Argonaut Gold Announces the La Colorada Project on Track for Production in Early Q2, 2012
Published : January 09, 2012

PEA Shows NPV of $278 Million, Projected Gold Equivalent Production of 480,000 Ounces

( 0 vote, 0/5 ) Print article
  Article Comments Comment this article Rating Follow Company  
0
Send
0
comment

TORONTO, ONTARIO--(Marketwire - Jan. 9, 2012) - Argonaut Gold Inc. (News - Market indicators) ("Argonaut Gold", "Argonaut" or the "Company") is pleased to announce the results from a new National Instrument 43-101 compliant ("N.I. 43-101"), Preliminary Economic Assessment ("PEA") for the 100% owned La Colorada gold-silver project, located 45 km southeast of Hermosillo, Mexico. The updated PEA was completed by SRK Consulting Inc. of Denver, CO. Argonaut acquired the La Colorada project (along with the San Antonio Gold Project) through the acquisition of Pediment Gold Corp. in February of 2011. (All dollar values in this release are expressed in $US).

La Colorada PEA Specifications (base case $1,500/oz gold and $20/oz silver):

Project Highlights

  • Initial capital expenditure for the project is estimated at $14.5 million with a sustaining capital of $11.7 million.
  • Pre-tax cash flow from operations estimated at $349 million over the Life of Mine ("LOM").
  • Approximately a one year payback on initial investment, primarily generated by reprocessing 2.7 million tonnes of run of mine ("ROM") material grading 0.43 grams per tonne gold ("Au g/t") and 10.2 grams per tonne silver ("Ag g/t").
Specifics  
Mining costs $1.50/tonne
Processing costs $2.36/tonne
Site G&A $0.55/tonne
Initial capital $14.5 million
Sustaining capital $11.7 million
Average cash cost $620/ounce

Financial Details

  • Pre-tax Net Present Value ("NPV") of $278 million using a 5% discount rate.
  • Pre-tax Internal Rate of Return ("IRR") of 249% calculated by Argonaut Gold.
  • Average annual pre-tax cash flow of $40.8 million. 

Production Specifications

  • Average LOM cash operating costs are estimated to be $620 per ounce based on silver noted as a byproduct credit.
  • Total processed indicated and inferred resource includes 35.5 million tonnes containing 796,000 ounces of gold and 11.6 million ounces of silver (average grades are 0.69g/t gold and 10.2g/t silver).
  • Recovered ounces from production include 438,000 ounces of gold and 3.1 million ounces of silver (For a total of 480,000 gold equivalent ounces) utilizing expected average metallurgical recoveries of 55% for gold and 27% for silver.
  • LOM gold production is estimated at an average of 53,000 gold equivalent ounces per year over a 9 year mine life.
  • Throughput estimate of 4 million tonnes per year from an open-pit mine, with a recovery process using cyanide heap leaching, followed by carbon adsorption/stripping and electrowinning to produce dore bars. 
Specifics  
Total resource processed: 35.5 million tonnes
LOM strip ratio: 3.4:1 (waste:ore)
Average grade: 0.69 g/t Au and 10.2 g/t Ag
Total recovered gold equivalent ounces: 480,000 ounces
Estimated gold recovery: 55% gold and 27% silver
Life Of Mine: 9 years
Average annual production: 53,000 gold equivalent ounces

Peter Dougherty, President and CEO of Argonaut Gold stated:

"We are excited to present the La Colorada PEA which shows a very significant return on a minimal initial investment. It demonstrates the strong economic viability of the mine, supporting a pay back of approximately 1 year. Development of the project will be fully funded by our internal cash balance and ongoing cash flow from operations. The PEA is inclusive of drilling thru September 2011. Further drilling on the property and potential optimization of the project remain important initiatives for the company."

Mr. Dougherty added:

"The necessary permits are in hand for us to begin production in the second quarter of 2012. The La Colorada mine has robust project economics that will potentially contribute over $300 million in cash flow for Argonaut shareholders. The Pediment acquisition is a prime example of how Argonaut can Create Value Beyond Gold."

Project Economics and Production Schedule

The mining plan developed for the La Colorada project by SRK Consulting provides for a production profile which will involve the processing of approximately 35.5 million tonnes of total potential mineable material set out in the PEA. Over a 9 year project life a total of 480,000 gold equivalent ounces is expected to be recovered, providing an average production of approximately 53,000 gold equivalent ounces per year. The LOM average strip ratio for processed material is estimated to be approximately 3.4 to 1. A summary of the annual mine production is outlined below.

