Mr. Pete Dougherty reports
ARGONAUT GOLD ANNOUNCES DRILL RESULTS AT THE LA COLORADA MINE'S EL CRESTON DEPOSIT THAT SIGNAL POTENTIAL OPEN PIT EXPANSION
Argonaut Gold Inc. has completed a 22-hole reverse-circulation (RC) drill program totalling 5,139 metres at the La Colorada mine in Sonora, Mexico. The drilling was designed to test for the downdip extension of potential open-pit mineralization at the El Creston deposit. The company believes the results of the 2017 drill program, coupled with the results of 70 RC holes drilled during 2016 (see press release dated Oct. 3, 2016), have the potential to expand the El Creston open pit beyond its current design.
The recently completed El Creston drill program was mainly designed to convert inferred resource projected downdip to a measured and indicated resource. All 22 holes were spaced along the northern fringes of the historical El Creston pit and drilled to intersect mineralized zones that dip northerly below the currently designed pit limits. In addition to upgrading inferred resources and confirming indicated resource, the 2017 drill program was intended to further derisk the project prior to the commencement of mining. The associated table illustrates the El Creston deposit mineral resource estimate year over year that was most recently updated at Dec. 31, 2016, and shows the high conversion rate of inferred resource to indicated resource through the 2016 drill program as well as the ability to discover new inferred resource. The results from the 2017 drill program are not included in the mineral resource estimate.
EL CRESTON MINERAL RESOURCE ESTIMATE -- 2015 VERSUS 2016 (1)
El Creston Tonnes Au grade Au ounces Ag grade Ag ounces
deposit Class (000) (g/t) (000) (g/t) (000)
Dec. Indicated 12,869 0.61 251 12.5 5,154
31, 2015 Inferred 487 0.92 14 17.9 280
Dec. Indicated 13,097 0.63 264 16.5 6,937
31, 2016 Inferred 2,381 0.82 63 12.1 923
(1) The El Creston deposit Dec. 31, 2015, mineral resource estimate was updated internally and
reviewed by qualified persons Mike Lechner and Richard Rhoades. The mineral resource update used
a gold price of $1,300 and a silver price of $18. A gold equivalent cut-off grade of 0.106 g/t
was used.
The El Creston deposit Dec. 31, 2016, mineral resource estimate was updated internally and reviewed by qualified persons Mr. Lechner and Mr. Rhoades. The resource update used a gold price of $1,400 and a silver price of $20. A cut-off grade of 0.11 gram per tonne gold was used and is supported by the current operating costs. The mineral resources are confined within a conceptual pit using MineSight software and slope templates developed by Golder Associates.
Pete Dougherty, president and chief executive officer, commented: "The results of the drill campaigns over the past 11 months have further delineated and derisked the El Creston deposit and give us further confidence in the potential to expand the El Creston open pit beyond its current design. These results substantiate the company's decision to accelerate stripping at El Creston and is an example of how brownfields exploration continues to yield positive results at La Colorada."
Gold samples were capped at 10 g/t Au. The associated table illustrates key highlight holes from the 2017 drill program. For a full table of all drill results, plan view maps and cross-sections, please visit the company's website.
KEY HIGHLIGHT HOLES
Hole From To Interval Au Ag
17-LCRC-479 (m) (m) (m) (g/t) (g/t)
interval 161.5 166.1 4.6 0.32 1
interval 175.3 190.5 15.2 0.62 5
including 179.8 182.9 3.0 1.69 8
interval 195.1 214.9 19.8 0.72 10
including 201.2 204.2 3.0 2.32 17
including 211.8 213.4 1.5 1.93 7
interval 245.4 257.6 12.2 0.44 5
interval 265.2 271.3 6.1 0.33 5
Hole From To Interval Au Ag
17-LCRC-481 (m) (m) (m) (g/t) (g/t)
interval 189.0 192.0 3.0 0.15 4
interval 199.6 240.8 41.1 1.15 6
including 199.6 201.2 1.5 3.81 2
including 225.6 230.1 4.6 6.57 24
including 231.6 233.2 1.5 2.62 7
Hole From To Interval Au Ag
17-LCRC-482 (m) (m) (m) (g/t) (g/t)
interval 100.6 106.7 6.1 0.16 10
interval 147.8 166.1 18.3 0.26 33
interval 201.2 208.8 7.6 0.49 2
interval 213.4 240.8 27.4 0.96 5
interval 248.4 251.5 3.0 0.65 9
interval 262.1 278.9 16.8 2.69 3
including 262.1 268.2 6.1 6.86 5
Hole From To Interval Au Ag
17-LCRC-483 (m) (m) (m) (g/t) (g/t)
interval 123.4 128.0 4.6 0.21 1
