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McEwen Mining forging ahead with expansion plans for Timmins

Oct 16, 2020

McEwen Mining is expecting gold production to continue to increase quarter by quarter at its flagship Timmins operation. The company is about half way through the development phase in reaching a new mining zone. 

In the company's quarterly filings, McEwen reports consolidated production for Q3 2020 was 23,100 gold ounces and 575,000 silver ounces, or 30,400 gold equivalent ounces, at the average gold:silver price ratio for the quarter of 79:1.

Production rebounded during Q3 after the successful restart of all four of our operations, which were temporary suspended during Q2, largely due to actions taken to prevent the spread of COVID-19 amongst our workers, business partners, and communities.

Black Fox Mine, Timmins, Canada (100%)

In Q3, Black Fox produced 5,800 GEOs, compared to 2,200 GEOs in Q2. The mine is benefitting from the additional development work completed during Q2 that increased mining flexibility. We expect production to continue to trend higher during Q4, and mining from Black Fox to continue into H1 2021, while we transition to mining the Froome deposit.

Froome  Development

Development of underground access to the Froome deposit, located a half mile (800 m) west of the Black Fox mine, is on track, having advanced 47% by the end of the quarter. We plan to reach the deposit in Q2 2021 and achieve commercial production from Froome in Q4 2021. Froome offers several benefits compared to Black Fox such as straighter more efficient haulage, wider and more consistent mineralization, and lower cost bulk mining methods. We are targeting an average annualized production rate of 40-45,000 GEOs per year from Froome over a period of approximately 2.5 years.

Fox Complex Expansion  Economic Study

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. The PEA is expected to be completed in Q4 2020 and will identify the optimal business case on which to complete a feasibility study in 2021. Combined, the Fox Complex deposits host nearly 3.0 million gold ounces of Measured and Indicated resources, and an additional 1.0 million gold ounces of Inferred resources (2). The objective of the PEA is to develop a plan for the Fox Complex where it would grow to an annual production of 100-150,000 ounces of gold, at a cash cost of $800/oz and an all-in sustaining cost (AISC) of $1,050/oz, over a 10-year life. Production growth is envisioned to start ramping up in 2022.

Grey Fox and Stock – 2020 Exploration

On September 10th we completed a flow-through financing, which provides US$10 million for exploration activities in the Timmins region over the next 1-2 years. The initial focus is on two high-potential targets, Stock West and Whiskey Jack. Both of these targets returned very encouraging results during the 2018-2019 drilling campaigns, and we are looking forward to continue exploration at these exciting discoveries, with the objective to define additional resources.

Whiskey Jack Target

Drilling 650 feet (200 m) north of existing resource blocks at the Grey Fox deposit in 2019 resulted in the discovery of a new zone called Whiskey Jack that returned 9.9 g/t Au over 39 m and 9.7 g/t Au over 6 m in hole 19GF-1248. The 2020 drilling has been designed to: a) test for extensions of the gold mineralization, which is open at depth and along strike (see Figure 1), and b) infill the central discovery area with 100 ft (30 m) spaced drilling, in order to assess gold distribution and the potential to define additional resources.

Drilling started in September and visible gold is showing in 6 of the 9 new holes logged to date, similar to the ratio observed during the 2019 drilling campaign. Highlights of the first new drill holes(3) in the Whiskey Jack target are as follows:

20.0 g/t Au over 6.7 m from hole 20GF-1255
16.3 g/t Au over 2.3 m from hole 20GF-1112
9.5 g/t Au over 2.4 m (core length) from hole 20GF-1152

Tags: Northern Ontario / Operational Updates / Gold / All Articles