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Argonaut Gold signs collar options for El Castillo gold mine

Argonaut Gold Inc. expects to extend the life of the El Castillo gold mine in Mexico, its highest-cost operation, after signing a series of collar option contracts on a portion of the remaining life-of-mine production.

The contracts cover 145,500 ounces of gold between the fourth quarter and the first half of 2022 at an average floor price of US$1,450 per ounce and a weighted average ceiling price of US$1,706/oz. The company will realize the actual gold sales price if the gold price remains within the range of the collars.

Argonaut said Aug. 26 that the deals ensure cash flow that will help fund its development projects as it seeks to extend El Castillo's life of mine beyond mid-2022. It also noted that the zero-cost collar program represents a small percentage of the mine's total gold ounces.

According to a March 2018 estimate, El Castillo contains proven and probable mineral reserves of 121.3 million tonnes at 0.34 g/t of gold for 1.3 million ounces and 10.2 g/t of silver for 26.2 million ounces.