Argonaut Gold (ARNGF)

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Argonaut Gold Announces Record Quarterly Production of 63,749 Gold Equivalent Ounces, Record Quarterly Revenue of $120.2 Million and Provides Second Quarter 2021 Operating and Financial Results

Outlook

Argonaut is on track to achieve its 2021 consolidated production, cost and capital guidance. The table below outlines the first half of 2021 production and cost actuals compared to full year 2021 guidance:

2021 PRODUCTION AND COST GUIDANCE

The Magino construction project is tracking on schedule. During the three and six months ended June 30, 2021, the Company incurred $64.0 million and $103.2 million in costs, respectively, related to the construction of the Magino project that were capitalized to assets under construction. Of this amount incurred, the majority was for securing long lead time components for the mineral processing plant and for site development, camp construction and earthworks.

While the Magino construction project remains on schedule, Argonaut is currently reviewing the impacts of COVID-19, foreign currency exchange rates, contingencies, potential adjustments to the development plans and cost inflation to certain inputs related to the initial capital estimate (excluding ramp-up capital) which it believes will likely exceed the 15% last disclosed in the press release dated May 4, 2021.

Argonaut is currently working to optimize its life-of-mine plans. Following this work, the Company anticipates publishing updated National Instrument ("NI") 43-101 Technical Reports for the the El Castillo Complex (El Castillo and San Agustin mines) and the La Colorada mine by the end of 2021.

Argonaut also believes there is a potential opportunity to reduce the near term sustaining capital requirement at its La Colorada mine, primarily by deferring some of the capitalized stripping of the Veta Madre pit. While this evaluation is ongoing, early indications illustrate a mine plan that is generally neutral in terms of net present value but provides additional cash flow during 2021 and 2022. More information regarding a new mine plan at La Colorada will be provided concurrent with the publication of an updated NI 43-101 Technical Report, which is expected by the end of 2021.

Full year 2021 capital guidance has not changed. However, Argonaut now expects to invest approximately an additional $10 million at the Magino construction project and decrease capital spending at La Colorada by approximately $10 million during 2021.

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