TORONTO, ONTARIO--(Marketwire - Oct 18, 2012) - McEwen Mining Inc. (MUX)(MUX.TO) is pleased to announce Third Quarter production results and the discovery of a new vein system at the San José mine (49%) in Argentina. The San José mine had another solid quarter of production and El Gallo Phase I (100%) in Mexico achieved its first gold pour. Third Quarter production totaled 10,572 ounces gold and 760,670 ounces silver, representing 25,200 gold and gold equivalent ounces1. The Company remains on track to produce approximately 105,000 gold and gold equivalent ounces in 2012. Production costs will be announced with the Third Quarter financial results, which will be released in early November.
San José Mine - Argentina (49%)
The San José mine continued to meet its full year production guidance. Production attributable to McEwen Mining during the Third Quarter totaled 10,274 ounces gold and 760,480 ounces silver, representing 24,899 gold and gold equivalent ounces. The average grade mined at San José during the quarter was 5.24 gpt gold and 402 gpt silver, slightly lower than previous quarters, but in line with the Company''s expectations. The decrease in grade was offset by higher throughput at the process plant. Ounces sold in the quarter were higher than normal due to the sale of accumulated concentrate inventory from the previous quarter.
|San José Mine Production Comparison|
|San José - 100%*||Year to Date 2012||3rd Quarter |
|2nd Quarter |
|3rd Quarter |
|Ore production (tonnes)||380,911||136,577||128,803||124,204|
|Average grade gold (gpt)||5.71||5.24||5.98||5.75|
|Average head silver (gpt)||416||402||430||448|
|Average gold recovery (%)||90.4||91.1||88.6||91.1|
|Average silver recovery (%)||86.6||87.9||84.2||87.2|
|Gold produced (ounces)||63,270||20,967||21,946||20,908|
|Silver produced (ounces)||4,407,000||1,552,000||1,500,000||1,562,000|
|Gold equivalent1 produced (ounces)||148,020||50,813||50,792||50,946|
|Gold sold (ounces)||61,127||29,126||17,661||18,140|
|Silver sold (ounces)||4,343,000||2,165,000||1,146,000||1,409,000|
|McEwen Mining - 49% Share|
|Gold produced (ounces)||31,002||10,274||10,754||10,245|
|Silver produced (ounces)||2,159,430||760,480||735,000||765,380|
|Gold equivalent1 produced (ounces)||72,530||24,899||24,888||24,964|
|*McEwen Mining holds a 49% attributable interest in the San José mine.|
El Gallo Phase 1 - First Gold Pour in Mexico
On September 24th the Company announced that it had achieved its first gold pour from El Gallo Phase I. The remaining commissioning activities are underway, with commercial production anticipated to be achieved late this year. An update on the commissioning of Phase I will be provided with the Company''s Third Quarter financial results.
1Gold equivalent calculated using an average silver:gold ratio of 52:1.
Discovery of New Vein System at the San José Mine in Argentina
The Company is pleased to announce the discovery of a new vein system at the San José mine. This result is part of the largest exploration program ever being conducted at the mine this year. The new discovery is the high-grade gold/silver Emilia vein, located within the known San José area. The Emilia vein has been traced over a strike length of more than 1,000 meters and it is open to the east and at depth. The Emilia drilling also identified sub-parallel veins called the Estela and Esperanza veins, and the system represents the eastward extension of the east-west Micaela system. For a full set of results please see Table 2. The discovery of this new vein system is encouraging and illustrates the prospective nature of the San José mine and the surrounding land package.
The location of the Emilia vein is shown in Figure 1. Highlights from the holes recently drilled on the Emilia vein include:
|Table 1.Drill Hole Intercepts - Emilia Vein|
|Drill Hole||Intercept |
|True Width |
|SJD-496 including||2.30 |
|SJD-1246 including||1.65 |
|SJD-1264 including||1.65 |
|SJD-1269 including||4.70 |
About the San José Mine
The San José mine is a high grade silver/gold mine located in southern Argentina in the province of Santa Cruz. The mineralisation occurs as low sulphidation quartz veins. It is owned and operated by Minera Santa Cruz S.A., a joint venture between Hochschild Mining (51%) and McEwen Mining (49%). Operations commenced at San José in June 2007 and in the second half of 2008 its processing capacity was increased from 750 to 1,500 tonnes per day. The mine produced 81,000 ounces gold and 5.9 million ounces silver in 2011.
