TORONTO, Jan. 29, 2021 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to provide an update on its progress so far this year along with a timeline for deliverables in 2021 and recent financing activities.
Timmins, Canada
The Fox Complex has a combined resource base of 3 million oz(1) of gold and we have ambitious plans for these assets. Independent technical consultants have been employed to develop a Preliminary Economic Assessment (PEA) to expand the production from the current short mine life producing 30-40,000 oz gold per year to a ten-year mine life with annual production of 100-150,000 oz gold per year. Early results are encouraging.
The turnaround at the Black Fox Mine is progressing, with development of the underground access to the Froome deposit ahead of schedule. The first ore from Froome is planned to be delivered to the mill later this quarter and commercial production is expected to begin in Q4 of this year.
Underground drilling at the Black Fox Mine continues to return encouraging high-grade intercepts that illustrate the potential of the mine. These recent results are from delineation drilling:
64.7 g/t gold over 2.0 m core length (1.0 m TW(2)) from hole 300-F892-03 (300 level West Flank)
50.8 g/t gold over 5.6 m core length (1.3 m TW) from hole 460-L249-02 (460 level Central Zone)
37.7 g/t gold over 2.6 m core length (1.0 m TW) from hole 460-L249-06 (490 level Central Zone)
12.7 g/t gold over 3.2 m core length (2.0 m TW) from hole 490-L310-14 (490 level Central Zone)
At the Stock property, surface exploration drilling is underway with three drills on the Stock West target, and one drill testing for the extension of economic mineralization below the historic workings of the Stock Mine. 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 this year. Previously the mine was dewatered in just 4 months via the existing shaft workings.
Nevada, USA
On January 7th, we updated resource and reserve numbers for our Gold Bar Mine. As a result of the 16% overall reduction in estimated reserves, an updated Feasibility Study has been completed and the report will be published by February 23rd.
Exploration drilling has resumed on targets close to the mine. On our adjoining Tonkin property, we have an oxide deposit that we are assessing as a potential source of production that may also extend the mine life of Gold Bar.
Argentina
The San José mine, which is operated by our joint venture partner Hochschild Mining, has resumed production after being temporarily closed during Q4 2020 due to government-imposed quarantine measures. The mine performed well in 2020 despite interruptions due to COVID-19 issues. We are pleased to report that we have just received our first dividend for the year from our 49% interest in the San José mine.
On January 20th, Hochschild released encouraging exploration drilling results from San José including: 1.3 m @ 13.8 g/tAu and 3,149 g/tAg (SJD-2188, Ramal HVNX vein), and 1.6 m @ 5.6 g/t Au and 648 g/tAg (SJD-2210, Isabel vein).
At our Los Azules copper project, we expect to provide an update on the construction of a new access road to the project in the coming months. This critical infrastructure would provide year-round access to the project, compared to the current road which is only passable 5 months of the year. The Los Azules PEA published in 2017 projected a robust operation at $3/lb copper. With the improving copper price, interest in the project has increased.
We are currently evaluating two alternatives to realize more value for our shareholders: one is pursuing a joint venture with a senior mining company to bring the project into production; and the other alternative is spinning out the asset into a new public company. Concurrently we are looking at opportunities to improve the economics of Los Azules with ore sorting technologies.
Mexico
The Fenix Feasibility study, that envisions a gold and silver mine with a 9.5-year life, will be published by February 15th. The project is turn-key with permits in hand, as well as an established local workforce.
FINANCING
We have closed the previously announced private placement offering (the “Offering”) of 12,600,600 flow-through common shares (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) priced at US$1.01 (Cdn$1.29) per flow-through common share for total gross proceeds of US$12,689,000 (Cdn$16,254,774). The Offering was completed through a syndicate of underwriters led by Cantor Fitzgerald Canada Corporation as sole bookrunner and included H.C. Wainwright & Co., LLC and A.G.P./Alliance Global Partners.
The proceeds of the Offering will be used exclusively to fund development of the Froome deposit, which is part of the Fox Complex in Timmins, Ontario.
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.
