Argonaut Gold on Track To Reach 2022 Goals

Argonaut Gold reported its 2Q22 financial and operating results, highlighting that despite lower ore extraction, it expects to achieve its 2022 production guidance. Additionally, the company plans to adjust its 2022 cost guidance, as inflation is driving up the prices of key resources.

In a press release, the company highlighted that it produced 59,192oz of gold equivalent during 2Q22. Production fell 7 percent due to the fewer tons mined, lower silver and gold grades, as well as lower recoveries from its Mexican asset, the La Colorada mine in Sonora. La Colorada produced 23 percent fewer gold equivalent oz at a 65 percent higher cash cost per gold oz sold compared to 2Q21.

In addition, Argonaut reported higher cash costs due to higher strip ratios at El Castillo, La Colorada and Florida Canyon, which cost the company more resources. The company announced that despite lower production, it expects to reach its 2022 production guidance. Additionally, as inflationary pressures continue to increase mining costs, it will adjust its 2022 cost guidance to a higher figure.

Larry Radford, President and CEO, Argonaut Gold, said "we were slightly ahead of our operational budget in terms of gold equivalent oz production during the second quarter. At a slightly higher cost than budgeted due to inflationary pressures on input costs. We recently put a financing package together that we believe fully finances the Magino construction project. With the financing behind us and what I believe to the right team now in place, I feel Argonaut is in a much better position to execute on our business plan."

Additionally, Argonaut reported that its 2Q22 revenues were US$111.4 million, which is less than the US$120.2 million in 1Q21. Additionally, 57,344oz of gold were sold at an average price of US$1,884/oz, which is less than the 63,000oz sold at an average price of US$1,812/oz in 2Q21. Argnaut explained that the sale decreased due to lower production and sales of La Colorada and El Castillo mines.

In addition, the company highlighted that it has strengthened its ESG approach in 1H22 by providing mining training courses and a children's safety course, as well as installing a new chlorinator for a pipeline in La Colorada to improve the water quality. In addition, the La Colorada mine has been selected to implement a pilot plan by the Center of Excellence for the Extraction and Energy Sectors of the UN Economic Commission for Europe, which seeks to further align the mining sector with UN standards.