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Argonaut Gold`s Magino Mine Financing secures poduction date for 2023

Dec 12, 2022

Building a mine during a pandemic is not an easy task. Argonaut Gold was up to the challenge as they continued on schedule for their production date in 2023.  
Northern Ontario has an excellent new team as the Magino Project heads into production. Their partnering First Nations and the northeastern Ontario communities have embraced the operation and continue to see the benefits. Argonaut announced Chuck Hennessey as Vice President, Canadian Operations effective August 29, 2022. Hennessey brings 35 years of mining and project leadership experience to the role. He has extensive experience in mining construction, operational readiness, plant commissioning and project ramp up.  Most recently, Hennessey worked for Centerra Gold Corporation as Vice President of Operations  and was general manager at two large Ontario mines. Hennessey has been credited with improving safety, cost and production at these mine sites and building relationships with First Nations partners.
Argonaut Gold also announced early November that it has completed the financing package to bring the Magino gold mine into production. The property, 40 km northeast of the town of Wawa, Ontario, is the site of an underground mine which has the same name it had when it opened just after the First World War. The mine operated sporadically over the decades and recovered 141,319 oz. of gold over that period of time.
The company has arranged a term loan of $200 million and a revolving credit facility of $50 million for development and construction of their open pit and conventional mill. Argonaut has hedged 25,000 gold ounces per quarter for the six quarters starting in the third quarter 2023 at a gold price of $1,860/oz. and 15,000 gold ounces per quarter for the 10 quarters starting in the first quarter 2025 at a gold price of $1,860/oz.
In addition, the company has hedged 10,000 gold ounces per quarter for the 10 quarters starting the first quarter 2025 at a gold price of $1,763/oz.
The company has also closed the sale of a 2% net smelter return royalty on Magino and the surrounding land package with Franco-Nevada (TSX: FNV) for $52.5 million and a $10 million equity private placement, for which approximately 34.7 million Argonaut common shares at a price of C$0.3931 per share will be issued to Franco-Nevada.
The Magino gold project has measured and indicated resources of 132.4 million tonnes grading 0.94 g/t gold for 4.0 million oz. and an inferred resource of 20.9 million tonnes at 0.78 g/t gold for 526,000 contained ounces.
Larry Radford, Argonaut President and CEO said, “Magino is a key driver of our future growth with a production potential of 142,000 ounces per year for the first five years of production at significantly lower life-of-mine cash costs of approximately $907 per ounce,”
Drilling results from Argonaut’s Magino Mine continue to return encouraging results. In September, results from deep drilling at Magino indicated high-grade intercepts. The ongoing drill program continues to intersect multiple zones of mineralization at depth along a strike length of 1500 meters reinforcing the underground expansion potential below the planned Magino open pit.
“The drill results further demonstrate the potential of a mineral resource expansion at depth at the Magino Project. We continue to receive assays, and our goal is to expand the mineral resource envelope to include an open pit and underground scenario to meaningfully extend the project’s mine life and increase mine profitability,” commented Larry Radford.


Magino pic
Photo: CIP Piping Installation


Magino Construction Update


Argonaut is continuing construction and has commenced operational readiness activities at the Magino Project. As of October, 2022 the C$920 million estimated cost to completion, C$626.0 million had been spent and C$726.0 million had been committed.
The Magino construction project was estimated at approximately 70% complete. The company has recently completed a progress report of construction activities and milestones which are bringing them that much closer to the completion of their build process.


Site Works & Construction Progress


Site works and construction milestones reached in September include:
• Process Building Foundation work including: SAG and Ball Mill slab pouring, SAG Mill backfill completion, pinion gear rough set and prep of ring gear, rebar installation for Grinding/Gravity transformer blast walls.
• Leach Tank and Thickener work including: installation of final tank panels for leach tanks including prep for hydrostatic testing and completion of leach tank bridges, handrails and grating.
• Electrical work throughout the plant site including: cable distribution and installation at the Reagent, TMF and Leach Tanks.
• Water Quality Control Pond work including: completion of doweling, continuing formwork and backfill.
• Tailings Management Facility (TMF) / Reagent / ADR area work including: filter installation in ADR, installation of Tailings pumps, completion of rebar and grade slab pour for Reagent area, completion of Stage 1A Embankment rockfill, completion of upstream toe hydrovac bulk cleaning, ongoing frost protection and liner placement, completion of structural steel installation in ADR area, continuing CIP pipe installation and rough set of area pumps.
• Liquefied Natural Gas (LNG) Power Plant work including: installation of the Engine Hall rebar, cladding, insulation and crane, completion of radiator foundation grouting and ongoing culvert work.
As preproduction mining continues Argonaut will continue with their Reverse Circulation (RC) ore control drilling, continued open pit de-watering and prepare for installation of the underground pump stations.
Argonaut’s team continues to engage with community members and all indigenous communities to ensure that their neighbours are well informed of all activities with the project.
Key highlights of Argonaut’s Environment, Permitting and Community Relations include:
• Effluent, surface water, air quality, groundwater and overburden ARD sampling and monitoring.
• Installation of pumps and pipelines for TMF water filling for startup.
• Ongoing spill prevention inspections and corrective actions.
• Participated in monthly meetings to share updates with Indigenous Partners to address environmental matters. This includes First Nation’s site engagement related to power line rerouting, the LNG Plant and the ECA permit.
• Continuous engagement with all Indigenous Partners on employment, training opportunities and general updates on the project.
• Hosted a Community Meet and Greet for the local community which welcomed over 250 individuals from Dubreuilville, Wawa and Sault Ste Marie. This included tours of the Administration building, bus tours of the mine site and a Community BBQ.
• Community food donations to Chadwick Home and the Wawa Food Bank.
• Working with local students for Co-Op placements, including two students from École Secondaire l’Orée des Bois in Dubreuilville, who are working with our Health and Safety team.

The Magino Project continues to make progress as they assemble and mobilize their teams and build infrastructure. Their HR/Recruitment and purchasing teams have recently attended and exhibited at the CEN CAN Expo in Thunder Bay to promote site and recruitment engagement activities.
As winter is around the corner in Northern Ontario the construction site will look to finalize pipeline corridor construction, execute winterization of site and continue with exploration drilling and start the field exploration program.


For this article and more visit the digital copy of: The Northern Ontario Mining Report

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Tags: Northern Ontario / Operational Updates / Gold / All Articles