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Argonaut Gold Announces Fourth Quarter and Year End Financial and Operating Results

06.03.2024  |  CNW

TORONTO, March 6, 2024 - Argonaut Gold Inc. (TSX: AR) (the "Company", "Argonaut Gold" or "Argonaut") today reported financial and operating results for the fourth quarter ("Q4") and year ended December 31, 2023. All dollar amounts are expressed in United States dollars, unless otherwise specified (CA$ refers to Canadian dollars).

"In fiscal 2023, we set clear objectives for our operations. These included commissioning the Magino mine on schedule, stabilizing Florida Canyon which had underperformed for several years, and reviewing and optimizing our Mexican operations. Presently the Magino mine is steadily progressing through the ramp-up period. Both the Florida Canyon mine and our Mexican mines had a strong year, exceeding the upper end of production guidance on a combined basis by 9%. Notably, Florida Canyon achieved its highest production total in 19 years.

Looking ahead to 2024, we consider Magino to be our future and the key driver for per-share growth. Our immediate focus remains on production optimization and unlocking the significant potential at Magino through reserve expansion. Additionally, we are diligently working on optimizing mining operations at the Florida Canyon mine with the sulfide redevelopment plan. Furthermore, we plan to finalize a debt refinancing agreement to enhance liquidity and flexibility, enabling us to achieve our expansion goals. These objectives align with our mission statement, emphasizing asset growth and operational excellence." stated Richard Young, President and Chief Executive Officer of Argonaut Gold.

Financial & Operating Highlights



Three months ended

December 31,

Year ended

December 31,

Financial Data


2023

2022

%
Change

2023

2022

%
Change

Revenues1

$000s

115,578

95,877

21 %

372,457

388,341

(4) %

Cost of sales1

$000s

105,455

120,474

(12) %

332,294

364,513

(9) %

Gross profit

$000s

10,123

(24,597)

NM5

40,163

23,828

69 %

Net income (loss)

$000s

27,931

(174,937)

NM

38,270

(152,202)

NM

Earnings (loss) per basic and
diluted share

$/share

0.03

(0.22)

NM

0.04

(0.28)

NM

Adjusted net loss2

$000s

(17,392)

(37,722)

(54) %

(2,462)

(22,391)

(89) %

Per basic share2

$/share

(0.02)

(0.05)

(59) %

(0.00)

(0.04)

(100) %

Operating cash flow

$000s

7,659

2,372

NM

43,345

(3,749)

NM

Operating cash flow before changes
in working capital and other items2

$000s

18,341

8,617

NM

67,353

70,597

(5) %

Total sustaining capital expenditures

$000s

14,762

9,936

49 %

30,562

43,913

(30) %

Magino construction capital

$000s

54,070

82,586

(35) %

297,456

364,701

(18) %

Cash and cash equivalents

$000s

83,785

73,254

14 %

83,785

73,254

14 %

Net debt2

$000s

(128,736)

(4,327)

NM

(128,736)

(4,327)

NM



Three months ended

December 31,

Year ended

December 31,

Operating Data


2023

2022

%
Change

2023

2022

%
Change

Gold produced3

oz

60,619

41,642

46 %

193,693

197,174

(2) %

Gold equivalent ounces ("GEOs")
produced3,4

oz

61,523

42,510

45 %

197,511

203,155

(3) %

Gold sold3

oz

59,632

50,606

18 %

192,918

200,695

(4) %

Average realized price

$/oz sold

1,907

1,860

3 %

1,892

1,877

1 %

Cost of sales

$/oz sold

1,768

2,383

(26) %

1,722

1,816

(5) %

Cash cost2

$/oz sold

1,437

2,007

(28) %

1,434

1,443

(1) %

All-in sustaining costs2 ("AISC")

$/oz sold

1,804

2,266

(20) %

1,722

1,763

(2) %

_________________________________

1 In the three and twelve months ended December 31, 2023, the Company recognized $4.8 million and $26.9 million of revenues, and $4.7 million and $20.0 million of cost of sales, respectively, related to the pre-commercial production phase of the Magino mine, achieved effective November 1, 2023.

2 This is a Non-IFRS Measure; please see "Non-IFRS Measures" section.

3 In the three and twelve months ended December 31, 2023, 5,275 and 19,231 gold ounces were produced, and 2,002 and 13,528 gold ounces were sold, respectively, from the pre-commercial production phase of the Magino mine.