About McEwen Mining (www.mcewenmining.com)
The goal of McEwen Mining is to qualify for inclusion in the S&P 500 by 2015 by creating a high growth, low-cost, mid-tier gold producer focused in the Americas. McEwen Mining''s principal assets consist of the San José mine in Santa Cruz, Argentina (49% interest); the El Gallo complex in Sinaloa, Mexico; the Gold Bar project in Nevada, US; the Los Azules project in San Juan, Argentina and a large portfolio of exploration properties in Argentina, Nevada and Mexico.
McEwen Mining has 267,919,384 shares issued and outstanding. Rob McEwen, Chairman, President and Chief Owner, owns approximately 25% of the shares of the Company. As of June 30, 2012, McEwen Mining had cash and liquid assets of US$38 million and is debt free.
Reliability of Information
Minera Santa Cruz S.A., the owner of the San José mine, is responsible for and has supplied to the Company all reported results from the San José mine. This press release is based entirely on information provided to McEwen Mining by Minera Santa Cruz S.A. (MSC). McEwen Mining''s joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates other than MSC do not accept responsibility for the use of project data or the adequacy or accuracy of this release. As the Company is not the operator of the San José mine, there can be no assurance that production information reported to the Company by MSC is accurate, the Company has not independently verified such information and readers are therefore cautioned regarding the extent to which they should rely upon such information.
The technical contents of this news release has been reviewed and approved by Jim Duff, Senior Operations Advisor to the Company, a Qualified Person as defined by Canadian Securities Administrator National Instrument 43-101 "Standards of Disclosure for Mineral Projects". Assay results were reported to McEwen Mining by MSC, which is the operating company for the San José mine joint venture. Assay results for the drilling were reviewed by Jim Duff. All samples were collected in accordance with industry standards. Drill core samples were submitted to Alex Stewart Assayers, Argentina S.A. in Mendoza, Argentina, for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays. Jim Duff has reviewed the assay certificates from the lab and the quality control measures.
Cautionary Note to U.S. Investors
McEwen Mining reports its resource estimates in accordance with standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in Canadian National Instrument 43-101 ("NI 43-101"). These standards are different from the standards generally permitted in reports filed with the SEC. Under NI 43-101, McEwen Mining reports measured, indicated and inferred resources, measurements which are generally not permitted in filings made with the SEC. According to NI 43-101 criteria, the estimation of measured resources and indicated resources involve greater uncertainty as to their economic feasibility than the estimation of proven and probable reserves. Under SEC Industry Guide 7 criteria, measured, indicated and inferred resources are considered Mineralized Material. The SEC considers that in addition to greater uncertainty as to the economic feasibility of Mineralized Material compared to proven and probable reserves, there is also greater uncertainty as to the existence of Mineralized Material. U.S. investors are cautioned not to assume that measured or indicated resources will be converted into economically mineable reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources.
Caution Concerning Forward-Looking Statements
This press release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the date of this press release, McEwen Mining Inc.''s (the "Company") estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, risks related to business integration as a result of the business combination between US Gold and Minera Andes, factors associated with fluctuations in the market price of precious metals, mining industry risks, political, economic, social and security risks associated with foreign operations, risks associated with the construction of mining operations and commencement of production and the projected costs thereof, risks related to litigation including specifically but not limited to ongoing litigation with respect to the Los Azules property which if resolved adversely to the Company, would materially affect the Company''s ability to develop the Los Azules project, property title, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves and other risks. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See McEwen Mining''s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information regarding the Company. All forward-looking statements and information made in this news release are qualified by this cautionary statement.
To view Figure 1, "San José Mine - Emilia Vein System", please visit the following link: http://media3.marketwire.com/docs/McEwenMining1016fig1.pdf
To view Figure 2, "Emilia Vein System - Drill Hole Locations", please visit the following link: http://media3.marketwire.com/docs/McEwenMining1016fig2.pdf
|Table 2. Emilia Vein System Drilling Results From July 1, 2012 to September 30, 2012|
|Drill Hole||From |
|True Width |