Argonaut Gold Announces Q2 Production of 30,310 Gold Equivalent Ounces

TORONTO, ONTARIO--(Marketwired - Jul 15, 2014) - Argonaut Gold Inc. ("Argonaut", "Argonaut Gold" or the "Company") (AR.TO), announced today that the Company had production of 30,310 gold equivalent ounces ("GEOs") during the second quarter ended June 30, 2014 ("Q2"). This included 21,359 GEOs at its 100% owned El Castillo Mine ("El Castillo") located in Durango, Mexico and 8,951 GEOs at its 100% owned La Colorada Mine ("La Colorada") located near Hermosillo, Mexico.

		2nd Quarter
		2014	2013	Change
Total Gold Equivalent Ounce Production:
	GEOs loaded to the pads1	53,003	42,965	+23%
	GEOs projected recoverable ounces1,2	31,849	25,344	+26%
	GEOs produced ounces1	30,310	34,572	-12%
	GEOs ounces sold1	31,723	32,424	-2%
1 GEOs are based on conversion ratio of 55:1 for silver to gold and is the referenced ratio throughout the release.
2 Recoverable ounces - see tables titled Second Quarter 2014 El Castillo Operating Statistics and Second Quarter 2014 La Colorada Operating Statistics

SECOND QUARTER 2014 HIGHLIGHTS:

El Castillo

• GEO production of 21,359 ounces consisting of 21,041 gold ounces and 17,474 silver ounces (GEOs at 55:1 conversion rate).

• 37,352 gold ounces loaded on the leach pads equating to 21,424 projected recoverable gold ounces.

• Mining:

  • The daily mining rate for the quarter increased from 87 thousand tonnes per day ("ktpd") in the first quarter to 91 ktpd in the second quarter, an increase of 5% quarter over quarter (24% year over year). The mine plan incorporated mostly oxidized ore, increasing from 75% to 87% of total ore to the pads for the second quarter over the first quarter. This should result in improved recoveries in the coming quarter.

  • Strip ratio increased to 1.2:1 which is consistent with mine plan expectations.

• Crushing and conveying:

  • West crusher conveyor moved a record 1,468,000 tonnes to the pads.

  • East crusher conveyor moved a record 1,615,000 tonnes to the pads.

• West side pad expansion continues ahead of schedule.

  • Cell 2a was completed in May and over liner placement is nearly complete, well ahead of schedule.

  • Cell 3b the rock fill was completed in June and the cell construction will be finalized in the third quarter, which is also ahead of schedule.

La Colorada

• GEO production of 8,951 ounces, consisting of 8,420 gold ounces and 29,224 silver ounces (GEOs at 55:1 conversion rate).

• 15,651 gold ounces and 189,621 silver ounces loaded on the pad; equating to 10,425 projected recoverable GEOs to leach pad.

• We are ahead on stripping for the year. The strip ratio for the quarter of 4.49 fell in comparison to 7.22 realized during the first quarter, as ore shipments to the crusher increased.

• Record 880,000 tonnes of crushed ore was loaded to the leach pad which is an increase of 182% year over year. A new level of 10 ktpd of crushed ore to the pads has now been established. Since Q1 of this year we have achieved nearly a 40% improvement in crushing.

• An additional tertiary crusher was added to the crushing circuit and commissioned at the beginning of July in an effort to further increase crushing capacity.

Magino

• The Richmont surface and mining rights expansion agreement was finalized. A budget and exploration plan for this property will be developed.

• We have identified additional material for further heap leach column test work to be performed, and will begin this metallurgical test work in Q3.

• We continue to advance the permitting studies on the project.

San Antonio

• The Company continues to work on a dual permitting path; plans include pursuing a mutually beneficial project for all stakeholders by simultaneously pursuing the legal path to obtaining permits as well as working with local and federal agencies and officials.

San Agustín

• The Phase I drill program of 22,114 metres has been completed to date including 21,115 metres of reverse circulation ("RC") in 217 drill holes and 999 metres of PQ core in 13 drill holes.

