Argonaut Gold (TSX: AR) is cashed up to advance the Ontario-based Magino gold mine to its first imminent gold pour after closing a $17.5 million flow-through financing, it said Wednesday.
The company issued 6.6 million flow-through common shares to a syndicate of underwriters led by Scotiabank and Cormark Securities. The deal is subject to final approval by the Toronto Stock Exchange.
The brownfields Magino mine, 40 km northeast of the town of Wawa, was mined intermittently since the mid-1920s, producing 114,319 oz. metal from 803,135 tonnes of ore that graded 4.43 grams gold per tonne. The project is expected to reach commercial production by year-end.
Earlier this year, Argonaut upgraded the Magino resources to 132.4 million measured and indicated tonnes grading 0.94 grms gold for over 4 million oz. The inferred resource is 20.9 million tonnes at 0.78 grams per tonne for 526,000 oz. Proven and probable reserves stand at 65.5 million tonnes grading 1.15 grams per tonne for 2.4 million oz. gold.
BMO Capital Markets resumed coverage of the issuer with mining analyst Brian Quast writing the company remained fully funded to see the build-out through to completion, with minimal timeline slippage of first production in the secoind half of May, versus the earlier anticipated Q4 2022 first pour.
The analyst points out Argonaut has confirmed that the majority of the required operations permits have been received, however, as of its May 5 earnings call, one operational permit remained outstanding. “The permit is expected in due course, but any delay would pose a threat to the first gold timeline,” said Quast.
The open pit mine will be a conventional truck and shovel operation at a rate of 10,000 tonnes per day, with an average head grade of 1.15 gram gold per tonne. The mill will feature two stages of crushing followed by a semi-autogenous mill and ball milling.
Ground material will pass through a gravity circuit, followed by leaching, carbon-in-pulp recovery, and the gold and silver content eventually recovered by electrowinning. Gold doré will be smelted from the electrowinning sludge. Total pre-production capital costs were estimated at $980 million.andalso operates the Florida Canyon gold mine in Nevada as well as the El Castillo, San Agustin, and La Colorada gold mines in Mexico.
Very interesting news.