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Post by Entendance on Feb 5, 2021 9:36:28 GMT -5
McEwen Mining Announces Fox Complex Growth Funding Secured by Registered Direct Offering
February 5, 2021
TORONTO, Feb. 05, 2021 -- McEwen Mining Inc. (the “Company” or “McEwen”) (NYSE and TSX: MUX), announces an oversubscribed registered direct offering with several existing and new institutional investors for the sale of an aggregate of 30,000,000 shares of common stock at a purchase price of $1.05 per share (the “Offering”).
“The timing of this offering was critical for two reasons: 1. It completes the funding required to bring the Froome deposit into production later this year. Froome is our production bridge to the future growth of the Fox Complex, where we see potential for higher gold production, lower cost per ounce and a longer mine life; and 2. It will strengthen our balance sheet and working capital position, which will help address our going concern note and debt covenants,” commented Rob McEwen, Chairman and Chief Owner.
Cantor Fitzgerald & Co. and Roth Capital Partners are acting as exclusive co-lead placement agents for the Offering in the United States and internationally (except Canada).
The Offering is expected to close on February 9, 2021 and is subject to customary closing conditions, including approvals from the TSX and the NYSE.
The shares of common stock described above are being offered in the United States pursuant to an effective “shelf” registration statement (File No. 333-224476) that was filed with the Securities and Exchange Commission (the “SEC”) and was declared effective by the SEC on July 6, 2018. The securities may be offered only by means of a prospectus. A prospectus supplement and the accompanying prospectus will be filed with the SEC. The prospectus supplement and accompanying prospectus, when filed, will be available on the SEC’s website at www.sec.gov and may also be obtained from Cantor Fitzgerald & Co., Attention: Capital Markets, 499 Park Ave., 6th Floor, New York, New York 10022, or by telephone at (212) 829-7122, or by e-mail at prospectus@cantor.com, and from Roth Capital Partners at 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660, (800) 678-9147.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. 
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Post by Entendance on Feb 9, 2021 16:45:21 GMT -5
McEwen Mining: Registered Direct Offering of Common Stock Completed & Closed
TORONTO, ONTARIO, February 9, 2021 – McEwen Mining Inc. (the “Company” or “McEwen”) (NYSE and TSX: MUX), reports that it has closed the previously announced registered direct offering of common shares foraggregate gross proceeds of US$31.5 million. “I deeply regret being in a position where we had to finance at this price, a price well below what I believe to be our real value. However, the timing of this financing was critical for two key reasons: One, it completes the funding required to bring the Froome deposit into production later this year. Froome is our production bridge to the future growth of the Fox Complex, where we see potential for significantly higher gold production, lower cost per ounce and a much longer mine life; and Two, it strengthens our balance sheet and working capital position, which will help address our going concern note and debt covenants.
I do take some solace from the fact that there was big demand for the offering, of over $120 million, and this is an expression of confidence by investors in our company’s future,” said Rob McEwen, Chairman & Chief Owner.Cantor Fitzgerald & Co. and Roth Capital Partners, LLC acted as exclusive co-placement agents for the Offering in the United States and internationally (except Canada).
The shares of common stock described above were offered in the United States pursuant to an effective “shelf” registration statement (File No. 333-224476) that was filed with the Securities and Exchange Commission (the “SEC”) and declared effective on July 6, 2018, and a prospectus supplement dated February 5, 2021. The prospectus supplement and accompanying prospectus are available on the SEC’s website at www.sec.gov and may also be obtained from Cantor Fitzgerald & Co., Attention: Capital Markets, 499 Park Ave., 6th Floor, New York, New York 10022, or by telephone at (212) 829-7122, or by e-mail at prospectus@cantor.com, and from Roth Capital Partners at 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660, or by telephone at (800) 678-9147. |
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Post by Entendance on Feb 16, 2021 17:54:19 GMT -5
McEwen Mining: Fenix Project Feasibility Study Report Filed
February 16, 2021
McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) (“McEwen” or the “Company”) is pleased to announce the filing of a technical report prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), for its 100%-owned Fenix Project (the “Project”), which is located in the State of Sinaloa, Mexico. The technical report is available on SEDAR under the Company's profile at www.sedar.com 
“The Fenix Feasibility Study envisions a 9.5-year mine life with an attractive after-tax IRR of 28% using $1,500/oz gold and $17/oz silver. At $1,800/oz gold and $25/oz silver the project generates a 51% After-Tax IRR and a $91 million NPV@8% .
The project will incorporate an environmentally progressive method of tailings management, using in-pit storage that creates multiple benefits such as improved safety, smaller environmental footprint, lower capital and operating costs, and improved reclamation outcomes.
Average annual production is projected at 26,000 (1 ) oz gold in Phase 1 and 4,500,000 (4 ) oz silver equivalent in Phase 2. The critical path environmental permits are in hand for the first phase of production. In addition, the El Gallo Complex infrastructure remains in place, as well as an established, well-experienced local workforce. Our next steps will involve detailed engineering, assessment of procurement options, and the evaluation of financing alternatives,” said Rob McEwen, Chairman and Chief Owner.
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Post by Entendance on Feb 23, 2021 5:18:50 GMT -5
McEwen Mining: Gold Bar Updated Feasibility Study Report Filed -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) (“McEwen” or the “Company”) is pleased to announce the filing of an updated technical report prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), for the Gold Bar Mine (the “Feasibility Study” or “FS”). The technical report is available on SEDAR under the Company's profile at www.sedar.com 
Financial Analysis
The FS Base Case using a gold price assumption of $1,500/oz generates a life-of-mine (LoM) discounted after-tax value of $55.2 million at an 8% discount rate. A summary of key economic metrics is provided in Table 1.Over the 6-year mine life, production will total 17.2 million tons of ore at a diluted gold grade of 0.025 oz/t (0.84 g/t) for a total payable gold of 302,000 oz as at Dec. 1st, 2020. A summary of the gold production for the 6-year mine life included in the FS is described in Table 2.
BackgroundIn Q1 2020, the Company reported that a significant reduction in contained ounces at Gold Bar was likely. Since that time significant work, as described below, has been completed to determine the extent of the reduction and mitigate it. To provide perspective on the changes that have occurred at Gold Bar, consider that in 2019, when we started mining, the Reserve estimate was 430,000 gold ounces. Cumulative mine production through December 2020 was 58,600 gold ounces, and the Reserve estimate announced today is 302,000 gold ounces. The net reduction of 16%(3) is driven by improvements to the geologic model, metallurgical recovery, additional drilling information, and higher gold prices.
Work completed in 2020 to arrive at the updated resource and reserve estimates:
110,500 feet (33,700 m) of drilling and additional metallurgical testing was incorporated into the Resource and Reserve estimates. The drilling program included 64,000 feet (19,500 m) at the Pick deposit and 35,000 feet (10,700 m) at Gold Bar South (“GBS”). An ongoing drill program at the Gold Ridge deposit (“Ridge”) with 13,000 feet (4,000 m) drilled to date will be incorporated in a future resource update.
The Pick, Ridge, Cabin, and GBS geological models and resource estimates were updated by McEwen Mining technical staff. The geologic interpretations were updated to include structural modeling for all deposits. All resource and reserve estimates were subject to independent third-party review for quality assurance.
Experts in the field of heap leach technology were engaged to review ore processing and recommended improvements based on test work and site observations, which include ending agglomeration, revised recovery estimates for all resources, and categorization of resources based on metallurgical attributes and clay content.
Metallurgical testing is underway to assess an expected increase in leaching of run-of-mine (ROM) ores and its potential to improve the economics.
Mining and Processing
The FS calls for oxide ore to be mined from three open pits and transported by 100-ton haul trucks to be processed, either by crushing and conveying to the heap leach pad, or by using trucks to place run-of-mine (ROM) ore on the heap leach pad. The study assumes the continued use of a contract mining fleet. The existing adsorption-desorption recovery (ADR) carbon plant will continue to produce a final gold-silver doré product.
A summary of the design criteria for the FS are provided in Table 3.
Explanation of Variances
The 2020 FS update generates an NPV@8% of $55.2 million using a gold price of $1,500/oz and of $149.2 million for a gold price of $1,900/oz(5). The NPV estimates provided on January 7th, 2021 were in the range of $62 to $76 million using a gold price of $1,500/oz and of $150 to $170 million for a gold price of $1,900/oz. The estimates provided on January 7th were based on the most accurate and complete information available to management at the time. The FS economic model was adjusted, including a reduction of 1,500 oz in the planned placed ounces, and an increase of $0.09/ton in fuel cost based on haulage simulations.
Resources and Reserves
Updated Resource and Reserve Estimates are provided in Tables 4 to 6.
Notes:
1) NPV is discounted to December 1, 2020.
2) Table 2 excludes production in Dec. 2020 and from residual leaching in 2028.
3) Mine Past Production (58,600 oz Au) + Current Reserves (302,000 oz Au) = 360,600 oz Au is 16.1% lower than 430,000 oz Au
4) 2020 FS assumes 78% for crushed oxide, 50% for crushed mid-carb., 72% for Pick/Ridge ROM, and 61% for GBS ROM.
5) Upside Case gold price used in the 2020 FS is $1,800/oz. NPV at $1,900/oz gold is provided for comparison to the Jan. 7th, 2021 disclosure only.
6) Mineral Resources were estimated at a price of $1,725/ounce Au and are inclusive of Mineral Reserves. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into a Mineral Reserves estimate. Mineral Resources were estimated using the guidelines set out in the CIM Definition Standards for Mineral Resources. Mineral Resources as stated are contained within an optimised pit shell that demonstrates reasonable prospects for eventual economic extraction.
7) Numbers in the tables have been rounded to reflect the accuracy of the estimates and may not sum due to rounding.
8) The Inferred Mineral Resource in these estimates has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration. Quantity and grade of reported Inferred resources are uncertain in nature and there has been insufficient exploration to classify these Inferred resources as Measured or Indicated.
9) Reserves were estimated at a price of $1,500/ounce Au and are contained within an engineered pit design based on a Lerch Grossman Algorithm.
CAUTIONARY NOTE TO US INVESTORS REGARDING RESOURCE ESTIMATION
McEwen 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.
TECHNICAL INFORMATION
The 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 and reserve 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." More here
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Post by Entendance on Mar 10, 2021 18:18:21 GMT -5
“2020 was a brutal year but we more than survived and have come out stronger from it. The ‘Going Concern Note’ has been removed from our financial statements; we released two feasibility studies that shows the potential to extend the life of our Mexican operations by 9.5 years, and outlines a 6-year life for our Gold Bar mine, which recovered from what was tantamount to a near-death experience for the operation in early 2020. The future of our Fox Complex is becoming more visible. Access to the Froome deposit is nearly complete and commercial production is planned to start in Q4. This will extend the life of the Black Fox mine by 2.5 years, providing a bridge to our second phase of growth at Fox, which we will unveil in Q2. Given our large gold resource base in the Timmins area, we expect it to support a potential ten-year mine life with annual production of 100-150,000 ounces of gold.
Our recent financings in late 2020 and early 2021 were met with huge market demand and more importantly have supplied us with adequate funds for our key development projects and exploration programs in 2021. We currently have liquid assets of $49 million! Finally, we extended the maturity date of our debt from August 2021 to August 2023, with a supportive lending partner.
Beneficial developments that we welcomed, but were beyond our control, were the massive increases in the prices of silver and copper and the resultant increase in the values of our silver and copper assets. For example, using the current price of copper in the financial model from our 2017 Preliminary Economic Assessment of Los Azules, we arrive at a Net Present Value, discounted at 8%, of approximately $5 billion. In respect of the potential value of our silver assets, if we combine the San José mine and the Fenix Project, it could potentially represent a medium-sized silver producer. One investment banker we spoke to suggested the value of such a company could be a minimum of $140 million. We believe that there is significant value to be realized by spinning these assets out in two separate vehicles. In this manner we could raise the necessary capital to advance these properties, while maintaining a large shareholding. I believe that the shares of these new companies will grow in value along with the growth in demand for these metals, on the back of the green technology movement. Specifically, the electrification of transportation, renewable energy technologies and the continuing urbanization of Asia and Africa.
While I am deeply pained by our awful financial performance in 2019 and 2020, I recognize that those years are behind us and the past cannot be changed, but we can and are shaping a better future. This year will not be stellar as we continue to fix operating issues and continue to invest in exploration and business systems - the foundations for a strong mining company. Looking beyond this year, myself and our entire senior management team, many of which are new hires, feel very optimistic about the company’s growth and are committed to delivering it to you!
Let me leave you with one last thought. As you know our stock symbol is MUX and here is what we are striving to make it mean – Motivated, United, Xceptional” commented Rob McEwen, Chairman & Chief Owner...
McEwen Mining Inc. (MUX)
FORM 10-K | Annual Report
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Post by Entendance on Mar 15, 2021 15:16:24 GMT -5
MCEWEN MINING: Disruption of Mexican Operation
March 15, 2021
TORONTO, March 15, 2021 - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reports that activities at its El Gallo Project in Mexico have been temporarily suspended as the result of an illegal blockade of the main access to the property by members of nearby communities. Certain individuals involved in the blockade believe that the annual payments and infrastructure improvements made to the local communities should increase significantly. El Gallo has operated harmoniously with the local communities since mining started in 2012, having demonstrated a long-standing track record of supporting local communities. In this context, the current situation is surprising. The site remains minimally staffed to maintain appropriate safety and security, and the environmental systems. McEwen Mining is negotiating for a peaceful resolution to the issues.
El Gallo has been residual heap leaching since Q3 2018 and is expected to contribute 3-4% to the Company’s gold equivalent production in 2021.
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Post by Entendance on Mar 29, 2021 10:57:44 GMT -5
McEwen Mining: Normal Operation Restored in Mexico
TORONTO, March 29, 2021 - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to report that activities at its El Gallo Project in Mexico have been restored following successful resolution of the concerns raised by members of the nearby communities. A new 10-year agreement has been reached providing additional support to the communities and greater long-term certainty for the El Gallo operation.
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Post by Entendance on Apr 13, 2021 6:16:06 GMT -5
McEwen Mining: Additions to Senior Management
TORONTO, April 13, 2021 - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to announce two senior management additions: Stephen McGibbon has joined as the Executive Vice President of Exploration; and Ruben Wallin has joined as the Vice President of Environment, Health, Safety & Sustainability.
“I am very pleased to welcome Steve and Ruben. With these additions we are reuniting proven performers. Peter Mah, our COO, and I worked closely with Steve at Goldcorp Inc. and both were an important part of the team that made Goldcorp’s Red Lake mine such a resounding success. Peter also worked with Rubin as part of the senior management team that built the very profitable Victor diamond mine owned by De Beers.” stated Rob McEwen, Chairman and Chief Owner of McEwen Mining.
Stephen McGibbon is a Professional Geologist with extensive exploration, mine production and senior management experience throughout North America. Stephen was a senior member of the team that discovered Goldcorp’s “High Grade Zone” deposit in Red Lake, which lead to one of the most profound mining company transformations of the last 25 years. Since 2006 and until recently, Stephen enjoyed continued success at Premier Gold Mines that included key asset purchases and exploration success in Nevada and Mexico, while also revitalizing the historic Geraldton mining camp with the Hardrock Project, one of Canada’s largest 21st century gold discoveries.
“I’m excited to be welcomed into MUX, where an important transformation is underway,” commented Mr. McGibbon. “My experience dovetails extremely well with the MUX team, and I trust that my skills, confidence and commitment to this transformation will strengthen the Company’s ability to deliver market-moving results going forward.”
Mr. Wallin is an environment and sustainability professional with more than 30 years of experience in the global mining industry. He has broad corporate and operational management experience in the areas of environment, health and safety, community relations, government relations, permitting and tailings management. Mr. Wallin has worked extensively throughout the Americas and Africa during his career and is experienced in current global industry standards and best practices. In Canada, he has been involved in the successful operation of the Detour Lake Mine, the Canadian Malartic Mine and the Victor Mine. Before joining McEwen Mining, Mr. Wallin held the position of Vice President of Environment and Sustainability for Detour Gold Corporation.
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Post by Entendance on Apr 19, 2021 7:10:45 GMT -5
April 19, 2021
McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reports consolidated production for Q1 2021 of 23,300 gold ounces and 493,200 silver ounces, or 30,600 gold equivalent ounces(1)(GEOs), compared to 35,100 GEOs in Q1 2020. All operations delivered production in line with budget. Production is expected to increase over the balance of the year and to be 20-40% greater than 2020.