                         
  Units Total Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
 
Total Mine Production                        
  Waste 000s Tonnes 121,219 4,847 9,336 19,982 19,053 19,288 21,384 18,809 8,519 0  
  Total Mineable Material 000s Tonnes 32,753 1,153 2,664 4,018 4,947 4,712 2,616 5,191 7,452 0  
  Total Material 000s Tonnes 153,972 6,000 12,000 24,000 24,000 24,000 24,000 24,000 15,972 0  
  Rehandled ROM 000s Tonnes 2,700 2,700                  
    Total Processed Material 000s Tonnes 35,453 3,853 2,664 4,000 4,000 4,000 4,000 4,000 4,000 4,937  
  Recoverable Gold from Pad (55%) 000s Ounces 438.1 31.0 46.1 47.7 45.4 64.9 48.7 53.5 67.3 29.6 3.9
  Recoverable Silver from Pad (27%) 000s Ounces 3,146.9 228.7 222.4 279.6 254.1 368.3 258.8 607.1 530.7 337.2 59.9
    Total Gold Equivalent Production 000s Ounces 480.076 34.063 49.053 51.392 48.834 69.821 52.144 61.620 74.331 34.116 4.701
  Gold and Silver production is based on 55.1% and 27.1% overall average recoveries respectively mined material and recoveries vary by deposit, refer to PEA for details
   

Argonaut Gold has calculated the gold equivalent ounces using a $20/ounce silver price and a $1500/ounce gold price, providing a 75:1 gold equivalent ratio. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would categorize them as mineral reserves. There is no certainty that the PEA will be realized.

La Colorada National Instrument 43-101 Technical Report Resources

The La Colorada resources disclosed as part of the updated PEA were reported in a N.I. 43-101 compliant Technical Report filed on www.sedar.com on December 8, 2011. The 1,067,000 gold ounces grading 0.64 g/t gold is contained within 50 million tonnes; this was calculated using a 0.10 g/t gold cut-off grade. The complete resource estimate table is included below:

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/ar_figure2.pdf.

For further information on the La Colorada project please see the N.I. 43-101 compliant technical report entitled "Technical Report on Resources La Colorada Property Sonora, Mexico dated December 8, 2011 and available on www.sedar.com and under the company's profile as well as the company's website, www.argonautgoldinc.com.

About Argonaut Gold

Argonaut 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 development stage and past producing La Colorada project, the advanced exploration San Antonio project, and several exploration stage projects, all of which are located in Mexico.

Creating Value Beyond Gold

Cautionary Language Regarding Forward-Looking Information

This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release are forward-looking statements (or forward-looking information). The Company's plans involve various estimates and assumptions and its business and operations are subject to various risks and uncertainties. For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form and most recent Management Discussion and Analysis on file with the Canadian securities regulatory authorities on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. The Company assumes no obligation to update the forward-looking information contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein. 

The potential quantities and grades disclosed herein in connection with the drilling results at La Colorada have been presented in an updated resource prepared by SRK Consulting of Denver, CO.

Non-IFRS Measures

The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use certain other non-IFRS financial measures to evaluate the Company's performance including its ability to generate cash flow and profits from its operations. The Company has included certain non-IFRS measures in this document. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and 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. Readers are advised to read all IFRS accounting disclosures presented in the Company's Financial Statements for more detail.

Qualified Persons

Preparation of this press release was supervised by Mr. Thomas Burkhart, Argonaut's Vice President of Exploration and, a "Qualified Persons" as defined by NI 43-101. Mr. Alberto Orozco, Argonaut's Mexico Exploration Manager also supervised the drill programs and on-site sample preparation procedures at La Colorada. Bret Swanson of SRK of Denver, CO, who is an "Independent Qualified Person" as defined by NI 43-101 and the lead person responsible for completing the updated La Colorada resource has reviewed this press release as it relates to the La Colorada project.

For sample analysis the Company utilizes a system of Quality Assurance/Quality Control that includes insertion and verification of standards, blanks and duplicates consistent with industry standards. Samples from the La Colorada project are collected at site by personnel of Inspectorate's preparation laboratory in Hermosillo where samples are prepared and pulps sent for assay in Inspectorate's Sparks, NV laboratory. Samples are analyzed for gold by Fire Assay and Atomic absorption finish (PKG-AuAg assay code; 0.005 to 10ppm detection limit) plus Silver by Aqua Regia and Atomic Absorption finish (0.1 to 200 ppm detection limit). Samples over 10 g/t Au are assayed with gravimetric finish (Assay code Au-1AT-GV). All samples are also assayed by ICP-AES (code GENX-30) for a suite of 30 elements.

