TORONTO, ONTARIO--(Marketwired - July 6, 2015) - Argonaut Gold Inc. (TSX:AR) ("Argonaut", "Argonaut Gold" or the "Company"), is pleased to provide a drilling update for its 100% owned San Agustin project. The project is located just 10 kilometres southwest from the Company's El Castillo Mine ("El Castillo") in Durango, Mexico. The Company completed a Preliminary Economic Assessment ("PEA") on the project in February, 2015. The San Agustin PEA resulted in a pit-constrained indicated resource of 845,000 gold ounces and 28 million silver ounces contained in 82.2 million tonnes of material at a grade of 0.32 grams per tonne ("g/t") gold and 10.7 g/t silver, for a total of 1,280,000 gold equivalent ounces. The gold equivalent ounces are calculated utilizing a 65:1 gold price to silver price ratio and does not incorporate the recovery differential between gold and silver.
The Company continues to better define the overall economic potential of the project. In addition to detailed sampling and geologic mapping, the Company is utilizing induced polarization (IP) and magnetic studies to prioritize target areas. Thirty one wide spaced RC holes (5,277 meters) were completed with most drilling positioned to test the northwest extension of the mineralized footprint. This expansion drilling was accomplished subsequent to the PEA and is not contained therein. The work completed thus far indicates potential to expand mineralization over an additional 1,000 metres, with the potential for a 50% increase in the existing resource area. Additional work will also be done on the Consejo 1 claim, acquired in 2014, which sits adjacent to the existing claims and shows potential for structurally controlled high-grade mineralization. The company has undertaken additional step-out drilling during the second quarter of 2015.
CEO Commentary
Pete Dougherty, President and CEO of Argonaut Gold said "The San Agustin project is a very exciting project for Argonaut. Due the close proximity to our El Castillo operation, this is a natural future extension of the El Castillo mine. The work completed to date, indicates the ability to further expand the known resource area. The proximity of San Agustin to El Castillo and the current exploration work indicating that the resource may be much larger than currently reported with a potential of improved economics."
San Agustin Expansion Drilling
Drilling completed thus far along the northwest extension supports the potential to significantly expand shallow oxide gold mineralization upwards of 1,000 metres northwest of the current resource. Results from this wide-spaced drilling include: DH-242, 0.27 g/t Au over 24.4 m, DH 251, 0.25 g/t Au over 32.0 m and DH-269 0.38 g/t Au over 16.8 m. Going forward the Company expects to complete additional in-fill and step-out drilling in these known areas of mineralization.
| Drill Hole |
Azimuth/Dip
Degrees |
From |
To |
Length |
Au g/t |
Ag g/t |
| SAGRC- 242 |
315/-50 |
0 |
24.4 |
24.4 |
0.27 |
0.7 |
| and |
|
35.1 |
51.8 |
16.8 |
0.24 |
0.7 |
| and |
|
70.1 |
76.2 |
6.1 |
0.35 |
1.4 |
| and |
|
76.2 |
77.7 |
1.5 |
4.13 |
1.6 |
| and |
|
77.7 |
80.8 |
3 |
0.2 |
0.8 |
| and |
|
96 |
99.1 |
3 |
0.19 |
1.2 |
| and |
|
103.6 |
109.7 |
6.1 |
0.16 |
1.4 |
| SAGRC - 251 |
225/-50 |
0 |
1.5 |
1.5 |
0.3 |
0.5 |
| and |
|
13.7 |
19.8 |
6.1 |
0.26 |
0.2 |
| and |
|
32 |
64 |
32 |
0.25 |
0.3 |
| and |
|
97.5 |
102.1 |
4.6 |
0.17 |
0.4 |
| and |
|
115.8 |
118.9 |
3 |
0.33 |
2.4 |
| SAGRC - 269 |
225/-50 |
4.6 |
13.7 |
9.1 |
0.9 |
0.2 |
| and |
|
13.7 |
15.2 |
1.5 |
8.45 |
0.2 |
| and |
|
15.2 |
16.8 |
1.5 |
0.35 |
0.1 |
| and |
|
24.4 |
27.4 |
3 |
1.43 |
0.4 |
| and |
|
32 |
35.1 |
3 |
3.28 |
0.6 |
| and |
|
35.1 |
36.6 |
1.5 |
0.23 |
0.2 |
| and |
|
59.4 |
76.2 |
16.8 |
0.38 |
0.2 |
| and |
|
91.4 |
121.9 |
30.5 |
0.19 |
0.5 |
Full drill results are available on the Company's website at www.argonautgold.com.
In the following map, drill holes noted by the larger dots are listed in the accompanying table; the smaller red dots contain greater than 25 meters of near-surface oxide mineralization grading over 0.15 g/t gold.
