Argonaut Gold Inc.
TSX : AR

Argonaut Gold Inc.

November 28, 2011 09:20 ET

Argonaut Gold Inc. Reports on Metallurgical Test Work for El Castillo Sulphide

Favorable Results Indicate Further Work Necessary

TORONTO, ONTARIO--(Marketwire - Nov. 28, 2011) - Argonaut Gold Inc. (TSX:AR) ("Argonaut Gold", "Argonaut" or the "Company") announces initial results regarding possible heap leaching of El Castillo sulphides. SRK's November 6, 2011 technical report includes a measured and indicated ("M&I") sulphide resource of 1.5 million ounces at an average grade of 0.32 g/t (please see foot note #1) which underlies oxide and transitional gold mineralization at El Castillo.

It is important to note, that the sulphide material will not be accessed for several years as we continue to mine the oxide and transition ores. However, given the large size of these resources, the company has completed preliminary metallurgical testing.

To view "Map #1", please visit the following link: http://media3.marketwire.com/docs/argonaut_gold_nov28_map01.pdf

In regards to the results generated to date, Peter Dougherty, President and CEO for Argonaut Gold said "Column tests conducted in early 2011 confirmed that the leach cycle was very rapid with over 90% of the leachable metal recovered in the first 10 days. This, coupled with low reagent consumption, supports the possibility that sulphides can be leached."

Mr. Dougherty added "However, within the El Castillo deposit there is significant variability to how sulphides react to cyanide leaching. The Company is currently reviewing known variables within the deposit that could influence recoveries. These include host rock, sulphide content and fragmentation. Additional metallurgical testing and characterization studies will need to be completed."

Historical Metallurgical Test Work

In May 2009, Castle Gold Corp. performed preliminary metallurgical test work with SGS Mineral Services Lakefield, Ontario Canada (coarse ore cyanide bottle roll testing) on the sulphides indicating recoveries from as high as 42.8% for one sample to as low as 8.3% (3/4 inch to 1/4 inch crush sizes for 21 days leaching). Potential for resource growth and adjustments to the future production profile at El Castillo prompted further metallurgical work on the sulphides. (See press release May 7, 2009).

Recent Metallurgical Work

In the fall of 2010 the company completed 7 core holes within key mineralized areas of the sulphide deposit. This material was shipped to Kappes Cassiday Associates ("KCA") in Reno, Nevada for metallurgical testing. Their work included 96 hour bottle roll tests on sulphide material with an average head grade of .501 g/t gold resulting in an average gold extraction of 53%.

Their column test work reported gold recoveries of between 26% and 51% with an average of 38%. The column tests ran for 60 days on -3/8 inches (9.5 mm) particle sizing in four separate columns.

Column Test Head Assay g/t Au Extraction % Au Consumption
Cyanide kg/MT
Consumption
Lime kg/MT
DCA - 1 0.264 26% 1.04 2.0
DCA - 2 0.618 34% 1.53 3.5
DCA - 4 0.606 39% 1.20 2.5
DCA - 5 0.328 51% 0.92 2.0

These findings support the potential for leach application of the sulphide ore. Based upon KCA's experience with mostly clean non-reactive ores, cyanide consumption in production heaps would be only 25-33% of the laboratory column test consumptions. Additionally, it was found that extraction was quite rapid with over 75% of the leachable gold reporting to solution in the first 15 days of leaching.

To view "Map #2", please visit the following link: http://media3.marketwire.com/docs/argonaut_gold_nov28_map02.pdf

In the spring of 2011 the company completed an additional 16 core holes for further metallurgical testing of the sulphides. (Please refer to map #2). These holes were positioned to intersect sulphide zones that underlie the final oxide/transition pit areas. Sulphide composites were compiled from three main areas referred to as the North, Central (or main) and South zones. These composites were again sent to KCA in Reno who completed bottle roll and column tests.

The findings:

Bottle Roll Test Calculated Head gms Au/MT Extraction % Au Time
North 0.814 78% 96 hours
Central (main) 0.066-0.441 21%-51% 48 hours
South 0.214 58% 96 hours

The cyanide bottle roll tests reported gold recoveries between 21%-78%. KCA also completed column tests on composites representative of the three study areas. Results are noted in the following table:

Column Test Head Assay g/t Au Extraction % Au Consumption
Cyanide kg/MT
Consumption
Lime kg/MT
# Days under Leach
North composite 0.92 48% 0.75 2.11 72
Central (Main) 0.075 - 0.442 11% - 35% 0.50 - 0.80 3.01 - 3.09 40
South composite 0.29 39% 0.67 2.24 72

Column test work showed a wide range of recovery from 11% to 48%. Recovery was rapid with 90% of the metal recovered in the first 10 days of leaching. Sulphide tests have provided mixed results and the Company will complete additional testing to further define the metallurgical variability of the sulphide zones and their possible economic significance.

Technical Information and Mineral Properties Reports

The technical information contained in this document has been prepared under supervision by Mr. Thomas H. Burkhart, Argonaut's Vice President of Exploration, and a qualified person as defined by NI 43-101.

Information on the Company's properties please see the reports as listed below on the Company's website or on www.sedar.com:

El Castillo Mine NI 43-101 Technical Report on Resources and Reserves, Argonaut Gold Inc., El Castillo Mine, Durango State, Mexico dated November 6, 2010

Footnote #1

Castillo Sulphide (Global) Measured 70,600 0.328 744,800
Castillo Sulphide (Global) Indicated 91,200 0.272 797,500
Total Castillo Sulphide (Global) M&I 161,800,000 0.296 1,540,000

About Argonaut Gold

Argonaut is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets are the production-stage El Castillo Mine in the State of Durango, Mexico, the development stage and past producing La Colorada project, the advanced exploration San Antonio project, and several exploration stage projects, all of which are located in Mexico.

Creating Value Beyond Gold

Cautionary Note Regarding Forward-looking Statements

This news release contains forward-looking statements that involve risks and uncertainties that could cause results to differ materially from management's current expectations. Actual results may differ materially due to a number of factors. Except as required by law, Argonaut Gold Inc. assumes no obligation to update the forward-looking information contained in this news release.

Contact Information