McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is
pleased to announce an updated Indicated Resource Estimate of
499,000 contained gold ounces and Probable Reserve
Estimate of
302,000 recoverable gold ounces for
the Gold Bar Mine in Nevada (“Gold Bar”). See Tables 1-3 for the
updated estimates.
Gold Bar’s estimated after-tax net present value
(NPV) discounted at 8% and using a gold price of $1,500/oz is in
the range of $62 to $76 million; while the upside
case at a gold price of $1,900/oz is in the range of $150
to $170 million. Potential mine life is in the range of 5
to 7 years based on currently estimated reserves.
In 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 to December 2020 is 58,600 gold ounces, and the
Reserve estimate announced today is 302,000 gold ounces. The net
reduction of 16%(1) is driven by changes to the geologic model,
metallurgical recovery, additional drilling information, and higher
gold prices.
A feasibility study will be published within 45
days from the date of this press release.
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, 35,000 feet (10,700 m) at Gold Bar
South (“GBS”), and an ongoing drill program at the Gold Ridge
deposit (“Ridge”) with 11,500 feet (3,500 m) drilled to
date.
- The Pick, Ridge, and GBS geological models and resource
estimates were updated by McEwen Mining technical staff. The Cabin
resource estimate was updated by Mine Technical Services (MTS). The
geologic interpretations were updated to include structural
modeling for all deposits. All resource 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.
Table 1. Indicated Resource
Estimate(2)(3) ($1,725 per Ounce Gold, Effective Dec 1st,
2020)
Pit |
kTons |
Gold (oz/ton) |
Gold Grade (g/t) |
Recoverable Grade (g/t) |
Contained (k-oz) |
Recoverable (k-oz) |
|
|
Cabin |
420 |
0.024 |
0.81 |
0.60 |
9.9 |
7.4 |
|
Ridge |
1,527 |
0.026 |
0.88 |
0.68 |
39.3 |
30.5 |
|
Pick |
14,092 |
0.027 |
0.91 |
0.67 |
375.4 |
274.7 |
|
GBS |
2,573 |
0.029 |
0.99 |
0.60 |
74.4 |
45.4 |
|
Total |
18,611 |
0.027 |
0.92 |
0.66 |
499.0 |
358.0 |
|
Table 2. Inferred Resource Estimate(3)(4) ($1,725 per
Ounce Gold, Effective Dec 1st, 2020)
Pit |
kTons |
Gold (oz/ton) |
Gold Grade (g/t) |
Recoverable Grade (g/t) |
Contained (k-oz) |
Recoverable (k-oz) |
|
|
Ridge |
751 |
0.019 |
0.65 |
0.50 |
14.3 |
11.0 |
|
Pick |
1,105 |
0.025 |
0.85 |
0.64 |
27.5 |
20.7 |
|
GBS |
362 |
0.031 |
1.06 |
0.65 |
11.2 |
6.9 |
|
Total |
2,217 |
0.024 |
0.82 |
0.62 |
53.0 |
38.5 |
|
Table 3. Probable Reserve Estimate(3)(5) ($1,500 per
Ounce Gold, Effective Dec 1st, 2020)
Pit |
kTons |
Gold (oz/ton) |
Gold Grade (g/t) |
Recoverable Grade (g/t) |
Contained (k-oz) |
Recoverable (k-oz) |
|
|
Ridge |
1,186 |
0.025 |
0.87 |
0.68 |
30.2 |
23.4 |
|
Pick |
13,927 |
0.024 |
0.81 |
0.59 |
327.3 |
238.5 |
|
GBS |
2,135 |
0.031 |
1.05 |
0.64 |
65.7 |
40.1 |
|
Total |
17,249 |
0.025 |
0.84 |
0.60 |
423.1 |
302.0 |
|
Notes:
- Mine Past Production (58,600 oz Au) + Current Reserves (302,000
oz Au) = 360,600 oz Au is 16.1% lower that 430,000 oz Au
- 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.
- Numbers in the tables have been rounded to reflect the accuracy
of the estimates and may not sum due to rounding.
- 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.
- 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
resources 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.
Under NI 43‑101, we report measured,
indicated and inferred resources, which are measurements that are
generally not permitted in filings made with the SEC. The
estimation of measured resources and indicated resources involve
greater uncertainty as to their existence and economic feasibility
than the estimation of proven and probable reserves under Industry
Guide 7. 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, the SEC
only permits issuers to report “mineralized material” in tonnage
and average grade without reference to contained ounces. Under U.S.
regulations, 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.
TCHNICAL INFORMATIONThe
technical content of this news release has been reviewed and
approved by Peter Mah, P.Eng., COO of McEwen Mining and a Qualified
Person as defined by Canadian Securities Administrators National
Instrument 43-101 "Standards of Disclosure for Mineral
Projects."
The technical information in this news release
related to resource 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."
CAUTION CONCERNING FORWARD-LOOKING
STATEMENTSThis news release contains certain
forward-looking statements and information, including
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements and information expressed, as at the date of this news
release, McEwen Mining Inc.'s (the "Company") estimates, forecasts,
projections, expectations or beliefs as to future events and
results. Forward-looking statements and information are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties, risks
and contingencies, and there can be no assurance that such
statements and information will prove to be accurate. Therefore,
actual results and future events could differ materially from those
anticipated in such statements and information. Risks and
uncertainties that could cause results or future events to differ
materially from current expectations expressed or implied by the
forward-looking statements and information include, but are not
limited to, effects of the COVID-19 pandemic, fluctuations in the
market price of precious metals, mining industry risks, political,
economic, social and security risks associated with foreign
operations, the ability of the corporation to receive or receive in
a timely manner permits or other approvals required in connection
with operations, risks associated with the construction of mining
operations and commencement of production and the projected costs
thereof, risks related to litigation, the state of the capital
markets, environmental risks and hazards, uncertainty as to
calculation of mineral resources and reserves, and other risks.
Readers should not place undue reliance on forward-looking
statements or information included herein, which speak only as of
the date hereof. The Company undertakes no obligation to reissue or
update forward-looking statements or information as a result of new
information or events after the date hereof except as may be
required by law. See McEwen Mining's Annual Report on Form 10-K for
the fiscal year ended December 31, 2019 and other filings with the
Securities and Exchange Commission, under the caption "Risk
Factors", for additional information on risks, uncertainties and
other factors relating to the forward-looking statements and
information regarding the Company. All forward-looking statements
and information made in this news release are qualified by this
cautionary statement.
The NYSE and TSX have not reviewed and do not
accept responsibility for the adequacy or accuracy of the contents
of this news release, which has been prepared by management of
McEwen Mining Inc.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and
explorer focused in the Americas with operating mines in Nevada,
Canada, Mexico and Argentina. It also owns a large copper deposit
in Argentina.
CONTACT INFORMATION: |
Investor Relations:(866)-441-0690 Toll
Free(647)-258-0395 Mihaela Iancu ext. 320
info@mcewenmining.com |
Website:
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150 King Street WestSuite 2800, P.O. Box 24Toronto, ON,
CanadaM5H 1J9 |
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