Jul 15 2016
Argonaut Gold Inc. announces production of 29,237 gold equivalent ounces during the second quarter ended June 30, 2016.
Given the lower than anticipated production during the second quarter, the Company is now guiding toward the lower end of its 2016 production guidance to between 130,000 to 135,000 GEOs (previously 130,000 to 140,000 GEOs). All dollars in this press release are expressed in U.S. dollars, unless otherwise noted.
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2nd Quarter |
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Change |
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Year to date |
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Change |
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2016 |
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2015 |
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2016 |
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2015 |
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| Total Gold Equivalent Ounce Production: |
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| GEOs loaded to the pads1 |
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63,724 |
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55,871 |
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14% |
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114,726 |
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110,125 |
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4% |
| GEOs projected recoverable ounces1,2 |
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32,125 |
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31,617 |
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2% |
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59,981 |
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63,251 |
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(5%) |
| GEOs produced ounces1 |
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29,237 |
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36,529 |
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(20%) |
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61,391 |
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79,784 |
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(23%) |
| GEOs ounces sold1 |
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31,230 |
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36,547 |
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(15%) |
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61,242 |
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78,965 |
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(22%) |
| 1 GEOs are based on conversion ratio of 65:1 for silver to gold for 2016 and 55:1 for 2015. This is the referenced ratio throughout the release |
| 2 Recoverable ounces - El Castillo expected gold 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% |
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2016 Production (000s) |
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2nd Quarter Guidance |
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2nd Quarter Actual |
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Year to date Guidance |
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Year to date Actual |
| El Castillo GEOs produced |
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20.0 - 21.0 |
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15.3 |
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37.5 - 40.0 |
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32.9 |
| La Colorada GEOs produced |
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14.5 - 15.5 |
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13.9 |
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26.5 - 28.5 |
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28.5 |
| Total GEOs produced |
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34.5 - 36.5 |
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29.2 |
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64.0 - 68.5 |
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61.4 |
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Pete Dougherty, President and CEO, stated: "We discovered more areas with economic mineralization than expected at both operations. However, as the areas are lower grade, it delayed mining of higher grade areas and resulted in lower production for the second quarter. We anticipate getting into the higher grade areas during the second half of the year which, coupled with production improvements, should improve output. Therefore, we are guiding to the low end of the full year production. While second quarter production was lower than anticipated, as we look to the future, these low grade gains have good potential to extend the life of both mines."
At El Castillo, the Company experienced lower than anticipated grade as a result of mine sequencing, as it continued to mine in phase seven of the pit longer than planned due to low grade ore gains. The Company expects to be finished mining in the phase seven pit area by the end of July 2016 and will be focused on higher grade phase six during the balance of 2016. Also, the Company is in the process of relocating its idle CR2 crushing unit from La Colorada to El Castillo and anticipates this unit will be operational during the third quarter 2016. The Company expects an increase in crushing capacity of 5,000 to 6,000 tonnes per day, which should lead to stronger second half production at El Castillo.
At La Colorada, the mine continued to produce low grade gains of mineralized material, which reduced the overall grade from original projections. While the Company is pleased to discover areas of unexpected low grade mineralization, processing this material contributed to lower production than planned. These low grade gains were partially offset by higher than budgeted throughput (over 13,000 tonnes per day versus 11,000 tonnes per day budgeted).
SECOND QUARTER 2016 AND RECENT HIGHLIGHTS:
Corporate Highlights
- Cash balance grew to $54.1 million.
- Completed C$4.5 million private placement of flow-through common shares for Magino project drilling.
El Castillo
- Production of 15,358 GEOs.
- 35,222 contained gold ounces loaded on the leach pads.
- Over 76,700 tonnes per day mined and approximately 2.7 million ore tonnes placed on the leach pads.
La Colorada
- Production of 13,282 gold ounces and 38,819 silver ounces, for 13,879 GEOs.
- 20,388 contained gold ounces and 527,398 contained silver ounces loaded on the leach pads.
- Over 56,300 tonnes per day mined and approximately 1.2 million mineralized material tonnes placed on the leach pads.
- Completed construction of Northeast leach pad ahead of schedule and on budget.
San Agustin
- Completed and filed the updated Preliminary Economic Assessment National Instrument ("NI") 43-101 Technical Report dated June 10, 2016.
- Entered into agreement to acquire the necessary land for development.
- Filed Change in Use of Soil permit application.
Magino
- Initiated infill drill program at 10 to 12 metre centres on mineral resources expected to be mined during the first two years of mine life.
- Committed to geotechnical drilling program.
- Continued to advance permitting.