The ramp-up of the Magino project, in northern Ontario, is under way, putting the mine on track to achieve commercial production during the current quarter, reports Toronto-listed Argonaut Gold CEO Richard Young.

Magino achieved its first gold pour in mid-June – about 30 days behind schedule. During June, the mine produced an initial 3 295 oz and sold 72 oz. Accordingly, the company recognised $0.1-million of revenues.

Overall revenue for the second quarter was 25% lower at $83-million, owing to lower planned production from Argonaut’s three Mexican mines, partially offset by higher production from Florida Canyon, in Nevada, and the initial sales from Magino.

Consolidated production of 43 492 gold-equivalent ounces (GEOs), including the initial 3 295 oz of gold from the Magino mine, was 27% lower compared to 59 190 GEOs from the second quarter of 2022, owing to lower ore tonnes mined and processed at the three Mexican operations.

Cost of sales per ounce of $1 590 and all-in sustaining costs per ounce of $1 594 were similar to the prior-year period and largely in line with 2023 full-year guidance. 

"Production and per ounce costs are largely on plan for the first half of the year, placing the company on track to meet its full-year production and cost guidance targets set at the beginning of the year.

“We continue to ramp up the mill at Magino to steady-state and are expecting to achieve commercial production in the third quarter of this year. The plant has been running at or above nameplate throughput capacity when operating," comments COO Marc Leduc.

Magino is expected to produce between 72 000 oz and 81 000 oz of gold in 2023 at cash costs of between $850/oz and $950/oz and about 148 000 oz of gold at a cash cost of $868/oz in 2024, its first full year of production.

Meanwhile, Argonaut believes Magino could be one of the biggest and lowest-cost mines in Canada.

To that end, during the third quarter, while commissioning the Magino mill, the company will start a reserve development drilling programme intended to increase reserves in combination with engineering studies to increase mill throughput.

At Florida Canyon, Argonaut will also start a drill programme as part of a proof-of-concept programme on the sulphide material.

“We believe organic growth through mineral resource expansion will deliver significant value within the Company's asset base and lays the long-term foundation to grow our current production profile as we seek to become a low-cost, midtier North American gold producer," comments Young.