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(Kitco News) – Argonaut Gold (TSX: AR) announced today that commercial production has been achieved at the company’s Magino mine in Ontario effective November 1, 2023.
The Magino mine property is a past producing underground gold mine located 40 kilometres northeast of Wawa, Ontario, approximately 14 kilometres southeast of the town of Dubreuilville.
The property consists of seven patented mining claims, four leased mining claims and 69 unpatented mining claims totaling 2,204.495 hectares. A positive feasibility study was published December 2017 showcasing open-pit mining opportunity. The project has 2.4 million ounces of gold in proven and probable reserves, 4.6 million ounces in measured and indicated resources (inclusive of reserves), and a mine life of 19 years.
The company said that plant commissioning and ramp-up proceeded largely on plan from June through August, ramping up from approximately 50% of nameplate capacity to 80%, placing the plant on track for commercial production in September. However, 20 days of unplanned downtime in September, delayed the ramp-up.
Importantly, Argonaut said in a press release that the plant has been largely operating at nameplate capacity since the beginning of the quarter.
The company added that full year production for the Magino mine will not meet the guidance set out at the beginning of the year due to the slower than planned ramp-up to commercial production.
However, the company said it remains on track to meet its full year consolidated production and all-in sustaining cost guidance set at the beginning of the year
As a result of the slower than planned ramp-up of Magino to commercial production, the company said it will bolster its balance sheet through the sale to Franco-Nevada of an additional 1% net smelter return royalty (NSR) on its Magino mine, and its non-core royalty holdings in Canada and Mexico for an aggregate purchase price of US$29.5 million.
Upon the closing of this transaction Franco-Nevada will hold an aggregate 3.0% NSR on the Magino mine.
Argonaut Gold is a Canadian-based gold producer with a portfolio of operations in North America. Focused on becoming a low-cost, mid-tier gold producer, the company’s newest gold mine, Magino is expected to become Argonaut’s largest and lowest cost mine.
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