McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reports
consolidated production for
Q2
2019 of
36,216 gold ounces and
850,525 silver ounces, or
45,881
gold equivalent ounces(1) (“GEOs”) using the average
gold:silver price ratio during Q2 of
88:1. Our San
José and El Gallo mines, which accounted for 62% our total gold and
silver production in Q2
, exceeded our targets. Our
other two operations, the Gold Bar and Black Fox mines, performed
better than in Q1, but below our forecast. Looking ahead, our
production guidance for the year 2019 has been reduced by 6% for
gold and is unchanged for silver. On a gold equivalent basis,
silver is forecast to represent 20% of our 2019 consolidated
production of 190,000 GEOs.
|
Consolidated Production Summary |
|
|
Q1 |
Q2 |
Full Year |
|
2018 |
2019 |
2018 |
2019 |
2018 |
2019Guidance |
Gold (oz) |
35,069 |
26,938 |
36,959 |
36,216 |
135,203 |
152,000 |
Silver (oz) |
695,651 |
703,219 |
772,432 |
850,525 |
3,032,694 |
3,225,000 |
GEOs(1) |
44,344 |
36,315 |
47,258 |
45,881 |
175,640 |
190,000 |
(1) 'Gold Equivalent Ounces' are calculated
based on a 75:1 gold to silver price ratio for periods up to and
including Q1 2019, and 88:1 for Q2 2019. Going forward McEwen has
adopted a variable gold:silver ratio for reporting that
approximates the average during each fiscal quarter. 2019 GEO
Guidance has been restated at an 85:1 ratio, resulting in a
decrease of 5,000 GEOs. |
|
Rob McEwen, Chairman and Chief Owner commented:
“The big events in Q2 were achieving commercial production
at Gold Bar in late May and the high-grade exploration results from
the Black Fox properties. Production results in the quarter were
mixed. San José and El Gallo, which accounted for 62% of our Q2
production, performed well this quarter. At Gold Bar and Black Fox,
we have had our head down and were pushing hard all quarter long.
While both mines delivered better production in Q2 than in Q1, we
didn’t achieve our forecast numbers. As a result, we have reduced
our 2019 production guidance for gold by 6%.”
Gold Bar Mine, Nevada
(100%)
Commercial production was achieved at Gold Bar
on May 23, 2019. Gold Bar produced 7,940 gold
ounces in Q2. The ramp-up to full production is
progressing but the delays in Q1 adversely impacted our gold
production in Q2 and our forecast for 2019.
In essence, less ore was placed onto the heap
leach pad than planned, which in turn has delayed the application
of solution to the ore, and subsequently the recovery of gold. Gold
production is increasing, and we expect much better performance in
the second half of 2019. Ore grade and tonnage are reconciling
positively to our block model, and the gold recovery curves are
tracking well compared to our budget.
Our revised plan is to produce
15,000 gold ounces in Q3 and
17,000 gold ounces in Q4.
Guidance for 2019 has been reduced from
50,000 to 42,000 gold ounces as a
result of the slower than expected ramp-up.
Our 2019 exploration budget for the Gold Bar
property is $5 million. Drilling started mid-May
with an initial focus on Gold Bar South in order to provide data
necessary to advance economic studies and permitting. Our objective
is to incorporate Gold Bar South into the mine plan this year and
have permitting in place so that development could begin in late
2020. Starting in July, drilling will be testing the deep potential
of the property for Carlin-type gold deposits.
Black Fox Mine, Timmins, Canada
(100%)
Black Fox produced 9,420
gold ounces in Q2. Production was adversely
affected by water infiltration into the mine due to an unusually
heavy spring run-off. In order to protect the main infrastructure
of the underground operation, the western part of the mine was
allowed to flood temporarily. This action reduced production by
limiting access to some areas where Q2 production was planned. As a
result, production guidance for 2019 has been
reduced from 50,000 to 45,000
gold ounces.
Our 2019 exploration budget for the Black Fox
Complex is $18 million and includes surface and
underground drilling. Drilling started in April and there are
currently 10 surface drill rigs and one dedicated underground drill
rig actively exploring on the Black Fox and Stock properties.
