Argonaut gold announces Q1 gold production of 21,084 ounces

Tuesday, Apr 17, 2012

Argonaut Gold Inc. ("Argonaut Gold" or the "Company") (TSX:AR) announced today that the Company produced 21,084 gold ounces during the 1st quarter of 2012 (ended March 31, 2012) at its 100% owned El Castillo Mine ("El Castillo" which is located 100 km north of the city of Durango, Mexico) and 100% owned La Colorada Mine ("La Colorada" which is located 50 kilometers southeast of Hermosillo, Mexico).

FIRST QUARTER 2012 El CASTILLO OPERATING RESULTS:

The first quarter operating statistics showed improvement over the Q1 2011. Ore production has increased to an annualized rate of more than 12 million tonnes. The contractor has increased the size of the mining fleet, now operating 18 trucks with 100 tonne capacity. With completion of contruction on cell 5, the east side pad capacity is now approximately 30 million tonnes. In Q1, construction began at cell 7A on the west side pads. Guidance for 2012 production is 75-80,000 ounces with a $625-$650 cash cost.

During Q1 of 2012, 14,498 ounces of gold were sold. At March 31, 2012, inventory at the third party desorption plant was approximately 5,500 ounces of gold.

Pete Dougherty, President and CEO of Argonaut Gold noted: "Gold production for the first quarter was in line with our 2012 guidance; cash cost guidance is anticipated to be $625-$650 per ounce at both operations. Non-commercial production of 3,085 gold ounces and 17,182 silver ounces at La Colorada began this quarter. While reprocessing material at La Colorada is anticipated to provide limited production during 2012, this cash flow will be used for continued infrastructure construction at the project. The Company is now producing from two gold mining operations, diversifying the Company's production portfolio and providing cash for capital expenditures and funding exploration. The capital expansions planned at El Castillo and La Colorada set the stage for production growth in 2012 and beyond."

Source: Marketwire