TORONTO, Feb. 02, 2021 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to extend a warm welcome to all our new shareholders, provide production guidance for 2021 of an expected 141,000 to 160,400 gold equivalent ounces (GEOs)(1), and discuss one of our most valuable yet under-appreciated assets, the Los Azules copper project. Beyond the potential of our gold and silver assets, Los Azules provides MUX with large indirect exposure to the growth of the electric vehicle market, renewable energy and the continuing urbanization of Asia.
“ I wish to extend a warm welcome to all of our new shareholders. Some of you may not be familiar with our 100%-owned Los Azules project. According to a study (Preliminary Economic Assessment published in 2017 (2 ) ), it has the potential to generate strong returns at a $3.00/lb copper price. Here are some of the highlights: a 36-year mine life; Capex of $2.4 Billion, a payback in 3.6 years; and annual production in the first 13 years of 410 Million lbs of copper at a cost of $1.14/lb. You may be interested to learn that in terms of value, using today’s metal prices of gold at $1,834/oz, silver at $26.17/oz and copper at $3.51/lb, that approximately 522 lbs of copper are equal to 1 oz of gold or 70 oz of silver, and 7.5 lbs of copper are equal to 1 oz of silver.
Los Azules does not have reserves, but it has Indicated and Inferred resources of:
General Motors recently announced that it will be aggressively shifting to electric vehicles, producing 30 new electric models within 4 years, and producing only electric vehicles by 2035, which may be followed by the other auto manufacturers and create an increased demand for copper and other metals.
Plans for Los Azules
We are concurrently working on two alternatives to fund the advancement and development of Los Azules. One alternative is to joint venture with a senior industry player to bring the project into production. The other alternative is to spin out Los Azules into a separate company and raise funds for it to aggressively advance the project towards a production decision. With the increasing copper price, we have received a heightened level of interest in Los Azules from major mining companies.
Production Guidance
We are forecasting our 2021 gold equivalent production to be in the range of 141,000 to 160,400 gold equivalent ounces (GEOs) using a gold:silver ratio of 75:1. These production levels represent a 21% to 38% improvement over 2020. The table below provides the forecast production by mine site.
Operations Status
The turnaround at our operations is the result of new leadership in our senior executive and operations teams. At our Fox Complex in Timmins, we have a well-funded exploration program underway following on our successful exploration results from 2018-2020. Also, we are completing the access ramp to the Froome deposit in late Q1 and expect to reach commercial production in Q4.
In Mexico, we have recently announced the Feasibility Study for the Fenix ( 3) gold-silver project, which at $1,800/oz gold and $25/oz silver generates a 51% After-Tax IRR, $90.8 million NPV@8% and a 2.9 years payback, with average annual production of 26,000 (4) oz gold in Phase 1 and 4,200,000 (5) oz silver equivalent in Phase 2.
In Argentina, our San Jos é Min e is a high-grade silver and gold producer with a large property package that nearly encircles Newmont’s rich Cerro Negro mine,” commented Rob McEwen, Chairman and Chief Owner.
2021 Production Guidance
Notes:
(1) 'Gold Equivalent Ounces' are calculated based on an assumed gold to silver price ratio of 75:1.
(2) Download the Los Azules PEA (2017) report here: https://s21.q4cdn.com/390685383/files/technical_reports/los_azules/LosAzulesPEA_Rev0_20171016.pdf
(3) Refer to our news release dated December 31, 2020 for details.
(4) Estimated 26,000 oz Au per annum production assumes full production from years 1 to 5.
(5) All references to silver equivalent are based on an 88 Ag oz to 1 Au oz ratio. For Phase 1 silver accounts for 2% of total production. For Phase 2 gold accounts for approximately 9% of total production. Average annual AgEq production is from years 5 to 9.5.
(6) The San José Mine is 49% owned by McEwen Mining Inc. and 51% owned and operated by Hochschild Mining plc.
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.