An updated N.I. 43-101 compliant technical report will be filed within 45 days of the date of this press release.



Argonaut Gold Inc.
Nichole Cowles
Investor Relations Manager
(775) 284-4422 x 101
nichole.cowles@argonautgoldinc.com
www.argonautgoldinc.com
Data and Statistics for these countries : Mexico | All
Gold and Silver Prices for these countries : Mexico | All

Argonaut Gold Inc.

PRODUCER
CODE : AR.TO
Follow and Invest
Add to watch list Add to your portfolio Add or edit a note
Add Alert Add to Watchlists Add to Portfolio Add Note
ProfileMarket
Indicators
VALUE :
Projects & res.
Press
releases
Annual
report
RISK :
Asset profile
Contact Cpy

Argonaut Gold is a gold producing company based in United states of america.

Argonaut Gold holds various exploration projects in Mexico.

Its main assets in production are EL SASTRE GOLD MINE, EL SASTRE, EL SASTRE - EL ARENAL, EL SASTRE BRIDGE ZONE and EL SASTRE - LUPITA ZONE in Guatemala and EL CASTILLO in Mexico and its main exploration property is SAN ANTIONIO in Mexico.

Argonaut Gold is listed in Canada. Its market capitalisation is CA$ 700.7 millions as of today (US$ 556.1 millions, € 489.8 millions).

Its stock quote reached its highest recent level on January 25, 2013 at CA$ 9.99, and its lowest recent point on March 20, 2020 at CA$ 0.76.

Argonaut Gold has 176 940 000 shares outstanding.

Your feedback is appreciated, please leave a comment or rate this article.
Rate : Average note :0 (0 vote) View Top rated
 