4 Based on a silver to gold ratio of 80:1 in 2023 and in 2022.

5 References to "NM" are certain change percentages are not meaningful.

2023 COMPANY HIGHLIGHTS

Financial Highlights

  • Revenues for the year ended December 31, 2023 of $372.5 million were 4% lower than the $388.3 million from the prior year as a result of the planned lower production from the Company's three Mexican mines - La Colorada, San Agustin and El Castillo, partially offset by the initial production at the Magino mine and higher production at the Florida Canyon mine.
  • Revenues included $60.0 million from the Magino mine, of which $26.1 million were pre-commercial production ounces. The Magino mine achieved commercial production effective November 1, 2023.
  • Gross profit of $40.2 million was 69% higher than $23.8 million from the prior year due to lower production costs and depreciation and depletion expense.
  • Generated cash flow from operating activities before changes in working capital and other items totalling $67.4 million, comparable to the prior year amount of $70.6 million.
  • Net income of $38.3 million, or $0.04 per basic and diluted share, compared to a net loss in 2022 of $152.2 million, or $(0.28) per basic and diluted share, with the increase largely due to $24.0 million of impairment reversals recorded for mineral properties, plant and equipment in the current year compared to $135.5 million of impairments recorded in the prior year. Higher gross profit and higher income tax recovery also contributed to the increase in net income year over year.
  • Adjusted net loss of $2.5 million, or $0.00 per share, compared to an adjusted net loss of $22.4 million, or $(0.04) per share in the previous year, a reduction in the loss of $19.9 million primarily due to higher gross profit as a result of lower depreciation, depletion and amortization in 2023.
  • Cash and cash equivalents of $83.8 million and net debt of $128.7 million as at December 31, 2023.
  • Consolidated production of 197,511 GEOs was 3% lower compared to 203,155 GEOs from the prior year. The decrease in production was largely due to lower production from the Company's Mexican mines, partially offset by the initial production from the Magino mine, and higher production from the Florida Canyon mine.
  • Cost of sales per gold ounce sold of $1,722, cash cost per ounce of $1,434 and AISC per ounce of $1,722 were all lower than the prior year comparative driven primarily due to lower unit costs at El Castillo and La Colorada.
  • During November 2023, the Company closed the sale of an additional 1.0% net smelter return ("NSR") royalty on its Magino mine for $28.0 million to a subsidiary of Franco-Nevada Corp. ("Franco-Nevada"). Franco-Nevada holds an aggregate 3.0% NSR royalty on the Magino mine.
  • On December 12, 2023, the Company completed a bought deal public offering, through a syndicate of underwriters, under which the Company sold a total of 223,685,000 common shares of the Company at a price of CA$0.38 per common share, for gross proceeds of $62.5 million (CA$85.0 million) and net proceeds to the Company of $59.6 million (CA$81.1 million).
  • On December 15, 2023, the Company obtained a waiver on certain financial covenants on its $250 million financing package (collectively referred to as the "Loan Facilities"). It was anticipated the Company would not be in compliance with certain financial covenants as at December 31, 2023 and accordingly obtained the waiver to prevent a default event which could trigger the Loan Facilities becoming immediately due and payable. On February 28, 2024, the Company received a further waiver on financial and nonfinancial covenants until March 8, 2024. The Company continues to work through its refinancing plans with both current and prospective lenders. The Company will require an additional waiver from its current lenders on or about March 8, 2024, to avoid a breach of covenants, and anticipates the current constructive refinancing process to continue thereafter. An unremedied breach of covenants can have an adverse impact on the Company's liquidity and solvency.

