Novo Resources

Argonaut Gold Extends Mineralization on Recently Acquired Fresnillo Mineral Concession Adjacent to El Castillo Mine

TORONTO, May 8, 2017 /CNW/ - Argonaut Gold Inc. (TSX: AR) (the "Company", "Argonaut Gold" or "Argonaut") is pleased to announce that it has completed approximately 11,540 metres in 75 reverse-circulation ("RC") drill holes on the North Target area that lies adjacent to the El Castillo open pit mine. The North Target lies within a 420 hectare mineral concession recently acquired from a wholly-owned subsidiary of Fresnillo Plc ("Fresnillo") (see press release dated February 23, 2017).  The North Target drilling is part of an ongoing US$2 million infill RC drill program within areas of projected mineralization outward from the currently operational El Castillo open pit mine. 

Previous wide-spaced drilling by Fresnillo established the gold potential in the area and was valuable in the design of the current drilling program.  The Company's objective was to increase drill-hole density within mineralized areas to approximately 35 metre spacing, which is consistent with the current modeling practices at El Castillo.  These new drill hole results of the North Target area display strongly oxidized gold bearing rocks with the same chemical and structure characteristics as the El Castillo open pit mine.  Potential to extend the current El Castillo pit limits and extend mine life is highly promising.  Drilling continues on the South Target area where Fresnillo's prior work supports further drilling to possibly extend pit limits there as well, and the results are expected to be released during the second half of 2017.  The Company anticipates publishing an updated National Instrument 43-101 Technical Report for the El Castillo mining complex during the first quarter of 2018, where the drill results from the North and South Target areas will be incorporated into an updated mineral reserve and resource estimates. 

Pete Dougherty, President & CEO commented: "With the acquisition of Fresnillo's San Juan concession and the drill results so far, we expected to increase the life of the El Castillo mine.  Drilling results to date are positive and indicate strong potential to expand the current pit limits initially into the North Target area.  This previously announced acquisition also allows us to extract a large, known wedge of economic mineralization that lies on our side of the original concession boundary, as we move the pit wall back onto the newly acquired ground."

Thomas Burkhart noted: "Based on our geologic understanding of the El Castillo gold system, it was clear that there is a north to northeast trend of mineralization that continued into the North Target area.  Overall, the continuity of gold mineralization and thicknesses were better than expected and the depth of oxidation is deeper than our current pit in the north exceeding 200 metres.  We are very pleased with the results of this drill program to date."

Argonaut Gold 5 8 2017

Table 1 below illustrates key highlight holes from the North Target area.  For a full table of drill results, plan view maps and cross sections, please visit: http://www.argonautgold.com/gold_operations/drill_results/

Table 1: Selected Drill Results

Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-697 180 65°          
Interval     42.7 141.7 99.1 0.64 1
Including     109.7 120.4 10.7 2.35 0
Interval     152.4 182.9 30.5 0.27 0
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-700 180 65°          
Interval     32.0 36.6 4.6 0.18 0
Interval     53.3 195.1 141.7 0.49 1
Including     80.8 88.4 7.6 2.27 1
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-702 180 55°          
Interval     50.3 204.2 153.9 0.53 1
Including     82.3 86.9 4.6 2.49 2
Including     120.4 123.4 3.0 3.20 0
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-706 180 67°          
Interval     105.2 190.5 85.3 0.52 1
Including     121.9 132.6 10.7 1.85 1
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-707 180 68°          
Interval     15.2 131.1 115.8 0.44 1
Including     48.8 53.3 4.6 1.09 1
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-710 180 64°          
Interval     32.0 170.7 138.7 0.58 1
Including     54.9 65.5 10.7 1.30 1
Including     79.2 86.9 7.6 3.49 3
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-718 180 80°          
Interval     0.0 114.3 114.3 0.41 1
Including     45.7 50.3 4.6 1.20 2
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-721 180 66°          
Interval     25.9 36.6 10.7 0.37 1
Interval     47.2 158.5 111.3 0.54 1
Including     64.0 68.6 4.6 1.41 1
Including     93.0 100.6 7.6 2.91 1
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-722 180 57°          
Interval     19.8 96.0 76.2 0.51 1
Including     19.8 24.4 4.6 1.75 1
Including     30.5 35.1 4.6 1.60 2
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-726 180 68°          
Interval     13.7 155.4 141.7 0.68 1
Including     32.0 44.2 12.2 4.30 3
Hole Azimuth Dip From (m) To (m) Interval (m) Au g/t Ag g/t
17-CA-728 180 65°          
Interval     3.0 97.5 94.5 0.52 1
Including     7.6 16.8 9.1 1.20 5
Including     30.5 33.5 3.0 4.04 0

Qualified Person Comments / Quality Control Procedures

Drill samples are transported to the preparation laboratory of ALS-Chemex Labs Inc. in Chihuahua, Mexico where samples are prepared and pulps sent for assay in the laboratory of ALS-Chemex in Vancouver, British Columbia.  Samples are analyzed for gold by fire assay and atomic absorption finish.  For silver, samples use a multi-element inductively coupled plasma (ICP) assay.  Argonaut utilizes standard Quality Assurance/Quality Control sample procedures that include the insertion of sample standards, blanks and duplicates as well as systematic check assaying by a second accredited laboratory.

The technical information relating to exploration activities disclosed in this news release was prepared under the supervision of, and reviewed and verified by, Thomas Burkhart, Argonaut Gold's Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

For further information on the El Castillo mine, please see the technical report on the El Castillo mine titled "NI 43-101 Technical Report on Resources and Reserves, Argonaut Gold Inc., El Castillo Mine, Durango State, Mexico", dated February 24, 2011 (effective date of November 6, 2010), prepared by SRK Consulting (U.S.), Inc. for Argonaut Gold (the "El Castillo Report").  The El Castillo Report is available electronically on Argonaut's website at www.argonautgold.com or on SEDAR under Argonaut's issuer profile at www.sedar.com.

The Company is not aware of any legal, political, environmental or other risks that could materially affect the El Castillo mine other than those set out in the annual information form of Argonaut for the financial year ended December 31, 2016 (dated March 20, 2017) filed on SEDAR under Argonaut's issuer profile at www.sedar.com.  Please see below under the heading "Cautionary Note Regarding Forward-looking Statements" for further details regarding risks facing the Company.

About Argonaut Gold

Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production activities.  Its primary assets are the production stage El Castillo mine and the construction stage San Agustin project in Durango, Mexico and the production stage La Colorada mine in Sonora, Mexico.  Advanced exploration stage projects include the San Antonio project in Baja California Sur, 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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Argonaut Gold

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