Canadian gold miner Argonaut on Tuesday announced a new capital cost estimate of C$800-million for its Magino project – a C$290-million increase on the previous estimate – and said Pete Dougherty had ceased to be the president and CEO of the company with immediate effect.

Given the substantial increase in the Magino construction capital estimate, the TSX-listed miner also said that it expected a funding shortfall to see the project through to completion.

“We are conducting an immediate review of both financing and strategic alternatives,” VP corporate development and investor relations Dan Symons said in a statement.

He explained that the Magino project was no exception to the cost increases, inflation and Covid-19 impacts reported across the industry, with these accounting for about 32% of the capital increase.

Changes in scope account for about 28% of the capital expenditure (capex) increase and primarily relate to site development, the tailings management facility (TMF) and permanent power. About 20% of the capex increase relates to increases in quantities.

There was also a cost involved for compressing the schedule, after work on the processing facility fell behind owing to civil works challenges. Compressing the schedule to meet the initial target of first gold pour by March 2023 was deemed to be more economic than delaying the overall project.

“We have a much higher degree of confidence in the updated Magino capital estimate now that we are nearly a year into the project and have vastly reduced the unknowns around civil works both at the plant site and TMF,” said Symons.

Regarding the leadership change, chairperson James Kofman commented that the board would work activity with, and be available to the executive leadership team while a search for Dougherty’s replacement was under way.

“Our board consists of four members with mining CEO experience and a wealth of knowledge in both financing and strategic alternatives. We have full confidence in the existing executive team to step up during this interim period,” said Kofman.

He also thanked Dougherty for his contributions during his tenure as president and CEO.

Argonaut was cleared in early 2021 to start site preparation for construction of Magino, which will produce about 150 000 oz/y in the first five years of its 17-year mine life.

The company's stock fell 25% to to C$2.36 a share on Monday.