"CDG increases Argonaut's proven and probable gold mineral reserves by 48% and, through the work detailed in the PFS, provides Argonaut with a low operating cost, heap leach project with an after-tax NPV5% of US$175 million at $1,350/oz gold and $16.75/oz silver - and $222 million at $1,450 gold and $18 silver," president and CEO Pete Dougherty said.

The Mexico-focused company had last month lowered its 2019 production guidance to 190,000-200,000oz gold-equivalent and raised all-in sustaining costs to $1,125-$1,150/oz, as it started to rebound after a "challenging" second quarter.

It has continued to hit hurdles, reporting two fatalities at its La Colorada mine in October and experiencing a blockade at El Castillo the same month, followed by authorities knocking back an updated environmental impact assessment for its proposed San Antonio gold mine.
 
Argonaut said it was expecting a permitting decision for Cerro del Gallo in the first quarter of 2020, having filed a unified technical document for land use change in April.

Dougherty said the project fitted well within the team's abilities as another openpit heap leach project in Mexico.

The PFS for Cerro del Gallo estimated cash costs of $597/oz gold sold and all-in sustaining costs of $677/oz.

Initial capex was put at $134 million and the after-tax IRR at 20%.

The study anticipated average annual production of 64,000oz gold, 1.3 million ounces of silver and 2,400 tonnes of copper over a 15.5-year mine life.

The company's shares lost C2c or 1.1% yesterday to close at $1.76, in the lower portion of a 52-week range of $1.20-$2.87.

Argonaut is capitalised at $315.9 million (US$240.8 million).