McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is
pleased to report additional positive drill results from Grey Fox,
part of the Black Fox Complex, located in the prolific Timmins gold
district, Canada (see
Figure 1). Highlights of the
new results are shown below in
Table 1.
Q4 and
FY2019 cost estimates for
our Black Fox and Gold Bar mines are also updated below.
“These results highlight the potential
to find additional gold mineralization across the one square
kilometer Grey Fox Deposit area,” said Sylvain Guerard,
SVP Exploration.
The Grey Fox Area is comprised of four deposits:
147, 147NE, Contact and South. Drill results in this news release
are confirming the continuity of the main gold mineralized shoot at
147NE and suggest the presence of two intriguing new areas of
mineralization at the South Zone and Whiskey Jack (see
Figure 2).
Table 1 - Selected Drill
Results from South Zone, Whiskey Jack, 147NE and 147 Zone
HOLE-ID |
From (m) |
|
To (m) |
|
Core Length (m) |
Estimated True Width (m) |
Gold Grade (g/t) |
|
Gold Grade (opt) |
|
Zone |
19GF-1198 |
281.2 |
|
300.0 |
|
18.8 |
ND |
10.9 |
|
0.35 |
|
South Zone |
Including |
285.0 |
|
295.0 |
|
10.0 |
ND |
15.9 |
|
0.51 |
|
South Zone |
And |
317.9 |
|
320.0 |
|
2.1 |
ND |
28.9 |
|
0.93 |
|
South Zone |
Including |
319.0 |
|
320.0 |
|
1.0 |
ND |
54.5 |
|
1.75 |
|
South Zone |
19GF-1211 |
273.8 |
|
276.8 |
|
3.0 |
ND |
20.4 |
|
0.66 |
|
South Zone |
Including |
273.8 |
|
274.8 |
|
1.0 |
ND |
44.4 |
|
1.43 |
|
South Zone |
19GF-1242 |
111.6 |
|
120.0 |
|
8.4 |
ND |
14.1 |
|
0.45 |
|
Whiskey Jack |
Including |
113.6 |
|
114.9 |
|
1.3 |
ND |
59.1 |
|
1.90 |
|
Whiskey Jack |
19GF-1173 |
342.9 |
|
354.0 |
|
11.2 |
8.2 |
5.7 |
|
0.18 |
|
147NE |
Including |
351.2 |
|
353.2 |
|
2.0 |
1.5 |
19.3 |
|
0.62 |
|
147NE |
19GF-1175 |
188.7 |
|
190.7 |
|
2.0 |
0.7 |
52.6 |
|
1.69 |
|
147NE |
Including |
189.1 |
|
189.8 |
|
0.7 |
0.3 |
148.0 |
|
4.76 |
|
147NE |
19GF-1204 |
311.0 |
|
317.0 |
|
6.0 |
4.4 |
12.3 |
|
0.40 |
|
147NE |
Including |
311.0 |
|
314.0 |
|
3.0 |
2.2 |
19.2 |
|
0.62 |
|
147NE |
19GF-1187 |
227.0 |
|
241.0 |
|
14.0 |
11.4 |
7.0 |
|
0.23 |
|
147 Zone |
Including |
232.0 |
|
234.0 |
|
2.0 |
1.6 |
22.0 |
|
0.71 |
|
147 Zone |
19GF-1180 |
85.0 |
|
87.0 |
|
2.0 |
1.5 |
25.1 |
|
0.81 |
|
147 Zone |
Including |
86.0 |
|
87.0 |
|
1.0 |
0.8 |
48.6 |
|
1.56 |
|
147 Zone |
g/t - grams per tonne, opt – Troy ounces per metric tonne, ND - not
determined. |
Geological Explanation (see
Figure 2)
At 147NE, we have observed
that higher grades and thicker mineralization occur where northwest
dipping structures intersect favorable iron-rich volcanic host
rocks, for example 5.7 g/t Au
over 8.2 m, including 19.3
g/t Au over 2.2 m (Hole 19GF-1173). This
zone is exposed at surface and has been drill tested to a depth of
350 m where mineralization is offset by a fault.
