New Wisdom Investment Limited

Mexico Govt denies gold project

(Dec 19, 2016)

Mexico’s environmental authority (SEMARNAT) has denied another environmental impact assessment (MIA) for TSX-listed Argonaut Gold’s proposed San Antonio project in Baja California Sur.

Argonaut said in a statement that SEMARNAT did not approve the MIA because it required additional information on impacts to the environment and aquifer, and on plant construction, operation and closure plans.

The decision is the latest blow in the long-running San Antonio saga for Argonaut, which has two operating mines in Mexico and a third, San Agustin, in the construction stage.

Permitting issues began at San Antonio in August 2012, when the initial MIA was denied due in part to a zoning issue, which the company argued against in federal court.

The federal appeals court ruled earlier this year the zoning had not been properly established and ordered SEMARNAT to annul its MIA denial and issue a new decision.

President and CEO Pete Dougherty said Argonaut was disappointed with the latest denial but believed the information requested was readily available and it could respond swiftly.

He said the company was evaluating legal options, possibly re-submitting a revised MIA and continuing dialogue.

“We will review the factors that led to this decision and determine a path to move this project forward,” he said.

“Our plan calls for a modern approach to mining including cleaning up historical overburden stockpiles and tailings and working to improve the local aquifer.

“We continue to believe that San Antonio remains one of the best undeveloped projects in the sector and we will continue to seek ways to unlock the benefits and value of this project for the local communities and for our shareholders.”

The project has a 65 million tonne resource grading 0.83g/t gold for 1.735 million ounces of gold.

Argonaut’s shares have ranged this year from C79c in January to a high of C$4.45 in July, then slid last week from $2.38 to close at $1.60.

Chairman Brian Kennedy is due to leave at the end of this year with company director Jim Kofman taking the helm from December 31.

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