Argonaut Gold Exceeds 2012 Guidance with Gold Production of 108,081 Ounces

Q4 Gold Production of 25,805 Ounces at El Castillo; 6,195 Ounces at La Colorada

TORONTO, ONTARIO–(Marketwire – Jan. 17, 2013) – Argonaut Gold Inc. (“Argonaut Gold” or the “Company”) (TSX:AR), announced today that the Company achieved record gold production of 32,000 ounces during the 4th quarter ended December 31, 2012. This included 25,805 ounces at its 100% owned El Castillo Mine (“El Castillo”) in Durango, Mexico and 6,195 ounces at its 100% owned La Colorada Mine (“La Colorada”) in Sonora, Mexico. All dollar amounts are in US dollars except as otherwise noted.


El Castillo

  • Record production of 25,805 gold ounces (+31% improvement over Q4 2011)
  • 39,329 gold ounces loaded on the pad (+30% improvement over Q4 2011)
  • West Side Pad 8 construction moving forward; first cell to be loaded starting in Q2 of 2013

La Colorada

  • Production of 6,195 gold ounces and 47,890 silver ounces
  • 8,845 gold ounces and 815,219 silver ounces loaded on the pad
  • Phase 2 pad construction is 65% complete
  • Crushing circuit relocated and fully operational
    • Final crushing circuit expansion scheduled for early in Q2 of 2013
  • Overburden removal commenced in the La Colorada/Gran Central pit


  • Year-end cash balance was $191 million as of December 31, 2012, of which C $115 million for warrant exercises was included
  • Fourth Quarter sales of 29,500 ounces of gold and 70,910 ounces of silver

Full year 2012

  • Total production of 108,081 ounces of gold (+50% over 2011)
    • El Castillo 87,712 ounces (+22% over 2011)
    • La Colorada 20,369 ounces

El Castillo In Pit Sulphide Mineralization

  • Over 360,000 gold ounces have been added to El Castillo’s in-pit resources. The additional sulfide mineralization is divided into two categories including non-silicified sulphides and silicified sulphides; this provides 22.6 million tonnes at a grade of 0.504 g/t. The majority of the mineralization falls in the non-silicified category which has an average grade of 0.47 g/t with recoveries ranging from 25% to over 50%. The smaller silicified zone of mineralization is mainly confined to a higher grade breccia pipe averaging 0.80 g/t. yielding recoveries of 11% to 28%.
  • Results encompass approximately 5,000 meters of core drilling for 32 holes completed in multiple programs over the last three years. All metallurgical testing was completed by Kappes, Cassidy & Associates (“KCA”) in Reno, Nevada.
Measured and Indicated Resource Table
Sulphide non-silicified Sulphide silicified
Cutoff Tonnes Au g/t Au oz cont. Tonnes Au g/t Au oz cont.
0.15 24,032,586 0.428 330,392 2,801,142 0.717 64,590
0.20 22,639,932 0.443 322,310 2,599,320 0.759 63,388
0.25 20,200,020 0.469 304,655 2,415,744 0.799 62,064
0.30 17,337,720 0.501 279,379 2,085,348 0.882 59,127
0.40 10,978,344 0.589 208,000 1,680,330 1.013 54,715
For economic evaluation, the non-silicified sulphide zone is based upon 30% recovery; the silicified sulphide zone is based upon 17% recovery.
  • Global Sulphide Resource:
    • El Castillo’s global measured and indicated (“M&I”) sulphide resource shows 1.5 million ounces of gold at an average grade of 0.296 g/t; it lies below the oxide and transitional gold resource at El Castillo. It is the Company’s current interpretation that the silicified sulphides make up a relatively low percentage of the total sulfides and is largely limited to the silicified breccia pipe.

Please visit http://argonautgold.com for a full table of metallurgical results and images related to the sulphides.


Fourth quarter 2012 operating statistics showed improvement over fourth quarter 2011 results. Ore production is now at an annualized rate of approximately 13 million tonnes.

El Castillo Operating Statistics
3 Months Ended Year End
12/31/2012 12/31/2011 Change 12/31/2012 12/31/2011 Change
Mining (000)
Total tonnes mined 6,695 5,437 23% 24,052 20,009 20%
Tonnes ore 3,321 2,912 14% 11,962 11,145 7%
Heap Leach Pad (000)
Direct ore tonnes to leach pad 2,033 2,098 -3% 7,561 8,114 -7%
Crushed Ore tonnes to pad 1,282 839 53% 4,555 3,041 50%
Gold grade (g/t) 0.37 0.32 15% 0.39 0.33 18%
Gold loaded to pad (oz) 39,329 30,162 30% 151,462 117,939 28%
Gold loaded to carbon(oz) 25,805 19,698 31% 87,712 72,049 22%
Gold sold (oz) 23,595 20,468 15% 89,881 66,521 35%
1 “g/t” is grams per tonne
2 “oz” means troy ounce

Richard Rhoades, Chief Operating Officer of Argonaut Gold said “Year-end production at El Castillo of 87,712 gold ounces came in above increased guidance of 85,000 ounces for the year. The team at El Castillo team delivered yet another quarter of continued improvement, providing a 10% increase over the initial 2012 guidance. In addition to exceeding guidance expectations, the Company has seen dramatic improvement in crushing at the operation. The operation is now crushing at a rate of approximately 5 million tonnes per year.”

Production has approached a near steady state at El Castillo. Higher grade material during the fourth quarter of 2012 provided for production of over 25,000 ounces against to guidance of 21-22,000 ounces for the quarter. In 2013, the operation anticipates lower grades, offset by higher volumes of material, for an estimated 5-10% increase over total 2012 production.


Overburden removal continues at La Colorada in preparation for full scale mining. During the fourth quarter, the crusher was relocated with a minimal impact to the production plan. Fourth quarter production provided 6,195 ounces of gold, for a total 2012 production of 20,369 ounces. Final production exceeded expectations due to higher than anticipated recoveries from the reprocessing of material and positive grade reconciliation.

La Colorada Operating Statistics
3 Months Ended Year Ended
12/31/2012 12/31/2012
Mining (000)
Total Tonnes mined 2,945 7,173
Tonnes ore 922 3,332
Heap Leach Pad (000)
Crushed ore tonnes to pad 623 2,895
Gold grade (g/t) 0.43 0.43
Gold loaded to pad (oz) 8,845 40,180
Gold loaded to carbon(oz) 6,195 20,369
Silver loaded to carbon (oz) 47,890 132,805
Gold sold (oz) 5,907 19,900
Silver sold (oz) 54,108 116,717
1 “g/t” is grams per tonne
2 “oz” means troy ounce

In discussing the Company’s fourth quarter and year end highlights, Mr. Pete Dougherty, President and CEO said “2012 has been a year of significant accomplishments for Argonaut Gold’s employees. The Company has delivered on operational production expectations and added an important project, Magino, for future growth and development.

The El Castillo production rate has shown continual improvement quarter over quarter. La Colorada has exceeded initial expectations while forming the foundation for the future. There is still more work to be done to elevate the Company to the status of a mid-tier producer and I am grateful for what has been accomplished so far.”

Argonaut Gold Q4 and Year End Financial Results Conference Call and Webcast:

The Q4 and year end financial results call is set to take place on March 26, 2013 at 8:30 am ET. Details for the call in participation are included below:

Q4 and Year-End Conference Call Information:
Toll Free (North America): 1-866-226-1792
International: 1-416-340-2216
Webcast: www.argonautgold.com
Q4 and Year End 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 March 26, 2013 until April 2, 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 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.