Argonaut Gold Announces Full Year 2014 Gold Production of 136,706 Gold Equivalent Ounces; Record Quarterly Production of 44,312 Gold Equivalent Ounces

2015 Guidance of 135,000-145,000 Gold Equivalent Ounces of Production
at a Cash Cost of $700-$750

January 7, 2015

Toronto, Ontario – (January 7, 2015) Argonaut Gold Inc. (“Argonaut”, “Argonaut Gold” or the “Company”; TSX: AR) announced today that it had record production of 44,312 gold equivalent ounces (“GEO” or “GEOs”) during the fourth quarter ended December 31, 2014. This included 27,870 gold equivalent ounces at its 100% owned El Castillo Mine (“El Castillo”) located in the State of Durango, Mexico and 16,442 gold equivalent ounces at its 100% owned La Colorada Mine (“La Colorada”) located near Hermosillo, Mexico. Gold equivalent ounces are calculated on the basis set out below.

FOURTH QUARTER 2014 HIGHLIGHTS:

El Castillo

• Quarterly production of 27,870 gold equivalent ounces; full year production of 93,379 gold equivalent ounces (at 55:1 conversion of silver to gold ounces).
• During the quarter, 37,986 gold ounces loaded on the leach pads.
• 7.4 million total tonnes mined and 3.0 million tonnes processed through the crushing circuits during the quarter.
• Heap Leach pad 3B west completed.

La Colorada

• Quarterly production of 15,682 gold ounces and 41,787 silver ounces, for 16,442 gold equivalent ounces (at 55:1 conversion of silver to gold ounces).
• Full year production of 40,535 gold ounces and 153,548 silver ounces, for 43,327 gold equivalent ounces (at 55:1 conversion of silver to gold ounces).
• During the quarter, 19,917 gold ounces and 270,601 silver ounces loaded on the leach pads.
• Average crusher throughput for the quarter of 12,140 tonnes per day.

Project updates

• Updates are expected to be provided in mid-January 2015 regarding the San Agustín Preliminary Economic Assessment (“PEA”) and the ongoing Magino metallurgical test work.

2015 GUIDANCE

• Gold production of 135,000-145,000 gold equivalent ounces (at a 55:1 conversion of silver to gold ounces).
  • El Castillo – 85,000-90,000 gold ounces at cash costs of $750-$800 per gold ounce sold (cash cost per ounce sold is a non-IFRS measure as described in the notes to this release).
  • La Colorada – 50,000-55,000 gold equivalent ounces at cash costs of $600-$650 per gold ounce sold (cash cost per ounce sold is a non-IFRS measure as described in the notes to this release).
  • Total cash cost of $700-$750 per gold ounce sold (cash cost per ounce sold is a non-IFRS measure as described in the notes to this release).
• Total capital spending of $37 million, with anticipated spending by project of:
  • El Castillo - $16 million in total capital, consisting of $4 million in leach pad expansion, $6 million in sustaining capital and $6 million in capitalized stripping.
  • La Colorada - $11 million in total capital, consisting of $3 million in leach pad expansion, $2 million in sustaining capital and $6 million on capitalized stripping.
  • San Antonio - $2 million on-going cost excluding any capital for construction of the project that is subject to permits being granted.
  • San Agustín - $2 million in design costs excluding drilling and any capital for construction of the project subject to permits being granted and a construction decision by the board of directors.
  • Magino - $2 million in technical and permitting studies.
  • Exploration program - $4 million primarily focused at San Agustín, Magino and fixed holding costs for land and concessions.

Pete Dougherty, Argonaut Gold’s President and CEO, said “Overall, 2014 was a challenging year for Argonaut. However, our teams have overcome these obstacles as can be seen in the record production results of the fourth quarter. We are pleased with the efforts made and look forward to 2015. In addition to the strong 2014 operational results, we continued to move forward other projects in our portfolio. At the San Agustín project, an updated resource nearly tripled the previous resource, and we believe there continues to be upside exploration potential still to be realized. At Magino, we finalized a transaction with Richmont Mines Inc. that will allow us to look at adding further value to the project with possible resource expansion onto this adjacent property. d