Argonaut Gold Inc. (“Argonaut”, “Argonaut Gold” or the “Company”; TSX: AR) announced initial production results for the third quarter in 2015. 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 La Colorada mine in Sonora, Mexico.
Pete Dougherty, Argonaut Gold’s President and CEO, said “Once again we have demonstrated the ability to maintain a strong cash position in spite of a challenging market. We have made several changes within our operations and organization to better position ourselves to grow the cash on the balance sheet at current gold prices. The bulk of our capital spending was front half loaded with the majority of our projects complete as of the third quarter. We anticipate capital spending to be lower in the fourth quarter and into 2016. We are confident in our ability to achieve the production guidance established for the year, while maintaining or growing our current cash balance.
In third quarter 2015 Argonaut Gold Inc announced production results 28,876 gold equivalent ounces (“GEO” or “GEOs”; calculated at conversion ratios set out below) during the third quarter ended September 30, 2015.
This included 17,297 GEOs at its 100% owned El Castillo Mine (“El Castillo”) located in the State of Durango, Mexico and 11,579 GEOs at its 100% owned La Colorada Mine (“La Colorada”) located near Hermosillo, Mexico. Argonaut is well positioned to achieve its full year production guidance of 135,000 to 145,000 GEOs.
| 3rd Quarter | Change | Year to date | Change | |||
| 2015 | 2014 | 2015 | 2014 | |||
| Total Gold Equivalent Ounce Production: | ||||||
| GEOs loaded to the pads1 | 48,768 | 69,777 | ↓30% | 158,893 | 178,832 | ↓11% |
| GEOs projected recoverable ounces1,2 | 27,182 | 41,296 | ↓34% | 90,433 | 102,471 | ↓12% |
| GEOs produced ounces1 | 28,876 | 32,122 | ↓10% | 108,660 | 92,395 | ↑18% |
| GEOs ounces sold1 | 28,572 | 29,917 | ↓4% | 107,537 | 91,805 | ↑17% |
1 GEOs are based on conversion ratio of 55:1 for silver to gold and is the referenced ratio throughout this release
2 Recoverable ounces – El Castillo expected recovery rates: ROM oxide 50%, crushed oxide 70%, ROM transition 40%, crushed transition 60%, crushed sulphides argillic 30% and crushed sulphides silicic 17%; La Colorada expected recovery rates: gold 60% and silver 30%
THIRD QUARTER 2015 HIGHLIGHTS:
Corporate Highlights
- Cash balance is $44 million which is consistent with the prior quarter including 27,880 gold ounces sold at an average price sold of $1,131 per ounce.
El Castillo
- Quarterly production of 17,297 GEOs.
- During the quarter, 23,951 contained gold ounces loaded on the leach pads.
- 77,000 tonnes per day mined and 2.7 million tonnes of mineralized material placed on the heap leach pads during the quarter.
- Construction completed on the final heap leach pad 3b construction with commissioning to take place in October of this year.
La Colorada
- Quarterly production of 11,073 gold ounces and 27,836 silver ounces, for 11,579 GEOs.
- During the quarter, 18,090 contained gold ounces and 369,985 contained silver ounces were loaded on the leach pads.
- Average crusher throughput for the quarter of approximately 14,500 tonnes per day.
- Construction completed on the 9A heap leach pad and phase II of heap leach pad 6, providing an additional leaching capacity of 3 million tonnes.
THIRD QUARTER 2015 EL CASTILLO OPERATING STATISTICS
| 3 Months Ended Sept 30 | 9 Months Ended Sept 30 | |||||
| 2015 | 2014 | %Change | 2015 | 2014 | %Change | |
| Mining (Tonnes 000s) | ||||||
| Total tonnes mined | 7,047 | 7,714 | ↓9% | 20,996 | 23,835 | ↓12% |
| Total mineralized tonnes mined | 2,722 | 4,059 | ↓33% | 8,388 | 11,492 | ↓27% |
| Tonnes waste | 4,325 | 3,655 | ↑18% | 12,608 | 12,343 | ↑2% |
| Tonnes per day | 77 | 84 | ↓8% | 77 | 87 | ↓11% |
| Waste/mineralized material ratio | 1.59 | 0.90 | ↑77% | 1.50 | 1.07 | ↑40% |
| Heap Leach Pad (Tonnes 000s) | ||||||
| Tonnes mineralized material direct to leach pad | - | 1,063 | ↓100% | - | 2,569 | ↓100% |
| Tonnes crushed | 1,369 | 1,530 | ↓11% | 4,029 | 4,643 | ↓13% |
| Tonnes overland conveyor | 1,378 | 1,466 | ↓6% | 4,326 | 4,279 | ↑1% |
| Production | ||||||
| Gold grade (g/t)1 | 0.27 | 0.34 | ↓21% | 0.31 | 0.33 | ↓6% |
| Gold loaded to leach pad (oz)2 | 23,951 | 44,031 | ↓46% | 82,461 | 121,307 | ↓32% |
| Projected recoverable gold ounces loaded to pad (oz)3 | 14,310 | 27,214 | ↓47% | 50,515 | 70,916 | ↓29% |
| GEOs produced4 | 17,297 | 22,980 | ↓25% | 63,766 | 65,510 | ↓3% |
| Gold sold (oz) | 16,885 | 20,527 | ↓18% | 61,420 | 63,725 | ↓4% |
| Silver sold (oz) | 8,941 | 9,541 | ↓6% | 33,047 | 37,752 | ↓12% |
| 1 "g/t" is grams per tonne | ||||||
| 2 "oz" means troy ounce | ||||||
| 3 Recovery rates: ROM oxide 50%, crushed oxide 70%, ROM transition 40%, crushed transition 60%, crushed sulfides argilic 30%, crushed sulfides silicic 17% | ||||||
| 4 GEOs are based on a conversion ratio of 55:1 for silver to gold | ||||||
THIRD QUARTER 2015 LA COLORADA OPERATING STATISTICS
| 3 Months Ended Sept 30 | 9 Months Ended Sept 30 | ||||||
