PRESS RELEASE

Argonaut Gold reports financing and operating results

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Wednesday, February 20, 2019

PRESS RELEASE

(This is an abridged version of the release. For the full version click here)

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TORONTO, Feb. 19, 2019 /CNW/ - Argonaut Gold Inc. (TSX: AR) (the "Company", "Argonaut Gold" or "Argonaut") announces its financial and operating results for the fourth quarter and year ended December 31, 2018. The Company reports quarterly and full year net loss of $17.5 million and $7.6 million or loss per share of $0.10 and $0.04, respectively, adjusted net income1 of $2.5 million and $16.4 million and adjusted earnings per share1 of $0.01 and $0.09, respectively, derived from the sale of 42,328 and 155,480 gold equivalent ounces2 ("GEO" or "GEOs"), respectively, which generated cash flow from operations before working capital changes of $9.2 million and $58.1 million, respectively. During 2018, the Company achieved record quarterly and annual production of 51,658 and 165,117 GEOs, respectively. All dollar amounts are expressed in United States dollars unless otherwise specified.

CEO Commentary

Pete Dougherty, President and CEO stated: "We challenged ourselves early in 2017 to achieve an approximate 65% production growth target between 2017 and 2019. With our record fourth quarter in 2018 leading to a record year for the Company in terms of production, we are well on our way to achieving this objective. During 2018, we surpassed the significant milestone of over one million GEOs produced since Argonaut's founding, a testament to our commitment to health and safety, our people, our communities and our environment. There are two items that highlight that we are conducting our business the right way: one, we received the Environmentally and Socially Responsible Company designation in Mexico for the seventh consecutive year; and two, we had our best annual safety performance in the Company's history. We continued to de-risk and advance our development project portfolio. Our quarterly cash flows were impacted by timing of gold sales, as well as the previously disclosed Republic Metals Corporation bankruptcy filing. Our main focus as a Company during 2019 will be expanding the San Agustin mine's crushing capacity and adding cash to the balance sheet through free cash flow generation by our operations while continuing to de-risk and advance our development assets."

______________________________

1Please refer to the section below entitled "Non-IFRS Measures" for a discussion on these Non-IFRS Measures.

2GEOs are based on a conversion ratio of 70:1 for silver to gold ounces for 2017 and 2018. The silver to gold conversion ratio is based on the

three-year trailing average silver to gold ratio. This is the referenced ratio for 2017 and 2018 throughout the press release.

Key operating and financial statistics for the three months and year ended December 31, 2018 are outlined in the following table:

3 months ended

December 31

%

Change

Year ended

December 31

%

Change

2018

2017

2018

2017

Financial Data (in $USD millions except for earnings (loss) per share)

Revenue

$51.6

$39.5

31%

$196.1

$155.1

26%

Gross profit (loss)

($9.6)

$8.2

(217%)

$18.5

$31.3

(41%)

Net income (loss)

($17.5)

$5.2

(437%)

($7.6)

$23.9

(132%)

Earnings (loss) per share - basic

($0.10)

$0.03

(433%)

($0.04)

$0.14

(129%)

Adjusted net income1

$2.5

$6.4

(61%)

$16.4

$14.9

10%

Adjusted earnings per share - basic1

$0.01

$0.04

(75%)

$0.09

$0.09

0%

Cash flow from operating activities

before changes in non-cash operating

working capital

$9.2

$11.7

(21%)

$58.1

$45.9

27%

Cash and cash equivalents

$15.4

$14.1

9%

Net cash1

$2.4

$6.1

(61%)

Gold Production and Cost Data

GEOs loaded to the pads2

95,776

68,108

41%

318,667

217,224

47%

GEOs projected recoverable2,3

59,706

38,774

54%

181,638

126,755

43%

GEOs produced2,4,5

51,658

34,987

48%

165,117

126,704

30%

GEOs sold2

42,328

31,025

36%

155,480

123,554

26%

Average realized sales price

$1,226

$1,276

(4%)

$1,267

$1,257

1%

Cash cost per gold ounce sold1

$945

$755

25%

$792

$787

1%

All-in sustaining cost per gold ounce sold1

$1,046

$897

17%

$912

$922

(1%)

1Please refer to the section below entitled "Non-IFRS Measures" for a discussion of these Non-IFRS Measures.

2 GEOs are based on a conversion ratio of 70:1 for silver to gold ounces for 2017 and 2018. The silver to gold conversion ratio is based on the three-year

trailing average silver to gold ratio. This is the referenced ratio for 2017 and 2018 throughout the press release.

32018: Expected recoverable GEOs are based on the assumptions and parameters as set forth in the El Castillo Complex Technical Report dated

March 27, 2018 and the La Colorada Gold/Silver Mine Technical Report dated March 27, 2018. In periods where the Company mines

material not specifically defined in a technical report (for example: low grade stockpile material), management uses its best estimate of recovery based

on the information available. 2017: Expected recoverable GEOs - El Castillo expected recovery rates: ROM oxide 50%, crushed oxide 70%,

ROM transition 40%, crushed transition 60%, crushed sulphides argillic 30% and crushed sulphides silicic 17%; San Agustin expected recovery rates:

gold 66% and silver 16%; La Colorada expected recovery rates: gold 60% and silver 30%.

4Produced ounces are calculated as ounces loaded to carbon.

5Year ended December 31, 2017 includes GEOs produced by San Agustin prior to declaration of commercial production effective

October 1, 2017.

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