Argonaut Gold Inc. [AR-TSX] on Thursday released impressive drill results from its construction-stage Magino property in northern Ontario where commercial production is expected to be achieved by 2023.
The Magino mine property is a past-producing underground gold mine located 40 kilometres northeast of Wawa, Ontario, approximately 14 kilometres southeast of Dubreuilville. It is estimated to to host proven and probable reserves of 58.9 million tonnes, grading 1.13 g/t gold or 2.13 million ounces.
A feasibility study released in November, 2017, indicates that the project could yield 2.0 million ounces of gold over a 17-year mine life with average production of 150,000 ounces during the first five years. The study envisaged an all-in-sustaining cost of US$711 per gold ounce sold.
Drilling this year is primarily focused on tightening the drill spacing approximately 40 metres (upper portion) and 80 metres (lower portion) within the Elbow Zone from the bottom of the planned pit to a vertical depth from surface of around 1,000 metres.
The secondary focus of the program is to continue to drill test previously discovered high-grade gold structures within the South Zone, Central Zone, Scotland Zone, #42 Zone and Sandy Zone as well as other prospective showings located elsewhere on the Magino property.
Argonaut plans to drill approximately 25,000 metres on these targets this year. It is currently deploying four diamond drill rigs and anticipates completing the program during the fourth quarter of 2021.
On Thursday, Argonaut said drill hole MA21-070 has intersected a core length of 7.0 metres at 13.3 g/t gold, approximately 1.5 kilometres west of the border between the Magino property and Alamos Gold Inc.’s [AGI-TSX, NYSE] Island Gold mine property.
This was a follow-up drill hole to previously announced drill intersection MA20-057, which encountered 10.0 metres at 19.0 g/t gold in the South Zone.
“We are continuing to develop a better understanding on the structural controls on the high-grade mineralization at Magino and are now in the process of early-stage resource definition drilling on the Elbow Zone,’’ said Brian Arkell, Argonaut’s Vice-President, Exploration.
“With the extremely encouraging initial high-grade gold results at depth within the Elbow and South Zones, we are very excited about our success in defining a series of high-grade gold mineralized structures below the Magino planned open pit,’’ he said.
Argonaut recently emerged as a Canadian intermediate gold producer with annual production of 235,000 ounces of gold equivalent annually by completing a friendly merger deal with Alio Gold Inc.
The combined entity expects to benefit from an enhanced asset portfolio and improved geographical diversification with assets in Mexico, Canada and the United States.
On Thursday, Argonaut shares eased 3.4$ or 10.5 cents to $2.94 on volume of 414,060. The shares are currently trading in a 52-week range of $3.44 and $1.90.