Argonaut Gold Announces Record Q3 Gold Production of 31,074 Oz & Increases 2012 Production Guidance

TORONTO, ONTARIO–(Marketwire – Oct. 15, 2012) – Argonaut Gold Inc. (“Argonaut Gold” or the “Company”) (TSX:AR), announced today that the Company had record gold production of 31,074 ounces during the 3rd quarter ended September 30, 2012. This included 24,575 ounces at its 100% owned El Castillo Mine (“El Castillo”) which is located 100 km north of the city of Durango, Mexico and 6,499 ounces at its 100% owned La Colorada Mine (“La Colorada”) which is located 50 kilometers southeast of Hermosillo, Mexico.

THIRD QUARTER 2012 HIGHLIGHTS:

El Castillo

• Record production of 24,575 gold ounces represents a 46% improvement over Q3 2011
• 41,630 gold ounces loaded on the pad (+39% improvement over Q3 2011)
• Conveying and stacking system on the East Side Pad was fully functional during the third quarter
  • In September, > 500,000 ore tonnes were crushed and placed on the East Side Pad thru the conveyor
• West Side Pad 8 permit granted, with pad construction to be commenced in fourth quarter
• Land agreement signed extending term for an additional 10 year period

La Colorada

• Production of 6,499 gold ounces and 41,937 silver ounces
• 12,276 gold ounces and 1,164,742 silver ounces loaded on the pad
• Phase 2 pad construction is one-third complete
• Refining facility completed; now handling all materials from El Castillo and La Colorada
• Crushing circuit relocation and enhancements scheduled for Q4
  • Final crushing circuit expansion scheduled for early in Q2 of 2013
• Commenced overburden removal for fresh ore mining in Q3 of 2013; 1.8M tonnes moved

Financial

• Cash balance of $43 million as of September 30, 2012, after repayment of $6 million debt
• Record 42,534 ounces of gold sold

Exploration

• Signed letter of intent with Bravada Gold Corp.
  • Wind Mountain Project in Nevada with reported indicated and inferred gold resource (see Bravada NI 43-101 dated April 11, 2011)
  • Aligns with Argonaut Gold’s jurisdictional focus
  • Low entry risk with $250,000 commitment
  • Reasonable acquisition cost of $30/ounce for full purchase
  • Good exploration potential on the project with a goal of increasing resources

Fourth Quarter Outlook

• El Castillo production estimates of 22-23,000 ounces of gold
• La Colorada production estimates of 3-4,000 ounces of gold

Full year Outlook

• El Castillo production estimates of 84-85,000 ounces of gold
• La Colorada production estimates of 17-18,000 ounces of gold
• Total production guidance estimate of 101-103,000 ounces of gold

THIRD QUARTER 2012 El CASTILLO OPERATING RESULTS

Third quarter 2012 operating statistics showed improvement over third quarter 2011 results. Ore production is now at an annualized rate of approximately 12 million tonnes. Currently both sides of the operation are receiving ore to the pads and running their respective processing plants.

Richard Rhoades, Chief Operating Officer of Argonaut Gold said “Capital expansion programs completed in the first half of 2012 provided the framework for production improvements that are now coming to fruition. The El Castillo team has delivered continual year over year production increases, with updated 2012 guidance providing an 18% increase in production over full year 2011 production.”

Capital investments at the property included the addition of a conveying and stacking system which is now fully functional. During September, the circuit provided more than 500,000 tonnes of crushed ore delivered to the pad. The strong third quarter production was positively impacted by the rainy season which brought additional water to the pads during the quarter. Permits necessary to begin construction on West Side Pad 8 have been granted and construction will begin in Q4 of 2012, ahead of schedule.”

THIRD QUARTER 2012 LA COLORADA OPERATING RESULTS

Third quarter operating statistics showed continued improvement at the mine. To date, more than 75% of the Phase I run of mine material to be reprocessed has been recrushed and stacked for leaching.

Overburden removal has begun at La Colorada in preparation for the mining of fresh ore in the first quarter of 2013. Original plans for relocating the crusher were pushed to the fourth quarter; as a result the fourth quarter production expectations are approximately 3-4,000 ounces of gold, with 2012 guidance at La Colorada revised to 17-18,000 ounces.

Richard Rhoades, Chief Operating Officer of Argonaut Gold said “La Colorada has seen record production at the mine during the third quarter. The Company awarded a mining contract for the property and began pre-stripping to prepare for fresh ore mining to commence in early 2013. The capital expansion program for La Colorada is now well underway and with significant accomplishments made at the mine contributing to the growing production profile.”

In discussing the Company’s third quarter highlights, Mr. Pete Dougherty, President and CEO said “I am extremely proud of the men and women in our organization who daily achieve exceptional results, reflected in the Company’s accomplishments. In just two and a half years the El Castillo production rate has more than tripled. The team at site has delivered upon yearly production expectations along with timely completion of construction and expansion projects necessary for future growth. This coupled with a fantastic start-up of the recently commissioned La Colorada property have now pushed annual production guidance over the 100,000 ounce mark for the Company.”

Record sales for the quarter reflect 8,200 ounces carried over from the Q2 and should contribute to record earnings which will be released November 14^th. With a fully functioning refining circuit at La Colorada we have now been able to reduce the time and finished goods build up associated with final gold sales all of which were reflective in the quarter.

At La Colorada record production has yielded way to the preparation for mining activities to advance in 2013. The project continues in its development with construction and expansion programs laying the ground work for production growth at that property. The Company anticipates that the experiences at El Castillo will lend themselves well in the growth and development of La Colorada. Furthermore, we look to the exploration team for additional drilling on the La Colorada property, with an aim to add further value to the project.”

Argonaut Gold Q3 Financial Results Conference Call and Webcast:

The Q3 financial results call is set to take place on November 14, 2012 at 8:30 am ET. Details for the call in participation are included below:

The conference call replay will be available from 10:30 a.m. ET on November 14, 2012 until November 21, 2012.

Argonaut Gold Confirms Filing of Preliminary Economic Assessment for San Antonio

Argonaut Gold is pleased to confirm the filing today, pursuant to NI 43-101, the Preliminary Economic Assessment in relation to its San Antonio Property. For further information on the San Antonio Project please see the technical report entitled “NI 43-101 Technical Report on Resources San Antonio Project” dated effective as of September 1, 2012 and available on www.sedar.com and under the Company’s profile as well as the Company’s website, www.argonautgold.com.

The preliminary economic assessment is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorizes as mineral reserves, and that there is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves.

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 the State of Durango, Mexico, the production-stage La Colorada Mine in the State of Sonora, Mexico, the advanced exploration stage San Antonio project in the State of Baja California Sur, Mexico, and several exploration stage projects, all of which are located in Mexico.

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

Preparation of this release was supervised by Thomas Burkhart, Argonaut Gold’s Vice President of Exploration, and a Qualified Person under NI 43-101. For additional information on El Castillo please refer to the “NI 43-101 Technical Report on Resources and Reserves, Argonaut Gold Inc., El Castillo Mine, Durango State, Mexico” dated Nov. 6, 2010 and further information on La Colorada please refer to the “NI 43-101 Preliminary Economic Assessment La Colorada Project, Sonora, Mexico” dated December 30, 2011, both of which and available at Argonaut Gold’s website and profile on www.sedar.com.

Contact Information
Argonaut Gold Inc.
Nichole Cowles
Investor Relations Manager
(775) 284-4422 x 101
nichole.cowles@argonautgold.com
www.argonautgold.com