McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is
pleased to extend a warm welcome to all our new shareholders,
provide production guidance for 2021 of an expected
141,000
to 160,400 gold equivalent ounces (GEOs)(1), and discuss
one of our most valuable yet under-appreciated assets, the Los
Azules copper project. Beyond the potential of our gold and silver
assets, Los Azules provides MUX with large indirect exposure to the
growth of the electric vehicle market, renewable energy and the
continuing urbanization of Asia.
“I wish to extend a
warm welcome to all of our new shareholders. Some
of you may not be familiar with our 100%-owned Los Azules project.
According to a study (Preliminary Economic
Assessment published in
2017(2)), it has
the potential to generate strong returns at a $3.00/lb copper
price. Here are some of the highlights: a 36-year mine
life; Capex of $2.4 Billion, a payback in 3.6 years; and
annual production in the first 13 years of 410 Million lbs of
copper at a cost of $1.14/lb. You may be interested to learn that
in terms of value, using today’s metal prices of gold at $1,834/oz,
silver at $26.17/oz and copper at $3.51/lb, that approximately 522
lbs of copper are equal to 1 oz of gold or 70 oz of silver, and 7.5
lbs of copper are equal to 1 oz of silver.
Los Azules does not have reserves, but it has Indicated
and Inferred resources of:
|
Tonnes (Millions) |
Average Grade |
Contained Metal |
Cu % |
Au g/t |
Mo % |
Ag g/t |
Cu lbs Billions |
Au oz Millions |
Mo lbs Millions |
Ag oz Millions |
Indicated |
962 |
0.48 |
0.06 |
0.003 |
1.8 |
10.2 |
1.7 |
57.3 |
55.7 |
Inferred |
2,666 |
0.33 |
0.04 |
0.003 |
1.6 |
19.3 |
3.8 |
194.0 |
135.4 |
Cu = copper, Au = gold, Mo = molybdenum, Ag =
silver
General Motors recently announced that
it will be aggressively shifting to electric vehicles, producing 30
new electric models within 4 years, and producing only electric
vehicles by 2035, which may be followed by the other auto
manufacturers and create an increased demand for copper and other
metals.
Plans for Los Azules
We are concurrently working on two
alternatives to fund the advancement and development of Los Azules.
One alternative is to joint venture with a senior industry player
to bring the project into production. The other alternative is to
spin out Los Azules into a separate company and raise funds for it
to aggressively advance the project towards a production decision.
With the increasing copper price, we have received a heightened
level of interest in Los Azules from major mining
companies.
Production Guidance
We are forecasting our 2021 gold
equivalent production to be in the range
of 141,000 to 160,400 gold equivalent ounces
(GEOs) using a gold:silver ratio of 75:1. These production levels
represent a 21% to 38% improvement over 2020. The table below
provides the forecast production by mine site.
Operations Status
The turnaround at our operations is the
result of new leadership in our senior executive and operations
teams. At our Fox Complex in Timmins, we have a well-funded
exploration program underway following on our successful
exploration results from 2018-2020. Also, we are completing the
access ramp to the Froome deposit in late Q1 and expect to reach
commercial production in Q4.
In Mexico, we have recently announced
the Feasibility Study for the
Fenix(3)
gold-silver project, which at $1,800/oz gold and $25/oz
silver generates a 51% After-Tax IRR, $90.8 million NPV@8% and a
2.9 years payback, with average annual production
of 26,000 (4) oz gold
in Phase 1 and 4,200,000 (5) oz silver
equivalent in Phase 2.
In Argentina, our San
José Mine is a
high-grade silver and gold producer with a large property package
that nearly encircles Newmont’s rich Cerro Negro mine,”
commented Rob McEwen, Chairman and Chief Owner.
