The discoveries comprise the Scotland, #42, Sandy and South zones, in addition to the Elbow and Central zones previously reported.

Argonaut said the new zones were below the proposed Magino openpit and 350-700m southwest of the increasingly important Elbow zone.

Each new zone returned high-grade mineralisation over minable widths, including 14 grams per tonne gold over 5.3m true width in the Scotland Zone, 14.6g/t over 3.8m in the #42 Zone, 13.5g/t over 2.3m in the Sandy Zone, and 10g/t over 1.5m true width in the South Zone. Further high-grade hits from the Elbow Zone, including 14.1g/t over 3.1m and 6.4g/t over 1.6m true width supplements the most recent success.

Since drilling started in July last year, Argonaut has completed about 48,000m of drilling over 56 diamond holes.

Magino is immediately west of Alamos Gold's Island Gold mine, where continued exploration below 400m-depth had since 2016 led to continuous increases in the overall resource, as well as generally higher grades.

Argonaut plans to test the continuity of the Elbow and Central zones, while also moving westward to continue testing other targets west of, and below, the planned Magino openpit.

President and CEO Pete Dougherty said the discoveries had demonstrated the continued discovery potential of the asset. "We are only now beginning to scratch the surface of the full potential of the exploration upside to this mineralised system."

Laurentian Bank Securities Equity Research agrees, saying continued exploration drilling should continue to demonstrate further gold upside.

"We believe that given Argonaut's strong cash position (including the recent completion of a C$11.5M flow-through equity financing), coupled with exploration success to date, that the pace of drilling in 2021 should increase," said analyst Ryan Hanley.

Argonaut had previously estimated the initial capital to build Magino at US$360-$380 million, which incorporates a fixed bid pricing proposal from Ausenco, as well as contingency and inflation.

The company expects to fund the project through the Q3 cash balance of $178 million, estimated net proceeds of $55 million from the recent convertible debenture financing, $30 million from the sale of Ana Paula in September, and the company's estimated cash flow of $142 million from existing operations through 2022 at a gold price of $1,600/oz. These items are equal to $400 million in funding, supplemented by a $125 million credit facility.

Argonaut shares (TSX:AR) dropped more than 6% in Toronto on Monday to C$2.28, in line with the gold price dipping below US$1,850. Many Argonaut investors sold early in the trading session, perhaps suggesting a value opportunity, given the company's growing cash flows and production profile should gold continue to rise.