La Colorada NI 43-101 Technical Report October 15 2011

NI 43-101 Technical Report on Resources
La Colorada Project
Sonora, Mexico
Effective Date: October 15, 2011
Report Date: December 8, 2011
Report Prepared for
Argonaut Gold Inc.

77 King Street West
Toronto-Dominion Centre, Suite 400
Toronto, ON M4K 0A1
Canada
Report Prepared by
SRK Consulting (U.S.), Inc.

7175 West Jefferson Avenue, Suite 3000
Lakewood, CO 80235
SRK Project Number: 203900.020
Contributors:
Bart Stryhas, Ph.D., C.P.G.
Alberto Orozco, Argonaut Gold, Inc.
Richard J. Taylor, P.E., Kappes, Cassiday & Associates
Qualified Persons:
Bart Stryhas, Ph.D., C.P.G.
Richard J. Taylor, P.E., Kappes, Cassiday & Associates
NI 43-101 Technical Report on Resources – La Colorada Project Page i
Summary (Item 1)
Property Description and Ownership
The La Colorada Project (La Colorada or the Project) hosts several gold deposits located near the
historic mining town of La Colorada, Sonora, Mexico. The project consists of approximately 37 titled
concessions in three irregular blocks. The total land package aggregates 21,412.03 ha. The deposit
was exploited during two historic mining phases. The first was an underground operation from 1860
to 1916 and the second was an open pit mine from 1994 through 2000. The mineralization is
centered about UTM coordinates 541,665m E and 3,185,795m N. The property lies about 53 km
southeast of Hermosillo, the State Capital. Compañia Minera Pitalla S.A. de C.V. (Minera Pitalla) is
the owner of the Project. Minera Pitalla is 100% owned by Argonaut Gold Inc. (Argonaut).
Geology and Mineralization

The geology of La Colorada consists of Paleozoic to Early Mesozoic metasediments cut by Upper
Cretaceous volcanics. All of these units are intruded by Tertiary intrusives that include granitic to
dioritic phases and andesitic porphyry. Late-Cretaceous to Tertiary volcanic rocks and associated
continental clastic rocks unconformably overlie the Triassic and older rocks. There are two distinct
divisions of the volcanics. A lower 100 to 45 My Lower Volcanic Complex is composed mainly of
andesite with interstratified rhyolitic ignimbrites and minor interstratified basalt. The overlying Upper
Volcanic Complex has been dated at 34 to 27 My and is composed of extensive rhyolite and
rhyodacite ignimbrites with minor interstratified basalt. It constitutes the largest ignimbrite field in the
world. The upper sequence unconformably overlies on the older sequence and infills deeply incised
paleotopography in the older rocks. Late Cretaceous to Early Tertiary plutonic rocks (diorite,
granodiorite to granite) of the Sonoran Batholith outcrop throughout the region and have been dated
from 90 to 40 My.
The La Colorada Gold District has many of the characteristics of a low sulfidization epithermal-vein
type gold-silver deposit. The district underwent a complex hydrothermal history related to
Cretaceous plutonic activity, later higher level plutonic events, and finally a mid-Tertiary vein system
which shares characteristics in common with both a deep epithermal environment and a high-level
mesothermal system. Alteration can be seen in the older metamorphic and intrusive units mostly as
silicification, hematization and argillic alteration. The Tertiary volcanic rocks in the district are clearly
post-mineral and are unaltered.
Exploration
The exploration work is composed primarily of the drillhole database which supports the resource
estimation of this report. It consists of two main data sets. The older dataset was generated by
Explorationes Eldorado S.A. de C.V. (EESA) during their work on the project in the late 1990’s. The
more recent dataset was generated by Pediment and Argonaut beginning in 2007.
The resource estimation is supported by 1,319 drillholes, totaling 154,918 m. The drillhole database
has 80,187 samples. The drillholes are generally located in a wide range of spacing and
orientations. The maximum drillhole depth is 479 m and the average is 117 m.
BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

NI 43-101 Technical Report on Resources – La Colorada Project Page ii
Metallurgy
Metallurgical test work has been ongoing with several column tests on various composite samples
and crush sizes from the various deposits have been and are being performed at the Kappes,
Cassiday & Associates (KCA) facility in Reno, Nevada.
Gold and silver recovery based on 20 column tests conducted at the KCA laboratory in Reno,
Nevada running from 48 to 72 days resulted in recoveries of 44% for gold and 33% for silver.
Opportunities exist to optimize throughput and recovery of the ore which will be studied through
additional column tests and equipment reviews. Additional column test work is being completed by
KCA at the present time on core material from the Project. This test work is focused on a finer crush
size of minus 12.5 mm. If finer crushing is to be examined as a possible processing alternative
additional agglomeration test work will be required.
Recovery curves developed for La Colorada indicate very slow leaching and it is likely that several
percent more gold recovery will be realized with a 90 day leach cycle. It is recommended that all
future column tests be run at this leach cycle as a minimum.
Mineral Resource Estimate

The mineral resource estimations are based on geologic models consisting of a single rock type, cut
by numerous fault/vein zones. All model blocks are 5 m x 5 m x 5 m in the x,y,z directions,
respectively. Each model block is assigned a unique specific gravity based on direct measurement
of the various rock types. All block grade estimates were made using 3 m down-hole composites.
An Inverse Distance Weighting to the second power estimation algorithm was used for all gold grade
and silver estimations. The results of the resource estimation provided a CIM classified Indicated
and Inferred Mineral Resource. The mineral resources have been classified as Indicated and
Inferred based primarily on sample support. All resources supported primarily by drilling at 25 m
centers are classified as indicated and all resources supported by wider spaced drilling were
classified as inferred.
The La Colorada Mineral Resource estimate is reported below at a 0.1 ppm cut-off grade. The cut-
off based on a mining cost of US$1.20/t, a processing cost of US$2.70/t, Au and Ag recoveries of
60% and 30% respectively, G&A cost of $0.20/t, a no NSR and Au, Ag prices of US$1,500/oz,
US$20.00/oz respectively. The mineral resources are confined within a conceptual Whittle® pit
design based on the same parameters used for the cut-off grade and a 50° pit slope.

NI 43-101 Technical Report on Resources – La Colorada Project Page iii
Table 1: La Colorada Project Resource Statement(1)

Tonnes Au oz Ag oz
Deposit Class Au Cut-off Au (g/t) Ag (g/t)
(000s) (000s) (000s)
Indicated 0.10 29,900 0.724 696 5.1 4,905
La Colorada
Inferred 0.10 2,500 1.204 95 8.4 661
Indicated 0.10 14,400 0.618 287 12.1 5,635
El Crestón
Inferred 0.10 2,200 0.887 63 13.3 944
Indicated 0.10 2,900 0.491 46 3.3 307
Veta Madre
Inferred 0.10 0 0.665 0.2 2.4 0.7
Indicated 0.10 2,700 0.429 38 36.5 3,200
RoM Pad
Inferred 0.10 - - - - -
Indicated 0.10 50,000 0.664 1,067 8.7 14,047
All Deposits
Inferred 0.10 4,700 1.044 158 10.6 1,605
Source: SRK
(1) Rounded to reflect approximation
Mineral Resources that are not mineral reserves do not have demonstrated economic viability.
Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution.
These mineral resource estimates include inferred mineral resources that are normally considered
too speculative geologically to have economic considerations applied to them that would enable
them to be categorized as mineral reserves. There is also no certainty that these inferred mineral
resources will be converted to Measured and Indicated categories through further drilling, or into
mineral reserves, once economic considerations are applied.

NI 43-101 Technical Report on Resources – La Colorada Project Page iv
Table of Contents
Summary (Item 1) ......................................................................................................................................... i

1 Introduction (Item 2) .................................................................................................... 1
1.1 Terms of Reference and Purpose of the Report.................................................................................1
1.2 Qualifications of Consultants (SRK)....................................................................................................1
1.2.1 Details of Inspection ................................................................................................................2
1.3 Reliance on Other Experts (Item 3) ....................................................................................................2
1.3.1 Sources of Information and Extent of Reliance.......................................................................2
1.4 Effective Date......................................................................................................................................2
1.5 Units of Measure .................................................................................................................................2
2 Property Description and Location (Item 4)............................................................... 3
2.1 Property Description and Location......................................................................................................3
2.2 Mineral Titles.......................................................................................................................................3
2.2.1 Nature and Extent of Issuer’s Interest.....................................................................................4
2.3 Royalties, Agreements and Encumbrances........................................................................................5
2.4 Environmental Liabilities and Permitting .............................................................................................5
2.4.1 Required Permits and Status ..................................................................................................5
2.5 Other Significant Factors and Risks....................................................................................................6
3 Accessibility, Climate, Local Resources, Infrastructure and Physiography (Item 5)14
3.1 Topography, Elevation and Vegetation.............................................................................................14
3.2 Climate and Length of Operating Season.........................................................................................14
3.3 Sufficiency of Surface Rights ............................................................................................................14
3.4 Accessibility and Transportation to the Property ..............................................................................14
3.5 Infrastructure Availability and Sources..............................................................................................14
3.5.1 Port access............................................................................................................................15
3.5.2 Power ....................................................................................................................................15
3.5.3 Water Supply.........................................................................................................................15
3.5.4 Site Structures.......................................................................................................................15
3.5.5 Waste Disposal .....................................................................................................................16
3.5.6 Potential Heap Leach Pad Areas ..........................................................................................16
4 History (Item 6)........................................................................................................... 17
4.1 Prior Ownership and Ownership Changes .......................................................................................17
4.2 Previous Exploration and Development Results...............................................................................17
4.3 Historic Mineral Resource and Reserve Estimates ..........................................................................18
4.4 Historic Production ............................................................................................................................18
5 Geological Setting and Mineralization (Item 7)........................................................ 19

NI 43-101 Technical Report on Resources – La Colorada Project Page v
5.1 Regional, Local and Property Geology .............................................................................................19

5.2 Significant Mineralized Zones ...........................................................................................................20
6 Deposit Type (Item 8)................................................................................................. 27
6.1 Mineral Deposit .................................................................................................................................27
6.2 Geological Model Applied .................................................................................................................27
7 Exploration (Item 9) ................................................................................................... 30
7.1 Relevant Exploration Work ...............................................................................................................30
7.2 Surveys and Investigations ...............................................................................................................30
7.2.1 Exploration Rock and Soil Sampling .....................................................................................30
7.3 Significant Results and Interpretation ...............................................................................................30
8 Drilling (Item 10)......................................................................................................... 31
8.1 Type and Extent ................................................................................................................................31
8.2 Procedures........................................................................................................................................32
8.2.1 Pediment, Reverse Circulation (RC) Drilling .........................................................................32
8.2.2 Pediment Core Drilling. .........................................................................................................32
8.2.3 Argonaut Reverse Circulation (RC) Drilling...........................................................................32
8.2.4 Argonaut Core Drilling. ..........................................................................................................33
8.2.5 Argonaut RoM Pad Drilling....................................................................................................33
8.3 Interpretation and Relevant Results..................................................................................................33
9 Sample Preparation, Analysis and Security (Item 11)............................................. 36
9.1 Methods ............................................................................................................................................36
9.1.1 Reverse Circulation Drill Samples.........................................................................................36
9.1.2 Diamond Drill Core Samples .................................................................................................36
9.2 Security Measures ............................................................................................................................36
9.3 Sample Preparation ..........................................................................................................................36
9.4 QA/QC Procedures and Results .......................................................................................................37
9.5 Opinion on Adequacy........................................................................................................................38
10 Data Verification (Item 12) ......................................................................................... 44
10.1 Procedures........................................................................................................................................44
10.2 Limitations .........................................................................................................................................45
10.3 Data Adequacy..................................................................................................................................45
11 Mineral Processing and Metallurgical Testing (Item 13)......................................... 46
11.1 Testing and Procedures ....................................................................................................................46
11.2 Relevant Results ...............................................................................................................................46
11.3 Recovery Estimate Assumptions ......................................................................................................49
11.4 Additional Test Work .........................................................................................................................50

NI 43-101 Technical Report on Resources – La Colorada Project Page vi
12 Mineral Resource Estimate (Item 14)........................................................................ 52

12.1 Qualified Persons for the Mineral Resource Estimate ......................................................................52
12.2 Drillhole Database.............................................................................................................................52
12.3 Geology.............................................................................................................................................52
12.4 Block Model.......................................................................................................................................52
12.5 Compositing ......................................................................................................................................53
12.6 Density ..............................................................................................................................................54
12.7 Variogram Analysis ...........................................................................................................................54
12.8 Grade Estimation ..............................................................................................................................54
12.8.1 La Colorada...........................................................................................................................54
12.8.2 El Crestón..............................................................................................................................55
12.8.3 Veta Madre............................................................................................................................56
12.8.4 RoM Pad ...............................................................................................................................56
12.9 Model Validation................................................................................................................................57
12.10Resource Classification ....................................................................................................................59
12.11Mineral Resource Statement ............................................................................................................59
12.12Mineral Resource Sensitivity.............................................................................................................60
13 Adjacent Properties (Item 23) ................................................................................... 63
14 Other Relevant Data and Information (Item 24) ....................................................... 64
15 Interpretation and Conclusions (Item 25) ................................................................ 65
15.1.1 Exploration ............................................................................................................................65
15.1.2 Mineral Resource Estimate ...................................................................................................65
15.1.3 Metallurgy ..............................................................................................................................65
15.2 Significant Risks and Uncertainties...................................................................................................66
16 Recommendations (Item 26) ..................................................................................... 67
16.1 Mineral Resources ............................................................................................................................67
16.2 Metallurgy and Processing................................................................................................................67
17 References (Item 27) .................................................................................................. 68
18 Glossary...................................................................................................................... 69
18.1 Mineral Resources ............................................................................................................................69
18.2 Mineral Reserves ..............................................................................................................................69
18.3 Definition of Terms ............................................................................................................................70
18.4 Abbreviations ....................................................................................................................................71

NI 43-101 Technical Report on Resources – La Colorada Project Page vii
List of Tables
Table 1: La Colorada Project Resource Statement(1) ....................................................................................... iii
Table 2.2.1: Concession Details........................................................................................................................4
Table 2.2.1.1: Concession Payment Liabilities..................................................................................................5
Table 8.1.1: EESA Drilling Summary...............................................................................................................31
Table 8.1.2: Pediment Drilling Summary .........................................................................................................31
Table 8.1.3: Argonaut Drilling Summary..........................................................................................................32
Table 10.1.1: MacMillian et al (2001) Comparative Sampling Results............................................................44
Table 11.2.1: La Colorada Project Column Test Results on RoM Leach Pad Material ..................................47
Table 11.2.2: La Colorada Project Column Test Results on Core Material – Gold.........................................47
Table 11.2.3: La Colorada Project Column Test Results on Core Material – Silver .......................................48
Table 11.3.1: La Colorada Project Estimated Field Recoveries......................................................................50
Table 12.4.1: Block Model Limits.....................................................................................................................53
Table 12.5.1: Assay Capping Parameters.......................................................................................................54
Table 12.8.1.1: La Colorada Indicator Estimation Parameters........................................................................55
Table 12.8.1.2: La Colorada Grade Estimation Parameters ...........................................................................55
Table 12.8.2.1: El Crestón Grade Estimation Parameters ..............................................................................56
Table 12.8.3.1: Veta Madre Grade Estimation Parameters ............................................................................56
Table 12.8.4.1: RoM Pad Grade Estimation Parameters ................................................................................56
Table 12.9.1: Grade Estimation Characteristics ..............................................................................................58
Table 12.9.2: Statistical Model Validation........................................................................................................59
Table 12.9.3: Nearest Neighbor Model Validation...........................................................................................59
Table 12.11.1: La Colorada Project Resource Statement (1) ...........................................................................60
Table 12.12.1: Gran Central Grade Tonnage..................................................................................................61
Table 12.12.2: El Crestón Grade Tonnage......................................................................................................61
Table 12.12.3: Veta Madre Grade Tonnage....................................................................................................62
Table 18.3.1: Definition of Terms ....................................................................................................................70
Table 18.4.1: Abbreviations .............................................................................................................................71
List of Figures
Figure 2-1: Project Location Map ......................................................................................................................7
Figure 2-2: Project Site Map..............................................................................................................................8
Figure 2-3: Regional Concession Map ..............................................................................................................9
Figure 2-4: Local Concession Map..................................................................................................................10
Figure 2-5: Detailed Concession Map .............................................................................................................11
Figure 2-6: Royalty Concession Map ..............................................................................................................12

