Argonaut Gold Inc. is pleased to announce that it has executed a fixed bid engineering, procurement, construction, and commissioning contract (the “EPC contract”) with Ausenco Engineering Canada Inc. (“Ausenco”), a leading engineering and construction management company, for the construction of the Magino processing facility and other parts of the Magino construction project. The EPC contract totals approximately 40% of Magino’s initial capital estimate of between C$480 million and C$510 million (approximately US$360 million and US$380 million at a 0.75 Canadian dollar to US dollar exchange ratio, which was the approximate ratio when the construction decision was made October 2020).
Pete Dougherty, President and CEO stated: “We are very pleased to partner with Ausenco on the Magino project construction. Ausenco is an industry leader in the field of building high-quality processing facilities in the mining industry and recently did an excellent job with the Moose River project in Nova Scotia, Canada. We are excited for Magino to be one of the first projects entering construction in the current gold price environment, as we feel first-mover advantage is critical when securing a construction team of the highest quality and with a superior track record.”
The Magino project has received tremendous stakeholder support locally, provincially and federally, as well as strong shareholder support to see the project move forward. Argonaut recently posted the first phase of financial assurance with the province of Ontario and expects the Magino project Closure Plan will be filed by the province of Ontario in January 2021, which will allow for construction to commence.
Ana Paula Sale Agreement
Argonaut and AP Mining have amended the agreement for the previously announced sale of the Ana Paula project to AP Mining (see press release dated September 11, 2020) to allow more time to meet the regulatory and government approvals required for closing. In connection with the amendment, AP Mining has agreed to pay an additional US$1.0 million at 15 months from the closing date and to reimburse all of Argonaut’s costs incurred associated with the Ana Paula project incurred between January 1, 2021 and the closing of the transaction. Closing continues to be subject to financing and receipt of all necessary approvals, which is expected in the first quarter of 2021.
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