Argonaut closes out ‘spectacular’ year with record quarter

Magino project Credit: Argonaut Gold

In the last quarter of 2020, Argonaut Gold posted record gold production of 56,986 gold-equivalent oz., which is a 16% increase over the 48,951 gold-equivalent oz. produced in the third quarter. The fourth-quarter gold output brings the company’s 2020 gold-equivalent production up to 203,483 oz., which is in line with its prior guidance for 200,000 to 215,000 gold-equivalent oz.

This year, the company expects its four open-pit assets to generate 210,000 to 250,000 gold-equivalent oz. at all-in sustaining costs of US$1,250 to US$1,350 per oz. Argonaut’s most recent AISC guidance for 2020 was at US$1,225 to US$1,350 per oz.

With construction of the Magino gold project in northern Ontario expected to start this year, Argonaut’s capital budget for 2021 stands at US$255 to US$275 million, with approximately 80% of this total dedicated towards expansionary capital, mainly for the development of Magino.

In a press release, Pete Dougherty, Argonaut’s president and CEO, noted that the 2021 production guidance numbers from the company are conservative as Argonaut accounts for the potential impacts of Covid-19 precautions.

“2020 was a spectacular year for Argonaut, as we completed a merger, saw the conclusion of Schedule 2 amendment and executed on a financing plan for Magino’s development and achieved record quarterly production in our most recent quarter.  As we look to 2021, we are taking a cautious approach to guidance when considering potential productivity challenges due to COVID-19 protocols and contact tracing…”

Dougherty also added that the company will focus on harnessing cash flow from its operating mines during Magino construction as it transitions from being a “relatively high-cost junior producer with short mine life assets to an intermediate lower-cost producer with long life assets.”

Earlier this month, the company announced that it had executed a fixed bid engineering, procurement, construction and commissioning contract (EPC contract) with Ausenco for construction of the Magino processing facility and other parts of the Magino project. The contract covers approximately 40% of the $480 to $510-million initial capital cost estimate for the 10,000 t/d project.

Argonaut expects to release fourth-quarter and 2020 financial results on Feb. 25. The miner closed out the year with approximately US$214 million in cash.

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