Growth Highlights
Magino

  • Effective November 1, 2023, the Magino mine achieved commercial production.
  • Plant throughput has averaged 8,970 tonnes per day ("tpd") during the fourth quarter.
  • During the fourth quarter, the daily mining rates increased sequentially month over month from an average of 40,400 tpd in the third quarter to 40,800 tpd in October, to 45,400 tpd in November and 50,500 tpd in December. Overall, there was a 25% increase in December compared to the third quarter average.
  • With additional mobile equipment scheduled to arrive in the first half of 2024, along with the installation of the fleet management system, management expects daily mining rates to increase into the 65,000 tpd range by the second half of 2024. This is in line with the current NI 43-101 technical report for the Magino mine.
  • Magino gold grades mined have increased, resulting in the average grade milled, on a monthly basis, increasing from 0.69 grams per tonne ("gpt") in October to 1.02 gpt in November and to 1.07 gpt in December.
  • Mill throughput rates remained below planned capacity in December averaging 9,240 tpd, however, a scheduled mill shutdown in January 2024 is expected to support the continued increase in tonnes per operating hour ("tpoh") to the planned capacity of 453 tpoh which equates to 10,000 tpd through design improvements. Plant availability is expected to remain a challenge into the second quarter.
  • During the three and twelve months ended December 31, 2023, the Magino mine produced 22,059 and 36,015 gold ounces and sold 19,535 and 31,061 gold ounces, respectively. Production was lower than expected in part due to challenges as it transitioned into a steady feed of higher grade ore. Since improved mining practices were implemented in November, the operations have delivered an increase in feed grade to the mill.
  • The infill drill program underway to convert Mineral Resources to Mineral Reserves is proceeding well, having completed approximately 27,000 metres through the end of 2023, constituting 43% of the planned program. The program is expected to be completed on time in June 2024. The goal of the drill program is to add between 500,000 and 1 million ounces to Mineral Reserves, based on the conversion of existing Mineral Resources. A second phase program is expected to continue through the end of 2024. Mill optimization and expansion studies are well underway to determine the most cost effective path to expand the process facilities to between a target of 17,500 and 20,000 tpd.
  • A NI 43-101 technical report including the balance of the 63,000 metre drill program and detailed mill optimization and expansion plans is expected to be completed for the second half of 2024.

Florida Canyon

  • In 2023, Florida Canyon reported its highest production total in 19 years.
  • For 2024 production, material movement and grades are expected to be similar to 2023.
  • All permits to construct Phase III of the South Heap Leach Pad, which include bulk earthworks and expansion of the leach pumping and gold recovery systems, have now been received. Site bulk earthworks were initiated in December 2023. Construction of these facilities is expected to be completed in 2024.
  • Ore placed on the leach pad is expected to be approximately 20% lower than last year but ounce production is expected to be only marginally lower benefiting from the additional process capacity being added in 2024 as part of the construction of the third leach pad, which will allow the drawdown of inventory which built up in 2023 due to limited processing capacity.
  • Drilling concluded on the 1,250-metre West sulphide program in mid-2023.
  • Drilling concluded on the 7,520-metre East sulphide program in late 2023.
  • A 3,760-metre in-fill drill program was also conducted in the oxide resources in late 2023.
  • Analysis and modelling of the drilling results is ongoing and expected to be complete in early 2024.

This press release should be read in conjunction with the Company's consolidated financial statements for the year ended December 31, 2023 and associated Management's Discussion and Analysis ("MD&A") for the same period, which are available on the Company's website at www.argonautgold.com, in the "Investors" section under "Financial Filings", and under the Company's issuer profile on SEDAR+ at www.sedarplus.ca.

CONFERENCE CALL AND WEBCAST

Management will host a live conference call and webcast to discuss the fourth quarter and fiscal year highlights with a question-and-answer session as follows:

Date & Time:

Wednesday, March 6, 2024 at 10:00 a.m. ET

Telephone:

Toll Free (North America) 1-888-664-6392


International 1-416-764-8659

Conference ID:

98243619

Webcast:

https://app.webinar.net/kG904kEPrKE

Presentation:

Available for download at www.argonautgold.com.

Conference Call Replay


Telephone:

Toll Free Replay (North America) 1-888-390-0541


International Replay 1-416-764-8677

Entry Code:

243619 #

The conference call replay will be available until March 13, 2024 at 11:59 p.m. ET.

NON-IFRS MEASURES

The Company provides certain non-IFRS measures as supplementary information that management believes may be useful to investors to explain the Company's financial results.

"Cash cost per gold ounce sold" is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. The Company reports cash cost per ounce on a sales basis. We believe that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure, along with sales, are considered to be key indicators of a Company's ability to generate operating profits and cash flow from its mining operations.

Cash cost figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies.

The World Gold Council definition of AISC seeks to extend the definition of cash cost by adding corporate, and site general and administrative costs, reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of producing gold from current operations. AISC excludes income tax payments, interest costs, costs related to business acquisitions and items needed to normalize profits. Consequently, this measure is not representative of all of the Company's cash expenditures. In addition, the calculation of AISC does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of the Company's overall profitability. For the year ended December 31, 2023, along with comparative periods, the Company reclassified regional general and administrative expenses in Mexico, and accretion expenses previously classified under the corporate group, to each individual mine group. Management believes this better attributes regional general and administrative expenses and accretion expenses and also improves comparability amongst our peer companies.

