Argonaut Gold, a Canadian-based gold producer, is anticipating meeting the low end of its production target for the year. However, the company faced challenges during the commissioning and ramp-up to commercial production at its newest gold mine, Magino.
Impact on Production
Despite achieving commercial production at the Magino mine in Ontario at the beginning of November, the slower-than-planned commissioning and ramp-up, along with lower-than-expected gold grades processed, have resulted in a production level below expectations.
Argonaut Gold estimates that its gold-equivalent production across its U.S. and Mexican operations will range between 160,000 and 165,000 ounces. This falls within a 5% to 10% increase above the higher end of Argonaut’s production guidance. However, due to the challenges faced at Magino, the cost of sales per ounce, cash cost per ounce, and all-in sustaining cost are expected to surpass previously set targets for the year.
In the third quarter of this year, Argonaut produced 53,094 ounces of gold, demonstrating an increase from 44,857 ounces during the same period last year. However, for the nine months ending in September, gold output decreased by 14% compared to the previous year, with a total of 133,074 ounces.
During the third quarter, gold equivalent production rose to 53,911 ounces from 45,939 ounces in the prior year. Meanwhile, gold sales experienced growth as well, reaching 54,571 ounces for the quarter compared to 38,639 ounces in the previous year.
Operations and Outlook
Apart from the Magino mine, which is expected to become Argonaut’s largest and most cost-effective operation, the company also operates the Florida Canyon mine in Nevada, as well as the La Colorada and San Agustin mines in Mexico.
Despite the challenges faced at Magino, Argonaut Gold remains optimistic about achieving its production target for the year. The company’s focus continues to be on optimizing operations and delivering sustainable results.