Argonaut Gold Inc. [AR-TSX] has released updated technical reports from Mexican operations, including the Castillo Complex in Durango and its La Colorada Mine in Sonora state, Mexico.
The El Castillo Complex is made up of the El Castillo and San Agustin Mines, which share infrastructure and resources.
Highlights from the March 27, 2018 press release include a 74% increase in contained gold ounces at El Castillo, where reserves now stand at 40.8 million tonnes, grading 0.40 g/t, containing 522,000 ounces of gold. That compares to a previous update in December, 2016, when reserves stood at 22.4 million tonnes, grading 0.42 g/t gold, containing 300,000 ounces.
That amounts to an increase of 18.4 million tonnes, or 74% in contained gold ounces.
The increase was largely achieved through the addition of the San Juan concessions that were recently acquired from Fresnillo PLC [FRES-LSE], a Mexico-based precious metals company.
In addition, the latest update returned maiden reserves at both La Colorada and San Agustin. It is worth noting that Argonaut outlined 220,000 ounces of gold in the measured and indicated resources category at El Castillo, thus highlighting the potential for reserve additions through future upgrades of material that is currently in the resource category.
“We significantly increased our mineral reserves and mine life at El Castillo through the purchase of, and exploration success on, the adjacent San Juan mineral concession,” said Argonaut President and CEO Pete Dougherty.
“Furthermore, we feel we have more opportunity at El Castillo in the future with approximately an additional 220,000 gold ounces in measured and indicated mineral resources above and beyond the mineral reserve,” he said.
“With San Agustin now also having achieved commercial production, the El Castillo Complex boasts a proven and probable mineral reserve of 1.3 million gold ounces and 26.2 million silver ounces and across our Mexico operations we now have over 1.7 million gold ounces of mineral reserves.”
At La Colorada, Dougherty said the company continues to demonstrate its ability to consistently replace the ounces it depletes annually through mining due to successful exploration programs.
Argonaut aims to create the next quality mid-tier gold producer in the Americas with production of between 300,000 and 500,000 ounces.
The company has said it expects to produce between 165,000 and 180,000 gold equivalent ounces in 2018 at a cash cost of between US$700 and US$800 per gold ounce sold at all-in sustaining costs of between US$850 and US$950 an ounce.
Aside from El Castillo and the La Colorada Mine, Argonaut’s portfolio includes a basket of advanced stage exploration projects. They include San Antonio in Baja California Sur, Mexico, and Cerro del Gallo in Guanajuato, Mexico as well as the Magino Project in Ontario.
On Wednesday, Argonaut Gold shares eased 2.49% or $0.06 to $2.35. The 52-week range is $2.92 and $1.76.