Fox Complex, Timmins, Canada (100%)Black Fox produced 5,200 GEOs during the period, compared to 8,300 GEOs in Q1 2020. Mining at Black Fox has begun transitioning to the Froome deposit, where a progressive ramp-up is planned through Q3, with commercial production expected in Q4. At the Stock property, surface exploration is underway with four drills at the Stock West target, and one drill at the historic Stock Mine. A Preliminary Economic Assessment (PEA) to expand the production from the Fox Complex will be released late in Q2. The exploration budget for 2021 is $9 million.San José Mine, Santa Cruz, Argentina (49% ( 2) )During Q1, San José produced 9,500 gold ounces and 492,300 silver ounces, for a total of 16,700 GEOs, compared to 14,900 GEOs in Q1 2020. The Company received $5 million in dividends during the quarter. San José performed well after a challenging 2020 that was impacted by COVID-19 restrictions. In 2021, the exploration budget is $10 million.
Gold Bar Mine, Nevada (100%)
During the quarter, Gold Bar produced 7,400 GEOs, compared to 9,100 GEOs in Q1 2020. Updated resource and reserve estimates were completed. Production in Q2 is expected to be higher than Q1. The exploration budget for 2021 is $5 million and will be focused on testing for near-mine targets and on further defining oxide resources on the neighbouring Tonkin property.El Gallo Project, Sinaloa, Mexico (100%)In Q1, El Gallo produced 1,300 GEOs from residual leaching of the heap leach pad. Operations were briefly disrupted by a blockade of the mine entrance by members of the local community, which has been resolved. A new 10-year agreement has been reached between the El Gallo operation and the neighbouring communities.COVID-19 Update
The worsening COVID-19 infection rate in Ontario is being closely monitored; to date it has not had a material impact on operations or exploration activities at the Fox Complex.Financial Results
Operating costs for the quarter ended March 31, 2021 will be released with our 10-Q Quarterly Financial Statements. Our next quarterly management conference call will occur on Monday, May 10th at 11:00 am EDT to discuss the Q1 2021 results.
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Notes:
(1) 'Gold Equivalent Ounces' are calculated based on a gold to silver price ratio of 68:1 for Q1 2021, 94:1 for Q1 2020, 86:1 for the FY 2020 and 75:1 for 2021 Production Guidance.
(2) The San José Mine is 49% owned by McEwen Mining Inc. and 51% owned and operated by Hochschild Mining plc.
Technical Information
The 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."
Reliability of Information Regarding San José
Minera 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.
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Post by Entendance on May 8, 2021 3:28:02 GMT -5
May 7, 2021 Conference Call and Webcast: Monday, May 10 th , 2021 at 11:00 am EDT
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Post by Entendance on May 10, 2021 5:57:41 GMT -5
May 10, 2021 McEwen Mining Reports Upbeat Exploration & Delineation Results Including true width intervals of 6.08 g/t Au over 25.7 m at Stock West, 3.40 g/t Au over 24.3 m at Gold Bar, and 62.5 g/t Au & 5,571 g/t Ag over 2.0 m at San JoseTORONTO, May 10, 2021 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to report strong exploration results from the ongoing drilling at the Stock West project near Timmins, Ontario. The Stock West target, initially discovered in late-2019, is being drill-tested as part of a fully funded two-year $20 million exploration and delineation program at the Fox Complex. Drilling is designed to support a Preliminary Economic Assessment (PEA), currently underway, to evaluate the potential of expanding mining operations. The Company is also pleased to update progress on the $5 million drilling program at the Gold Bar mine property near Eureka, Nevada, where encouraging new results support our confidence in the geological and mineral resource model driving operational improvement. A new drill result from the San Jose Property in Argentina may have meaningful implications for ongoing exploration.
Stock West Drilling, OntarioA total of 57 holes have been completed at the Stock West target since August 2020. The majority of these are designed to support litho-structural modeling and expand or infill an ongoing mineral inventory estimate. Encouraging new assay results (across true widths) from the 2020-2021 second exploration phase include the following:
8.43 g/t Au over 14.3 m including 23.68 g/t Au over 1.1 m – hole S20-138a
6.76 g/t Au over 15.6 m including 43.00 g/t Au over 0.4 m – hole S20-148
6.08 g/t Au over 25.7 m including 28.30 g/t Au over 0.6 m – hole S20-149
6.21 g/t Au over 19.0 m – hole S20-154
3.80 g/t Au over 7.3 m – hole S21-157
For several holes, some of which contain visible gold (VG), assay results that are pending. Figure 1 provides a longitudinal section view of the multiple target areas at Stock. Figure 2 focuses on Stock West with a longitudinal view of the mineralization showing the pierce points of the various intercepts detailed in Table 1.
Figure 1: www.globenewswire.com/NewsRoom/AttachmentNg/d7f7f562-351a-41e3-a51e-aaf8ea22c326
Data from the current drilling campaign is being integrated into the geological and resource models. For a complete list of drilling results at Stock West since August 2020, please visit www.mcewenmining.com.
Figure 2: www.globenewswire.com/NewsRoom/AttachmentNg/075f1df3-449f-470d-9460-21bae5c44bb2
Executive Vice President (Exploration) Stephen McGibbon commented: "The recent drilling results from Stock West are less than 1/3 of a mile (500 m) from our Fox Complex mill and are a great example of the near-term growth opportunities that will augment the Company's strategic decision-making over the next two years."
Table 1 - Highlight drill intercepts from the 2020-21 program at Stock West
Mineralization at Stock West is characterized by a bright-green fuchsite-ankerite alteration. This alteration system has now been traced over a 1,600-foot (500-meter) segment of the east-west trending structural corridor. It currently remains poorly tested for two miles (3 km) to the west and below 2,000 feet (600 meters) vertical depth.
Modeling efforts indicate that mineralization shows continuity that may represent an attractive mineable body. This is being evaluated in the upcoming PEA as a potential operation alongside the Grey Fox resource. The goal of the PEA is to evaluate opportunities in the district, including the Fuller and Davidson-Tisdale deposits near Timmins, to understand the potential value represented for future exploration and development work. A total of seven surface drills are active on the Fox Complex, including four at Stock West, one at Stock Main and two drills recently activated at Grey Fox. Drilling will continue during the remainder of 2021.
Gold Bar Drilling, Nevada
McEwen Mining has committed $5 million toward drilling at the Gold Bar Mine in order to delineate new mineral resources, replace mining depletion, and further de-risk the geological and metallurgical models that are the basis of future production planning. During Q1 2021, the resource model reconciliation of actual mining depletion performed within 5% on contained ounces. Recent results are summarized in Table 2 and Figure 3. Core holes drilled partly for metallurgical purposes returned strong mineralization and potentially high gold recoveries (Au:CN Ratio %) from lab-based cyanidation work.
Several holes have samples whose assays remain pending and are expected to be reported on in the near future.
The Ridge oriented core drill program successfully confirmed mineralization, locally increasing the average grade of existing resource model blocks and extending mineralization into new areas. This phase of the 2021 program consists of twenty reverse circulation holes and seven oriented core holes for a cumulative 3,417 meters.
Figure 3 : www.globenewswire.com/NewsRoom/AttachmentNg/a2898b55-a1f1-4ca1-9224-598bcc07cace
San Jose Drilling, Argentina (49% MUX)
McEwen Mining’s joint venture partner and mine operator Hochschild Mining is undertaking a $9.3 million drill program in 2021 at San Jose, of which $5.7 million is earmarked for exploration drilling of priority targets including the Escondida Vein and the Telken target (located proximal to Newmont’s Cerro Negro Mine). In Q1, 1,396 m of drilling was completed at Escondida and Telken. The Escondida Vein is a high-grade exploration target hosting both gold and silver mineralization. Recently, hole SJM-529 intersected 2.0 meters of Escondida vein material containing 62.5 g/t Au and 5,571 g/t Ag. Mineralization to-date has been outlined over a 100-meter strike length by 180-meter vertical extent. Drilling will continue during the second quarter with 1,000 meters planned for resource delineation at Escondida.
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TECHNICAL INFORMATION
Technical information pertaining to Stock West and Gold Bar geology and exploration contained in this news release has been prepared under the supervision of Ken Tylee, P.Geo., a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects." Technical information pertaining to Gold Bar geology and exploration contained in this news release has been prepared under the supervision of Kevin Kunkel, P.Geo., a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Reliability of Information Regarding San José
Minera 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. |
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Post by Entendance on May 10, 2021 13:40:05 GMT -5
McEwen Mining, Inc. (MUX) CEO Robert McEwen on Q1 2021 Results
Company Participants
Robert McEwen - Chairman, CEO, President & Chief Owner
Anna Ladd-Kruger - CFO
Peter Mah - COO
Steve McGibbon - EVP, Exploration
Conference Call Participants
Heiko Ihle - H.C. Wainwright & Co.
Jacob Sekelsky - Alliance Global Partners
Joseph Reagor - ROTH Capital Partners
John Tumazos - John Tumazos Very Independent Research
Robert McEwen Good morning, everyone, and welcome. I'm certain everyone will agree with me that 2020 was a brutal year for us. But 2021 has started off with great momentum. One, our treasury is full; two, the going concern qualification is gone from our financials; three, our exploration program is generating strong results as evidenced by today's press release; four, our mine lives and pinenes in Nevada have been extended and operations are now hitting our targets in terms of gold production, but we have much work still to do to bring our cost per ounce down; five, with the much improved copper and silver price over the last 12 months, better than the doubling in both cases. We have -- inside of the McEwen Mining, we have a silver company, QSource and Production, and we also have a very large copper deposit Los Azules, which we're looking aggressively for ways to best advance at projects.
At this point, I'd like to turn the session over to Anna to talk about our financial operations, and she'll be followed by Peter, and he'll be followed by Steve. Anna, all yours.
Anna Ladd-Kruger
Thank you, Rob, and good morning, everyone. Just going to give a brief overview of our Q1 results. Our revenue in Q1 from gold and silver sales from our 100% operated properties was just under $24 million. Average realized prices of $17.63 as compared to Q1 2020 of $31 million revenues at average realized prices of $15.91.
roduction in Q1 was 30,600 gold equivalent ounces. Predominant factors were reduced production from our 100% owned lines of which Peter Mah, our COO, will review in more detail shortly. We reported a net loss of $12.5 million or $0.03 per share. This compares to a net loss of $99.2 million or $0.25 per share in Q1 of last year.
The decrease in our net loss relates to an $84 million impairment charge recorded at Gold Bar in the comparative quarter last year. We've also had improved performance from our investment in the MSC San Jose mine in Q1 2021.
During the quarter, as Rob alluded to, our treasury is full, we completed 2 equity financings. The first one was specific raise of $12.7 million in Canadian development expenses. And the funds were specifically raised for the development of our new Froome deposit, was part of our Fox Complex in Timmins, Ontario. The second was an equity financing for gross proceeds of $31.5 million. With the completion of these raises, all of our programs are now fully funded for 2021.
In addition to this, we received $5 million in dividends in Q1 from our interest in the San Jose mine. We ended the quarter with $52.5 million in liquid assets, $81 million in current assets and a positive working capital of over $35 million. We've been very busy with our exploration program, invested $5 million in Q1. The primary focus was on growing the Fox Complex resource base. We also invested $1.8 million on the Fox Complex expansion PEA and as well as on our Fenix Project in Mexico. Steve McGibbon, our new Executive Vice President of Exploration, joined us during Q1, and he will be providing more details on our exploration program shortly.
We continue to manage our operating margins by controlling our capital expenditures and explorer contracts as well as looking to reduce our G&A cost this year. We also began implementing management systems to streamline processes and to gain further efficiency. We expect our financial performance and more specifically cost to continue to improve throughout 2021 as we ramp up our free deposit towards commercial pricing in Q4.
Given this ramp-up and the ongoing PEA study, which will have further production and cross details, we're still not in a position to provide firm cost guidance. Further, the ongoing variable restrictions in response to recent outbreaks of the new COVID-19 strains continue to create uncertainty for the mining industry. The company will provide an update on costs as soon as possible and in any event, no sooner than the release of our PEA study in late Q2.
I will now turn the call over to Peter Mah, our Chief Operating Officer. Thank you.
Peter Mah
Thank you, Anna, and good morning all. The turnaround of our operations continues to show positive signs to improve delivery, cost, and growing production from a strong pipeline of resources and discoveries sourced organically from our strategically located assets.
During Q1, we met important milestones such as the feasibility studies for the Fenix Project in Mexico and the update at the Gold Bar Mine in Nevada. We also reached an important milestone at the Froome deposit, where first ore was mined in Q1, and currently, mining is progressing as planned. All operations delivered production in line with the results and our expectations. Production is expected to increase through 2021 and achieve 20% to 40% higher than 2020.
At the San José mine in Argentina, our attributable production from the mine was 9,500 gold ounces and 492,300 silver ounces for a total of 16,700 gold equivalent ounces. Total cash costs and all-in sustaining costs were $10.88 and $13.28 per GEO, respectively, all of which compared favorably to the same period last year.
Moving on to Gold Bar in the U.S. The mine produced 7,400 gold equivalent ounces in Q1 at a total cash cost and all-in sustaining cost of $18.65 and $19.34 per GEO, respectively. Production reflects a 19% decrease from the 9,100 GEOs produced in Q1 2020. Production was impacted by decreased mining and pressure availability due to COVID quarantines, limiting available operators and winter weather hampering mining all resulted in lower gold production.
We continue to execute improvement initiatives at the Gold Bar Mine, which include improving contractor mining efficiencies while adding more equipment to accelerate production, potentially stacking more raw to reduce costs and improve throughput; and finally, adding ounces to plan with exploration drilling at Ridge, Pick and Old Gold Bar mine deposits. Production in Q2 is expected to be higher than Q1 and correspondingly cost per ounce are expected to decrease.
At the Fox Complex in Canada, we produced 5,200 GEOs in Q1 at a total cash cost and all-in sustaining of $12.62 and $15.60 per GEO, respectively. Mining at Black Fox has begun transitioning to the Froome deposit, where progressive ramp-up is planned and commercial production as expected in Q4. Cost per ounce are expected to decrease as we ramp up. They are an estimated 111,000 gold ounces in the life of mine plan at Froome with more underground exploration drilling planned aiming to extend the deposit near existing and plan mining.
In Q1, work progressed on the expansion PEA for the Fox Complex, we are targeting improved production and cost profiles leveraging the potential for operational synergies through shared resources and infrastructure. Results of the PEA are expected to be released towards the end of Q2. At El Gallo in Mexico, we produced 1,300 gold equivalent ounces from residual leaching. Operations were disrupted in March by a demonstration at the mine entrances by some of the local community members. There was overwhelming support for the company shown by the majority of the community, which helped resolve the situation and a new 10-year agreement was reached with the communities.
At losses for copper project in Argentina, Q1 work continued with preliminary engineering and developing of a cost estimate to advance the proposed low altitude all year access road. Throughout the remainder of the year, work will continue on baseline studies related to flora, fauna, surface water quality and archeology as required by the environmental and mining authorities. An estimate for a bankable feasibility study is being prepared and currently under review by the company. In addition, work will continue to identify opportunities to improve the economics of losses released with pulp or sorting technologies and other value-add alternatives.
I will now turn the call over to Steve McGibbon, the Executive Vice President of Exploration.
Steve McGibbon
Thank you, Peter. During Q1, we raised $5 million on exploration drill, we invested $5 million on exploration drilling and other exploration work. With the primary focus on growing the Fox Complex resource base. And we remain focused on our principal exploration goal of cost effectively discovering and extending gold deposits adjacent to our existing operations to contribute to near-term gold production.
At San José, the 2021 exploration budget is $10 million on a 100% basis, with 3 -- $2.3 million being spent in Q1. Recent exploration results generated by our partner and mine operator, have been encouraging, including an outstanding result from the Escondida vein of 62.5 grams per tonne gold at 5,571 grams per tonne silver over 2 meters. Some 1,400 meters of drilling were completed at Escondida and telcon targets in Q1. Escondida, we'll see a further 1,000 meters of drilling in Q2.
At Gold Bar in U.S.A., an updated resource and reserve estimate were completed. $0.9 million were spent from the $5 million exploration budget during the quarter, which is focusing on testing near-mine targets and further defining oxide resources on the neighboring Tonkin property. Drilling activities were focused primarily on the Ridge deposit in part to provide improved density and metallurgical data. Near-mine exploration during Q1 has delivered encouraging results from the North Ridge target.
