Name and Location
Magino gold project, Ontario, Canada.

Client
Argonaut Gold.

Project Description
The Magino mine property is a past producing underground gold mine, 40 km north-east of Wawa, in Ontario. The property consists of seven patented mining claims, four leased mining claims and 69 unpatented mining claims totalling 2 205 ha.

The December 2013 prefeasibility study (PFS) on the project envisages an openpit mine, with a primary ore crusher, a conveyor, a crushed ore stockpile, a process plant to extract the gold, a low-grade ore stockpile, waste rock and tailings management facilities, explosives magazines, camp accommodation, administration offices, laboratory facilities, nonmining waste facilities, maintenance facilities and warehouses.

Updated results on the 2013 PFS released in September have resulted in improved economics, even at a lower gold price.

Net Present Value/Internal Rate of Return
According to the updated PFS, the project’s internal rate of return (IRR) has improved from 18% to 29% using an unchanged price of $1 250/oz gold. Using a gold price of $1 100, the project has a pretax IRR of 25%.

The updated PFS has indicated a pretax net present value (NPV), at a 5% discount rate, of $336-million at a gold price of $1 100.
At a gold price of $1 250/oz, the company estimates a pretax NPV of $517-million and IRR of 34%.

Value
The company has updated the capital estimates based on current mining fleet costs, calling for initial capital of $302-million, as opposed to the 2013 PFS estimate of $356-million and life-of-mine sustaining capital of $49-million, down from the previous estimate of $58-million.

Duration
Not stated.

Latest Developments
The 2015 Magino drilling results and optimisation studies will be incorporated into an updated mineral resource and updated PFS for the project, which is expected to be released in late 2015.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Argonaut Gold corporate development officer Curtis Turner, tel +1 775 284 4422, fax +1 775 284 4426 or email curtis.turner@argonautgold.com.