AR Argonaut Gold Inc

TORONTO, May 29, 2024 /CNW/ - Argonaut Gold Inc. (TSX: AR) ("Argonaut", "Argonaut Gold" or the "Company") announced today that it has filed updated technical reports (the "Reports") for its Florida Canyon and San Agustin mines. The Reports can be found on the Company's website at www.argonautgold.com or under the Company's issuer profile at www.sedarplus.ca.

The Reports have been prepared in accordance with the disclosure and reporting requirements set forth in the Canadian Securities Administrators' National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"), Companion Policy 43-101CP to NI 43-101 and Form 43-101F1 Technical Report, as well as the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves.

Florida Canyon is an open pit and heap leach gold recovery mining operation that has been operating continuously with sporadic periods of interrupted production, since 1986. Florida Canyon is located approximately 45 miles southwest of Winnemucca, Nevada, adjacent to Interstate Highway 80. The Florida Canyon mine is owned through a wholly-owned subsidiary of Argonaut Gold acquired through its acquisition of Alio Gold Inc. in July 2020.

The technical report, entitled "NI 43-101 Technical Report, Florida Canyon Gold Mine, Pershing County, Nevada, USA" (the "Florida Canyon Technical Report"), effective date of May 1, 2024, has been prepared for Argonaut and a wholly-owned subsidiary to be formed by Argonaut ("SpinCo") by Global Resource Engineering Ltd.

In the Florida Canyon Technical Report, a financial analysis was developed using a discounted cash flow approach on a pre-tax and after-tax basis. The net present value was calculated from the cash flows generated based on a discount rate of 5% utilizing gold metal selling prices of US$2,200 per ounce for 2024, US$2,150 per ounce for 2025/2026 and thereafter US$1,900 per ounce. Gold metal prices are elevated in the first three years to reflect current metal price trends, with latter years reverting to slightly above the 3-year trailing average. Silver metal selling price is assumed as US$20 per ounce.

• Average annual gold production of 70,000 ounces from 2024 through 2030
• Total cash cost of US$1,394 per ounce and all-in sustaining cost of approximately US$1,630 per ounce over the remaining life-of-mine¹
• Pre-tax net present value (5%) of US$153 million
• After-tax net present value (5%) of US$139 million

The following served as the qualified persons ("QPs") for the Florida Canyon Technical Report: 

• Ms. Terre Lane, RM SME, MMSA, Global Resource Engineering Ltd.
• Mr. Jeffrey Todd Harvey, PE, RM SME, Global Resource Engineering Ltd.
• Mr. Hamid Samari, MMSA, Global Resource Engineering Ltd.
• Mr. Larry Breckenridge, PE, Global Resource Engineering Ltd.

The San Agustin mine is located in the northern San Lucas de Ocampo Mining District. The main part of the San Agustin mine is composed of two concessions acquired from Silver Standard Resources Inc. in December 2013. Argonaut began mining operations at the San Agustin mine in February 2017, pouring gold and silver doré in September 2017, and commencing commercial production in October 2017.

The technical report, entitled "San Agustin Gold/Silver Mine, Durango, Mexico, NI 43-101 Technical Report" (the "San Agustin Technical Report"), effective date of May 15, 2024, has been prepared for Argonaut and SpinCo by Argonaut and Kappes, Cassiday & Associates.

The net present value was calculated from the cash flows generated based on a discount rate of 5% utilizing gold metal selling prices of US$2,200 per ounce for 2024 and US$2,150 per ounce for 2025/2026. Gold metal prices are elevated in the life-of-mine plan to reflect current metal price trends and recognizing the short life-of-mine period remaining. Base case silver selling price is assumed as US$20 per ounce.

• Gold production of 89,000 ounces from April 2024 through 2026
• Total cash cost of US$1,701 per ounce²
• Pre-tax and after-tax net present value (5%) of US$30 million

Qualified Persons

The following served as the QPs for the San Agustin Technical Report: 

• Mr. Marc Leduc, P. Eng, Argonaut
• Mr. Owen Nicholls, CPG AIPG, Argonaut
• Mr. Carl Defilippi, RM SME, Kappes, Cassiday & Associates

The Company provides certain non-IFRS measures as supplementary information that management believes may be useful to investors to explain and evaluate the Company's financial results. "Total cash cost" and "all-in sustaining cost" are non-IFRS measures. Non-IFRS measures do not have any standardized meaning prescribed under IFRS; therefore, they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For further information about non-IFRS measures, please see the Company's management's discussion and analysis for the year ended December 31, 2023 and the Company's management's discussion and analysis for the three months ended March 31, 2024, each filed under the Company's issuer profile on SEDAR+.

Argonaut Gold is a Canadian-based gold producer with a portfolio of operations in North America. On March 27, 2024, Argonaut and Alamos Gold Inc. ("Alamos") entered into an arrangement agreement whereby Alamos will acquire all of the issued and outstanding shares of Argonaut pursuant to a court approved plan of arrangement ("the Arrangement"). As part of the Arrangement, Alamos will acquire Argonaut's Magino mine and Argonaut's assets in the United States and Mexico will be spun out to its existing shareholders as a newly-created junior gold producer, SpinCo. As a result, SpinCo is expected to own the Florida Canyon and San Agustin mines. Argonaut Gold trades on the Toronto Stock Exchange (TSX) under the ticker symbol "AR".

This press release contains certain "forward-looking statements" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Argonaut Gold. Except for statements of historical fact relating to Argonaut, all statements included herein are forward-looking statements. The words "believe", "expect", "strategy", "target", "plan", "scheduled", "commitment" "opportunities", "guidance", "project", "continue", "on track", "estimate", "growth", "forecast", "potential", "future", "extend", "planned", "will", "could", "would", "should", "may" and similar expressions typically identify forward-looking statements. In particular, this press release contains forward-looking statements including, without limitation, information and statements regarding the San Agustin and Florida Canyon mines; the parameters and components of the financial analyses and net present value calculations of the various mineral properties of Argonaut; the timing and amount of estimated future production; the ability of the Company to achieve its production estimates; costs of production; estimated production and mine life of the various mineral properties of Argonaut; and the future price of gold and silver.

Forward-looking statements are necessarily 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 but are not limited to: variations in ore grade or recovery rates; changes in market conditions; changes in inflation; risks relating to the availability and timeliness of permitting and governmental approvals; the possibility of project cost overruns or unanticipated costs and expenses; risks relating to international operations; fluctuating metal prices and currency exchange rates; changes in project parameters; labour disputes and other risks of the mining industry; and failure of plant, equipment or processes to operate as anticipated.

These factors are discussed in greater detail in Argonaut's most recent annual information form dated March 28, 2024 and in the most recent management's discussion and analysis for the three months ended March 31, 2024, both filed under the Company's issuer profile on SEDAR+, which also provide additional general assumptions in connection with these statements. Argonaut cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail.

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. Further, the forward-looking statements included herein speak only as of the date of this press release.

SOURCE Argonaut Gold Inc.