NI 43-101 Technical Report on Resources – La Colorada Project Page viii
Figure 2-7: Surface Ownership Map................................................................................................................13

Figure 5-1: La Colorada Project Regional Geology.........................................................................................23
Figure 5-2: La Colorada/Gran Central Pit Area Geology.................................................................................24
Figure 5-3: El Crestón Pit Area Geology .........................................................................................................25
Figure 5-4: La Colorada/Gran Central Area Cross Section Geology ..............................................................26
Figure 8-1: 2011 Argonaut Drillhole Location Map..........................................................................................35
Figure 9-1: Blank Analyses Performance Chart ..............................................................................................39
Figure 9-2: Certified Standard OxE86 Performance Chart..............................................................................40
Figure 9-3: Certified Standard OxF65 Performance Chart..............................................................................41
Figure 9-4: Certified Standard SG40 Performance Chart ...............................................................................42
Figure 9-5: Field Duplicate Performance Chart...............................................................................................43
Figure 11-1: Metallurgical Drill Hole Locations ................................................................................................51
Appendices
Appendix A: Certificate of Author

NI 43-101 Technical Report on Resources – La Colorada Project Page 1
1 Introduction (Item 2)
1.1 Terms of Reference and Purpose of the Report
SRK Consulting (U.S.), Inc. (SRK) has been retained by Argonaut Gold Inc. (Argonaut), to prepare a
Canadian National Instrument 43-101 (NI 43-101) compliant Technical Report on Resources for the
La Colorada Project located in Sonora, Mexico (La Colorada or the Project). The quality of
information, conclusions, and estimates contained herein is consistent with the level of effort involved
in SRK’s services, based on: i) information available at the time of preparation, ii) data supplied by
outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This
report is intended for use by Argonaut subject to the terms and conditions of its contract with SRK
and relevant securities legislation. The contract permits Argonaut to file this report as a Technical
Report on Resources with Canadian securities regulatory authorities pursuant to NI 43-101,
Standards of Disclosure for Mineral Projects. Except for the purposes legislated under provincial
securities law, any other uses of this report by any third party is at that party’s sole risk. The
responsibility for this disclosure remains with Argonaut. The user of this document should ensure
that this is the most recent Technical Report on Resources for the property as it is not valid if a new
Report on Resources has been issued.
This report provides mineral resource estimates, and a classification of resources in accordance with
the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and
Reserves: Definitions and Guidelines, November 27, 2010 (CIM).
1.2 Qualifications of Consultants (SRK)

The Consultants preparing this report are specialists in the fields of geology, exploration, mineral
resource and mineral reserve estimation and classification, underground mining, geotechnical,
environmental, permitting, metallurgical testing, mineral processing, processing design, capital and
operating cost estimation, and mineral economics.
None of the Consultants or any associates employed in the preparation of this report has any
beneficial interest in Argonaut. The Consultants are not insiders, associates, or affiliates of
Argonaut. The results of this Report on Resources are not dependent upon any prior agreements
concerning the conclusions to be reached, nor are there any undisclosed understandings concerning
any future business dealings between Argonaut and the Consultants. The Consultants are being
paid a fee for their work in accordance with normal professional consulting practice.
The following individuals, by virtue of their education, experience and professional association, are
considered Qualified Persons (QP) as defined in the NI 43-101 standard, for this report, and are
members in good standing of appropriate professional institutions. The QP’s are responsible for
specific sections as follows:
x Bart Stryhas, Ph.D., CPG, is the QP responsible for Sections 3 through 10 and 13. He is the
QP responsible for the Mineral Resource estimation in Section 12.
x Richard J. Taylor, P.E., is the QP responsible for Section 11.

1.2.1 Details of Inspection

Bart Stryhas conducted a site visit of the project on June 16, 2011. Dr. Stryhas spent one day on
site reviewing the regional and local geology, drilling, logging and sampling procedures, In addition,
the QA/QC procedures were reviewed and resource estimation strategy was formulated with site
geologist and engineers.
1.3 Reliance on Other Experts (Item 3)

The Consultant’s opinion contained herein is based on information provided to the Consultants by
Argonaut throughout the course of the investigations. SRK has relied upon the work of other
consultants in the project areas in support of this Report on Resources. The sources of information
include data and reports supplied by Argonaut personnel.
Information on mineral titles was provided by Argonaut as compiled by Mr. Alberto Orozco,
Argonaut’s Mexico Exploration Manager. Additionally, a legal opinion on titles was compiled by
Mexico City law firm Vazquez & Associates in 2011. Specifically, Mr. Alberto Orozco and Vazquez &
Associates are responsible for Sections 2.2 and 2.3.
The Consultants used their experience to determine if the information from previous reports was
suitable for inclusion in this report and adjusted information that required amending. This report
includes technical information, which required subsequent calculations to derive subtotals, totals and
weighted averages. Such calculations inherently involve a degree of rounding and consequently
introduce a margin of error. Where these occur, the Consultants do not consider them to be
material.
1.3.1 Sources of Information and Extent of Reliance

Mr. Alberto Orozco has contributed the majority of the information contained within Sections 4, 5, 9,
10 and 11.
1.4 Effective Date

The effective date of this report is October 15, 2011.
1.5 Units of Measure

The metric system has been used throughout this report. Tonnes are metric of 1,000 kg, or 2,204.6
lb. All currency is in U.S. dollars (US$) unless otherwise stated.

2 Property Description and Location (Item 4)

2.1 Property Description and Location
The Project consists of an historic, open pit, heap leach gold mine. The mine consists of two main
pits, La Colorada/Gran Central and El Crestón, a partially reclaimed heap leach pad and several
office and support buildings. The pits and facilities are located within 37 titled mineral concessions
totaling 21,412.03 ha. The project is located in northwestern Mexico, in the town of La Colorada,
Sonora State, 53 km southeast of the city of Hermosillo, the State Capital. The mineralization is
centered about UTM coordinates 541,665m E and 3,185,795m N. (Figures 2-1 and 2-2)
2.2 Mineral Titles

The following information on the mineral titles was provided by Argonaut Gold Inc. as compiled by
Mr. Alberto Orozco, Argonaut’s Mexico Exploration Manager. Additionally, a legal opinion from
Mexico City law firm Vazquez & Associates was compiled in October of 2011 (Vazquez, 2011). The
results of this work conclude that all 37 of Argonaut’s concessions are valid in full force and effect.
The La Colorada property consists of 37 titled concessions in three irregular blocks separated by
ground held by other interests (Figures 2-3 through 2-5). The total land package aggregates
21,412.03 ha. The concession details are listed in Table 2.2.1. The Ext. Sonora IV concession was
one of 19 concessions optioned from Exploraciones La Colorada S.A. de C.V. The option purchase
was subsequently exercised on 18 of these concessions; however, Ext. Sonora IV concession was
cancelled by the Direction of Mines. Exploraciones La Colorada believes it has a case for the
removal of such cancellation and is appealing the decision. For this reason Pediment signed a
second option agreement with Exploraciones La Colorada establishing that, should they win the case
against the Direction of Mines, they would transfer the concession to Compañia Minera Pitalla S.A.
de C.V. for a payment of Pediment stock. This agreement has since expired. As of this moment a
decision by the courts is still pending. Although the concession has been cancelled it has not yet
been declared “free”. Until that time, the concession is not available for others to claim.
In the mid 1980’s Minerales de Sotula S.A. de C.V. and Industrias Peñoles, S.A.B. de C.V. began re-
acquiring the mineral concessions. In 1991, Cia. Minera Las Cuevas S.A. de C.V a Mexican
Subsidiary of Noranda acquired an option on the project. Later that same year, HRC Development
Corp and Rotor International S.A. formed a joint venture ownership of the project called
Explorationes Eldorado S.A. de C.V. (EESA). EESA held the project until 2000 when it sold out to
Grupo Minero FG S.A.de C.V. In 2001, ownership was transferred to Explorations La Colorada, S.A.
de C.V. In 2007, Pediment Gold Corp. optioned and eventually, purchased the key concessions,
surface ownership and infrastructure mine from Exploraciones La Colorada. Further key
concessions were also acquired in 2008 and 2010 by Pediment. In 2010, Argonaut Gold acquired
Pediment Gold Corp. including the La Colorada project held under Pediment’s wholly owned
Mexican subsidiary, Compañia Minera Pitalla S.A. de C.V. (Minera Pitalla).

Table 2.2.1: Concession Details

Title Surface Valid Associated
Concession Acquired By
No. (ha) From To Royalties
(1)
Sonora II 187663 8.8206 17-Sep-1990 16-Sep-2040 Contract with Exploraciones La Colorada Yes
(1)
Sonora VI 199425 19.6494 19-Apr-1994 18-Apr-2044 Contract with Exploraciones La Colorada Yes
(1)
El Crestón 199424 0.1300 19-Apr-1994 18-Apr-2044 Contract with Exploraciones La Colorada Yes
(1)
LULU 198975 5.8738 11-Feb-1994 10-Feb-2044 Contract with Exploraciones La Colorada Yes
(1)
Demasías del Yes
199929 0.7715 17-Jun-1994 16-Jun-2044 Contract with Exploraciones La Colorada
Crestón
(1)
Sonora V 211758 280.9564 30-Jun-2000 29-Jun-2050 Contract with Exploraciones La Colorada Yes
(1)
Sonora III 211974 51.0269 18-Aug-2000 17-Aug-2050 Contract with Exploraciones La Colorada Yes
(1)
Sonora I 211856 157.9862 28-Jul-2000 27-Jul-2050 Contract with Exploraciones La Colorada Yes
(1)
Fracción Yes
211958 37.7795 28-Jul-2000 27-Jul-2050 Contract with Exploraciones La Colorada
Sonora III
(1)
La Muculufa 211945 24.0000 28-Jul-2000 27-Jul-2050 Contract with Exploraciones La Colorada Yes
(1)
Sonora IV 211788 554.4622 28-Jul-2000 27-Jul-2050 Contract with Exploraciones La Colorada Yes
(1)
Vicenza 211757 1.4686 30-Jun-2000 28-Jun-2050 Contract with Exploraciones La Colorada Yes
(1)
La Cruz 217502 1.5488 16-Jul-2002 15-Jul-2052 Contract with Exploraciones La Colorada Yes
(1)
Crestón Dos Yes
218680 109.7378 3-Dec-2002 2-Dec-2052 Contract with Exploraciones La Colorada
Fracc.III
(1)
Crestón Dos Yes
Fracc.II
(1)
Crestón Dos Yes
Fracc. I
(1)
Crestón Tres 218869 466.5758 23-Jan-2003 22-Jan-2053 Contract with Exploraciones La Colorada Yes
(1)
Neri 232307 0.2275 18-Jul-2008 17-Jul-2058 Contract with Exploraciones La Colorada Yes
Ext Sonora IV 207597 443.0047 Pending Pending Pending Pending
Sandra Luz 199219 12.9455 16-Mar-1994 15-Mar-2044 Contract with Peñoles No
Las Tinajitas 206409 140.0000 16-Jan-1998 15-Jan-2048 Contract with Peñoles No
Vicky 206407 24.0000 16-Jan-1998 15-Jan-2048 Contract with Peñoles No
Rosalía 213745 7.9760 12-Jun-2001 11-Jun-2051 Contract with Peñoles No
Claudia 213214 32.7380 6-Apr-2001 5-Apr-2051 Contract with Peñoles No
Sandra Luz fracc.1 216046 0.3766 2-Apr-2002 1-Apr-2052 Contract with Peñoles No
Sandra Luz Fracc.2 216047 0.0173 2-Apr-2002 1-Apr-2052 Contract with Peñoles No
Carmelita 214065 150.0000 10-Aug-2001 9-Aug-2051 Contract with Minera Recami, S. A. de C. V. No
Los Pilares 214187 249.0328 10-Aug-2001 9-Aug-2051 Contract with Minera Recami, S. A. de C. V. No
El Crestoncito 231252 1.1693 25-Jan-2008 24-Jan-2058 Contract with Minera Recami, S. A. de C. V. No
LCA 231232 13233.3690 25-Jan-2008 24-Jan-2058 Staking No
LCA2 232278 2000.0000 16-Jul-2008 15-Jul-2058 Staking No
Dos Fracc.I 231247 117.8470 25-Jan-2008 24-Jan-2058 Staking No
Dos Fracc.II 231248 5.2974 25-Jan-2008 24-Jan-2058 Staking No
Dos Fracc. III 231249 22.7623 25-Jan-2008 24-Jan-2058 Staking No
Noria 235259 18.2630 4-Nov-2009 3-Nov-2059 Staking No
Red Norte 1 237088 3325.9782 29-Oct-2010 28-Oct-2060 Staking No
Mabelina 237242 0.1600 26-Nov-2010 25-Nov-2060 Staking No
(1) Royalties with Exploraciones La Colorada, S. A. de C. V.
a. 2% NSR for underground-mining production
b. 3% NSR for open-pit production
c. Buy-out clause only exists for underground production royalty. The 2%NSR can be bought out for single cash
payment of USD$300,000.00
d. There is no buy-out clause for open-pit mining royalty.
2.2.1 Nature and Extent of Issuer’s Interest

All mineral titles are held through Argonaut’s wholly owned Mexican subsidiary, Compañía Minera
Pitalla S.A. de C.V. (Minera Pitalla). Under Mexican mining regulations, it is necessary to pay a tax
for the “Mining Rights” twice annually (first and second semester). This tax is calculated based on
the surface area of a concession and does increase over time. The amounts payable (in Mexican
pesos) for each individual concession are shown in Table 2.2.1.1. The company has informed the
writers that all payments have been made for 2011. The next payments are due before the end of
December 2011. Argonaut holds the surface rights and legal access to 1,048 ha of the concession
package. This is shown in Figure 2-7.

Table 2.2.1.1: Concession Payment Liabilities

1st Semester 2nd Semester
Concession Title number Payment (Pesos) Payment (Pesos)
2010 2011
Carmelita 214065 9,483.00 9,483.00
Los Pilares 214187 15,744.00 15,744.00
Crestoncito 231252 9.00 9.00
NERI 232307 2.00 2.00
SONORA V 211758 31,263.00 31,263.00
SONORA III 211974 3,226.00 5,678.00
SONORA I 211856 9,988.00 17,580.00
FRACC SONORA II 211958 2,389.00 4,204.00
LA MUCULUFA 211945 1,518.00 2,671.00
LA CRUZ 217502 49.00 98.00
CRESTON TRES 218869 14,754.00 29,497.00
CRESTON DOS FRACC. III 218680 3,470.00 6,938.00
CRESTON DOS FRACC. II 218679 143.00 284.00
CRESTON DOS FRACC. I 218678 10,896.00 21,785.00
SONORA IV 211788 35,054.00 61,696.00
VICENZA 211757 164.00 164.00
SONORA VI 199425 2,187.00 2,187.00
EL CRESTON 199424 15.00 15.00
LULU 198975 654.00 654.00
DEMASIAS EL CRESTON 199929 86.00 86.00
SONORA II 187663 982.00 982.00
LCA 231232 100,574.00 100,574.00
LCA2 232278 15,200.00 15,200.00
Dos Fracc I 231247 896.00 896.00
Dos Fracc II 231248 41.00 41.00
Dos Fracc III 231249 173.00 173.00
LAS TINAJITAS 206409 15,578.00 15,578.00
VICKY 206407 2,671.00 2,671.00
SANDRA LUZ 199219 1,441.00 1,441.00
SANDRA LUZ FRACC. 1 216046 24.00 24.00
SANDRA LUZ FRACC. 2 216047 2.00 2.00
ROSALIA 213745 505.00 888.00
CLAUDIA 213214 2,070.00 3,643.00
NORIA 235259 - 139.00
Red Norte 1 237088 - 16,896.00
Mabelina 237242 - 1.00
2.3 Royalties, Agreements and Encumbrances

Certain claims held by Argonaut have a royalty payment. These claims and the royalty burdens are
listed in Table 2.2.1. The specific concession with royalty burdens are shown in Figure 2-6.
2.4 Environmental Liabilities and Permitting

2.4.1 Required Permits and Status
Exploration activities at La Colorada operate under the NORMA-120 issued by the Federal
environmental agency SEMARNAT. The NORMA-120 is not an issued permit, but rather a set of
regulations that allow exploration to take place. To work under the NORMA, a Company can present
a report of initiation of exploration activities and then carry out its exploration staying under a

percentage of affectation and observing a set of rules that include, road and pad dimensions,
disposal of waste, etc.
Much of the exploration activities at La Colorada, however; occur in areas which have already
received a change of use in soils for mining activities.
2.5 Other Significant Factors and Risks

SRK is unaware of any other significant factor or risks to access, title or the right to perform work on
the project.