• Initiated Phase II drill program, completing 1,750 of 13,000 metres to date.

• Metallurgical test work continues with column tests being run by independent laboratory Kappes, Cassiday & Associates in Reno, Nevada and bulk run of mine column tests at El Castillo.

• Argonaut Gold purchased Geologix Resources claims for the Nuestra Senora del Carmen II property, and has an agreement to acquire the Consejo 1 title.

  • These concessions total 489 hectares immediately to the west and east of the current drill program for the Company.

• A cash payment of $10M was made to Silver Standard Resources Inc. ("Silver Standard"), as well as a $1.6M VAT payment to the government of Mexico on this transaction.

CEO Commentary

Pete Dougherty, President and CEO for Argonaut Gold said, "Operationally we have achieved marked improvement quarter over quarter in our mining and processing. These operational improvements will lead to production increases in the 2^nd half of the year as we see mining capacity and gold recovery increasing.

At El Castillo, we are ahead with our heap leach pad construction. At La Colorada, we have commissioned the new secondary cone crusher and installed a fourth tertiary cone crusher which should further improve crushing production. We anticipate further production gains to be achieved in the second half of the year through these capital investments.

On the exploration front, we are pleased with the initial drilling results from the newly acquired San Agustin project. We have expanded our mineral concessions further with the purchase of the Nuestra Senora del Carmen II and the Consejo 1 title.

We continue to work toward permitting at both San Antonio and Magino. At Magino, we announced positive heap leach column results which have prompted further test work which will begin in Q3. At the San Antonio project, we are seeking an approach to move this project forward as it represents significant value to all stakeholders.

With steady improvement at the operations through the first half of the year, we anticipate a strong second half of the year as outlined in January.

The Company continues to advance all of our projects as we work to build up our production profile to join the ranks of the intermediate gold producers. We are excited by the process improvements, our operating team's ability to set new mining and processing records and our exploration group's positive drill results to date. We are looking forward to a strong second half of the year."

SECOND QUARTER 2014 EL CASTILLO OPERATING STATISTICS
		3 Months Ended March 31							6 Months Ended June 30
		2014		2013		% Change			2014		2013		% Change
Mining
Tonnes ore (000s)		3,767		3,278		+15	%		7,433		6,450		+15	%
Tonnes waste (000s)		4,524		3,418		+32	%		8,688		6,431		+35	%
Tonnes mined (000s)		8,291		6,695		+24	%		16,120		12,882		+25	%
Tonnes per day (000s)		91		74		+24	%		89		71		+25	%
Waste/ore ratio		1.20		1.04		+15	%		1.17		1.00		+17	%
Heap Leach Pad
Tonnes ore direct to leach pad (000s)		683		1,710		-60	%		1,506		3,440		-56	%
Tonnes crushed (000s)		1,616		1,565		+3	%		3,113		2,996		+4	%
Tonnes overland conveyor (000s)		1,468		NA		+100	%		2,814		N/A		+100	%
Production
Gold grade (g/t)1		0.31		0.38		-19	%		0.32		0.37		-12	%
Gold loaded to leach pad (oz)2		37,352		40,169		-7	%		77,276		76,192		+1	%
Projected recoverable gold ounces (oz)3		21,424		23,403		-8	%		43,702		44,937		-3	%
Gold produced (oz)		21,041		28,075		-25	%		43,017		51,200		-16	%
Gold sold (oz)		22,292		26,705		-17	%		43,198		46,214		-7	%
1 "g/t" is grams per tonne
2 "oz" means troy ounce
3 Recovery rates: ROM oxide 50%, crushed oxide 70%, ROM transition 40%, crushed transition 60%, crushed sulfides argilic 30%, crushed sulfides silicic 17%.

