Argonaut eyes strong Q4 at Mexican mine

Argonaut Gold is on track for a strong Q4, with higher stacking rates at the La Colorada mine in Mexico helping lift production.

La Colorada was impacted by water issues and the COVID-19 pandemic, CEO Pete Dougherty told the Reno-based company’s Q3 earnings call.

But stacking rates are now above target levels, at about 16,000t/d, compared to 13,500t/d budgeted by the company, he said.

“We expect Q4 will be the strongest [quarter] of the year,” he told the call.

GUIDANCE CUT

Companywide production is tracking close to the lower end of original 2020 guidance of 210,000-230,000oz gold equivalent.

As a result, the company is lowering guidance to 200,000-215,000oz, Dougherty said.

La Colorada is expected to produce 46,000-50,000oz, down from 53,000-57,000oz, with El Castillo and San Agustín, both also in Mexico, contributing 43,000-47,000oz and 63,000-67,000oz, respectively, compared to original guidance of 45,000-50,000oz and 62,000-68,0000oz.

The Florida Canyon asset in the US is expected to produce 47,000-50,000oz.

Q3 RESULTS

Revenue in Q3 was US$94.4mn, up from US$66.8mn, with net income rising to US$13.4mn from US$4.9mn.

Results were helped by a 30% increase in average realized prices to US$1,915/oz and higher gold equivalent production of 48,951oz, up from 44,712oz.