La Colorada Project Figure 2-1
Sonora, Mexico
Project Location Map
Source: Argonaut Gold Inc., 2011
Sonora, Mexico
Project Site Map
Sonora, Mexico
Regional Concession Map
Sonora, Mexico
Local Concession Map
Sonora, Mexico
Detailed Concession Map
Sonora, Mexico
Royalty Concession Map
Sonora, Mexico
Surface Ownership Map
3 Accessibility, Climate, Local Resources,

Infrastructure and Physiography (Item 5)
3.1 Topography, Elevation and Vegetation
The project is located in the basin-and-range geological province which is dominated by alternating
ranges and valleys bound by normal faults. This general geomorphology predominates in the district
of La Colorada with the hills being easily identifiable by Tertiary volcanic rocks that have been tilted
about 15° to the west. Elevations at La Colorada range between 400 and 650 meters above sea
level. The pit areas and the current exploration zones of Veta Madre and La Verde at located in
rather smooth-topography zones. Argonaut completed a flight and photogrammetric reconstitution
during 2011 that covers a total area of 3,343 hectares with the main historic production areas at its
center. Vegetation consists of extensive mesquite and paloverde trees, cactus and sparse grass
cover.
3.2 Climate and Length of Operating Season

The La Colorada property lies within the Sonora Desert climatic region. It has an arid climate, with
summer temperatures sometimes exceeding 47 °C. Winter temperatures vary from mild to cool in
January and February. Rainfall is affected by the North American Monsoon, with over two-thirds of
the average, 19.3 cm of rain falling between the months of July and September. The weather at the
project allows for operation during the entire year.
3.3 Sufficiency of Surface Rights

Since 2008, Pediment Gold Corp. acquired the main surface rights for the La Colorada mine and the
La Primavera Ranch that cover an area of 1,046.8 ha.
The surface rights are adequate for disposal of waste. The full exploitation of the La Colorada/Gran
Central pit and expansion of heap leach pads will require additional surface rights. It is expected that
as studies continue, the location and trade-offs governing the purchase of additional land will
become clearly defined.
3.4 Accessibility and Transportation to the Property

The village of La Colorada and the La Colorada Property are located 40 km southeast of Hermosillo
city, in the State of Sonora, Mexico. Access is via paved Highway 16, which continues east to the
town of Yécora and the city of Chihuahua.
3.5 Infrastructure Availability and Sources

The village of La Colorada is located adjacent to the site and contains a small supply of labor (275
inhabitants) and some basic equipment. The city of Hermosillo (900,000 inhabitants) is located 45
km from the site with a large supply of skilled and unskilled labor along with most supplies and
contractors for construction and operations available. There are daily flights to Hermosillo from
Mexico City, Phoenix and Los Angeles. Hermosillo is a major mining center for Northern Mexico with

access to vendors, contractors and consultants for most reagents, supplies, equipment or services
need for exploration, construction, operations and closure.
In addition, equipment and reagents can be sourced through several major cities in the U.S., the
closest of which is through Nogales, Arizona, 177 miles north of Hermosillo via Federal Highway 15,
with an estimated travel time of 3.5 to 4 hours.
3.5.1 Port access

Equipment or reagents that are not available in Hermosillo can be accessed by the port of Guaymas,
an industrial sized port on the located in Sonora on the California Gulf Coast. Travel from Guaymas
to Hermosillo is 138 km on Federal Highway 15, with an approximate travel time of 1.5 to 2 hours.
3.5.2 Power
La Colorada has a dedicated 33 KV power line and 10 MVA substation which were built by Eldorado
in 1997. The main transmission line is 23 km from the community of Estacion Torres to the Mine
site. La Colorada’s operations plan calls for a peak power load of 2.5 MVA for ADR plant, 1000 KVA
for crushing and 1500 KVA for conveying. Therefore, no upgrade to the power infrastructure is
expected at this time.
3.5.3 Water Supply

The water supply used during production by Eldorado Gold Ltd. (1994-2000) and Grupo Minero FG
(2000-2003) came from the dewatering of underground workings, the Wyman shaft and Open pit
dewatering.
With regards to water rights, any water taken from open pit operations either ground water or surface
run-off can be used without a special permit. Water from the underground workings requires a
permit and is defined by the CNA (National Water Commission).
It is estimated that the combined water storage of El Crestón and Gran Central total at least 1 million
cubic meters of water. Dewatering will likely use an 8 inch pipe pumping a head of 150 m when pre-
strip operations encounter the water level.
3.5.4 Site Structures

The mine site structures are composed of:
x A main office building built with masonry walls and metal insulated sheet roof which is big
enough for geology and site administration personnel;
x A laboratory built with metal sheeting and a three unit office trailer;
x A Warehouse comprised of two 48 ft containers;
x A Lunch room built with a metal frame and combo sheet walls with capacity for 120 people,
including a cooking area;
x A process ADR plant foundation covering 800 m2; and
x A 500 m2 metal framework undergoing refurbishment.

3.5.5 Waste Disposal

Two primary waste dumps have been located to store waste from the project. The Gran Central and
El Crestón dumps and are located on land owned by Argonaut. The El Crestón dump has potential
storage for 144.3 million m3. The Primavera dump has potential storage for 71.6 million m3.
3.5.6 Potential Heap Leach Pad Areas

Golder Associates have completed a heap leach design plan within the current site footprint. They
currently have a design for 15 Mt of potentially minable resource. If additional minable resource is
identified, the remainder of pad space required must come from additional land purchases. SRK and
Argonaut have located a potential pad site to the Northeast which would accommodate the additional
pad space but no land purchases have been made at this time and there is no guarantee that the
pad location will be finalized.

4 History (Item 6)
4.1 Prior Ownership and Ownership Changes
The original La Colorada concessions were staked by Jesuit missionaries in 1740. By 1790,
Spanish miners had taken ownership. In 1860, an English company installed pumps and worked the
concessions until 1877 when they sold out to the Creston-Colorado Company. In 1888 the property
was sold to the Pan American Company. In 1895, the London Exploration Company purchased the
concessions. In 1902, the Mines Company of America took ownership. During the Mexican
Revolution in 1916, the mine closed and the facility was eventually dismantled.
In the mid 1980’s Minerales de Sotula S.A. de C.V. and Industrias Peñoles, S.A.B. de C.V. began re-
acquiring the mineral concessions. In 1991, Cia. Minera Las Cuevas S.A. de C.V a Mexican
Subsidiary of Noranda acquired an option on the project. Later that same year, HRC Development
Corp and Rotor International S.A. formed a joint venture ownership of the project called
Explorationes Eldorado S.A. de C.V. (EESA). EESA held the project until 2000 when it sold out to
Grupo Minero FG S.A.de C.V. In 2001, ownership was transferred to Explorations La Colorada, S.A.
de C.V. In 2007, Pediment Gold Corp. optioned and eventually, purchased the key concessions,
surface ownership and infrastructure mine from Exploraciones La Colorada. Further key
concessions were also acquired in 2008 and 2010 by Pediment. In 2010, Argonaut Gold acquired
Pediment Gold Corp. including the La Colorada project held under Pediment’s wholly owned
Mexican subsidiary, Compañia Minera Pitalla S.A. de C.V. (Minera Pitalla).
4.2 Previous Exploration and Development Results

In the early nineties, Compañía Minera Las Cuevas invested $350,000.00 in exploration at La
Colorada, including reverse-circulation drilling. Later, EESA carried out systematic exploration on
the Project, focusing mostly in the El Crestón-Minas Prietas zone, but with great detail also in the La
Colorada/Gran Central zones. During the 1990’s, EESA continued its exploration program and
explored other zones such as Veta Madre, La Verde and Los Duendes. EESA conducted geological
mapping, surface sampling of rock and soils, geophysical programs, trenching and core and reverse-
circulation drilling. Other studies were also conducted by request of EESA, such as geotechnical
studies for pit-slope stability, metallurgical tests and mineralogical and petrographical studies. EESA
operated an open-pit, heap-leach operation starting in the El Crestón pit and in later years in the La
Colorada/Gran Central areas. Small-scale production also took place in the Los Duendes area,
southeast of the El Crestón pit.
In 2007, Pediment Gold Corp. optioned the project from Exploraciones La Colorada, S.A. de C.V.
and began compiling the previous work accompanied by an exploration program that included
surface sampling and mapping. A drill program commenced in 2008 focusing in the known
mineralization zones of El Crestón, La Colorada/Gran Central, Veta Madre and La Verde. The
results were followed up by the +10,000 m drill program of 2009 which combined diamond and RC
drilling and had a greater focus on the Veta Madre zone.

4.3 Historic Mineral Resource and Reserve Estimates

Various historical resource estimations have been completed on the project including; Nordin 1992,
Giroux and Charbonneau 1992 and Giroux 1999. All of the “historical” estimations are super
seceded by the current NI 43-101 compliant resource estimation discussed in Section 12 of this
report.
4.4 Historic Production

Mining activity in the district dates as far back as the mid 1700’s when Jesuit missionaries
discovered and later began mining the Minas Prietas zone. In the mid 1800’s and English company
installed pumps which allowed them to reach deeper levels and expanded the mining capacity at La
Colorada. The Pan American Company of New York began the first cyanidation process at La
Colorada by the late 1800’s. Several foregoing companies conducted underground mining from the
Minas Prietas, La Verde, Gran Central and Amarillas zones from this time until the early 1900’s;
however, political unrest related to the Mexican revolution caused mining to stop as the facilities had
to be evacuated. Only small-scale gambusino activity continued after that until exploration activity
resumed in 1991.
In 1993, Mr. Chester Millar successfully undertook a pilot heap leach test of 30,760 t of run-of mine
(RoM) material, producing approximately 1,500 oz of gold. Following this, a positive feasibility study
resulted in mine construction beginning in the same year. The industrial scale phase started
successfully as a conventional open pit, RoM, cyanide heap leach operation with an activated carbon
recovery process. Mine construction started in September of 1993, with the first gold poured in
January 1994. During the second year of operations the recovery process was replaced with a
conventional Merrill-Crowe (MC) circuit. Next, a two stage crushing circuit was implemented to treat
ore coming from the La Colorada/Gran Central pit – this was required to achieve economical
recovery levels. Construction started during 1996 and the crushing facility became operational in
1997. Approximately 30% of the ore was treated as RoM and dumped directly onto the pads, with
the rest being crushed in the two stage crushing plant to a size of -3/4”. The leaching-MC circuit had
a processing capacity of approximately 8,000 t of ore daily at its peak capacity. The mine operated
an average of 315 days/yr. During commercial production between 1994 and 2000, EESA produced
approximately 290,000 oz of gold and about 1 million oz of silver. EESA sold the mine and plant to a
local Hermosillo mine contractor, Grupo Minero FG S.A. de C.V. (FG), who continued limited
production and decommissioning for a year or so after 2000, and is estimated to have produced
approximately 70,000 additional oz of gold. EESA and FG production statistics cited from Diaz, 2007
and Herdrick, 2007.

5 Geological Setting and Mineralization (Item 7)

5.1 Regional, Local and Property Geology
The following is cited directly from McMillian et al (2009) with minor modifications of text and
formatting.
Physiographically, the La Colorada Property is located in the western foothills of the Sierra Madre
Occidental mountain chain, 110 km east of the Gulf of California. Tectonically the property is located
at the boundary between the Sonoran Basin and Range Province and the Sierra Madre Occidental
Province. These intrusive rocks are contiguous with the broad batholithic belt extending along the
western margin of North America. West-directed folding and thrust faulting occurred during the Late
Cretaceous Laramide Orogeny. Basin and Range faulting, followed in the Tertiary, and constitutes
the dominant structural event in the area.
Bedrock ranges in age from Proterozoic through Cenozoic and includes high-grade metamorphic
gneisses, shelf facies sedimentary strata, extensive andesitic to rhyolitic volcanic deposits and
dioritic to granitic intrusive rocks. Basement rocks consisting of gneisses, schists and quartzites cut
by plutons dated at 1,710 and 1,750 million years are some of the oldest rocks exposed in Mexico
and reach their southernmost limit just north of La Colorada property – these rocks are considered
the cratonic basement of North America (Zawada et al, 2001). Upper Triassic clastic sedimentary
strata (conglomerate, sandstone and siltstone) of the Barranca Group unconformably overlie the
metamorphic basement rocks in scattered locations throughout east-central and southern Sonora.
Late-Cretaceous to Tertiary volcanic rocks and associated continental clastic rocks unconformably
overlie the Triassic and older rocks. These units thicken considerably eastward, where they form
extensive sequences underlying the high plateau of the Sierra Madre Occidental Mountains. There,
two distinct divisions are apparent. A lower 100-45 Ma Lower Volcanic Complex composed mainly
of andesite with interstratified rhyolitic ignimbrites and minor interstratified basalt. The overlying
Upper Volcanic Complex has been dated at 34-27 My and is composed of extensive rhyolite and
rhyodacite ignimbrites with minor interstratified basalt. It constitutes the largest ignimbrite field in the
world. The upper sequence unconformably overlies on the older sequence and infills deeply incised
paleotopography in the older rocks. Late Cretaceous to Early Tertiary plutonic rocks (diorite,
granodiorite to granite) of the Sonoran Batholith outcrop throughout the region and have been dated
from 90-40 Ma.
The area of La Colorada is covered by Mid-Cambrian to lower Ordovician quartzites and

metalimestones; carboniferous limestones and sandstones; Triassic oligomictic conglomerate,
limestones and shales; and Upper Cretaceous volcanic tuffs ranging in composition from andesite to
rhyolite. The previous units are intruded by Paleocene to Oligocene age intrusives that include
granite, granodiorite, diorite and andesitic porphyry. These intrusives are interpreted to be the result
of the active continental margin stage of this region with the subduction of the Farallon Plate beneath
the North American plate. This was followed by a continental extension stage and continental rifting
of the Basin and Range province during the Tertiary which generated the youngest lithological units
represented in the area. The base of this tectonic stage is represented in the area by the Early
Miocene Báucarit formation, which is composed of continental conglomerates and sandstones
interbedded with basaltic to andesitic volcanic rocks. This is overlain by the Late Miocene Lista

Blanca formation composed by bimodal volcanism of rhyolitic tuff and andesite. The youngest unit
during the Tertiary is an extension-related olivine basalt unit.
Alteration can be seen in the older metamorphic and intrusive units mostly as silicification,
hematization and argillic alteration. The Tertiary volcanic rocks in the district are clearly post-mineral
and are unaltered.
On a regional scale, basin and range faults are characterized by north-northwest striking normal
faults. Crustal blocks formed by the Basin and Range faults have moderate to steep regional dips.
Steeply-dipping east-northeast trending regional faults transverse to the main trend are also common
throughout Sonora.
5.2 Significant Mineralized Zones