"Adjusted net loss" and "adjusted net loss per basic share" exclude a number of temporary or one-time items, which management believes not to be reflective of the underlying operations of the Company, including the impacts of: unrealized losses (gains) on derivatives, non-operating income, foreign exchange losses (gains), impacts of foreign exchange on deferred income taxes, inventory impairments (reversals), impairments (reversals) of mineral properties, plant and equipment, and other unusual or non-recurring items. Adjusted net loss per basic share is calculated using the weighted average number of shares outstanding under the basic calculation of earnings per share as determined under IFRS.

"Net debt" is calculated as the sum of the cash and cash equivalents balance net of debt as at the statement of financial position date. "Net debt" calculation includes unamortized transaction costs netted against the drawn debt, but excludes Convertible Debentures and equipment loans which are currently included in total debt, in order to show the nominal undiscounted debt. This measure has no standard meaning under IFRS and other companies may calculate this measure differently.

"Operating cash flow before working capital and other items" is a non-IFRS measure as it involves adjustments to the operating cash flow metric defined by IFRS. The company presents operating cash flow that excludes certain working capital changes and other items such as income taxes and interest received, this helps investors to assess the performance of the Company's operations.

1. The following tables provide reconciliations of production costs and cost of sales per gold ounce sold on the financial statements to cash cost per gold ounce sold and AISC per gold ounce for each mine:

Magino Mine


Three months ended
December 31,

Year ended
December 31,



2023

2023

Gold sold

oz

19,535

31,061

Cost of sales

$000s

36,971

52,199

Cost of sales per gold ounce sold

$/oz

1,893

1,681

Production costs

$000s

28,785

43,660

Less silver sales

$000s

(85)

(142)

Cash Cost

$000s

28,700

43,518

Cash cost per gold ounce sold

$/oz

1,469

1,401





Cash Cost

$000s

28,700

43,518

Accretion and other expenses

$000s

130

520

Sustaining capital expenditures

$000s

10,426

10,426

AISC

$000s

39,256

54,464

AISC per gold ounce sold

$/oz

2,010

1,753

Florida Canyon Mine


Three months ended
December 31,

Year ended
December 31,



2023

2022

% Change

2023

2022

% Change

Gold sold

oz

18,220

13,979

30 %

70,427

49,616

42 %

Cost of sales

$000s

30,500

32,084

(5) %

114,210

99,280

15 %

Cost of sales per gold ounce sold

$/oz

1,674

2,295

(27) %

1,622

2,001

(19) %

Production costs

$000s

26,035

28,655

(9) %

97,634

87,586

11 %

Less silver sales

$000s

(346)

(194)

78 %

(1,293)

(694)

86 %

Cash Cost

$000s

25,689

28,461

(10) %

96,341

86,892

11 %

Cash cost per gold ounce sold

$/oz

1,410

2,036

(31) %

1,368

1,751

(22) %









Cash Cost

$000s

25,689

28,461

(10) %

96,341

86,892

11 %

Exploration expenses

$000s

857

-

NM

1,680

-

NM

Accretion and other expenses

$000s

294

130

126 %

1,177

521

126 %

Sustaining capital expenditures

$000s

3,462

3,592

(4) %

17,260

20,417

(15) %

AISC

$000s

30,302

32,183

(6) %

116,458

107,830

8 %

AISC per gold ounce sold

$/oz

1,663

2,302

(28) %

1,654

2,173

(24) %

La Colorada Mine


Three months ended
December 31,

Year ended
December 31,



2023

2022

% Change

2023

2022

% Change

Gold sold

oz

7,967

7,487

6 %

25,957

42,349

(39) %

Cost of sales

$000s

13,998

13,860

1 %

48,556

59,069

(18) %

Cost of sales per gold ounce sold

$/oz

1,757

1,851

(5) %

1,871

1,395

34 %

Production costs

$000s

10,353

12,103

(14) %

39,057

49,194

(21) %

Less silver sales

$000s

(287)

(247)

16 %

(992)

(2,486)

