VANCOUVER (miningweekly.com) – TSX-listed Argonaut Gold has completed a 22-hole reverse-circulation (RC) drill programme totalling 5 139 m at the La Colorada mine in Sonora, Mexico, increasing the potential to expand the El Creston openpit beyond its current design.

The drilling tested the down-dip extension of the open El Creston pit with the intention of converting inferred resources to the measured and indicated categories.

“The results of the drill campaigns over the past 11 months have further delineated and de-risked the El Creston deposit and give us further confidence in the potential to expand the El Creston openpit beyond its current design. These results substantiate the company’s decision to accelerate stripping at El Creston and are an example of how brownfields exploration continues to yield positive results at La Colorada,” president and CEO Pete Dougherty stated.

Argonaut previously updated its reserves and resources for year-end 2016, which saw increased tonnage at lower grades at La Colorada, but did not include the results from the most recent 22 holes.

The measured and indicated grade at La Colorada is 0.59 g/t while the undiluted average grade of the drill results weighted by interval length is 0.99 g/t.

Argonaut management is optimistic about the possibility of expanding the El Creston pit beyond its current design.

Argonaut on Monday also reported fourth-quarter earnings results, beating analyst forecasts by C$0.02 at C$0.04 a share, or C$5.7-million for the three months ended December.

Revenue of C$35.3-million was up 10% year-on-year, derived from sales of 28 891 oz gold, at an average price of $1 186/oz.

In 2017, the company plans to produce between 115 000 oz and 130 000 oz of gold equivalent, based on the three-year historical average silver to gold ratio of 70:1. Output is expected to rise to within a range of 155 000 oz and 170 000 oz gold equivalent in 2018, and between 170 000 oz and 185 000 oz of gold equivalent in 2019.