McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) reports
consolidated production for Q1 2018 of 35,069 gold ounces and
695,651 silver ounces, or 44,344 gold equivalent
ounces(1) (“GEOs”), using a 75:1 gold to silver ratio.
Consolidated Production
Summary
|
Q1 ‘18 |
Q4 ‘17 |
Q3 ‘17 |
Q2 ‘17 |
Q1 ‘17 |
Gold ounces |
35,069 |
48,609 |
19,051 |
22,191 |
20,096 |
Silver ounces |
695,651 |
926,739 |
749,749 |
779,487 |
722,767 |
GEOs |
44,344 |
60,965 |
29,047 |
32,584 |
29,733 |
|
|
|
|
|
|
Highlights of the first quarter from our three
producing mines and our newest mine in Nevada, which is under
construction, are as follows:
Gold Bar Mine, USA
(100%)
Construction activities at Gold Bar focused on
finishing civil works related to the heap leach pad, ponds and site
infrastructure, in preparation for major equipment and material
deliveries in the second quarter. Construction is advancing on
schedule for completion by the end of 2018. During the first three
years of operation beginning in 2019 Gold Bar is projected to
produce 55,000, 74,000 and
68,000 ounces of gold respectively.
Black Fox Mine, Canada
(100%)
Black Fox produced 12,078
GEOs, in line with our full year production guidance for 2018 of
48,000 GEOs. A $12 million exploration program is ongoing across
the Black Fox Complex, drilling results and other developments will
be released quarterly, with the next update anticipated by the end
of April.
A new technical report and resource/reserve
estimates for the Black Fox Complex was published on April 6, 2018.
The complete report, with an effective date of October 31, 2017, is
available on the Company’s website and on www.sedar.com. For
comparative purposes the previous resource/reserve estimates by the
former property owner had an effective date of December 31, 2016.
The new mineral resource estimate for the Black Fox Mine resulted
in a 40% increase in gold resource in the Indicated category to
538,000 ounces, and a decrease of 2% in the Inferred category to
44,000 ounces (see Table i). The overall increase
is mainly attributable to improvements in methodology used to
constrain high and low-grade domains within lithological and
alteration envelopes. This significantly reduced internal dilution
that previously resulted in the exclusion of potential
resource. Additionally, capping grades and variography
parameters were reviewed and tailored to each domain.
The new mineral reserve estimate for the Black
Fox Mine resulted in a 2% increase in Proven and Probable gold
reserves to 113,000 ounces (see Table ii).
Resource estimates for the Froome and Grey Fox
deposits were also updated. The new Froome resource estimate is in
line with the previous estimate. At Grey Fox, the updated resource
considered a potential underground mining scenario (previously open
pit and underground) and was calculated using additional drill hole
data, updated geological and structural interpretations and tighter
controls on the estimation process. Comparing underground resources
only, gold resource in the Indicated category increased by 44% to
465,000 ounces, and the Inferred category decreased by 32% to
100,000 ounces.
El Gallo Mine, Mexico
(100%)
El Gallo produced 12,217 GEOs,
in line with our budget and full year production guidance for 2018
of 32,000 GEOs. Mining from the existing open pits will cease in
Q2, while heap leaching activities are expected continue until
2020, or as long as it remains economical to do so. Operating
expenses will diminish significantly in Q2, while gold production
will decline more gradually, resulting in an overall reduction in
cost per ounce produced for the balance of 2018.
San José Mine, Argentina
(49%)
Our attributable production from San José was
10,822 gold ounces and 692,052
silver ounces, for a total of 20,049 GEOs.
Production at San José in the first quarter is typically lower than
other quarters due to regularly scheduled maintenance, however the
mine is on-track to achieve our full year guidance for 2018 of
91,000 GEOs. We received approximately $5 million in dividends from
our interest in San José during Q1, and with spot gold and silver
prices significantly above budget, we expect to continue to receive
dividends in each of the subsequent quarters.
