5
|
$1,143
|
$1,353
|
(16%)
|
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 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 until
July 1, 2020, it is only making
comparisons between the three months ended September 30, 2021 and 2020 periods and is not
making comparisons between the nine months ended September 30, 2021 and 2020 periods in the table
above.
During the third quarter of 2021, the Florida Canyon mine
produced 25% more GEOs at a cash cost per gold ounce sold 16% less
than during the third quarter of 2020 (see "Non-IFRS Measures"
section). Higher GEO production and lower cash cost per gold
ounce sold were primarily related to a 17% increase in gold grade
and operational and productivity improvements made since acquiring
the mine July 1, 2020, which led to
significantly more gold ounces placed on the leach pads in prior
months of 2021.
Guidance and Outlook
Argonaut is tracking towards the upper half of its 2021 GEO
production guidance and the lower half of its 2021 cost guidance.
The table below outlines the nine month ended September 30, 2021 actuals compared to full year
2021 guidance:
2021 PRODUCTION AND COST GUIDANCE
|
9 Months
Ended
September
30
|
Full Year 2021
Guidance
|
GEO
production
|
182,230
|
210,000 –
250,000
|
Cash cost per gold
ounce sold1
|
$955
|
$950 –
$1,050
|
AISC per gold ounce
sold1
|
$1,234
|
$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 nine months ended September 30, 2021, the Company incurred
$68.0 million and $171.2 million in costs, respectively, related to
the construction of the Magino project.
While the Magino construction project remains on schedule,
Argonaut is in the midst of a review of 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 exceed the 15% above the original
guidance of between C$480 million and
C$510 million and confirmed in the
press release dated August 10,
2021. Argonaut intends to provide an updated capital estimate
for the Magino construction project before the end of 2021, at
which time updated 2021 capital guidance for the Magino
construction project will also be provided. Based on this
capital review related to Magino, the 2021 Magino construction
capital guidance is withdrawn (previously $190 million to $200
million) and will be updated once the Magino capital review
is finalized.
2021 capital spend, excluding the Magino construction project,
is tracking within the 2021 capital guidance range of between
$65 million and $75 million, including the $10 million reduction in capitalized stripping at
the La Colorada mine disclosed in
the press release dated August 10,
2021.
Argonaut Gold Third Quarter 2021 Operational and Financial
Results Conference Call and Webcast:
The Company will host the third quarter 2021 conference call and
webcast at 10:00 am EST today,
Monday, November 15, 2021.
Conference Call Information
Toll Free (North
America):
|
1-888-664-6392
|
International:
|
1-416-764-8659
|
Conference
ID:
|
80837957
|
Webcast:
|
www.argonautgold.com
|
Conference Call Replay:
Toll Free Replay Call
(North America):
|
1-888-390-0541
|
International Replay
Call:
|
1-416-764-8677
|
Replay Entry
Code:
|
837957#
|
The conference call replay will be available from 1:00 pm EST on November
15, 2021 until 11:59 pm EST on
November 22, 2021.
Non-IFRS Measures
The Company has included certain
non-IFRS measures including "Cash cost per gold ounce sold",
"All-in sustaining cost per gold ounce sold", "Adjusted net
income", and "Adjusted earnings per share – basic" in this press
release to supplement its financial statements, which are presented
in accordance with International Financial Reporting Standards
("IFRS"). 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. Adjusted net income
is equal to net income less foreign exchange impacts on deferred
income taxes, foreign exchange (gains) losses, non-cash impairment
write down (reversal) of work-in-process inventory, unrealized
(gains) losses on commodity derivatives and care and maintenance
expenses. Adjusted earnings per share – basic is equal to
adjusted net income divided by the basic weighted average number of
common shares outstanding. 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.
Please see the management's discussion and analysis ("MD&A")
for full disclosure on non-IFRS measures.
This press release should be read in conjunction with the
Company's unaudited interim condensed consolidated financial
statements for the three and nine months ended September 30,
2021 and associated MD&A, for the same period, which are
available from the Company's website, www.argonautgold.com, in the
"Investors" section under "Financial Filings", and under the
Company's profile on SEDAR at www.sedar.com.
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: the Magino construction capital
estimate; the realization of mineral reserve estimates; the timing
and amount of estimated future production; costs of production;
estimated production and mine life of the various mineral projects
of Argonaut; timing of approval for modifications to existing
permits; permitting and legal processes in relation to mining
permitting and approval; 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
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 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,
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 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.
For more information, contact:
Argonaut Gold Inc.
Dan
Symons
Vice President, Corporate Development & Investor Relations
Phone: 416-915-3107
Email: dan.symons@argonautgold.com
Source: Argonaut Gold Inc.
SOURCE Argonaut Gold Inc.