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Argonaut Gold Inc. (TSX: AR) (the “Company”, “Argonaut Gold” or “Argonaut”) announces fourth quarter and full year 2023 production results. The Company expects to provide 2024 production, operating, capital and cost per ounce guidance on February 26, 2024, and plans to report its financial results for the three and twelve months ended December 31, 2023 in the first half of March, 2024.
“Our Florida Canyon mine in Nevada and our Mexican mines had a solid year, surpassing the top end of production guidance on a combined basis by 9%. Our newest mine, Magino, met target start date of commissioning the mill in mid-May, however, ramp up of the mine and mill took longer than anticipated, resulting in the Company missing consolidated production guidance by a small margin. Despite this setback, we are proud of the Magino team completing construction on schedule, meeting forecast costs to complete, and transitioning into operations in a challenging environment that included key components of the operation being deferred to conserve cash during construction and an overall industry shortage of skilled miners in Ontario. Mining at Magino improved significantly by the end of year and mill modifications scheduled for early in the new year are expected to enable the mill to operate at nameplate capacity consistently,” stated Richard Young, President and CEO of Argonaut Gold.
Fourth quarter 2023 production was 61,523 gold equivalent ounces (GEOs), an increase of 14% compared to the third quarter 2023, benefiting from the commissioning of the Magino Mine. Overall, 2023 consolidated annual production was 197,509 GEOs, 1% less than the Company’s annual guidance of 200 to 230 thousand GEOs. Cash and cash equivalents totaled $83.8 million at year end with $218 million outstanding under the Company’s term loan facilities.
Summary of Production Results
|
2023 |
Total |
2023 |
|||||||
|
Production – GEO’s |
Q1 |
Q2 |
Q3 |
Q4 |
Actual |
||||
|
Magino |
0 |
3,296 |
10,693 |
22,112 |
36,101 |
72,000 |
81,000 |
||
|
Florida Canyon |
12,746 |
18,251 |
22,384 |
17,780 |
71,161 |
55,000 |
65,000 |
||
|
La Colorada |
5,674 |
5,932 |
6,741 |
7,861 |
26,208 |
27,000 |
30,000 |
||
|
San Agustin |
12,924 |
11,245 |
10,208 |
10,252 |
44,629 |
35,000 |
39,000 |
||
|
El Castillo |
7,241 |
4,768 |
3,885 |
3,518 |
19,412 |
10,000 |
14,000 |
||
|
Consolidated Mexican |
90,247 |
72,000 |
83,000 |
||||||
|
Total* |
38,585 |
43,492 |
53,911 |
61,523 |
197,511 |
200,000 |
230,000 |
||
|
*Totals may not add due to rounding |
In summary, the Company nearly achieved consolidated lower end of production guidance, with strong performances from Florida Canyon and the Mexican operations, offset by lower than expected output from Magino.
- Daily mining rates for the month of December were largely on target, averaging 50,500 tonnes per day (“tpd”). There has been a steady improvement in the daily mining rate through 2023, with continuing improvement in the average quarterly daily mining rate through the year:
|
Mining Rate – tpd |
Q1 |
Q2 |
Q3 |
Q4 |
Q4 Detail |
||||||||
|
Oct |
Nov |
Dec |
|||||||||||
|
Magino |
14,400 |
23,500 |
40,400 |
45,600 |
40,800 |
45,400 |
50,500 |
||||||
- Overall, the daily average mining rate increased by 25% in December compared to the third quarter average.
- With additional mobile equipment scheduled to arrive in H1 2024 along with the installation of the fleet management system, management expects daily mining rates to increase into the 65,000 tpd range in 2024, in line with the current NI 43-101 technical report for the Magino Mine.
- In parallel with the increase in the daily mining rate through the fourth quarter, gold grades mined have also increased, resulting in the average grade milled, on a monthly basis, increasing from 0.69 grams per tonne in October, to 1.02 grams per tonne in November, to 1.07 grams per tonne in December.
- Mill throughput rates remained below nameplate in December, averaging 9,240 tpd, however, a scheduled mill shutdown in the first half of January 2024 is expected to support the continued increase in mill average daily throughput to the nameplate of 10,000 tpd.
- The infill drill program underway to convert Mineral Resources to Mineral Reserves is proceeding well, having completed approximately 27,000 metres through the end of 2023, constituting 43% of the planned program. The program is expected to be completed on time in June 2024. The goal of the drill program is to add between 500,000 and 1 million ounces to Mineral Reserves, based on the conversion of existing Mineral Resources. A second phase program is expected to continue through the end of 2024.
- Mill optimization and expansion studies are well underway to determine the most cost effective path to expand the process facilities to between a target of 17,500 and 20,000 tpd.
- An updated NI 43-101 technical report for the Magino Mine including the updated Mineral Reserves and Mineral Resources and mill optimization and expansion opportunities is expected to be completed in the first quarter of 2024. A second NI 43-101 technical report including the balance of the 63,000 metre drill program and detailed mill optimization and expansion plans is expected to be completed in the third quarter of 2024.
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