First Quarter Financial
Results
Operating costs for the quarter ended March 31,
2018 will be released with our 10-Q Quarterly Financial Statements
in early May. As of April 6, 2018 we are debt-free with liquid
assets of approximately $52 million.
Table i: Mineral Resource Statement,
Black Fox Complex, SRK Consulting (Canada) Inc., October 31,
2017
Classification |
|
Cut-off GradeGold (g/t) |
Quantity(‘000 t) |
Grade Gold(g/t) |
Contained
MetalGold (‘000 oz) |
Indicated Mineral Resource |
Underground |
Black
Fox |
3.00 |
2,145 |
7.80 |
538 |
|
Froome |
3.20 |
941 |
5.26 |
159 |
|
Grey Fox |
3.60 |
2,177 |
6.64 |
465 |
Total Indicated |
|
|
5,263 |
6.87 |
1,162 |
Inferred Mineral Resource |
Underground |
Black
Fox |
3.00 |
216 |
6.35 |
44 |
|
Froome |
3.20 |
125 |
4.70 |
19 |
|
Grey Fox |
3.60 |
453 |
6.83 |
100 |
Total Inferred |
|
|
794 |
6.36 |
163 |
- Mineral resources are not mineral reserves and do not have
demonstrated economic viability. All figures rounded to reflect the
relative accuracy of the estimates. Composites were capped where
appropriate. Mineral resources reported at variable cut-off grades
as indicated, assuming an underground extraction scenario, a gold
price of US$1,500/oz, C$:US$ exchange rate of 1.25; and
metallurgical gold recoveries of 96 percent for Black Fox, 90
percent for Froome and 80 percent for Grey Fox.
Table ii: Mineral Reserve Statement,
Black Fox Mine, SRK Consulting (Canada) Inc., October 31,
2017
Classification |
Quantity (‘000 t) |
Grade Gold(g/t) |
Contained MetalGold (‘000 oz) |
Proven Mineral Reserve |
|
Underground |
- |
- |
- |
Total Proven |
- |
- |
- |
Probable Mineral Reserve |
|
Underground |
395 |
8.88 |
113 |
Total Probable |
395 |
8.88 |
113 |
- Mineral reserves are included in the mineral resources. All
figures have been rounded to reflect the relative accuracy of the
estimate. Mineral reserves are based on a cut-off value of 3.72 g/t
gold (4.28 g/t including 15% dilution) assuming a gold price of
US$1,250/oz, a C$:US$ exchange rate of 1.25:1:00, milling
recoveries of 96%, royalty of 4.55%, and operating cost of C$171/t.
Mineral reserves are stated at a mill feed reference point and
include for diluting materials and mining losses.
About McEwen Mining
McEwen has the goal to qualify for inclusion in
the S&P 500 Index by creating a profitable gold and
silver producer focused in the Americas. McEwen’s principal
assets consist of: the San José mine in Santa
Cruz, Argentina (49% interest); the El Gallo Gold mine
in Mexico; the Black Fox mine in Timmins, Canada; the
Gold Bar mine in Nevada, currently under construction; and the
large Los Azules copper project in Argentina, advancing
towards development.
McEwen has a total of 337 million shares outstanding. Rob
McEwen, Chairman and Chief Owner, owns 24% of the shares.
Footnotes
(1) |
'Gold
Equivalent Ounces' are calculated based on a 75:1 gold to silver
ratio. |
(2) |
The San
José Mine is 49% owned by McEwen Mining Inc. and 51% owned and
operated by Hochschild Mining plc.All dollar amounts are US
Dollars |
|
|
Reliability of Information Regarding San
JoséMinera Santa Cruz S.A., 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 InformationThe
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
Administrators National Instrument 43-101 "Standards of Disclosure
for Mineral Projects".
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. 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, 2017 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.
Mihaela IancuInvestor Relations(647) 258-0395 ext
320info@mcewenmining.com |
Facebookfacebook.com/mcewenrob
Websitewww.mcewenmining.com
Twittertwitter.com/mcewenmining |
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1J9(866) 441-0690 |
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