Argonaut Gold Inc. (TSX:AR) (the "Company", "Argonaut Gold" or "Argonaut") is pleased to announce they have signed an agreement pursuant to which the Company will acquire the San Agustin project, located 10 kilometers from the their El Castillo project in Durango, Mexico, from Silver Standard Resources (TSX:SSO) ("Silver Standard Inc.").
Completion of the transaction is subject to customary closing conditions, including receipt of required regulatory and TSX approvals. Argonaut Gold expects the transaction to close in the first quarter of 2014. Silver Standard will also retain a 2% NSR interest on all sulphide hosted mineralization.
The San Agustin project hosts an indicated resource of 1.6 million ounces of gold and 48 million silver ounces within 121 million tonnes. In addition, the project carries an inferred resource of 1.06 million gold ounces and 37 million silver ounces within 91.2 million tonnes.
Peter Dougherty, President and CEO of Argonaut Gold said, "Argonaut is very pleased to add this project to our portfolio. The San Agustin project is 10 kilometers from our operating El Castillo mine in Durango, Mexico and the mineralization is hosted on the same geologic setting. We anticipate that proximity of the two projects will allow for operational synergies and in addition to sharing resources and infrastructure, operational and geological knowledge acquired at El Castillo will be utilized in the development of San Agustin.
"The mineral system has an oxidized cap which hosts approximately 400k ounces of gold and 16.4 million ounces of silver. Argonaut's near term exploration objectives include in-fill and step out drilling of the known oxide resource. Current near surface oxide mineralization remains open in all directions and the exploration potential is considered excellent. Argonaut will also be conducting additional metallurgical work on the project."