Richard Rhoades, Chief Operating Officer for the Company, said, "At El Castillo, operations continued to increase productivity in the mining and crushing/conveying areas. The mining fleet moved more than 91 thousand tonnes of material per day, a new production record. Both the west and east crushing/conveying systems set records for throughput. As anticipated, we have experienced seen a higher strip ratio for the 1^st half of 2013, which peaked in the second quarter at 1.2. The strip ratio is expected to decline to 1.0 by the 4^th quarter. The percentage of transition ore (which has lower leach recoveries) continued to decrease, accounting for only 13% of the total ore placed on the pad during the quarter.

The progress to date on the heap leach pad construction is well ahead of schedule, which will allow the mining operations to increase placements during the second half of the year."

SECOND QUARTER 2014 LA COLORADA OPERATING STATISTICS
		3 Months Ended March 31							6 Months Ended June 30
		2014		2013		% Change			2014		2013		% Change
Mining
Tonnes ore (000s)		700		342		+105	%		1,260		898		+40	%
Tonnes waste (000s)		3,145		3,802		-17	%		7,188		7,600		-5	%
Total tonnes (000s)		3,845		4,143		-7	%		8,488		8,499		-1	%
Waste/ore ratio		4.49		11.12		-60	%		5.70		8.46		-33	%
Tonnes rehandled (000s)		245		0		+100	%		315		0		+100	%
Heap Leach Pad
Tonnes ore direct to leach pad (000s)		880		312		+182	%		1,515		715		+112	%
Production
Gold grade mined (g/t)1		0.68		0.28		+141	%		0.63		0.29		+119	%
Gold loaded to leach pad (oz)2		15,651		2,796		+460	%		26,463		6,559		+303	%
Projected recoverable GEOs loaded (oz)3		10,425		1,941		+437	%		17,473		4,584		+281	%
Gold produced (oz)		8,420		5,511		+53	%		15,983		11,293		+42	%
Silver produced (oz)		29,224		45,318		-36	%		96,803		90,197		+7	%
GE0s produced (oz)		8,951		6,335		+41	%		17,743		12,933		+37	%
Gold sold (oz)		8,530		5,051		+69	%		16,263		10,983		+48	%
Silver sold (oz)		32,083		27,801		+15	%		105,294		82,070		+28	%
GEOs sold		9,113		5,556		+64	%		18,177		12,475		+46	%
1 "g/t" is grams per tonne
2 "oz" means troy ounce
3 Recovery rates: Gold 60% and Silver 30%
4 GEOs based on conversion ratio of 55:1 for silver to gold

Richard Rhoades said, "At La Colorada, the mine grades continue to improve averaging 0.68 g/t during the second quarter. We have added to the tertiary crushing capacity, with throughput improving by nearly 40% over Q1. We have begun reprocessing an old heap leach pad, which should result in lower operating cost. We are now in a position to achieve greater production increases in the second half of the year."

Exploration at San Agustín

The majority of the Company's 2014 exploration budget is focused on the recently acquired San Agustín project, located 10 kilometres southwest of El Castillo. The two deposits lie on the same regional mineral trend and are geologically very similar.

Argonaut Gold has now completed Phase I of the two phase drilling program. Phase I drilling consisted of more than 22,000 metres at San Agustín. RC drilling includes 21,115 metres in 217 holes; PQ core drilling includes nearly 1,000 metres in 13 holes. The results from this Phase I drilling will be incorporated into a current resource and then followed up with a preliminary economic assessment anticipated by the end of the year.

Drill Summary
	Phase I			Phase II
	RC	CORE	RC + CORE	RC	CORE	RC + CORE
Completed Drill Holes	217	13	230	10	-	10
Completed Metres	21,115	999	22,114	1,750	-	1,750

Tom Burkhart, Vice President of Exploration for the Company, said, "When Argonaut acquired the San Agustin project there was an historic resource and potential to fill-in and expand the known zone of mineralization. The Company completed a tight spaced Phase I drill program in what was termed the Main Zone of the deposit in order to report a new resource from this area in Q3 of this year. The required drilling for this was accomplished ahead of schedule and under budget. Our work combined with earlier drilling has established mineral continuity in the Main Zone. We also conducted additional wide space drilling which we believe supports our assumption that the San Agustin mineral system has the potential to grow.