| 2015 | 2014 | %Change | 2015 | 2014 | %Change | ||
| Mining (Tonnes 000s) | |||||||
| Tonnes mineralized material | 628 | 757 | ↓17% | 1,689 | 2,017 | ↓16% | |
| Tonnes waste | 2,638 | 3,486 | ↓24% | 7,312 | 10,674 | ↓31% | |
| Total tonnes | 3,266 | 4,243 | ↓23% | 9,001 | 12,691 | ↓29% | |
| Waste/mineralized material ratio | 4.20 | 4.61 | ↓9% | 4.33 | 5.29 | ↓18% | |
| Tonnes rehandled | 691 | 301 | ↑130% | 2,122 | 616 | ↑244% | |
| Heap Leach Pad (Tonnes 000s) | |||||||
| Tonnes crushed and loaded to pads | 1,330 | 1,068 | ↑25% | 3,815 | 2,583 | ↑48% | |
| Production | |||||||
| Gold grade to leach pad (g/t)1 | 0.42 | 0.62 | ↓32% | 0.46 | 0.57 | ↓19% | |
| Gold loaded to leach pad (oz)2 | 18,090 | 21,195 | ↓15% | 56,629 | 47,658 | ↑19% | |
| Projected recoverable GEOs loaded (oz)3,4 | 12,872 | 14,082 | ↓9% | 39,918 | 31,555 | ↑27% | |
| Gold produced (oz) | 11,073 | 8,870 | ↑25% | 42,190 | 24,853 | ↑70% | |
| Silver produced (oz) | 27,836 | 14,958 | ↑86% | 148,745 | 111,761 | ↑33% | |
| GEOs produced (oz) | 11,579 | 9,142 | ↑27% | 44,894 | 26,885 | ↑67% | |
| Gold sold (oz) | 10,995 | 8,883 | ↑24% | 42,755 | 25,146 | ↑70% | |
| Silver sold (oz) | 29,077 | 18,313 | ↑59% | 151,839 | 123,607 | ↑23% | |
| GEOs sold | 11,524 | 9,217 | ↑25% | 45,516 | 27,394 | ↑66% | |
| 1 "g/t" is grams per tonne | |||||||
| 2 "oz" means troy ounce | |||||||
| 3 Recovery rates: gold 60% and silver 30% | |||||||
| 4 GEOs based on conversion ratio of 55:1 for silver to gold | |||||||
Richard Rhoades, Chief Operating Officer of Argonaut Gold, said “As expected, production at El Castillo was down for the quarter due to lower grades being processed and seasonal rains.
Despite these challenges, the team has continued to show the ability to reduce the heap leach pad ounce inventory and meet production guidance.
Argonaut Gold Inc look forward to a drier fourth quarter as the monsoon season ends. The grades are anticipated to increase next year as mining begins in the northwest pushback in the pit.
At the La Colorada Mine, the crushing circuit continues to perform as expected, averaging 14,500 tonnes per day. The Company continues to operate with a blend of reprocessed material from the historic leach pads and fresh ore from the La Colorada/Gran Central pit.
Heap leach pad construction is complete for the year and mining are preparing for the initial construction phase of the Northeast leach pad, scheduled to commence in early 2016.
All major contracts have been renegotiated including changing mining contractor in an effort to control cost in a difficult gold market environment.
On a whole, the Company is on track to achieve our target production for the year of 135,000 to 145,000 GEOs, and is ahead of schedule on our construction projects.”
For 2016, the Company is preparing to operate in a $1,000 gold price environment. This will include all operating, capital, and corporate costs within this $1,000 per ounce target. Planning to run the business within this parameter will provide the Company with flexibility as we move forward. We are in a favorable position with continued positive cash flow and no debt. The Company will continue to advance the development projects to a shovel ready stage, but our commitment is to preserve our balance sheet and protect our shareholders investments until market conditions merit advancing the projects.”
Despite these challenges, the team has continued to show the ability to reduce the heap leach pad ounce inventory and meet production guidance.
Argonaut Gold Inc look forward to a drier fourth quarter as the monsoon season ends. The grades are anticipated to increase next year as mining begins in the northwest pushback in the pit.
At the La Colorada Mine, the crushing circuit continues to perform as expected, averaging 14,500 tonnes per day. The Company continues to operate with a blend of reprocessed material from the historic leach pads and fresh ore from the La Colorada/Gran Central pit.
Heap leach pad construction is complete for the year and mining are preparing for the initial construction phase of the Northeast leach pad, scheduled to commence in early 2016.
All major contracts have been renegotiated including changing mining contractor in an effort to control cost in a difficult gold market environment.
On a whole, the Company is on track to achieve our target production for the year of 135,000 to 145,000 GEOs, and is ahead of schedule on our construction projects.”
For 2016, the Company is preparing to operate in a $1,000 gold price environment. This will include all operating, capital, and corporate costs within this $1,000 per ounce target. Planning to run the business within this parameter will provide the Company with flexibility as we move forward. We are in a favorable position with continued positive cash flow and no debt. The Company will continue to advance the development projects to a shovel ready stage, but our commitment is to preserve our balance sheet and protect our shareholders investments until market conditions merit advancing the projects.”
Source : Argonaut gold
