AR Argonaut Gold Inc

Argonaut Gold (TSX:AR) today announced its full results for the first quarter
ended March 31, 2010.


Quarterly Highlights year over year 



--  Total Tonnes mined up + 90% 
--  Ore tonnes processed up + 102% 
--  Gold Production up +72%  
--  Cash cost per Oz. produced (El Castillo) down -10%  
--  Revenue from Operations up +211%  
--  Cash flow from Operations up +331%  
--  New mining contract & fleet 
--  New crushing contract & circuit 
--  Cash and short-term investments $35MM 



CEO Commentary:

Pete Dougherty, President and CEO, made the following comments in regards to El
Castillo's first quarter 2010 results: "El Castillo has shown strong quarterly
production results, with significant year-over-year growth in production. Our
exploration success has provided a solid foundation for potential resource &
reserve expansion. The capital expansion program is well underway with
significant progress in the process and plant expansion projects. These
improvements provide me with comfort that we will be able to achieve our goal of
increasing overall production by 60%+ to 47,000 ounces for 2010."


This press release should be read in conjunction with the Company's unaudited
consolidated interim financial statements for the quarter-ended March 31, 2010
and associated Management's Discussion and Analysis ("MD&A") which are available
from the Company's website www.argonautgoldinc.com, in the "Investors" section
under "Financial Filings", and on SEDAR www.sedar.com.


Summary of Production Results: 

Year over year, total tonnes mined increased by +90%, with approximately 1
million tonnes moved in March. The increase in total tonnes mined is due to a
larger more efficient truck fleet, more heap leach capacity and improvements
being made to the crushing circuit capacity. We are targeting production of 1.5
million total tonnes per month in the latter part of the year. We will achieve
these results by replacing our 40 ton fleet with a new larger 100 ton mining
fleet and higher capacity loaders. This fleet will begin to arrive on site
during July with commissioning to follow shortly thereafter. Tonnes of ore
placed on the pads increased over 100% to 1.3 million tonnes for the quarter.
Crushed ore increased to 314,405 tonnes or 58% quarter over quarter. The new
crushing equipment has been delivered, installed and is being commissioned. This
new equipment is anticipated to increase crushing capacity to 300,000 tonnes per
month in the future. 


Gold production of 10,242 ounces in the first quarter of 2010 was a 72% increase
compared to the first quarter of 2009. This improvement was due to the increased
mining and processing capacities at the mine. Key operational metrics and
production statistics for the first quarter of 2010 compared to 2009 are
presented at the end of this press release in Table 1.


Cash cost of operations decreased 9% to $590 per ounce reflecting increased ore
tonnes to the pad and lower operating cost per tonne mined offset by lower grade
mined coupled with higher chemical consumption associated with increased
production. 


Capital Expansion Program: 

The 100x100 meter drill program has been completed ahead of schedule and under
budget. To-date we have expanded the mineralization 400 to 500 meters to the
south and 300 to 400 meters east of the known pit boundary. We have embarked
upon a new 50x50 meter drill program to further define the ore body. Investments
to expand crushing capabilities are well underway with all equipment on site.
Expansion of our heap leach pads has grown to include pads 5 & 6 being completed
and commissioned. Permits to expand the mine including pad 7, the east pad and
the new processing facility were granted. Currently, pads 7 and cell 1 of the
east pad are under construction. The plant modifications are well in hand with
anticipated carbon columns for the existing facility to arrive in May with
commissioning in June.


While the expansion improvements provide the framework for meeting current
projected production at El Castillo, drilling success will allow for increases
in future production by adding to resources and reserves.


Summary of Financial Results: 

Financial results for the first quarter of 2010 improved significantly over the
first quarter of 2009, as a result of higher ounces of production. Revenue
increased 172% to $9.3 million, from increased production and higher gold
prices. Cost of goods sold of $9.3 million was high due to purchase price
accounting fully valuing all pad and finished goods inventory at the date of
acquisition of Castle Gold on December 30, 2009. Actual operating costs were
$590 per ounce reflecting lower grades mined and higher chemical consumption
associated with increased tonnage. Net loss was $3.2 million reflecting the
purchase price allocation and amortization of the initial purchase of the
project. 


Looking forward: 

Argonaut projects gold production of 47,000 ounces for 2010, with an annualized
run rate in December 2010 of 60,000 ounces per year. We anticipate cash cost to
be approximately $565 per ounce.


Cash Requirements: 

Our original capital expansion program of $10 Million has increased to $15-20
million. After a successful phase 1 drilling program, the company has elected to
embark upon an expanded drill program and increase the process facility
capacity. The company anticipates funding these capital needs from its operating
cash flow and cash on hand. 


Reminder of Q1 2010 Financial Results Conference Call and Webcast: 

Argonaut Gold will host a conference call on Tuesday, May 18, 2010 at 9:30 am
EDT to discuss the first quarter 2010 results and provide an update of the
Company's operating, exploration, and development activities.


Participants may join the conference call by dialing 1 (888) 430-8701 or 1 (719)
325-2105 for calls outside of Canada and the United States. The pass code is
8186640. The conference call may also be accessed via webcast by visiting the
Company's website, www.argonautgoldinc.com. 


