Argonaut Gold Announces Fourth Quarter and Year End Financial and Operating Results

Press Release

TORONTO, Ontario – (March 6, 2024) Argonaut Gold Inc. (TSX: AR) (the “Company”, “Argonaut Gold” or “Argonaut”) today reported financial and operating results for the fourth quarter (“Q4”) and year ended December 31, 2023. All dollar amounts are expressed in United States dollars, unless otherwise specified (CA$ refers to Canadian dollars).

“In fiscal 2023, we set clear objectives for our operations. These included commissioning the Magino mine on schedule, stabilizing Florida Canyon which had underperformed for several years, and reviewing and optimizing our Mexican operations. Presently the Magino mine is steadily progressing through the ramp-up period. Both the Florida Canyon mine and our Mexican mines had a strong year, exceeding the upper end of production guidance on a combined basis by 9%. Notably, Florida Canyon achieved its highest production total in 19 years.

Looking ahead to 2024, we consider Magino to be our future and the key driver for per-share growth. Our immediate focus remains on production optimization and unlocking the significant potential at Magino through reserve expansion. Additionally, we are diligently working on optimizing mining operations at the Florida Canyon mine with the sulfide redevelopment plan. Furthermore, we plan to finalize a debt refinancing agreement to enhance liquidity and flexibility, enabling us to achieve our expansion goals. These objectives align with our mission statement, emphasizing asset growth and operational excellence.” stated Richard Young, President and Chief Executive Officer of Argonaut Gold.

2023 COMPANY HIGHLIGHTS

Financial Highlights

Revenues for the year ended December 31, 2023 of $372.5 million were 4% lower than the $388.3 million from the prior year as a result of the planned lower production from the Company’s three Mexican mines – La Colorada, San Agustin and El Castillo, partially offset by the initial production at the Magino mine and higher production at the Florida Canyon mine.
Revenues included $60.0 million from the Magino mine, of which $26.1 million were pre-commercial production ounces. The Magino mine achieved commercial production effective November 1, 2023.
Gross profit of $40.2 million was 69% higher than $23.8 million from the prior year due to lower production costs and depreciation and depletion expense.
Generated cash flow from operating activities before changes in working capital and other items totalling $67.4 million, comparable to the prior year amount of $70.6 million.
Net income of $38.3 million, or $0.04 per basic and diluted share, compared to a net loss in 2022 of $152.2 million, or $(0.28) per basic and diluted share, with the increase largely due to $24.0 million of impairment reversals recorded for mineral properties, plant and equipment in the current year compared to $135.5 million of impairments recorded in the prior year. Higher gross profit and higher income tax recovery also contributed to the increase in net income year over year.
Adjusted net loss of $2.5 million, or $0.00 per share, compared to an adjusted net loss of $22.4 million, or $(0.04) per share in the previous year, a reduction in the loss of $19.9 million primarily due to higher gross profit as a result of lower depreciation, depletion and amortization in 2023.
Cash and cash equivalents of $83.8 million and net debt of $128.7 million as at December 31, 2023.
Consolidated production of 197,511 GEOs was 3% lower compared to 203,155 GEOs from the prior year. The decrease in production was largely due to lower production from the Company’s Mexican mines, partially offset by the initial production from the Magino mine, and higher production from the Florida Canyon mine.

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