To view Figure 1, please visit the following link: https://media3.marketwire.com/docs/1015754%20Fig.%201.pdf
The current PEA for San Agustin included 271 RC drill holes totaling 30,043 meters completed in 2014 by Argonaut. This reported resource makes up the southeastern portion of a much larger mineralized footprint on the project which offers significant expansion potential. A strong network of fractures control mineralization as displayed in the following geologic map.
To view Figure 2, please visit the following link: https://media3.marketwire.com/docs/1015754%20Fig.%202.pdf
Mapped structural features are noted in blue.
Property Structural Features:
The Company has compiled soil sampling and IP geophysics on the property. The following soil map (left side) notes wide distribution of anomalous gold. The white dashed line indicates gold in soil values of over 100 ppb. The IP map on the right identifies a strong chargeability signature over the resource and a similar anomaly exists to the northwest that remains to be tested. The strong IP is thought to be an indication of underlying sulfide mineralization. The collation of information from soil, structure and IP are valuable in prioritizing the Company's ongoing exploration program.
To view Figure 3, please visit the following link: https://media3.marketwire.com/docs/1015754%20Fig.%203.pdf
Tom Burkhart, Argonaut Gold's Vice President of Exploration said "San Agustin is geologically very similar to El Castillo. We have a high comfort level with the deposit, and our ability to expand the resource. The work completed thus far on the project supports the potential to significantly expand the San Agustin gold-silver resource. The Company currently has permits in place for an additional 220 drill holes and drilling continues on the project."
To view Figure 4, please visit the following link: https://media3.marketwire.com/docs/1015754%20Fig.%204.pdf
The above leapfrog diagram depicts the trends of possible mineralization beyond the current resource area. It is clear that the wide-spaced drilling completed thus far to the northwest is defining a strong northwest extension of gold mineralization. The Company's ongoing exploration priority is to fill-in this potential expansion area.
Path way forward:
The Company is in the process of acquiring the necessary surface rights for the project. The Company has submitted the Environmental Impact Statement (Manifesto Impacto Ambiental) and this process is expected to take between six and nine months. The Company embarked on an additional drill program to continue to test the extent of mineralization on the property. The Company expects to complete this over the summer and to compile an updated project assessment by the end of the year.
About Argonaut Gold
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 the La Colorada Mine in Sonora, Mexico. Advanced exploration stage projects are the San Antonio project in Baja California Sur, Mexico, the Magino project in Ontario, Canada and the San Agustn project in Durango, Mexico. The San Agustn and Magino projects will be the primary exploration targets for Argonaut in 2015. The Company also has several exploration stage projects, all of which are located in North America.
Qualified Person, Quality Control and Mineral Properties Reports
Technical information included in this release was supervised and approved by Thomas Burkhart, Argonaut Gold's Vice President of Exploration, and a Qualified Person under National Instrument ("NI") 43-101.
RC drill cuttings are split on the drill rig and 1/4 of a 1.52 meter drill interval is collected for assay. The samples are picked up by ALS Minerals at the project site and transported by secure truck to their sample prep facility in Zacatecas, Mexico. Prepared sample pulps are shipped by air to the ALS Analytical Lab in Vancouver. The assay procedure on each sample is a Fire Assay using a 30 gram charge followed by an atomic absorption analysis (FF-AA). The Company uses Industry standard QA/QC procedures including inserting alternating standards, blanks and duplicates as every 10th sample. This results in every 30 samples having a blank, a standard and a duplicate.
For further information on the Company's material properties, please see the reports as listed below on the Company's website or on www.sedar.com:
| San Agustn Project |
NI 43-101 Technical Report on Resources, Argonaut Gold Inc., San Agustn Project, Durango, Mexico dated February 15, 2015 |
Cautionary Note Regarding Forward-looking Statements
This press release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Argonaut Gold Inc. ("Argonaut" or "Argonaut Gold"). Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to the estimation of mineral reserves and resources; success of exploration activities; the realization of mineral reserve estimates; estimated production and mine life of the various mineral projects of Argonaut; the timing and amount of estimated future production; costs of production; and financial impact of completed acquisitions; the benefits of the development potential of the properties of Argonaut; the future price of gold, copper, and silver; synergies; and currency exchange rate fluctuations. Except for statements of historical fact relating to Argonaut, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Argonaut and there is no assurance they will prove to be correct.
Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include variations in ore grade or recovery rates, changes in project parameters, changes in market conditions, risks relating to international operations, fluctuating metal prices and currency exchange rates, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated.
These factors are discussed in greater detail in Argonaut's most recent Annual Information Form and in the most recent Management Discussion and Analysis filed on SEDAR, which also provide additional general assumptions in connection with these statements. Argonaut cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Argonaut believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.
Although Argonaut has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Argonaut undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered if the property is developed. Comparative market information is as of a date prior to the date of this document.