Argonaut Gold, Bravada agree to Wind Mountain option

Bravada Gold Corp. and Argonaut Gold Inc. have signed a letter of intent (LOI) for the continued exploration and development of Bravada’s Wind Mountain gold and silver property in northwestern Nevada, where Bravada has outlined a National Instrument 43-101 resource of 570,000 ounces of gold and 14.7 million ounces of silver in the indicated category and an additional 354,000 ounces of gold and 10.1 million ounces of silver in the inferred category (see news release dated April 11, 2011).

Under terms of the LOI, Argonaut can fund staged expenditures totalling US$7.5million over a three-year period to earn the option to purchase the project by paying Bravada a price of $30 per ounce of gold-equivalent contained within Measured and Indicated resource categories as determined by independent Qualified Persons. The purchase price will be paid 50% in cash and 50% in shares in Argonaut. Bravada would also retain a one percent net smelter return royalty for any production from the property in excess of the purchased ounces.

Argonaut has made a firm commitment of $250,000 under the LOI to conduct a drilling program this fall that will test two exploration targets beneath shallow alluvial cover: the undrilled Zephyr target and the down-dip extension of shallow oxide mineralization that Bravada drilled at the North Hill target during 2011. For example, previously announced WM11-038 at North Hill intersected 6.1m of 0.619g/t Au and 17.9g/t Ag beginning at surface.

In the event that the LOI leads to a full option agreement, the minimum expenditure for year one will be $1.15 million. Bravada will be operator initially. The minimum expenditures for years two and three are $2.35 million and $4.0 million, respectively. Timing for expenditures may be extended where they result from permitting delays.

President Joe Kizis commented, “Argonaut is a highly respected and well funded mine operator with two active mines in Mexico and a third nearing production. They produced 72,000 ounces of gold in 2011 and are projecting to produce 88,000-97,000 ounces of gold during 2012. Their experience in open-pit mining and heap leaching of disseminated gold in Mexico should be directly applicable to Wind Mountain and we are pleased to work with them to advance Wind Mountain as their first project outside of Mexico.”

About Wind Mountain

The past-producing Wind Mountain gold/silver project is located approximately 160km northeast of Reno, Nevada in a sparsely populated region with excellent logistics, including county-maintained road access and a power line to the property. A previous owner, AMAX Gold recovered nearly 300,000 ounces of gold and over 1,700,000 ounces of silver between 1989 and 1999 from two small open pits and a heap-leach operation (based on files obtained from Kinross Gold, successor in interest to AMAX Gold). Rio Fortuna Exploration (U.S.) Inc., a wholly owned US subsidiary of Bravada Gold Corporation, acquired 100% of the property through an earn-in agreement with Agnico-Eagle (USA) Limited, a subsidiary of Agnico-Eagle Mines Limited, which retains a 2% NSR royalty interest, of which 1% may be purchased. A Technical Report for an independent Preliminary Economic Assessment (PEA) and resource estimate was conducted by Mine Development Associates (MDA) of Reno and has been posted on SEDAR, as previously reported (see NR-07-12 dated May 1, 2012).

The PEA assumes open-pit, contract mining with conventional trucks and shovels, run-of-mine leaching, and a base-case price of US$1,300 per ounce of gold and $24.42 per ounce of silver. The base-case economic model (1) is summarized below in US dollars and Imperial units (some values rounded):

Resource inside the pits = 42.1 million short tons of Indicated Resource @ 0.011 oz Au/t & 0.26 oz Ag/t, and 2.2 million short tons of Inferred Resource @ 0.008 oz Au/t & 0.18 oz Ag/t, both utilizing a 0.006 oz Au/t cutoff Gold & Silver Ounces mined = 465,000 oz Au & 11,198,000 oz Ag (516,000 oz Au-eq(2)) Gold & Silver Ounces produced = 288,000 oz Au & 1,680,000 oz Ag (320,000 oz Au-eq(2)) Waste: Ore Strip ratio = 0.71:1 Capital = Initial capital of $45.4 million with $18.4 million sustaining capital Mine Life = approximately 7 years of mining with 2 additional years of residual leaching & rinsing Payback Period = 2.2 years Life-of-mine cash cost(3) = $859 per ounce Au Total Pre-Tax cost(3) = $1,080 per ounce Au IRR = 29% Pre-tax NVP@5% = $42.9 million

Sensitivity studies by MDA indicate that gold and silver prices 30% higher in the same modeled pit and at the same recovery rates ($1,690/oz Au and $31.75/oz Ag) would increase the IRR to 74% and the NPV@5% to $136.2 million. Gold and silver prices that are 20% lower ($1,040/oz Au and $19.54/oz Ag) would result in the model being uneconomic at an NPV@5%. Sensitivities of the model to capital and operating costs are also provided. MDA notes that additional studies such as additional metallurgical studies to evaluate crushing higher-grade portions of the deposit and grid drilling to delineate economic portions of the previously mined “waste rock”, which are given no value in the current model, could further enhance the economics of known mineralization. Approximately 43% of the pre-mining strip in the PEA model consists of “waste rock”, and MDA is optimistic that with further drilling and sampling a portion of this material’s grade and tons could be quantified for economic evaluation.

Mine Development Associates compiled the technical report. Thomas Dyer, P.E. is a Senior Engineer for MDA and is responsible for sections of the technical report involving mine designs and the economic evaluation, and Steven Ristorcelli, C.P.G., is a Principal Geologist for MDA and is responsible for the sections involving the Mineral Resource estimate. These are the Qualified Persons of the technical report for the purpose of Canadian NI 43-101, Standards of Disclosure for Economic Analyses of Mineral Projects.

Joseph Anthony Kizis, Jr. (AIPG CPG-11513, Wyoming PG-2576) is the Qualified Person responsible for reviewing the technical results in this release.