Argonaut Gold Announces Third Quarter 2018 Operating and Financial Results
Press Release
TORONTO, Nov. 8, 2018 – Argonaut Gold Inc. (TSX: AR) (the “Company”, “Argonaut Gold” or “Argonaut”) is pleased to report its financial and operating results for the third quarter ended September 30, 2018. The Company’s quarterly cash flow from operating activities was $10.9 million before changes in operating working capital, with revenue of $41.3 million, a net loss of $2.7 million or loss per share of $0.02, an adjusted net loss1 of $1.0 million or adjusted loss per share1 of $0.01 and production of 34,165 gold equivalent ounces2 (“GEO” or “GEOs”). All dollar amounts are expressed in United States dollars, unless otherwise specified (C$ refers to Canadian dollars).
CEO Commentary
Pete Dougherty, President and CEO stated: “We achieved a significant milestone during the quarter in which we produced our millionth gold equivalent ounce, showcasing our commitment to sustainable and profitable mining since launching Argonaut Gold at the end of 2009. Also during the quarter, we had higher production and lower costs compared to 2017, despite the interruption of mining activities at La Colorada, as we are now realizing the positive effects of lower cost production from our San Agustin mine. During the third quarter at La Colorada, we experienced the impacts of the low grades stacked on the leach pads during the suspension of blasting activities in the second quarter in the form of lower production; although, we saw costs normalize as mining activities recommenced upon receiving our explosives permit in late July. Despite these impacts, we are on track to meet the lower end of our 2018 production guidance of 165,000 GEOs, as all of our operations are now performing very well and we anticipate a very strong fourth quarter.”
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1 |
Please refer to the section below entitled “Non-IFRS Measures” for a discussion of these Non-IFRS Measures. |
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2 |
GEOs are based on a conversion ratio of 70:1 for silver to gold. This is the referenced ratio for each year throughout the release. |
Key operating and financial statistics for the three and nine months ended September 30, 2018 and 2017 are outlined in the following table6:
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3 Months Ended Sept 30 |
9 Months Ended Sept 30 |
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2018 |
2017 |
Change |
2018 |
2017 |
Change |
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Financial Data (in millions except for earnings (loss) per share) |
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Revenue |
$41.3 |
$28.7 |
44% |
$144.4 |
$115.6 |
25% |
|
Gross profit (loss) |
($3.3) |
$3.6 |
(192%) |
$28.0 |
$23.1 |
21% |
|
Net income (loss) |
($2.7) |
$0.4 |
(775%) |
$9.9 |
$18.7 |
(47%) |
|
Earnings (loss) per share – basic |
($0.02) |
$0.00 |
– |
$0.06 |
$0.11 |
(45%) |
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Adjusted net income (loss)1 |
($1.0) |
($0.4) |
(150%) |
$13.9 |
$8.6 |
62% |
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Adjusted earnings (loss) per share – basic1 |
($0.01) |
($0.00) |
– |
$0.08 |
$0.05 |
60% |
|
Cash flow from operating activities before changes in non-cash operating working capital |
$10.9 |
$5.7 |
91% |
$48.9 |
$34.2 |
43% |
|
Cash and cash equivalents |
$20.6 |
$37.5 |
(45%) |
$20.6 |
$37.5 |
(45%) |
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Net cash1 |
$12.6 |
$37.5 |
(66%) |
$12.6 |
$37.5 |
(66%) |
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Gold Production and Cost Data |
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GEOs loaded to the pads2, 5 |
67,244 |
64,486 |
4% |
222,891 |
173,335 |
29% |
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GEOs projected recoverable2, 3, 5 |
37,763 |
36,630 |
3% |
121,932 |
100,772 |
21% |
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GEOs produced2, 4, 5 |
34,165 |
24,280 |
41% |
113,459 |
91,717 |
24% |
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GEOs sold2, 5 |
34,248 |
23,160 |
48% |
113,152 |
93,080 |
22% |
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Average realized sales price |
$1,212 |
$1,270 |
(5%) |
$1,282 |
$1,250 |
3% |
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Cash cost per gold ounce sold1 |
$867 |
$893 |
(3%) |
$735 |
$798 |
(8%) |
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All-in sustaining cost per gold ounce sold1 |
$988 |
$1,063 |
(7%) |
$862 |
$931 |
(7%) |
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1 |
Please refer to the section below entitled “Non-IFRS Measures” for a discussion of these Non-IFRS Measures. |
|
2 |
GEOs are based on a conversion ratio of 70:1 for silver to gold. This is the referenced ratio for each period throughout the release. |
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3 |
2018: Expected recoverable GEOs are based on the assumptions and parameters as set forth in the El Castillo Complex Technical Report dated March 27, 2018 and the La Colorada Gold/Silver Mine Technical Report dated March 27, 2018. In periods where the Company mines material not specifically defined in a technical report (for example: low grade stockpile material), management uses its best estimate of recovery based on the information available. 2017: Expected recoverable GEOs – El Castillo expected recovery rates: ROM oxide 50%, crushed oxide 70%, ROM transition 40%, crushed transition 60%, crushed sulphides argillic 30% and crushed sulphides silicic 17%; San Agustin expected recovery rates: gold 66% and silver 16%; La Colorada expected recovery rates: gold 60% and silver 30%. |
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4 |
Produced ounces are calculated as ounces loaded to carbon. |
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5 |
The three and nine months ended September 30, 2017 includes pre-commercial production from San Agustin. |
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6 |
As the San Agustin project was in the pre-production development stage as at September 30, 2017, the GEOs produced are excluded from the revenue, gross profit, net income, earnings per share, adjusted net income (loss), cash flows from operations, cash cost and all-in sustaining cost numbers presented in this release for the three and nine months ended September 30, 2017. |
IBF4
