Argonaut Gold lowers guidance

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Monday, October 17, 2016

Argonaut Gold lowered its 2016 guidance as production fell short of expectations at its El Castillo mine in Mexico.

The company, Mexico's eighth biggest gold producer in Q2, now expects to produce 115-120,000oz gold equivalent this year, compared to 130-135,000oz previously guided.

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Output at El Castillo was impacted by higher-than-anticipated rainfall in Q3, which hampered mining and crusher throughput.

[GRAFICO:FIGURA:ID_3974]

Production was also lower than expected because of changes to mine sequencing. In 2016, Argonaut expects to mine 2.8Mt of ore which was not in the original mine plan. The material comprises lower grade oxide ore, and transition and higher grade sulfide ore. The latter yields significantly lower recoveries.

These changes are expected to have a positive impact on 2017 production, the Toronto-based company said.

In Q3, El Castillo produced 13,049oz gold, down from 17,134oz, with La Colorada generating 12,610oz gold and 35,863oz silver, up from 11,073oz and 27,836oz, respectively.

Output at La Colorada was below expectations on account of the discovery of additional economic low-grade material, mining of which delayed processing of higher grade ore.

Companywide output was 26,322oz gold equivalent, down from 28,876oz. Argonaut also has the San Agustín and San Antonio projects in Mexico, and Magino in Canada.