Nominations of Argonaut Gold Inc.
11/15/2013Announces New Chief Financial Officer
12/15/2011Announces New Chief Operating Officer
Financials of Argonaut Gold Inc.
3/16/2015Announces 2014 Revenue of $166.3M, $42.5M in Cash Flow from ...
8/6/2013Provides Notice of Second Quarter Financial Results on Augus...
7/25/2012Provides Notice of Second Quarter Financial Results on Augus...
3/19/2012Provides Notice of Fourth Quarter and Year End Financial Res...
8/5/2011Provides Notice of Second Quarter Financial Results on Augus...
Project news of Argonaut Gold Inc.
1/31/2014Confirms Filing of Prefeasibility Study for the Magino Proje...
1/20/2014CORRECTION FROM SOURCE - Argonaut Gold Announces Full Year 2...
1/20/2014Announces Full Year 2013 Gold Production of 120,224 gold equ...
12/31/2013Announces Completion of the San Agust=EDn project purchase f...
11/6/2013Announces Purchase of San Agust=EDn project from Silver Stan...
10/16/2013Announces Q3 Gold Production of 26,690 Ounces
7/15/2013Announces Record Q2 Gold Production of 33,586 Ounces
4/15/2013Announces Q1 Gold Production of 28,907 Ounces
2/25/2013Announces 2013 Production Guidance of 120-140,000 Ounces
1/17/2013Exceeds 2012 Guidance with Gold Production of 108,081 Ounces
1/17/2013Exceeds 2012 Guidance with Gold Production of 108,081 Ounces
7/18/2012Announces Q2 Gold Production of 24,123 Ounces
4/17/2012Announces Q1 Gold Production of 21,084 Ounces
7/15/2011Announces Q2 Gold Production of 17,453 Ounces
4/14/2011Announces Q1 Gold Production of 18,005 0unces
3/22/2011(San Antionio)Reports on Resource Expansion Drilling at San Antonio
2/14/2011(El Castillo)Provides 2011 Guidance on El Castillo Production of 70-75,00...
Corporate news of Argonaut Gold Inc.
5/25/2016Argonaut Gold Raises C$4.5M via Private Placement of Flow-Th...
5/4/2016Argonaut Gold Announces Results of Annual and Special Meetin...
5/3/2016Argonaut Gold Announces First Quarter 2016 Earnings per Shar...
4/29/2016Argonaut Gold Announces $30 Million Revolving Credit Facilit...
4/14/2016Argonaut Gold Announces First Quarter 2016 Production of 32,...
4/6/2016Argonaut Gold Further Strengthens Board and Management Team
1/18/2016Argonaut Gold Announces Updated Pre-Feasibility Study Result...
11/30/2015Mexus Gold is Pleased to Announce That Argonaut Gold Has Com...
11/24/2015Argonaut Gold Chairman Brian Kennedy Retiring; Jim Kofman to...
11/3/2015Argonaut Gold Announces Third Quarter 2015 Revenue of $32M; ...
11/2/2015Argonaut Gold El Castillo Update
10/22/2015Argonaut Gold El Castillo Update
10/19/2015Mexus Commences Drill Pad Construction for Argonaut
10/15/2015Argonaut Gold Announces Third Quarter 2015 Production of 28,...
9/17/2015Argonaut Gold Announces Updated Economic Parameters to the D...
9/14/2015Mexus Gold US Julio/Santa Elena Update
9/9/2015Mexus Gold US Press Release Correction
8/17/2015Argonaut Gold Updates Mexus Gold US on the Julio property
8/14/2015Argonaut Gold Announces Second Quarter 2015 Revenue of $44M;...
4/15/2015Announces First Quarter 2015 Production of 43,255 Gold Equiv...
3/16/2015Argonaut Gold Announces 2014 Revenue of $166.3M, $42.5M in C...
2/20/2015Argonaut Gold Confirms Filing of Technical Report and Prelim...
1/26/2015Argonaut Gold Receives TSX Acceptance of Shareholder Rights ...
1/20/2015Argonaut Gold Adopts Shareholder Rights Plan
1/13/2015Argonaut Gold Announces Full Year 2014 Gold Production of 13...
1/13/2015Argonaut Gold Announces Updates on the Magino and San Agusti...
1/12/2015Argonaut Gold Announces Updates on the Magino and San Agusti...
1/7/2015Argonaut Gold Announces Full Year 2014 Gold Production of 13...
11/6/2014Argonaut Gold Announces Third Quarter 2014 Revenue of $37.3M...
10/15/2014Argonaut Gold Announces Q3 Production of 32,122 Gold Equival...
10/3/2014Argonaut Gold Confirms Filing of National Instrument 43-101 ...
8/29/2014IIROC Trade Resumption - AR
11/12/2013Announces 3rd Quarter 2013 Revenue of $42.4M and Net Income ...
8/13/2013Announces 2nd Quarter 2013 Revenue of $44.9M and Net Income ...
5/14/2013Announces 1st Quarter 2013 Revenue of $43.1M and Net Income ...
4/26/2013Amends Annual Meeting Business in Response to ISS Comments
3/26/2013Announces 2012 Revenue of $187.1 Million and Net Income of $...
11/14/2012Announces Third Quarter 2012 Revenue of $72.9 Million and Ne...
10/15/2012and Prodigy Agree to Friendly Business Combination
10/15/2012and Prodigy Agree to Friendly Business Combination
10/15/2012and Prodigy Agree to Friendly Business Combination
9/4/2012Announces Updated PEA for the San Antonio Project, Projected...
8/15/2012Announces Record Production, Record Revenue and Record Earni...
5/15/2012Announces First Quarter 2012 Revenue of $24.4 Million and Ne...
5/8/2012Provides Exploration Update on San Antonio and La Colorada
4/25/2012for Annual and Special Meeting of Shareholders
3/30/2012Announces 2011 Revenue of $105 Million and Net Income of $26...
3/14/2012Added to the S&P/TSX Composite Index
2/27/2012Announces 2012 Project Initiatives
1/9/2012Announces the La Colorada Project on Track for Production in...
11/28/2011(El Castillo)Reports on Metallurgical Test Work for El Castillo Sulphide
10/24/2011Increases Measured and Indicated Resource at La Colorada to ...
9/14/2011to be Included in the S&P TSX SmallCap Index
8/15/2011Reports Q2 2011 Revenue of $21.6 Million Net Income of $5.2 ...
6/15/2011Provides Update on 2011 Drilling at La Colorada; Board Appro...
6/6/2011Reports Q1 2011 Revenue of $25.7 Million
5/20/2011Announces Intent to Terminate Registration Under U.S. Securi...
5/9/2011s Resource for San Antonio
4/7/2011Begins Resource Expansion Drilling at the La Colorada Projec...
3/31/2011Announces Q4 Revenue of $19.9 Million as Part of Year End Fi...
3/16/2011to Begin Trading on the S&P Canadian Index Operations
1/25/2011Shareholders and Pediment Gold Corp Shareholders Approve Bus...
Comments closed
 