The Ridge oriented drill core program successfully confirmed mineralization, locally increasing the average grade of existing resource model blocks and extending mineralization into new areas. Exploration initiatives are continuing at Ridge, where this phase of the 2021 program consists of 20 reverse circulation holes and 7 oriented core holes. Early stage geological evaluations are underway at the Old Gold Bar mine in Q2.
At the Fox Complex in Canada, exploration activities ramped up in Q1 following the funding received from our flow-through share programs, which are being used to expand high potential target areas eligible for Canadian exploration expenditures. Exploration work has been the primary focus on growing the Fox Complex resource base.
During Q1, drilling at the Black Fox Mine continued to return encouraging high-grade intercepts at depth. Underground drilling is being completed to identify additional mineralization adjacent to the Black Fox ore body where mineralization remains unconstrained in multiple directions.
The Stock West mineralized body was discovered in mid-2019. In 2020, exploration activities were focused on follow up drilling. As our press release outlined this morning, 57 holes have been completed since August 2020. A portion of these do have assays pending, including some that contain visible gold. Initial results suggest the potential to define an important new zone of mineralization 500 meters or about 0.5 mile from our Stock processing facility.
In Q1, we spent $3.4 million of a total $9 million exploration budget for the Timmins area. We contracted 4 drills at Stock to increase the density of our intercepts needed to develop a 3D model to generate an initial resource estimate for Stock West and to test and confirm historical drill results, below 300 meters of Stock Main, a total of 58,000 feet or 17,700 meters of surface exploration drilling was completed at Stock West and Stock Main with the primary focus at the Stock West mineralized zone.
Together with the PEA for the expansion of the Fox Complex, that will be released in Q2, we will update the resource of Stock East and will produce a maiden resource at Stock West. Service exploration is continuing at the Stock property with four drills at Stock West and 1 drill at the historic Stock Mine.
Robert McEwen
I just want to thank Steve and Peter for their statements and assessment of where we are we've -- we can expect for the balance of this year to get more exploration results throughout the year. We have large land packages in major gold districts of Timmins and Nevada. And we're also winning an emerging gold silver district in Southern Argentina, where San José mine. The expansion plans for our Timmins operations, where we have 3 million ounces in the indicated category where it'd be released at the end of Q2. And with the doubling of the silver and copper prices in the last 12 months, when you look at the silver mining, we have a silver company inside of through operations delivering silver. With San José mine and the Fenix Project in Mexico. And our large Los Azules copper project, we are progressively pursuing 2 alternatives right now to advance that project. It's very sensitive to the price of copper, and we're looking to monetize that value in any possible way we can. So -- and I would expect the decision there in the next few months.
Heiko Ihle, H.C. Wainwright & Co.
Two quick ones for you. In regards to the strong drilling results today at the Stock West, I mean, it looks like you have several asset results for holes, in your words not mine, some of which contain visible goal that are still pending. Any idea how long it will take for these results? And more importantly, have you encountered any results of Stock West or anywhere else for that matter, that have changed your focus of drilling for that respective site over the remainder of the year? It looks like some more assays at Gold Bar pending as well.
Robert McEwen
Peter and Steve, would you care to answer Heiko's question?
Steve McGibbon
Yes, I can chime in first on that. With respect to drill results pending, we expect to be getting a steady stream of results over time. And we are seeing that there is constraints at assay labs right now that are making that turnaround time, not as quick as we would like it to be, and we're working on opportunities to try to mitigate that somewhat.
But in general, the results that we've brought haven't changed our focus or our priorities, which ultimately are being driven by the plan and the results that will be presented in the PEA. Peter, perhaps you want to chime in?
Peter Mah
Yes. I would concur with Steve, Heiko. That's Fox Complex. We're drilling Stock West, Stock Main, Whiskey Jack, 147, Contact Zones and Gibson. Gibson has an existing decline which we would probably use to access the Whiskey Jack and the north end their Contact and 147. So those were all in the plan. Very promising, encouraging results, confirming the geologic interpretations and our business cases for the PEA.
Over at Gold Bar, Ridge was our #1 target. So we have got some great results there, continued drilling there. The next one we're going to be targeting after that is the Old Gold Bar mine. And targeting analysis of underway there and then talk and will follow, and then we'll also do some follow-up drilling and Pick. So continuing to follow the plan and really encouraging results.
Heiko Ihle
And just a quick clarification with Azules. Obviously, you're saying that cash costs and all-in sustaining are no longer key metrics that you're using, which makes sense. So you're no longer relying on disclosing cash costs, all-in sustaining costs or really anything else. Is there another metric that you would be willing to disclose? Or any more guidance you can give to us in regards to helping us estimate the cash flow from the site for the rest of the year? And any idea with a duration of how long this to come to disclosable assets? Or how to phase this disclosable asset better.
Anna Ladd-Kruger
So Heiko, this is Anna. Thanks for the question. We do provide some costs with respect to El Gallo and [indiscernible], I'm certainly happy to take this off-line to you as well. The cost to keep El Gallo is important as we look to kind of strategically decide what to do with that asset. That will come in probably the next couple of months. We continue to have a workforce there that we're keeping. We are permitted there to start our operations.
So in terms of cash flow, I would say we're pretty much breakeven in terms of the care and maintenance. But we do continue to sort of invest in seeking El Gallo along until a formal decision is made by the company on being strategic with the asset.
Jacob Sekelsky, Alliance Global Partners
Just staying in Mexico, a quick question on Fenix. I'm just curious where it stands from a capital allocation standpoint. And if you guys have any plans to move forward with the development decision there? Or just sort of your thoughts around that?
Anna Ladd-Kruger
Jake, it's Anna.
Robert McEwen
Jake...
Anna Ladd-Kruger
Go ahead, Rob.
Robert McEwen
Go ahead.
Anna Ladd-Kruger
Okay. So at the moment, we are, again, just evaluating strategic options. We will probably come to a decision on that asset in terms of how we will fund it and what the next steps are in the next couple of months, if not sooner. Rob, I didn't know if you add anything further to add on that?
Robert McEwen
No, that's covered, Anna. You covered it well.
Jacob Sekelsky
So that's probably a midyear type event that we'll see something other than that.
Anna Ladd-Kruger
That's correct, Jake.
Jacob Sekelsky
And then just switching over to Black Fox and the Timmins region in general, the hub-and-spoke strategy seems like it's coming together, with Froome coming online. But do you think there's additional M&A opportunity in the region? Or are you guys sort of comfortable with the assets in the land that you have there now?
Robert McEwen
Jake, until our currency is stronger, we're looking at building our base on a -- looking solid before we think it's stepping out.
Joseph Reagor, ROTH Capital Partners
So first thing, the dividend from MSC was pretty significant this quarter. Was that solely from this quarter? Or was there some kind of extra cash in there from previous quarters during the pandemic when maybe the -- guys over m Minera Santa being a little more conservative in holding back the cash?
Anna Ladd-Kruger
I can answer that question. Thanks for the question. So the cash received, it is a bit of both, you are right. So they held that cash for most of 2020 in light of COVID. There is a surplus there and -- so it's about a mix of both. We are certainly happy to have received the $5 million dividend. And there is a signal that there will be potentially more dividend this coming year, but it is really quite dependent on the situation in Argentina with respect to COVID. Certain things right now in terms of their operations, look like they're all back in order. But we sort of remain on hold there with respect to further dividends for the rest of 2021.
Joseph Reagor
Okay. Fair enough. And then switching gears to Gold Bar. Obviously, the cash costs were quite elevated in the quarter. I assume the plan is that as grades tick up and stacking rates tick up over the remainder of the year, we should see cash costs come down. I know you're not giving specific guidance, but is it best for us from a modeling standpoint to assume a gradual decline?
Peter Mah
Yes Joe, this is Peter. Yes, you're exactly right there. Hello? Yes. You're exactly right there. We are working to work through that strip. We talked about last year. We're getting through that releasing ore and looking at opportunity ore and including that the exploration stuff you heard earlier. So we're working towards the feasibility and beating the feasibility.
Joseph Reagor
Okay. And then one final one, if I could, on Gold Bar. From what we've been hearing, there's a lot of people looking to buy operating assets in Nevada. Is that something you would consider selling? Or do you guys consider it kind of like a flagship of the company?
Robert McEwen
Every asset has price. So as -- we're always open to suggestions, but we think our property in Nevada is large. It's on a trend where there's some major mines just above us. And we don't think there is a loss in a exploration potential there. We think there is room to grow that deposits and our Falcon projects significantly. So they have to put a sleep number in front of that.
John Tumazos, John Tumazos Very Independent Research
Rob, congratulations on the life extensions at Gold Bar. Concerning the PEA for Black Fox, I'm directing the question to Peter and Steve, I don't understand why it's the PEA when the mill entails and processing is very well defined. How much money would you have to spend to upgrade the gold resources, to determine the precise size and shape of stopes, the mine development layout resolve any uncertainties about top cuts or drill density for it to be a feasibility study, how many holes, how many dollars would that be to have a more certain mine plan?
Peter Mah
I'll start, Steve. John, it sounds like you're on the team already, in the room talking. Yes, those are all big questions. And I think that the reason why we're a PEA and combining the 3 really good project areas in the district. It was quite a challenge to assess the trade-offs and what order we could bring things in and what permitting, and we did a big gap analysis to identify all that. So we're right in the middle of running the cash flows now and answering all those questions.
So I can't really report there that will come out, obviously, with the PEA, but we plan to fast track rate to an FS and potentially, in some cases, if we can see a clear enough line of sight right towards project development and early production. And that if you recall in the past calls was our objective to see if we did identify a pathway there.
And then we like the Stock West deposit, and we like accessing the Grey Fox area through the Gibson decline, and that's what we're trying to respond to an answer. At Grey box, there's a lot of drilling has been done, but again, up above 400, 500-meter level. So there's a lot more to do. And that will be one of the outputs from the PEA.
John Tumazos
Peter, let me try another way since I'm an honorary member of the team. The year-end reserve for Black Fox was 14,000 ounces. We all know there's more gold there. Since McEwen has bought the project, there's been innumerable over 1-ounce assays often 0.5 meter or a meter narrow. How much money do you think the property merits to drill tightly, so a QP calls it reserves.
Peter Mah
Yes, I'll pass that to Steve, I can add to that, too.
Steve McGibbon
Yes. I guess, specific to Black Fox, what I would say is that as you'd be aware, we do get some very high-grade drill results. But the ore at the same time, is very, very nuggety. And we expect that in order to really be able to identify and seize on that potential that we need to undertake a significant program that probably gets our drilling centers somewhere between 5 and 8 meters to try to overcome that nuggety nature of the ore. And we can kind of confirm what that drilling is from more immediate access points, but the longer-term potential of the property will require a significant amount of drilling, of which we haven't put a final number on at this point. We're really just initially trying to target accessible areas and drill him with a density that satisfies us, but that we would reliably converting them into reserves.
John Tumazos
It's 5 to 8 meters is an impressive goal. That would certainly define the size and the shape of stopes.
Robert McEwen
Correct. I concur with Steve, and we've moved -- we're in the process of moving the production team to Froome, and that way exploration can go about carrying out the drilling and work needed without the pressure of production on their backs. And we like the west flank, we like the deeps and is there potential connection to Froome. So we're still going to be advancing that Stack project, and hopefully, coming forward with a better understanding that's minable shapes and higher grades achievable.
Thank you, everyone, for joining the call, and taking it forward to further exploration news and our PEA coming out of Timmins, and our movement on loss of business. All The best. And a very successful day. Thank you.
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Post by Entendance on Jun 19, 2021 21:37:56 GMT -5
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Post by Entendance on Jun 29, 2021 16:46:00 GMT -5
McEwen Mining Inc. is in talks to sell a stake in a copper project in Argentina as the gold and silver producer looks to tap into booming prices of the metal used in wiring.
The company run by Canadian gold veteran Rob McEwen is holding conversations with another mining company as part of a proposal that could see a portion of the copper project sold privately and then taken public within 12 months, McEwen said Tuesday.
“The market seems to prefer a pure copper play as opposed to a large copper project in a smaller precious metals company,” he said in an interview. “With the increase in copper price, there’s more interest.”
McEwen, the founder and former head of Goldcorp, is looking at ways to monetize both the copper project and certain silver assets to focus on its gold mines that missed guidance in past years, with the company forced to raise funds. He said those setbacks have now been turned around.
McEwen, 71, described Los Azules in San Juan province near the Chilean border as “one of the larger undeveloped copper projects in the world not owned by a major,” with potential annual production of more than 200,000 metric tons and a valuation in excess of $5 billion at today’s copper prices.
He expects to have a decision on the strategy for the project in the next month, adding that the would-be partner has the capability to take it through to production.
Argentina, where interventionist policies have held back mining, is now “looking a little more favorable” as authorities look to diversify from farming and politicians in Chile and Peru seek a greater share of mining profits. |
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Post by Entendance on Jul 5, 2021 11:53:30 GMT -5
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Post by Entendance on Jul 6, 2021 6:52:24 GMT -5
TORONTO, July 06, 2021
McEwen Mining Inc. (NYSE and TSX: MUX) announces a non-brokered private placement financing of up to 8,000,000 common shares of its wholly-owned subsidiary McEwen Copper Inc. at a subscription price of US$10.00 per common share, for gross proceeds of up to US$80 million (the "Offering"). McEwen Copper currently has 17,500,000 common shares outstanding.
A lead order to purchase 50% of the Offering has been committed by Rob McEwen, Chairman and Chief Owner of McEwen Mining. His investment corporation, Evanachan Limited, will purchase 4,000,000 common shares of McEwen Copper for US$40 million and is prepared to close on this portion of the Offering immediately.
Subscription for the remaining 4,000,000 common shares is available to qualified accredited investors, subject to a US$2 million minimum investment and certain other conditions. The securities sold in the Offering are private and subject to transfer restrictions until such time they become listed on a public exchange.
Pursuant to this transaction, McEwen Copper will hold a 100% interest in the Los Azules copper project in San Juan, Argentina, and a 100% interest in the Elder Creek exploration property in Nevada, subject to a 1.25% net smelter return (NSR) royalty on both assets payable to McEwen Mining.
Assuming completion of the full amount of the Offering, McEwen Mining will be the controlling shareholder and own 68.6% of McEwen Copper. The new investors, including Rob McEwen, will own 31.4%.
McEwen Copper intends to pursue an initial public listing within 12 months from the closing of this Offering. Proceeds from the Offering will be used exclusively by McEwen Copper to advance the Los Azules project to a pre-feasibility study, construction of a new year-round access road to the project, exploration drilling at Los Azules and Elder Creek, environmental permitting and community relations, and general corporate purposes.
" This is a significant and exciting moment for McEwen Mining because of the value it should release. Currently, the market appears to be giving us little value for our Los Azules copper deposit, despite its impressive size and robust economics at present copper prices. Unfortunately, the scale of the required project development expenditures would require McEwen Mining to issue a massive number of additional shares. This share dilution would not be acceptable. However, we believe that by putting our copper assets, Los Azules and Elder Creek, into a separately listed company exclusively focused on copper, we can create an attractive copper investment vehicle. It will allow us to raise the money necessary to fund progress towards the rapid development of one of the world's largest copper resources. We expect that McEwen Copper will compare very favorably to other single-asset copper developers. Within 12 months of closing this Offering we plan to take the company public. In the interim, we will be investigating ways to make a share distribution to you, MUX shareowners, of a portion of McEwen Mining’s holdings of McEwen Copper in a tax-efficient way ," stated Rob McEwen, Chairman and Chief Owner.
The proposed Offering was reviewed and approved by the disinterested members of the board of McEwen Mining. McEwen Mining will retain management direction over McEwen Copper and has engaged consultants with significant expertise and experience developing and operating copper mines in South America.
Los Azules is an advanced large-scale porphyry copper exploration project located in the prolific Andean Cordillera copper belt, 56 miles (90 km) north of Glencore’s El Pachón project and near the border with Chile. In 2017, McEwen Mining completed a positive Preliminary Economic Assessment (PEA) on the project, which is available at www.mcewenmining.com/operations/los-azules. Elder Creek is an early-stage copper-gold porphyry exploration project located in Northern Nevada 6 miles (9 km) from SSR Mining’s Marigold Mine Complex.
