Argonaut Gold Inc.

Argonaut Gold Inc.

February 14, 2011 20:38 ET

Argonaut Provides 2011 Guidance on El Castillo Production of 70-75,000 Ounces and Outlines Substantive Exploration and Capital Expansion Programs

TORONTO, ONTARIO--(Marketwire - Feb. 14, 2011) - Argonaut Gold Inc. (TSX:AR) ("Argonaut" or the "Company") is pleased to provide guidance on estimated production and anticipated operating costs for El Castillo in 2011. Argonaut will also begin an aggressive exploration program to further define and understand the potential at its major gold projects. 

2011 Highlights

  • El Castillo Production and Cash Cost Forecast
    • 70-75,000 ounces of gold at cash costs ranging between $575 -$600 per ounce. (51,323 ounces were produced in 2010) 
    • Increase in production from 2010 guidance of 60-65,000 ounces.

  • $17 million Capital Expenditure Investments
    • El Castillo – Capital expenditures are estimated at $8 million, going towards expanding the east side processing facilities. 
    • San Antonio - Capital expenditures are estimated at $9 million, funds have been allocated for engineering and environmental studies as well as permitting for the project; a new 43-101 report is expected by the end of the second quarter.

  • $6 million Exploration program

    • El Castillo – 1,000 meter drill program to test sulphides with accompanying metallurgical test work.

    • San Antonio – 10,000 meter drill program to further define the intermediate zone

    • La Colorada – 19,000 meter drill program aimed at converting inferred resource

    • La Fortuna – 1,000 meter program to follow up on earlier identified targets

Peter Dougherty, President and CEO of Argonaut Gold said "2010 was a banner year at the El Castillo gold mine; with extensive expansion and drilling programs that dramatically changed El Castillo's production profile. 2011 looks to be another year of significant growth starting with the recently completed Pediment merger. The acquisition of the development stage property San Antonio, as well as the historical producer La Colorada, offers potential to further add to Argonaut's future production outlook. During 2011, we will carry out an aggressive exploration program on our portfolio of quality properties. In addition, we look forward to further unlocking additional value at El Castillo, utilizing internal cash flow in order to establish additional gold ounces across all of our properties, as well as fund further development of our projects."

About Argonaut

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 San Antonio project and the past producing La Colorada project, both located in Mexico. Argonaut is a producing gold company created by former executive management team members of Meridian Gold Inc.  

Creating the Next Quality Mid-Tier Gold Producer in the Americas.

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.

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