The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Argonaut Gold Ltd. Reports Completion of its Phase I-2010 Resource Expansion Program at the El Castillo Mine in Durango, Mexico

Thursday, May 13, 2010

Argonaut Gold Ltd. Reports Completion of its Phase I-2010 Resource Expansion Program at the El Castillo Mine in Durango, Mexico09:27 EDT Thursday, May 13, 2010TORONTO, ONTARIO--(Marketwire - May 13, 2010) - Argonaut Gold Ltd. (TSX:AR) is pleased to announce that its 2010 Phase I Resource Expansion Program at El Castillo was completed on April 22nd. This program was designed to extend and identify the approximate limits of the El Castillo mineral system to the south and east of the reported gold resource. This program consisted of completing a minimum 100 meter drill grid as a means to better identify the approximate size of the El Castillo mineral system. Results of the 121 hole drill program, spanning 16,250 meters, have significantly increased the dimensions of the gold zone by upwards of 500 meters to the south and 300 to 400 meters to the east. Several areas remain open and will require additional step-out drilling. (Please refer to contour map of mineral distribution & supporting cross section location map and cross sections on Company website, Dougherty, President and CEO for Argonaut noted, "All indications continue to support the probability that the El Castillo resources are expected to double from what was reported at the end of 2009." He also stated that "El Castillo was acquired, in part, for its exploration upside and it is gratifying to see the exploration success at the project. It is also important to note that the drilling was completed ahead of schedule and on budget."Subsequent to the Company's last press release on March 31, 2010 an additional 30 holes were completed with the best results tabulated as follows: Table 1 --------------------------------------------------------------------------- Summary Assay Results - El Castillo Phase 1 Reverse Circulation Drill Program Holes --------------------------------------------------------------------------- From To Thickness Hole Number Hole Depth (meters) (meters) (meters) Au Values g/t --------------------------------------------------------------------------- CA-333 144.4 0 36 36 0.326 --------------------------------------------------------------------------- CA-335 159.6 4.6 47.1 42.6 0.391 --------------------------------------------------------------------------- CA-338 155 36.5 53.22 16.7 0.569 --------------------------------------------------------------------------- CA-341 180.9 1.52 30.4 28.9 0.436 --------------------------------------------------------------------------- CA-343 199 0 13.7 13.7 0.466 --------------------------------------------------------------------------- CA-344 202.2 3 71.4 68.4 0.354 --------------------------------------------------------------------------- CA-346 220.4 0 51.7 51.7 0.339 --------------------------------------------------------------------------- CA-349 199.2 21.3 59.3 38 0.214 --------------------------------------------------------------------------- CA-354 158 1.52 74.5 73 0.558 --------------------------------------------------------------------------- CA-356 235.6 24.3 94.2 70 0.566 --------------------------------------------------------------------------- CA-360 56.2 0 42.6 42.6 0.282 --------------------------------------------------------------------------- (i)Note: Reported mineral widths have not been verified as true widths as more drilling will be required to identify the orientation of the mineralization. All distances shown are in meters.(For a full table of drill results please refer to the Company website, 2 in-fill drill ProgramImmediately upon the conclusion of the Phase I, 100 meter drill-spacing program, the Company embarked on an aggressive in-fill drill program that is expected to bring much of the known mineralization into a measured and indicated category. The objective of the in-fill program is to drill-out the resource on 50 meters or less spacing. This program commenced on April 23 and will consist of an estimated 140 drill holes totaling approximately 16,000 meters. This program is scheduled for completion by the end of September. The results of the 2010 drill programs will be incorporated into a new 43-101 report that is scheduled for completion by the end of 2010. Other work currently in the planning stages on the project for 2010 includes the completion of at least six core holes within the ore body to obtain metallurgical samples. These samples will be utilized to better determine potential heap leach recoveries of partially oxidized gold bearing material (Transition Ore) and sulfide mineralization. Both the transition and sulfide zones occur below the oxide mineralization and represent considerable tonnages of gold mineralized material that could add significantly to the long term economics of the El Castillo Mine. (See Castle Gold Corporation press release May 7, 2009).La Fortuna, Llano Colorado and La CompaWith the acquisition of Castle Gold and the El Castillo Mine, the Company also acquired the advanced exploration stage La Fortuna gold-silver project in western Durango State and the La Compa and Llano Colorado gold-silver exploration properties in Sonora State, Mexico. Sufficient drilling at the La Fortuna project has been completed to produce a compliant NI-43-101 report, with a measured and indicated resource of 4.8 million tons grading 2.96 g/t for 308,000 ounces of gold at a 0.5 gpt cutoff (Toren Olson Consulting, National Instrument 43-101 (October 21, 2008). Prior to Argonaut acquiring the property the most recent emphasis on the project was metallurgical studies where both heap leach and conventional milling possibilities were being studied. Argonaut is reviewing the results and recommendations of this work. In addition, the Company is considering additional step-out and in-fill drilling of the resource area. The La Fortuna property also hosts at least 20 other known mineral occurrences. Six of these were recommended for drilling by independent geologists contracted by the previous owner of the property. Argonaut is in the process of prioritizing these various targets and will conduct further field evaluations leading to specific exploration planning.On the La Compa and Llano Colorado properties field visits are scheduled to gauge the potential of both land holdings with additional project work contingent on these initial exploration results.As stated by Vice President of Exploration Tom Burkhart, "The ongoing in-fill and step out drilling at El Castillo continues to increase our knowledge and understanding of the mineral system. This work is providing increased confidence in the predictability and continuity of mineralization that bodes well for significantly expanding economic mineralization and prioritizing exploration activity. Additionally, I look forward to further evaluating the economic potential of other properties within the company's portfolio that, based on preliminary reviews, show attractive potential."To view the El Castillo Project, please visit the following link: Argonaut Argonaut is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets being the production-stage El Castillo Project and the exploration-stage La Fortuna Project, both located in the State of Durango, Mexico. Argonaut is a new venture created by former executive management team members of Meridian Gold Inc. Creating the Next Quality Mid-Tier Gold Producer in the Americas. Qualified Person Comments/Quality Control ProceduresThis Press Release was reviewed and approved by Thomas Burkhart, B.Sc. in Geology, Argonaut Gold's Vice President of Exploration. Mr. Burkhart is a Qualified Person as defined in National Instrument 43-101.Mr. Burkhart reviewed the reverse circulation drill program and on-site sample preparation procedures at El Castillo. All drill hole samples were composited at site into 1.5 meter intervals and split with half the sample transported to ALS-Chemex's sample preparation lab in Hermosillo, Mexico. Pulps are prepared in Hermosillo and then sent to ALS-Chemex's Laboratories in Vancouver, Canada where gold assays are completed using a fire assay procedure with an Atomic Absorption Spectroscopy finish. The Company utilizes a system of check assays and sample blanks consistent with industry standards.To be reported here there must be a minimum of 5 meters of material where each sample interval is equal to or exceeds a .15 gram per tonne cutoff (which is representative of the current AC Howe pit design).Cautionary Note Regarding Forward-looking StatementsThis news release contains forward-looking statements that involve risks and uncertainties that could cause results to differ materially from management's current expectations. Actual results may differ materially due to a number of factors. Except as required by law, Argonaut Gold Ltd. assumes no obligation to update the forward-looking information contained in this news release.FOR FURTHER INFORMATION PLEASE CONTACT: Argonaut Gold Ltd. Nichole Cowles Investor Relations Manager (775) 284-4422 x 101