The Offering is expected to close by July 30, 2021.
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Post by Entendance on Jul 7, 2021 23:17:30 GMT -5
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Post by Entendance on Jul 13, 2021 6:01:39 GMT -5
July 13, 2021 McEwen Mining: Q2 2021 Production Results
TORONTO, July 13, 2021 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reports consolidated production for Q2 2021 was 31,700 gold ounces and 611,800 silver ounces, or 40,800 gold equivalent ounces(1)(“GEOs”), compared to 19,200 GEOs in Q2 2020. Overall production from our operations is on track with our previously announced 2021 production guidance.
Gold Bar Mine, Nevada (100%)
During the quarter, Gold Bar produced 14,100 GEOs, compared to 6,100 GEOs in Q2 2020.
Black Fox Mine, Timmins, Canada (100%)
Black Fox produced 7,100 GEOs during the period, compared to 2,200 GEOs for Q2 2020. Mining at Black Fox has begun transitioning to the Froome deposit, where a progressive ramp-up is planned through Q3, with commercial production expected in Q4.
San José Mine, Santa Cruz, Argentina (49% ( 2) )
During Q2, San José produced 9,300 gold ounces and 607,000 silver ounces, for a total of 18,300 GEOs, compared to 9,000 GEOs in Q2 2020. The Company received $2.5 million in dividends during the quarter.
El Gallo Project, Sinaloa, Mexico (100%)
In Q2, El Gallo produced 1,300 GEOs from residual leaching of the heap leach pad.
Financial Results
Operating costs for the quarter ended June 30, 2021 will be released with our 10-Q Quarterly Financial Statements. Liquid assets(3) as of June 30, 2021 were approximately $44 million.
Notes:
(1) 'Gold Equivalent Ounces' are calculated based on a gold to silver price ratio of 94:1 for Q1 2020, 104:1 for Q2 2020, 68:1 for Q1 2021, and 68:1 for Q2 2021.
(2) The San José Mine is 49% owned by McEwen Mining Inc. and 51% owned and operated by Hochschild Mining plc.
(3) The term liquid assets used in this report is a non-GAAP financial measure. We report this measure to better understand our liquidity in each reporting period. Liquid assets are calculated as the sum of the Balance Sheet line items of cash and cash equivalents, restricted cash and investments, plus ounces of doré held in precious metals inventories valued at the London PM Fix spot price at the corresponding period.
Technical Information
The 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."
Reliability of Information Regarding San José
Minera 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.
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.
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Post by Entendance on Jul 28, 2021 6:27:34 GMT -5
MCEWEN MINING: Q2 2021 Results Webcast
July 28, 2021
TORONTO, July 28, 2021 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) invites you to join our conference call on Thursday, August 5th, 2021, from 2:00 pm EDT, where management will discuss our Q2 2021 financial results and project developments and follow with a question-and-answer session. Questions can be asked directly by participants over the phone during the webcast.
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Post by Entendance on Aug 4, 2021 16:09:00 GMT -5
McEwen Mining Revenue of $40.7M (+122.5% Y/Y) beats by $2.05M "Our operations delivered strong production results in line with our expectations,
and we are on track to meet our 2021 production guidance of 141,000 to 160,400 GEOs."
McEwen Mining: Q2 2021 Results
August 4, 2021 McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today reported its second quarter (Q2) and first half (H1) results for the period ended June 30th, 2021.
Our operations delivered strong production results in line with our expectations, and we are on track to meet our 2021 production guidance of 141,000 to 160,400 GEOs.
We continue to execute on our turnaround strategy and have made significant progress both from an operational and a financial perspective (see Tables 1-3 here). We expect this trend to continue to the remainder of 2021, as the Froome mine at the Fox Complex reaches commercial production in Q4.
On July 6, 2021, we announced that a subsidiary that holds 100% of the Los Azules copper project will be raising financing for the continued development of that project, as well as to fund a modest exploration program for its Elder Creek copper exploration property in Nevada. McEwen Copper is seeking to raise up to $80 million in a private offering and Rob McEwen has committed the first $40 million dollars.
Our quarterly webcast will take place on Thursday, August 5th at 2 pm EDT.
Operations Update
Gold Bar Mine, USA (100% Interest)
Gold Bar produced 14,100 GEOs in Q2 at total cash costs(2) and all-in sustaining costs (AISC)(2) of $1,463 and $1,619 per GEO sold, respectively. This compares to 6,100 GEOs in Q2 2020 at total cash costs and AISC of $1,772 and $2,462 per GEO, respectively. The cost decrease is driven by the increase in production and by the significant operational improvements we have been continuing to work through over the past year. We expect to see this trend continue into the second half of 2021.
Exploration is focusing on testing near-mine targets and further defining oxide resources on the neighboring Tonkin property. During the quarter we incurred exploration expenses of $1.3 million of a total $5.0 million budget for 2021.
Fox Complex, Canada (100% Interest)
Black Fox produced 7,100 GEOs in Q2 at total cash costs and AISC of $917 and $1,088 per GEO sold, respectively. This compares to 2,200 GEOs in Q2 2020 at total cash costs and AISC of $3,121 and $3,332 per GEO, respectively. Mining has transitioned to the Froome deposit and is performing to plan, commercial production expected in Q4 2021.
We remain focused on our principal exploration goal of cost-effectively discovering and extending gold deposits adjacent to our existing operations to contribute to near-term gold production. During the quarter we incurred exploration expenses of $3.5 million of a total $9.0 million budget for 2021.
A Preliminary Economic Assessment (PEA) to expand the production from the Fox Complex is expected to be released in the second half of the year, following additional drilling and resource estimate updates at the Stock and Grey Fox properties.
San José Mine, Argentina (49% Interest)
Our attributable production from San José in Q2 was 9,300 gold ounces and 607,000 silver ounces, for a total of 18,200 GEOs(3). For Q2, total cash costs and AISC were $1,105 and $1,500 per GEO sold, respectively. This compares to 9,000 GEOs in Q2 2020 at total cash costs and AISC of $1,280 and $1,476 per GEO, respectively. In Q2 2020, operations at San José were adversely impacted by government-imposed COVID-19 restrictions.
We received $2.6 million and $7.6 million in dividends in Q2 and H1, respectively, compared to $0.3 million dividends received during the same periods in 2020.
El Gallo Project, Mexico (100% Interest)
In Q2, El Gallo produced 1,300 GEOs from residual leaching of the heap leach pad. Incremental residual leaching cost for the period was $2.7 million(4). The residual leaching activities at El Gallo are expected to wind down in early 2022.
Los Azules Copper Project, Argentina (100% Interest)
On July 6, 2021, we announced the formation of a wholly-owned subsidiary to hold the Los Azules Copper project (“McEwen Copper”) and to raise financing to advance the project to a preliminary feasibility study and to construct a road to the project providing year-round access compared to the current 5-month seasonal access window. McEwen Copper will hold the Los Azules assets as well as the Elder Creek exploration project in Nevada. McEwen Copper is seeking to raise up to $80 million in a private offering.
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Post by Entendance on Aug 6, 2021 3:02:41 GMT -5
McEwen Mining Inc. (MUX) CEO Robert McEwen on Q2 2021 Results August 5, 2021 2:00 PM ET
Company Participants
Robert McEwen - Executive Chairman and Chief Owner
Anna Ladd-Kruger - Chief Financial Officer
Peter Mah - Chief Operating Officer
Steve McGibbon - Executive Vice President of Exploration
Conference Call Participants
Jake Sekelsky - Alliance Global Partners
Heiko Ihle - H.C. Wainright & Co
John Tumazos - Very Independent Research, LLC
Robert McEwen Good afternoon, shareholders and interested investors. I’m very pleased to welcome you to our Q2 2021 conference call. Over the past 15-months, we have rebuilt our senior management team at head office and other mines. And it is these talented individuals who are responsible for the turnaround we are currently experiencing.
Today, Peter, Anna, Steve and I are going to share with you the significant improvements in performance of our operations and financial strength. Along with a review of the highlights of our exploration program and our plans for surfacing value of our giant copper project Los Azules.
But first, I’m truly delighted to say that our mines are operating much more efficiently, such that we are back to delivering on our production guidance. We are building our treasuries and our share price are gaining some of the ground that lost last year.
These are very encouraging indications that we are getting back on-track, and that the trend is definitely up. However, there is still a lot of ground to recapture and I want to assure you that we are fully committed and driving hard to do so to regain that ground.
Now, I will ask Anna to share with you the positive transformation of our financial condition as seen in our results of Q2 for the first half of this year.
Anna Ladd-Kruger
Thank you Rob and good afternoon, everyone. Q2 was the quarter demonstrating operational progress in our turnaround strategy, lower costs and a strengthening treasury. All resulting in improved financial.
Strong production for our operations translated into solid revenues from our gold and silver sales for the quarter. Our revenues from 100% owned operations during the quarter was 40.7 million, which is an increase of 123% compared to Q2 of last year.
Average realized sales prices in the quarter were 1,830 per gold equivalent ounces, compared to prices of 1,733 realized in Q2 of last year. Our cash gross profit which is a non-GAAP measures that excludes depreciation was 9.6 million for the quarter, an increase of 13.6 million from Q2 of last year’s cash gross loss of negative 4.9 million.
The change in Q2 is attributed to increased production in sales, higher average realizable gold prices and decreased cash costs per ounce at both our Gold Bar and Fox Complex operation, which Peter Mah in a bit more detail shortly.
We reported a net loss of six million or negative $0.01 per share for Q2. This does include a total of 7.7 million invested in our exports and advanced projects. This compares to a net loss of 19.8 million or negative $0.05 per share in Q2 2020. Again, an improvement primarily driven by the increase in improved operations.
Our exploration activities wrapped up in 2021. And we have spent approximately 0.9 million to-date and in high potential targets in both Ontario and Nevada. We are also incurring eligible Canadian exploration expenditures in the two locations of Ontario. Steve McGibbon will give further updates on our various exploration programs shortly.
We also spent just under $1 million on advanced projects during the quarter. This includes continue spending on our Fox Complex PEA or Preliminary Economic Assessment and the Phoenix project in Mexico.
Our total liquid assets as of June 30th was 48.9 million, compared to 20.8 million for the same period last year. This is reflecting higher cash and cash equivalents, restricted cash, investments and our precious metals inventory.
We also receive 2.6 million in dividends in Q2 from my interest in San José mine, for a total of 7.6 million in H1. This compares 0.3 million in the same period first half of last year. Net cash investing activities of 12.3 million in the first half of this year is largely attributed to the capital development costs at our Froome mine at our Fox Complex. We remain on-track to reach commercial production in Q4. We ended Q2 with 74.9 million in current assets and a positive working capital of 30 million.
Thank you. I will now turn the call to Peter Mah, our Chief Operating Officer.
Peter Mah
We are pleased to report on another good quarter of McEwen Mining, with production trending up on-track with our 2021 guidance. Costs are trending down with teams focused on continuous improvement and the expansion project that the Fox Complex is progressing well.
Consolidated gold production in Q2 2021 was 40,700 gold equivalent ounces, over two times higher than production during the same period last year. Total production for the first half of 2021 was 71,300 GEOs in-line with the lower end of our guidance range of 141,000 to 160,400 GEOs.
Q2 production from a 100% owned lines was 22,400 GEOs, which increased by 12,300 as compared to Q2 last year. Q2 consolidated costs per GEO for our 100% owned lines and operations was 12.86 for cash costs about 41% lower than last year, and 14.47 for all-in sustaining costs, which was 47% lower than last year.
Moving on to each region. At the Gold Bar Mine in Nevada, Q2 production was 14,100 gold equivalent ounces, reflecting a 132% increase over last year. The production increased in the first half of 2021 to 21,500 gold equivalent ounces from 15,300 for the same period last year.
Cash costs per GEO for the quarter reduced 18% to 14.63, while all-in sustaining costs reduced 35% to 16.19, compared to the same period last year. Improved production and costs were driven by the increased gold production, operational improvements to efficiencies and no COVID interruptions to the production.
Moving on to Canada, Q2 production of the Fox Complex was 7,100 GEOs, reflecting more than a threefold increase from the 2,200 GEOs produced in Q2 of last year. Increased due to our expectations according to the mine plan as mining wound-down at Black Fox and transitioned to the ramp up at Fox Mine modestly better than expected.
Cash costs per ounce in Q2 decreased to $917, compared to 31.21 in 2020, while all-in sustaining costs per ounce in Q2 decreased to 10.88 compared to 33.32 in 2020. The decrease in cost reflects improved gold production, better mining efficiencies, more consistent, more throughput, and more reliable grade control programs.
In addition the Q2 2021 cost per ounce benefited from an optimized mine design reducing underground development costs and schedule at the Froome deposit and no production interruptions due to COVID.
Froome remain on-track to reach commercial production in Q4 of this year, grade reconciliation is on plan, metallurgical recovery has slightly outperformed our expectations and further optimizations of recovery versus grind size was ongoing. Underground resource and reserve definition drilling is underway with the aim to extend the life of mine at Froome and help bridge gold production, while the Grey Fox and Stock projects are advanced.
The Fox Complex expansion drill results and model updates are expected to be delivered in Q3 and the preliminary economic assessment subsequently in Q4 of this year. Plans are underway to select the mining contractor to start dewatering the stock mineshaft in Q4 this year. This will provide access to the existing underground developments from which the Company plans to conduct underground drilling at Stock.
At El Gallo in Mexico, Q2 productions was 1,300 gold equivalent ounces from residual leaching of existing heap leach pad. Residual leach activities are projected to wind down towards early 2022. We are currently evaluating multiple strategic alternatives, including the potential divestiture of our Mexican business units.
Shifting to Argentina as a San José Mine. Q2 production attributed to our 49% interest with 18,200 GEOs, nearly two times the production for the same period last year, due to higher ore tons process, and reduced impacts on COVID.
Increases were slightly offset by lower process grades due to delayed timing of smelting and lower grade mill fields substituted development. Cash costs were 1,105 per GEO, slightly lower than Q2 2020 for reasons mentioned. While all-in sustaining we are on par for the same period last year at $1500 per gold equivalent ounces.
Thank you, I will now turn the call over to Steve McGibbon our Executive Vice President of Exploration.
Steve McGibbon
Exploration activities ramped up significantly in Q2 across all projects in Canada, the United States and Argentina, with a total investment of some $6.9 million. As you know, nearly 35,000 meters of core and are seed driven equivalent to more than 114,000 feet once completed. The focus on exploration remained on cost effective discoveries and extending deposits adjacent to our existing operations in order to sustain near to medium term gold production.
Firstly, I will update the work and our 49% San José property, which is operated by our joint venture partner Hochschild Mining. On a 100% basis, the 2021 exploration budget for San José is $9.3 million with 2.9 million spent in Q2 2021. Lease and exploration expenditures for the first half of the year to $5.2 million.
Proximal to current San José operations, resource drilling is completed in Escondido and the timing of gains. From the 3410 meters of drilling, several encouraging drill intercepts of 1.5 meters to 2.5 meters, creating typically between 2.5 and 3.5 grams per tonne gold, and 200 to 300 grams per tonne silver were realized.
One addition on these core monomers for SKD 2267 ran 18.4 grams per tonne gold and 1879 grams per tonne silver, along with a 1.4 meter core length. I will remind the listeners that gold and silver deposits at San José are epithermal and will often produce highly variable drill results through the normal course of a drill program.
At the Timmins some 283 meters were completed and include a 3.1 meter intercept grading 5.5 grams per tonne gold and six grams per tonne silver involved SKD 2328. During the third quarter 3000 meters of drilling will be carried out the permanent structure, in addition to testing a geophysical target to the south of San José.
At Gold Bar Mine in Q2 exploration incurred $1.3 million in expenditure to the Gold Bar Mine area, which included 4,700 meters or 15,400 feet of core and [indiscernible] this makes a part of our planned program for 2021 of about $5 million exploration spending.
Drilling activities during the quarter were focused primarily on the ridge deposits located west of the active pit mine and at the nearby 30% Atlas Mine. Exploration efforts saw to reduce the risk known mineralization and to test potential deposit expansion of each area. The Ridge core drill program confirmed mineralization locally and return intercepts that were reported in our May 10th exploration and definition update.
Exploration activities of the atmosphere included 1,500 meters in 10 RC goals after mine mapping and modeling identified several drill targets for evaluation. Some assays remain pending, but our best results to-date is a deeper intercept that comprises - that compasses at about 27 meters or 90 feet of 3.10 grams per tonne gold OGB 010. This includes a higher grade interval of about 10.7 meters, or 35 feet of 6.33 grams per tonne gold.
