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(Kitco News) - Argonaut Gold (TSX: AR) today announced consolidated production of 38,585 gold equivalent ounces (GEOs) in Q1 2023, down 30% compared to 55,516 GEOs produced in Q1 2022.
The company said that the decrease in production was due to lower ore tonnes mined and lower grades placed on the leach pads at the company's three Mexican operations as part of the wind down of those operations.
Argonaut added that Q1 2023 cost of sales per ounce of $1,977, cash cost per ounce of $1,660 and all-in-sustaining costs (AISC) per ounce of $1,947 were between 27% and 44% higher than the prior year period; however, they were largely in line with 2023 full-year guidance.
“With the planned first gold pour of the Magino mine in the second half of May, cost of sales, cash cost, and AISC are expected to be in-line with full year 2023 guidance,” the company said.
The company’s Q1 2023 revenue of $69.0 million was 35% lower than $105.8 million from the first quarter of 2022, due to lower planned production from the company's three Mexican mines - El Castillo, La Colorada and San Agustin.
Argonaut added that gross loss of $2.5 million was $24.2 million lower than gross profit of $21.7 million from the first quarter of 2022, due to planned lower revenues from lower production, higher costs at the Mexican operations and inventory impairment related to the inability to apply fuel tax credits, net realizable value, and inventory obsolescence write downs.
The company said it generated cash flow from operating activities before changes in non-cash working capital and other items totaling $10.5 million, a reduction of 58% due to lower gross profit.
Argonaut also reported Q1 2023 net loss of $10.4 million, or $0.01 per basic and diluted share, compared to Q1 2022 net income of $5.6 million, or $0.02 per share, largely due to lower gross profit.
Importantly, according to a press release, construction of the company's largest and lowest cost gold mine, the Magino project, is on track for first gold pour in the second half of May, with commercial production expected during the third quarter of 2023.
"The year is off to a solid start with our four operating mines tracking well to plan, as well as Magino, our new flagship mine. We believe Magino has the potential to be one of the largest and lowest cost gold mines in Canada. To achieve that goal, we are embarking on a 12-to-15-month drill program, leveraging off of the 2022 drill program that significantly increased our open pit resource base," said President and CEO Richard Young.
Argonaut Gold is a Canadian gold company with a portfolio of operations and multi-stage assets in North America. The company is in the final stages of construction at its Magino project, located in Ontario, Canada. Magino is expected to achieve commercial production in the third quarter of 2023 and become Argonaut's largest and lowest cost mine.
The company also has three operating mines including the Florida Canyon mine in Nevada, USA, where it is pursuing additional growth, La Colorada mine in Sonora, Mexico and San Agustin mine in Durango, Mexico.
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