(60) %

Cash Cost

$000s

10,066

11,856

(15) %

38,065

46,708

(19) %

Cash cost per gold ounce sold

$/oz

1,263

1,584

(20) %

1,466

1,103

33 %









Cash Cost

$000s

10,066

11,856

(15) %

38,065

46,708

(19) %

Exploration expenses

$000s

20

-

NM

390

869

(55) %

Accretion and other expenses

$000s

64

18

NM

257

71

NM

Sustaining capital expenditures

$000s

331

4,897

(93) %

1,057

17,495

(94) %

AISC

$000s

10,481

16,771

(38) %

39,769

65,143

(39) %

AISC per gold ounce sold

$/oz

1,316

2,240

(41) %

1,532

1,538

- %

San Agustin Mine


Three months ended
December 31,

Year ended
December 31,



2023

2022

% Change

2023

2022

% Change

Gold sold

oz

9,556

17,719

(46) %

44,148

65,844

(33) %

Cost of sales

$000s

17,624

33,785

(48) %

81,324

106,335

(24) %

Cost of sales per gold ounce sold

$/oz

1,844

1,907

(3) %

1,842

1,615

14 %

Production costs

$000s

16,000

27,536

(42) %

71,263

84,189

(15) %

Less silver sales

$000s

(751)

(1,206)

(38) %

(4,396)

(7,568)

(42) %

Cash Cost

$000s

15,249

26,330

(42) %

66,867

76,621

(13) %

Cash cost per gold ounce sold

$/oz

1,596

1,486

7 %

1,515

1,164

30 %









Cash Cost

$000s

15,249

26,330

(42) %

66,867

76,621

(13) %

Exploration expenses

$000s

38

-

NM

75

-

NM

Accretion and other expenses

$000s

59

10

NM

238

30

NM

Sustaining capital expenditures

$000s

238

748

(68) %

1,332

1,871

(29) %

AISC

$000s

15,584

27,088

(42) %

68,512

78,522

(13) %

AISC per gold ounce sold

$/oz

1,631

1,529

7 %

1,552

1,193

30 %

El Castillo Mine


Three months ended
December 31,

Year ended
December 31,



2023

2022

% Change

2023

2022

% Change

Gold sold

oz

4,353

11,421

(62) %

21,325

42,886

(50) %

Cost of sales

$000s

6,362

40,625

(84) %

36,005

99,829

(64) %

Cost of sales per gold ounce sold

$/oz

1,462

3,557

(59) %

1,688

2,328

(27) %

Production costs

$000s

6,009

34,904

(83) %

32,152

80,203

(60) %

Less silver sales

$000s

(37)

(102)

(64) %

(315)

(817)

(61) %

Cash Cost

$000s

5,972

34,802

(83) %

31,837

79,386

(60) %

Cash cost per gold ounce sold

$/oz

1,372

3,047

(55) %

1,493

1,851

(19) %









Cash Cost

$000s

5,972

34,802

(83) %

31,837

79,386

(60) %

Exploration expenses

$000s

-

-

NM

-

533,000

(100) %

Accretion and other expenses

$000s

133

6

NM

530

19

NM

Sustaining capital expenditures

$000s

-

(138)

(100) %

-

3,923

(100) %

AISC

$000s

6,105

34,670

(82) %

32,367

83,861

(61) %

AISC per gold ounce sold

$/oz

1,402

3,036

(54) %

1,518

1,955

(22) %

All Mines


Three months ended
December 31,

Year ended
December 31,



2023

2022

% Change

2023

2022

% Change

Gold sold

oz

59,632

50,606

18 %

192,918

200,695

(4) %

Cost of sales

$000s

105,455

120,574

(13) %

332,294

364,513

(9) %

Cost of sales per gold ounce sold

$/oz

1,768

2,383

(26) %

1,722

1,816

(5) %

Production costs

$000s

87,182

103,201

(16) %

283,766

301,172

(6) %

Less silver sales

$000s

(1,506)

(1,749)

(14) %

(7,138)

(11,565)

(38) %

Cash Cost

$000s

85,676

101,566

(16) %

276,628

289,607

(4) %

Cash cost per gold ounce sold

$/oz

1,437

2,007

(28) %

1,434

1,443

(1) %









Cash Cost

$000s

85,676

101,566

(16) %

276,628

289,607

(4) %

Corporate general and administrative
expenses

$000s

2,763

2,072

33 %

11,807

10,562

12 %

Regional general and administrative
expenses

$000s

2,168

2,267

(4) %

5,979

4,560

31 %

Share-based compensation expense

$000s

607

774

(22) %

2,433

3,104

(22) %

Exploration expenses

$000s

915

(2,094)

