TORONTO (miningweekly.com) – Canadian miner Argonaut Gold has declared commercial production at its $42.6-million San Agustin project, in Mexico, effective from October 1, the company announced on Tuesday.
The Toronto-headquartered company reported that it had reached the milestone two weeks after pouring first gold.
The company’s TSX-listed stock gained 1.7% in early trading Tuesday, at C$2.44 apiece.
The project is located 10 km from the El Castillo mine, adding flexibility and capitalising on synergies derived from shared infrastructure with the neighbouring El Castillo mine complex.
The company completed construction of the project on schedule and more than 20% under budget, the company advised in a press release.
“We believe the El Castillo complex has the ability to ramp up to 150 000 gold equivalent ounces of production over the next couple of years, which will be the driving force of our approximate 60% production growth rate and lower operating costs by 2019,” stated president and CEO Peter Dougherty.
All aspects of the San Agustin mine have been transitioned to the operations team.
According to an April 2016 preliminary economic assessment, San Agustin will average 80 000 gold equivalent ounces a year over the first five years, calculating an after-tax net present value, at a 5% discount, of $89.9-million, and a strong internal rate of return of 50%.
The company plans to disclose the total initial capital and pre-commercial production operating results for San Agustin when it releases its third-quarter 2017 operating and financial results on November 2.