Argonaut Gold Inc. Updates Drill Results From the El Castillo Resource Expansion Program Core Drilling Program Commences for Metallurgical Testing of Transition and Sulfide Ores

TORONTO, ONTARIO -- (Marketwire) -- 10/12/10 -- Argonaut Gold Inc. (TSX: AR) ('Argonaut' or the 'Company') is pleased to provide an update regarding its 2010 resource expansion drill program at its 100 percent owned El Castillo gold mine in the State of Durango, Mexico.

Following the successful Phase I drill program at El Castillo, Phase II of the drill program was initiated with two reverse circulation drill rigs. The Phase I drilling was positioned on approximately 100 meter centers and was designed to identify the extent of potential gold mineralization that expands to the south and east of the current El Castillo open-pit mining operation. Phase I encompassed 16,250 meters totaling 120 holes, and was completed in mid April.

Immediately thereafter, Phase II drilling commenced on approximately 50 meter spacing within mineralized areas identified by Phase I. Total drilling from both phases includes more than 35,000 meters spanning over 280 holes. Additional infill drilling results, similar to current pit grades, are anticipated to be added into a measured category of an updated 43-101 Technical Report, that is scheduled for completion by year's end.

Visit argonautgoldinc.com for a list of drill holes in 2010.

To view a figure of the Phase I Drilling, please visit the following link: http://media3.marketwire.com/docs/ar_1012_fig_1.pdf

To view a figure of the Phase I and Phase II Drilling in 2010, please visit the following link: http://media3.marketwire.com/docs/ar_1012_fig_2.pdf

Tom Burkhart, Vice President of Exploration for Argonaut Gold said 'It's been exciting to be part of a successful drill program at El Castillo. Drilling results have increased the mineralized envelope by approximately 500 meters to the south and 400 meters to the east, representing almost a 100% increase in dimensions over the existing $625 pit. We'll continue to employ an RVC drill to further test the property potential at El Castillo as it remains open in several areas of interest.'

Transition and Sulphide Ore

An ongoing priority for the Company is to evaluate the economics of transition and sulphide ore zones that underlie the oxide resource, as this material potentially represents a significant increase in ore tonnages for the El Castillo operation. The company has committed to additional metallurgical testing with Kappes Cassidy Associates of Reno to assess the following:

Phase I - Metallurgical testing of bulk samples from the mine.

Phase II - Evaluation of the transition and sulphide ores. A 1,000 meter core drilling program is currently in progress to provide transition and sulfide samples for further metallurgical studies. The new transition and sulphide material will be assessed to evaluate the recoveries.

To view a figure of the Skematic view of transition and oxide ore as it underlies the oxide open pit area, please visit the following link: http://media3.marketwire.com/docs/ar_1012_fig_3.pdf

Tom Burkhart, Vice President of Exploration for Argonaut commented, 'We look forward to seeing how a new National Instrument 43-101 compliant technical report will impact the production profile and life of mine at El Castillo when we incorporate results from drilling through September as well as metallurgical work, new operating costs and production improvements.' In regards to Argonaut's overall exploration program, Tom added 'We look forward to initiating a drill program at our La Fortuna Project in the 4th quarter.'

Amalgamation of Argonaut Gold Inc.

Effective October 1, 2010 Argonaut Gold Ltd. has amalgamated with its wholly-owned subsidiary Argonaut Gold Inc. The Company will continue under the name Argonaut Gold Inc. as approved by shareholders at its last annual general meeting of shareholders.

Sale of Guatemala assets

Argonaut Gold has sold its 50% ownership of its closed El Sastre mine in Guatemala to its joint venture partner for $1.3 million. Argonaut Gold considered El Sastre a non-core asset.

About Argonaut

Argonaut is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets being the production-stage El Castillo Project and the exploration-stage La Fortuna Project, both located in the State of Durango, Mexico. Argonaut is a new venture created by former executive management team members of Meridian Gold Inc.

Creating the Next Quality Mid-Tier Gold Producer in the Americas.

Qualified Person Comments/Quality Control Procedures

All drill-hole samples were composited at site into 1.5 meter intervals and split with 1/4 of the sample transported to ALS-Chemex's sample preparation lab in Zacatecas, Mexico. Pulps are prepared here and then sent to ALS-Chemex's Laboratories in Vancouver, Canada where gold assays are completed using a fire assay procedure with an Atomic Absorption Spectroscopy ('AAS') finish. Sixteen RVC drill holes were also selected for cyanide leach analysis with this work also completed by ALS Chemex at their Vancouver facility. The Company utilizes a system of check assays, sample duplicates and sample blanks consistent with industry standards.

Preparation of this press release was supervised by Thomas Burkhart, Argonaut Gold's Vice President of Exploration and a Qualified Person under National Instrument 43-101. Mr. Burkhart also reviewed the reverse circulation drill program and on-site sample preparation procedures at El Castillo.

For additional information on the El Castillo gold mine, please refer to the Technical Report On The El Castillo Project, Durango, Mexico (July 31, 2008).

Cautionary Note Regarding Forward-looking Statements

This news release contains forward-looking statements that involve risks and uncertainties that could cause results to differ materially from management's current expectations. Actual results may differ materially due to a number of factors. Except as required by law, Argonaut Gold Inc. assumes no obligation to update the forward-looking information contained in this news release.

Contacts:

Argonaut Gold Inc.

Nichole Cowles

Investor Relations Manager

(775) 284-4422 x 101
nichole.cowles@argonautgoldinc.com
www.argonautgoldinc.com