NM

2,145

1,403

53 %

Accretion and other expenses

$000s

680

164

NM

2,722

641

NM

Sustaining capital expenditures

$000s

14,762

9,936

49 %

30,562

43,913

(30) %

AISC

$000s

107,571

114,685

(6) %

332,276

353,790

(6) %

AISC per gold ounce sold

$/oz

1,804

2,266

(20) %

1,722

1,763

(2) %









2. Adjusted net loss and adjusted net loss per basic share exclude a number of temporary or one-time items detailed in the following table:



Three months ended
December 31,

Year ended
December 31,



2023

2022

% Change

2023

2022

% Change

Net income (loss)

$000s

27,931

(174,937)

NM

38,270

(152,202)

NM

Unrealized (gains) losses on derivatives

$000s

(3,580)

5,035

NM

(5,230)

(7,165)

(27) %

Net foreign exchange (gains) losses

$000s

(9,261)

6,590

NM

(8,381)

8,662

NM

Impact of foreign exchange on deferred
income taxes

$000s

(9,675)

(6,413)

51 %

(9,948)

(7,556)

32 %

Tax recovery on recognition of deferred
tax assets

$000s

(9,899)

-

NM

(9,899)

-

NM

Inventory (reversal) impairment

$000s

(379)

22,996

NM

5,519

22,879

(76) %

(Reversal) impairment of mineral
properties, plant and equipment

$000s

(24,031)

135,547

NM

(24,031)

135,547

NM

Loss on disposal of mineral property

$000s

8,724

-

NM

8,724

-

NM

Other

$000s

-

(3,849)

(100) %

-

-

NM

Tax effect

$000s

2,778

(22,691)

NM

2,514

(22,556)

NM

Adjusted net loss

$000s

(17,392)

(37,722)

(54) %

(2,462)

(22,391)

(89) %

Weighted average number of common
shares outstanding

000s shares

911,290

808,690

13 %

866,060

552,547

57 %

Adjusted net loss per basic share

$/share

(0.02)

(0.05)

(60) %

(0.00)

(0.04)

(100) %

3. A reconciliation of net debt is detailed in the following table:



December 31,
2023

December 31,
2022

Cash and cash equivalents

$000s

83,785

73,254

Loan Facilities - Term Loan

$000s

(183,276)

(77,581)

Loan Facilities - Revolving Credit Facility

$000s

(29,245)

-

Net debt

$000s

(128,736)

(4,327)

4. A reconciliation of operating cash flow before working capital and other items



December 31,
2023

December 31,
2022

Net cash provided by (used in) operating activities

$000s

43,345

(3,749)

Less:




Changes in working capital

$000s

(22,759)

(35,755)

Income taxes paid

$000s

(3,368)

(39,837)

Interest received

$000s

2,119

1,246

Operating cash flow before changes in working capital and other items

$000s

67,353

70,597

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information contained or incorporated by reference in this press release, including any information as to our strategy, projects or future financial or operating performance, constitutes "forward-looking statements". Forward-looking statements are frequently characterized by words such as "estimate", "plan", "anticipate", "expect", "intend", "believe(s)", "potential", or statements that certain events or conditions "may", "should" or "will" occur, and similar expressions. This press release contains forward-looking statements and forward-looking information including, but not limited to: the timing and ability to refinance the existing term loan, the results of independent engineer technical reviews, the estimation of the Mineral Reserves and Resources, the realization of Mineral Reserve and Resource estimates, expected capital expenditures, costs and timing of development of new deposits, success of exploration activities and permitting requirements.

