Mr. Pete Dougherty reports

ARGONAUT GOLD ANNOUNCES REVENUE OF $158.6M AND $42.7M IN CASH FLOW FROM OPERATIONS BEFORE CHANGES IN NON-CASH OPERATING WORKING CAPITAL FOR THE FULL YEAR 2015

Argonaut Gold Inc. has released its financial and operating results for the fourth quarter and year ended Dec. 31, 2015. All dollar amounts are expressed in U.S. dollars unless otherwise specified.

                         FINANCIAL DATA
        (In millions of U.S. dollars, except per share)

                                      Three months ended Dec. 31,
                                                2015        2014

Revenue                                   $     32.0  $     49.0
Gross profit (loss)(1)                    $     (4.4) $      2.9
Inventory writedown(1)                    $     (5.6)          -
Impairment of non-current assets(2)       $   (228.7) $     (0.5)
Net (loss)(1,2)                           $   (182.5) $     (7.2)
(Loss) per share -- basic and diluted     $    (1.18) $    (0.05)
Adjusted net income                       $      2.2  $      1.9
Adjusted earnings per share -- basic      $     0.01  $     0.01
Cash flow from operating activities
before changes in non-cash operating
working capital                           $      7.8  $      7.3
Cash and cash equivalents
Gold production and cost data
GEOs loaded to the pads(3)                    55,769      62,823
GEOs projected recoverable(3.4)               28,823      38,093
GEOs produced(3)                              30,399      44,312
GEOs sold(3)                                  29,337      41,172
Average realized sales price              $    1,099  $    1,196
Cash cost per gold ounce sold             $      733  $      801
All-in sustaining cost per gold ounce
sold                                      $      865  $      962

                                         12 months ended Dec. 31,
                                                2015        2014

Revenue                                   $    158.6  $    166.3
Gross profit (loss)(1)                    $    (13.8) $     22.7
Inventory writedown(1)                    $    (25.9)          -
Impairment of non-current assets(2)       $   (228.7) $     (0.5)
Net (loss)(1,2)                           $   (202.7) $     (4.2)
(Loss) per share -- basic and diluted     $    (1.31) $    (0.03)
Adjusted net income                       $      3.9  $      6.3
Adjusted earnings per share -- basic      $     0.03  $     0.04
Cash flow from operating activities
before changes in non-cash operating
working capital                           $     42.7  $     42.5
Cash and cash equivalents                 $     45.9  $     51.4
Gold production and cost data
GEOs loaded to the pads(3)                   214,662     241,656
GEOs projected recoverable(3.4)              119,256     140,563
GEOs produced(3)                             139,059     136,706
GEOs sold(3)                                 136,874     132,976
Average realized sales price              $    1,168  $    1,256
Cash cost per gold ounce sold             $      755  $      771
All-in sustaining cost per gold ounce
sold                                      $      894  $      969

(1) Includes a non-cash impairment writedown of $5.6-million 
($3.8-million net of tax) and $25.9-million ($17.8-million net 
of tax) for the three and 12 months ended Dec. 31, 2015, 
respectively, related to work-in-process inventory at the El 
Castillo mine, valuing inventory at $1,060 per ounce as at Dec. 
31, 2015.
(2) Includes a non-cash impairment loss on non-current assets of 
$228.7-million ($167.0-million  net of tax) and deferred tax 
expense related to the weakening of the Mexican peso of 
$10.0-million and $15.6-million for the three and 12 months 
ended Dec. 31, 2015, respectively.
(3) Gold-equivalent ounces (GEO) are based on a conversion ratio 
of 55 to 1 (based on the three-year historical average for the 
period prior to 2015) for silver to gold and is the referenced 
ratio for the 2015 results throughout this release.
(4) Recoverable ounces -- El Castillo expected recovery rates: 
run-of-mine oxide 50 per cent, crushed oxide 70 per cent, ROM 
transition 40 per cent, crushed transition 60 per cent, crushed 
sulphides argillic 30 per cent and crushed sulphides silicic 
17 per cent; La Colorada expected recovery rates: gold 60 per 
cent and silver 30 per cent.

