Argonaut Gold Announces First Quarter 2016 Production of 32,154 Gold Equivalent Ounces

TORONTO, ONTARIO--(Marketwired - Apr 14, 2016) - Argonaut Gold Inc. (TSX:AR) ("Argonaut", "Argonaut Gold" or the "Company") is pleased to announce production of 32,154 gold equivalent ounces ("GEO" or "GEOs") during the first quarter ended March 31, 2016. All dollars in this news release are expressed in U.S. dollars, unless otherwise noted.

Pete Dougherty, President and CEO, stated: "First quarter 2016 GEO production was in line with guidance at El Castillo, exceeded guidance at La Colorada and showed a 6% improvement over the fourth quarter of 2015 yielding 32,154 GEOs, primarily as a result of increased crusher throughput at La Colorada. As we look toward the second quarter of 2016, we anticipate further advancement in crusher throughput. Moreover, we continue to advance our development projects and capital programs including being on schedule with leach pad construction at La Colorada."

FIRST QUARTER 2016 AND RECENT HIGHLIGHTS:

Corporate Highlights

• Cash balance grew to $46.6 million.
• Further strengthened board and management with two new board members and a new Vice President, Investor Relations.
• Received Environmental Socially Responsible Company award at all Mexican operations.

El Castillo

• Production of 17,500 GEOs.
• During the quarter, 23,259 contained gold ounces loaded on the leach pads.
• Over 75,900 tonnes per day mined and 2.8 million ore tonnes placed on the heap leach pads during the quarter.

La Colorada

• Production of 13,894 gold ounces and 49,370 silver ounces, for 14,654 GEOs.
• During the quarter, 21,519 contained gold ounces and 404,552 contained silver ounces loaded on the leach pads.
• Over 50,100 tonnes per day mined and 1.2 million tonnes of mineralized material placed on the heap leach pads during the quarter.
• Completed leach pad #5 (2.1 million tonne capacity).
• Northeast leach pad advancing well with anticipated completion Q3 2016.

Project Updates

• Re-costed San Agustin project at initial capital of $43 million – a capital savings of approximately $24 million compared with the initial capital estimate in the 2015 Preliminary Economic Assessment primarily due to utilizing synergies with El Castillo.
• Completed and filed an updated preliminary feasibility study and NI 43-101 Technical Report for Magino, resulting in a robust project with an after-tax NPV at a 5% discount rate of $415 million and IRR of 22.9% at $1,200 per ounce gold.

FIRST QUARTER 2016 El CASTILLO OPERATING STATISTICS

FIRST QUARTER 2016 LA COLORADA OPERATING STATISTICS

Richard Rhoades, Chief Operating Officer, commented: "At El Castillo, we performed in line with guidance of 17,500 GEOs. As previously announced, we anticipate the grade to improve during the second half of the year as we begin mining the north end of the phase 6 pit area. From a throughput perspective, we averaged over 30,000 tonnes per day to the leach pads compared with approximately 26,000 tonnes per day during the fourth quarter of 2015 – a 15% improvement that we anticipate will continue to further increase during the second quarter of this year.

At La Colorada, we continued to show strong performance with production exceeding guidance of 12,000 to 13,000 GEOs. The crushing circuit averaged 13,300 tonnes per day compared with the budget of 11,000 tonnes per day. We completed the phase 5 leach pad ahead of schedule and are progressing as planned on the new Northeast leach pad, which we anticipate will be completed during the third quarter of this year."

Full Year 2016 Guidance Reiterated

• Gold production of 130,000-140,000 GEOs (at a 65:1 conversion of silver to gold ounces).
  • El Castillo – 75,000-80,000 GEOs at cash costs of $750-$800 per gold ounce sold (Refer to Non-IFRS Measures section).
  • La Colorada – 55,000-60,000 GEOs at cash costs of $725-$775 per gold ounce sold (Refer to Non-IFRS Measures section).
• Cash cost per gold ounce sold of $750-$800 (Refer to Non-IFRS Measures section).
• Capital spending of $23 million including:
  • El Castillo - $4 million.
  • La Colorada - $14 million including expansion capital for Northeast leach pad and conveyor system.
  • San Antonio - $1 million for land and holding costs.
  • San Agustin - $1 million for land and permitting (excludes construction capital).
  • Magino - $1 million for land and holding costs.
  • Exploration and other - $2 million

Argonaut Gold Q1 2016 Financial Results Conference Call and Webcast – May 3, 2016:

The Q1 financial results call is scheduled to take place on May 3, 2016 at 8:30 AM (EDT). Details for the call-in participation are:

The conference call replay will be available from 11:30 AM (EDT) on May 3, 2016 to May 17, 2016.

Annual General Meeting:

Argonaut Gold Inc. will hold its annual meeting of shareholders on Tuesday, May 3, 2016 at 10:00 am (EDT) at the offices of Bennett Jones LLP, located at 3400 One First Canadian Place, Toronto, Ontario, Canada.

About Argonaut Gold

Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets are the production stage El Castillo mine in Durango, Mexico and La Colorada mine in Sonora, Mexico. Advanced exploration stage projects include the San Antonio project in Baja California Sur, Mexico, the Magino project in Ontario, Canada and the San Agustin project in Durango, Mexico. The Company also has several exploration stage projects, all of which are located in North America.

Cautionary Note Regarding Forward-looking Statements

This press release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the proposed transaction and the business, operations and financial performance and condition of Argonaut Gold Inc. ("Argonaut" or "Argonaut Gold"). Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and mine life of the various mineral projects of Argonaut; synergies and financial impact of completed acquisitions; the benefits of the development potential of the properties of Argonaut; the future price of gold, copper, and silver; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; success of exploration activities; and currency exchange rate fluctuations. Except for statements of historical fact relating to Argonaut, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Argonaut and there is no assurance they will prove to be correct.

Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, variations in ore grade or recovery rates, risks relating to international operations, fluctuating metal prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated. Although Argonaut has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Argonaut undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered if the property is developed. Comparative market information is as of a date prior to the date of this document.

Non-IFRS Measures

The Company has included certain non-IFRS measures including "Cash cost per gold ounce sold" in this press release to supplement its financial statements which are presented in accordance with International Financial Reporting Standards ("IFRS"). Cash cost per gold ounce sold is equal to production costs less silver sales divided by gold ounces sold. The Company believes that this measure provides investors with an improved ability to evaluate the performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS. Therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Please see the management's discussion and analysis for full disclosure on non-IFRS measures.

Qualified Person, Technical Information and Mineral Properties Reports

Technical information included in this release was supervised and approved by Thomas Burkhart, Argonaut Gold's Vice President of Exploration, and a Qualified Person under National Instrument ("NI") 43-101.

For further information on the Company's material properties, please see the reports as listed below on the Company's website or on www.sedar.com:

Contact

Argonaut Gold Inc.
Dan Symons
Vice President, Investor Relations
416-716-6466
dan.symons@argonautgold.com
www.argonautgold.com