Forward-looking statements are based on a number of assumptions, opinions and estimates, including estimates and assumptions in regards to the factors listed below that, while considered reasonable by the Company as at the date of this press release based on management's experience and assessment of current conditions and anticipated developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Many of these assumptions are based on factors and events that are not within the control of Argonaut and there is no assurance they will prove to be correct. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: the Company's ability to continue as a going concern, satisfying the conditions precedent for further draws on the Loan Facilities, satisfying ongoing covenants under the Loan Facilities, results of independent engineer technical reviews, the availability and change in terms of financing, the possibility of cost overruns and unanticipated costs and expenses, the ability of the Magino mine to be one of the largest and lowest cost gold mines, the winding down of the Mexican mines, the impact of inflation on costs of exploration, development and production, risk of employee and/or contractor strike actions, the future price of gold and silver, the estimation of the Mineral Reserves and Resources, the realization of Mineral Reserve and Resource estimates, the timing and amount of estimated future production at the Magino mine, Florida Canyon mine, La Colorada mine, San Agustin mine and El Castillo mine, mine closure plans for the La Colorada mine and El Castillo mine, costs of production (including cash cost per gold ounce sold), expected capital expenditures, costs and timing of development of new deposits, success of exploration activities, permitting requirements, currency fluctuations, the ability to take advantage of forward sales agreements profitably, the ability to recover property potentially impaired by third party insolvency proceedings, requirements for additional capital, government regulation of mining operations, environmental risks and hazards, title disputes or claims, limitations on insurance coverage, the use of proceeds from financings, the potential sale of the Company's non-core Mexican assets, and the timing and ability to refinance the existing Term Loan.

These factors are discussed in greater detail in the Argonaut's most recent Annual Information Form dated March 31, 2023, and in the most recent Management's Discussion and Analysis for the three and twelve months ended December 31, 2023, both filed under the Company's issuer profile on SEDAR+. Argonaut cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail.

Forward-looking statements included in this press release speak only as of the date of this press release. Although Argonaut has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Argonaut undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws.

TECHNICAL INFORMATION AND QUALIFIED PERSONS

The technical information contained in this press release has been prepared under the supervision of, and has been reviewed and approved by Mr. Owen Nicholls, CPG, Argonaut's Vice President of Exploration and Mr. Marc Leduc, P.Eng., Chief Operating Officer; both are qualified persons as defined by NI 43-101.

For further information on the Company's material properties, please see the reports as listed below on the Company's website www.argonautgold.com or on www.sedarplus.ca:

Magino Gold Mine

Magino Gold Project, Ontario, Canada, NI 43-101 Technical Report, Mineral
Resource and Mineral Reserve Update dated March 3, 2022 (effective date
of February 14, 2022)

Florida Canyon
Gold Mine

NI 43-101 Technical Report on Mineral Resource and Mineral Reserve
Florida Canyon Gold Mine, Pershing County, Nevada, USA dated July 8,
2020 and with an effective date of June 1, 2020

La Colorada
Gold/Silver Mine

La Colorada Gold/Silver Mine, Sonora, Mexico, NI 43-101 Technical Report
dated February 14, 2022 (effective date of October 1, 2021)

San Agustin
Gold/Silver Mine

San Agustin Gold/Silver Mine, Durango, Mexico, NI 43-101 Technical Report
dated February 14, 2022 (effective date of August 1, 2021)

Mineral Resources referenced herein are not Mineral Reserves and do not have demonstrated economic viability. Mineral Resource estimates do not account for mineability, selectivity, mining loss, and dilution. The Mineral Resource estimates include Inferred Mineral Resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is also no certainty that these Inferred Mineral Resources will be converted to Measured and Indicated categories through further drilling, or into Mineral Reserves, once economic considerations are applied.

About Argonaut Gold

Argonaut Gold is a Canadian-based gold producer with a portfolio of operations in North America. Focused on becoming a low-cost, mid-tier gold producer, the Company's flagship asset, the Magino mine, in Ontario, Canada is expected to become Argonaut's largest and lowest cost mine. The Company is pursuing potential for redevelopment and additional growth at the Florida Canyon mine in Nevada, USA. Together, the Magino and Florida Canyon mines are the Company's cornerstone assets that will drive Argonaut through this pivotal growth stage. The Company also has one additional operating mine in Mexico, the San Agustin mine in Durango. Residual production is expected from two additional mines located in Mexico. The La Colorada mine in Sonora was placed on care and maintenance at the end of 2023 pending a decision on strategic options for the mine, while mining activities ceased at the El Castillo mine in Durango in 2022. The San Agustin mine and the El Castillo mine together form the El Castillo Mining Complex. Argonaut is listed on the Toronto Stock Exchange ("TSX") under the ticker symbol "AR".

SOURCE Argonaut Gold Inc.



Contact
Joanna Longo, Investor Relations, Phone: 416-575-6965, Email: joanna.longo@argonautgold.com; Argonaut Gold Inc., www.argonautgold.com
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Mineninfo
Argonaut Gold Inc.
Bergbau
A1C70D
CA04016A1012

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