Name: El Castillo mine.

Location: The El Castillo mine is 100 km north of the City of Durango, in Mexico’s state of Durango.

Controlling Company: Argonaut Gold.

Brief History: El Castillo was a grass roots discovery resulting from a regional exploration drilling programme by Battle Mountain Gold (BMG) from 1995 to 1998. This led to a drill programme that resulted in the discovery and partial delineation of the El Castillo gold deposit. Castle Gold acquired the property from BMG in 2002 through its subsidiary, Minera Real de Oro, and Argonaut acquired Castle in December 2009.
The mine started construction and operations in 2007, with commercial production reported in 2008.

Brief Description: The El Castillo mine is a relatively low-grade gold deposit that benefits from a low strip ratio, disseminated mineralisation that complements bulk mining activities and good heap-leach recoveries.
Products: Gold.

Geology/Mineralisation: The El Castillo mine property is situated in the Altiplano subprovince of the Sierra Madre Occidental (SMO) region of central Mexico. The SMO represents an island arc assemblage of early Mesozoic age, comprising metamorphosed, deep-water sediments and island arc volcanics. The Altiplano subprovince lies on the east flank of the SMO, comprising Jurassic to late Tertiary sedimentary and volcanic rocks. The oldest rocks in the El Castillo mine area are Cretaceous flysch- sequence sediments that correspond to the upper member of the Mezcalera group. These consist of arenites, shales and thin- bedded limestone dipping moderately to steeply to the north-east with local zones of tight folding.

Cretaceous Mezcalera group flysch sediments are intruded by probable Oligocene porphyries of granodiorite to diorite composition. Petrographic studies indicate that most of the fine- to medium-grained porphyry found within the mineral system is granodiorite. This granodiorite corresponds to what was previously mapped as dacite or trachyandesite. It is thought to be of similar composition and age to the intrusive rocks mapped in the San Agustin and San Lucas mining districts situated about 15 km to the south-east of El Castillo.

Reserves: Proven oxide and transition reserves at El Castillo, as reported in the company’s third-quarter 2015 results, were 104.65-million tonnes, grading 0.36 g/t of gold. Probable oxide and transition reserves were estimated at 844 000 t, grading 0.33 g/t of gold.

Resources: Castillo oxide and transition in-pit measured and indicated resources, as reported in the company’s third-quarter 2015 results, were 165.7-million tonnes, grading 0,32 g/t of gold. Castillo sulphide measured and indicated resources were 161.8-million tonnes, grading 0.3 g/t of gold.

Mining Method: Openpit, heap leach.
Major Infrastructure and Equipment: The operation consists of an openpit gold mine, a crushing facility, a cyanide heap-leach pad, a carbon gold recovery plant, a waste dump, a truck shop and warehouse and a sample preparation lab and an atomic absorption gold analysis lab, as well as all support infrastructure.

Prospects: Argonaut is pursuing a development strategy for the San Agustin project, for which it expects to use common infrastructure with the nearby El Castillo mine. If this strategy is approved, Argonaut intends any future development of the San Agustin project to proceed as an extension of the El Castillo mine.
Contact Person: Corporate development officer Curtis Turner.

Contact Details:
Argonaut Gold,
tel +1 775 284 4422,
fax +1 775 284 4426, and
email curtis.turner@argonautgold.com.