Record Quarterly and Annual Production of
51,658 and 165,117 Gold Equivalent Ounces Respectively, Setting the
Stage for 2019
TORONTO, Jan. 22, 2019 /CNW/ - Argonaut Gold Inc.
(TSX: AR) (the "Company", "Argonaut Gold" or "Argonaut") is
pleased to announce it has met its 2018 production guidance with
record gold equivalent ounce1 ("GEO" or "GEOs")
production of 51,658 during the fourth quarter of 2018 and 165,117
during 2018. During the quarter, production was 37,977 GEOs
at the El Castillo Complex (18,984 from the El Castillo mine and 18,993 from the
San Agustin mine) located in the
State of Durango, Mexico and
13,681 GEOs at the La Colorada
mine located near Hermosillo, Sonora,
Mexico. During 2018, the El Castillo Complex and
La Colorada mine production
totaled 117,126 GEOs and 47,991 GEOs, respectively. All
dollar amounts are expressed in United
States dollars unless otherwise specified.
Pete Dougherty, President &
CEO stated: "We achieved record quarterly production of nearly
52,000 GEOs, which contributed to record annual production of over
165,000 GEOs. I commend the team on this
accomplishment. We achieved 51% production growth quarter
over quarter and are now at a run rate that indicates we can
produce over 200,000 GEOs in 2019. This represents an approximate
65% increase in full year production between 2017 and 2019 – a goal
that we set for ourselves early in 2017. With the strong
finish to 2018, the stage is set for a robust beginning to
2019. Our main focuses as a Company during 2019 will be
expanding the San Agustin mine's
crushing capacity and adding cash to the balance sheet through the
free cash flow generated by our operations while continuing to
de-risk and advance our development assets."
2019 Guidance
The Company anticipates it will produce between 200,000 to
215,000 GEOs during 2019 at a cash cost2 of between
$775 to $875 per gold ounce sold and all-in sustaining
costs ("AISC")2 of between $875 to $975 per
gold ounce sold. Table 1 below illustrates the 2019
production and cost guidance:
Table 1 – 2019 GEO Production and Cost
Guidance
|
|
El Castillo
Complex
|
La
Colorada
|
Consolidated
|
GEO
Production
|
In
000s
|
140 – 150
|
60 – 65
|
200 –
215
|
Cash costs(1)
(2)
|
$ per
oz/Au
|
760 –
860
|
800 – 900
|
775 –
875
|
AISC(1)
(2)
|
$ per
oz/Au
|
|
|
875 –
975
|
(1)
|
Assumes a MXN:USD
exchange rate of 20:1.
|
(2)
|
Please refer to
section "Non-IFRS Measures" below for a discussion of these
non-IFRS measures.
|
The Company plans to invest $50
million to $60 million in
capital expenditures during 2019. The largest one-time
budgeted capital item is approximately $15
million for the expansion of the crushing and leaching
facilities at the San Agustin mine
to increase capacity by an additional 10,000 tonnes per day ("tpd")
from 20,000 tpd to 30,000 tpd. Table 2 below illustrates the
projected capital expenditures for 2019 by project:
Table 2 – 2019 Capital Estimate by Project
($M)(1)
|
El Castillo
Complex
|
La
Colorada
|
Magino,
San
Antonio &
Cerro
del
Gallo
|
Consolidated
|
Total
|
27 – 31
|
14 – 16
|
9 – 13
|
50 –
60
|
(1)
|
Assumes exchanges
rates of MXN:USD of 20:1 and CAD:USD of 1.3:1
|
Table 3 below illustrates the projected capital expenditures for
2019:
Table 3 – 2019 Capital Estimate ($M)(1)
|
|
Sustaining
|
5 – 6
|
Expansion
|
28 – 33
|
Stripping
|
14 – 16
|
Exploration
|
3 – 5
|
Total
|
50 –
60
|
(1)
|
Assumes
exchanges rates of MXN:USD of 20:1 and CAD:USD of
1.3:1.
|
2019 Milestones
The Company is advancing several major milestones in 2019.
Table 4 below outlines key milestones and the estimated timeframes
for their completion:
Milestone
|
Estimated
Completion
|
Magino Environmental
Assessment
approval
|
H1 2019
|
San Agustin crusher
expansion from
20,000 tpd to 30,000
tpd
|
Q3 2019
|
Cerro del Gallo
pre-feasibility study
|
H2 2019
|
Argonaut Gold Fourth Quarter and Year End Financial Results
Conference Call and Webcast
The Company anticipates
releasing its fourth quarter and year-end financial and operational
results after market close on February 19,
2019 and will host a conference call and webcast on
February 20, 2019 at 9:00 am EST to discuss the results.
Fourth Quarter and
Year End Conference Call Information for February 20,
2019:
|
Toll Free (North
America):
|
1-888-231-8191
|
International:
|
1-647-427-7450
|
Webcast:
|
www.argonautgold.com
|
Fourth Quarter and
Year End Conference Call Replay:
|
Toll Free
Replay Call (North America):
|
1-855-859-2056
|
International
Replay Call:
|
1-416-849-0833
|
Passcode:
|
3470117
|
The conference call replay will be available from 2:00 pm EST on February
20, 2019 to 11:59 pm EST
February 27, 2019.
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.
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 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
management's discussion and analysis ("MD&A") 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 proposed
transaction and 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 various
mineral projects of Argonaut; synergies 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; the
realization of mineral reserve estimates; the timing and amount of
estimated future production; costs of production; 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" 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
changes in market conditions, variations in ore grade or recovery
rates, 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. 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. 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.
___________________________
|
1
|
GEOs are based on
conversion ratio of 70:1 for silver to gold ounces for 2018 and
75:1 for 2019. The silver to gold conversion ratio is based
on the three-year trailing average silver to gold exchange
ratio. This is the referenced ratio for each year throughout
the press release.
|
2
|
Please refer to
section "Non-IFRS Measures" below for a discussion of these
non-IFRS measures.
|
SOURCE Argonaut Gold Inc.