Argonaut Gold Extends El Castillo Mine Life, Mexico
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Argonaut Gold Inc. has entered into a series of zero-cost collar option contracts, which were approved by the board of directors.
The contracts cover a total of 145,500 ounces of gold through mid-2022. The floor price of the monthly gold collars has been set at $1,450/oz with the ceiling price of the collars ranging from $1,630/oz in the fourth quarter of 2019 to $1,760/oz for the first half of 2022. The company will realize the actual gold sales price if the price of gold remains within the range of the collars.
“By initiating a zero-cost collar gold price protection program on a portion of El Castillo’s estimated remaining life-of-mine production, we ensure profitability and are able to extend the mine life at our highest cost operation. Through either exploration success or a higher gold price, there may be potential to continue to extend the life of the El Castillo mine beyond mid-2022,” said Pete Dougherty, president and CEO.
“With a strong portfolio of development assets, we felt prudent to lock in cash flow certainty at the El Castillo mine to help fund our development projects while also continuing to maintain exposure to an increasing gold price for our shareholders. This is an opportunity to ensure cash flow at an attractive price protection point. When looking at the total amount of Argonaut’s mineral resource base, this zero-cost collar program represents a very small percentage of total gold ounces,” added Dougherty.
The contracts cover a total of 145,500 ounces of gold between Q4 2019 and the first half of 2022 at an average floor price of $1,450/oz and a weighted average ceiling price of $1,706/oz.
About Argonaut Gold
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 and the La Colorada mine in Sonora, Mexico. Advanced exploration projects include the San Antonio project in Baja California Sur, Mexico, the Cerro del Gallo project in Guanajuato, 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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