2021 Production Guidance
|
2021 Guidance Range |
Total Production |
|
Gold (oz) |
110,500 – 127,900 |
Silver (oz) |
2,300,000 – 2,450,000 |
GEOs(1) |
141,000 – 160,400 |
San José Mine, Argentina (49%)(6) |
|
Gold (oz) |
41,500 – 44,500 |
Silver (oz) |
2,300,000 – 2,450,000 |
GEOs(1) |
72,000 – 77,000 |
Gold Bar Mine, Nevada |
|
GEOs(1) |
37,000 – 45,000 |
Black Fox Mine, Canada |
|
GEOs(1) |
27,500 – 32,500 |
El Gallo Mine, Mexico |
|
GEOs(1) |
4,500 – 5,900 |
Notes:(1) 'Gold Equivalent
Ounces' are calculated based on an assumed gold to silver price
ratio of 75:1.(2) Download the Los Azules PEA
(2017) report here:
https://s21.q4cdn.com/390685383/files/technical_reports/los_azules/LosAzulesPEA_Rev0_20171016.pdf(3) Refer
to our news release dated December 31, 2020 for
details.(4) Estimated 26,000 oz Au per annum
production assumes full production from years 1 to
5.(5) All references to silver equivalent are
based on an 88 Ag oz to 1 Au oz ratio. For Phase 1 silver accounts
for 2% of total production. For Phase 2 gold accounts for
approximately 9% of total production. Average annual AgEq
production is from years 5 to 9.5.(6) The San José
Mine is 49% owned by McEwen Mining Inc. and 51% owned and operated
by Hochschild Mining plc.
Technical InformationThe
technical content of this news release has been reviewed and
approved by Peter Mah, P.Eng., COO of McEwen Mining and a Qualified
Person as defined by Canadian Securities Administrators National
Instrument 43-101 "Standards of Disclosure for Mineral
Projects."
The technical information in this news release related to
resource estimates has been reviewed and approved by Luke Willis,
P.Geo., McEwen Mining’s Director of Resource Modelling and
Qualified Person as defined by Canadian Securities Administrators
National Instrument 43-101 "Standards of Disclosure for Mineral
Projects."
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.
CAUTIONARY NOTE TO US INVESTORS
REGARDING RESOURCE ESTIMATIONMcEwen Mining presently
prepares its resource estimates in accordance with standards of the
Canadian Institute of Mining, Metallurgy and Petroleum referred to
in Canadian National Instrument 43-101 (NI 43-101). These standards
are different from the standards permitted in reports filed with
the SEC under Industry Guide 7 (“Guide 7”). Under NI 43-101, McEwen
Mining reports measured, indicated and inferred resources,
measurements which are generally not permitted in filings made with
the SEC under Guide 7. The estimation of measured and indicated
resources involve greater uncertainty as to their existence and
economic feasibility than the estimation of proven and probable
reserves. U.S. investors are cautioned not to assume that any part
of measured or indicated resources will ever be converted into
economically mineable reserves. The estimation of inferred
resources involves far greater uncertainty as to their existence
and economic viability than the estimation of other categories of
resources. Inferred Mineral Resources could be upgraded to
Indicated Mineral Resources with continued exploration. Therefore,
U.S. investors are also cautioned not to assume that all or any
part of inferred resources exist, or that they can be legally or
economically mined.
Canadian regulations permit the disclosure of
resources in terms of “contained ounces” provided that the tonnes
and grade for each resource are also disclosed; however, under
Guide 7, the SEC only permits issuers to report “mineralized
material” in tonnage and average grade without reference to
contained ounces. Under Guide 7, the tonnage and average grade
described herein would be characterized as mineralized material. We
provide such disclosure about our properties to allow a means of
comparing our projects to those of other companies in the mining
industry, many of which are Canadian and report pursuant to NI
43-101, and to comply with applicable disclosure requirements.
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, effects of the COVID-19 pandemic, 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, 2019 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.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and
explorer focused in the Americas with operating mines in Nevada,
Canada, Mexico and Argentina. It also owns a large copper deposit
in Argentina.
CONTACT INFORMATION: |
|
Investor Relations:(866)-441-0690 Toll
Free(647)-258-0395Mihaela Iancu ext.
320info@mcewenmining.com |
Website:
www.mcewenmining.comFacebook: facebook.com/mcewenminingFacebook: facebook.com/mcewenrobTwitter:
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