Further three oriented core holes are planned for the third quarter, and will round out the initial phase of drilling efforts. Activities at the Tonkin property, including starting a property wide revaluations of regional geology, mineralization controls and their context in relation to other large carbon type systems industry.
Revenue which is choose of this work suggests often has greater similarities to other properties hosting large carbon type systems to the North in previously thought, including the geological setting for the lower grade loss.
And 19 for RC and four hole core drilling program, totaling some 1,500 meters has been underway during the third quarter, primarily testing oxide mineralization at the one - deposit. This work is being integrated into an updated geologic model that will dovetail with our improved property rights understanding.
Ongoing exploration activities at Tonkin, East Deck, Cabin, Park Canyon are planned to continue throughout the second half of 2021. Exploration at Gold Bar South has successfully advanced the project and is expected to contribute to Gold Bar’s future production.
At the Fox Complex in Canada, exploration will continue throughout 2021. As production area shifts to the frontline underground exploration zone on its East and West frame has been underway, with the objective of extending the Froome deposit near and assisting [indiscernible] structure. The Froome deposit also remains open at depth potentially exists for nearby sub-parallel mineralization in the hanging wall and footwall that will also be drill tested.
Underground drilling that the Black Fox mine continued to return encouraging hybrid results at the 160 West and 130 East targets approximately remain -. Underground diamond drilling is being completed to identify additional mineralization adjacent to the Black Fox ore body that could be inserted into future mining plan.
In the second quarter, we invested 3.5 million in exploration activities including some 26,500 meters of core drilling focused around Stock West, Stock lien targets at the Stock property and the Whiskey Jack and Gibson targets a Grey Fox.
The Stock exploration area sits adjacent to ours stock home, which currently processes or from our Black Fox and Froome mines, the mill process ore from the historical underground Stock of mine which operated intermittently from the 1980s until 2004, produced 137,000 ounces in gold.
The Stock was discovered in mid 2019 and in 2020 exploration activities were focused on follow-up drilling. Initial results suggested potential to define a significant result in mineralization, a half mile ore body 100 meters from our Stock processing facility.
In Q2 2021 core drillings were secured as stock to infill and expand the main dimensions of gold mineralization. Total of 20,008 meters of surface exploration drilling was completed during the quarter at Stock West and Stock Main with the primary focus Stock West development.
Two drill rigs also completed 1861 meters to test the extension of sheets below the underground workings of the Stock mine. Activities of a great box project including drilling targets, with a focus on the interpretation of local heating trends at the Whiskey Jack and Gibson targets. We expect the resource model to be updated in the second half of 2021.
During the second quarter we reported new stock less assay results in our previously mentioned [indiscernible] update. We have made good progress improving sample analysis charter funded assay labs in both Ontario and Nevada, and on increasing drilling capacity with additional rims input jurisdictions. As a result we anticipate updating exploration and delineation results before the end of Q3.
Robert McEwen
Thank you Peter. Now I would like to talk about how we are going to develop one of our assets in a way that I believe has the potential to create significant value for McEwen Mining.
As you know, we have a large copper project, losses in it. It is a giant within our portfolios properties and a giant on a global scale. I do not believe the potential value of loss reserve is reflected in our price, in our share price, and that is something that we are determined to change.
Furthermore, I believe there are several reasons why it has remained undervalued. First, loss of the list has a number of risks associated with it. It is remote with limited access with only road access five-months of the year. It is only at a preliminary economic assessment stage. So uncertainty remains about its resources, its economic projections, CapEx and permitting.
Large investment is required to reduce these risks. And unfortunately, the funding requirements are significantly greater in the McEwen Mining’s Treasury. Without resorting to a financing that will lead to considerable share dilution.
Second, McEwen Mining - the management debt and copper experience to develop at least perceived by the market. And we have done quite a bit to correct that situation putting together a large team very experienced copper people.
The third, the market prefers, appears to prefer to invest in a pure copper play, pure copper development company over small gold producers such as ourselves with a large cash flow copper development facility.
So to surface the values losses as we consider the number of alternatives. The first one was to self funded, but because of the large potential dilution involved with funding and ourselves, because that alternative is unattractive.
The second was to seek out a joint venture or an outright sale. And we had discussions with a number of major mining companies where the treasury and the experience to build it. But we wanted to maintain a continuing interest and none of the companies we spoke to wanted to joint venture they all wanted to buy in 100%.
And we would be left with no continuing interest in the property. We could suggest to all of them that we would like to retain a royalty, because this property is that a 36-year life with a very robust economics at this point.
And it would be a shame to give it away at an early stage when the copper price seems to be going higher through to the electrification of the world’s transportation system, and renewable energies. All big users of copper and a projected deficit coming in the future in terms of the supply of copper.
The third option was distributing to our shareholders with ideas been around since the days of [indiscernible] which we seeded cumulatively, and never gained traction for a couple of reasons. And they remain, there is a complex tax structure that needs to be dismembered and upon distribution to our shareholders, there would be a tax of them, both for McEwen Mining and for the shareholders receiving the development or the distribution.
In addition, distributing it the company would have to go out and do some fundraising. And it is not at this stage right now, because of the issues I mentioned earlier on to get a large value for the assets.
The fourth option we looked at, and have decided we want to go forward with is to privately fund a subsidiary that holds losses and advance the project, moving it towards a prefeasibility study, and then latterly on to a feasibility stage. But getting towards the pre feasibility getting year round access constructed, which is underway right now.
And then within 12-months to 14-months taking it public. If you look at - we believe this is a good - the best alternative for maximizing value for shareholders. If you look at copper projects, that large copper projects that have been purchased between 2010 and 2018, you can see that the stage of development of the project is clearly reflected in the value paid per pound.
So at the earliest stage where you have some drill results, and you come up with a resource, that is the lowest amount and when you go all the way from that to luminary economic assessment on to a pre feasibility and then on to a feasibility study, the value incrementally increases.
And that is the strategy we have taken that we can see a significant increase in the value of the property by solving the access problems by doing more drilling and completing the studies environmental metallurgical with other to produce a pre feasibility study. And then go on to a feasibility study.
To get the ball rolling, we didn’t have the money in, we are at a disadvantage in terms of going public. And I decided to personally get this ball rolling by committing $40 million of the up to $80 million. We are looking to raise and that will allow us to move the project quite aggressively.
In fact, the road into the property the new route is now into its 15th day of construction. It will take a better part of a year to complete that. But it will be make a huge difference on this project. What might it do in reinvestment is a related party transaction. We asked the disinterested directors on board, which everyone is set myself to engage and independence in value.
So look at what McEwen Mining was getting relative to the market. And so they are really looking at 175 million on the properties plus a royalty of 1.25%. And we think right now, the projects valued at about just under copper £29.5 billion of copper in the indicated and inferred category is valued at about 0.6 of a sense.
Moving to a pre-feasibility and the feasibility, you can move to £0.03 to £0.06 and even higher than that, if you are in a strong market. And if you do the math, you can understand why we see this creating the biggest value in McEwen Mining, rather than selling out to a company today, at the early stage of what appears to be a strong bull market developing copper.
At this point, I would like to thank you for your attending and invite you to our question-and-answer period.
Jake Sekelsky, Alliance Global Partners
Thanks for taking my question. So it is good to see that cost that gold bar are trending down. I’m just curious, if we should expect to see some further improvements here over the next few quarters. And if so, you are going to be touched on some of the operational improvements that are driving us?
Robert McEwen
Certainly. I will pass that question over to Peter.
Peter Mah
Hi Jake thanks for your question. We released the feasibility as you are aware and we are driving towards that guidance, we are not providing updated trough guidance at this time. But we can certainly see from our production profile, and costs are trending quite well relative to the feasibility.
That is best information we can share at this time. I think regarding where to improve this machine areas, we spoke on the last quarter’s regarding the mine, the process plant and just general administration, our areas of focus. We continue to look for improvements in our mining with their mining contractors.
Regarding processing, we have been completing that program which I think we talked about last call. And that was targeting run of mine leaching. So those tests are just coming through. They have been fairly positive, but we are in the analysis stage of what that means to the split of how much we could place on the pad of ROM versus crushing.
And lots of business improvements through amendments and areas working through synergy. Some of our synergies with our Mexican operation, we have been utilizing some of the team there to support our Nevada team. And we are going quite well.
Jake Sekelsky
Okay. That is helpful. And then speaking of Mexico and it looks like residual leaching at El Gallo is probably going to conclude in the first half of next year. I think you guys touched on this a bit earlier, but give any more color on sort of plans for the mix [Kynapse] (Ph) is going forward, whether it be on the M&A front or looking at development of both Phoenix? Just any color you have on Mexico would be helpful.
Peter Mah
We are looking at Phoenix. We are just pushing a couple of leaders there to try to improve the economics of the project and also looking at first funding.
Jake Sekelsky
Started to lean one way or the other, whether it is M&A there or developing yourself.
Peter Mah
That is right.
Jake Sekelsky
Got it. Okay, that is all in mind. Thanks again Rob and congrats on a good quarter.
Heiko Ihle, H.C. Wainright & Co
The Fox Complex, would you be able to give a little bit more color when you expect to see it? And more importantly, would you think and call of good to amazing all time scenario for the side would look like?
Robert McEwen
Peter would you care to answer Heiko?
Peter Mah
Sorry, my potato fingers I hit the wrong button there. And I just got back and I didn’t catch that question Heiko.
Heiko Ihle
I will repeat it. The PA at the Fox Complex, would you be willing to progress a little bit more color on AUM you think it is going to be shared with the marketplace? And but more importantly, also would be good to amazing outcome scenario for the site would look like we should expect to see?
Peter Mah
Sure. Good, amazing. I will touch on that second. That we are reviewing, obviously some extra work in the grilling that Steve shared with you. We are targeting Q4 of releasing the PA likely to the earlier side about our current schedule shows. So I expect to see that before the year end. Good to amazing, well how big do we want to dream here.
In the PA in the first step of our expansion we are targeting a 10 year mine life of something more so 100,000 ounces a year with this project charter which we are still analyzing resources and waiting on some results and optimizing our mind plan layers so, it is trending well. We don’t have everything consolidated yet to give you a view on that and that’ll come out before this year.
Heiko Ihle
Moving on to making copper and the interest in losses. It is been tomorrow, it would have been a month since the initial announcement. How is the deal coming along? And is there any other future timelines that you can may be disclose, so I know you set to 12-months in the original press release that cannot in July. But is there any other may be hard in soft timelines that you are willing to talk about or what you think we should expect to see may be quarter-by-quarter?
Robert McEwen
We will probably close in two stages cycle. One, during this one around the middle of the month. I mean, it is a legacy of a lot of subsidiaries. That came as losses in list the previous owners losses in list and Andy said a labyrinth of subsidiaries and came in Canada and Argentina.
And those all had to be cleaned up and taken a little longer than we thought they would. So we are looking to close that simplify that structure by mid-August. And then again by the end of September. In terms of a go public, we would be looking at up to 12-months after the September.
Heiko Ihle
Got it. Very helpful. Thank you very much.
John Tumazos, Very Independent Research
Thank you very much and congratulations both in new progress and the energy of all the members of the McEwen team. I’m thinking of the February 1 announcement, or another company, i.e. gold said they were creating a new management team, or been stronger management team and they hired a former CEO of Nevada Copper, for that one jurisdiction, Nevada company. And I’m just thinking how the Fox Complex has at least three deposits and the Stock Complex is at least three deposits, and the Timmins downtown Lexam VG projects, or at least three projects.
Gold Bar is over three deposits and then there is El Gallo and an $80 million program up in the [indiscernible] in Argentina. Is there a whole new management structure to be rolled out for Argentina or are Peter and Steve and Stephen and the team working 72-hours a day or should we just assume that El Gallo and what I call the downtown Timmons, like Lexam VG properties are on a back burner, because there is only so much you can do at Fox and Stock and Gold Bar and it is just a remarkable treasure of opportunities.
Robert McEwen
Yes they are working 76-hours a day. Pete, did you want to talk about the team that is been assembled for loss of service. It is quite extensive, very deep in copper experience?
Peter Mah
Absolutely. And thanks, John. Various deep questions and gather, because there are more than 76-hours in a day. We have assembled quite a support team around the project which includes some internal sort of consultants some additional people on the ground in San José, or sorry in the Miss Adlon and external consultants.
So, internally, we have beefed up with a construction manager Gary Cochran, a former Anglo employee very decorated career of mine building. We brought on Bill Thomas, one of his last projects was Constancio. Dave Tyler, who has been doing work for us on all our technical projects was starting to get more involved. And then Jim Sorenson, from Samuel, who may have heard of, is quite a large project career.
In addition to Samuel on the external side, and their team we brought on, we brought on - and their copper excellence group, Dave meadows, and Howe, who was the study manager for the Elton project. They have recently come into the fold. And then as our case is assembled, very tough team, Dr. Sullivan, and Sylvia for the resource development. So they are actively engaged with our team on developing growth plans.
On the mind engineering side, we have involved the Gerald Whittle and his group and the enterprise optimizer and that actually that was kicked off today, we are looking at sort of optimizations around phasing and all of that. So we have quite an extensive group infrastructure, I guess, go on and on and on. But it is not in our last lap. It is over few years of experience in large corporate projects, successful projects, played a team advancing.
John Tumazos
So you and Steve and Stephen, aren’t managing the Argentina theater of operations, where Nevada and Ontario are funny, with a touch?
Peter Mah
Our management team, so myself and Steve and Reuben Wallin on permitting environmental health, safety, or providing the oldest site to that team, so they and sort of governance and controls. So we monitor and drive mode of justice through that team. There is an extensive team under each one of those areas that is actually executing.
John Tumazos
Is it too much to, let’s just assume for a second that the management team is delegating and supervising Argentina, but you still have Froome the stock restart and all these different good zones and gold bar? you guys manage - of operation in North America?
Peter Mah
Absolutely. I think our results we have been doing for this year results speaking for themselves. At Froome we are on-track, potentially a beat on commercial production. We have a very solid team. We beefed up our operating team as well brought in managers beneath the director of operations in Canada. We have a Director of Operations so there has been a lot of expansion of those organizational charts ahead of all of this.
Now, of course, El Gallo doesn’t take a lot of our time and we are looking at strategic options. And I think we are fairly right fit for this year. We are not knowing any dire need of roles. There is always recruitment process going on. And we want to hire the right people to advance all of our regions. Once the TA is done, we will know more clearly what the next steps are, for the Fox expansion.
And, as I mentioned earlier, without permission to select the contractor and go down the soft trap for dewatering and get the underground drilling, they are going to advance the project. But once we get more clarity on the strategic options and move forward. We will be able to write what’s remaining McEwen Mining in terms of our organizational structure.
Anna can certainly speak to the finances inside and all the other areas where there is been significant recruitment, success and doubling up of our team.
Anna Ladd-Kruger
John it is a very good question. We need people to run things. And just on sort of the admin on the things, we are seriously putting in systems to really help a lot of the streamline and automation so we have got actually ERP system, a budgeting and forecasting system, a number of other operational systems on the go this year by end of year one, that will certainly help. We are recruiting as Peter said, additional folks of director level, VP levels and thinking about succession planning.
Also comment that your McEwen conference specifically, a path is to get it public, within a year or less. And the intention at that time is obviously going to support the public company. It will need a more dedicated management team with compliance and reporting for public companies as an example. So for now, we monitor and we work quite closely with some of the results to seen. We see some of that energy that is here today at the company.
John Tumazos
I could ask the different follow-up. Thank you very much Anna. Your results improved to lose only a penny with all this activity and new hiring going on. Can you talk to what the CapEx was in the June quarter? And how many of these new people are capitalized versus expense?
Anna Ladd-Kruger
There is different capital for the quarter really related to the free mine project that we just tried, I think 12 million tonnes. None of the individuals establish speaking of more we are capitalizing could be sort of ongoing management. A lot of them were the positions we set up already there. And we are going to some of them are replacements. Some of them are sort of combining positions and finding the right people to step up and take the phone. In terms of even just that your executive level, I didn’t think we have added any new positions at that level is replaced.
John Tumazos
Or the Argentine consultants and team members capitalized for this as illustrate that expense?
