Argonaut Gold forecasts Q4 rebound
Argonaut Gold is on track to meet 2018 guidance despite setbacks at its La Colorada mine in Mexico, with improved performance expected in Q4.
The Toronto-based company produced 34,165oz gold equivalent in Q3, up from 24,280oz in the same period last year, due to the addition of the San Agustín mine at the El Castillo operation, also in Mexico.
But output has lagged behind forecasts due to an explosives permit suspension at La Colorada, which resulted in lower grade stockpiles being processed. The mine produced 7,271oz in Q3, down from 9,827oz.
Companywide output in the first nine months was 113,459oz gold equivalent, well short of full-year guidance of 165,000-180,000oz.
But Argonaut expects to meet the lower end of guidance this year, with a Q4 rebound projected at La Colorada after normal operations resumed in late July, CEO Pete Dougherty told the company's Q3 earnings call.
"With operations at La Colorada now back to normal, coupled with increased production and lower costs at El Castillo with the addition of San Agustín, that sets the stage for a very strong Q4, both operationally and financially," he said.
EARNINGS
Argonaut recorded a Q3 loss of US$3.3mn, compared to net income of US$3.6mn in the same period last year, while revenues rose to US$41.3mn from US$28.7mn on higher gold volumes sold, partly offset by 5% lower average realized prices.
All-in sustaining costs declined 7% to US$988/oz gold sold, due to production at the lower cost San Agustín operation.
PROJECTS
Argonaut expects to receive metallurgical test results for its Cerro del Gallo gold-silver project in Mexico by end-2018.
And the company says it continues to engage with authorities ahead of a possible resubmission of an environmental permit at the San Antonio gold project, also in Mexico, after a previous rejection.
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