TORONTO, ONTARIO–(Marketwire – Jan. 17, 2013) – Argonaut Gold Inc. (“Argonaut Gold” or the “Company”) (TSX:AR), announced today that the Company achieved record gold production of 32,000 ounces during the 4^th quarter ended December 31, 2012. This included 25,805 ounces at its 100% owned El Castillo Mine (“El Castillo”) in Durango, Mexico and 6,195 ounces at its 100% owned La Colorada Mine (“La Colorada”) in Sonora, Mexico. All dollar amounts are in US dollars except as otherwise noted.

FOURTH QUARTER 2012 HIGHLIGHTS:

El Castillo

• Record production of 25,805 gold ounces (+31% improvement over Q4 2011)


• 39,329 gold ounces loaded on the pad (+30% improvement over Q4 2011)


• West Side Pad 8 construction moving forward; first cell to be loaded starting in Q2 of 2013

La Colorada

• Production of 6,195 gold ounces and 47,890 silver ounces


• 8,845 gold ounces and 815,219 silver ounces loaded on the pad


• Phase 2 pad construction is 65% complete


• Crushing circuit relocated and fully operational
  
  
  
  • Final crushing circuit expansion scheduled for early in Q2 of 2013


• Overburden removal commenced in the La Colorada/Gran Central pit

Financial

• Year-end cash balance was $191 million as of December 31, 2012, of which C $115 million for warrant exercises was included


• Fourth Quarter sales of 29,500 ounces of gold and 70,910 ounces of silver

Full year 2012

• Total production of 108,081 ounces of gold (+50% over 2011)
  
  
  
  • El Castillo 87,712 ounces (+22% over 2011)
  
  
  • La Colorada 20,369 ounces

El Castillo In Pit Sulphide Mineralization

• Over 360,000 gold ounces have been added to El Castillo’s in-pit resources. The additional sulfide mineralization is divided into two categories including non-silicified sulphides and silicified sulphides; this provides 22.6 million tonnes at a grade of 0.504 g/t. The majority of the mineralization falls in the non-silicified category which has an average grade of 0.47 g/t with recoveries ranging from 25% to over 50%. The smaller silicified zone of mineralization is mainly confined to a higher grade breccia pipe averaging 0.80 g/t. yielding recoveries of 11% to 28%.


• Results encompass approximately 5,000 meters of core drilling for 32 holes completed in multiple programs over the last three years. All metallurgical testing was completed by Kappes, Cassidy & Associates (“KCA”) in Reno, Nevada.

• Global Sulphide Resource:
  
  
  
  • El Castillo’s global measured and indicated (“M&I”) sulphide resource shows 1.5 million ounces of gold at an average grade of 0.296 g/t; it lies below the oxide and transitional gold resource at El Castillo. It is the Company’s current interpretation that the silicified sulphides make up a relatively low percentage of the total sulfides and is largely limited to the silicified breccia pipe.

Please visit www.argonautgold.com for a full table of metallurgical results and images related to the sulphides.

FOURTH QUARTER 2012 El CASTILLO OPERATING RESULTS

Fourth quarter 2012 operating statistics showed improvement over fourth quarter 2011 results. Ore production is now at an annualized rate of approximately 13 million tonnes.

Richard Rhoades, Chief Operating Officer of Argonaut Gold said “Year-end production at El Castillo of 87,712 gold ounces came in above increased guidance of 85,000 ounces for the year. The team at El Castillo team delivered yet another quarter of continued improvement, providing a 10% increase over the initial 2012 guidance. In addition to exceeding guidance expectations, the Company has seen dramatic improvement in crushing at the operation. The operation is now crushing at a rate of approximately 5 million tonnes per year.”

Production has approached a near steady state at El Castillo. Higher grade material during the fourth quarter of 2012 provided for production of over 25,000 ounces against to guidance of 21-22,000 ounces for the quarter. In 2013, the operation anticipates lower grades, offset by higher volumes of material, for an estimated 5-10% increase over total 2012 production.

FOURTH QUARTER 2012 LA COLORADA OPERATING RESULTS

Overburden removal continues at La Colorada in preparation for full scale mining. During the fourth quarter, the crusher was relocated with a minimal impact to the production plan. Fourth quarter production provided 6,195 ounces of gold, for a total 2012 production of 20,369 ounces. Final production exceeded expectations due to higher than anticipated recoveries from the reprocessing of material and positive grade reconciliation.

In discussing the Company’s fourth quarter and year end highlights, Mr. Pete Dougherty, President and CEO said “2012 has been a year of significant accomplishments for Argonaut Gold’s employees. The Company has delivered on operational production expectations and added an important project, Magino, for future growth and development.

The El Castillo production rate has shown continual improvement quarter over quarter. La Colorada has exceeded initial expectations while forming the foundation for the future. There is still more work to be done to elevate the Company to the status of a mid-tier producer and I am grateful for what has been accomplished so far.”

Argonaut Gold Q4 and Year End Financial Results Conference Call and Webcast:

The Q4 and year end financial results call is set to take place on March 26, 2013 at 8:30 am ET. Details for the call in participation are included below:

The conference call replay will be available from 10:30 a.m. ET on March 26, 2013 until April 2, 2013.

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, the advanced exploration stage San Antonio project in Mexico, the recently acquired advanced exploration stage Magino project in Ontario, Canada and several exploration stage projects, all of which are located in North America.

Creating Value Beyond Gold

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”). 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.

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 (“NI 43-101”). For further information on the Company’s properties discussed herein please see the reports as listed below on the Company’s website or on www.sedar.com: