Name and Location
Magino gold project, Ontario, Canada.

Client
Argonaut Gold.

Project Description
An updated prefeasibility study (PFS) on the Magino property, based on an updated mineral resource estimate of 143-million undiluted tonnes in the indicated category and 43.3-million undiluted tonnes in the inferred category, has built on the study completed in January 2014 and more fully uses the resource.

The updated PFS envisages a significantly larger operation.

Based on metallurgical testwork results, a flowsheet for the processing facility has been developed, which includes primary crushing, followed by a grinding circuit, a gravity recovery circuit, a leach circuit, a carbon-in-pulp circuit, carbon-in-column gold recovery, electrowinning and smelting to produce gold doré.

The flowsheet also includes cyanide destruction and a conventional slurry tailings pond. The process facility is designed for an average feed of 30 000 t/d as opposed to 12 500 t/d in 2014, with total recovered ounces estimated at 2.8-million ounces, compared with 1.7-million ounces previously. A gold recovery of 93.5% is estimated based on metallurgical testwork.

Net Present Value/Internal Rate of Return
Compared with the January 2014 study, the project has a pretax net present value, at a 5% discount rate, of $610-million and a pretax internal rate of return of 27.6%, compared with 18.2%; and a payback of 2.6 years, compared with 4.2 years.

Value
The initial capital cost of the project has increased from $356-million in the 2014 study to $540-million in the updated PFS.

Duration
Not stated.

Latest Developments
Argonaut is working with the community and Aboriginal groups in the vicinity of the project and will continue to maintain open dialogue as the project advances.

As part of the process of making application for approval of the project, the Magino project description was submitted in mid-2013. The company has voluntarily halted the permit applications pending the outcome of the PFS and expects to restart that process while working with the provincial and federal permitting agencies and its neighbours to advance the project. The company will consider its alternatives to finance and develop the project to efficiently realise the full potential of this asset.

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 ext 104.