Anna Ladd-Kruger
At the moment, according to U.S. capital expense, when we go forward into McEwen copper, and at the moment we are thinking Canadian listing will be able to follow IFRS and will be capitalizing those expenditures.
John Tumazos
So it is really amazing that you only lost a penny with all this activity going on. Congratulations.
David Dennison
Good afternoon Rob and team. David Dennison Individual Investor and author of his company since 2004 I think [indiscernible]. So a couple of questions again, just as an individual investor. First question is what can I expect as a current McEwen Mining investor in the next 12, 18, 20 months as the McEwen copper progresses, and things have different listen as you hope or expect? And then the second question is the 100% owned, maybe I misheard this or correct me if I’m wrong, but 100% owned property or assets that you have down next to the San José Mine that you are drilling. What does that mean that if you find something? Does that mean, it becomes subsumed under the current structure where you get 49%, or you don’t know that yet, over?
Robert McEwen
Okay. San José first. The properties that Minera Andy’s house, there were two sets of properties around the mine Minera Andy one off field had another. And a number of years ago, we merged those two interests together. So they are all contained within the San José mine property. And under the Minera Santa Cruz, which is the subject controls the mine.
We own 49% of that company, which is the mine and the properties. And we chose cost shielding ourselves retain the 2% NSR on the properties we have ended in. So we don’t have any 100% on the properties in the vicinity of San José any longer.
David Dennison
Okay, I missed, I guess missed that, it was going out of here 100% owned or something like that. So okay, thank you for that clarification.
Robert McEwen
And on the copper project, because it is Argentina and because it is sort of limited access, we will gain access to the property in November. We have a plan to do 53,000 meters of drilling. There are ongoing studies for environmental permitting metallurgical economic community relations. We hope to advance the project significantly next year through the drilling increase the confidence in the resources as they are done.
First, step will be updating the preliminary economic assessment that was done in 2017 and we are just looking at what the costs or costs has changed. Looking at how we had proposed to mine and their ways of reducing costs and lowering capital there and then moving on to a pre feasibility study. That would probably be completed no earlier in the end of next year. But we really want to go public before that.
But you have a drill season right now that really run this from November to the end of March, early April, we are putting in camps that will allow us to operate through that period. Road construction has started on what we call the Northern route, which we believe will give us 12-months access to the property via lower altitude winds in less problems with the snow, the current with have to go over two passes one 4,000 meters, and the other 4,200 meters. And there is, again, we are suggesting snowing that even at 20 feet of snow in there. So [indiscernible] was all the way up and down from those passes.
So we have really struggled for a long time trying to economically through the project, because we have this tiny little window where you can get in, set up the drills start drilling, and then you have to take them out each year. So it could be a huge boost to my mind this profit. So I would like to take a public within 12-months plus 14-months. Hope that answers you question.
David Dennison
Mostly, I guess, looking at your crystal ball, Rob in 12, 18, or let’s say 25 months from now. Things progress as you want and no big obstacles. And McEwen copper has gone public. There is interest from the markets. As a current McEwen Mining shareholder, do I get anything from that or do I simply have to buy into that as it develops over?
Robert McEwen
Under current plan there, we looked at distributions to shareholders of an interest. And that has tax consequences for both McEwen Mining and for shareholders receiving that distribution. They would have a taxable event many people will probably want to sell to cover off the taxes.
So we have looked at it and sample the best way to get the value will be to advance the project. If you look at the financing, we are looking to raise $40 million to $80 million. At the current price of this issue. If we just raise 40, they would be McEwen Mining would continue to fall 82% interest in the company prior to going public and has a 1.25% interest on that property.
If you look at the past 12 large copper transactions between 2010 and 2018, you can see a progression in value as you move from the resource and then the PEA then a pre-feasibility study and a feasibility study progression in value. So if we said, our drilling confirms and upgrade so these orders can we hit 29 - continue to hit 29.5 billion pounds copper grade.
If you got $0.03 a pound for them, you would be looking at a value of $885 million. If you got $0.05 a pound you would be looking at 1.475 billion. And we have a large interest in that company.
So there are, I think, loss reserves in this new vehicle would be a very attractive asset. And quite comparable to a number of the large, single asset developed software developers I would say right now to carry significantly higher market share. But we have to do the work first to justify the market cap.
David Dennison
Thank you, Robin. Sorry, if those questions were a little remedial, I’m not a mining expert by any stretch, just an individual investor. So thanks.
Robert McEwen
Not at all. You are welcome anytime.
I would like to thank everyone for joining us today. Stay tuned as best is yet to come. Thank you.
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Post by Entendance on Aug 6, 2021 15:00:54 GMT -5
“Let’s put it this way, gold still remains on Wall Street and in the west probably the most under-owned, least crowded trade in the global financial markets. … The era in which gold was the asset which people loved to hate and hated to love is starting to come to an end. We’re still in the very early innings. It’s still a smart money trade as opposed to a big passive money trade but that’s about to happen.”
“The difference is this, the market is now ready for the next leg of the gold bull market. The first leg was the one that took us up 12 consecutive years in a row regardless of whether there were inflation fears, deflation fears, whether there was a glut of oil or a shortage of oil, political stability or political instability, dollar weakness, dollar strength. It didn’t matter. Every year for 12 years gold went up. The next move is going to be a third wave, a long wave that lasts for a decade or fifteen years, maybe more …
I think that you really are looking at a complete paradigm shift that will make gold the generational trade.” -Thomas Kaplan
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Post by Entendance on Sept 6, 2021 9:14:35 GMT -5
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Post by Entendance on Sept 17, 2021 7:25:01 GMT -5
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Post by Entendance on Sept 22, 2021 3:46:32 GMT -5
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Post by Entendance on Sept 29, 2021 6:38:58 GMT -5
McEwen Mining: Director Appointment And Los Azules Update
TORONTO, Sept. 29, 2021 - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to report that William (Bill) Shaver, P. Eng., has been appointed to the Board of Directors effective immediately.
Mr. Shaver is a seasoned mining executive with over 50 years of management and executive experience in all facets of mine design, construction, and operations. In 1980, he was a founder of Dynatec Corporation, which became one of the leading contracting and mine operating groups in North America. In 2013, he was recognized as the Ernst and Young Entrepreneur of the Year for his devotion to bringing innovation to the mining industry. Most recently, he served as Chief Operating Officer of INV Metals before its sale to Dundee Precious Metals. He completed the Technician Program at the Haileybury School of Mines and is a Professional Engineer with a BSc in Mining Engineering from Queens University in Kingston. He is also a designated Independent Corporate Director, having received his ICD.D designation in 2019.
Mr. Shaver replaces Gregory Fauquier, who has resigned from the Board of Directors after seven years of distinguished service to the Company. We sincerely thank Mr. Fauquier for his contributions and wish him well in all his future endeavors.
Los Azules Project, Argentina
The McEwen Copper division, 81% owned by McEwen Mining, is rapidly advancing work on the Los Azules project following the completion of the US$40 million first tranche private placement financing announced August 23, 2021. The second tranche of the private placement is expected to close shortly. Preparations are underway for a large 53,000-meter drilling program targeting the upgrading of Inferred mineral resources to the Indicated category. The first 2 drill rigs are arriving in early November 2021, ramping up to the full complement of 10 drills by January 2022. Access to the project is currently being established on the existing exploration road, which has been safely cleared by crews 48 miles (78 km) of the route, approximately three quarters of the way to the project. Construction of a new all-season lower altitude access road is underway, with completion expected in H2 2022.
McEwen Copper has engaged an experienced group of professionals and consultants to guide the Los Azules project towards the pre-feasibility study stage, including Dave Tyler, Study Director, Gary Cochran, Project & Construction Manager, and Bill Thomas, Manager of Business Improvement & Operational Readiness.
Dave Tyler, Study Director
Dave is a senior mining executive with over 30 years of expertise in innovation, planning, engineering, permitting, start-up, and operations of successful mines internationally. He has authored multiple feasibility studies of major precious and base metals mining projects globally, including South America. Mr. Tyler was previously the Study Director for Newmont Mining, VP of Technical Services for Coeur Mining, and the Vice President Project Development for Twin Metals, leading a $1.1B copper-nickel development project near an environmentally sensitive national wilderness area.
Gary Cochran, Project & Construction Manager
Gary is a seasoned mining and construction professional with over 35 years of experience in surface mining and associated construction works. He has successfully led multiple large-scale projects and has trained personnel to high standards of safe economical operation in all aspects of mining and construction. Gary was the Construction & Project Manager for Hudbay Minerals’ Constancia Copper Mine in Peru. He also managed the El Brocal Zinc open pit mine operations in Peru. Gary was a manager for Anglo American’s Quellaveco Mine in Peru and was involved in managing winter operations as an advisor to Barrick’s Veladero project in Argentina.
William Thomas, Manager of Business Improvement & Operational Readiness
William (Bill) is a project consulting engineer experienced in facility design optimization, mineral processing, asset management, logistics, safety, training and change management. Bill was a project consultant to Hudbay Minerals’ Constancia Project in Peru, as well as Project Consultant to both Newmont and Freeport, responsible for defining core business processes to support capital effectiveness and delivery of low cost, high productivity business-ready facilities.
Technical Information
The technical contents of this news release have been reviewed and approved by G. 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."
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Post by Entendance on Oct 4, 2021 2:45:19 GMT -5
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Post by Entendance on Oct 6, 2021 11:15:14 GMT -5
McEwen Mining's Q3 production increases 41% Y/Y
TORONTO, Oct. 06, 2021 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reports consolidated production for Q3 2021 was 32,100 gold ounces and 792,000 silver ounces, or 42,900 gold equivalent ounces(1)(“GEOs”), compared to 30,400 GEOs in Q3 2020. Consolidated production for the nine months ended September 30, 2021 is 114,300 GEOs, compared to 85,700 GEOs during the same period in 2020. 2021 production is trending towards the midpoint of the guidance range for the year.
Fox Complex, Timmins, Canada (100%)Fox produced 8,300 GEOs during the period, compared to 5,800 GEOs for Q3 2020.Mining at Fox has transitioned to the Froome deposit, where commercial production was reached on September 19, 2021, 3 months ahead of schedule. The underground infrastructure at Froome is expected to be fully developed by June 2022.
Highlights of results and opportunities at Froome:
Encouraging drill results were returned from near-mine exploration designed to extend the Froome resources and mine life, providing more time to bridge potential future production from the Grey Fox and Stock deposits. The Company expects to update the Froome resource and life-of-mine plan with the release of the Fox Complex Preliminary Economic Assessment (PEA) in late-Q4 2021.
Although early in the overall mining process, there have been positive trends in metallurgical recovery, which is 2.2% above plan, and average gold grade, which is 3.8 g/t versus plan of 3.2 g/t.
Cash costs and AISC per ounce produced are reflecting better than expected efficiencies during the initial ramp-up of production to commercial levels.Gold Bar Mine, Nevada (100%)During the quarter, Gold Bar produced 12,400 GEOs, compared to 6,800 GEOs in Q3 2020. Production is on track to meet guidance for 2021.
The permitting process to access ore at the Gold Bar South (GBS) deposit has progressed well, with authorizations now anticipated to be received in Q4 2021. The Company is planning for gold production from GBS in H2 2022.
Exploration highlights from our adjoining Tonkin property.
Positive initial drill results at the Rooster deposit include refractory mineralization of 14.7 g/t gold over 6.1 m (20 ft) in hole TS208 starting at 29.9 m (98 ft) depth, and mixed oxide/refractory mineralization of 1.5 g/t gold over 20.9 m (68.5 feet) starting at 59.3 m (194.5 ft).
Also at Rooster, hole TS186 reported 1.8 g/t gold over 25.9 m (85 ft) of oxide mineralization (cyanide solubility of 81%) starting from surface, and hole TS202 reported 0.76 g/t gold over 41.1 m (135 feet) starting from surface with cyanide solubility of 67%.
Ongoing mapping at the Tonkin Property during the quarter is reassessing the exploration potential based on an updated geological interpretation and includes relogging of previous drilling at Rooster.
San José Mine, Santa Cruz, Argentina (49% ( 2) )
During Q3, San José produced 10,800 gold ounces and 790,000 silver ounces, for a total of 21,600 GEOs, compared to 15,900 GEOs in Q3 2020. We received $2.4 million in dividends during the quarter, for a total of $10 million for the nine months ended September 30, 2021.
El Gallo Project, Sinaloa, Mexico (100%)
In Q3, El Gallo produced 560 GEOs from residual leaching of the heap leach pad.
McEwen Copper
With the approach of Argentinian spring and the melting of snow in the mountains, access to the Los Azules project site has been re-established via the existing exploration road. Drills and crews will begin mobilizing to the project in November and a 174,000 ft (53,000 m) drill program is expected to be completed by the end of Q2 2022. Construction of the new all-season access road has already advanced approximately 17 km from the east end. In order to accelerate its completion, construction advancing from the west end of the new road will begin this quarter. The new year-round access road is a key milestone in unlocking the project’s value as the current route is inaccessible 7 months of the year. All road construction will be completed by local San Juan contractors as part of the ongoing shared benefits with the local communities, entrepreneurs and workers. The prefeasibility study is in the tender award stage and is expected to begin as soon as possible in Q4 2021.
Financial Results
Operating costs for the quarter ended September 30, 2021 will be released with our 10-Q Quarterly Financial Statements.
Notes:
(1) 'Gold Equivalent Ounces' are calculated based on a gold to silver price ratio of 94:1 for Q1 2020, 104:1 for Q2 2020, 79:1 for Q3 2020, 68:1 for Q1 2021, 68:1 for Q2 2021 and 73:1 for Q3 2021.
(2) The San José Mine is 49% owned by McEwen Mining Inc. and 51% owned and operated by Hochschild Mining plc.
Technical Information
Technical information pertaining to mining operations contained in 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."
Technical information pertaining to Gold Bar geology and exploration contained in this news release has been prepared under the supervision of Kevin Kunkel, P.Geo., a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects." |
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Post by Entendance on Nov 3, 2021 17:48:33 GMT -5
McEwen Mining (NYSE:MUX): Q3 GAAP EPS of -$0.04
Revenue of $37.1M (+35.5% Y/Y)
McEwen Mining: Q3 2021 Results TORONTO, Nov. 03, 2021 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today reported its third quarter (Q3) results for the period ended September 30th, 2021.
We continue to execute our turnaround strategy and have made significant progress both from an operational and a financial perspective (see Tables 1-3 below). We expect this trend to continue with the ongoing production ramp-up from the Froome deposit at the Fox Complex.
Our operations delivered production results in line with our expectations, and we are on track to meet our 2021 production guidance of 141,000 to 160,400 GEOs.
Cash and liquid assets (1) and working capital at September 30th, 2021 were $72.7 million(2) and positive $45.8 million, respectively, including $40 million of cash raised by our McEwen Copper subsidiary to advance the Los Azules project.
Continued to aggressively invest $6.2 million in exploration and $4 million in advanced projects, primarily focused on the Fox Complex.
These investments in our future growth and profitability accounted for a large part of our reported net loss of $17.4 million, or ($0.04) per share, compared to a net loss of $9.8 million, or ($0.02) per share in Q3 2020.
Commercial production at the Froome deposit was reached on September 19th. Froome is the newest production area at the Fox Complex and has several advantages compared to Black Fox mine, such as a straighter, shorter, and more efficient underground haulage route, and wider more consistent mineralization that is amenable to lower-cost bulk mining methods.
Results of the Fox Complex Expansion PEA are expected by the end of Q4 2021. The study will incorporate the 2021 exploration and resource definition drilling results and will highlight the exciting development plans for the Grey Fox and Stock deposits.
Our quarterly webcast will take place on Thursday, November 4 th at 2 pm EDT. Please see the details further below.
Operations Update
Gold Bar Mine, USA (100% Interest)Gold Bar production for Q3 and 9M was 82% and 54% better, respectively, compared to Q3 and 9M 2020. While cash costs(2) and all-in sustaining costs (AISC)(2) for the 9M period dropped by 10% and 21%, respectively, compared to 9M 2020.
12,400 GEOs were produced in Q3 at total cash costs and AISC of $1,553 and $1,618 per GEO sold, respectively. This compares to 6,800 GEOs in Q3 2020 at total cash costs and AISC of $1,585 and $1,769 per GEO, respectively. AISC was positively impacted by less capital investment in processing equipment in 2021 versus 2020.