The wide spaced drill holes outside the Main Zone drilling primarily focused on testing the potential to the northwest. Drilling to date has yielded positive results and indicates the San Agustin mineral system remains open. Our next Phase of drilling will consist of approximately 13,000 metres, and is designed to establish the broader limits of the mineral system. This is an exciting project and our Mexican exploration team is doing a fantastic job moving this project forward."

The Phase II RC drill program has begun on exploration ground for which the Company has received exploration permits. As additional exploration permits are received, the budget and scope of this drilling will be evaluated.

Significant drill hole results from the Main Zone
Drill Hole Number		From (metres)		To (metres)		Thickness (metres)		Gold Grade (g/t)		Silver Grade (g/t)		Mineral Type
14-SAGRC-122		7.62		64.01		56.39		0.35		25.7		Oxide
14-SAGRC-134		0.00		51.82		51.82		0.29		11.2		Oxide
14-SAGRC-163		0.00		38.10		38.10		0.49		13.9		Oxide
14-SAGRC-199		0.00		70.10		70.10		0.33		1.7		Oxide
14-SAGRC-201		0.00		39.62		39.62		0.64		2.0		Oxide
14-SAGRC-212		0.00		42.67		42.67		0.49		4.4		Oxide
14-SAGRC-213		0.00		82.30		82.30		0.32		3.7		Oxide
14-SAGRC-217		0.00		39.62		39.62		0.45		6.4		Oxide
14-SAGRC-219		12.19		74.68		62.48		0.33		12.7		Oxide
Select extension drill hole results to the Northwest
Drill Hole Number		From (metres)		To (metres)		Thickness (metres)		Gold Grade (g/t)		Silver Grade (g/t)		Mineral Type
14-SAGRC-135		19.81		21.34		1.52		29.20		1.0		Oxide
14-SAGRC-157		59.44		67.06		7.62		3.17		84.4		Oxide
14-SAGRC-196		36.58		41.15		4.57		10.68		44.6		Oxide
14-SAGRC-198		76.20		91.44		15.24		1.05		16.9		Oxide
14-SAGRC-229		36.58		38.10		1.52		15.80		3.2		Oxide

The majority of drilling is oriented to cross the mineral system as close as possible to determine true widths. However, the Company cannot assure that all the reported intervals represent the true widths of the mineral system.

Complete results from the drilling campaign are posted on the Company's website at www.argonautgold.com.

To view the 2014, Phase I grade thickness drill hole map, please visit the following link: http://media3.marketwire.com/docs/ARmap1.pdf.

To view the 2014, Phase I & II drill hole map, please visit the following link: http://media3.marketwire.com/docs/957427_MAP2.pdf.

Argonaut Gold Q2 Financial Results Conference Call and Webcast:
The Q2 financial results call is scheduled to take place on August 14, 2014 at 8:30 am EDT.
Q2 Conference Call Information
	Toll Free (North America):	1-877-223-4471
	International:	1-647-788-4922
	Conference ID:	67705385
	Webcast:	http://www.argonautgold.com/
Q2 Conference Call Replay:
	Toll Free Replay Call (North America):	1-416-621-4642
	International Replay Call:	1-800-585-8367

The conference call replay will be available from 11:30 am EDT on August 15, 2014 until August
29, 2014.

