McEwen Mining Inc.
MCEWEN MINING: 2021 Outlook and 2020 Year End and Q4 Results
TORONTO, March 11, 2021 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today reported fourth quarter and full year results for the period ended December 31, 2020, along with the outlook for 2021.
“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.
If you would like to be immediately contacted with our progress, please provide me with your contact details via my personal assistant Tara Saratsiotis. Her email is tsaratsiotis@mcewenmining.com
- For the full year 2020, production was 114,800 gold equivalent ounces (GEOs), compared to 174,400 GEOs in 2019.
- Our consolidated net loss in 2020 of $152.3 million, or $0.38 per share relates primarily to the impairment for the Gold Bar Mine of $83.8 million; investment of $27.5 million on advanced projects and exploration; a gross loss of $27 million from our operations; and general and administrative costs of $9 million.
- Our three 100%-owned mines generated a cash gross loss of $4.0 million in 2020, and a gross loss of $27 million. Cash gross profit (loss) is calculated by adding back depletion and depreciation to gross profit (loss).
- We are forecasting our 2021 gold equivalent production to be in the range of 141,000 to 160,400 GEOs a 23% to 40% increase over 2020.
- At Black Fox, development of the vent drive that will provide initial access to the Froome underground deposit has advanced 95% by the end of February 2021. We are on track to reach the main deposit before the end of March, and complete the necessary development work to allow for commercial production to be achieved by the fourth quarter of 2021.
- Gold Bar Feasibility Study Update was filed in February 2021. Using a $1,500/oz gold price the NPV(8%) is $55.2 million, over a 6-year mine life. Probable gold reserves estimated at December 31, 2020 were 300,000 oz. Exploration programs are ongoing with the objective of extending the mine life beyond 6 years.
- Fenix Feasibility Study was filed in February 2021. Using a $1,500/oz gold price and $17/oz silver price the NPV(8%) is $32 million, over a 9.5-year mine life. Fenix has the key permits towards construction.
- The Grey Fox project’s Indicated resource estimate was updated in April 2020, increasing 43% to 888,000 oz Au at 7.1 g/t. An independent preliminary economic study on expanding production at the Fox Complex is expected to be completed by the end of Q2.
- In 2020, we completed 43,000 feet (13,000 meters) of drilling at Black Fox, and 111,000 feet (34,000 meters) of drilling at Gold Bar.
- Cash and liquid assets at March 10th, 2021 was $49 million.
- Our year-end conference call will take place today, Thursday, March 11th at 11am EST. Details are provided below.
Operations Update
Black Fox Mine, Canada (100% Interest)
Production from Black Fox in 2020 was 24,400 GEOs. Total cash costs and AISC were $1,397 and $1,650 per GEO, respectively.
We incurred $6.5 million in 2020 for exploration initiatives, compared to $25.8 million in 2019. 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.
The Froome deposit, which is part of the Fox Complex, is accessed from two declines starting at the Black Fox pit and is situated approximately one-half mile west of the Black Fox mine. The mineralized material from Froome will be hauled approximately 20 miles (32 km) to the Stock Mine mill, where it will be processed. Development of the vent drive that will provide initial access to the Froome underground deposit has advanced 95% by the end of February 2021. We are on track to reach the main deposit before the end of Q1 and to complete the necessary development work required to achieve commercial production by the fourth quarter of 2021.
The Stock exploration area sits adjacent to our Stock mill, which currently processes ore from our Black Fox mine. The Stock West mineralized zone was discovered in mid-2019; in 2020 five drill rigs completed 53,600 feet (16,350 meters) of follow-up drilling. Initial results suggest the potential to define a significant new zone of mineralization 800m (1/2 mile) from our Stock processing facility. The majority of our 2020 drilling was designed to infill the gaps between our encouraging 2019 intercepts. This will increase the density of the data needed to develop a 3D model and the Company expects to generate an initial resource estimate while drilling continues. Four contracted drill rigs completed a total of 58,600 feet (17,900 meters) by year-end. Drilling resumed in early January 2021. Assuming this drilling is successful in identifying sufficient gold to support a decision to re-open the historic Stock Mine, we are well positioned to act quickly and begin dewatering the mine in the second half of 2021. Previously the mine was dewatered in just 4 months.
In April 2020, the Indicated resource estimate for Grey Fox project increased 43% to 888,000 oz Au at 7.1 g/t. We have engaged an independent engineering group to complete a Preliminary Economic Assessment (PEA) on the Grey Fox - Black Fox, Stock and Timmins resources utilizing our existing central milling capacity. We plan to grow annual production at the Fox Complex to 100-150,000 ounces of gold, at a targeted cash cost of $800/oz and an all-in sustaining cost (AISC) of $1,100/oz, over a +10-year life, with production envisioned to start ramping up from 2022. The PEA’s completion is expected in Q2, and will support the optimal business case on which to further complete a feasibility study. Mining from the Froome deposit, as described above, is expected to bridge gold production, providing cash flow while we continue to drill and assess additional potential resources at the Black Fox, Grey Fox, Stock and Timmins projects for future development towards expanded production.
