Argonaut Gold Increases La Colorada Measured and Indicated Resource

Argonaut Gold Increases Measured and Indicated Resource
at La Colorada to 1.1 million Gold Ounces up 76%
14 million Silver Ounces up 173%
The Company is moving forward on the development of La Colorada Project

Toronto, Ontario – (October 24, 2011) Argonaut Gold Inc. (TSX: AR) (“Argonaut” or the “Company”) is pleased to report that the Measured and Indicated (“M&I”) gold resource at its 100% owned La Colorada Project located near Hermosillo, Mexico has increased from 605,000 M&I ounces to 1,067,000 M&I ounces.

New National Instrument 43-101 (“NI 43-101″) Technical Report on Resources
Argonaut has received an updated Canadian National Instrument 43-101 compliant Mineral Resource estimation from SRK Consulting in Denver, CO (“SRK”) for its La Colorada project. The updated resource of 1,067,000 ounces is based on previous historical drilling plus an additional 206 drill holes totaling 31,744 metres completed in 2011. The resource is contained within 50 million tonnes of mineralized material at an average grade of 0.664 g/t gold and 8.7 g/t silver. This is a 76% increase in the gold resource over a previous (pre-Argonaut) technical report that identified an M&I resource of 605,000 ounces.

Updated Mineral Resource Summary of the La Colorada Property as of June 25, 2011

The stated Indicated mineral resources have been prepared in accordance with Canada’s National Instrument 43-101 Standards of Disclosure for Mineral Projects. The Qualified Person, as defined by National Instrument 43-101, for the mineral resource estimation, is Principle Resource Geologist, Dr. Bart Stryhas , of SRK, Denver, Colorado. The resources are contained within Whittle pit shells based on $1,500/oz Au price, $20/oz Ag price, and recoveries of Au and Ag at 60% and 30% respectively.

Impact of change in cut-off grade:

A further review of the impact of raising the cutoff grade of La Colorada and El Creston shows minimal impact to the resource. By raising the cutoff grade from 0.10 g/t to 0.30 g/t the overall average grade increases to 1.0 g/t (48%), while total ounces drop -107 k oz (-11%). This indicates the whittle pit resource as reported can be optimized to find the optimum balance of cash flow to ounces produced. This is noted in the following table.

2011 Drill Program:
Phase 1 of the La Colorada Drill Program was focused on converting previously inferred mineralization at the La Colorada and Gran Central resource areas. Initial favorable drill results prompted the Company to double the drill program scope, increasing the drill budget to $7.7 million with an estimated total of approximately 52,000 metres. The Company currently has three drill rigs operating on the property with a fourth rig scheduled to arrive shortly.

Composite highlights of the La Colorada Project

Drill hole map of La Colorada/Gran Central and El Creston

A summary to date of the drill results used in the resource is available on the website
Click here for a list of the drilling results
A tabulation of the 2011 resource drill holes:

La Colorada Cross Section

El Creston Cross Section

The Company previously announced results from 25,750 metres of drilling in 170 holes (as of June 15, 2011). Today Argonaut is releasing results from an additional 36 holes consisting of 5,994 metres of drilling. Drilling continues to show two main mineralized areas that form the bulk of the La Colorada/Gran Central resource areas, but significant mineralization is also being defined within the Intermediate Zone that lies between these two mineralized zones. In addition, ongoing drilling at El Creston has confirmed that strong mineralization continues to depth below previous exploration. On the nearby Veta Madre deposit an aggressive drilling program is in progress with the objective of expanding the reported resource and to defining the extent of mineralization by year’s end.

Path forward:
Given the significantly expanded resource base, the Company has embarked upon a multi staged development approach to the La Colorada project. Permits are in-hand to initiate the first stage which includes the construction of new leach pads, a crushing circuit and a processing plant within the existing footprint of the previous mining operation. Stage I will involve processing material from the existing Run of Mine (ROM) leach pad (2.7 million tons at an average grade of 0.43g/t gold).

The second and more comprehensive stage of the project involves the full scale mining of the La Colorada pit. Permit applications to conduct this work are being prepared to expand the existing mine footprint which requires additional overburden storage, the expansion of the pit limits and additional heap-leach pad construction. Currently, we believe these permits will be submitted in Q1 of 2012, and we anticipate receiving these permits in the normal course of business.

Initial Development Activities:
The Company has recently completed a land purchase of 330 hectares with negotiations for additional land acquisitions underway. Initial commitments have been made to purchase processing equipment and construct heap leach pads. The Company expects the Stage 1 budget to be less than $10 million.

Argonaut’s President and CEO Mr. Pete Dougherty stated, “We are very pleased to announce the expanded resource for the La Colorada project. The success of the drilling program to date has allowed us to take the next steps towards development of the project.” He added “Drilling will continue on the property as targets such as El Creston, Veta Madre and La Verde still hold exploration potential.”

Footnotes
Table1-1: Mineral Resource Statement, La Colorada, Effective Date June 25, 2011, Bart Stryhas PhD (Mining), of SRK, Denver, Colorado

Notes to Accompany Mineral Resources Table:

1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability

2. Mineral Resources are reported as undiluted.

4. Mineral Resources are reported within a conceptual pit shell

5 The resources are contained within Whittle pit shells based on $1,500/oz Au price, $20/oz Ag price, mining cost of $1.20/t, process cost of 2.70/t and recoveries of Au and Ag at 60% and 30% respectively.

6. Totals tonnes and grade values may be rounded.

The SRK resource estimation is based on 2011 drill information from 206 drill holes totalling 31,744 metres and previous datas incorporated within the Giroux & Hendrick resource estimate. The average drillhole spacing within Indicated resource areas is approximately 50m. Argonaut plans to file a report under National Instrument 43-101 in connection with this disclosure.

About Argonaut
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 advanced exploration stage San Antonio project, the past producing and advanced exploration stage La Colorada project, and several exploration stage projects, all of which are located in Mexico.

Creating Value Beyond Gold

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.

The potential quantities and grades disclosed herein in connection with the drilling results at La Colorada have been presented in an updated resource prepared by SRK Consulting in Denver, CO.

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. Dr. Bart Stryas of SRK of Denver, CO, who is an “Independent Qualified Person” as defined by NI 43-101 and the lead person responsible for completing the updated La Colorada resource has reviewed this press release as it relates to the La Colorada project.

For sample analysis the Company utilizes a system of Quality Assurance/Quality Control that includes insertion and verification of standards, blanks and duplicates consistent with industry standards. Samples from the La Colorada project are collected at site by personnel of Inspectorate’s preparation laboratory in Hermosillo where samples are prepared and pulps sent for assay in Inspectorate’s Sparks, NV laboratory. Samples are analyzed for gold by Fire Assay and Atomic absorption finish (PKG-AuAg assay code; 0.005 to 10ppm detection limit) plus Silver by Aqua Regia and Atomic Absorption finish (0.1 to 200 ppm detection limit). Samples over 10 g/t Au are assayed with gravimetric finish (Assay code Au-1AT-GV). All samples are also assayed by ICP-AES (code GENX-30) for a suite of 30 elements.

For further information on the La Colorada project please visit the Company’s website.

For more information, contact:
Argonaut Gold Inc.

Nichole Cowles

Investor Relations Manager

Tel: (775) 284-4422 x 101

Email: nichole.cowles@argonautgoldinc.com

www.argonautgoldinc.com