Argonaut also separately updated its 2020 guidance to include Alio's Florida Canyon mine, where it had updated the life of mine plan last week, and said it was well-positioned to generate "significant" free cash flow (FCF) of an expected US$62-$87 million in 2020.

The company is now expecting to produce 210,000-230,000 gold-equivalent ounces this year, from Florida Canyon and its mines in Mexico, the El Castillo Complex and La Colorada.

It had produced 31,531oz Au-eq in the June quarter from its Mexican operations despite the temporary curtailment of activities due to COVID-19 restrictions.

"We believe we are well-poised to transform Argonaut into a long mine life, lower-cost, intermediate producer over the next few years, as we harvest the cash from our existing higher-cost operating asset portfolio and re-invest in our lower-cost growth asset portfolio," president and CEO Pete Dougherty said yesterday.

He said the past-producing Magino was in the "superior pipeline of growth assets" along with Cerro del Gallo and Ana Paula in Mexico.

A positive feasibility study in 2017 for Magino had outlined strong economics at a $1,250/oz gold price and the project achieved a key permitting milestone in June, which Argonaut said de-risked Magino and made it much more attractive to potential joint venture partners and project financing lenders. 

The company said it planned to use the proceeds from the offering "for the advancement" of Magino and for general corporate purposes.

It said the syndicate of underwriters, led by BMO Capital Markets, had agreed to buy 43.1 million shares at C$2.55 and had been granted a 15% over-allotment option.

Argonaut shares (TSX: AR) hit a one-year high last week of C$2.99.

They closed down 5.4% yesterday to $2.82 to capitalise it at $509.6 million (US$375 million).