Technical Information and Mineral Properties Reports

The technical information contained in this document has been prepared under supervision of, and reviewed and approved by Mr. Thomas H. Burkhart, Argonaut's Vice President of Exploration, and a qualified person as defined by National Instrument 43-101. For further information on the Company's properties please see the reports as listed below on the Company's website or on www.sedar.com:

El Castillo Mine		NI 43-101 Technical Report on Resources and Reserves, Argonaut Gold Inc., El Castillo Mine, Durango State, Mexico dated February 24, 2011
La Colorada Mine		NI 43-101 Preliminary Economic Assessment La Colorada Project, Sonora, Mexico dated December 30, 2011
Magino Gold Project		NI 43-101 Technical Report and Mineral Resource Estimate on the Magino Gold Project, Ontario, Toronto, Canada dated January 30, 2014
San Antonio Gold Project		NI 43-101 Technical Report and Mineral Resource Estimate on the San Antonio Gold Project, Baja California Sur, Mexico dated October 10, 2012

The San Agustín project is not a material property of Argonaut. For further information on the San Agustín project, please see the historic estimates disclosed in the technical report titled "San Agustín Resource Estimate" dated March 2009 and available under the profile of Silver Standard at www.sedar.com. Per Silver Standard, the historic mineral reserves estimate was completed by Gilles Arseneau, Ph.D., P.Geo, a Qualified Person, pursuant to NI 43-101, in a technical report completed by Wardrop, a TetraTech company, entitled "San Agustín Resources Estimate" dated March, 2009. The report was reviewed by Thomas Burkhart on behalf of Argonaut Gold, who has concluded that it continues to be relevant and reliable as a basis for understanding the potential resources at the property. To the best of Argonaut Gold's knowledge, information and belief, there is no new material, scientific or technical information that would make the disclosure of the mineral resources inaccurate or misleading. Argonaut Gold has not done sufficient work to classify the historic estimate as current mineral resources or mineral reserves and is not treating the historical estimate as current mineral resources or mineral reserves. The Company has begun an approximately 25,000 metre drill program to update the resource model and verify or upgrade the historic work to support the development of a current estimate.

Qualified Person Comments/Quality Control Procedures

For sample analysis the Company utilizes a system of Quality Assurance/Quality Control that includes insertion and verification of standards, blanks and duplicates consistent with industry standards. The preparation of this Press Release was supervised and approved by Thomas Burkhart, Argonaut Gold's Vice President of Exploration and a Qualified Person under National Instrument 43-101. Mr. Burkhart also reviewed the reverse circulation and core drilling programs and on-site sample preparation procedures at La Colorada.

Samples from the San Agustin Project are collected at site by Argonaut's personnel and transported to ALS-Chemex preparation laboratory in Zacatecas, where samples are prepared and pulps sent for assay in ALS-Chemex's Vancouver, BC laboratory. Samples are analyzed for gold by Fire Assay and Atomic absorption finish (Au-AA23 assay code; 0.005 to 10 ppm detection limit) plus Silver by Aqua Regia and Atomic Absorption finish (0.1 to 200 ppm detection limit). Samples over 10 g/t Au are assayed with gravimetric finish (Assay code Au-GRA21). All samples are also assayed by ICP-AES (code ME-ICP41) for a suite of 35 elements.

(Au AA-23 assay method code;). Samples over 10 g/t Au are assayed with gravimetric finish (Assay code AU-GRA21). All samples are also assayed by ICP-MS (code ME-ICP41) for a suite of 35 elements.

The potential quantities and grades disclosed herein are conceptual in nature, there has been insufficient exploration to define an updated mineral resources and it is uncertain if further exploration will result in these targets being delineated as an updated mineral resource.

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 the La Colorada mine in Sonora, Mexico. Advanced exploration stage projects include the San Antonio project in Baja California Sur, Mexico, and the Magino project in Ontario, Canada. The recently acquired San Agustín project is the primary exploration target for Argonaut in 2014. The Company also has several exploration stage projects, all of which are located in North America.

Creating Value Beyond Gold

Cautionary Note Regarding Forward-looking Statements

This preliminary announcement of production results will be followed with a report of financial results in connection with the publication of quarterly financial information. 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; economics 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 parametres, 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.

These factors are discussed in greater detail in Argonaut's most recent Annual Information Form and in the most recent Management Discussion and Analysis filed on SEDAR, which also provide additional general assumptions in connection with these statements. Argonaut cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Argonaut believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

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.