Argonaut Gold Inc.

Argonaut Gold Inc. 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 include the San Antonio project in Baja California Sur, Mexico, and the Magino project in Ontario, Canada. The recently acquired San Agustín project is the primary exploration target for Argonaut in 2014. The company also has several exploration stage projects, all of which are located in North America.

Expert Comments:

Andrew Kaip, BMO Capital Markets (3/16/15)
"Argonaut Gold Inc. was able to build its cash balance by $6.9M in a depressed metal market. Guidance for 2015 remains at 135–145 Koz gold. . .the company is budgeting $37M in expansion capital in 2015. Argonaut exited 2014 with $51.4M in cash and equivalents."

Matthew Sheppard, Jacob Securities (3/16/15)
"Argonaut Gold Inc. reported Q4/14 operational and financial results. Production totaled 43.4 Koz gold at cash costs of $801/oz. Production was in-line with our expectations. . .the company has posted its San Agustin preliminary economic assessment. We’ve revisited our assumptions for San Agustin and adjusted forecast tonnage, grades, recoveries and unit costs to reflect its findings. Our cash flow per share estimates for Argonaut have increased on average by 4% from 2018 to 2021. We reiterate our Buy rating and CA$5.65 per share target."

Mike Parkin, Desjardins Securities (3/16/15)
"Argonaut Gold Inc. released its Q4/14 and 2014 financial results. . .and hosted a conference call. Overall, we view the earnings release as neutral. . .in the conference call presentation, the company projected a year-end 2015 cash balance of $50M at $1,250/oz gold vs. the $51.4M at year-end 2014. . .Argonaut reported cash costs of $801/oz for Q4/14 and $771/oz for 2014. . .the company had previously announced guidance of 135,000–145,00 oz Au eq (assumes a gold/silver ratio of 55:1) at total cash costs of $700–750/oz gold sold (net of by-products)."

Jeff Killeen, CIBC World Markets (1/13/15)
"Argonaut Gold Inc. has released a PEA for its San Agustin project. . .production of approximately 50 Koz Au eq per year at cash costs of $670/oz Au eq over a 10.5-year mine life. Initial capital costs are expected to be $67M, with sustaining capital of $23.4M over the mine life (or $45/oz Au eq production). Economics based on a $1,200/oz gold price and $17/oz silver price include a 5% NPV of $70.2M and an internal rate of return of 22%. . .with the San Antonio project hung up at the permitting stage and development of Magino assumed to be longer-dated, San Agustin could provide the near-term production growth the company is currently lacking."

Mike Parkin, Desjardins Securities (1/13/15)
"Argonaut Gold Inc.'s San Agustin PEA results released yesterday call for an open-pit heap-leach operation with a 10.5-year mine life processing 72.4M tonnes grading 0.32 g/t gold and 10.6 g/t silver with average annual production of 50.4 Koz Au eq. Total metal to be recovered is estimated at 488 Koz gold and 3.8 Moz silver. Based on a $1,200/oz gold price and 5% discount rate, the company estimates the after-tax NPV at $70.2M. . .we estimate production could begin in mid-2016 after a 6–9 month permitting period and 6–9 month construction period.. .we have raised our 12-month target on Argonaut to CA$3.00 (from CA$2.70)."

Matthew Sheppard, Jacob Securities (1/12/15)
"Argonaut Gold Inc. is working to optimize cyanide concentrations and has conducted testing on sample composites from Magino; the testing indicates that cyanide consumption could be reduced by approximately 30%. This is a significant finding considering that cyanide accounted for over 23% of the estimated milling costs."

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