Argonaut Gold Announces Q1 Gold Production of 28,907 Ounces

Toronto, Ontario – (April 15, 2013) Argonaut Gold Inc. (“Argonaut Gold” or the “Company”; TSX: AR), announced today that the Company had gold production of 28,907 ounces during the 1st quarter ended March 31, 2013. This included 23,125 ounces at its 100% owned El Castillo Mine (“El Castillo”) located in Durango, Mexico and 5,782 ounces of gold at its 100% owned La Colorada Mine (“La Colorada”) located in Hermosillo, Mexico. Argonaut Gold is continuing its ramp up of production at both operations and we expect production increases as the year progresses. The Company is also pleased to announce an updated resource for the Veta Madre deposit at La Colorada with good expansion potential within the surrounding geologic environment.


El Castillo

  • Production of 23,125 gold ounces, representing a 30% improvement over Q1 2012.
  • 36,023 gold ounces loaded on the pad, a 2% improvement over Q1 2012.
  • West Side Pad 8 construction continues to make good progress and we have now begun loading and leaching.
  • Argonaut now operating all mining at El Castillo, having assumed contractor activities in March.

La Colorada

  • Production of 5,782 gold ounces, an 87% improvement over Q1 2012.
  • Production of 44,879 silver ounces, a 161% improvement over Q1 2012.
  • 3,763 gold ounces and 70,694 silver ounces loaded on the pad.
  3 Months Ended March 31,
  2013 2012 % Change
Mining (Tonnes 000)
Total tonnes mined 6,186 5,965 +3.7%
Tonnes ore mined 3,173 3,051 +4.0%
Heap Leach Pad (Tonnes 000)      
Direct ore tonnes to pad 1,729 2,184 -20.8%
Crushed ore tonnes to pad 1,432 838 +70.8%
Gold produced
Gold grade (g/t)
Gold loaded to pad (oz) 36,023 35,283 +2.1%
Gold sold(oz) 19,509 14,498 +34.6%
1 “g/t” is grams per tonne
2 “oz” means troy ounce

Richard Rhoades, Chief Operating Officer of Argonaut Gold said “2013 will be an important year at El Castillo. The Company is moving forward its expansion programs this year. Nearly 30 million tonnes of pad capacity will be built on the west side pad #8. Our goal is to achieve our production targets while concurrently building for the future. In addition, capital expenditures for a west side crusher/overland conveyor, aimed at reducing costs, will be completed and fully operational in the third quarter.” Mr. Rhoades added, “The grade this quarter was due to higher than anticipated grades mined on the north side of the pit”.

  3 Months Ended March 31,
  Q12013 Q1 2012 % Change
Mining (Tonnes 000)  
Total tonnes moved 4,355 680 +540%
Ore tonnes moved 557 680 -18.2%
Heap Leach Pad (Tonnes 000)      
Crushed ore tonnes to pad 403 680 -40.8%
Gold produced
5,782 3,085 +87%
Gold grade (g/t) 0.48 0.41 +18.3%
Gold loaded to pad (oz) 3,763 8,886 -58%
Gold sold (oz) 5,932 0 n/a
Silver sold (oz) 54,269 0 n/a
1 “g/t” is grams per tonne
2 “oz” means troy ounce

Commenting on La Colorada production, Mr. Rhoades said, “Mining during the first half of the year will be of lower grade with a higher strip ratio. During the second half of the year, the tonnes processed are expected to increase, along with the overall grade”.

Veta Madre Deposit Adds 110,000 Inferred Gold Ounces at La Colorada, Surrounding mineralized envelope provides potential growth in ounces

The Company is pleased to report an updated NI 43-101 compliant mineral resource from SRK Consulting of Denver, CO (“SRK”) showing an inferred resource of 110,145 gold ounces and 701,908 silver ounces at the Veta Madre deposit, which forms part of the La Colorada mineral system. The resource contained within an optimized Whittle-Pit consists of 6.7 million tonnes of material at an average grade of 0.51 g /t of gold and 3.25 g/t silver. Economic parameters utilized in this Whittle Pit optimization are based on actual costs realized at the La Colorada operation, a cut-off grade of 0.10 grams/tonne and metallurgical test work performed by Kappes, Cassiday & Associates (“KCA”) of Reno, NV. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be classified as mineral reserves. There is no assurance that any part of the inferred resources will ultimately be converted to mineral reserves.

