Argonaut Gold

Location: Dubreuilville, Ontario
Commodity: Gold
Project Phases: Construction Execution

Client Overview

Argonaut Gold Inc., a prominent Canadian gold mining company with operations in Mexico and Nevada, USA, initiated the Magino project in Northern Ontario. This initiative is aimed at transforming the company’s production and cost profiles through sustainable growth.

TMG’s Contributions

TMG was brought on board by Argonaut Gold’s Board of Directors to carry out an independent review of the ongoing self-executed infrastructure construction following a significant increase in the estimated construction capital upon completion, which soared by approximately $290 million. The areas requiring additional funds included the Tailings Management Facility, Site Development, Permanent Power, Owner General & Administration, and Project Indirects.

• Independent Project Review: TMG conducted a comprehensive site visit and evaluated the project execution plan, focusing on existing cost control processes, project reporting, and the updated Capital Expenditures Estimate.
• Budget Analysis: The review identified the causes of budget increases, which were attributed to scope changes, modifications in quantity and specifications for major earthworks facilities, schedule recovery capital to adhere to the original timeline for first gold production, and related contingencies.
• Team Augmentation: To address gaps in construction oversight and project controls, TMG provided seconded personnel to bolster the Owner’s Team, ensuring continued support through the completion of the project scope.

Results

TMG’s thorough analysis and report played a pivotal role in revising the project’s escalation and contingency estimates. By identifying key areas of concern and augmenting the construction oversight and project controls teams, TMG contributed significantly to the project’s long-term success and stability:

• Budget Optimization: TMG’s insights into budgetary overruns led to a more accurate and manageable escalation and contingency planning.
• Enhanced Project Oversight: The integration of TMG’s seconded personnel into the Owner’s Team improved construction oversight and project controls, facilitating better management and execution of the project.
• Strategic Support: TMG’s involvement provided critical executive guidance, project monitoring, and construction support, ensuring the project remains on track for successful completion.

The Magino project demonstrates Argonaut Gold Inc.’s commitment to expanding its operational footprint and enhancing its production capabilities through strategic initiatives. TMG’s expert review and ongoing support underscore the importance of robust project management practices in overcoming challenges and achieving project milestones. This case study highlights TMG’s role in enabling Argonaut Gold to navigate complexities and drive forward with its ambitious growth objectives.