Gold Bar Mine, USA (100% Interest)
Gold Bar produced 28,000 GEOs in 2020. Total cash costs and AISC were $2,106 and $2,459 per GEO, respectively.
The outbreak of the COVID-19 pandemic had a significant impact on 2020 production, as the Gold Bar operation shut down in Q2 and isolation quarantine protocols reduced operating shifts in Q4 after site personnel tested positive for COVID-19. The slower ramp up to full mining rates following the shutdown was primarily due to delays related to mining contractor rehiring of operators.
In 2020, we spent $5.1 million on exploration activities in and around the Gold Bar mine, which included 110,500 feet (33,700 m) of drilling and metallurgical testing to support the updated reserve estimates. Drilling at Gold Bar South has successfully advanced the project and is expected to contribute to Gold Bar mine’s future production. Subject to the receipt of permit approvals as planned, the mining of Gold Bar South could begin as early as Q1 2022.
In January 2021, updated resource model and resource and reserve estimates were completed, providing us with a more accurate model to plan from moving forward. Remodeling of these deposits has been completed in-house and reviewed by an independent third-party mining consultant. Optimization of the reserve will continue into 2021, to improve ore deliveries to the pad.
San José Mine, Argentina (49% Interest)
Our attributable production from San José in 2020 was 31,800 gold ounces and 2,013,000 silver ounces, for a total of 54,500 GEOs. Total cash costs(2) and all-in sustaining costs (AISC)(2) were $1,233 and $1,514 per GEO, respectively.
Gold and silver production decreased significantly in 2020 as a result of suspensions of mining activities due to COVID-19 combined with operating below capacity during ongoing countrywide travel restrictions.
In 2021, our partner Hochschild Mining is planning a significant exploration program at San José. Towards the end of 2020 drilling started to return encouraging results in the Saavedra area close to where mining takes place. During Q1 2021, 6,500 ft (2,000 m) of resource drilling is planned at the Betania and Isabel veins, with campaigns also continuing at the Telken zone close to Newmont’s Cerro Negro mine and at Aguas Vivas, north-west of San José.
El Gallo Project, Mexico (100% Interest)
Production from El Gallo in 2020 was 8,000 GEOs from residual leaching of the heap leach pad. During 2020, residual leaching costs were $11.4 million, or $1,409 per GEO sold.
For 2021, we expect to recover 4,500-5,900 GEOs from residual leaching of the heap leach pad.
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.
Source: https://www.mcewenmining.com/investor-relations/press-releases/press-release-details/2021/MCEWEN-MINING-2021-Outlook-and-2020-Year-End-and-Q4-Results/default.aspx
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Socio comercial de Recursos Humanos - Argentina
El Socio Comercial de Recursos Humanos supervisará todos procesos de reclutamiento y todas las actividades de recursos humanos para las operaciones existentes y los nuevos proyectos en Argentina.
Global Procurement Lead
The Global Procurement Lead will oversee all procurement and supply chain activities for existing operations and new projects, to develop and execute strategic sourcing aligned with McEwen’s overall spend.
Senior Data Analyst
We are looking for a dynamic, self-motivated professional with a passion for data. This analytical and data expert needs to establish McEwen’s analytical reporting platform in PowerBi / SQL Databases, as well as work closely in the integration between our various platforms and data sources.
Security Guard
The Security Guard, reporting directly to the Security Supervisor, is responsible for operating the mine security gate house and monitoring all activity coming on or leaving the mine site.
Mill Manager
The Mill Manager’s main responsibility is to ensure the safe and economical operation of the milling and metallurgical department.
Sample Preparation Technician x 2
Primary responsibility of a Sample Preparation Technician is to perform sample preparation of underground drill core, chips and muck samples as well as other duties given by the Shift Crew Leader during the course of a shift.
Refiner/Metallurgical Technician
Reporting to the Chief Metallurgist, the Refiner/Metallurgical Technician will ensure the safe, secure, efficient, and cost-effective operation and maintenance of the refinery to meet or exceed safety, production and cost targets, while ensuring environmental compliance.
Mill Supervisor
• Provide technical support and direction for the Mill team.
• Implementation of standards.
• Plant testing programs and operational parameters.
Multiple Mill Operator Positions
As an integral part of the McEwen Mining Mill Operations team, the Mill Operators will efficiently perform all required duties while maintaining a safe and collaborative work environment.
Senior Project Engineer
Reporting to the Manager of Technical Services, the Senior Project is responsible to assist in leading the Engineering department in the design and scheduling of the underground mine development.