1

Argo Gold Inc.

ARQ $0.12 Canadian Securities Exchange |OTCPK: ARBTF | Market Cap $4M

Description: Argo Gold is a growth-oriented junior mining company which owns 100% of a gold project in

Ontario with widespread and high-grade gold mineralization. Assays on some drill intercepts at the Uchi Gold

Project have yielded extremely impressive results: 132 grams per tonne (g/t) of gold over 1.8 meters and 139 g/t

over 2.1 meters. Furthermore, another junior mining company, Great Bear Resources (TSXV: GBR), has made

a major gold discovery in the same lightly-explored region as the Uchi Project. This discovery validated gold

exploration in the Confederation volcanic rocks of the Birch-Uchi Greenstone Belt (see pages 3-4), opening up

the potential of high-grade gold mineralization in that region. Until Great Bear Resources’ August 2018 find,

explorers had spent 50 years searching for high-grade gold mineralization in the Confederation volcanics. [The

region has hosted some low-grade deposits. For example, First Mining Gold Corporation’s (TSX: FF) recently

released a Preliminary Economic Assessment on its Springhole Gold Project, which contains around four

million ounces of gold equivalent at a grade of about 1 gram of gold per tonne.]

Argo’s Uchi Gold Project and Great Bear Resources’ (TSXV: GBR) Dixie Project are only 75 kilometers (km)

apart, and they bear striking similarities in terms of geology, structure, type of gold mineralization, and the

amount of overburden of each project. If the Uchi Project were to approach the success of the Dixie Project, it

would be a transformational success for both Argo Gold and its shareholders. We do note that while we believe

that Uchi could potentially contain 1-2 million ounces of gold, it is unlikely to approach the size of Dixie, a

potential “Red Lake-style” system. See page 8. Third-party due diligence studies suggest that Dixie could be a

world-class gold discovery.

The importance of the favorable location of the Uchi Project (and the Dixie Project) cannot be understated: a

common thread among prolific gold and base metal districts is spatial proximity to major fault structures

and/or major crustal boundaries. Intrusions along both the Uchi and Dixie gold projects are proximal to the

south crustal boundary of the Uchi Belt, or Subprovince. We believe that this boundary between the Uchi

volcanics and the English River region will become much more significant for mineral deposits.

We also note that the pervasive amounts of overburden at both Argo’s Uchi Project and Great Bear Resources’

Dixie Project (about 1-3 meters throughout each) requires additional exploration techniques like geophysical

and geochemical processes. Argo completed the first of such studies in August 2019. See page 10.

Argo’s commitment to the Uchi Project reflects Argo management’s core strategy of acquiring and developing

high-grade gold assets. Furthermore, the company plans to focus on properties in Ontario where

infrastructure (roads and electricity) is already in place and which are near past-producing mines.

Tormont50 Growth Report

Tormont50: Identifying timely topics and trends in the sub-$200 million market.

Research Type: Emerging Timeliness: Current Date: Oct. 28, 2019

2

Key Geological Characteristics of the Uchi Project: The Superior Province is the largest, relatively

undisturbed block of the earth’s crust dating from the Archeon eon, 4 billion to 2.5 billion years ago (4 Ga to

2.5 Ga). It has been stable since around 2.5 Ga and comprises the core of the Canadian Shield and extends into

the north-central part of the United States. See Figure 1.

Figure 1: Canadian Shield

Source: Wikipedia.

3

More than 4,500 tonnes of gold have been discovered in the Superior Province, including the Uchi region. See

Figure 2.

Figure 2: Location of Uchi Region in Canada.

Source: U.S. Geographical Survey.

Figure 3 shows the Birch-Uchi Greenstone Belt, as well as the Red Lake Greenstone Belt, in greater detail.

Greenstone belts are volcanic-sedimentary sequences, which include ultramafic rocks, dolerite, basalt, chert,

sandstone, and other rock types. Gold is most commonly found along the edges of greenstone belts and

associated with structural features.

4

Until recently, most gold mining exploration in this geographic area has taken place in the Red Lake region,

which is characterized by the Balmer Assemblage, or Sequence, rock formation. The Balmer structure dates

from 2.99 Ga - 2.96 Ga and is characterized by high-iron, basalt rocks that contain less sodium than some other

basalt stones. The Balmer Assemblage has been proven to host significant high-grade gold mineralization at

Pure Gold’s (TSXV: PGM) Madsen mine and Newmont Goldcorp’s (TSX: NGT) Red Lake and Campbell mines,

the three of which have produced a cumulative 26 million ounces of gold. Some of the mines had gold deposits

as deep as 3,000 meters below the surface.

Figure 3: Birch-Uchi Greenstone Belt

Source: Argo Gold.

