Argonaut Gold reports the measured and indicated gold resource at its 100%-owned La Colorada project located near Hermosillo, Mexico, has increased from 605,000 oz to 1,067,000 oz. The updated resource is based on previous historical drilling plus an additional 206 drill holes totaling 31,744 m completed in 2011. The resource is contained in 50 million mt of mineralized material at an average grade of 0.664 g/mt gold and 8.7 g/mt silver.
Phase 1 of Argonaut’s 2011 La Colorada drill program focused on converting previously inferred mineralization to measured and indicated. Initial favorable drill results prompted the company to double the drill program scope, increasing the drill budget to $7.7 million and planned drilling to an estimated total of 52,000 m. The company had three drill rigs operating on the property as of late October 2011, with a fourth rig scheduled to arrive shortly.
Given the significantly expanded resource base, Argonaut has embarked on a multi-staged development approach for La Colorada. Permits are in-hand to initiate the first stage, which includes construction of new leach pads, a crushing circuit and a processing plant within the existing footprint of the previous mining operation.