As construction work advances at its Magino project in Ontario, Argonaut Gold (TSX: AR) has completed a $10-million private placement with Ausenco Engineering, its engineering, procurement, construction and commissioning (EPC) contractor.
The miner has issued the Australia-based engineering and construction management company 4.3 million shares at $2.35 a share (an 8.3% premium to the prior day’s close). Proceeds are intended for the construction of Magino and corporate purposes.
“The private placement by Ausenco aligns our respective companies, as we work together to advance and unlock value of the Magino project. We are very pleased to have a partner with ‘skin in the game’ as we continue to advance Magino’s construction,” Pete Dougherty, Argonaut’s president and CEO, said in a release.
Argonaut has also provided a Magino construction update, which is proceeding on and ahead of schedule. Long-lead time items are now secured, preparations are underway for process plant earthworks, expected to start in the second quarter, now that the site has been cleared. Once these are completed, the schedule calls for a concrete pour and steel construction to enclose the process facility building before the upcoming winter.
In January, Argonaut executed the fixed bid EPC contract that includes construction of the processing facility and covers approximately 40% of the $480 to $510-million initial capital cost estimate for the 10,000 t/d project.
A 2017 feasibility study for Magino outlined a 17-year mine, producing an average of 150,000 oz. of gold in the first five years of operation at all-in sustaining costs of US$711 per oz.
Magino is forecast to come online in the first half of 2023.