interval 150.9 153.9 3.0 0.28 11
interval 184.4 243.8 59.4 1.24 6
including 184.4 185.9 1.5 7.39 7
including 189.0 195.1 6.1 3.32 8
including 219.5 224.0 4.6 2.85 6
including 227.1 228.6 1.5 10.00 10
interval 248.4 249.9 1.5 6.89 5
interval 262.1 268.2 6.1 0.19 10
Hole From To Interval Au Ag
17-LCRC-484 (m) (m) (m) (g/t) (g/t)
interval 135.6 137.2 1.5 1.08 2
interval 155.4 157.0 1.5 1.30 3
interval 179.8 182.9 3.0 0.89 6
interval 190.5 242.3 51.8 0.52 4
interval 251.5 253.0 1.5 0.22 14
interval 259.1 262.1 3.0 0.67 1
Hole From To Interval Au Ag
17-LCRC-485 (m) (m) (m) (g/t) (g/t)
interval 106.7 115.8 9.1 0.38 28
interval 184.4 233.2 48.8 0.97 12
including 208.8 211.8 3.0 1.56 5
including 217.9 224.0 6.1 1.74 3
including 231.6 233.2 1.5 10.00 24
interval 245.4 268.2 22.9 0.32 4
Hole From To Interval Au Ag
17-LCRC-486 (m) (m) (m) (g/t) (g/t)
interval 167.6 222.5 54.9 0.89 5
including 170.7 172.2 1.5 10.00 9
including 196.6 198.1 1.5 3.08 13
Hole From To Interval Au Ag
17-LCRC-489 (m) (m) (m) (g/t) (g/t)
interval 201.2 207.3 6.1 0.24 81
interval 214.9 251.5 36.6 1.22 12
including 217.9 221.0 3.0 6.36 21
including 234.7 237.7 3.0 4.83 22
interval 288.0 345.9 57.9 1.00 4
including 298.7 309.4 10.7 4.22 3
Hole From To Interval Au Ag
17-LCRC-490 (m) (m) (m) (g/t) (g/t)
interval 152.4 285.0 132.6 1.29 24
including 155.4 157.0 1.5 4.17 27
including 166.1 170.7 4.6 8.19 44
including 184.4 187.5 3.0 7.05 274
including 268.2 272.8 4.6 3.64 103
Hole From To Interval Au Ag
17-LCRC-492 (m) (m) (m) (g/t) (g/t)
interval 166.1 181.4 15.2 1.32 4
including 167.6 169.2 1.5 10.00 19
interval 185.9 213.4 27.4 1.01 16
including 195.1 199.6 4.6 4.86 25
interval 217.9 222.5 4.6 3.00 70
including 219.5 221.0 1.5 6.53 85
interval 228.6 236.2 7.6 0.35 22
Tom Burkhart, vice-president of exploration, commented: "The El Creston open pit exploits a large structural controlled vein system that comes to surface and dips to the north. This system was an important historical producer in the district and an obvious drill target beneath the designed pit. We are very pleased that the 2017 drill program confirms what we suspected and are optimistic that these encouraging results will positively impact the continuing development of the El Creston deposit."
Qualified person comments/quality control procedures
The preparation of this press release was supervised and approved by Thomas Burkhart, Argonaut Gold's vice-president of exploration and a qualified person under National Instrument 43-101. Mr. Burkhart also reviewed the reverse circulation and on-site sample preparation procedures at La Colorada.
For sample analysis, the company utilizes a system of quality assurance/quality control that includes insertion and verification of standards, blanks and duplicates consistent with industry standards.
Samples from the El Creston deposit are collected at site by Argonaut's personnel and transported to ALS-Chemex preparation laboratory in Hermosillo, where samples are prepared and pulps sent for assay in ALS-Chemex's Vancouver, B.C., laboratory. Samples are analyzed for gold by fire assay and atomic absorption finish (Au-AA23 assay code; 0.005-to-10-part-per-million detection limit) plus silver by aqua regia and atomic absorption finish (0.1 to 100 ppm detection limit). Samples over 10 g/t Au are assayed with gravimetric finish (assay code Au-GRA21).
Argonaut is not aware of any legal, political, environmental or other risks that could materially affect the potential development of the El Creston deposit other than those set out in its annual information form filed on SEDAR.
For further information regarding the La Colorada mine, please see the technical report titled National Instrument 43-101 preliminary economic assessment La Colorada project, Sonora, Mexico, effective Oct. 15, 2011.
About Argonaut Gold
Inc.
Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets are the production-stage El Castillo mine and the construction-stage San Agustin project in Durango, Mexico, and the production-stage La Colorada mine in Sonora, Mexico. Advanced exploration-stage projects include the San Antonio project in Baja California Sur, Mexico, and the Magino project in Ontario, Canada. The company also has several exploration-stage projects, all of which are located in North America.
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