On May 23, 2019 we released very positive gold
drill results from the Black Fox Mine and promising intersections
in the Grey Fox Area. We followed up with more high-grade drill
result from Grey Fox 147NE Target on July 10, 2019, see news
release:
https://www.mcewenmining.com/investor-relations/press-releases/press-release-details/2019/McEwen-Mining-Exploration-Drives-a-Potential-New-Source-of-Production/
San José Mine, Santa Cruz, Argentina
(49%(2))
The San José mine is on-track to achieve our
full year guidance for 2019 of 49,000 gold ounces
and 3,225,000 silver ounces. Our attributable
production from San José in Q2 was
13,518 gold ounces and 848,268
silver ounces, for a total of 23,158 GEOs.
El Gallo Project, Sinaloa, Mexico
(100%)
Based on the improved leaching performance from
process plant modifications completed in Q2, we are increasing our
full year guidance for 2019 at El Gallo to 16,000
gold ounces from residual leaching. El Gallo produced
5,340 gold ounces in Q2.
Fenix Project
Work on the Fenix Project feasibility study and
permitting is progressing. We expect the permit to be approved and
the feasibility study to be completed in Q3 2019.
Second Quarter Financial
Results
Operating costs for the quarter ended June 30,
2019 will be released with our 10-Q Quarterly Financial Statements
at the end of July.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver
producer with operating mines in Nevada, Canada, Mexico and
Argentina. It also owns a large copper deposit in Argentina.
McEwen’s goal is to qualify for inclusion in the S&P 500 Index
by creating a profitable gold and silver producer focused in the
Americas.
McEwen has approximately 362 million shares
outstanding. Rob McEwen, Chairman and Chief Owner, owns 22% of the
shares.
Notes:
(2) The San José Mine is 49%
owned by McEwen Mining Inc. and 51% owned and operated by
Hochschild Mining plc.
All dollar amounts are US Dollars.
Reliability of Information Regarding San
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.
Technical Information
The technical contents of this news release has
been reviewed and approved by Chris Stewart, P.Eng., President
& COO of McEwen Mining and a Qualified Person as defined by
Canadian Securities Administrators National Instrument 43-101
"Standards of Disclosure for Mineral Projects."
CAUTION CONCERNING FORWARD-LOOKING
STATEMENTS
This news release contains certain
forward-looking statements and information, including
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements and information expressed, as at the date of this news
release, McEwen Mining Inc.'s (the "Company") estimates, forecasts,
projections, expectations or beliefs as to future events and
results. Forward-looking statements and information are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties, risks
and contingencies, and there can be no assurance that such
statements and information will prove to be accurate. Therefore,
actual results and future events could differ materially from those
anticipated in such statements and information. Risks and
uncertainties that could cause results or future events to differ
materially from current expectations expressed or implied by the
forward-looking statements and information include, but are not
limited to, factors associated with fluctuations in the market
price of precious metals, mining industry risks, political,
economic, social and security risks associated with foreign
operations, the ability of the corporation to receive or receive in
a timely manner permits or other approvals required in connection
with operations, risks associated with the construction of mining
operations and commencement of production and the projected costs
thereof, risks related to litigation, the state of the capital
markets, environmental risks and hazards, uncertainty as to
calculation of mineral resources and reserves, and other risks. The
Company’s dividend policy will be reviewed periodically by the
Board of Directors and is subject to change based on certain
factors such as the capital needs of the Company and its future
operating results. Readers should not place undue reliance on
forward-looking statements or information included herein, which
speak only as of the date hereof. The Company undertakes no
obligation to reissue or update forward-looking statements or
information as a result of new information or events after the date
hereof except as may be required by law. See McEwen Mining's Annual
Report on Form 10-K for the fiscal year ended December 31, 2018 and
other filings with the Securities and Exchange Commission, under
the caption "Risk Factors", for additional information on risks,
uncertainties and other factors relating to the forward-looking
statements and information regarding the Company. All
forward-looking statements and information made in this news
release are qualified by this cautionary statement.
The NYSE and TSX have not reviewed and do not
accept responsibility for the adequacy or accuracy of the contents
of this news release, which has been prepared by management of
McEwen Mining Inc.
|
CONTACT INFORMATION: |
|
Mihaela IancuInvestor Relations(647)-258-0395 ext
320info@mcewenmining.com |
Website: www.mcewenmining.com
Facebook: facebook.com/mcewenminingFacebook:
facebook.com/mcewenrob Twitter:
twitter.com/mcewenminingTwitter:
twitter.com/robmcewenmux Instagram:
instagram.com/mcewenmining |
150 King Street WestSuite 2800, P.O. Box 24Toronto, ON, CanadaM5H
1J9(866)-441-0690 |
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