Financial highlights -- 2015:

• Revenue of $158.6-million from sales of 136,874 GEOs (gold-equivalent ounces) at an average price of $1,168 per gold ounce for the full year and revenue of $32.0-million from sales of 29,337 GEOs at an average price of $1,099 per gold ounce for the fourth quarter;
• Adjusted net income of $3.9-million for the full year and $2.2-million for the fourth quarter. Net loss of $202.7-million for the full year and $182.5-million for the fourth quarter primarily due to the non-cash impairment of non-current assets;
• Cash balance of $45.9-million as of the end of the year, a reduction of $5.5-million from the beginning of the year, including the payment of $20.0-million to Silver Standard in May, 2015, for the completion of the San Agustin purchase;
• Cash flow from operations before changes in non-cash working capital of $42.7-million for the full year and $7.8-million for the fourth quarter;
• Capital investments (mineral properties, plant and equipment) of $37.0-million for the full year and $5.2-million for the fourth quarter.

Company highlights -- 2015

Corporate highlights:

• Record GEO production of 139,059 for the full year, which is an increase of 2 per cent over the previous year. GEO production for the fourth quarter was 30,399, a decrease of 31 per cent versus the fourth quarter of 2014;
• Cash costs were $755 per gold ounce sold for the full year and $733 for the fourth quarter;
• All-in sustaining cost per gold ounce sold of $894 for the full year and $865 for the fourth quarter.

El Castillo:

• Annual production of 80,497 GEOs and fourth quarter production of 16,731 GEOs;
• During the year and fourth quarter, 104,399 and 21,938 contained gold ounces loaded on the leach pads, respectively;
• Completion of construction and placement of mineralized material on leach pad 3b east.

La Colorada:

• Record annual production of 55,056 gold ounces and 192,837 silver ounces for 58,562 GEOs. Fourth quarter production was 12,866 gold ounces and 44,092 silver ounces for 13,668 GEOs;
• 80,228 contained gold ounces and 1,651,916 contained silver ounces were loaded on the leach pads during the year, and 23,599 contained gold ounces and 562,733 contained silver ounces were loaded on the leach pads during the fourth quarter;
• Average crusher throughput for the year and fourth quarter of approximately 14,500 and 16,000 tonnes per day, respectively;
• Construction completed on the 9A leach pad and phase 2 of leach pad 6;
• Finalized reprocessing of historic leach pad material.

Project updates:

• San Agustin preliminary economic assessment;
• Magino drilling and prefeasibility study;
• San Antonio cost update.

Chief executive officer commentary

Pete Dougherty, president and chief executive officer of Argonaut Gold, stated: "I am proud of what the team has accomplished. We had a record year of production as a company. We met our production guidance for the year, even with lower grades than planned at El Castillo. At La Colorada, throughput and production exceeded expectations. We were able to increase cash on the balance sheet in the second half of the year and were only slightly down year over year, even after the $20-million final payment to complete the purchase of the San Agustin project. We expect to make a construction decision on this project in the latter part of 2016. We were able to negotiate key contracts and streamline the business to allow us to plan for fully loaded costs (including operating, capital, taxes and corporate administrative costs) to be less than $1,000 per ounce for 2016. This gives us tremendous leverage to a rise in gold price. Our share price did not perform as we would have liked during 2015, but with positive cash flow generation and almost no debt, we are well positioned to meet our 2016 goals and reach valuation parity with our peers.

"With regards to our development projects, we are striving to ensure that all three of our development projects are shovel ready. We recently released the results of the updated PFS for the Magino project and the results make this project stand out as one of the top undeveloped gold assets in North America from a payback, internal-rate-of-return and net-present-value perspective. We are exploring ways to unlock the value of this project through responsible financing options. We submitted permit applications for the San Agustin project and have developed plans to link the project with El Castillo's infrastructure, thereby reducing the upfront capital and improving the cost structure. We expect to make a construction decision on this project in 2016. At San Antonio, we continue to be highly active in engaging both the local communities and key officials at federal, state and local levels to create the conditions necessary to move the project forward. We are excited about the opportunities for the company in 2016, and will continue to execute upon our commitments, to preserve our balance sheet and protect our shareholders' investments until market conditions merit advancing the projects."

