Argonaut Gold Inc. the New Kid on the Northern Ontario Gold Mining Block

By Frank Giorno

Argonaut Gold Inc. a Vancouver, B.C-based company, is a relatively new player in the Northern Ontario gold mining scene, although it has run five mines in Mexico. The Prodigy-Magino Mine near Wawa, Ontario will be their first gold mine in Ontario.

“The goal of Argonaut Gold is to create the next quality, mid-tier gold company in the Americas,” said Curtis K.Turner, Corporate Development Officer, addressing the session on Gold Mining In the Americas at the PDAC Convention in Toronto.

Argonaut Gold recently entered the Ontario mining scene purchasing Prodigy Gold Inc.’s Magino Mine near Dubreuilville, Ontario. The purchase received final approval to proceed from the British Columbia Supereme Court on December 7, 2012 and was completed on February, 15, 2013. The transaction was valued at $341 million gross, net of cash $300 million.

The Magino mine property is a former underground gold mine located 40 kilometres northeast of Wawa, Ontario, approximately 14 kilometres southeast of the town of Dubreuilville. The property has seven patented mining claims, four leased mining claims and 69 unpatented mining claims totaling 2,204.495 hectares. Magino was evaluated by Prodigy as an open-pit mining opportunity with the potential for deeper, higher grade gold production.

Based on its Preliminary Economic Assessment (PEA as of November 12, 2011), Magino has a life of mine average gold production of 249,000 oz. per year over an 11 year life. Over that time Argonaut Gold Inc. projects a total of 2.6 million ounces at a grade of 1.15 g/t.

The mine will operate as an open pit mine producing 20,000 milled tonnes per day and achieve 95 percent recovery. It is expected the costs of production will be $461 oz.

In 2012 an additional 89,000 metres of drilling in 340 holes was completed to advance the project toward a proposed pre-feasibility study. The drilling consisted of in-fill drilling in the pit and condemnation drilling for site layout. In-fill drill spacing averaged of 25 metres within the constrained pit. The drilling campaign also outlined a new zone of mineralization in the southeast corner of the drilling zone.

“The project will be of value not only for the shareholders but also for the surrounding community,” said Brian Maher, CEO of Prodigy Gold just prior to the final sale to Argonaut Gold .

“This proposed mining operation could have 200 to 300 employees, good high-paying jobs, in an economically depressed part of Ontario” Maher said.

“We think the benefit we can bring to the community and our shareholders is one of the things that makes this project not only unique but really one of the better development opportunities anywhere in the western hemisphere,” he added.

In addition to the Magino Mine, Argonaut also runs two operating mines in Mexico El Castillo and La Colorada. It also has another mine - the San Antonio Mine which is in the late exploration stage.