The significant mineralized zone of this Report on Resources include the El Crestón, La
Colorada/Gran Central, and Veta Madre Zones. The following descriptions are cited directly from
McMillian et al (2009) with minor modifications of text and formatting.
El Crestón
The El Crestón and Minas Prietas veins constitute the largest vein system on the La Colorada
Property and were originally mined as separate ore bodies; however they are now recognized as
being part of the same mineralized zone. El Crestón refers to the current open pit area, while Minas
Prietas is located to the east of the pit. The following description is paraphrased from Ball (1911),
quoted in Lewis (1995): The veins generally strike east to east-northeast, dipping an average of 75°
N. The veins have well-defined walls and below the 100 m level are simple with few “spurs” and
parallel veins. Apparently the best values are found where the veins were thickest. The veins of El
Crestón Mine are from north to south: New Vein, North Vein, Perry Vein, South Middle Vein and
South Vein. Although the veins are separate entities, they coalesce and bifurcate in a subparallel
series of veins. The veins are all fault controlled, with the faulting preceding the veining, but small
post-ore fault offsets of a few meters is common. Again, the following descriptions are paraphrased
from Ball (1911), quoted in Lewis (1995): New Vein apparently averaged 3 to 4 m in thickness,
approximately 250 m in length and more than 225 m deep. Its surface exposure was low grade, and
had “particularly rich” grades at depths of 100 to 225 m. The North Vein was traced for more than
1,100 m. It averages 2.5 m in width, with poor grades except near surface, where it was stoped for a
length of 325 m. Ball (1911), described the South Vein as being 850 m long with an average north
dip of 820, although it locally flattens to about 400 north. The vein averages 2.5 m in width and is
higher grade near surface for a length of 525 m, but only for 170 m in the deeper levels of the mine.
The Perky (or North Middle Vein) is a splay from the west end of the South Vein. It was about 180 m
long, with a maximum width of 1 m. According to Ball (1911) the mineralized zone was wider near
the surface because the veins converge towards each other and because there is a vein stockwork –
these two factors allowed for mining by “open cut methods”. Ball (1911) states that the greater
widths and higher grades near the surface were due to a combination of greater fracturing and
secondary (supergene) enrichment. Lithologies in the El Crestón-Minas Prietas deposit include
siltstone, shale and chert of the Paleozoic Mine Sequence; diorite, monzonite and quartz feldspar
porphyry of the intrusive suite as well as hornfels and skarn derived from the sedimentary sequence
and andesite (Lewis, 1995). Alteration styles include hematization, manganese oxides, silicification,
argillic, potassic, sericitic and chloritic affecting all rock types. Deep red hematite is a prominent and

obvious feature. Manganese oxides are apparently associated with some of the higher gold values.
Structurally, the Colorada Sur Fault is the main controlling feature. It has a variable strike which
averages 60°E and dips vertically to steeply north. Although the underground mines selectively
mined individual veins over narrow widths as described above, EESA’s open pit extracted larger
scale stockwork zones and areas of multiple veining over cumulative thickness of up to 90 m (Lewis,
1995).
Gran Central Deposit
Gran Central is geologically similar to El Crestón-Minas Prietas, and again is composed of quartz
veins and stockworks localized in the Gran Central Fault. It is hosted in a diorite stock which
contains roof pendants of siltstone and lesser calc-silicate hornfels. Quartz feldspar porphyry dykes
up to 2 m in width cut the diorite. The youngest rocks are a few small pre-mineral mafic dikes up to 2
m in thickness. At the eastern end of the deposit, the diorite is in fault contact with and covered by
an andesite “cap”. The andesite is less altered and oxidized than the underlying diorite and devoid
of gold values (Lewis, 1995). EESA tested the zone over a length of 450 m and a depth of 150 m,
but the old underground extends 200 to 300 m further to the west and to a depth of 300 m. The
east-west trending Gran Central Fault is the controlling structure and has a north dip averaging 50°.
The Gran Central Fault consists of a number of sub-parallel splays, where quartz veins, stockworks
and breccias zones are associated with clay-chlorite gouge. Alteration minerals are similar to those
found at El Crestón-Minas Prietas; however calcite is a common gangue mineral, and siderite veins
as well local amethyst are present (Lewis, 1995). Footwall rocks tend to be more heavily altered
than hanging wall rocks. Fine native gold is present in the deposit and some areas with visible gold
posed a minor “nugget effect” problem for EESA at Gran Central (Lewis, 1995). Sulfide minerals
ranging between 1 and 3% by volume are characteristic in the unoxidized portion of the deposit. In
the sulfide portion of the deposit, the minerals include galena, sphalerite, lesser chalcopyrite, minor
tetrahedrite and traces of chalcocite and covellite.
La Colorada Deposit
Gold-bearing quartz veins and stockworks at La Colorada are hosted in an east-west striking fault
with a north dip averaging 45°. It is hosted by rhyolite porphyry and diorite. It is within and adjacent
to the same dioritic stock which hosts the Gran Central Deposit. EESA traced the mineralization for
500 m along strike and for 100 m down dip. The zone is an average of 20 m thick. Lewis (1995)
state that according to historical records, mineralization is terminated at a depth of approximately
200 m by a flat fault, below which non-mineralized granite is present. Mineralogy and alteration are
similar to El Crestón-Minas Prietas.
Veta Madre Zone
Veta Madre is located 1.5 km. east of El Crestón-Minas Prietas Pit. It consists of a zone of extensive
alteration associated with the Colorada Sureste Fault. Historical miners sunk three deep sub-vertical
shafts. Rock types include siltstone, diorite, monzonite, granite, rhyolite feldspar porphyry and
dacite. EESA completed 11 trenches of different lengths and 1,566 samples were taken which
returned gold values of between 0.15 and 0.8 ppm with sporadic higher values of between 1.5 and
5.0 ppm Au. Anomalous zinc values were encountered at one location with one 4 m section grading
1.5% Zn. EESA drilled twenty one reverse-circulation drill holes totaling 2,372 m. A single diamond
hole was drilled in the area (249.9 m). These holes intersected mineralization along an east-

northeast trending structure, with a strike length of close to 500 m. Pediment has since completed
25 RC drill holes (2,098 m) in 2008- 2009, with follow-up drilling.
Regional and local geologic maps complied by Argonaut are presented in Figures 5-1 through 5-3. A
representative, geologic cross section through the La Colorado/Gran Central area is presented in
Figure 5-4.

Sonora, Mexico
Regional Geology
Sonora, Mexico
La Colorada/Gran Central Pit Area Geology
Sonora, Mexico
El Crestón Pit Area Geology
Sonora, Mexico
La Colorada/Gran Central Area
Source: Argonaut Gold Inc., 2011 Cross Section Geology
6 Deposit Type (Item 8)

The following descriptions of deposit types are cited directly from McMillian et al (2009) with minor
modifications of text and formatting.
6.1 Mineral Deposit

La Colorada Gold District has many of the characteristics of a low sulfidization epithermal-vein type
gold-silver deposit. Although there are differences, such as the more sheared and deformed nature
of the La Colorada deposits, the authors (McMillian et al, 2009) believe that La Colorada could be an
outlier of the prolific Sierra Madre Occidental trend of gold-silver deposits that traverses much of
central Mexico. Zawada et al (2001) from fluid inclusion studies, state that “La Colorada district
underwent a complex hydrothermal history related to Cretaceous plutonic activity, later higher level
plutonic events, and finally a mid-Tertiary vein system which shares characteristics in common with
both a deep epithermal environment and a high-level mesothermal system.” Zawada et al (2001) go
on to state that “features indicative of a deep epithermal environment include abundant multistage
coarse and fine grained crystalline quartz bands, with gold deposition more abundant in the finer
grained stages; abundant primary growth zones indicative of open-space filling under hydrostatic
pressure conditions; and the absence of low temperature silica phases such as chalcedony or
recrystallized amorphous silica, which are typically present within the mineralized zones of higher
epithermal systems” .
The current authors (McMillan et al) believe that the deposits are epithermal in nature and of the low-
sulfidization type in particular. The La Colorada deposits however have been subject to burial and
as a consequence to shearing and elevated temperatures prior to being exhumed and re-exposed.
These suppositions are not merely academic, and are believed to have exploration implications – in
particular in tracing the key structural-stratigraphic traps for mineralization down-dip in the relevant
fault blocks generally west from the known mineral deposits below the Tertiary volcanic cover.
6.2 Geological Model Applied

Discussion of the general characteristics of epithermal Au-Ag deposits follows and is believed to be
relevant. Recently epithermal-type Au-Ag deposits in the Pacific Rim and in Eurasia have been the
source of much of the world’s new gold supply. This has resulted in an improved understanding of
epithermal-type precious metal deposits and has allowed for construction of models which could be
very useful in future exploration of the La Colorada Property. The following comments are based
largely on recent papers by Hedenquist et al (2000) and Simmons et al (2005).
Epithermal deposits are found in the shallow parts of subaerial high-temperature hydrothermal
systems and are very important in Tertiary to Recent calc-alkaline and alkaline volcanic rocks. They
are particularly important in the Circum Pacific Volcanic Arcs and in the Mediterranean and
Carpathian regions of Europe. Host rocks are variable and include volcanic and sedimentary rocks,
diatremes and domes. Structural controls include dilatant zones related to extensional faulting and
favorable lithologies in permeable and/or brecciated host strata in the near-surface environment.
Although some mineralization can be disseminated, most common mineralization is hosted by
steeply-dipping vein systems. Both open-pit bulk mining and selective underground mining methods
are employed to exploit the deposits, depending upon the nature of the mineralized bodies. Heap-

leach treatment is possible in some oxidized deposits. In contrast some high-sulfidation deposits
can be refractory, with the gold encapsulated by sulf-arsenide minerals.
Mineral textures include banded, crustiform-colliform and lattice textures composed of platey calcite
sometimes pseudo morphed by quartz. An important feature of epithermal deposits is a pronounced
vertical zonation, with quartz veins carrying base metal sulfide mineralization at depth, becoming
silver-rich higher in the system and finally gold-rich near the top. Both low-sulfidation and high-
sulfidation epithermal deposits can be overlain by a discontinuous blanket of kaolinite-smectite,
sometimes with alunite and native sulfur, within an opaline rock that is easily eroded (Hedenquist et
al, 2000). Although some deposits display intermediate characteristics, two end member types of
deposit are generally recognized.
High-sulfidation deposits are characterized by a silicic core of leached residual vuggy silica as the
main host to the mineralization (Hedenquist et al, 2000). Major metallic minerals can include pyrite,
enargite/luzonite and covellite, with lesser quantities of native gold and electrum, chalcopyrite and
tennantite/tetrahedrite. Upward from the silicic core there is generally an upward-flaring advanced
argillic zone consisting of quartz-alunite, barite and kaolinite, and in some cases pyrophyllite, or
zunyite (Hedenquist et al, 2000). High sulfidation deposits are commonly proximal to and in some
cases hosted by a high level subvolcanic intrusive or dome – calderas constitute a particularly
important environment.
Low-sulfidation deposits typically range from veins, through stockworks and breccias to disseminated
zones. Mineralized bodies in low-sulfidation systems are commonly associated with quartz and
adularia, with carbonate minerals or sericite as the major gangue minerals. Major metallic minerals
can include pyrite/marcacite, pyrrhotite, arsenopyrite and high-iron sphalerite. Less abundant
metallic minerals include native gold and electrum, cinnabar, stibnite, Au-Ag selenides, Se sulfosalts,
galena, chalcopyrite and tetrahedrite/tennantite. Hedenquist et al (2000) state that hot spring sinter
can form above a low-sulfidation deposit and that the clay alteration associated with a deposit can
“mushroom” above the deposit towards the surface and have an aerial extent “two orders of
magnitude larger than the actual ore deposit.” In some cases mercury mineralization, and/or
geochemically anomalous As, Sb and Tl, is found near the top of the deposit and in the overlying
siliceous sinter.
According to Herdrick (2007), the La Colorada project area contains at least three parallel vein
trends on which underground and open pit mining has been conducted. Targeting of drill holes is
based on structural analysis and vertical zoning recognized in the district, as well as fluid inclusion
and alteration studies which indicate that gold mineralization exposed in the pits resulted from boiling
in the epithermal system. The upper parts of a boiling system are typically recognized as barren
alteration zones, overlying potentially gold bearing parts of the vein structure at depth. Veins are
focused along east-west and northeast-southwest trending structures that dip moderately to the
north and northwest, and cut across local skarn alteration and intrusive bodies. Surface mining was
focused along three structures, the upper parts of which flare out into stockwork zones. Eight
different structures in the La Colorada mine area appear to have older underground workings in gold
bearing quartz veins.
Age dating was undertaken on three hydrothermal sericite samples. Two are from the La Colorada
Pit and one from the Gran Central Pit (Zawada et al, 2001). The samples were subject to 40Ar/39Ar
analyses at the New Mexico Institute of Science and Technology Geochronology Research Lab in

Socorro, New Mexico, yielding respectively: 27.1 +/- 2.0 Ma, 22.45 +/-0.19 Ma and 23.83 +/- 1.6 Ma.
Two biotite samples collected from dioritic intrusions from the Gran Central Pit yielded ages of 70.4
+/-0.2 Ma and 69.9 +/- 2.2 Ma. These dates suggest that the hydrothermal alteration and associated
gold mineralizing event was Miocene in age and probably related to the Tertiary volcanic event. The
Cretaceous age for the biotite in the diorite suggests the intrusive event for the granitic plutonic rocks
was much earlier and not associated with the hydrothermal gold mineralizing event.

7 Exploration (Item 9)
7.1 Relevant Exploration Work
Argonaut has conducted surface exploration consisting of rock chip and soil sampling.
7.2 Surveys and Investigations

7.2.1 Exploration Rock and Soil Sampling
Selected surface rock samples were collected by qualified Mexican geologists together with
appropriate geological-technical data, including UTM coordinates, lithology and mineralization
recorded in field books. The samples are placed in standard plastic rock sample bags, tagged and
the locations recorded in a master database. The plastic bags are sealed using plastic pull ties. All
samples are taken to the office facilities within the La Colorada project.
During 2011, Argonaut’s regional exploration program at La Colorada included soil sampling from the
Sombreretillo and the Los Duendes areas. Sampling was made over a spacing array of 50 m by 100
m, and nearly all samples consisted of material from the B and C horizons, with depths ranging from
20 to 45 cm. Detailed information for all samples was recorded in paper and later included in the
Surface Database. All samples were placed mainly in cloth bags, and were shipped to the laboratory.
So far, Argonaut’s geologists have taken 99 samples in the Los Duendes area, to the south of El
Creston open pit; as well as 61 soil samples from Sombreretillo, located to the Northeast of the Veta
Madre area.
7.3 Significant Results and Interpretation

Small outcrops of Qtz+Ox mineralized structures with anomalous Au values were sampled at the
Sombreretillo area, to the northeast of Veta Madre; these structures are hosted by dacitic rocks with
strong presence of Qtz veinlets, and they are parallel to the mineralization trend of the Veta Madre
area. Recently received assay results of around 50 rock samples from the Sombreretillo area, have
helped Argonaut’s exploration personnel to design a new drill program, which is currently under
review and it is programmed to be implemented in the near future.
In addition, a siltstone-hosted mineralized structure trending to the northwest was sampled at the Los
Duendes area, from where several rock samples with anomalous Au assays were found; turning the
area into a possible further exploration target.
General reconnaissance of two new properties, Red Norte and Red Sur, located to the south of the
La Colorada mine, has been carried out; results from that work shows presence of several North-
South trending veins and structures, which are accompanied of anomalous values of Au and Ag that
may lead to more aggressive exploration in the near future.
Soil sampling results in both areas have been positive; and, as mentioned before, a new drilling
program , partially based on surface sampling and intended to expand the resource has been
already made.