Financial results -- fourth quarter 2015

Revenue for the three months ended Dec. 31, 2015, was $32.0-million, a decrease from $49.0-million for the three months ended Dec. 31, 2014. During the fourth quarter of 2015, gold ounces sold totalled 28,443 at an average realized price per ounce of $1,099 (compared with 40,277 gold ounces sold at an average price per ounce of $1,196 during the same period of 2014).

Production costs for the fourth quarter of 2015 were $21.6-million, a decrease from $33.1-million in the fourth quarter of 2014 primarily due to the decreased gold ounces produced. Cash cost per gold ounce sold decreased to $733 in the fourth quarter of 2015 from $801 in the same period of 2014, principally due to a decrease in mine operating costs.

Net loss for the fourth quarter of 2015 was $182.5-million or $1.18 per basic share, an increase from the net loss of $7.2-million or five cents per basic share for the fourth quarter of 2014. The increase in the net loss was due principally to the impairment loss on non-current assets ($167.0-million net of tax), the writedown of the leach pad inventory value ($3.8-million net of tax) and deferred tax expense related to the weakening of the Mexican peso of $10.0-million.

Cash increased by $2.2-million as compared with the previous quarter to $45.9-million as of Dec. 31, 2015. Cash generated from operating activities before changes in non-cash working capital in the fourth quarter of 2015 was $7.8-million. Cash spent toward capital expenditures in the fourth quarter was $5.2-million, primarily for deferred stripping at the El Castillo and La Colorada mines.

Financial results -- year-end 2015

Revenue for the year ended Dec. 31, 2015, was $158.6-million, a decrease from $166.3-million during the year ended Dec. 31, 2014. Gold ounces sold totalled 132,618 at an average realized price per ounce of $1,168 and silver ounces sold totalled 234,080 at an average realized price per ounce of $16 (compared with 129,148 gold ounces sold at an average price per ounce of $1,256 and 210,595 silver ounces sold at an average price of per ounce of $19 during the same period of 2014).

Production costs for the year ended Dec. 31, 2015, were $103.9-million, comparable with $103.6-million in 2014. Cash cost per gold ounce sold was $755 in 2015, comparable with $771 in 2014.

Cash spent toward capital expenditures for the year was $37.0-million, primarily for leach pad construction, installation of crushing equipment, capitalized stripping, mining equipment purchases and equipment overhauls.

The company provided updated guidance in the third quarter of 2015 of between 135,000 to 145,000 GEOs of production at a cash cost per gold ounce sold at the high end or slightly over the range of $700 to $750 with total capital spending of $37-million, compared with the company's actual 2015 results of 139,059 GEOs at a cash cost per gold ounce sold of $755 with total capital expenditures of $37-million.

Fourth quarter and full year 2015 El Castillo operating statistics

Summary of production results at El Castillo

The gold ounces loaded to the pads in the fourth quarter of 2015 were 42 per cent lower compared with fourth quarter of 2014 and 34 per cent lower for the full year 2015 compared with the full year for 2014, due to lower gold grades per tonne. Ounces loaded to the pads were also impacted by a reduced amount of tonnes of mineralized material loaded to the pads resulting from the discontinuance of hauling ore directly to the leach pads.

GEO production of 16,731 ounces in the fourth quarter of 2015 was 40 per cent lower compared with the fourth quarter of 2014. As expected according to the mine plan, production for the quarter was largely impacted by the lower mineralized material tonnes and lower grades mined.

GEO production of 80,497 was 14 per cent lower for the full year 2015 compared with the full year 2014, impacted by the lower tonnes and grade of mineralized material mined.

