Argonaut Gold Confirms Southern Extension of Gold Mineralization on the Recently Acquired Fresnillo Mineral Concession Adjacent to the El Castillo Mine

TORONTO, June 1, 2017

The South Target drilling was supported by wide-spaced drilling previously completed by Fresnillo and by mineralized exposures projected south from the El Castillo pit limits.  The Company's objective was to increase drill-hole density within mineralized areas to approximately 35 metre spacing, which is consistent with the current modeling practices at El Castillo.  The drill results from the South Target area display strongly oxidized gold bearing rocks with the same chemical and structure characteristics as the El Castillo open pit mine.  The combined results of the North and South Target areas show potential to extend the current El Castillo pit limits and extend mine life.

Based on the success of the drilling campaign on the Fresnillo concession to date, the Company expects to commence an approximate 6,000 metre, Phase Two drilling program in areas where mineralization remains open for potential expansion.  The Company anticipates publishing an updated National Instrument 43-101 Technical Report for the El Castillo mining complex during the first quarter of 2018, where all drill results from the North and South Target areas will be incorporated into an updated mineral reserve and resource estimate. 

Pete Dougherty, President & CEO commented: "Drilling results in both the North and South Target areas, along with the known wedges of economic mineralization that were unavailable to us prior to the Fresnillo concession purchase by reason of mineral concession boundary alone, indicate strong potential to expand the current pit limits and extend mine life.  The positive drill results lend solid support for our acquisition of the Fresnillo concession and our vision of creating a meaningful, flagship asset at the El Castillo mining complex which will include the El Castillo and San Agustin deposits." 

Thomas Burkhart, Qualified Person noted: "Based on our geologic understanding of the El Castillo gold system, we expected that our drilling to the south would encounter strong mineralization and this was confirmed.  As with the North Target, mineralization south of the El Castillo pit showed overall better than expected continuity, locally higher than average gold grades and strong oxidation.  Mineralization remains open in several areas and we look forward to commencing a Phase Two drill program shortly to better delineate our gold zones in preparation for an updated mineral reserve and resource estimate.  The Phase One drilling program has been very successful and we are pleased with the results."

Table 1 below illustrates key highlight holes from the South Target area.  For a full table of drill results, plan view maps and cross sections, please visit: http://www.argonautgold.com/gold_operations/drill_results/

Table 1: Selected Drill Results