8 Drilling (Item 10)

The majority of the drilling which supports the current resource estimation was conducted by the
three most recent owners of the project including; EESA, Pediment and Argonaut.
8.1 Type and Extent

EESA completed 874 drillholes on the project during their ownership. The details of the EESA
drilling are outlined in Table 8.1.1.
Table 8.1.1: EESA Drilling Summary

RC/Percussion Diamond Core Total Drilled
Drilling by Area and DH Type:
Number m Number m Number m
El Crestón Pit 381 42,047.62 26 3,327.85 407 45,375.47
Gran Central Pit 150 18,358.70 27 3,400.10 177 21,758.80
La Colorada Pit 158 23,254.71 18 3,439.10 176 26,693.81
La Verde 33 1,439.00 0 0.00 33 1,439.00
NE Extension 28 2,266.00 2 314.00 30 2,580.00
Veta Madre 21 2,372.00 0 0.00 21 2,372.00
El Represo 1 279.20 3 204.00 4 483.20
Los Duendes 24 639.00 32 1,670.00 56 2,309.00
Colorada Norte 32 3,526.00 0 0.00 32 3,526.00
Colorada Sur 46 4,226.00 0 0.00 46 4,226.00
Total 874 98,408.23 108 12,355.05 982 110,763.28
Pediment completed 133 drillholes on the project during their ownership. The details of the
Pediment drilling are outlined in Table 8.1.2.
Table 8.1.2: Pediment Drilling Summary

2008 2009 2010 Total
Total Drilling: Number m Number m Number m Number m
RC 22 4,314.64 105 7,533.86 1 353.57 128 12,202.07
DD (with precollar) 0 0.00 5 1,518.70 0 0.00 5 1,518.70
Total 22 4,314.64 110 9,052.56 1 353.57 133 13,720.77
Drilling By Area:
El Crestón Pit 2 358.20 36 2,886.78 1 353.57 39 3,598.55
Gran Central Pit 3 580.60 9 1,214.28 0 0.00 12 1,794.88
La Colorada Pit 1 341.40 13 1,580.15 0 0.00 14 1,921.55
La Verde 7 1,327.60 18 1,109.46 0 0.00 25 2,437.06
NE Extension 5 964.70 4 237.75 0 0.00 9 1,202.45
Veta Madre 4 742.14 21 1,356.36 0 0.00 25 2,098.50
Leach pads 0 0.00 4 60.96 0 0.00 4 60.96
Waste Pads 0 0.00 5 606.82 0 0.00 5 606.82
Total 22 4,314.64 110 9,052.56 1 353.57 133 13,720.77
Argonaut has completed 245 drillholes on the project to date. The details of the Argonaut drilling are
outlined in Table 8.1.3.

Table 8.1.3: Argonaut Drilling Summary

Total drilling: Number m
RC 142 23,810.95
DD (with precollar) 76 11,635.07
Total 218 35,446.02
Drilling by area:
El Crestón Pit 12 2,470.40
Gran Central Pit 69 12,045.27
La Colorada Pit 64 10,451.15
La Verde 9 1,908.05
NE Extension 0 0.00
Veta Madre 64 8,571.15
Leach Pads 16 385.55
Waste Pads 11 402.33
Total 245 36,233.90
Source: Minera Pitalla Drilling Summary – 2011
8.2 Procedures
8.2.1 Pediment, Reverse Circulation (RC) Drilling
Pediment used Layne de México and Globexplore Drilling S.A. de C.V., both of Hermosillo, for the
reverse circulation drilling. Drillholes were generally oriented on azimuths 180° and 160° and
inclined with dips between -45° and -90° to the south because of the predominant north dip to the
veins and stockwork zones. Brunton compass was used for marking the direction of drilling on the
pads. All drill holes contained a systematic code numbering, using a prefix indicating the year and
type of drilling and had continues numbering. Initial pads were located by handheld GPS. Upon
completion, further surveying with precision instruments was completed to obtain the exact drillhole
coordinates. RC pipe diameter was 5 1/8 inch for Lyne RC or 5.0 inch for Globexplore RC. RC
cuttings were logged coincidentally with drilling using hand lens and binocular field microscope . RC
samples were taken every 5 ft (1.52 m) regardless of lithology, alteration or mineralization. Chip
trays were set up at this sample interval. After completion of a drillhole, the site was monumented by
a marker composed of down-hole PVC pipe encased in a cement block which was labeled with the
drillhole number.
8.2.2 Pediment Core Drilling.

Pediment used Layne de Mexico of Hermosillo for its core drilling. Layne drilled with a skid mounted
Cummins B-20 diamond drill rig. This equipment was used to drill 5 new holes, and 2 existing holes
were re-entered. All holes were drilled using HQ diameter bits. The entire hole was sampled. In the
mineralized zones samples were collected at regular 1.0 m or less, intervals. In zones with no
obvious mineralization, samples were collected at 3.0 m intervals.
8.2.3 Argonaut Reverse Circulation (RC) Drilling.

Argonaut used Layne de México and Major Drilling de Mexico S.A, de C.V., both of Hermosillo, for its
RC drilling. Drillholes were oriented on azimuth 180° and inclined with dips between -45° and -90° to
the south following Pediment´s drill scheme. The drill plan design was to infill at 25 m spacing.
Brunton compass was used for marking the direction of drilling on the pads. All drillholes contained

a systematic code numbering, using a prefix indicating the year and type of drilling and had
continuous numbering follow the system of Pediment. Initial pads were located by handheld GPS.
Upon completion, further surveying with precision instruments was completed to obtain the exact
drillhole coordinates. RC pipe diameter was 5.0 in for Lyne RC or 5 1/8 in for Major RC. RC cuttings
were logged coincidentally with drilling using hand lens and binocular field microscope. RC samples
were taken every 5 ft (1.52 m) regardless of lithology, alteration or mineralization. Chip trays were
set up this sample interval. After completion of a drillhole, the site was monumented by a marker
composed of down-hole PVC pipe encased in a cement block which was labeled with the drillhole
number.
8.2.4 Argonaut Core Drilling.

Argonaut used Landdrill International Mexico S.A. de C.V. and Falcon Perforaciones de Mexico S.A.
de C.V. both of Hermosillo and GDA Servicios Mineros S.A. de C.V. of Chihuahua for its core drilling.
Two drills were skid-mounted and two were buggy-mounted diamond drill rigs. Some of the holes
were drilled using PQ diameter bits in order to obtain metallurgical samples, others used HQ
diameter bits to obtain exploration samples. Sampling procedures followed the protocols established
by Pediment as described above.
8.2.5 Argonaut RoM Pad Drilling

A Becker-Hammer rig contracted from Layne de Mexico was used to drill test the RoM leach pad and
Waste dumps at La Colorada. This type of drilling drives casing with a percussion hammer without
the necessity of rotation. The casing is a double wall drive pipe with a large center opening which
allows even large cobbles to be lifted without prior crushing. Since drilling and casing are combined
in one operation, this method provides a continuous and generally, more accurate sample of the
geological formation being drilled. Since the RoM pad and waste dumps consist of uncrushed rock,
the Becker was chosen to get as much recovery in the coarse size as possible. The Becker hammer
used at La Colorada had a 9-in outer diameter and 6-in inner diameter with dual tube drill pipe.
Layne reported the rig being able to commonly lift 4-in cobbles.
All Becker hammer drill holes were drilled at a -90 angle and were drilled without introducing water.
The sampling procedure on this type of drilling was similar to the one used in RC samples, with the
exception that none of the sample portions were discarded. Routinely, the sample was discharged
and split by half; 50% of the sample was bagged and stored at the storage house and the other 50%
was split again to obtain two 25% portions of the total; one of which was bagged and stored as a lab
sample witness and the other 25% was bagged, marked and shipped to the preparation laboratory.
Whenever a duplicate sample was needed, both 25% portions were split again, so four 12.5% splits
were obtained, two of which were shipped to the preparation lab and the other two were stored at the
storage house.
8.3 Interpretation and Relevant Results

Reputable contractors using industry standard techniques and procedures have conducted the La
Colorada drilling. The historic drilling was conducted to the industry best practices of the time. This
work has defined several large zone of anomalous gold mineralization within the El Crestón, La
Colorada/Gran Central, and Veta Madre Zones. Figure 8-1 shows the locations of the Argonaut
drillholes. The drillholes are generally located in a wide range of spacing and orientations. They

typically bear to the south, inclined steep to moderately. This orientation provides an oblique angle
of intersection between the predominate plane of mineralization and the drillhole. Based on the wide
range of drillhole orientations most of the sample lengths do not represent true thickness of
mineralization. In general, the drillhole intercept length is greater than the true thickness of
mineralization.
SRK is of the opinion that the drilling operations were conducted by professionals, the RC chips and
core were handled and logged in an acceptable manner by professional geologists, and the results
are suitable for support of an NI 43-101 compliant resource estimation.

Sonora, Mexico
Drillhole Location Map
9 Sample Preparation, Analysis and Security (Item 11)

9.1 Methods
9.1.1 Reverse Circulation Drill Samples
RC samples were collected every 5 ft or 1.52 m. The rig is equipped with a cyclone with both a
vertical and a lateral discharge. Material from the vertical discharge passes through a second splitter
to obtain two samples. One of the splits is discarded and the other is split again to obtain two new
samples. These final two samples are bagged in previously-marked plastic (dry material) or
micropore bags (wet material) and sealed with plastic pull ties. One of the bags is weighed and
collected for assay, while the other reject is stored at the La Colorada warehouse as a duplicate in
case further checks are required. QA/QC field duplicates are prepared by splitting the reject once
and keeping one half for storage, the other half is then split again and bagged as a field duplicate to
go for assay. The sampling process is performed by trained local workers under the supervision of
one experienced worker and a project geologist. At the end of the day or shift, all sample bags for
assay are taken to the La Colorada office and organized there, inserting the corresponding QA/QC
samples containing blanks and standards.
9.1.2 Diamond Drill Core Samples

Samples were first marked by the geologist after geological logging, RQD and photography was then
completed. Sample splits were collected dry, using either a manual or a hydraulic core splitter. In
the case of filed duplicates, the samples had to be split twice, making sure representative parts were
used in both sample bags. Weights for all samples were recorded prior to sending to the lab.
Sample splitting was performed by local trained workers under the supervision of Argonaut’s
qualified geologist. Core boxes are stored at a warehouse in La Colorada using plastic boxes which
are properly marked with drillhole number and intervals contained in meters.
9.2 Security Measures

All Argonaut drill and surface samples taken at the Project were stored and secured in the Project’s
office. Sample transfer to the assay lab were regularly scheduled three times a week. The samples
were collected by Inspectorate directly at the site. Personnel from the lab would sign off after the
samples were loaded into the truck, then the samples were delivered to the preparation laboratory in
Hermosillo. The laboratory itself would ship processed pulps for assay in their laboratories in the
U.S.
9.3 Sample Preparation

All of Argonauts samples were prepared and analyzed by Inspectorate Labs, Hermosillo, Mexico.
Inspectorate is fully independent of Argonaut; it is not an ISO certified laboratory but does follow the
“Bureau Veritas” code of ethics.
All samples were dried, crushed, split and pulverized in Inspectorate’s Hermosillo prep facility. The
pulps were then sent to Inspectorate’s main U.S. facility in Reno Nevada for fire assay gold and
silver analysis.

As part of routine procedures, Inspectorate uses barren wash material between sample preparation
batches and, where necessary, between highly mineralized samples. This cleaning material is
tested before use to ensure no contaminants are present and results are retained for reference.
Inspectorate’s sample preparation and fire assay procedures are as follows:
1. Sample is logged in and weighed.

2. Sample is dried in ovens.
3. Sample is crushed to 80% <2 mm or better.
4. The crusher is cleaned with compressed air after each sample.
5. Sample is split using Jones Riffle until up to 250 g sample remains.
6. Sample is packed and the reject is returned to original bag and stored.
7. Sample from step 5 is pulverized to 85% passing -200 mesh or better.
8. Pulps are shipped to Reno, Nevada.
9. Au and Ag are assayed by fire assay using Atomic Absorption Spectrometry (AAS) finish,
with 50 g nominal sample weight.
10. 30 additional elements are assayed by ICP using aqua regia digestion and read with ICP-
AES.
9.4 QA/QC Procedures and Results

Argonaut’s practice is to insert one control sample (standards, blanks and duplicates) at 10-sample
intervals through an entire drill hole. The control sample inserted each time is in sequence as
standard, blank and field duplicate. This repeats for as many QA/QC sample intervals as the drill
hole requires. Standards used are commercially produced by Rocklabs and include different gold
grades and two material types: oxide and sulfide. The material type is selected to match the type of
mineralization being sampled in the drill hole. Commercial blanks are also purchased from
Rocklabs. Field duplicates are prepared during drilling as described in Section 9.1.
After certified assay results are received from Inspectorate labs, statistical and/or graphic QA/QC
analyses are applied to all control samples. Argonaut does not include any analytical batch results in
its final database that have not passed the QA/QC procedure satisfactorily.
Duplicate samples are evaluated mainly using the Spearman Rank’s correlation coefficient (R2),
which considers differences in Au-values sorting-ranks and is calculated to assure a good positive
correlation represented by the proximity of R2 to 1. In addition, the Pearson correlation coefficient is
also calculated for the original data, to verify the direct correlation level.
Figures 9-1 through 9-5 show that all Standards and Blank samples fell within acceptable limits.
Repeatability on duplicate samples results was highly acceptable; requests for several re-assays on
duplicates were triggered by high differences in results, and almost all the issues were attributed to
the presence of a minor nugget effect, seen also in previous drilling programs. Statistically, the
Spearman coefficient demonstrated a very good positive correlation level for the duplicates in the
2011 program (0.8875). The Pearson coefficient value reflects the heterogeneity of the duplicates.
Certificates of results for all reference material are issued by RockLabs, these documents contain
mainly the mean Au values and the Standard Deviation for each standard they manufacture, and this
information is taken into account to establish the tolerance limits which determine if a re-assay is

required. Reference material results that Argonaut receives from Inspectorate are graphically
analyzed as part of the QA/QC procedures.
9.5 Opinion on Adequacy

SRK is of the opinion that the analytical work performed by Inspectorate is valid and suitable for use
in resource estimation. The fire assay method is an industry accepted analytical technique to
determine Au and Ag content in exploration samples. The QA/QC program employed by Argonaut
meets current industry standards and the results of this work indicate good precision and accuracy of
the analytical results.

Sonora, Mexico
Blank Analyses Performance Chart
Source: Argonaut Gold Inc, 2011
Sonora, Mexico
Certified Standard OxE86 Performance Chart
Sonora, Mexico
Certified Standard OxF65 Performance Chart
Sonora, Mexico
Certified Standard SG40 Performance Chart
Sonora, Mexico
Field Duplicate Performance Chart
10 Data Verification (Item 12)

10.1 Procedures
Two data verification procedures have been employed to verify the data in this report. The first
involves 11 character samples collected by McMillian et al (2009); the second is verification of the
electronic data base completed by SRK.
The following description of data verification by character samples is cited directly from McMillian et
al (2009) with minor modifications of text and formatting.
During the property visit by two of the authors (McMillan and Dawson) on October 3, 2009, eleven
character samples were taken. The samples collected ranged between 0.64 and 6.03 kg., averaging
about 2 kg. They were collected with a geological pick into a plastic sample bag and delivered
personally by McMillan and Dawson on October 3 to the ALS Chemex preparation facility in
Hermosillo. The analytical results and comparative Pediment results are presented in Table 10.1.1.
The riffle split samples of the reverse circulation drill cuttings show good correlation as was
expected. The chip samples show poorer correlation – perhaps reflecting to greater variability and or
more personal bias in chip sampling.
Table 10.1.1: MacMillian et al (2001) Comparative Sampling Results

Duplicate and Character Rock Chip and RC Drill Cutting Samples – La Colorada Mine area
Au ppm
(1) (1) Au ppm
Sample No Easting Northing Description (2) Pediment
this work (2)
Gold
El Crestón pit ramp. 2 m chip sample on bench between
Pediment Samples 324282 and 324283. N-trending
MD001 54282 3185654 vuggy quartz veinlets to 1 cm. cutting red weathering 0.11 0.014 0.026
hornfelsed argillite. 20 cm. N-trending, steeply-dipping
felsic dyke cuts sediments.
El Crestón pit ramp. 2 m chip sample on bench between
MD002 542840 3185640 Pediment Samples 324264 and 324265. Quartz vein 0.53 0.197 0.111
stockwork cutting altered argillite. ~75 to 80% quartz.
El Crestón pit. 2 m chip sample on bench duplicating
Pediment Sample 324224. 0.5 to 2 cm. quartz vein swarm
MD003 542920 3185760 0.18 0.138
trends SW cutting red baked argillite. Broken granodiorite
intrusive dykes to 0.5 m.
El Crestón pit. 2 m chip sample on bench duplicating
Pediment Sample 324223. 0.5 to 2 cm. quartz vein swarm
MD004 542920 3185760 0.35 0.103
trends SW cutting red baked argillite. Broken granodiorite
intrusive dykes to 0.5 m.
El Crestón pit. 10 to 15 cm. gouge zone in same location
MD005 542920 3185760 2.45 0.485
as MD003. Duplicates Pediment Sample 324222.
La Colorada pit. 1.5 m sample of La Colorada vein. Vein
is intensely oxidized but contains fine pyrite, galena and
MD006 541233 3185777 sphalerite and some vuggy quartz. Vein (which is a 0.95 0.164
stockwork of fine veinlets) dips ~ 500 N. Duplicates
Pediment Sample 434696.
Gran Central pit. 3 m chip sample of 1.4 m highly altered
shear zone dipping NE ~450. Drusy quartz, maroon and
MD007 541345 3185642 0.32 4.71
red Fe oxides and some Mn. Duplicates Pediment
Sample 434806.
MD008 Duplicate riffle split of RC hole sample 40556. 0.77 0.776
(1) NAD 27 Mexico, Zone 12K
(2) all samples assayed by ALS-CHEMEX

SRK verified the electronic database to the original source data to assure validity of the data
supporting the resource estimation of this report. Argonaut supplied SRK with scanned copies of the
original drill logs or assay certificates where possible. SRK then manually compared the collar
locations, orientations/down-hole surveys and assay data within the electronic database to the
original sources. Assay certificates were only available for 67% of the assay data used to support
the current resource estimation. Eleven percent of these were validated by direct checks, no input
errors were found. Drill collar location from the EESA program were located in mine grid coordinates
and then transformed into UTM coordinates. The EESA mine grid is a truncated version of and older
UTM grid. Some of the original EESA collar coordinates are available in drill logs but due to the
transformation, direct comparison to the current coordinates was not possible. All drill collar
locations from the Pediment and Argonaut drilling were verified to the original sources. No errors
were found. Three percent of the hole orientation/down-hole surveys were verified to original data,
no errors were found.
10.2 Limitations
SRK was not limited in its access to any of the supporting data used for the resource estimation or
describing the geology and mineralization in this Report on Resources.
The database verification is limited to the procedures described above. All mineral resource data
relies on the industry professionalism and integrity of those who collected and handled it. SRK is of
the opinion that appropriate scientific methods and best professional judgment were utilized in the
collection and interpretation of the data used in this report. However, users of this report are
cautioned that the evaluation methods employed herein are subject to inherent uncertainties.
10.3 Data Adequacy

It is SRK’s opinion that the drillhole data is adequate to support to resource estimation of this report.

