TORONTO, ONTARIO -- (Marketwire) -- 02/25/13 -- Argonaut Gold Inc. (TSX: AR) ("Argonaut", "Argonaut Gold" or the "Company") is pleased to announce Company 2013 production guidance, project initiatives and exploration objectives across the Company's properties throughout the Americas. Production in 2013 is planned to increase to between 120,000 and 140,000 ounces of gold up from 108,000 ounces of gold in 2012. Cash cost of production is also expected to increase slightly to between $630 and $660 per ounce.
The Company is undertaking an aggressive capital expansion program in 2013 which should prepare the Company for further production expansions in 2014 and beyond. This will essentially complete capital expansion programs at both La Colorada and El Castillo until 2015, when we will finalize the remaining 15mm tons of pad capacity at El Castillo.
Exploration drilling totaling 89,000 meters has taken place at Magino, part of this drilling has revealed a new zone.
Capital Expansion Program for 2013
El Castillo $32 millionLa Colorada(1) $14 millionMagino $3 millionSan Antonio(2) $3-15 millionExploration(3) $5-11 million----------------------------------TOTAL $57-75 millionNotes: (1) Including $5 million in pre-stripping costs (2) Subject to permitting process timeline (3) Subject to exploration results
El Castillo 2013 Capex Initiatives:
The funding can be classified into three main initiatives:
-- $15 mm: New West side pad and ponds with 30mm ton capacity to be built in 2013-- $10 mm: Transfer of Contractor mining equipment to the Company-- $7 mm: New crushing and overland conveying system for the West pad 8
La Colorada 2013 Capex Initiatives:
The funding can be classified into three main initiatives:
-- $7mm: New crushing system capable of producing +4mm tonnes per year at less than 3/8"-- $5mm: Pre-stripping of pit-- $2mm: Plant and pad expansions
Pete Dougherty, Argonaut Gold's President and CEO stated: "2012 was a significant year for the Company; we exceeded gold production guidance, added La Colorada as a second operation and completed the acquisition of Prodigy Gold. El Castillo is near a steady state of production with 2013 guidance of between 90,000 and 100,000 gold ounces at cash costs of $700 to $725 per ounce. Due to an anticipated 14% reduction in grade, we will be increasing the volume of ore tonnes processed to maintain gold ounce production levels. From a capital perspective we are looking to make improvements to our cost basis by taking over the mining from our contractor, and adding an in-pit crushing and conveying system to deliver to West pad 8."
Mr. Dougherty added "At La Colorada, fresh ore mining has begun. The mine plan anticipates grades to increase quarter over quarter with production loaded towards the second half of the year. Installation of the new crusher and pad construction will be completed in the second quarter of this year. Full year 2013 gold production at La Colorada is expected to be between 30,000 and 40,000 ounces of gold at average cash costs for the year of $450 to $475 per ounce, net of silver credits."