Fourth quarter and full year 2015 La Colorada operating statistics

Summary of production results at La Colorada

As anticipated this year, the company processed more tonnes from the historic leach pads, therefore, the total tonnes of mineralized material mined decreased by 6 per cent for the fourth quarter of 2015 compared with the fourth quarter of 2014 and 13 per cent for the full year 2015 compared with the full year of 2014. However, during the fourth quarter of 2015 processing of the historic material was completed. Going forward the feed material will be entirely from the mine. The strip ratio has decreased as the company continues to advance the pit. As noted, the crusher throughput from material sourced from both locations exceeded expected levels. As a result, production of 13,668 GEOs was achieved in the fourth quarter of 2015, a decrease of 17 per cent over the fourth quarter of 2014 production of 16,442 GEOs. The decrease in the production for the fourth quarter versus the prior year was a result of lower grades and longer leach cycle times due to location of placement of material on higher lifts of the leach pads. The full-year production in 2015 was 58,562 GEOs versus 43,327 GEOs for the full year of 2014, an increase of 35 per cent.

Chief operating officer comments

Richard Rhoades, COO of Argonaut Gold, stated: "As expected, production at El Castillo was down for the quarter due to lower grades being processed. Despite these challenges, the team has continued to show the ability to reduce the heap-leach pad ounce inventory and achieve planned production. We achieved our production goals for the year and reduced costs throughout the year, setting us up for a positive 2016. As mentioned previously, the grades are anticipated to increase in the second quarter of 2016 as production begins in the northwest pushback in the pit.

"At the La Colorada mine, the crushing circuit continued to perform well, averaging 16,057 tonnes per day in the fourth quarter of 2015. As of November, we operated with mining solely from the La Colorada/Gran Central pit, as we finalized the processing of the historic leach pad material. Construction of the initial phase of the Northeast leach pad is ready to commence.

"As a whole, we achieved a production record this year through the efforts to continuously improve the operations and become more efficient in all aspects of production. Due to these efforts in 2015, we look forward to a successful 2016 as we continue to focus on the safety of our employees, the relationship with the communities and the natural environment in which we operate and work to provide the best operational results possible for our shareholders."

Guidance and expansion projects for 2016

The company provided guidance for 2016 of between 130,000 and 140,000 GEOs of production (based on the three-year historical average silver-to-gold ratio of 65 to 1) at a cash cost per gold ounce sold of $750 to $800, and $23-million for capital expenditures and exploration initiatives. Major capital expenditures in 2016 are expected to include approximately $4-million at El Castillo, $14-million at La Colorada, $1-million at San Antonio, $1-million at San Agustin (excluding construction capital should a construction decision be made) and $1-million at Magino. Exploration and other capital expenditures in 2016 are expected to amount to approximately $2-million.

Company progress

Mr. Dougherty added: "We are pleased with the results for 2015. We achieved record production, advanced the development of our projects and completed a majority of the remaining capital investments at our operations, while maintaining a strong cash position. The company has announced its annual production guidance for 2016 of 130,000 to 140,000 GEOs with cash costs of $750 to $800 per gold ounce sold, resulting in another year of consistent performance from our operations. Due to declining gold prices in the second half of 2015, the company is prepared to operate in a $1,000-gold-price environment. If we continue to experience a stronger gold price, we will have greater flexibility and tremendous leverage as we move forward.

"We are in a favourable position with positive cash flow and no debt. The company will continue to advance the development projects to a shovel-ready stage, but we also recognize the importance of a strong balance sheet and the need to protect our shareholders investments as we prepare to advance these projects."

Argonaut Gold Q4 and full year 2015 financial results conference call and webcast -- March 16, 2016

The Q4 and full year 2015 financial results call is scheduled to take place on March 16, 2016, at 8:30 a.m. ET. Details for the call-in participation and webcast are as follows.

Q4 and full-year 2015 conference call information for March 16, 2016:

Toll-free (North America):  1-877-223-4471

International:  1-647-788-4922

Webcast:  the company's website

Q4 and year-end conference call replay:

Toll-free replay call (North America):  1-905-694-9451

International replay call:  1-800-408-3053

Passcode:  4950688

This press release should be read in conjunction with the company's audited consolidated financial statements for the year ended Dec. 31, 2015, and associated MD&A, which are available from the company's website in the investors section under financial filings and under the company's profile on SEDAR.

Technical information and mineral properties reports

The technical information contained in this document has been prepared under the supervision of, and has been reviewed and approved by, Thomas H. Burkhart, Argonaut's vice-president of exploration, a qualified person as defined by National Instrument 43-101.

We seek Safe Harbor.