11 Mineral Processing and Metallurgical Testing (Item

13)
All information contained within this section was provided by Kappes, Cassiday & Associates (KCA)
in Reno, Nevada.
Metallurgical test work was completed in 2011 on material drilled from the existing RoM Leach Pad
at La Colorada as well as on new PQ and HQ core drilled from the La Colorada, La Colorada West,
Gran Central and Gran Central West pit designations.
The metallurgical drillhole locations are included in the map presented in Figure 11-1.
In both cases, the amount of drilling completed for the test programs completed by KCA in 2011
would appear to be representative of the areas being examined.
11.1 Testing and Procedures

For the RoM Leach Pad sample a group of nineteen (19) buckets of material were received at KCA
in Reno, Nevada. The received material was stage crushed to 100% passing 25 millimeters and a
portion of this material then crushed to 100% passing 12.5 mm in order to develop crushed material
for head characterization, bottle roll leach test work, agglomeration test work and column leach test
work.
For the metallurgical core drill holes developed at La Colorada, KCA received one hundred and
eighty nine (189) 5 gallon buckets containing HQ and PQ core (1/2 split and whole core was
received) and assay control sample pulps from the La Colorada Project of Argonaut Gold, Inc.
located near Hermosillo, Mexico. The core intervals received were prepared and assayed by
Inspectorate in Sparks, Nevada for gold and silver.
An additional group of core samples were received. These core samples were contained in twenty
one (21) buckets and were intervals of ½ split HQ core previously assayed by La Colorada
personnel. These core intervals were from the Gran Central West area.
A total of two hundred and six (206) intervals were received from four (4) separate areas of the La
Colorada project. The intervals received were representative of thirteen (13) drill holes developed
from across these areas.
A total of four (4) core composites were developed for head characterization, bottle roll leach test
work, preliminary agglomeration and column leach test work. These composites were representative
of the La Colorada, La Colorada West, Gran Central and Gran Central West areas.
Column leach tests were conducted on each of the four (4) composites utilizing material crushed to
100% passing 25, 16, 12.5 mm for the La Colorada West and the Gran Central West composites and
material crushed to 100% passing 25, 16, 12.5 and 8.0 mm for the La Colorada and Gran Central
composites.
11.2 Relevant Results

The results of the column leach tests conducted on the RoM Leach Pad material are summarized in
Table 11.2.1.

The column leach tests were completed on material crushed to 100% passing 25 and 12.5 mm.
Screen analyses of the column tailings indicated that the two (2) column leach tests conducted had
similar particle sizes with 80% of the material crushed to minus 25 mm being finer than 10.5 mm and
80% of the material crushed to minus 12.5 mm finer than 8.2 mm. Gold recoveries for the two (2)
columns ranged from 43% to 46% after 78 days of leaching. Sodium cyanide consumption averaged
0.34 kg/t NaCN and ranged from 0.30 to 0.38 kg/t NaCN.
The feed material for both column leach tests were agglomerated with cement prior to leaching. The
cement added during agglomeration was approximately 2 kg/t.
Table 11.2.1: La Colorada Project Column Test Results on RoM Leach Pad Material
The results of the column leach tests conducted on the core composites are summarized in Tables
11.2.2 and 11.2.3.
Table 11.2.2: La Colorada Project Column Test Results on Core Material – Gold

Table 11.2.3: La Colorada Project Column Test Results on Core Material – Silver
It should be noted that some degree of variability was noted during the course of the column test
program reported here with regard to head assays and calculated head assays completed for
individual tests. While the exact source of this variability was not determined from the test work the
relative standard deviation for the calculated head gold values for each group were all less than 13%
and this would indicate generally good agreement between column tests.
For this test program the minus 25 mm material was leached for 48 days. The minus 16 and minus
12.5 mm material were leached for 63 days and the material crushed to minus 8 mm were leached
for 72 days. Examination of the leach curves does indicate that leaching was continuing to some
extent when the column leach tests were ended. Although some additional recovery could possibly
be obtained with longer leaching it is believed that the crushed size of the material is the most
important factor with regard to metal recovery.
For most sets of column leach tests the minus 16 mm crushed material and the minus 12.5 mm
crushed material indicated similar type recoveries and in some cases the recoveries from the minus
12.5 mm material were lower than recoveries obtained at the 16 mm crushed size. This similarity
may be attributed to the screen analyses of these crushed products. The finer size fractions in these
two (2) crushed sizes, in some cases, were not different in weight percent.
The general recovery trend does indicate that both gold and silver recoveries do improve with finer
crushing.
For the Gran Central core composite gold recoveries ranged from 30% for material crushed to minus
25 mm to 55% on material crushed to minus 8 mm. Silver recoveries ranged from 19 to 45%.
The consumption of sodium cyanide ranged from 0.16 to 1.79 kg/t NaCN. Hydrated lime addition
averaged approximately 2 kg/t Ca(OH) 2 for the material crushed between 12.5 and 25 mm. The
minus 8 mm crushed material was agglomerated with the addition of 2.01 kg/t cement.

For the Gran Central West core composite gold recoveries ranged from 41% for material crushed to
minus 25 mm to 48% on material crushed to minus 12.5 mm. Silver recoveries ranged from 24 to
40%.
averaged approximately 2 kg/t Ca(OH) 2 for the material crushed between 12.5 and 25 mm.
For the La Colorada core composite gold recoveries ranged from 44% for material crushed to minus
25 mm to 70% on material crushed to minus 8 mm. Silver recoveries ranged from 17 to 47%.
averaged approximately 2 kg/t Ca(OH) 2 for the material crushed between 12.5 and 25 mm. The
minus 8 mm crushed material was agglomerated with the addition of 2.01 kg/t of cement.
For the La Colorada West core composite gold recoveries ranged from 32% for material crushed to
minus 25 mm to 46% on material crushed to minus 12.5 mm. Silver recoveries ranged from 30 to
47%.
averaged approximately 2 kg/t Ca(OH) 2 for the material crushed between 12.5 and 25 mm.
From KCA’s field experience, cyanide consumption in production heaps is usually 25 to 33% of the
laboratory column test consumption. Therefore, at the 16 mm crush size, a field cyanide
consumption of 0.14 kg/t can be expected. It should be noted that at the 8 mm crush size there is a
substantial increase in cyanide consumption, and the field consumption at this finer crush size can
be expected to be higher, in the range of 0.40 kg/t.
11.3 Recovery Estimate Assumptions

When examining the results from laboratory column test work and projecting this to estimated field
recoveries the recoveries obtained from laboratory columns are typically reduced by 3 percentage
points. In a similar manner, silver recoveries are typically adjusted by up to 5 percentage points.
After review of historical processing data from La Colorada it was determined that no reduction from
laboratory column test work was needed. As the recovery curves indicate very slow leaching, it is
almost certain that several percent more gold recovery would be realized with a 90 day leach cycle.
Gold recovery in the field from RoM Pad Leach material crushed to 100% passing 25 mm with a p80
size of 10.5 mm would be estimated to be 43%.
Column test recoveries along with estimated field recoveries for the four (4) areas defined by the
core material are presented in Table 11.3.1.

Table 11.3.1: La Colorada Project Estimated Field Recoveries
11.4 Additional Test Work

Additional column test work is being completed by KCA at the present time on core material from the
Project. This test work is focused on finer crushing (minus 12.5 mm).
If finer crushing is to be examined as a possible processing alternative additional agglomeration test

work will be required.

Sonora, Mexico
Metallurgical Drill Hole Locations
12 Mineral Resource Estimate (Item 14)

12.1 Qualified Persons for the Mineral Resource Estimate
Dr. Bart Stryhas constructed the geologic and mineral resource model discussed below. He is
responsible for the resource estimation methodology, mineral resource classification and resource
statement. Dr. Stryhas is independent of the issuer applying all of the tests in Section 1.5 of NI 43-
101.
The resource estimation is based on the current drillhole database, digitized as-built topography of
open pits, interpreted fault structures, geologic controls and current topographic data. The
estimation of mineral resource was completed utilizing a computerized resource block model by
VULCAN® modeling software.
12.2 Drillhole Database

The drillhole database was compiled by Argonaut and is determined to be of good quality. The
database consists of four, Microsoft Excel® spreadsheets containing collar locations surveyed in
UTM grid coordinates, drillhole orientations with some down hole deviation surveys, assay intervals
with gold and silver analyses by fire assay and geologic intervals with rock types.
orientations. They typically bear to the south, inclined steep to moderately. This orientation provides
an oblique angle of intersection between the predominate plane of mineralization and the drillhole.
The maximum drillhole depth is 479 m and the average is 117 m. The historic drillholes are generally
short and lack down-hole surveys. Nearly all of the modern, longer holes do have down-hole
surveys. The appropriate codes for missing samples and no recovery were used during the
modeling procedures.
12.3 Geology
The resource estimation is based on a generalized geologic model consisting of a single rock type.
The mineralization is hosted all lithologies, primarily controlled by the fault and vein development.
The principal mineralization occurs as quartz veinlets and silica replacement within the La Colorada,
Gran Central, El Crestón and Veta Madre fault/vein zones. The Intermediate Zone is defined as
diffuse zone of mineralization located parallel, and midway between the Gran Central and La
Colorada structures.
Overall, the resource area has a deep level of oxidation controlled primarily by the fault/vein
development. The bedrock is typically well oxidized within the mineralized zones and less oxidized
in the barren zones. To date, Argonaut has been unable to map a discrete oxide/sulfide boundary.
All material within the current resource models is considered oxidized or transitional.
12.4 Block Model

Four block models were used to estimate the current resources. Each block model was constructed
within the UTM coordinate limits listed in Table 12.4.1. A 5 m x 5 m x 5 m (x,y,z) block size was
chosen as an appropriate dimension based on the current drillhole spacing and a potential open pit,

smallest mining unit. Two topographic surfaces were used to flag the location of bedrock in the block
model. Within the mined areas, open pit as-built topography was generated from historic mapping.
These were digitized and wire framed into a top of bedrock surface. Outside of the mined areas, the
top of bedrock was defined by the current topographic data. Wire frame solids of the historical
underground workings were provided by Argonaut. These were used to flag the block model so that
no resources could be tabulated from the previously mined blocks. Soil thickness varies slightly over
the deposit and is generally very thin or non-existent.
Table 12.4.1: Block Model Limits

Model Orientation UTM Minimum UTM Maximum Block Size(m)
Easting 540,850 541,845 5
La Colorada Northing 3,185,365 3,186,160 5
Elevation 100 550 5
Easting 542,000 543,250 5
El Crestón Northing 3,185,200 3,186,300 5
Elevation 100 550 5
Easting 543,900 545,000 5
Veta Madre Northing 3,185,325 3,186,075 5
Elevation 220 500 5
Easting 541,725 542,175 5
RoM Pad Northing 3,186,125 3,186,400 5
Elevation 390 430 5
12.5 Compositing
The raw assay from each of the resource estimation domains was plotted on histograms and
cumulative distribution plots to assess appropriate capping and compositing parameters. The
original assay sample lengths range from 0.1 to 111 m with an average of 1.8 m. For the modeling,
these were composited into 5.0 m down-hole lengths. This length was chosen mainly so that at least
two average samples would be composited together and the composites would comprise each 5 m
block diameter. The histogram of the drillhole database shows a strongly negative skewed
distribution, typical for most gold deposits. The cumulative distribution curves illustrate a continuous
population set with a distinct break in slope and continuity at the upper levels of mineralization. Each
unique dataset for each resource model domain was capped independently based on the break in
slope and distribution of the cumulative distribution plot. The capping parameters and results are
listed in Table 12.5.1.

