Argonaut Gold Inc. (TSX: AR) (the “Company”, “Argonaut Gold” or “Argonaut”) announces today the Company’s 2024 guidance including production, cost per ounce as well as capital and exploration expenditure forecasts.
Consolidated gold production for 2024, including the Mexican operations, is expected to be in the range of 225,000 and 250,000 gold equivalent ounces (“GEOs”), an increase of 13% to 25% over 2023 production. Cost of sales and cash costs per ounce of gold sold are expected to be similar to 2023, while all-in-sustaining costs per ounce sold are expected to be higher than 2023 due to the increase in sustaining capital at Magino and Florida Canyon. Higher sustaining costs at Magino are related to the completion of the tailings management facility. At Florida Canyon, higher sustaining costs are due to the construction of the third heap leach pad.
In 2023, Argonaut achieved a significant milestone with the commissioning of its flagship asset, the Magino mine. Ramp up continues into 2024 and the mining and milling rates are expected to be in line with Magino’s NI 43-101 Technical Report 2022 (“Technical Report”) in the second half of 2024. Analysis to-date shows that total contained gold is projected to be within 1% of the reserve model compared to grade control polygons. While we believe the block model properly estimates the grade of the ore, the mine site is experiencing higher dilution rates than anticipated in the Technical Report due to challenges with selectively mining the high-grade parts of the ore body. As a result of the higher dilution than previously modeled in the high-grade areas of the deposit, the average grade to the mill is expected to be approximately 5 to 10% lower than in the Technical Report over the next 2 to 3 years; however, life-of-mine grades and ounces are not expected to be impacted. The Company expects to have an updated technical report with the latest findings filed in the second half of 2024.
“Over the last few months, we have analyzed our mining practices and grade and tonnes modeled and delivered to the process plant, in great detail. We have learned that selectively mining the high-grade portion of the deposit to the extent predicted in the Technical Report, in the initial three years, may not be achievable. In 2024, lower grades due to pit sequencing coupled with lower mining and processing rates in the first half of the year are expected to be offset by higher mill throughput in the second half of the year following the completion of optimization work underway in the first half of the year and improvements in mill availability,” stated Marc Leduc, Chief Operating Officer of Argonaut Gold. “Notably, gold recoveries are on plan, while unit costs are expected to be higher in 2024 relative to the Technical Report but decline over the following 12 to 18 months as we continue to work through the ramp up process.”
“Operationally, our near-term focus continues to be the ramp up of the Magino mine. The medium-term goal is to expand the reserve base and mill throughput in order to increase production to the 200,000 to 250,000 ounce per year range, while reducing the cost structure. Given the grade of the deposit, scale is important to drive strong free cash flows. We anticipate completing a re-financing of our current debt package by the end of the first quarter to provide sufficient liquidity during this ramp-up phase and for our future growth objectives,” stated Richard Young, President and Chief Executive Officer.
2024 OUTLOOK
