Name of the Project
Magino gold project.
Location
The project is located 40 km north-east of Wawa, Ontario, Canada.
Project Owner/s
Canada-based mining company Argonaut Gold.
Project Description
Magino is a past-producing underground gold mine.
The project has total proven and probable reserves of 59-million ounces grading 1.13 g/t gold. A feasibility study on the project has identified it as a strategic, long-life asset.
Envisaged is a 115 700 oz/y gold operation with a 17-year mine life. Average gold production of 150 000 oz/y is expected over the first five years.
Openpit mining operations will use a fleet comprising 16 m3 front shovels, a 13 m3 front-end loader and 140 t haul trucks. This fleet will be supplemented by drills and graders, as well as track and rubber-tyre dozers.
A 10 000 t/d processing facility has been selected for the feasibility study, compared with the 30 000 t/d plant presented in the January 2016 prefeasibility study.
The adopted flowsheet includes primary crushing, a single-stage semiautogenous grinding mill, gravity recovery circuit, cyanide leach and carbon-in-pulp gold adsorption circuit with cyanide recovery and detoxification, as well as thickening, before tailings are discharged to a tailings facility.
Potential Job Creation
During construction, about 500 to 600 jobs will be created and about 350 employees will be engaged as part of ongoing operations.
Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of $408-million and an internal rate of return of 22.6%, with a payback of 3.8 years.
Capital Expenditure
In December 2021, Argonaut Gold announced a new capital cost estimate of C$800-million for the Magino project – a C$290-million increase on the previous estimate.
Planned Start/End Date
Argonaut envisions a two-year construction period, with first gold production at Magino expected to start during the first half of 2023.
Latest Developments
Argonaut is still reviewing the final cost estimate for the Magino project. Argonaut CEO Larry Radford has warned that the project's costs could increase by a further C$120-million.
This compares with the C$800-million estimate that Argonaut provided before Radford stepped in as CEO in March 2022. Radford was brought in after the previous CEO quit in the wake of the first major cost overrun at Magino in December.
The project was initially expected to cost C$510-million and the latest preliminary estimate means that the costs have surged by 80%.
Argonaut is advancing financing options, in parallel with strategic alternatives, to keep Magino on schedule for its first gold by the end of March 2023.
“Our goal is to have a solution in place by the end of the second quarter 2022,” Radford has said.
Should neither a financing nor a strategic alternative be available promptly, Argonaut might have to amend or adjust its plans for the construction project.
The company has also warned that certain subcontractors have been exposed to current and threatened labour actions, which could give rise to delays.
Estimates are that the project is about 50% complete.
Key Contracts, Suppliers and Consultants
Ausenco Engineering Canada (engineering, procurement, construction and commissioning).
Contact Details for Project Information
Argonaut Gold, tel +1 775 284 4422, fax +1 775 284 4426 or email info@argonautgold.com.