Reports Q2 2018 Production Results
Toronto, July 17, 2018 AEST (ABN Newswire) - McEwen Mining Inc. (
NYSE:MUX) (TSE:MUX) reports consolidated production for Q2 2018 of 36,959 gold ounces and 772,432 silver ounces, or 47,258 gold equivalent ounces(see Footnote 1 below)("GEOs"), using a 75:1 gold to silver ratio.
Consolidated Production Summary --------------------------------------------------------------------- Q2 '18 Q1 '18 Q4 '17 Q3 '17 Q2 '17 Gold ounces 36,959 35,069 48,609 19,051 22,191 Silver ounces 772,432 695,651 926,739 749,749 779,487 GEOs 47,258 44,344 60,965 29,047 32,584 ---------------------------------------------------------------------
Highlights of the second quarter from our four mines including our newest mine in Nevada, which is under construction, are as follows:
Gold Bar Mine, USA (100%)
Construction activities at Gold Bar focused on the heap leach pad, and installation of the crushing and process facility. All major equipment and bulk materials are either on site or purchased. Engineering for the project is complete and approximately 90% of contracts are awarded. Construction is advancing on schedule for completion by the end of 2018, targeting production in Q1 2019. During the first three years of operation beginning with 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 14,055 GEOs, in line with our full year production guidance for 2018 of 48,000 GEOs. A $15 million exploration program is ongoing across the Black Fox Complex, drilling results and other developments will be released quarterly, with the next update planned in the coming weeks.
El Gallo Mine, Mexico (100%)
El Gallo produced 10,808 GEOs, in line with our budget and full year production guidance for 2018 of 32,000 GEOs. By the end of Q2, mining and crushing activities ceased and contractor equipment has been demobilized from the mine site. Closure, reclamation and residual heap leach activities are ongoing and will continue for several years.
A new Preliminary Economic Assessment (PEA) study on the potential restart of production from the El Gallo Complex at some point in the future was published on July 9, 2018. The proposed development plan evaluated in the PEA is called Project Fenix. The key outcomes of Project Fenix include an average annual production rate of 47,000 ounces gold equivalent (AuEq), a 12-year mine life, low initial capital cost of $41 million for Phase 1 and $30 million for Phase 2, and pay-back period of 4.1 years. At current gold and silver prices the after-tax internal rate of return (IRR) is 28%, and the net present value (NPV) at a 5% discount rate is $60 million.
Capital cost estimates for Project Fenix are to a level of accuracy that is consistent with a PEA technical report. During the next 14 months we will continue to review mineral processing, mine sequencing, material transportation and tailings storage options; and the flow sheet will be optimized by undertaking trade-off studies, updating cost models and additional metallurgical testwork.
The PEA is available for review on our website and SEDAR (http://www.sedar.com).
San José Mine, Argentina (49%(see Footnote 2 below))
Our attributable production from San José was 12,139 gold ounces and 769,197 silver ounces, for a total of 22,395 GEOs. Production is on-track to achieve our full year guidance for 2018 of 91,000 GEOs. We received approximately $2.4 million in dividends from our interest in San José during Q2.
First Quarter Financial Results
Operating costs for the quarter ended June 30, 2018 will be released with our 10-Q Quarterly Financial Statements in early August. As of July 9, 2018 we are debt-free with liquid assets of approximately $30 million.
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
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 Inc
McEwen Mining (NYSE:MUX) (TSE:MUX) is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. McEwen Mining also holds a 48.3% interest in McEwen Copper, which is developing the large, advanced-stage Los Azules copper project in Argentina. The Company's goal is to improve the productivity and life of its assets with the objective of increasing the share price and providing a yield. Rob McEwen, Chairman and Chief Owner, has a personal investment in the Company of US$225 million.
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