Argonaut Exploration Inc.
TSX VENTURE : AGA

October 16, 2012 10:49 ET

Argonaut Exploration Inc. Acquires Historic Lucky Luke and Cordillera Gold Properties

CALGARY, ALBERTA--(Marketwire - Oct. 16, 2012) - Argonaut Exploration Inc. (the "Company") (TSX VENTURE:AGA), a company engaged in the exploration and development of precious and base metals near Terrace, British Columbia, is pleased to announce has entered into two mineral title purchase agreements to acquire a 100% royalty free interest in adjoining claims which contain the historic Lucky Luke and Cordillera gold mines. The newly acquired adjoining properties are located 13 km northeast of the city of Terrace on the west side of the Skeena River on the lower east slope of Kitsalas Mountain. The property is 2 km due west of the Company's Terrace claims and 6 km northwest of the Company's Columario gold mine. The historic mine sites are at low elevations, both below 305 m above sea level. The Lucky Luke mine and Cordillera mine located 457 m and 185 m respectively due west of the CN railway that crosses the property.

Visible gold with sulphides in quartz vein bearing fault zones have been documented in the historic workings from both mine locations.

President and C.E.O. Ray Cook states: "The acquisition by Argonaut of the historic Lucky Luke mine and nearby Cordillera mine is a continuation of the management's plan to build a potentially significant precious metal inventory in the Terrace and northwest British Columbia Region. These properties are at an early phase of exploration and past production is the product of exploration tunnelling in the early 1900s. Conventional industry directed investigation through modern geological, geophysical and diamond drilling methods have never occurred on most of these properties reminiscent of remote third world countries. Argonaut has now acquired most of the known documented historic gold occurrences in the Terrace area. No other public or private company has accomplished this in the 125 years of Terrace's exploration history. The Terrace rock types, mineralized vein and stock work systems are identical in age, geology and precious metal content to those locations in the ever widening bullion rich "Golden Triangle" district immediately north and potentially continuous with the Terrace region."

Lucky Luke Mine (Group)

The Lucky Luke property was worked from 1917 to 1934 and involved the development of two parallel tunnels at 990 feet (ft) (302 m) elevation above sea level and at 1045 ft (319m) elevation with separate adits on a single quartz vein in a fault shear zone. The main (lower) tunnel was excavated for 130 feet before intersecting the strike of the shear zone that contained the quartz vein. The upper tunnel was similarly excavated for a shorter distance of 20 ft (6 m) before intersecting the same shear zone with the contained quartz vein. Underground tunnelling continued to a fault zone that offset the vein-shear zone to the west while the vein-shear zone appears to be open (continue) to the east. A raise along the vein-shear zone was completed between the lower and upper tunnels and a winze (shaft) was developed along the vein to a depth of 80 ft (24.4 m) below the main (lower) tunnel. The quartz is mineralized with bornite, chalcocite and visible free gold that is usually associated with the steel-gray chalcocite. The shear zone is documented as ranging from 3 to 6 ft (0.9 to 1.8 m) wide and the quartz vein averaged 0.75 ft (0.23 m) wide. Both the shear zone and the quartz vein returned gold and silver values.

In 1924, 25 tons (22,7 tonnes) of hand-sorted ore returned: 18 ounces of gold, 316 ounces of silver, and 11,162 lbs of copper. The mine had an aerial tramline, one-third mile (536 m) in length, running from the ore bin to a small mill near the railway. The tramline and mill are no longer present.

Cordillera Mine (Group)

The Cordillera mine property was discovered in 1914 when the finding of rich float led to its discovery. The property was explored and developed from 1914 to 1930 with little additional work to the present day.

Historic exploratory work was done on a system of quartz veins that strike northeast and dip to the northwest at low angles between 15 degrees (°) to 35°. The veins are relatively short quartz lenses that are repeated along strike. The quartz lenses vary from 0.8 ft (0.24 m) to 11 ft (3.3 m) in width. The veins follow a variety of faults that complicate the continuity of the mineralized vein system. Two sub-parallel tunnels were constructed in a westerly direction to intersect the vein system at high angles. The upper tunnel from number 2 adit at elevation 500 ft (152 m) above sea level is 415 ft (126.5 m) long and intersects two cross-cutting vein systems. The lower tunnel from number 1 adit at elevation 420 ft (128 m) elevation is 450 ft (137 m) long and intersects the vein system at 400 ft (122 m) from the portal. In addition to the two tunnels are short drifts and inclined shafts that test the quartz vein system both in the tunnels and in outcrop. Vein samples collected in 1935 were relatively low in gold content with the highest grade channel sample across 1.4 ft (0.43 m) returning gold 0.04 oz./ton and silver 0.46 oz./ton.

Significantly better gold values were sampled in 1915 by British Columbia government agents who documented that the mineralization was "chiefly chalcocite and bornite in a quartz gangue, in which can be seen many particles of free gold, visible to the naked eye." Reported 1915 sample results were:

Location sampled. Assay Values
Gold (Oz./ton ) Silver (Oz./ton ) Copper (% )
Selected sample from No.1 open-cut 0.38 9.3 23.4
Average sample across 3 feet from No. 3 open-cut 0.40 3.8 7.1
Shipping-ore from No. 2 open-cut, representing about 10 percent of vein-matter 0.70 8.9 10.6
Shipping-ore from No.1 open-cut, representing about 5 per cent of vein matter 0.36 9.5 21.1

The above summarized historic information is from Kindle E. D.'s 1937 Geological Survey of Canada Memoirs 205 and 212 plus the British Columbia Government's "Report of the Minister of Mines - 1915". There is no further record of historic work performed on the Lucky Luke mine (group) or the Cordillera mine (group) after 1934. The two historic mine areas are approximately 500 meters apart and are potentially part of the same fault controlled, gold bearing vein-fault system.

About Argonaut Exploration Inc.

Argonaut is a junior mineral exploration company focused on the acquisition, exploration and development of gold, silver and copper bearing mineral properties. For more information on the Corporation visit its website at www.argonautexploration.com.

This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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