Exploration is focusing on near-mine targets and further defining oxide resources on the neighboring Tonkin property that could potentially be processed at Gold Bar. During the quarter, we incurred exploration expenses of $1 million. Encouraging results at the Tonkin Rooster deposit included drill intercepts up to 1.0 g/t gold over 57.9 m and a cyanide solubility(3) of 74% and 3.2 g/t gold over 38.1 m (including 14.7 g/t over 6.1 m) with an 11% cyanide solubility that occur within a complex structural framework. An ongoing program of remapping, relogging historic drill holes and producing an updated geologic model by year-end will establish a basis for continued exploration at the Tonkin Property in 2022.
Fox Complex, Canada (100% Interest)Fox production for Q3 and 9M was 43% and 26% better, respectively, compared to Q3 and 9M 2020. Cash costs and AISC for the 9M period both dropped by 23%, compared 9M 2020.
8,300 GEOs were produced in Q3 at total cash costs and AISC of $1,154 and $1,423 per GEO sold, respectively. This compares to 5,800 GEOs in Q3 2020 at total cash costs and AISC of $1,581 and $1,644 per GEO, respectively. The increase in production and the corresponding decrease in costs were attributed to improved efficiencies realized from production at the Froome deposit. In September, commercial production was achieved at Froome, three months ahead of schedule. Mining from Froome is expected to bridge production while the Grey Fox and Stock projects will be advanced in the production pipeline.
At the Stock property, we see the opportunity to further expand the Stock West footprint beyond the grade-thickness contours shown below (see Figure 1). Of particular interest is hole S21-202, which returned 4.4 g/t gold over 21.0 m estimated true width, 200 m above hole S19-95, which returned 27.2 g/t gold over 7.0 m. These holes are located at the projected intersection of the Stock West shallow eastern plunge and the historically steep Stock Mine plunge, and they command further drilling in 2022.
Figure 1. Longitudinal section of Stock West and Stock Mine profiling hole S21-202 interceptmcewenmining.com/files/doc_news/archive/2021/20211103_Fig_1.pdf
We remain focused on our principal exploration goal of cost-effectively discovering and extending gold deposits adjacent to our existing operations to contribute to near-term gold production growth. During the quarter, we incurred exploration expenses of $4.2 million in relation to this program.
The Preliminary Economic Assessment (PEA) for the Fox Complex expansion will be released later this quarter. It is based on the Grey Fox, Froome, Stock, and Fuller resources, which are envisioned to be mined and then processed at an upgraded centralized mill at Stock. The objective of the PEA is to outline a low-cost, near-term business case that increases production and mine life for the Fox Complex.
San José Mine, Argentina (49% Interest)
San José attributable production(4) for Q3 and 9M was 36% and 43% better, respectively, compared to Q3 and 9M 2020. While cash costs and AISC for the 9M period dropped by 11% and 6%, respectively, compared 9M 2020.
Attributable production was 10,800 gold ounces and 790,000 silver ounces, for a total of 21,600 GEOs(3). For Q3, total cash costs and AISC were $1,100 and $1,466 per GEO sold, respectively. This compares to 15,900 GEOs in Q3 2020 at total cash costs and AISC of $1,269 and $1,538 per GEO, respectively.
In 2021, we have received $10 million in dividends from our interest in San José.
Exploration drilling in the mine area at San José returned encouraging results including: 6.3 m of 44.4 g/t gold in the Betania vein, 1.9 m of 14.5 g/t gold and 342 g/t silver in the Jimena vein, and 4.3 m of 14.9 g/t gold and 1,381 g/t silver in the Amelia vein.
McEwen Copper
Activity at McEwen Copper’s Los Azules project is moving ahead quickly. The exploration road has been reopened, three work camp sites have been established, an expanded local labor force and preparations are underway for starting a 10-drill, 174,000-foot (53,000 m) drilling program. Drilling will focus on conversion of Inferred mineral resources to the Indicated category, as well as deeper exploration targets, where drilling ended in strong copper mineralization. Drills are expected to turn towards the end of November and continue through the end of Q2 2022.
Construction of the new access road for providing the necessary year-round access to the project is advancing as planned. As part of our ongoing involvement with local communities and businesses, local contractors are being sourced for the construction.
The contract for delivery of a pre-feasibility study (PFS) is at the tender stage and work is expected to begin in Q4. Whittle Consulting has been engaged to assist in identifying opportunities to improve the project that will be investigated during the PFS preparation.
Management will discuss our Q3 2021 financial results and project developments and follow with a question-and-answer session. Questions can be asked directly by participants over the phone during the webcast. |
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Post by Entendance on Nov 6, 2021 13:39:36 GMT -5
McEwen Mining's (MUX) CEO Rob McEwen on Q3 2021 Results Company Participants
Rob McEwen – Chairman and Chief Owner
Anna Ladd-Kruger – Chief Financial Officer
Peter Mah – Chief Operating Officer
Steve McGibbon – Executive Vice President of Exploration
Conference Call Participants
Heiko Ihle – HCW
Jake Sekelsky – Alliance Global Partners
Joseph Reagor – Roth Capital Partners
John Tumazos – Very Independent Research, LLC.
Rob McEwen
Good afternoon, and welcome fellow shareholders and curious investors. Our fortunes are definitely improving. This is the second consecutive quarter, where our production has increased, and our production costs have decreased relative to last year. I am delighted to say that our Q3 was a good quarter. And year-to-date, we are looking far better than we did last year at this time. We are making good progress on our turnaround.
Gold and silver production is up at our mines in Canada, America and Argentina, and our operating costs are falling. These results are due to the extra efforts of many individuals, and in particular, to our senior management team at head office and at our mines. But this is just the start. We know there’s much more to achieve, and we are intently focused and motivated to build an exceptional company. That becomes a model for mining in the 21st century.
We have made a large investment in exploration over the years, and we will soon be showcasing the results of this effort. It is expected to extend the life of our mines and provide the foundation for future gold and silver production growth. I imagine that many of you feel the same way as I do when looking at our share price. I’m not happy with it. And I bet neither are you. But as you will hear today, we have good reason to be optimistic. Our operations are starting to hump.
Exploration is starting to reveal the promise of our large land holdings in prolific gold and silver districts and our very big copper project is coming alive. Another indication that the market is beginning to appreciate our progress is our share performance year-to-date. It’s up 15.7% relative to the industry’s performance as measured by the ETFs, the GDX and GDXJ that have declined 11.6% and 19.7%, respectively, during the same period.
So here’s the today’s agenda. Anna will cover our financials, Peter, our operations, and Steve, our exploration. I will follow with news on the McEwen Copper and provide closing remarks, then open the Q&A segment of the meeting. Anna, the podium is yours.
Anna Ladd-Kruger Thank you, Rob, and good afternoon, everyone. Q3 was another solid quarter that demonstrated operational progress in our turnaround strategy, translating into lower costs and a continued strengthening balance sheet. Our average realized gold sales price in the quarter was $1,793 per gold equivalent ounces, down from $1,925 in Q3 of last year, reflecting the lower spot prices. Nevertheless, stronger production from our operations translated has increased there. Revenue from our 100% owned operations during the quarter was $37.1 million, a 36% increase compared to the revenue in Q3 of last year.
Cash gross profit, which is a non-GAAP measure that includes the depreciation was $6.4 million for the quarter compared to $3.9 million for Q3 2020. The nine months ended September 30 was $16.1 million versus $2.8 million, a material increase of 575% compared to the same period last year.
Much of this change is due to the increased production sales despite lower realized gold prices and decreased per ounce cash cost for both Gold Bar and the three-month transition sweep from site commercial production at the Fox Complex, one full quarter ahead of vision. Peter Mah will detail more of our operational achievements shortly.
During Q3, we also continued to aggressively invest in our fleet with $10.3 million spent on our exploration and advanced projects. This is reflected in reporting a loss of $17.4 million or minus $0.04 per share for the quarter compared to a net loss of $9.8 million or minus $0.02 per share in Q3 2020. In addition, we got [indiscernible] San José mine, with a $5.2 million reduction compared to Q3 2020. This decrease is primarily due to continued COVID-19 related expenditures of the operations in Argentina.
We also spent $4 million on the gas project during the quarter, which included continued spending for the Fox Complex expansion PEA. Our total liquid assets as of September 30 is $72.7 million compared to $18.8 million for the same period last year. This is reflecting higher cash and cash equivalents, investments and precious metal inventory as well as the $40 million range for our mature and copper investment.
In October, we also decreased an additional $2.3 million in dividends from our San José mine, bringing the year-to-date dividend up $10 million compared to a total of $0.3 million received in 2020. Cash used in investing activities of $20.4 million for a nine-month period, increased relative to the $7.8 million in the same period last year. The change is primarily due to capital development costs included the Fox Complex for the three-month deposit, partially offset by the dividend to receive from our San José mine. Lastly, we ended the quarter with $92.1 million in current assets and a positive working capital at $45.8 million. Thank you. I will now turn the call to Peter Mah, our Chief Operating Officer.
Peter Mah
Thank you, Anna, and good day all. We had another good quarter at McEwen mining with production trending up, costs going down and operations on track to meet our 2021 guidance of 141,000 to 160,400 gold equivalent ounces. Production in Q3 2021, with 42,900 gold equivalent ounces or 41% higher than the same quarter last year. The increased production was attributed to operational improvements at the Gold Bar, Fox, and San José operations, which were in line with our expectations.
Total production was 114,300 gold equivalent ounces for the nine-month period ending Q3 2021 or 35% higher than the same period last year. From our 100% owned operations, Q3 consolidated cash and all-in sustaining cost per GEO for $13.9 and $15.39, respectively, or 12% and 10% over compared to last year. For the nine months ended September 30, 2021, our consolidated cash and all-in sustaining costs lowered by 14% and 21%, respectively, compared to last year.
Gold Bar production for Q3 and year-to-date ending September 30 was 12,400 GEOs and 33,900 GEOs, representing 82% and 54% increases over last year. Cash and all-in sustaining cost per GEO for the quarter were lower by 2% to $15.53 and 9% to $16.18, respectively, compared to last year. The increased production and lower costs were attributed to improved mining efficiencies, processing optimization, tighter work control and reduced COVID impact.
Moving on to Canada, Fox Complex. Production in Q3 2021 for the nine months ended September 30, 2021, in the Black Fox mine with 8,300 GEOs and 20,600 GEO’s representing a 42% and 26% increase, respectively. Relative to the GEOs produced in the comparable period in 2020. Cash and all-in sustaining cost per GEO were $11.54 and $14.23 in Q3 2021, 27% and 13% lower than 2020, respectively.
Cash costs and all-in sustaining per GEO were $11.02 and $13.39 for the nine months ended September 30, 2021, both 23% lower in the comparable period in 2020. Higher production and lower costs were the result of more efficient mining, increased utilization of mowing capacity, better grade control, decreased COVID impacts, and reaching commercial production at term ahead of schedules.
The optimization of the mine design and underground development and improved capital spend effectiveness, further contributed to the improvement. The company is looking forward to releasing the Fox Complex expansion growth results, model updates, and preliminary economic analysis in Q4 2021. The work is targeting higher gold production, a longer mine life, and lower cost than historically achieved at the Fox Complex. In Q3, El Gallo produced 600 GEOs in residual leaching and activities are winding down towards 2022. Multiple strategic initiatives are being evaluated.
Moving now to Argentina at the San José mine, Q3 2021 attributable production was 10,800 gold ounces and 790,000 silver ounces for a total of 21,600 gold equivalent ounces or 36% higher than last year. The GEO production year-to-date ending September 30 increased by 43% compared to last year. Q3 cash and all-in sustaining costs per GEO sold were $1,100 and $1,466, respectively. This decreased from last year’s cost of $1,269 and $1,538 respectively.
The increased production and reduced costs were attributed to higher ore tonne process, higher grade process in Q3 and improved workforce availability of the COVID’s restriction lifted in 2020. I will now turn the call over to Steve McGibbon, Executive Vice President of Explorations.
Steve McGibbon
Thank you, Peter. Exploration activity continued during Q3 across all projects in Canada, the United States and Argentina with total spending of $6.2 million. Our principal exploration goal remains to cost-effectively make discoveries and to extend deposits adjacent to our existing operations in order to contribute to near to medium-term gold production growth.
To that end, we had solid results from the recent quarter on which to build. Firstly, I will update on the work at our 49% owned San José property operated by our joint venture partner, Hochschild Mining. 100% basis, San José exploration was $2.7 million in Q3 and on track to meet the 2021 exploration budget of $9.3 million.
San José has been in operation since 2007. Exploration activities at San José located in Santa Cruz province, we’re focused on the telco Norte and Savadia near-mine targets, exploration drilling in these areas returned encouraging results, including 6.3 meters of 44.4 grams per tonne gold in the Betania vein, 1.9 meters from 14.5 grams per tonne gold and 342 grams per tonne silver in Jimena vein, and 12.3 meters of 14.9 grams per tonne gold and 1,381 grams per tonne silver in the Amelia vein. Drilling is expected to continue through Q4 2021. The Q3 brownfield program at San José carried out 6,900 meters of drilling.
Adding further high-grade inferred resources during the quarter and bringing the inferred resources adding year-to-date to approximately 121,000 GEOs, which is 9.1 million silver equivalent ounces. Longer term, we recognize the tremendous exploration potential of this property and province. Iman’s Cerro Negro mine is only 20 kilometers away and largely surrounded by our nearly 700,000 acre property that remains under stored.
As the Gold Bar Mine and properties in Nevada, and in Q3 2021 for the nine months ended September 30, 2021, we incurred $1 million and $2.7 million in exploration, respectively, at both the Gold Bar Mine and Tonkin mine areas. At the Gold Bar Mine area, we are committed to targeting potential unmined zones and extending known mineral structures. Our exploration efforts are focused on derisking the geological and metallurgical models and expanding resources to replace mining depletion. Our Tonkin property sits immediately south of world-class Carlisle deposits being developed by Barrick Gold.
Tonkin has not seen exploration activity, while Gold Bar was being built and production stabilized, but we recognize the long-term value creation that could be realized by committing exploration balance here. During the three months ended September 30, drilling was aggregated at the Tonkin Rooster deposit, located some 25 miles north of Gold Bar, which generated positive initial results starting from surface, including oxide dominant drill intercepts of 1 gram per tonne gold over 57.9 meters. 10.65 grams per tonne gold over 71.6 years, with both likely amenable to heap leaching.
The Rooster deposit is structurally complex and includes mineralization in both lower plate lime stones and other plate shirts and siltstones. The oxide material has the same host rocks as we see at Gold Bar, whereas the more refractory style mineralization, which can be very high-grade is hosted in the conformation, also cost to multimillion ounce or deposits at Turquoise Ridge. We are very encouraged by intercepts that include hole TS208 at 3.23 grams per tonne gold over 38.1 meters and locally grading over 14 grams per ton.
An ongoing program of remapping, relogging historic drill holes and producing an updated geological model by year-end will establish a basis for a stronger commitment to talking, including further defining oxide resources that could potentially be processed at Gold Bar. At the Fox Complex in Canada, we incurred $4.2 million in Q3 exploration expenditures in 2021. The majority of which was deployed at the stock property with lesser focus at Grey Fox. The stock property includes a historic stock mine, current mineral resources at stock needs and an important 2019 gold discovery at Stock West. Our fast complex processing plant also resides at stock.
Our overall strategy in 2021 as stock includes delineation and expansion of non-mineralization of Stock West and Stock Mine in support of production will be detailed in our upcoming Fox Complex PEA.
Also, we are ranking and drill testing targets likely to host the next important discovery on the property. In Q3 2021, a total of 19,400 meters of surface exploration drilling was completed with potentially important ramifications. Our particular interest was hole S21-202, which returned 4.3 grams per tonne gold over 21 meters have estimated it. This hole is a 200 meters from the Stock West discovery area and also resides some 250 meters above our S19-95, 27.2 grams per tonne gold over seven years in 2019.
These holes are located at the projected intersection of the Stock West east plunge and the Stock Mine west plunge, and they will command further drilling in 2022. These intercepts which have far more similarities to the geometries and grades being successfully mined at from versus Black Fox are very exciting to us. Additional discovery potential is being assessed in the footwall of the Stock Mine, where we believe the host unit for the Stock West deposit called the [indiscernible] exists. That has been very poorly tested in the past.
A discovery here would be very beneficial, owing to the proximity of underground infrastructure. Fox complex expansion, a PEA summary, an independent engineering group has been engaged to complete the PEA on the Fox, Grey Fox, Black Fox, pruned stock and filler resources using our existing centralized milling capacity of stock.
