McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) is pleased
to announce production highlights of the first quarter 2016 and one
acquisition.
Highlights
- Total production in Q1 was 37,958 gold equivalent
ounces(1), a 14% increase over Q1 2015.
- Increased production guidance for 2016 to 144,000 gold
equivalent ounces.
- Acquired the Net Smelter Return (NSR) royalty on our El
Gallo Mine and El Gallo Silver deposit.
- Strong balance sheet: $43 million(2) in liquid assets
and no debt!
El Gallo Mine, Mexico – A Record
Quarter
In Q1 the mine produced 20,101 gold equivalent
ounces, compared to 15,391 gold equivalent ounces during same
period in 2015. Production in Q1 set a new quarterly record as a
result of processing higher grade ore stockpiled in the previous
quarter. Production in subsequent quarters is expected to be lower
as the influence of higher grade ore diminishes during the year.
Full year guidance for El Gallo in 2016 is now increased to 55,000
gold equivalent ounces. The 2016 exploration budget for Mexico is
$4 million.
Today we acquired the existing tiered NSR
royalty (the “Royalty”) on the El Gallo Mine, currently paying 3.5%
of gross revenue less allowable deductions. The purchase price
consisted of a $5.25 million payment on closing and a conditional
deferred payment of $1 million to be made on June 30, 2018. The
Royalty ceased being payable at the end of February 2016. This
transaction will enhance the future profitability of the El Gallo
Mine and removes a royalty burden on existing and potentially new
deposits inside the Royalty’s area of influence, including the El
Gallo Silver deposit.
San José Mine, Argentina (49%)(3)
Our attributable production from San José in Q1
was 8,960 gold ounces and 667,319 silver ounces, for a total of
17,857 gold equivalent ounces. Compared to Q1 2015, gold and silver
production was down 5% and up 4% respectively. Q1 production is
typically lower than other quarters due to mill shutdown and
maintenance over the holidays.
Full year production guidance for San José in
2016 is 45,000 gold ounces and 3.3 million silver ounces, for a
total of 89,000 gold equivalent ounces attributable to us. The 2016
exploration budget is $4.5 million.
Nevada Exploration
Exploration drilling is planned to begin on the
newly acquired Afgan-Kobeh property in mid-May. The primary
objective of this drilling is to expand the size of the existing
resource.
Financial Results
Operating costs for the quarter ended March
31st, 2016 will be released with our Quarterly Financial Statements
in early May.
ABOUT MCEWEN MINING
(www.mcewenmining.com)
McEwen Mining’s goal is to qualify for
inclusion in the S&P 500 Index by creating a high growth,
profitable gold and silver producer focused in the Americas and
Europe. McEwen Mining's principal assets consist of the San José
Mine in Santa Cruz, Argentina (49% interest), the El Gallo Mine and
El Gallo Silver project in Sinaloa, Mexico, the Gold Bar project in
Nevada, USA, and the Los Azules copper project in San Juan,
Argentina.
McEwen Mining has total of 298 million
shares outstanding. Rob McEwen, Chairman and Chief Owner, owns 25%
of the Company.
Footnotes:
(1) 'Gold Equivalent Ounces' are calculated based on a 75:1
silver to gold ratio.
(2) Figures updated as of April 18, 2016. Includes cash, cash
equivalents and precious metals at market. Net of royalty and
property acquisitions mentioned herein.
(3) The San José Mine is owned by Minera Santa Cruz S.A., which
is a joint venture 49% owned by McEwen Mining Inc. and 51% owned
and operated by Hochschild Mining plc.
RELIABILITY OF INFORMATION REGARDING THE
SAN JOSÉ MINE
Minera Santa Cruz S.A. (“MSC”), the owner of the
San José Mine, is responsible for and has supplied to the Company
all reported results from the San José Mine. McEwen Mining's joint
venture partner, a subsidiary of Hochschild Mining plc, and its
affiliates other than MSC do not accept responsibility for the use
of project data or the adequacy or accuracy of this release.
TECHNICAL INFORMATION
The technical contents of this news release has
been reviewed and approved by Nathan M. Stubina, Ph.D., P.Eng.,
FCIM, Managing Director and a Qualified Person as defined by
Canadian Securities Administrator National Instrument 43-101
"Standards of Disclosure for Mineral Projects".
CAUTION CONCERNING FORWARD-LOOKING
STATEMENTS
This news release contains certain
forward-looking statements and information, including
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements and information expressed, as at the date of this news
release, McEwen Mining Inc.'s (the "Company") estimates, forecasts,
projections, expectations or beliefs as to future events and
results. Forward-looking statements and information are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties, risks
and contingencies, and there can be no assurance that such
statements and information will prove to be accurate. Therefore,
actual results and future events could differ materially from those
anticipated in such statements and information. Risks and
uncertainties that could cause results or future events to differ
materially from current expectations expressed or implied by the
forward-looking statements and information include, but are not
limited to, factors associated with fluctuations in the market
price of precious metals, mining industry risks, political,
economic, social and security risks associated with foreign
operations, the ability of the corporation to receive or receive in
a timely manner permits or other approvals required in connection
with operations, risks associated with the construction of mining
operations and commencement of production and the projected costs
thereof, risks related to litigation, the state of the capital
markets, environmental risks and hazards, uncertainty as to
calculation of mineral resources and reserves, and other risks. The
Company’s dividend policy will be reviewed periodically by the
Board of Directors and is subject to change based on certain
factors such as the capital needs of the Company and its future
operating results. Readers should not place undue reliance on
forward-looking statements or information included herein, which
speak only as of the date hereof. The Company undertakes no
obligation to reissue or update forward-looking statements or
information as a result of new information or events after the date
hereof except as may be required by law. See McEwen Mining's Annual
Report on Form 10-K for the fiscal year ended December 31, 2015 and
other filings with the Securities and Exchange Commission, under
the caption "Risk Factors", for additional information on risks,
uncertainties and other factors relating to the forward-looking
statements and information regarding the Company. All
forward-looking statements and information made in this news
release are qualified by this cautionary statement.
The NYSE and TSX have not reviewed and do not
accept responsibility for the adequacy or accuracy of the contents
of this news release, which has been prepared by management of
McEwen Mining Inc.
CONTACT INFORMATION:
Mihaela Iancu
Investor Relations
(647) 258-0395 ext 320
info@mcewenmining.com
Christina McCarthy
Director of Corporate Development
(647) 258-0395 ext 390
corporatedevelopment@mcewenmining.com
150 King Street West
Suite 2800, P.O. Box 24
Toronto, Ontario, Canada
M5H 1J9
(866) 441-0690
Website
www.mcewenmining.com
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