Mr. Dan Symons reports

ARGONAUT GOLD ANNOUNCES $23 MILLION BOUGHT DEAL PUBLIC OFFERING OF FLOW-THROUGH COMMON SHARES

Argonaut Gold Inc. has entered into an agreement with a syndicate of underwriters led by Cormark Securities Inc., pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 8,156,100 common shares to be issued as flow-through shares with respect to Canadian development expenses (CDE) within the meaning of the Income Tax Act (Canada) and the regulations thereunder in force as of the date hereof at a price of $2.82 per CDE flow-through share for gross proceeds to the company of approximately $23-million.

The underwriters also have an option to purchase that number of additional CDE flow-through shares equal to 15 per cent of the number of CDE flow-through shares sold pursuant to the offering at the CDE offering price, for market-stabilization purposes and to cover overallotments for a period expiring 30 days after the date of closing.

The proceeds from the sale of the CDE flow-through shares will be used on development expenses on the Magino project as permitted under the Tax Act to qualify as CDE. The company will renounce all the CDE development expenses in favour of the subscribers of the CDE flow-through shares effective on or before Dec. 31, 2021.

The CDE flow-through shares will be offered by way of short-form prospectus in each of the provinces of Canada, except for Quebec, pursuant to National Instrument 44-101 -- Short Form Prospectus Distributions, and some may be resold in the United States pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended, and in such other jurisdictions outside of Canada and the U.S. as agreed to by the company, in each case in accordance with all applicable laws and provided that no prospectus, registration statement or similar document is required to be filed in such jurisdiction.

Closing is expected on or about Feb. 11, 2021, and is subject to Toronto Stock Exchange and other necessary regulatory approvals.

About Argonaut Gold Inc.

Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production. Its primary assets are the El Castillo mine and San Agustin mine, which together form the El Castillo complex in Durango, Mexico, the La Colorada mine in Sonora, Mexico, and the Florida Canyon mine in Nevada. The company also holds the development-stage Magino project, the advanced-exploration-stage Cerro del Gallo project and several other exploration-stage projects, all of which are located in North America.

We seek Safe Harbor.