The Uchi Belt is primarily composed of the Confederation Assemblage rocks, which date from 2.75 Ga - 2.73

Ga. Confederation Assemblage units are a mix of calc-alkaline sediments and volcanic rocks; frequently

Confederation Assemblage rocks overlie Balmer Assemblage rocks in the Uchi Belt. Historically, only about 5

million ounces of gold have been discovered in Confederation volcanic rocks, but interest in exploring the Uchi

Belt has increased dramatically following Great Bear’s high-grade gold discovery at its Dixie Project. The Dixie

Project has Confederation Assemblage geology, as does Argo’s flagship Uchi Gold Project. Both Dixie and

Argo’s Uchi Gold Project are proximate to the Uchi Lake Deformation Zone. See Figure 4. The two projects

have other similar characteristics: gold mineralization occurring through narrow-vein quartz systems, similar

overburden levels and very little outcroppings, or visible exposures of bedrock.

5

Figure 4: Uchi Lake Deformation Zone

Source: Argo Gold.

Major gold deposits in the Red Lake Gold District are associated with regional scale deformation zones, and the

most significant deposits occur where two of the regional structures intersect. That seems likely to be the case

in the Uchi Belt as well. Indeed, management at Great Bear has declared that a regional scale deformation

zone – they have named the LP Fault – is likely the source of mineralization. At Argo’s Uchi Gold Project, the

Uchi Break structure (see pages 7-8) is closely related with mineralization. Both Great Bear’s Dixie Project and

Argo’s Uchi Gold Project are proximal to the major crustal boundary of the Uchi Belt (or Subprovince) and the

associated Uchi Deformation Zone along this southern boundary.

To illustrate the implications of a potential discovery at the Uchi Project, consider the appreciation of Great

Bear Resources stock since late August 2018, when the company announced its first extensive high-grade gold

discovery at the Dixie Project -- 16.35 meters of gold at a concentration of 26.91 g/t. Since then (and

admittedly after additional discovery announcements), the shares of Great Bear Resources have soared around

1,100%, reaching a total equity capitalization of $275 million. See Figure 5.

6

Figure 5: Great Bear Resources 5-Year Stock Price History, in Canadian Dollars

Source: Yahoo Finance.

Uchi Gold Project: The Uchi Gold Project is a large-scale corridor, 5 km in strike length and about 1.5 km

wide, with widespread gold mineralization. It contains a number of prospects, the most important of which is

the Woco Gold Prospect. See Figure 6.

7

Figure 6: Argo Gold’s Uchi Gold Project

Source: Argo Gold.

Figure 7 shows the positions of the Red Lake and Birch-Uchi Belts and the tremendous mine gold mining

successes within the Red Lake Belt in relation to the position of the Woco Prospect.

8

Figure 7: Uchi Geographical Subprovince, Birch-Uchi Greenstone Belt, Argo Gold’s Woco

Gold Prospect

Source: Argo Gold.

Note especially the north-south Uchi Break structure about 300 meters east of the Woco Prospect shown in

Figures 6 and 7. The Uchi Break is considered to be a good-controlling structure for both the Uchi Gold

Project’s Woco and Northgate Gold Prospects.

Woco Prospect: Argo completed a 2,500 meter diamond drilling program in the spring of 2019 at the Woco

Prospect, marking the first exploration efforts of any kind at Woco in nearly 30 years. Based on both historic

drilling plus this drilling program, Argo has discovered some extremely impressive high-grade gold intercept

readings:

9

132 g/t over 1.8 meters;

139 g/t over 2.1 meters;

65 g/t over 1.83 meters;

62 g/t over 3.6 meters.

We note that the drill holes at Woco which encountered basalt and dacite generally also encountered gold,

which is consistent with geology theory. See Figure 8. Indeed, fractured basalt is a common host rock for gold.

The gold is likely mobilized by hydrothermal solutions during the alteration of the structure of rocks by heat or

pressure. In that case, the gold deposit usually shows up as a quartz vein that carries the gold. High-grade gold

veins are a key characteristic of the Woco Prospect.

Figure 8: Basalt and Dacite Correlate to Gold Mineralization at Woco Prospect

Source: Argo Gold.

10

Other gold prospects within the Uchi Gold Project include:

• Northgate is a quartz vein system with visible gold. The spring 2019 drilling program encountered a

gold intercept at Northgate with a concentration of 34.4 grams of gold per tonne over 0.5 meters. In

2017, Argo discovered a chip sample on the property with a reading of 27.4 g/t of gold over a 0.65 meter

span.

• RainGold is also a gold vein system. One Argo Gold assay showed gold mineralization of 14.5 g/t over a

2.6-meter span. Like at Woco, gold mineralization has been found in conjunction with basalt and dacite

rocks.

Argo commissioned a biogeochemistry survey to be performed at the Uchi Gold Project in late July 2019.

About 1,100 samples were collected over the entire 5 km of strike length. Two interesting observations from

the survey are as follows:

• Argo found indications of gold mineralization in the bark of black spruce trees. These readings strongly

suggest the presence of gold in the bedrock at the Uchi Project.

