Argonaut Gold (TSX: AR) announced Thursday it has achieved first gold pour at its Magino mine located in Dubreuilville, Ont. — the company’s first Canadian mine operation. The process plant ramp-up remains on schedule with commercial production expected in the third quarter this year.
Magino is expected to produce between 72,000 to 81,000 oz. of gold in 2023 at cash costs of between US$850 and US$950 per oz., and about 148,000 oz. of gold at a cash cost of $868 per oz. in 2024, its first full year of production.
“We are proud of the Argonaut team for delivering Canada’s newest gold mine. The Magino mine is key to achieving our vision to become a low-cost, mid-tier North America gold producer,” Argonaut’s president and CEO Richard Young commented in a media release.
The company recently closed a $17.5 million flow-through financing to advance the Magino mine towards first gold pour. Situated 40 km northeast of the town of Wawa, the deposit was mined intermittently since the mid-1920s, producing 114,319 oz. gold from 803,135 tonnes of ore that graded 4.43 grams gold per tonne.
Argonaut has seen preproduction capital costs at Magino rise from an estimated $510 million in 2020 to $920 million last year, with the final cost now pegged at $980 million.
Adding ounces
Argonaut is also seeking to grow Magino. It plans to begin a 12-to-15-month exploration and reserve development program in the third quarter to convert open pit resources to reserves, as well as test deep underground targets and open-pit targets along strike west of the current deposit.
At the same time, the company intends to review mill optimization and expansion opportunities, which would potentially raise throughput rates and increase annual production.
“With the first gold pour milestone behind us, we are now focused on completing commissioning and ramping up the mill to steady state,” COO Marc Leduc added. “In addition, we are looking to further grow our flagship gold mine as we commence a reserve development drilling program intending to increase reserves in combination with studies to expand and optimize mill throughput, both scheduled to begin later this summer.”
Earlier this year, the company upgraded the Magino resources to 132.4 million measured and indicated tonnes grading 0.94 gram gold per tonne for over 4 million ounces. The inferred resource is 20.9 million tonnes at 0.78 gram gold for 526,000 oz. Proven and probable reserves stand at 65.5 million tonnes grading 1.15 grams gold per tonne for 2.4 million oz. gold.
Shares of Argonaut Gold gained 1.7% as of 11:30 a.m. EDT on the Toronto Stock Exchange, giving the Nevada-based gold miner a market value of $516.3 million.
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