Argonaut Gold Inc.
Argonaut Gold Inc. (TSX: AR) (the “Company”, “Argonaut Gold” or “Argonaut”) announced that its wholly-owned subsidiary, Minera Real Del Oro, S.A. de C.V., has entered into an agreement with Desarrollos Mineros El Aguila, S.A. de C.V. (“El Aguila”), a wholly-owned subsidiary of Fresnillo Plc (“Fresnillo”) whereby Argonaut will acquire 420 hectares pursuant to a mineral concession (the “San Juan Concession”) owned by El Aguila covering known projections of El Castillo mineralization (the “Transaction”). In addition, the parties have entered into an agreement whereby portions of other adjacent concessions may be used by Argonaut for leach pads, ponds and overburden sites, subject to the terms of such agreement. All dollar amounts are expressed in United States dollars unless otherwise specified.
Under the terms of the Transaction, Argonaut has agreed to pay El Aguila cash consideration of $26 million, half of which is payable today upon the execution of the Transaction and the remainder on or before December 15, 2017.
Currently, Argonaut holds the surface rights to the San Juan Concession. Over the past three years Argonaut and Fresnillo have collaborated as Fresnillo completed 34,510 metres of exploration drilling in 132 drill holes. The Company reviewed these results and has found evidence that the El Castillo mineral system continues onto the San Juan Concession to the northeast and south of the original El Castillo concession boundaries. The Company believes that the acquisition of the San Juan concession has the potential to positively impact its production profile and notes the recently published three-year production outlook does not include any allowance for the impact of this acquisition. Pete Dougherty, President & CEO commented: “We are excited to have entered into an agreement that is beneficial to both parties. We will now be able to mine the remaining mineralization on our side of the concession boundary as we move the pit wall back onto the San Juan Concession. This, coupled with the known mineralization on the San Juan Concession, allows us the opportunity to expand the pit even farther. We have increased our footprint in the area threefold going from approximately 200 hectares to over 620 hectares. We believe this is a very strategic acquisition, as it means El Castillo has the potential to be an important part of our future production.”
Tom Burkhart, Vice President of Exploration stated: “The acquisition of the San Juan Concession greatly enhances our opportunity to extend mine life at El Castillo. We are excited to have acquired this concession, as it hosts significant drill intercepts close to the pit boundaries and may allow us to capture mineralization within our resources but not in the current mine plans due to slope angles. We expect to commence shortly on an approximate $2 million detailed infill program within areas of mineralization to increase drill hole density from its current 50 to 75 metre spacing. Once our infill drill program has been completed and analyzed, we will be in a position to update the mineral resource statement for El Castillo.”
To view plan view maps, cross sections, drill hole locations and results above a 0.15 g/t cutoff in relation to the El Castillo mine, visit:
About Argonaut Gold
Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets are the production stage El Castillo mine and the construction stage San Agustin project in Durango, Mexico and the production stage 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 Company also has several exploration stage projects, all of which are located in North America.
For more information on Argonaut Gold Inc. contact Dan Symons, Vice President, Investor Relations at (416) 915-3107. Email: firstname.lastname@example.org or visit the website at www.argonautgold.com.
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