• The company found a “gold anomaly” about 150 meters south-southeast of the Woco Prospect.

Next Steps – Highlighted by Biogeochemistry Survey and Structural Model: Argo is developing a

structural model of the mineralization at the Uchi Project. This model will ultimately guide the drilling

progression at the project. In addition, this winter Argo plans to bulldoze the 1-3 meters of overburden at

Woco. Doing so will allow the company to closely investigate the bedrock at Woco, particularly the areas of

interest highlighted by the structural model. Argo then expects to be in position for a significant drilling

campaign in 2020.

Argo’s Outlays – Fairly Modest So Far: Argo’s management has successfully controlled discovery and

exploration spending on the Uchi Project. Outlays on the spring 2019 drilling program totaled $600,000-

$700,000. In turn, the biogeochemistry survey and structural mapping initiatives had price tags of around

$150,000 and $50,000, respectively.

Zinc and Cobalt Projects: Argo also owns two zinc and four high-grade cobalt projects. See Figures 9 and

10. The zinc and cobalt projects comprise a total of 79 and 30 square kilometers, respectively. The projects are

substantial enough that they could potentially comprise a separate, standalone company.

11

Figures 9: Argo Gold’s Zinc Projects

Source: Argo Gold.

12

Figure 10: Argo Gold’s Cobalt Projects

Source: Argo Gold.

13

Investment Group Could Purchase Some of Argo’s Gold Exploration Projects: We understand that

a group has approached Argo regarding its three gold exploration properties around Wawa, Ontario. The

Macassa Creek, Abbie Lake and Mishi Lake properties are near Wesdome Gold Mine’s (TSX: WDO) Eagle River

Complex in Wawa, and have a cumulative strike length of about 10 km. See Figure 11. In addition, a grab

sample on a vein on the Mishi Lake Property contained 75 grams of gold per tonne of resource. If a transaction

were to occur, Argo would likely receive a combination of cash and shares of the acquiring company or

companies.

Figure 11:

14

Source: Argo Gold.

Strong and Heavily Invested Management Team: Argo is led by CEO Judy Baker and President Peter

Mah. Both have broad-based mining and financing/capital markets experience. Indeed, the entire

management team has a combined 150 years of mining experience. Furthermore, management and insiders

own about 15% of Argo shares.

Investment Summary – A Potentially Dramatic Revaluation Play: Argo has a unique asset, the Uchi

Gold Project, which already shows near-surface, high-grade gold mineralization. The project could prove to be

a significant gold discovery in a mining-friendly jurisdiction with necessary infrastructure in place. In

addition, it is surrounded by much larger mining companies, which has obvious M&A implications. Assays

from holes drilled at Uchi Gold’s Woco Prospect have yielded extremely high-grade gold intercept data. Most

importantly, the Uchi Gold Project has remarkably similar geologic and gold mineralization characteristics as

Great Bear Resources’ nearby Dixie Project. As confirming data on the Dixie discovery has been made public

over the past two years, Great Bear Resources shares have increased more than tenfold in value, bringing its

equity market capitalization to around $275 million. In comparison, Argo Gold’s current market value is only

about $4 million. Parenthetically, Great Bear’s discovery validates Argo management’s core business strategy

of searching for high-grade gold on Confederation Assemblage volcanic rocks.

As a consequence, we consider Argo Gold shares to a be an extremely attractive speculative

play. The shares could react explosively to positive drilling results given the trading history of

Great Bear Resources and the great disparity in market values of Argo Gold and Great Bear

Resources. Given the potential of Argo Gold, we believe that a reasonable near-term target for

Argo shares is a valuation equivalent to 5%-10% of Great Bear Resources. That equates to a fair

value of about $0.30-$0.40 for Argo Gold shares.

Jim McFadden, CFA, MBA

Tormont50 Research

10/28/2019

Tormont50 is a venue for highlighting timely ideas and trends in individual stocks and the market. Tormont50 is not an advisory service, and does not offer buy, sell,

or any other rating on the securities we discuss. The stocks we select for commentary are derived from our own research or via suggestions from Tormont50 members. We encourage participants to submit stocks or topics for discussion. Our goal for this project is to create an exclusive, “concierge” research platform that will serve both management teams and portfolio managers within the Tormont50 universe.

This message is intended only for the personal and confidential use of the designated recipient(s) members of the Tormont50. If you are not the

intended recipient of this message you are hereby notified that any review, dissemination, distribution or copying of this message is strictly

prohibited. This communication is for information purposes only and should not be regarded as an offer to sell or as a solicitation. This material is

based upon information which we consider reliable, but we do not represent that such information is accurate or complete, and it should not be relied

upon as such. This information is current and is subject to change. Past performance is not an indicator of future results and the value of the holdings

and the income derived from them can go down as well as up.