The builder of a Dubreuilville gold mine is now an owner

The builders of an open-pit gold camp, outside Dubreuilville, have taken an ownership stake in the project.

Argonaut Gold has raised $10 million through a private placement share offering with its contractor, Ausenco Engineering Canada.

This arrangement was first contemplated last January when Ausenco came aboard through a fix-bid engineering, procurement, construction and commission contract to to build the on-site processing plant at Magino.

As the holder of 4,255,319 common shares, Ausenco becomes an 8.3 per cent owner in the project. 

Argonaut said those proceeds are earmarked for mine construction work and general corporate purposes.

The mine life at Magino is projected for 17 years, with calculated production of 2.2 million ounces in that span.

But the company is continuing exploration in and around the proposed pit, and that's led to the discovery of high-grade gold at depth which could lead to an underground mine and greater longevity for the operation.

In a statement, Argonaut president-CEO Pete Dougherty was pleased to have a development partner with a "skin in the game."

"The private placement by Ausenco aligns our respective companies, as we work together to advance and unlock value of the Magino project."

“With our intimate knowledge of the Magino project, we are excited to partner with Argonaut in building Canada’s next gold mine," said Ausenco CEO-managing director Zimi Meka in the news release.

On the construction side at Magino, Argonaut reports they are ahead of schedule in terms of logging activities to carve out space from the bush for the mine, as well as installing access roads and preparing various work sites.

All long lead items for the mining operation have been secured and the area where the processing plant will go has been completely cleared.

The company said construction of earthworks will begin during the second quarter of 2021. Concrete pouring and steel erection will start this year for the buildings on the property.

The pad for a 144-person camp has been finished. Construction offices have been set up as well as installation of the first 88-person camp unit.

Magino is a former underground mine that was active in the 1920s and '30s. It's situated on 2,200 hectares that's 14 kilometres southeast of Dubreuilville.

When operational in 2023, the mine is expected to provide direct employment for 350.