Table 12.5.1: Assay Capping Parameters

Number of Net Loss of
Total Number Capping Minimum Maximum
Model Metal Samples Metal From
of Samples Level (ppm) Capped Capped
Capped Capping (%)
Au 50 13 51.7 356 8.4
La Colorada 3,101
Ag 200 9 222 1,031 2.2
Au 27 6 33.1 67 1.8
Intermediate 2,187
Ag 150 5 200 420 12.5
Au 33 12 50 224 4.8
Gran Central 4,760
Ag 281 10 288 499 0.2
Au 13 68 13.2 432 14.7
El Crestón 7,184
Ag 140 89 142 1,874 2.3
Au 2.1 32 2.1 25 7.2
Veta Madre 1,067
Ag 15 19 15.2 49 2.6
Au 1.4 15 1.41 17 15.3
RoM Pad 270
Ag 65 32 65.2 155 2.4
12.6 Density
Argonaut conducted density testing on the core drilling conducted in 2011. Density determinations
were made on 136 samples collected from a wide range of locations and rock types. The average
density from the Argonaut test work was 2.694 g/cm3. This test work correlates very well to historical
density test work reported by MacMillian et al (2009) who used an average density of 2.62 g/cm3.
The SRK resource models assigned the average density of 2.694 g/cm3 for all bedrock material in
the block models. The RoM pad and all waste dump material was assigned a standard density of
2.0 g/cm3.
12.7 Variogram Analysis

Variogram analysis was attempted on the composite samples to quantify the geo-statistical
characteristics of the Au data. The resultant variograms were predominantly of very poor quality
regardless of orientation. For this reason, all grade estimations were made using an Inverse
Distance Squared (ID2) algorithm.
12.8 Grade Estimation

Four unique block models were used to generate the total resource estimation of this report. The
grade estimation procedures of each are addressed below.
12.8.1 La Colorada
The La Colorada grade estimation was conducted within four independent estimation domains.
Three of these are wireframe grade shell generated by Argonaut at a 0.1 ppm grade threshold. The
fourth is an indicator domain located external to the wireframes. The wireframe solids are referred to
as La Colorada, Intermediate and Gran Central. Within these wireframes, SRK flagged all blocks
that were located within 60 m along strike or dip and 20 m normal to strike and dip of all samples.
Only these flagged blocks were allowed to be estimated for grade. The indicator blocks were flagged
external to the wireframes in order to pick up any significant mineralized zones which were too small
or discontinuous to wireframe. The indicator flagging was conducted using a three pass search

strategy according to the parameter listed in Table 12.8.1.1. Length weighting was used for all three
passes.
Table 12.8.1.1: La Colorada Indicator Estimation Parameters

Search Rotation Estimation Search Distances Min/Max # Octant
(z,y,x) Pass (z,y,x) m Samples Restriction
First 5,5,5 ½ None
355,-46,0 Second 30,30,5 3/5 2/octant
Third 60,60,5 3/5 2/octant
The Au and Ag grade estimation was conducted according to the parameter listed in Table 12.8.1.2.
Only indicator blocks with a value of 0.5 and above were selected for grade estimation. This equates
to a 50% probability of being locate within the 0.1 ppm grade shell. All grade estimations used
sample length weighting. As part of the grade estimation, model validation was conducted within
each domain. Certain domains required that higher grade sample distance restrictions be applied so
the model would validate. A high-grade restriction, as listed in Table 12.8.1.2, means that any block
located beyond the distances listed cannot use any composite sample above the listed grade.
Table 12.8.1.2: La Colorada Grade Estimation Parameters

Au High Ag High
Search Search Grade Grade
Estimation Rotation Estimation Distances Min/Max # Octant Distance Distance
Domain (z,y,x) Pass (z,y,x) m Samples Restriction Restriction Restriction
First 5,5,5 1/3 None None None
La Colorada Second 35,35,15 3/8 2/octant
Third 85,85,25 3/8 2/octant >35ppm<40m
First 5,5,5 1/3 None None
intermediat
Second 35,35,15 3/8 2/octant >20ppm<30m >25ppm<20m
e
355,-46,0
First 5,5,5 1/3 None None None
Gran
Second 35,35,15 3/8 2/octant >25ppm<20m
Central
Indicator
Second 35,35,15 3/8 2/octant
Blocks
12.8.2 El Crestón
The El Crestón grade estimation was conducted within a single estimation domain. This was defined
by a wireframe grade shell generated by Argonaut at a 0.1 ppm grade threshold. Within this
wireframe, SRK flagged all blocks that were located within 60 m along strike or dip and 30 m normal
to strike and dip of all samples. Only these flagged blocks were allowed to be estimated for grade.
All grade estimations used sample length weighting. No higher grade sample distance restrictions
were required in order to validate the model.

Table 12.8.2.1: El Crestón Grade Estimation Parameters

Search Rotation Search Distances Min/Max #
(z,y,x) Estimation Pass (z,y,x) m Samples Octant Restriction
First 5,5,5 1/3 None
340,-50,0 Second 35,35,20 3/8 2/octant
12.8.3 Veta Madre

The Veta Madre grade estimation was conducted within a single estimation domain. This was
defined by a wireframe grade shell generated by Argonaut at a 0.1 ppm grade threshold. Within this
wireframe, SRK flagged all blocks that were located within 30 m along strike or dip and 30 m normal
to strike and dip of all samples. Only these flagged blocks were allowed to be estimated for grade.
The Au and Ag grade estimation was conducted according to the parameter listed in Table 12.8.3.1
below. All grade estimations used sample length weighting. No higher grade sample distance
restrictions were required in order to validate the model.
Table 12.8.3.1: Veta Madre Grade Estimation Parameters

Search Rotation Estimation Search Distances Min/Max # Octant
(z,y,x) Pass (z,y,x) m Samples Restriction
First 5,5,5 1/3 None
60,0,0 Second 50,25,25 3/8 2/octant
12.8.4 RoM Pad

The RoM Pad grade estimation was conducted within a single estimation domain. This was defined
by a wireframe solid generated by SRK. The solid is based on surveyed topography of the existing
RoM Pad assuming a planer base. This material represents previously mined and partially leached
RoM ore. All grade estimations are based on the Becker hammer drill samples discussed in Section
8.2.5.
All grade estimations used sample length weighting. No higher grade sample distance restrictions
were required in order to validate the model. As part of the grade estimation, model validation was
conducted within the estimation domain. Both the Au and Ag estimations required that higher grade
sample distance restrictions be applied so the model would validate. A high-grade restriction, as
listed in Table 12.8.4.1, means that any block located beyond the distances listed cannot use any
composite sample above the listed grade.
Table 12.8.4.1: RoM Pad Grade Estimation Parameters

Search Search Au High Grade Ag High Grade
Rotation Estimation Distances Min/Max # Octant Distance Distance
(z,y,x) Pass (z,y,x) m Samples Restriction Restriction Restriction
0,0,0 Second 35,35,10 3/5 2/octant
Third 100,100,15 2/5 2/octant >1.2ppm<35m >60ppm<50m

12.9 Model Validation

Four techniques were used to evaluate the validity of the block model. First, during the ID2 grade
estimation; the estimation pass, the number of samples used, the number of drillholes used and the
average distance to samples was stored. This data was checked to evaluate the performance of the
sample selection parameters discussed above. The results for each estimation are listed are listed
in Table 12.9.1. Second, the interpolated block Au grades were visually checked on sections and
bench plans for comparison to the composite assay grades. Third, statistical analyses were made
comparing the estimated block grades in each domain to the composite sample data supporting the
estimation. The results in Table 12.9.2 show average block grade slightly below the average sample
grades. Fourth, nearest neighbor estimations were run using a single composite to estimate each
block model within the same parameters used for the ID2 grade model. The total contained gold
ounces, at a zero cut-off grade in the nearest neighbor model were compared to the Au ID2 grade
model at the same cut-off. The results are listed in Table 12.9.3. These show that in general, metal
is not being manufactured during the modeling process. All four-model validation tests described
above provided good confidence in the resource estimation.

Table 12.9.1: Grade Estimation Characteristics

Model/Domain Criteria Result
st
% Blocks Estimated in 1 Pass 11
nd
% Blocks Estimated in 3rd Pass 17
LC-La Colorada
Average Number of Samples Used Per Block 5.8
Average Number of Drillholes Used Per Block 2.8
Average Distance to Samples 23
% Blocks Estimated in 1st Pass 10
% Blocks Estimated in 2nd Pass 65
LC intermediate
nd
LC-Gran Central
Average Number of Samples Used Per Block 6
LC-Indicator
El Crestón
Veta Madre
st
RoM Pad

Table 12.9.2: Statistical Model Validation

Structural Average Composite Average Block Grade % Difference Comps to
Metal
Domain Grade Au (g/t) Au (g/t) Blocks
Au 1.215 1.210 0.4
LC_La Colorada
Ag 8.072 6.570 18.6
Au 0.592 0.585 1.1
LC- intermediate
Ag 4.579 4.572 0.1
LC- Gran Au 1.139 1.054 7.4
Central Ag 8.946 8.601 3.9
Au 0.405 0.402 0.6
LC-Indicator
Ag 5.154 4.319 16.2
Au 0.729 0.674 7.5
El Crestón
Ag 13.991 13.545 3.2
Au 0.402 0.316 21.5
Veta Madre
Ag 2.451 2.112 13.8
Au 0.446 0.415 7.0
RoM Pad
Ag 36.247 36.177 0.2
Table 12.9.3: Nearest Neighbor Model Validation

2
ID Au NN % Diff Au
2 2
ID Au ID Tonnes Metal NN Au Tonnes NN Au Metal ID2 to
Model Grade (M) (M) Grade (M) Metal NN
La Colorada 0.026343 1,225.0 32.265 0.026226 1,225.0 32.122 0.44
El Crestón 0.682285 21.081 14.383 0.715987 21.081 15.094 -4.9
Veta Madre 0.315806 5.897 1.862 0.331218 1.862 1.953 -4.9
RoM Pad 0.428428 2.724 1.167 0.421483 2.724 1.148 1.6
12.10Resource Classification
Mineral Resources are classified under the categories of Measured, Indicated and Inferred according
to CIM guidelines. Classification of the mineral resources reflects the relative confidence of the
grade estimates and the continuity of the mineralization. This classification is based on several
factors including; sample spacing relative to geological and geo-statistical observations regarding the
continuity of mineralization, data verification to original sources, specific gravity determinations,
accuracy of drill collar locations, accuracy of topographic surface, quality of the assay data and many
other factors, which influence the confidence of the mineral estimation. No single factor controls the
mineral resource classification rather each factor influences the end result.
The mineral resources have been classified as Indicated and Inferred based primarily on sample
support. Within the La Colorada, El Crestón and Veta Madre resource models, wire frame solids
were constructed about the areas where the majority of drillholes are spaced 25 m apart. The
wireframe was limited to the base of drilling. All resources within the wire frame solids were
classified as indicated. All resources located external to the wireframe solids were classified as
inferred. The RoM Pad is all classified as indicated mineral resource.
12.11Mineral Resource Statement

The La Colorada Mineral Resources are reported below in table 12.11.1 based on a 0.1 g/t Au cut-off
grade. The cut-off is supported by a mining cost of US$1.20/t, a processing cost of US$2.70/t, Au
and Ag recoveries of 60% and 30% respectively, G&A cost of $0.20/t, a no NSR and Au, Ag prices

of US$1,500/oz, US$20.00/oz respectively. The mineral resources are confined within a conceptual
whittle pit design based on the same parameters used for the cut-off grade and a 50° pit slope.
Table 12.11.1: La Colorada Project Resource Statement (1)

Tonnes Au oz Ag oz
Deposit Class Au Cut-off Au (g/t) Ag (g/t)
(000s) (000s) (000s)
Indicated 0.10 29,900 0.724 696 5.1 4,905
La Colorada
Inferred 0.10 2,500 1.204 95 8.4 661
Indicated 0.10 14,400 0.618 287 12.1 5,635
El Crestón
Inferred 0.10 2,200 0.887 63 13.3 944
Indicated 0.10 2,900 0.491 46 3.3 307
Veta Madre
Inferred 0.10 0 0.665 0.2 2.4 0.7
Indicated 0.10 2,700 0.429 38 36.5 3,200
RoM Pad
Inferred 0.10 - - - - -
Indicated 0.10 50,000 0.664 1,067 8.7 14,047
All Deposits
Inferred 0.10 4,700 1.044 158 10.6 1,605
Source: SRK
(1) Rounded to reflect approximation
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution.
These mineral resource estimates include inferred mineral resources that are normally considered
too speculative geologically to have economic considerations applied to them that would enable
them to be categorized as mineral reserves. There is also no certainty that these inferred mineral
resources will be converted to Measured and Indicated categories through further drilling, or into
mineral reserves, once economic considerations are applied.
12.12Mineral Resource Sensitivity

The grade versus tonnage distributions of the Mineral Resources are presented in Table 12.12.1

Table 12.12.1: Gran Central Grade Tonnage

Indicated Inferred
Total Ounces
Cut-off Au (g/t) Tonnage Ounces Cut-off Au (g/t) Tonnage Ounces
0 0.22 101,339,238 716,693 0 0.06 49,257,396 95,020 811,713
0.1 (1) 0.72 29,835,081 694,126 0.1 1.21 2,451,354 95,363 789,490
0.2 0.90 22,925,487 662,771 0.2 1.43 2,024,967 93,099 755,870
0.3 1.09 17,745,032 621,167 0.3 1.62 1,739,185 90,584 711,751
0.4 1.28 14,094,104 579,074 0.4 1.79 1,536,588 88,430 667,504
0.5 1.47 11,533,243 543,950 0.5 1.98 1,344,792 85,607 629,557
0.6 1.64 9,633,684 508,632 0.6 2.16 1,194,302 82,939 591,571
0.7 1.83 8,172,323 479,999 0.7 2.34 1,071,583 80,618 560,617
0.8 2.01 6,973,649 451,146 0.8 2.51 965,254 77,894 529,041
0.9 2.20 5,942,912 421,216 0.9 2.71 865,474 75,407 496,624
1 2.40 5,179,647 399,176 1 2.91 773,695 72,386 471,561
1.1 2.58 4,546,734 377,061 1.1 3.01 735,062 71,135 448,196
1.2 2.78 4,001,432 357,861 1.2 3.1 702,874 70,053 427,914
1.3 2.96 3,576,774 340,431 1.3 3.2 667,410 68,665 409,096
1.4 3.13 3,222,616 324,385 1.4 3.27 640,005 67,286 391,671
1.5 3.29 2,945,339 311,675 1.5 3.37 607,610 65,833 377,509
1.6 3.47 2,676,859 298,844 1.6 3.5 569,274 64,059 362,903
1.7 3.61 2,474,382 287,563 1.7 3.57 547,541 62,846 350,409
1.8 3.77 2,290,715 277,821 1.8 3.64 527,736 61,760 339,581
1.9 3.92 2,121,061 267,467 1.9 3.71 507,367 60,518 327,985
2 4.07 1,971,199 257,768 2 3.77 491,054 59,520 317,287
(1) Base Case
Table 12.12.2 illustrates the grade tonnage relationship of gold within pit 36 of the Whittle® analysis
for El Crestón.
Table 12.12.2: El Crestón Grade Tonnage

Indicated Inferred Total
Cutoff Au (g/t) Tonnage Ounces Cutoff Au (g/t) Tonnage Ounces Ounces
0 0.17 54,830,616 299,683 0 0.06 33,088,488 63,829 363,513
0.1 (1) 0.62 14,438,662 287,812 0.1 0.89 2,199,713 62,943 350,755
0.2 0.75 11,224,319 270,652 0.2 1.04 1,830,869 61,218 331,871
0.3 0.89 8,875,845 253,975 0.3 1.2 1,518,096 58,569 312,544
0.4 1.03 6,949,397 230,131 0.4 1.36 1,270,077 55,534 285,665
0.5 1.18 5,541,893 210,248 0.5 1.54 1,064,923 52,727 262,974
0.6 1.33 4,483,904 191,734 0.6 1.67 941,923 50,573 242,307
0.7 1.48 3,694,548 175,798 0.7 1.82 824,301 48,233 224,031
0.8 1.63 3,066,198 160,686 0.8 1.95 732,400 45,917 206,603
0.9 1.78 2,578,409 147,558 0.9 2.09 649,313 43,631 191,189
1 1.94 2,155,377 134,436 1 2.25 571,543 41,345 175,781
1.1 2.1 1,836,350 123,984 1.1 2.36 522,598 39,653 163,636
1.2 2.24 1,588,897 114,429 1.2 2.46 481,969 38,119 152,548
1.3 2.38 1,394,817 106,730 1.3 2.56 444,976 36,624 143,354
1.4 2.51 1,248,174 100,726 1.4 2.66 411,685 35,208 135,933
1.5 2.64 1,107,780 94,026 1.5 2.76 379,954 33,716 127,742
1.6 2.76 993,965 88,200 1.6 2.85 352,761 32,323 120,524
1.7 2.89 896,602 83,308 1.7 2.96 323,796 30,814 114,123
1.8 2.99 821,916 79,011 1.8 3.04 304,349 29,746 108,758
1.9 3.11 743,696 74,361 1.9 3.13 281,141 28,292 102,653
2 3.22 679,647 70,361 2 3.22 262,517 27,177 97,538
(1) Base Case

Table 12.12.3 Illustrates the grade tonnage relationship of gold within pit 36 of the Whittle® analysis
for Veta Madre.
Table 12.12.3: Veta Madre Grade Tonnage

Inferred
Cutoff Au (g/t) Tonnage Ounces
0 0.27 5,264,158 45,697
0.1 (1) 0.45 3,183,008 46,051
0.2 0.52 2,540,084 42,466
0.3 0.64 1,789,691 36,826
0.4 0.74 1,330,645 31,658
0.5 0.83 1,013,543 27,047
0.6 0.92 771,974 22,834
0.7 1.01 574,880 18,668
0.8 1.09 440,856 15,449
0.9 1.16 337,190 12,575
1 1.24 245,491 9,787
1.1 1.32 169,657 7,200
1.2 1.43 104,393 4,800
1.3 1.56 59,942 3,006
1.4 1.67 41,084 2,206
1.5 1.76 29,297 1,658
1.6 1.84 21,552 1,275
1.7 1.94 13,470 840
1.8 2 10,103 650
1.9 2.05 7,745 510
2 2.07 6,398 426
(1) Base Case

13 Adjacent Properties (Item 23)

There are no adjacent properties to the Project.

