Canadian miner Argonaut Gold has reported a 68% year-on-year drop in second-quarter adjusted income, with adjusted earnings a share down 73% to $0.02 each.
The miner’s production fell to 59 192 gold-equivalent ounces (GEOs), from 63 750 GEOs, while cash costs rose to $1 474/oz, from $876/oz and all-in sustaining costs jumped from $1 204/oz to $1 474/oz.
Argonaut attributed the 7% production decrease to lower ore tonnes mines, lower grades and lower recoveries at the La Colorada mine, in Mexico. However, CEO Larry Radford said that the miner was “slightly ahead” of its operational budget in terms of GEO production.
The higher costs were due to inflationary pressures on input costs.
Cash flows from operating activities before changes in non-cash operating working capital and other items totalled $23.3-million during the second quarter of 2022, a decrease from $39.3-million in the second quarter of 2021, primarily owing to fewer gold ounces sold and higher operating costs.
Commenting on Magino mine project, in Canada, Radford said the company was tracking well against the new capital estimate of C$920-million. By the end of June, $510.1-million and C$688.1-million had been spent and committed at the project.
“With the financing behind us and what I believe to be the right team now in place, I feel Argonaut is in a much better position to execute on our business plan.”
At the end of June, the Magino project was just over halfway complete, however, first gold may be delayed by a month to April 2023, the company cautioned.
Argonaut has received a delay claim from its process facility contractor Ausenco that the substantial completion milestone will be delayed by 23 days, owing to a province-wide strike of several trades, including crane operators and carpenters.
The miner noted that the delay claim has neither been accepted, nor captured in a definite schedule, but that it could impact the first gold pour.