Argonaut Gold (TSX: AR) announced last week that it has completed the financing package to bring the Magino gold mine into production. The property, 40 km northeast of the town of Wawa, Ont., is the site of the underground mine of the same name that opened after the First World War. Sporadic mining over the decades eventually recovered 141,319 oz. of gold.
The company has arranged a term loan of US$200 million and a revolving credit facility of US$50 million for development and construction of an open pit and conventional mill.
Argonaut has hedged 25,000 gold ounces per quarter for the six quarters starting in the third quarter 2023 at a gold price of US$1,860/oz. and 15,000 gold ounces per quarter for the 10 quarters starting in the first quarter 2025 at a gold price of US$1,860/oz. In addition, the company has hedged 10,000 gold ounces per quarter for the 10 quarters starting the first quarter 2025 at a gold price of US$1,763/oz. Argonaut has also fixed the dollar conversion rate at C$1.334 to US$1 for the next two years.
The company has also closed the sale of a 2% net smelter return royalty on Magino and the surrounding land package with Franco-Nevada (TSX: FNV) for US$52.5 million and a US$10 million equity private placement for which approximately 34.7 million Argonaut common shares at a price of C$0.3931 per share will be issued to Franco-Nevada.
The Magino gold project has measured and indicated resources of 132.4 million tonnes grading 0.94 g/t gold for 4.0 million oz. and an inferred resource of 20.9 million tonnes at 0.78 g/t gold for 526,000 contained ounces.
Details are available on www.ArgonautGold.com.