Argonaut Gold Announces 2012 Project Initiatives Gold Production has Begun at La Colorada

TORONTO, ONTARIO -- (Marketwire) -- 02/27/12 -- Argonaut Gold Inc. (TSX: AR) ('Argonaut' or the 'Company') is pleased to announce its plans for 2012 project initiatives for both of the Company's operating mines in Mexico. The El Castillo mine is located 100 km north of the capital city of Durango in Durango, Mexico, and the La Colorada mine is located 50 km southeast of the capital city of Hermosillo in Sonora, Mexico.

El Castillo 2012 Initiatives:

--  Mining Fleet
    --  In Q1, the haulage fleet will increase to a total of 18, one hundred
        ton capacity trucks.
--  Expanding heap leach capacity
    --  In Q2, west leach pad #7A will be commissioned, providing an
        additional 2.6 million tonnes capacity.
--  Reducing truck haulage requirements
    --  In Q3, a new crushing, conveying and stacking system will be in
        place reducing truck haulage requirements.
--  Future Pad expansions
    --  In Q4, construction to begin on pad #8 on the west side land which
        was acquired at the end of 2011.

Pete Dougherty, Argonaut President and CEO, stated: 'These initiatives will be implemented in a stepped phase throughout the year, and are designed to create a more efficient mining environment at El Castillo. At the end of last year as we extended operations to the east pads and plant, El Castillo experienced higher cash operating costs. We feel these initiatives will mitigate these costs. We believe El Castillo will be in a position to take the next steps in advancing production by year end with the addition of the new west pad #8.'

La Colorada 2012 Initiatives:

--  Production in Q1
    --  The Company began stacking and leaching material early in the first
        quarter.
--  Completion of desorption plant and refinery
    --  Expected to be completed in Q2, this new plant will provide refining
        capacity for all Mexican operations allowing for faster metal
        recovery and sales.
--  Expanding Mine Footprint
    --  In Q2, the phase two permit for expansion is expected to be received
        and mining is to begin at the La Colorada pit.

Mr. Dougherty commented: 'The Company is happy to announce that gold production has begun at the La Colorada mine. We are currently reprocessing material from the existing leach pads. Construction is well underway on the new desorption and recovery plant, as well as the refinery. When completed in the second quarter, it will have the capacity to handle material from all of the Company's Mexican operations. The enhancement of the desorption and refining circuit will allow the Company to process all loaded carbon at a single site, therein reducing costs, and expediting our sales process. It is satisfying to see the La Colorada mine begin ahead of schedule and continue to expand.'

Total Capital Expansion Program for 2012

El Castillo        $8-10 million
La Colorada        $15-20 million
San Antonio (1)    $3-4 million
Exploration (2)    $7-8 million
Note:   (1) Subject to permitting process timeline
        (2) Subject to exploration success

Mr. Dougherty commented: 'The Company is pleased to add a second producing mine to the Company's portfolio. The initiatives underway at both mines will allow for greater efficiencies and enhancements to production. Gold production at El Castillo is expected to be between 17,000 and 18,000 ounces for Q1 and is budgeted to increase each quarter. Q4 production is expected to reach 21,000 - 22,000 ounces, finishing the year for a total of 75,000 and 80,000 ounces at an average cash cost for the year of $625 to $650 per ounce. Gold production at La Colorada is expected to be between 2,000 and 2,500 ounces of gold for Q1 with gradual increases anticipated each quarter;. Q4 production is expected to be between 4,500 - 5,500 ounces at an average cash cost for the year of $625 to $650 per ounce. Full year La Colorada production is expected to be 13,500 to 17,000 ounces.'

About Argonaut Gold

Argonaut is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets are the production-stage El Castillo Mine in the State of Durango, Mexico, the La Colorada Mine in the State of Sonora, Mexico, the advanced exploration stage San Antonio project in the State of Baja California Sur, Mexico, and several exploration stage projects, all of which are located in Mexico.

Creating Value Beyond Gold

Cautionary Language Regarding Forward-Looking Information

This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release are forward-looking statements (or forward-looking information). The Company's plans involve various estimates and assumptions and its business and operations are subject to various risks and uncertainties. For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form and most recent Management Discussion and Analysis on file with the Canadian securities regulatory authorities on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. The Company assumes no obligation to update the forward-looking information contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein. The release should also reference La Colorada as being brought into production without a feasibility study demonstrating economic and technical viability and that there may be increased uncertainty and certain risks (identify if possible) of failure associated with the production decision.

Qualified Persons

Preparation of this press release was supervised by Mr. Thomas Burkhart, Argonaut's Vice President of Exploration and a 'Qualified Persons' as defined by NI 43-101. Mr. Alberto Orozco, Argonaut's Mexico Exploration Manager, also supervised the drill programs and on-site sample preparation procedures at La Colorada.

For more information, please refer to the appropriate project's technical report available on the Company's website as well as www.sedar.com:

La Colorada   NI 43-101 Preliminary Economic Assessment La Colorada Project
              Sonora, Mexico (October 15, 2011)

El Castillo   NI 43-101 Technical Report on Resources and Reserves Argonaut
              Gold Inc. El Castillo Mine Durango State, Mexico (November 6,
              2010)

Contacts:

Argonaut Gold Inc.

Nichole Cowles

Investor Relations Manager

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