Toronto’s Argonaut Gold has raised $85 million to fund future expansion at its Magino Mine, outside Dubreuilville, and another mine in Nevada.
The financing was done through a public offering of more than 223,000 common shares that closed on Dec. 12.
In a news release, the company said the proceeds are earmarked to “fund development and optimization” at Magino and its Florida Canyon Mine in Nevada.
The company didn’t specify how much will be individually allocated between Magino and Florida Canyon.
Magino is fully funded as an operating open-pit mine but Argonaut ran up its bills due to a raft of startup issues in late summer and the fall that created a $179-million debt.
During the run-up to commercial production in November, there were delays in commissioning the mill, the company didn’t mine as much gold as planned, gold grades and in haulage rates to the mill.
Fixing the balance sheet is a focus of Argonaut’s front office.
Magino currently has 2.4 million ounces sitting in gold reserves in its pit, which represent its near-term mining future, while there’s another 5 million ounces in resources that need to be better defined through drilling.
Some of the money from this financing raised will go toward converting those resources into the reserve category. There are also indications of gold below the pit that’s the main thrust of more exploration.
The mill is currently running at a 10,000-tonne-per-day rate but Argonaut is now talking about boosting that capacity to between 17,000 and 20,000 tonnes, and take annual gold production from 148,000 ounces, expected at Magino in 2024, to between 200,000 and 250,000 ounces a year.
Engineering work on that mill expansion has started and will be fully explained in the third quarter of 2024 when a new feasibility study of Magino is published. That report will contain the costs of that expansion and the timing to move to a higher rate.
Magino is fully funded as an operating mine, but Argonaut ran up its bills due to a raft of start-up issues in late summer and fall that created a $179-million debt. There were delays in commissioning the mill, the company didn’t mine as much gold as planned and was disappointed in the haulage rates to the mill.
Attracting people to come work at Magino continues to be a chronic issue, not just for Argonaut but across the industry.
In a recent online interview with Resource Talks, Argonaut president Richard Young said the company has budgeted for 400 employees at Magino and today that workforce sits at 361 with another 20 to start before year’s end. Expansion will mean Argonaut will need between 500 and 550 at Magino.
Company management contends Magino will eventually become one of Canada’s largest and lowest-cost gold mines. Magino has a current mine life of 19 years.
