Ms. Nichole Cowles of Argonaut reports

ARGONAUT GOLD INC. AND PEDIMENT GOLD CORP. ANNOUNCE FRIENDLY BUSINESS COMBINATION

Argonaut Gold Inc. (also known as Argonaut Gold Ltd.) and Pediment Gold Corp. have entered into a binding agreement to complete a business combination to create a premier mid-tier gold-producing company focused on the Americas. The combined entity will focus on generating value for its shareholders by increasing production, bringing new and existing projects into production, expanding the resource base, and growing cash flow.

Argonaut is a gold production and exploration company and is currently producing gold at its El Castillo project in Durango, Mexico. Argonaut forecasts 2010 production of 47,000 ounces gold at $600 (U.S.)/ounce cash cost. Pediment is a junior mining company with a focus on the exploration and development of low-cost gold assets in Mexico. Pediment's most advanced project is the San Antonio gold project in the state of Baja. A positive preliminary assessment was completed for the San Antonio gold project in August, 2010.

Pursuant to the terms of the agreement, all of the Pediment common shares issued and outstanding immediately prior to consummation of the business combination shall become exchangeable into the common stock of Argonaut on the basis of 0.625 of a common share of Argonaut for each one Pediment common share. Based on the closing price of Argonaut on the Toronto Stock Exchange (TSX) on Oct. 18, 2010, the exchange ratio implies an offer price of $2.56 per Pediment common share and values Pediment's equity at approximately $137.1-million on a fully diluted in-the-money basis.

This represents a 50.7-per-cent premium to the closing price of Pediment on the TSX on Oct. 18, 2010, and a 40.4-per-cent premium based on the 20-day VWAPs of both companies for the period ended Oct. 18, 2010. Upon completion of the transaction, Argonaut and Pediment shareholders will own approximately 63 per cent and 37 per cent of the combined company, respectively. The terms of the transaction have been unanimously approved by the boards of directors of both Argonaut and Pediment.

The newly combined company will draw on the expertise from both companies to fulfill board and management responsibilities. The newly combined board will comprise the current Argonaut directors and a representative of Pediment, Peter Mordaunt. Peter Dougherty will remain president and chief executive officer of the combined company.

Highlights of the combined entity:

• Diversified across two mining operations by 2013;
• Gold production expected to grow in excess of 150,000 ounces per year by 2013;
• Over 3.3 million ounces of measured and indicated gold resources;
• Strong balance sheet;
• Strong cash-flow-generating capabilities;
• A quality portfolio of exploration projects;
• Experienced management team and board of directors.

Mr. Dougherty, president and CEO of Argonaut, stated: "Combining Argonaut and Pediment provides a mutually beneficial transaction. The newly formed company will have access to an array of development and exploration opportunities. Cash generation from a producing mine will support the development of properties with high potential for expansion."

Gary Freeman, president and CEO of Pediment, stated: "This is a natural progression for Pediment as this merger brings together two talented management teams. The resulting company will encompass a strong capital markets presence, proven construction and operating experience, and a successful exploration team. It further allows realization of internal financing for the development of San Antonio and access to exploration funding. Pediment shareholders are receiving an attractive premium and will benefit from production at El Castillo."

Transaction rationale

Argonaut and Pediment believe the transaction will provide significant benefits for both companies' shareholders.

Benefits to the shareholders of Argonaut include:

• The San Antonio project provides an early stage development project with potential to produce in excess of 80,000 ounces Au per year by 2013;
• Increases Argonaut's leverage to gold resources;
• Provides diversification from a single operating mine to two operating mines in 2013;
• Geographic synergies with dual operations within Mexico;
• An extensive pipeline of grassroots exploration properties for future development;
• La Colorada has excellent potential to add significant value to the newly combined company;
• Extensive grassroots exploration expertise and nine exploration projects in Sonora, Mexico;
• Established exploration team with extensive experience in Mexico;
• Strong rerating potential via a portfolio of multiple mines, increase in resources and strong production growth profile at below industry average cash costs;
• Improvement in stock liquidity.

The benefits to the shareholders of Pediment include:

• Significant premium for Pediment shareholders based on 20-day VWAP;
• Immediate exposure to a record gold price environment by converting from an exploration focused company to a producing company;
• Access to management with extensive construction and operational experience;
• Strong balance sheet and operating cash flow which are expected to be sufficient to finance the construction of the San Antonio project.

Transaction details

The business combination is anticipated to be completed by way of a statutory plan of arrangement whereby Argonaut would acquire all of the issued and outstanding shares of Pediment in consideration for the issue of Argonaut shares on the basis of 0.625 of one Argonaut share for one Pediment share.

The transaction will be subject to certain standard conditions which will include no less than 66-2/3 per cent of the shareholders of Pediment and a simple majority of Argonaut shareholders voting in favour of the transaction at shareholders meetings expected to be held in December, 2010, and the acceptance of the Toronto Stock Exchange.

The transaction is unanimously supported by the board of directors of both Argonaut and Pediment. Management and directors of Pediment hold approximately 8.2 per cent, for which they have indicated that they will sign lock-up agreements supporting the transaction.

The agreement will be described in detail in the management information circulars of Argonaut and Pediment to be filed with the regulatory authorities and mailed to Argonaut and Pediment shareholders in accordance with applicable securities laws.

The transaction has been structured, with respect to Pediment shareholders in the United States, so as to permit reliance upon the exemption from the registration requirements of the U.S. Securities Act of 1933 provided by Section 3(a)(10) thereof. Upon closing of the transaction, Argonaut is expected to become the successor registrant to Pediment under the U.S. Securities Exchange Act of 1934.

Advisers

GMP Securities LP is acting as financial adviser to the board of Argonaut (comprising independent directors). GMP has provided an opinion to the board of Argonaut that, subject to certain assumptions and limitations set out therein, the proposed transaction is fair, from a financial point of view to the shareholders of Argonaut. Fraser Milner Casgrain LLP is acting as Argonaut's legal adviser and Greenberg Traurig LLP as its United States legal adviser.

Pediment has engaged Canaccord Genuity Corp., PI Financial Corp. and Axemen Resource Capital Ltd. as its financial advisers, Bull, Housser & Tupper LLP as its legal adviser, and Dorsey & Whitney LLP as its U.S. legal adviser. Canaccord Genuity has provided an opinion to the board of Pediment that, subject to certain assumptions and limitations set out therein, the proposed transaction is fair, from a financial point of view, to the shareholders of Pediment taken as a whole.

Tom Burkhart, Argonaut's vice-president of exploration, a qualified person under National Instrument 43-101, has read and approved the Argonaut technical information contained in this press release.

Mel Herdrick, Pediment's VP of exploration, a qualified person under NI 43-101, has read and approved the Pediment technical information contained in this press release.

A conference call to discuss the transaction will be held at 10:30 a.m. Eastern Time (7:30 a.m. Pacific Time) on Tuesday, Oct. 19, 2010, to provide shareholders, securities analysts and investors the opportunity to hear management discuss the business transaction outlined herein. The call can be accessed by dialling 1-866-226-1792 (toll-free) or 416-340-2218. The call will also be webcast live and can be accessed via the website of Argonaut. The call will be available for replay by dialling 1-800-408-3053 (toll-free) or 416-695-5800 (passcode 8724514 followed by the number sign) for 14 days.