MEXICO – Toronto-based Argonaut Gold has declared commercial production at its San Agustin gold-silver mine in Durango. The project came in on time and 20% below the initial capital budget estimate of $42.6 million (all U.S. dollars).
The coarse ore tunnel and secondary crusher at the San Agustin project. (Credit: Argonaut Gold)
President and CEO Pete Dougherty said, “We view San Agustin as an important piece of the El Castillo complex given the shared infrastructure and synergies with our neighbouring El Castillo mine.” The two operations are 10 km apart.
Using $1,300 gold and $20 silver, the San Agustin deposit has 82.2 million indicated tonnes grading 0.32 g/t gold and 10.7 g/t silver. The inferred resource is 7.0 million tonnes at 0.29 g/t gold and 11.0 g/t silver. Annual production over the life of the project will be 80,000 gold equivalent oz.
The preliminary economic assessment gave San Agustin an after tax net present value (5% discount) of $89.9 million and an after tax internal rate of return of 50% for an open pit mine with heap leaching recovery. Cash costs will be only $648 per gold equivalent oz.