The objective is to outline a potential low cost, near-term business case to increase production and mine life for the Fox Complex. The PEA activities for the nine months ended September 30 included ongoing drilling, modeling and remuneration, baseline work to support permitting, environmental, mine planning and trade-off studies, metallurgical assessment reviews and process flow sheet assessments and preliminary cash flow analysis. The PEA will include the resource estimates and an underground design, which are expected to be completed in late -- expected to be completed in late Q4 this year.
Rob McEwen
Thank you, Steve. Okay. Let’s talk about the McEwen Copper and how we see it benefiting to in mining. As some of you know, key assets is losses, which is a big project. How big, it’s one of the world’s largest undeveloped copper porphyry deposits not owned by a major mining company. It’s total indicated and inferred resources are estimated to be 32.89 billion pounds of copper equivalent.
For comparative purposes, let’s use today’s gold, silver and copper prices to see how large this resource would be if-converted to a gold equivalent. The answer will likely surprise you. It is 82 million gold equivalent ounces. I see the McEwen Copper becoming a powerful value driver for the McEwen Mining for us. However, to make that happen, we needed money that McEwen Mining didn’t have. And we needed to move fast to catch the limited weather window to access the project this season.
We felt that the fastest way to fund the advancement of Los Azules from its current preliminary economic assessment stage and advanced it to a preliminary -- a pre-feasibility stage was to do with private financing. We estimated that $60 million to $80 million, including contingencies, would be sufficient to deliver a pre-feasibility study. To kick start the financing, I personally provided a lead order of $40 million, and some others have subsequently followed.
With these initial funds, we are proceeding to de-risk and advance the project. So far, we have assembled a very talented and experienced copper team. We have begun construction of a new road to make the site accessible 12 months of the year rather than the current five months. The pre-feasibility study will include a 53,000 meter drill program to convert the insured resources to indicate it to complete environmental, technical and metallurgical studies and to find local infrastructure and training.
We are moving forward quickly. Our financing remains open on terms previously disclosed. The minimal order is $250,000. Let me share with you some of the math and reference, 12 of the large copper projects purchased between 2010 and 2008. In this group, there were four projects at the PEA stage or preliminary economic assessment stage of development. And the price paid per copper equivalent pound ranged from $0.02 to $0.034 per copper equivalent pound.
Due to the current remote nature of losses, the liquidity of our private placement, some geopolitical concerns. And being at its preliminary economic assessment stage, Los Azules for the purpose of our financing is valued at $175 million, which is equal to $0.065 per copper equivalent pound.
As I said earlier, we are using the funds to advance Los Azules to a pre-feasibility study stage. Only two of the 12 largest projects purchased were at the pre-feasibility level. The purchase price for these two projects was $0.134 and $0.155 per copper equivalent pound. Clearly, a significant increase in value over a preliminary economic assessment stage projects.
Let’s imagine for a moment. And when the launch of Los Azules pre-feasibility study is completed that, one, losses on risk still have total resources of 32.89 billion copper equivalent tons. Two, the private financing of $80 million has been fully subscribed, and thereby, reducing the McEwen Mining with an ownership to 69% of McEwen Copper. And three, Los Azules is valued at a much lower price per pound than the two pre-feasibility stage projects that I just mentioned.
What could McEwen Mining ownership in the field at $0.03 or $0.05 per copper equivalent pound. The answer is quite attractive. It is $681 million to over $1.1 billion, respectively. This match, this leverage to the price of copper is why we have created McEwen copper and why we believe it could be a significant value driver for McEwen Mining.
When combined with the improving performance of our mines producing gold and silver. We believe, we have a very compelling future. And our current share price presents an attractive entry point.
Heiko Ihle, HCW
Your 2021 guidance for Gold Bar is currently at 37,000 to 45,000 ounces. That’s 8,000 ounce gap between the high and the low end of the guidance, and there’s about 55 days less than a year. For contrast trend lining in Q3 production to Q4, you’d be at 33,900 plus 12.4 you did report 6,300. So I guess, can you just walk us through your thoughts of what factors could cause you to come in at either end of these that band in your guidance range, please?
Rob McEwen
Sure. I’ll ask Peter to answer that question.
Peter Mah
Sure. Thanks, Rob. Hi, Heiko, hope you’re well. Yes, the 37 was the feasibility number, and we’re obviously on the trend to beat that. There were some opportunity ounces that we couldn’t quite get a handle in terms of guiding at the feasibility stage. So we are trending. We were targeting kind of midpoint, and we’re trending on that quite well as we indicated and a potential for a beat.
So there’s still another strip to sort through when we transition from Pick West into the Pick Central and Pick East, and that’s what we’re sorting to as we work through the rest of this year and next year. So that’s the reason for that range. And I think we also wanted to build back our credibility and to meet and beat our guidance and go back a reputation on delivery. So I think those factors led us to establish those ranges last year.
Rob McEwen
It could be one other Heiko as well, and that is -- we’re changing contractors. And so, there might be an interruption, a brief interruption now. So we want to have a contingency for that.
Heiko Ihle
Got it. Okay. Also, you mentioned in the release that -- and this is a quote. The COVID-19 is not materially affecting our operations or our future strategic plans and objectives. While I assume this holds true for quite a few firms, I don’t think it’s really seen it in writing in many releases thus far. At least to a logical follow-up, are you still feeling any sort of impact with regards to cost warranting expenditures, workforce costs, et cetera or is that essentially just gone or I guess what I’m saying is that, are you talking about future impacts or about current impact? And now, I’m not saying total, I don’t know if this is a number that you have on and do you know 
  what percentage of your workforce is vaccinated?
Rob McEwen
It varies depending on site. Some of the understanding Gold Bar is the least vaccinated. You might want to come in there, Peter, knowing that more.
Peter Mah
Yes. Gold Bar, we’re around 50% vaccination rate. At Fox, I believe we’re around 75% to 80%. It might be just above 80%, actually. A lot of it is cultural in Nevada, and there’s a strong sort of culture of not vaccinating there. I think we’re not, the only one who are not in that arena experiencing that, Canada and our corporate, of course, were I think primarily all double vaccinated.
So that’s the status of the operations. We still have our protocols in place from prior. I think we are experiencing the same challenge as the industry is experiencing in supply chain, and we’re looking at the supply chain very carefully as we speak. We’ve recruited a global procurement lead to join our executive team. We just joined early this year, and part of his brief is looking at some of the potential risks to production and making sure we respond appropriately.
As far as active cases, we don’t have any at current at our sites. I think protocols were quite effective last year. I think the comment we’re referring to in our Q3 results is that we didn’t take a temporary suspension of operations, and that has contributed to higher, obviously, production, and that’s what we mean by that.
Heiko Ihle
Wonderful. Thank you all. Stay safe.
Jake Sekelsky, Alliance Global
Hey, Rob. Thanks for taking my questions. Hope, all is well. So just looking at Gold Bar costs, should we expect them to drop back down to 1,200, 1,300 an ounce range over the longer-term as capital investments moderate or do you think all-in sustaining costs of around 1,500 is sort of the new norm there going forward?
Rob McEwen
Over to you, Peter.
Peter Mah
Thanks. Hi, Jake. Well, I mean, I think you’ve got a pretty good view with the updated feasibility study. At this stage, I wouldn’t be guiding anything different than that cost profile. Next year, we need to raise or sure expand the footprint for our lease pad. Other aspects are the Gold Bar South project, which is actually trending ahead of schedule on permitting. It’s with on final review of the meta process, and we expect in Q4 to have approval to go forward in the feasibility, it showed Gold Bar in the second half of next year, we’re looking to accelerate that and bring production forward.
I think that’s the case for Gold Bar is bringing production forward and offsetting some of those capital costs next year. And then, once 2022 is completed, you can see in the feasibility, we start cash and all-in sustaining drop quite significantly. And we’re in quite a cash flow generation phase there for the six-year mine life.
And that’s part of what Steve looking at in the exploration of some of these near-term potential ounces of a fair amount of drilling also have been happening on Gold Bar this year at the Atlas, which is the old Gold Bar site Ridge. We’re going to be going back into cab, and we’ve identified more mineralization and extension of the cabin or. And that’s why, we’re turning back into Pick to see as we get towards the Pick East and West, or get more opportunity assets to bring it. So that’s the strategy there. But at the moment, the best guidance we have feasibility.
Jake Sekelsky
Okay. That’s helpful. Looking over to the Fox Complex. Assuming the PEA is positive later in Q4, how quickly should we expect you guys to move forward with the positive development position or execution, I guess, of the new mine plan?
Peter Mah
Yes, very good question, and I was expecting that it being a PEA, the general follow, we’d have to follow PFS and feasibility. Of course, this is a unique situation in that we have an operating mine at Froome mine where continue to explore Black Fox that we could hopefully bring on back online again in the future and a stock mill and tailings facility that’s got capacity. And so the PEA objective was exactly about what could we bring on quickly towards production? And so I would say, we chose the PEA because it was quite a complex set of deposits to understand and bring together. We’re obviously an operating mine and beyond feasibility and some of our knowledge of costs and things like that.
So our whole idea there was once we understood that pathway to value, we would be looking at where could you access quickly and bring on near-term production at low cash and all-in sustaining costs and increased scale. As you recall, those were the objective I think we trended very well there. The two areas that we see advancing quickest are the Stock West deposit and Grey Fox. And so if we look to the end of Q4 here where we released those results, they’re fairly exciting and look forward to growing on that strategy even further.
Jake Sekelsky
Okay. Fair enough. And then just more of a housekeeping item. On exploration, I mean, you guys were pretty aggressive this year, which was good to see, you’ve had some strong results. Should we be modeling a similar level of exploration in 2022?
Rob McEwen
I’ll let Steve handle that. We’re right in budget time but he can give you more of a flavor of that.
Steve McGibbon
Yes. I would say, in general terms, specifically for Nevada and Ontario, well, specific to Ontario, the flow-through funding that was raised in fourth quarter last year, we anticipate that that exploration funding will be depleted by the end of 2022. And we have a planned exploration program that is anticipated to work within that framework. At Nevada, our $5 million budget, we’ve had exploration spending that’s been a little slower than anticipated, and we’ll probably have a slight shortfall in spending in 2021 and anticipating rolling that difference into 2022. So expenditures in Nevada in 2022 will likely be higher than they were in 2021, but not necessarily a change in the three-year exploration plan for the area.
Jake Sekelsky
Fair enough. That’s all in my end. Thanks again.
Joseph Reagor, Roth Capital
So first, obviously, congrats on having a second consecutive strong quarter production. It’s good to see things going in the right direction here. With that said, a couple of minor questions. Maybe following on something just sitting on with the exploration spend. So far you spent about $18 million at the income statement level on exploration. Should we expect a similar company-wide exploration budget next year? Should we expect it to decline somewhat now that you’re finalizing this PEA over at Black Fox? Or maybe get some of the gives and takes there?
Rob McEwen
I would expect to be a little lighter next year as we move out of the PEA, move forward from the PEA at the Fox Complex. And the results -- at Gold Bar, probably there are some areas we want to get on to that will probably increase our expenditure there. And Hochschild, our partner in Argentina is still moving along there. Quite excited about some of the results they’re getting. But I’d say, it’s probably less by maybe 20%.
Joseph Reagor
Okay. That’s helpful. And then forgive me if I missed it, but did you give any outlook in the release or in the MD&A on your thoughts on the El Gallo and the Phoenix expansion? Any update there? Maybe it’s not immediate, but are you guys still planning on potentially doing that expansion in the near-term?
Rob McEwen
Peter, do you want to jump in?
Peter Mah
Sure. Thanks, Joe. Yes, it’s a good question. I am wondering where they put that in, so I’m glad you actually asked. We’ve been working on a number of strategic alternatives, one of those is a low CapEx alternative for Phase 1. So if you recall, the initial CapEx for Phase 1 was around $42 million in the feasibility, and that gave us sort of six, seven years of gold production. What we’ve actually identified is to the lower CapEx opportunities, which were right in the proposal phase, targeting somewhere around $25 million CapEx for Phase 1.
So we’re trying to find ways to advance that project, whether it’s internally or a partner or with other strategic alternatives such as a sale. So I think all told that, that option is looking quite promising. It’s early yet though, so we need to validate technical parameters and costing and construction, commissioning, and all those things. But either way, we believe that will add value, whatever strategic way we met those.
Joseph Reagor
Okay. That’s helpful. And then, Rob, just kind of a big picture question. I mean, Black Fox is headed in the right direction, you guys got the firm deposit up early. Gold Bar has had a good turnaround and now those two give you two steady state operations going forward from here, MSC is steady state with your partner there. Longer term, how do you take the company from, call it, 150,000 gold equivalent to 0.5 million and make it more of a mid-tier producer?
Rob McEwen
Well, one, we need a stronger share price before we go out looking for acquisitions or combinations. We’re putting a lot of energy into McEwen Copper, where we see a significant value accretion possible by moving from a PEA to a pre-feasibility stage. I would say, in the near term, that would be the largest generator -- potential generator. And from there, McEwen Mining, well -- at this point, is the majority shareholder and what we’ve been doing with McEwen Copper is working to surface the value of that asset. It’s somewhat unique in this world in terms of its size. And it’s a medium altitude, not as high as some of the others in the country, so easier operating conditions. And that’s where I think we could get some of the power to move to that next size.
Joseph Reagor
Okay. Thanks for the color. I’ll turn it over.
John Tumazos, Very Independent Research, LLC
Could you give us any drilling update of Hochschildat San José, the vains that might continue from Newmont onto your property sound exciting and vice versa. And second, you mentioned earlier that maybe if it were sold, it would be $150 million to your company. I’m hoping it’s $200 million or $250 million or more. If that pot of gold rain money on you, would it be reasonable to say you pay off all the debt first, put a little bit of money more into McEwen Copper, pay some kind of special dividend and have a little cash in your treasury for the guy that wants you to be 500,000 ounces next week?
Rob McEwen
All of the above sound great. Yes, we’d be using funds to retire the debt. Could use it in McEwen Copper. Special dividend is always close to my heart. When I was building Goldcorp, we got to a point where we are paying a dividend every month. And when -- I look ahead, that would be a fabulous position to get into. In terms of the exploration, Steve, would you care to comment on John’s question?
Steve McGibbon
Yes. I guess I would just highlight specific to San José and the potential extensions at the -- from the sale McEwen Mining onto the property is -- we did get an update on the Brownfields program that just under 7,000 units of drilling, we added 121,000 GEOs. But I think we regard -- we really regard that as perhaps a tip of the iceberg. We know that there’s tremendous potential on the property. We don’t have an update currently on what the drill plan is for 2022, but the results that we’ve seen year-to-date tell us that we need to keep pushing there and moving forward. The results have been big, and the grades of the drilling stats are very good. And we believe that this mine still has a very bright future.
Rob McEwen
I was just going to say that there’s been several parties that are interested in our interest in San José and in the whole property. But up until very recently, Argentina had a very restricted policy about letting foreign visitors come in. And so there was an inability to do an on-site due diligence. That’s now been cleared away. So we may see some action there.
John Tumazos
Steve, I apologize. I haven’t listened to a Hochschild presentation in a few years. They may have made some public comments that I missed, you know how there’s more gold and silver companies than people walking the streets in Toronto. You can’t keep up with them all. What have they said publicly about San José drilling?
Rob McEwen
Steve, did you hear John’s question.
Steve McGibbon
Yes, I did. Sorry, I just had some trouble with my phone. I can’t speak to you the specific comments by Hochschild on the program as a whole. That update certainly from them will come from the budgeting process and the plan on 2022.
John Tumazos
I’m very optimistic, Rob. I think most of the world’s major silver companies are in Santa Cruz province somewhere.
Rob McEwen
Yes.
John Tumazos
And your land position is multiple here and Hochschild’s land position is multiples of Newmont’s and Goldcorp spent over US$4.5 billion there. So I’m hoping you’re just very modest and humble, Rob.
Rob McEwen
Well, it’d be very nice if Newmont decided to spend like old purchase when they bought that property and look towards ours.
John Tumazos
Thank you.
Rob McEwen
Thank you, John.
That’s the end of our conference call, and I’d like to thank everybody for joining us. Best wishes for a successful investment. Thank you.
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Gold is important to me
Gold is important to me 
what percentage of your workforce is vaccinated?