Our knowledge and success drilling 147NE
resulted in the generation of targets with the same
characteristics, which were drilled at Whiskey Jack and South
Zone.
Whiskey Jack is a new
exploration target located 1 km north of the South Zone intercepts,
where drilling began in mid-September. Assays for one hole have
been received to date, which returned a very encouraging result of
14.1 g/t Au over 8.4 m, including
59.1 g/t Au over 1.3 m core
length, with multiple occurrences of visible gold in
quartz-carbonate veins and breccias overprinted by faulting.
Additional drilling in this area is underway to confirm the
orientation, thickness and continuity of the vein.
South Zone drilling has
improved our knowledge of the structural controls on the
replacement-style mineralization. Drill hole 19GF-1198 returned
10.9 g/t Au over 18.8 m core
length, including 15.9 g/t Au over 10.0
m, and contained visible gold associated with 2-10%
disseminated pyrite in silica-albite-hematite alteration
(replacement-style mineralization). Both styles of mineralization
occur preferentially in iron-rich volcanic rocks.
Additional drilling at the 147
Zone was done to reinforce our confidence in the geometry
of the mineralization for modeling purposes and to provide
additional drill intersections perpendicular to some of the
mineralization controlling structures.
Figure
1: https://www.globenewswire.com/NewsRoom/AttachmentNg/0367f6df-19b4-44a5-b887-750a2e928e8cFigure
2: https://www.globenewswire.com/NewsRoom/AttachmentNg/8a356cb9-6e78-4c9d-8eba-e527be117783Figure
3: https://www.globenewswire.com/NewsRoom/AttachmentNg/af8ce47c-acba-4f6a-af9a-b65e597be75e
Complete assay results from the latest drilling on the
Grey Fox area:
http://mcewenmining.com/files/doc_news/archive/2019_11_GreyFox_PR/2019_11_GF_composites_cog_3.xlsx
Updated Cost Estimates for Black Fox and
Gold Bar
For Black Fox, cash costs(1) for the full year
2019 are expected to be in line with our guidance(2) of
$905 per GEO, and AISC(1) are expected to be
higher than our guidance(2) of $1,080 per GEO(3).
Actual cash costs and AISC for Q3 YTD 2019 are
$859 and $1,326 per GEO,
respectively. Management’s AISC estimates for Q4 2019 and the full
year 2019 are $1,100-1,200 and
$1,250-1,300, respectively.
Cash costs have been well controlled at Black
Fox in 2019, and higher AISC are a result of higher than expected
sustaining capital expenses related to underground development,
improvement projects, and additional capital spending associated
with our transition to owner-operated crushing at the Stock Mill.
We plan to scale back production in 2020 to enable greater freedom
to explore in the mine, and free resources to advance development
of the Froome underground deposit adjacent to Black Fox.
For Gold Bar, cash costs and AISC for the full
year 2019(4) are expected to be higher than our guidance(2) of
$930 and $975 per GEO,
respectively. Actual cash costs and AISC for Q3 YTD 2019 are
$1,014 and $1,200 per GEO,
respectively. Management’s cash costs estimates for Q4 2019 and the
full year 2019 are $1,000-1,050 and
$1,000-1,050 per GEO, respectively; and AISC for
Q4 2019 and the full year 2019 are $1,250-1,350
and $1,200-1,300 per GEO, respectively.
Higher cash costs and AISC at Gold Bar are a
result of the delayed mine startup, and higher than expected
operating expenses and sustaining capital expenses required to
correct plant deficiencies and improve performance. We plan to
increase production in 2020 to 65,000-70,000 gold ounces, and
expect costs to moderate and then decline as our improvements take
effect.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver
producer and explorer with operating mines in Nevada, Canada,
Mexico and Argentina. It also owns a large copper deposit in
Argentina. McEwen’s goal is to create a profitable gold and silver
producer focused in the Americas.
