Achieves guidance for 2022 production
TORONTO, Feb. 27, 2023 /CNW/ - Argonaut Gold Inc. (TSX: AR) (the "Company", "Argonaut Gold" or "Argonaut") announced today its operating and financial results for the fourth quarter and year ended December 31, 2022. All dollar amounts are expressed in United States dollars, unless otherwise specified (CA$ refers to Canadian dollars).
FULL YEAR 2022 HIGHLIGHTS
Year endedDecember 31, 2022 compared to year ended December 31, 2021
Achieved 2022 annual guidance for gold equivalent ounce ("GEO" or "GEOs") production
Produced 203,155 GEOs
Sold 207,158 GEOs, a 17% decline
5% increase in average realized gold price per ounce to $1,877
11% decrease in revenue to $388.3 million as a result of lower gold ounces sold
On a per ounce sold basis, cash cost1 and all-in sustaining cost1 ("AISC") were higher due to inventory write-downs, lower year-over-year production, and higher costs
Generated cash flow from operating activities before changes in non-cash operating working capital and other items totaling $70.6 million, a reduction of 43% due to lower sales and higher costs
$135.5 million non-cash impairment of mineral properties, plant and equipment, largely due to the inflationary pressures on the Company's low-grade heap leach operations combined with land access and permitting issues at two of its Mexican mines, San Agustin and La Colorada
$22.9 million non-cash write-downs of inventories to net realizable values
Net loss of $152.2 million compared to net income of $26.5 million; adjusted net loss1 of $22.4 million compared to adjusted net income1 of $57.1 million
Cash and cash equivalents of $73.3 million
Undrawn debt capacity at year end stands at $170 million
FOURTH QUARTER 2022 HIGHLIGHTS
Quarter endedDecember 31, 2022 compared to quarter ended December 31, 2021
Produced 42,510 GEOs, a 31% decline
Sales of 51,615 GEOs, a 9% decline
3% increase in average realized gold price per ounce to $1,860
7% decrease in revenue to $95.9 million due to lower gold ounces sold partially offset by higher average realized gold price per ounce
On a per ounce basis, cash cost1 and AISC1 were higher due to the write-down of inventories to net realizable value at four mines. Additionally, lower production and inflationary pressures increased operating costs
Generated cash flow from operating activities before changes in non-cash operating working capital and other items of $8.6 million, 53% lower due to decline in gold sales and higher costs
"Last year was a challenging year for the Company on two fronts. First, the increase in construction costs at the Magino project required a large capital raise, including debt, equity and the sale of a royalty. Second, the inflationary pressures had a significant impact on operating results of our low-grade heap leach operations, resulting in an impairment of our Mexican assets and Florida Canyon mine," stated David Ponczoch, Chief Financial Officer.
"As part of the Company's effort to focus on prioritizing core assets, we have sold and optioned two non-core Mexican assets and revised mine plans of our three operating mines in Mexico to focus on free cash flow generation. As a result, we suspended mining activities at our El Castillo mine at the
end of last year and we expect mining activities at San Agustin and La Colorada will temporarily pause by the end of this year, until land access and permits are received to complete mining of the remaining reserves and resources," stated Marc Leduc, Chief Operating Officer.
"Looking ahead, management is laser focused on completing the Magino project, with first pour planned for mid-May followed by commercial production in the third quarter. The commissioning of Magino will be the first step in transforming the Company as it enters a pivotal growth stage. We believe Magino has the potential to be one of the 10 largest and lowest cost gold mines in Canada, combining a large open pit operation with the potential of higher-grade underground material to feed an expandable mill. In addition, management will be focused on exploring the large sulfide resource at Florida Canyon, located just below the oxide deposits," said Richard Young, President and Chief Executive Officer.
The Company is pleased to announce two new appointments to its senior leadership team: David Savarie, Vice President, General Counsel & Corporate Secretary, and Nancy Lee, Vice President, Human Resources. Mr. Savarie brings over 20 years of professional experience to the Company, the last 15 of which have been exclusively within mining. Ms. Lee brings more than 25 years of experience to the Company, the last 10 of which have been exclusively within mining.
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