McEwen Mining: Updated Gold Bar Resource and Reserve Estimates

McEwen Mining Inc. 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”). 

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.

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