TSX-listed Argonaut Gold produced 44 712 gold-equivalent ounces (GEOs) in the third quarter, which is a 31% improvement on the prior-year period’s 34 165 GEOs, but the company said on Thursday that it was tracking towards the lower-end of its 2019 production guidance.
The guidance for the year is to produce between 200 000 and 215 000 GEOs. Argonaut said it would produce between 190 000 and 200 000 GEOs during 2019.
Given the expectation that GEO production for the year will be near or slightly under the low end of previous guidance, the company now expected 2019 cash costs of between $900/oz and $925/oz of gold sold. It previously was $800/oz to $900/oz.
In addition, all-in sustaining costs would be between $1 125/oz and $1 150/oz sold, from a previous guidance of $1 025/oz to $1 125/oz, owing to fewer gold ounces sold.
During the three months ended September, Argonaut posted revenue of $66.8-million, an increase from $41.3-million from the prior-year period. During the third quarter of 2019, gold ounces sold totalled 44 303 oz at an average realised price of $1 474/oz, compared with 33 179 oz of gold sold at an average realised price of $1 212/oz during the same period of 2018.
Gold ounces sold for the three months ended September 30, 2019 increased compared to the same period in 2018, primarily due to an increase in gold ounces sold at the El Castillo and La Colorada mines as a result of increases in grade, ore tonnes to pad and recovery.
"Our net cash position increased by $11.7-million during the quarter and as the quarter progressed, we started to see a rebound in operations after a challenging second quarter earlier this year. We were able to stack considerable ounces to the leach pads, which should lead to a strong fourth quarter in terms of production.
“As previously guided, we expect crushing throughput at San Agustin to ramp up to 30 000 t/d during the fourth quarter after achieving nearly 25 000 t/d in the third quarter,” said CEO Pete Dougherty.
Argonaut’s net income improved to $4.9-million, from a loss of $2.7-million a year earlier and its adjusted net income came to $6.5-million, from an adjusted loss of $1.0-million.
The company plans to invest between $50-million and $55-million in capital programmes during 2019, of which about $41-million was spent during the first nine months of 2019.