Argonaut Gold has signed a fixed bid engineering, procurement, construction and commissioning (EPC) contract with Ausenco Engineering Canada for the Magino processing facility and other parts of the mining project in Ontario, Canada.

Argonaut said that the value of the contract is approximately 40% of the initial capital estimate for the Magino project of between $360m and $380m.

The gold property consists of seven patented mining claims, 69 unpatented mining claims, and four leased mining claims, that are spread over an area of 2,204.5ha.

Argonaut Gold president and CEO Pete Dougherty said: “We are very pleased to partner with Ausenco on the Magino project construction.  Ausenco is an industry leader in the field of building high-quality processing facilities in the mining industry and recently did an excellent job with the Moose River project in Nova Scotia, Canada.

“We are excited for Magino to be one of the first projects entering construction in the current gold price environment, as we feel first mover advantage is critical when securing a construction team of the highest quality and with a superior track record.”

Argonaut, which recently posted the first phase of financial assurance with the province of Ontario, plans to file the Magino project closure plan with the province of Ontario in January 2021 to allow for start of the construction.

The first gold pour for the project is slated to commence during the first half of 2023.

Argonaut amends Ana Paula sale agreement

Argonaut also announced that it has amended the agreement signed earlier with AP Mining for the sale of the Ana Paula project to AP Mining. This allows more time to meet the regulatory and government approvals required to close the deal.

As part of the amended deal, AP Mining will pay an additional $1m and reimburse all of Argonaut’s costs incurred associated with the Ana Paula project incurred between 01 January 2021 and the closing of the transaction.

The transaction is subject to financing and receipt of all necessary approvals in the first quarter of 2021.