Latest comment posted for this article
Be the first to comment
Add your comment
TORONTO (AR.TO)
3.96-0.50%
TORONTO
CA$ 3.96
11/18 16:00 -0.020
-0.5%
Prev close Open
3.98 4.00
Low High
3.96 4.09
Year l/h YTD var.
1.92 -  3.98 44.53%
52 week l/h 52 week var.
1.92 -  3.98 70.69%
Volume 1 month var.
880,581 22.98%
24hGold TrendPower© : -44
Produces Gold
Develops
Explores for
 
 
 
Analyse
Interactive chart Add to compare
Interactive
chart
Print Compare Export
Last updated on : 2/15/2010
You must be logged in to use the porfolio and watchlists (free)
Top Newsreleases
MOST READ
Annual variation
DateVariationHighLow
202144.53%3.441.90
202048.11%3.420.76
201923.33%2.871.36
2018-37.50%2.871.18
201713.21%2.981.76
 
5 years chart
 
3 months chart
 
3 months volume chart
 
 
Mining Company News
Plymouth Minerals LTDPLH.AX
Plymouth Minerals Intersects Further High Grade Potash in Drilling at Banio Potash Project - Plannin
AU$ 0.12-8.00%Trend Power :
Santos(Ngas-Oil)STO.AX
announces expected non-cash impairment
AU$ 6.49-4.84%Trend Power :
Oceana Gold(Au)OGC.AX
RELEASES NEW TECHNICAL REPORT FOR THE HAILE GOLD MINE
AU$ 2.68-0.74%Trend Power :
Western Areas NL(Au-Ni-Pl)WSA.AX
Advance Notice - Full Year Results Conference Call
AU$ 2.92-7.01%Trend Power :
Canadian Zinc(Ag-Au-Cu)CZN.TO
Reports Financial Results for Q2 and Provides Project Updates
CA$ 0.12+4.55%Trend Power :
Stornoway Diamond(Gems-Au-Ur)SWY.TO
Second Quarter Results
CA$ 0.02+100.00%Trend Power :
McEwen Mining(Cu-Le-Zn)MUX
TO ACQUIRE BLACK FOX FROM PRIMERO=C2=A0
US$ 1.03-2.83%Trend Power :
Rentech(Coal-Ngas)RTK
Rentech Announces Results for Second Quarter 2017
US$ 0.20-12.28%Trend Power :
KEFIKEFI.L
Reduced Funding Requirement
GBX 0.86-6.52%Trend Power :
Lupaka Gold Corp.LPK.V
Lupaka Gold Receives First Tranche Under Amended Invicta Financing Agreement
CA$ 0.04+12.50%Trend Power :
Imperial(Ag-Au-Cu)III.TO
Closes Bridge Loan Financing
CA$ 3.55-0.56%Trend Power :
Guyana Goldfields(Cu-Zn-Pa)GUY.TO
Reports Second Quarter 2017 Results and Maintains Production Guidance
CA$ 1.84+0.00%Trend Power :
Lundin Mining(Ag-Au-Cu)LUN.TO
d Share Capital and Voting Rights for Lundin Mining
CA$ 10.53-0.47%Trend Power :
Canarc Res.(Au)CCM.TO
Canarc Reports High Grade Gold in Surface Rock Samples at Fondaway Canyon, Nevada
CA$ 0.46-4.17%Trend Power :
Havilah(Cu-Le-Zn)HAV.AX
Q A April 2017 Quarterly Report
AU$ 0.19-2.56%Trend Power :
Uranium Res.(Ur)URRE
Commences Lithium Exploration Drilling at the Columbus Basin Project
US$ 6.80-2.86%Trend Power :
Platinum Group Metals(Au-Cu-Gems)PTM.TO
Platinum Group Metals Ltd. Operational and Strategic Process ...
CA$ 3.52+2.62%Trend Power :
Devon Energy(Ngas-Oil)DVN
Announces $340 Million of Non-Core Asset Sales
US$ 42.70-5.30%Trend Power :
Precision Drilling(Oil)PD-UN.TO
Announces 2017Second Quarter Financial Results
CA$ 8.66-0.35%Trend Power :
Terramin(Ag-Au-Cu)TZN.AX
2nd Quarter Report
AU$ 0.03-6.45%Trend Power :