Argonaut Gold has reported positive results from a preliminary economic assessment (PEA) of its 100% owned, heap-leach San Agustin gold-silver project approximately 100 km north of the city of Durango in Durango state, Mexico. The study assumes processing of 72.4 million mt of indicated resources containing 746,000 oz of gold at an average grade of 0.32 g/mt and 24.6 million oz of silver at an average grade of 10.6 g/mt. Total production over an initial mine life of 10.5 years is estimated at 488,000 oz of gold and 3.8 million oz of silver, equating to average annual production of 50,400 gold equivalent oz.
Initial project development costs are estimated at $67 million, including $11.4 million in contingency. The project is based on an outcropping deposit, with a low life-of-mine stripping ratio of 0.4:1, waste to ore. Cash costs of production are estimated at $670/gold equivalent oz.
Average annual San Agustin plant throughput is estimated at nearly 7 million mt, with 6 million mt processed via two-stage crushing and 1 million mt via one-stage crushing. Gold recovery will be by cyanide heap leaching and carbon adsorption.
Argonaut President and CEO Peter Dougherty said, “We have drilled more than 30,000 m and have only included roughly 22,000 m of the drilling in this PEA. We continue to test the extent of the deposit and have identified significant expansion potential for nearly 1.5 km to the northwest of the currently recognized resource. We hope that the close proximity of San Agustin to our currently producing El Castillo gold mine will lead to further reductions in capital and operating costs as we seek to share existing infrastructure and personnel.
“The low proposed strip ratio of the project should allow us to balance fleet requirements and maximize use of existing equipment. We will continue to look at various ways to sensibly grow this project as new drill results become available.”
Argonaut is also working on baseline and engineering plans needed to prepare San Agustin permitting documentation.
Kappes, Cassiday & Associates; Resource Modeling Inc.; and Argonaut Gold’s management team prepared the San Agustin PEA.