Argonaut Gold Announces Q3 Gold Production of 26,690 Oz

Toronto, Ontario – (October 16, 2013) Argonaut Gold Inc. (“Argonaut”, “Argonaut Gold” or the “Company”; TSX: AR), announced today that the Company had gold production of 26,690 ounces during the 3rd quarter ended September 30, 2013. This included 22,756 ounces at its 100% owned El Castillo Mine (“El Castillo”) located in Durango, Mexico and 4,234 ounces of gold at its 100% owned La Colorada Mine (“La Colorada”) located in Hermosillo, Mexico.

Argonaut Gold is also pleased to announce that it has entered into a surface and mining rights exchange agreement with Richmont Mines Inc. (“Richmont”; TSX:RIC). Pursuant to this agreement, Argonaut Gold will expand land access associated with its Magino Gold Project by obtaining both surface rights and mining rights up to 400 meters in depth on certain Richmont claims surrounding the project. Argonaut Gold will transfer its interest in certain claims to Richmont, to enable it to expand its exploration potential at its Island Gold Deep project. The terms of this agreement provide a $2 million payment from Argonaut to Richmont.

THIRD QUARTER 2013 HIGHLIGHTS:

El Castillo

  • Production of 22,756 gold ounces.
  • 39,120 gold ounces loaded on the pad.
  • West Side Pad 8 construction is ongoing.
  • West Side crusher and overland conveyor project was completed and is operational.
  • Permits were received for the new south waste dump.

La Colorada

  • Production of 4,234 gold ounces.
  • Production of 31,717 silver ounces.
  • 5,571 gold ounces and 76,692 silver ounces loaded on the pad.
  • La Colorada pit continues to be opened.
  • New crushing circuit installation was completed and is operational.

Magino

  • Mineral rights and land allows expansion of pit limits and further project development.

THIRD QUARTER 2013 El CASTILLO OPERATING STATISTICS

3 Months Ended September 30
 
9 Months Ended September 30
 
2013
2012
% Change
 
2013
2012
% Change

Mining (Tonnes 000’s)
 
 
 
 
 
 
 
Total tonnes mined
6,542
6,355
↑3%
19,424
17,358
↑12%
Total ore mined
3,406
3,083
↑11%
9,857
8,640
↑14%
Heap Leach Pad (Tonnes 000’s)
 
 
 
 
 
 
Tonnes ore direct to leach pad
1,868
1,811
↑3%
5,307
5,528
↓4%
Tonnes crushed
1,539
1,270
↑21%
4,535
3,273
↑39%
Production
 
 
 
 
 
 
 
Gold grade (g/t)
0.36
0.42
↓15%
0.36
0.40
↓8%
Gold loaded to leach pad (oz)
39,120
41,630
↓6%
115,312
112,133
↑3%
Gold produced (oz)
22,756
24,575
↓7%
73,957
61,907
↑20%
Gold ounces sold
25,840
33,839
↓24%
72,054
66,286
↑9%
1 “g/t” is grams per tonne
2 “oz” means troy ounce

Richard Rhoades, Chief Operating Officer of Argonaut Gold, said “Q3 gold production at El Castillo was impacted by the seasonal monsoon rainfall, while this impacted quarterly results full year production will meet our guidance. Permits were received at El Castillo for construction of the new overburden deposit areas, which will provide a shorter haulage of overburden at the south end of the pit. Also, the new west side crushing and overland conveying system was completed in August and is now fully operational. Argonaut anticipates El Castillo will continue to produce 100,000 ounces a year.

At La Colorada, we continue to open the Gran Central/La Colorada pit and are now mining ore grade material. The mining contractor is in the process of a planned expansion of the fleet which will increase tonnage. This should allow for 60,000 tonnes per day to be mined, which will lead to future production growth. By year end, La Colorada will be operating at approximately a 50-60,000 ounce run rate.

THIRD QUARTER 2013 LA COLORADA OPERATING STATISTICS

3 Months Ended September 30
 
9 Months Ended September 30
 
2013
2012
% Change
 
2013
2012
% Change

Mining (Tonnes 000’s)
 
 
 
 
 
 
 
Total tonnes mined
3,300
2,708
↑22%
11,798
4,228
↑179%
Total ore mined
415
924
↓55%
1,313
2,410
↓46%
Heap Leach Pad (Tonnes 000’s)
 
 
 
 
 
 
Crushed ore tonnes to pad
535
848
↓37%
1,250
2,272
↓45%
Production
 
 
 
 
 
 
 
Gold grade (g/t)
0.33
0.43
↓23%
0.31
0.43
↓29%
Gold loaded to leach pad (oz)
5,571
12,276
↓53%
12,130
31,335
↓61%
Gold produced (oz)
4,234
6,499
↓35%
15,527
14,174
↑10%
Silver produced (oz)
31,717
41,937
↓24%
121,914
84,915
↑44%
Gold ounces sold
4,952
8,695
↓43%
15,935
13,993
↑14%
Silver ounces sold
50,881
52,861
↓4%
132,951
62,609
↑112%
1 “g/t” is grams per tonne
2 “oz” means troy ounce

Pete Dougherty, President and CEO said, “Despite some operational challenges we remain on target to produce 100,000 ounces at El Castillo and 24,000 ounces at La Colorada, which will meet our 2013 guidance of 120,000 – 140,000 ounces of gold. The capital expansion programs at both sites should pay dividends in Q4 and set the standard for 2014 production.”

In referencing the recent land acquisition agreement with Richmont, Mr. Dougherty added “It now allows for future pit expansion and provides additional exploration upside for the project. Our teams are now looking at the potential changes the land expansion may have on the project.”

Argonaut Gold Q3 Financial Results Conference Call and Webcast:
The Q3 financial results call is scheduled to take place on November 12, 2013 at 8:30 am ET. Details for the call in participation are:

Q3 Conference Call Information:

Toll Free (North America): 1-866-223-7781
International: 1-416-340-8018
Webcast: www.argonautgold.com

Q3 Conference Call Replay:

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

The conference call replay will be available from 10:30 a.m. ET on November 12, – November 19, 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 advanced exploration stage Magino project in Ontario, Canada and several exploration stage projects, all of which are located in North America.