McEwen has approximately 362 million shares
outstanding. Rob McEwen, Chairman and Chief Owner, owns 22% of the
shares.
Notes:
- Cash Costs and All-in Sustaining
Costs (AISC): Cash costs consist of mining, processing, on-site
general and administrative costs, community and permitting costs
related to current operations, royalty costs, refining and
treatment charges (for both doré and concentrate products), sales
costs, export taxes and operational stripping costs, and exclude
depreciation and depletion. All-in sustaining costs consist of cash
costs (as described above), plus environmental rehabilitation
costs, amortization of the asset retirement costs related to
operating sites, sustaining exploration and development costs,
sustaining capital expenditures, and sustaining lease payments.
Both cash costs and all-in sustaining costs are divided by the gold
equivalent ounces sold to determine cash costs and all-in
sustaining costs on a per ounce basis. We use and report these
measures to provide additional information regarding operational
efficiencies both on a consolidated and an individual mine basis,
and believe that these measures provide investors and analysts with
useful information about our underlying costs of operations.
Reconciliation to the nearest U.S. GAAP measure is provided in
McEwen Mining's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019.
- Cost guidance was published on February 21, 2019, and was
unchanged.
- Gold Equivalent Ounces (GEOs) are calculated based on a 75:1
gold to silver price ratio for periods up to and including Q1 2019,
88:1 for Q2 2019, and 87:1 for Q3. 2019. Costs estimates using a
85:1 ratio.
- Gold Bar declared commercial production on May 23, 2019.
QUALIFIED PERSONTechnical
information pertaining to geology and exploration contained in this
news release has been prepared under the supervision of Ken
Tylee, P.Geo. Mr. Tylee is a "qualified person" within the meaning
of NI 43-101.
The technical information under the heading
‘Clarification of Black Fox and Gold Bar Q4 2019 Cost Estimates’ in
this news release has been reviewed and approved by Chris Stewart,
P.Eng., President & COO of McEwen Mining and a Qualified Person
as defined by Canadian Securities Administrators National
Instrument 43-101 "Standards of Disclosure for Mineral
Projects."
TECHNICAL INFORMATIONFor a list
of technical terms and their definitions, please consult our mining
glossary: https://www.mcewenmining.com/investor-relations/glossary/default.aspx
Grams per tonne (g/t) converted to Troy ounces
per tonne (opt) at ratio 31.1035 to 1.
All intercept widths are true widths unless
otherwise specified.
Composite criteria unless otherwise stated: Cut
off grade 3 g/t Au, minimum length 2 m, and maximum consecutive
interval waste 3 m. If grade x length > 6 the composite will be
added. There is no top cutting or capping of assays.
All exploration drill core samples at
the Black Fox Complex were submitted as 1/2 core.
Analyses reported herein were performed by the independent
laboratories: ALS Laboratories, which is ISO
9001/IEC17025 certified, and AGAT Laboratories, which is ISO
9001/IEC17025 certified. McEwen’s quality control program includes
systematic insertion of blanks, standard reference material and
duplicates to ensure laboratory accuracy.
For further details about the Black Fox Complex
project including Grey Fox 147NE target area, please see our NI
43-101 technical report titled "Technical Report for the Black Fox
Complex, Canada" dated April 6th, 2018 with an effective date of
October 31st, 2017 available on SEDAR (www.sedar.com) under our
issuer profile.
CAUTIONARY NOTE REGARDING NON-GAAP
MEASURESIn this report, we have provided information
prepared or calculated according to U.S. GAAP, as well as provided
some non-U.S. GAAP ("non-GAAP") performance measures. Because the
non-GAAP performance measures do not have any standardized meaning
prescribed by U.S. GAAP, they may not be comparable to similar
measures presented by other companies.
CAUTION CONCERNING FORWARD-LOOKING
STATEMENTSThis 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.
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, 2018 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: |
Investor Relations:(866)-441-0690 Toll
Free(647)-258-0395 Mihaela Iancu ext. 320
info@mcewenmining.com |
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