A recorded playback of the conference call can be accessed after the event until
June 2, 2010 by dialing 1 (888) 203-1112 or 1 (719) 457-0820 for calls outside
Canada and the United States. The pass code for the conference call playback is
8186640, followed by the # key. 


Reminder of Annual General and Special Meeting of Shareholders: 

Argonaut invites all shareholders to attend the Annual General and Special
Meeting of Shareholders ("AGM") on Wednesday, May 19, 2010. The AGM will begin
at 10:00 am EDT and will be held at the Fairmont Royal York Hotel, located at
100 Front Street West, Toronto, Ontario. During the meeting, senior management
will provide a general corporate update followed by an informal
questions-and-answers session. 




Table 1 - Summary of Production Results                                     
                                                                            
El Castillo Operating Statistics                    3/31/2010   3/31/2009(i)
------------------------------------           -------------- --------------
                                                                            
Total Tonnes mined                                  2,890,313      1,509,900
Tonnes Ore                                          1,313,526        651,500
Tonnes Ore-direct to leach pad                        999,121        452,900
Tonnes Crushed                                        314,405        198,500
Gold Grade (grams/tonne)                                 0.39           0.57
                                                                            
Gold Produced (ounces)                                 10,242          5,968
Cash cost per ounce produced                             $590           $650
                                                                            
(i)Note: Information obtained from Castle Gold Corporation press release    
 dated May 28, 2009.                                                        



About Argonaut 

Argonaut is a Canadian gold company engaged in exploration, mine development and
production activities. Its primary assets being the production-stage El Castillo
Project and the exploration-stage La Fortuna Project, both located in the State
of Durango, Mexico. Argonaut is a new venture created by former executive
management team members of Meridian Gold Inc. Creating the Next Quality Mid-Tier
Gold Producer in the Americas.


Non-GAAP Measures 

"Cash cost" is a non-GAAP measure calculated in accordance with the Gold
Institute Production Cost Standard and includes site costs for all mining
(excluding deferred stripping costs), processing administration, royalties and
production taxes but exclusive of depletion, depreciation, reclamation,
financing costs, capital costs and exploration costs. Cash cost is presented as
we believe that it represents an industry standard of comparison. 


"Cash cost per ounce" is a non-GAAP measure derived from the cash cost of ounces
produced as a measure of total ounces produced. 


Cash cost per ounce is not a term defined under Canadian generally accepted
accounting principles, and does not have a standard, agreed upon meaning. As
such cash cost per ounce may not be directly comparable to cash cost per ounce
reported by similar issuers. 


Cautionary Language Regarding Forward-Looking Information 

This news release contains certain forward-looking statements. Forward-looking
statements include but are not limited to those with respect to the price of
gold, the estimation of mineral resources and reserves, the realization of
mineral reserve estimates, the timing and amount of estimated future production,
costs of production, capital expenditures, costs and timing of development of
new deposits, success of exploration activities, permitting time lines, currency
fluctuations, requirements for additional capital, completion of capital
projects, availability of financing on acceptable terms, government regulation
of mining operations, environmental risks, unanticipated reclamation expenses
and title disputes or claims and limitations on insurance coverage. In certain
cases, forward-looking statements can be identified by the use of words such as
"goal", "targets", "objective", "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "does not anticipate", or "believes" or variations of such
words and phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
Argonaut Gold to be materially different from any future results, performance or
achievement expressed or implied by the forward-looking statements. Such risks
and uncertainties include, among others, the actual results of current
exploration activities, conclusions of economic evaluations, changes in project
parameters, possible variations in grade and ore densities or recovery rates,
failure of plant, equipment or processes to operate as anticipated, accidents,
labour disputes or other risks of the mining industry, delays in obtaining
government approvals or financing or in completion of development or
construction activities, risks relating to the integration of acquisitions, to
international operations, to the price of gold. 

Although Argonaut Gold 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 as anticipated, estimated or intended. It
is important to note, that: (i) unless otherwise indicated, forward-looking
statements indicate the Company's expectations as at the date of this news
release; (ii) actual results may differ materially from the Company's
expectations if known and unknown risks or uncertainties affect its business, or
if estimates or assumptions prove inaccurate; (iii) the Company cannot guarantee
that any forward-looking statement will materialize and, accordingly, readers
are cautioned not to place undue reliance on these forward-looking statements;
and (iv) the Company disclaims any intention and assumes no obligation to update
or revise any forward-looking statement even if new information becomes
available, as a result of future events or for any other reason. In making the
forward-looking statements in this news release, Argonaut Gold has made several
material assumptions, including but not limited to, the assumption that: (i)
consistent supply of sufficient inputs including power will be available to
develop and operate the project as planned; (ii) metal prices and exchange rates
experienced match those anticipated; (iii) mineral reserve and resource
estimates are accurate; (iv) the technology used to develop and operate its
project will and will continue to work effectively; (vi) that labour and
materials will be sufficiently plentiful as to not impede the projects or add
significantly to the estimated cash costs of operations; and (vii) that the
process and plan expansion projects continue to be implemented successfully.

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