Veta Madre restricted and non-restricted pit

Horizontal section for bench 295 showing the outlines for both restricted and unrestricted pits.

Mineralization at Veta Madre is oxidized material which begins at surface and runs to the current drill depths of 170 meters. Expected recoveries are estimated at 85% for gold and 15% for silver, as determined by column heap leach testing completed by KCA. The resource outlined above is constrained to our surface right concessions and only recovers parts of a much larger mineralized envelope. The Company anticipates additional resource could be added to the production profile if additional surface rights can be acquired.

La Colorada Exploration Potential

In regards to exploration potential at the property, Tom Burkhart, Vice President of Exploration said “The current resources at La Colorada are part of a large gold-silver district that historically has produced between three and five million ounces of gold. The Company is currently reviewing satellite gold targets in proximity to the mine. These mineralized zones show evidence of limited past underground production where potential remains for open-pit extraction of mineralized wall-rock. These surrounding gold occurrences offer significant potential, and may add resources to the La Colorada operation. Also offering long-term upside at La Colorada is known high-grade mineralization that underlies all of the current open pit mining operation. The Company believes there is potential for underground mining at La Colorada and will be conducting further studies to evaluate this in 2013.”

First Quarter Highlights

Pete Dougherty, President and CEO of Argonaut Gold said “The Veta Madre resource is an exciting addition which could add near term production at La Colorada. The Company aims to permit this area for production within the next year. The production is anticipated to add approximately 10-20,000 ounces annually, with minimal capital requirements. This would be built as a heap leach operation with solution pumped to the La Colorada plant.”

Mr. Dougherty added, “During the first half of 2013, production expectations are for 46,000 ounces of gold at El Castillo and 9,000 ounces of gold at La Colorada. We anticipate that production will increase in the second half of 2013, with 49,000 gold ounces at El Castillo and 27,000 gold ounces at La Colorada. We are excited by the accomplishments at both mines and look forward to how capex invested through 2013 will lead to production growth and cash cost decreases at both operations.”

Argonaut Gold Annual General Meeting:
Argonaut Gold’s annual meeting of shareholders is scheduled to take place on Tuesday, May 7, 2013 at 11:00 am ET at the office of Bennett Jones LLP , Canada rooms A & B, 3400 One First Canadian Place, Toronto, Ontario, M5X 1A4.

Argonaut Gold Q1 Financial Results Conference Call and Webcast:
The Q1 financial results call is scheduled to take place on May 14, 2013 at 8:30 am ET. Details for the call in participation are:

Q1 Conference Call Information:

Toll Free (North America): 1-877-440-9795
International: 1-416-340-8527
Webcast: www.argonautgold.com

Q1 Conference Call Replay:

Toll Free Replay Call (North America): 1-800-408-3053
International Replay Call: 1-905-694-9451
Passcode: 7979249

The conference call replay will be available from 10:30 a.m. ET on May 14, – May 21, 2013.

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 in Durango, Mexico and, the La Colorada Mine in Sonora, Mexico, the advanced exploration stage San Antonio project in Baja California Sur, Mexico, the recently acquired advanced exploration stage Magino project in Ontario, Canada and several exploration stage projects, all of which are located in North America.

Creating Value Beyond Gold

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”). 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.

Qualified Person, Technical Information and Mineral Properties Reports

Preparation of this release was supervised by Thomas Burkhart, Argonaut Gold’s Vice President of Exploration, and a Qualified Person under NI 43-101. Mr. Alberto Orozco, Argonaut’s Mexico Exploration Manager also supervised the drill programs and on-site sample preparation procedures at La Colorada. Bret Swanson of SRK of Denver, CO, who is an “Independent Qualified Person” as defined by NI 43-101 and the lead person responsible for completing the updated Veta Madre resource has reviewed this press release as it relates to Veta Madre.

For further information on the Company’s properties please see the reports as listed below on the Company’s website or on www.sedar.com:

El Castillo Mine NI 43-101 Technical Report on Resources and Reserves, Argonaut Gold Inc., El Castillo Mine, Durango State, Mexico dated November 6, 2010
La Colorada Mine NI 43-101 Preliminary Economic Assessment La Colorada Project, Sonora, Mexico dated December 30, 2011

For more information, contact:
Argonaut Gold Inc.
Nichole Cowles
Investor Relations Manager
Tel: (775) 284-4422 x 101
Email: nichole.cowles@argonautgold.com