14 Other Relevant Data and Information (Item 24)

There is no other relevant data or information.

15 Interpretation and Conclusions (Item 25)

15.1.1 Exploration
The exploration work is composed primarily of the drillhole database which supports the resource
estimation of this report. It consists of two main data sets. The older dataset was generated by
EESA during their work on the project in the late 1990’s. The more recent dataset was generated by
Pediment and Argonaut since 2007.
orientations. The maximum drillhole depth is 479 m and the average is 117 m.
15.1.2 Mineral Resource Estimate

The mineral resource estimations are based on geologic models consisting of a single rock type, cut
by numerous fault/vein zones. All model blocks are 5 m x 5 m x 5 m in the x,y,z directions,
respectively. Each model block is assigned a unique specific gravity based on direct measurement
of the various rock types. All block grade estimates were made using 3 m down-hole composites.
An Inverse Distance Weighting to the second power estimation algorithm was used for all gold grade
and silver estimations. The results of the resource estimation provided a CIM classified Indicated
and Inferred Mineral Resource. The mineral resources have been classified as Indicated and
Inferred based primarily on sample support. All resources supported primarily by drilling at 25 m
centers are classified as indicated and all resources supported by wider spaced drilling were
classified as inferred.
15.1.3 Metallurgy
Preliminary indications are that higher metal recovery may be realized through finer crushing. This
should be studied further with additional metallurgical testwork. As such, it is expected that
recoveries stated here are achievable at a minimum and the risk of realizing lower recoveries is
considered low.

15.2 Significant Risks and Uncertainties

Risk Area Risk Level
Resources
Database Low
Exploration data Low
Quality Low
Sufficiency/Adequacy Low
Assaying Low
Surveying Low
Geology Moderate
Geology and Resource Modeling
Geological modeling Moderate
Resource modeling approach Low
Geostatistical analysis Low
Resource estimate Low
Metallurgical Test Work/Processing Facilities
Metallurgical Test Work Low
Ore type definition Low

16 Recommendations (Item 26)

16.1 Mineral Resources
The mineral resources estimated in this report are significant and additional technical study is
recommended. A Preliminary Economic Assessment is recommended to further evaluate the
potential of the project. This work would be a single phase of additional study, typically expected to
cost in the order of $100,000 to $200,000.
16.2 Metallurgy and Processing

Additional column test work is being completed by KCA focusing on finer crushing (minus 12.5 mm).
If finer crushing shows potential as a possible processing alternative, additional agglomeration test
work will be required.
The current recovery curves indicate very slow leaching and it is almost certain that several percent
more gold recovery would be realized with a 90 day leach cycle. It is recommended that all future
column tests should be run at this leach cycle as a minimum.
If finer crushing and agglomeration is eventually determined to be a viable processing option,

additional engineering and optimization of the flowsheet is recommended.

17 References (Item 27)

Ball, S.H.,1911, Geological Report on the property of the Mines Company of America, 22 p.
Diaz, Jorge, 2007, La Colorada Internal reports written by Interminera, S.A. de C.V. for Pediment
Gold Corp., 23 p.
Giroux, G and Charbonneau, D., 1992, Property and Resource Evaluation of the El Crestón Deposit,
La Colorada Project, Mexico, Unpublished report for Explorations Eldorado, S.A. de C.V.
Hermosillo, Mexico, 36 p.
Giroux, G., 1999, Audit of the Resources contained within the Gran Central and La Colorada Zones,
La Colorada Mine, Mexico, Unpublished report for Explorations Eldorado, S.A. de C.V.
Hermosillo, Mexico, 30 p.
Hedenquist, J.W., Arribas, A. and Gonzales-Urien, E., 2000, Exploration for Epithermal Gold
Deposits. Reviews in Economic Geology, vol. 13, p. 245-277.
Herdrick, M. 2007, Mina La Colorada, Sonora, Mexico. Confidential reports to directors of Pediment
Exploration, 11p.
Lewis, P.D., 1995, Structural Evaluation of the La Colorada Project Area, Sonora, Mexico.
Unpublished Report by Lewis Geoscience Services Inc. for Exploraciones Eldorado, S.A. de
C.V., Hermosillo, Mexico, 25 p.
McMillan, R.H., Dawson, J.M. and Giroux, G.H., 2009, Geologic Report on the La Colorada Property
with a resource Estimate on La Colorada and El Crestón Mineralized Zones, Sonora Mexico,
prepared for Pediment Gold Corp, November 30, 2009, 141p.
Nordin, G., 1992, Geologic Report, La Colorada Property, Sonora, Mexico. Unpublished report for
Explorations Eldorado, S.A. de C.V. Hermosillo, Mexico, 76 p.
Simmons, S.F.; White, N.C. and John, D.A., 2005, Geologic Characteristics of Epithermal Precious
and Base Metal Deposits. Economic Geology 100th Anniversary Volume, p. 485-522.
Vazquez, Sierra & Garcia, S.C. 2011, Title Opinion Compania Minera Pitalla, S.A. de C.V. Mining
Concessions, October 12, 2011.
Zawada, Ross, D. Albinson, Tawn and Aneyta, Reyna, 2001, Geology of the El Crestón Gold
Deposit, Sonora State Mexico. Economic Geology Special Publication # 8, New Mines and
Discoveries in Mexico and Central America, p. 187-197.

18 Glossary
18.1 Mineral Resources
The mineral resources and mineral reserves have been classified according to the “CIM Standards
on Mineral Resources and Reserves: Definitions and Guidelines” (November 27, 2010).
Accordingly, the Resources have been classified as Measured, Indicated or Inferred, the Reserves
have been classified as Proven, and Probable based on the Measured and Indicated Resources as
defined below.
A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic

material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has
reasonable prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a Mineral Resource are known, estimated or interpreted from
specific geological evidence and knowledge.
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or
quality can be estimated on the basis of geological evidence and limited sampling and reasonably
assumed, but not verified, geological and grade continuity. The estimate is based on limited
information and sampling gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drillholes.
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or
quality, densities, shape and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic parameters, to support mine
planning and evaluation of the economic viability of the deposit. The estimate is based on detailed
and reliable exploration and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for
geological and grade continuity to be reasonably assumed.
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or
quality, densities, shape, physical characteristics are so well established that they can be estimated
with confidence sufficient to allow the appropriate application of technical and economic parameters,
to support production planning and evaluation of the economic viability of the deposit. The estimate
is based on detailed and reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that
are spaced closely enough to confirm both geological and grade continuity.
18.2 Mineral Reserves

A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate
information on mining, processing, metallurgical, economic and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve
includes diluting materials and allowances for losses that may occur when the material is mined.
A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in some
circumstances a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility

Study. This Study must include adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time of reporting, that economic
extraction can be justified.
A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate
information on mining, processing, metallurgical, economic, and other relevant factors that
demonstrate, at the time of reporting, that economic extraction is justified.
18.3 Definition of Terms

The following general mining terms may be used in this report.
Table 18.3.1: Definition of Terms

Term Definition
Assay The chemical analysis of mineral samples to determine the metal content.
Composite Combining more than one sample result to give an average result over a larger
distance.
Cut-off Grade (CoG) The grade of mineralized rock, which determines as to whether or not it is economic
to recover its gold content by further concentration.
Dilution Waste, which is unavoidably mined with ore.
Dip Angle of inclination of a geological feature/rock from the horizontal.
Fault The surface of a fracture along which movement has occurred.
Footwall The underlying side of an orebody or stope.
Gangue Non-valuable components of the ore.
Grade The measure of concentration of gold within mineralized rock.
Hangingwall The overlying side of an orebody or slope.
Hydrocyclone A process whereby material is graded according to size by exploiting centrifugal
forces of particulate materials.
Igneous Primary crystalline rock formed by the solidification of magma.
Kriging An interpolation method of assigning values from samples to blocks that minimizes
the estimation error.
Lithological Geological description pertaining to different rock types.
LoM Plans Life-of-Mine plans.
Material Properties Mine properties.
Mineral/Mining Lease A lease area for which mineral rights are held.
Sedimentary Pertaining to rocks formed by the accumulation of sediments, formed by the erosion
of other rocks.
Stratigraphy The study of stratified rocks in terms of time and space.
Strike Direction of line formed by the intersection of strata surfaces with the horizontal
plane, always perpendicular to the dip direction.
Sulfide A sulfur bearing mineral.
Variogram A statistical representation of the characteristics (usually grade).

18.4 Abbreviations
The following abbreviations may be used in this report.
Table 18.4.1: Abbreviations

Abbreviation Unit or Term
A ampere
AA atomic absorption
A/m2 amperes per square meter
ANFO ammonium nitrate fuel oil
Ag silver
Au gold
AuEq gold equivalent grade
°C degrees Centigrade
CCD counter-current decantation
CIL carbon-in-leach
CoG cut-off grade
cm centimeter
cm2 square centimeter
cm3 cubic centimeter
cfm cubic feet per minute
ConfC confidence code
Crec core recovery
CSS closed-side setting
CTW calculated true width
° degree (degrees)
dia. diameter
EIS Environmental Impact Statement
EMP Environmental Management Plan
FA fire assay
ft foot (feet)
ft2 square foot (feet)
ft3 cubic foot (feet)
g gram
gal gallon
g/L gram per liter
g-mol gram-mole
gpm gallons per minute
g/t grams per tonne
ha hectares
HDPE Height Density Polyethylene
hp horsepower
HTW horizontal true width
ICP induced couple plasma
ID2 inverse-distance squared
ID3 inverse-distance cubed
IFC International Finance Corporation
ILS Intermediate Leach Solution
kA kiloamperes
kg kilograms
km kilometer
km2 square kilometer
koz thousand troy ounce
kt thousand tonnes
kt/d thousand tonnes per day
kt/y thousand tonnes per year
kV kilovolt
kW kilowatt
kWh kilowatt-hour

Abbreviation Unit or Term

kWh/t kilowatt-hour per metric tonne
L liter
L/sec liters per second
L/sec/m liters per second per meter
lb pound
LHD Long-Haul Dump truck
LLDDP Linear Low Density Polyethylene Plastic
LOI Loss On Ignition
LoM Life-of-Mine
m meter
m2 square meter
m3 cubic meter
masl meters above sea level
MARN Ministry of the Environment and Natural Resources
MDA Mine Development Associates
mg/L milligrams/liter
mm millimeter
mm2 square millimeter
mm3 cubic millimeter
MME Mine & Mill Engineering
Moz million troy ounces
Mt million tonnes
MTW measured true width
MW million watts
Ma million annum
My million years
NGO non-governmental organization
NI 43-101 Canadian National Instrument 43-101
OSC Ontario Securities Commission
oz troy ounce
% percent
PLC Programmable Logic Controller
PLS Pregnant Leach Solution
PMF probable maximum flood
ppb parts per billion
ppm parts per million
QA/QC Quality Assurance/Quality Control
RC rotary circulation drilling
RoM Run-of-Mine
RQD Rock Quality Description
SEC U.S. Securities & Exchange Commission
sec second
SG specific gravity
SPT standard penetration testing
t tonne (metric ton) (2,204.6 pounds)
t/h tonnes per hour
t/d tonnes per day
t/y tonnes per year
TSF tailings storage facility
TSP total suspended particulates
µm micron or microns
V volts
VFD variable frequency drive
W watt
XRD x-ray diffraction
y year

NI 43-101 Report on Resources – La Colorada Project Appendices
Appendices

Appendix A: Certificate of Author
SRK Denver
Suite 3000
7175 West Jefferson Avenue
Lakewood, CO 80235
T: 303.985.1333
F: 303.985.9947
denver@srk.com
www.srk.com
CERTIFICATE OF AUTHOR
I, Bart A. Stryhas Ph.D. CPG#11034 do hereby certify that:
1. I am a Principal Resource Geologist of:

7175 W. Jefferson Ave, Suite 3000
Denver, CO, USA, 80235
2. I graduated with a Doctorate degree in structural geology from Washington State University in 1988. In
addition, I have obtained a Master of Science degree in structural geology from the University of Idaho in
1985 and a Bachelor of Arts degree in geology from the University of Vermont in 1983.
3. I am a current member of the American Institute of Professional Geologists.
4. I have worked as a Geologist for a total of 22 years since my graduation in minerals exploration, mine
geology, project development and resource estimation. I have conducted resource estimations since
1988 and have been involved in technical reports since 2004.
5. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43-101) and
certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101)
and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of
NI 43-101.
6. I am responsible for Sections 1, 3 through 10 and 13 of the report titled “NI 43-101 Technical Report on
Resources, La Colorada Project, Sonora, Mexico” and dated December 8, 2011 (the “Technical Report”)
relating to the La Colorada Project. I have visited the Property on June 16, 2011, for one day.
7. I have not had prior involvement with the property that is the subject of the Technical Report.
8. As of the date of the certificate, to the best of my knowledge, information and belief, the Technical Report
contains all scientific and technical information that is required to be disclosed to make the technical
report not misleading.
9. I am independent of the issuer applying all of the tests in Section 1.4 of National Instrument 43-101.
10. I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance
with that instrument and form.
U.S. Offices: Mexico Office: Canadian Offices: Group Offices:

Anchorage 907.677.3520 Guadalupe, Zacatecas Saskatoon 306.955.4778 Africa
Denver 303.985.1333 52.492.927.8982 Sudbury 705.682.3270 Asia
Elko 775.753.4151 Toronto 416.601.1445 Australia
Fort Collins 970.407.8302 Vancouver 604.681.4196 Europe
Reno 775.828.6800 Yellowknife 867.873.8670 North America
Tucson 520.544.3688 South America
QP_Cert_Stryhas_Bart_TRR_20111208
SRK Consulting Page 2
11. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and
any publication by them for regulatory purposes, including electronic publication in the public company
files on their websites accessible by the public, of the Technical Report.
Dated this 8th day of December, 2011.
“Signed”
________________________________
Dr. Bart A. Stryhas, CPG, PhD
QP_Cert_Stryhas_Bart_TRR_20111208

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NI 43-101 Technical Report on Resources

Report Prepared for

Argonaut Gold Inc.

SRK Consulting (U.S.), Inc.

SRK Project Number: 203900.020

Geology and Mineralization

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

Mineral Resource Estimate

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

Table 1: La Colorada Project Resource Statement(1)

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

Summary (Item 1) ......................................................................................................................................... i

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

5.1 Regional, Local and Property Geology .............................................................................................19

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

12 Mineral Resource Estimate (Item 14)........................................................................ 52

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

Figure 2-7: Surface Ownership Map................................................................................................................13

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

1.2 Qualifications of Consultants (SRK)

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

1.2.1 Details of Inspection

1.3 Reliance on Other Experts (Item 3)

1.3.1 Sources of Information and Extent of Reliance

1.4 Effective Date

1.5 Units of Measure

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

2 Property Description and Location (Item 4)

2.2 Mineral Titles

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Table 2.2.1: Concession Details

2.2.1 Nature and Extent of Issuer’s Interest

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

Table 2.2.1.1: Concession Payment Liabilities

2.3 Royalties, Agreements and Encumbrances

2.4 Environmental Liabilities and Permitting

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

2.5 Other Significant Factors and Risks

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3 Accessibility, Climate, Local Resources,

3.2 Climate and Length of Operating Season

3.3 Sufficiency of Surface Rights

3.4 Accessibility and Transportation to the Property

3.5 Infrastructure Availability and Sources

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

3.5.1 Port access

3.5.3 Water Supply

3.5.4 Site Structures

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3.5.5 Waste Disposal

3.5.6 Potential Heap Leach Pad Areas

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4.2 Previous Exploration and Development Results

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4.3 Historic Mineral Resource and Reserve Estimates

4.4 Historic Production

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

5 Geological Setting and Mineralization (Item 7)

The area of La Colorada is covered by Mid-Cambrian to lower Ordovician quartzites and

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

5.2 Significant Mineralized Zones

BAS/SC La Colorada_NI 43-101 Technical Report on Resources_203900.020_004_20111208 December 8, 2011

Gran Central Deposit