TORONTO, ONTARIO--(Marketwired - May 15, 2013) - McEwen Mining Inc. (MUX)(MUX.TO) is pleased to announce an updated, Canadian National Instrument 43-101 compliant ("NI 43-101") mineral resource estimate for its 100% owned Los Azules Copper Project in San Juan Province, Argentina. Key developments include the successful conversion of inferred resources into the indicated category while increasing the size of the resource. The resource remains open along strike, to depth, and laterally. Los Azules ranks as one of the world's largest, undeveloped, high-grade, open pit copper projects, and appears to have significant growth potential.
Table 1. Los Azules Copper Project - Comparison of Previous and Current Mineral Resource Estimates
|June 2012 Resource Estimate Update||May 2013 Resource Estimate Update||% Change|
|Cu lbs |
|Cu lbs |
|*Details for gold and silver resources are included in Table 2.|
"This Resource Estimate Update marks the completion of our most successful drilling season at Los Azules. We discovered a new parallel zone to the west and significantly increased the Indicated Resource and Inferred Resource Estimates. Congratulations are in order to our exploration team in Argentina who set a record for the number of pounds discovered at Los Azules in one drill season," stated Rob McEwen, Chief Owner.
This season's exploration effort focused on expanding the resource base. A total of 15,800 meters of drilling was completed which produced a 17% increase in contained copper in the Indicated Resource category, to 5.4 billion lbs of copper and a 32% increase in contained copper in the Inferred Resource category, to 14.3 billion lbs of copper, since the June 2012 estimate of mineral resources. On February 5, 2013, we released an interim, mid-season resource update (to view click here). Table 1 shows a comparison of the new (May 2013) resource with the resource estimated at the end of last year's drilling program (June 2012).
This updated resource estimate will form the basis of a new Preliminary Economic Assessment (PEA), which is expected to be completed in the third quarter of 2013. This PEA will evaluate the possibility of: (1) increasing the daily throughput; (2) producing copper cathode instead of a concentrate and (3) processing low-grade mineralized material not previously considered, via a heap leach.
The advantages of being able to produce a copper cathode rather than a copper concentrate is two fold: First, it would eliminate the capital intensive, concentrate pipeline through Chile; and second, it would reduce the applicable export tax by 50%.
About Los Azules
Los Azules is a large undeveloped copper porphyry system located in western San Juan Province within a belt of porphyry copper deposits that straddles the Chilean/Argentine border. This belt contains some of the world's largest copper deposits, including Codelco's El Teniente and Andina mines, Anglo American's Los Bronces mine, Antofagasta PLC's Los Pelambres mine and Xstrata's El Pachón project, among others. Los Azules is one of the world's largest, highest grade, undeveloped copper-porphyry deposits not owned by a major base metals company.
Table 2. Los Azules Mineral Resource Estimate
In order to exhibit reasonable prospects for economic viability, the mineral resource estimate has been contained within a conceptual open pit shell generated using general technical and economic parameters that are defined at the end of this news release. For comparison purposes, resources are listed at a series of cut-off grades in Table 2. The Base Case cut-off grade of 0.35% Cu is highlighted in the table below.
|* "Tonnes" is stated in metric and is equivalent to 2205 lbs.|
|** Estimated contained metal values may be subject to rounding errors.|
Details on the parameters of the resource estimate are as follows:
- The resource estimate is based on data from 185 drill holes comprising a total length of 59,518 meters of drilling completed to the end of March 2013.
- There were a total of 27,688 individual samples selected for analysis. The samples were collected and analyzed in accordance with industry standards. Splits from the drill core samples were submitted to either Alex Stewart in Mendoza or ALS Chemex or ACME in Santiago, Chile for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays.
- The May 2013 mineral resource estimate for the Los Azules Copper Project was prepared under the direction of Robert Sim P.Geo. of SIM Geological Inc. The mineral resource estimate uses drill hole sample assay results and the interpretation of a geologic model that relates to the spatial distribution of copper in the deposit. Interpolation characteristics were defined based on the geology, drill hole spacing and geostatistical analysis of the data. Block grade estimates were done using Ordinary Kriging (OK) with a nominal block size measuring 20 meters long, 20 meters wide and 15 meters high. Resources are classified according to their proximity to sample data locations and are reported, as required under NI 43-101, according to the CIM Definition Standards for Mineral Resources and Mineral Reserves.
- Mineral resources, which are not mineral reserves, do not have demonstrated economic viability.
- The quantity and grade of reported Inferred resources are uncertain in nature and there has been insufficient exploration to classify these inferred resources as Indicated or Measured, and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured category.
- As required under NI 43-101, reasonable prospects for economic viability of the mineral resources has been exhibited by the application of a resource limiting pit shell built about copper grades in the model using a projected metal price of US$2.75 per lb. Cu, mining costs of US$1.00 per tonne, milling and G&A costs of US$4.25 per tonne, 100% recoveries and an average pit slope of 34 degrees.
About McEwen Mining (www.mcewenmining.com)
The goal of McEwen Mining is to qualify for inclusion in the S&P 500 by creating a profitable, 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 and the Los Azules Project in San Juan, Argentina.
McEwen Mining has 297 million (common + exchangeable) shares issued and outstanding. Rob McEwen, Chairman, President and Chief Owner, owns approximately 25% of the shares of the Company. As of April 29, 2013, McEwen Mining had cash and liquid assets of approximately US$50 million, remains debt free, and is listed on the New York and Toronto stock exchanges.
Robert Sim, P.Geo., a Qualified Person and independent of McEwen Mining as defined by National Instrument 43-101 ("NI 43-101") has reviewed and approved the technical content of this news release related to the mineral resource estimate presented herein. Bruce Davis, PhD, FAusIMM, who is a Qualified Person and independent of McEwen Mining, as defined by NI 43-101 and responsible for the quality control for the assaying of the Los Azules drill core has reviewed the assay quality control information. All samples were collected in accordance with industry standards. Splits from the drill core samples were submitted to the ACME sample preparation laboratory in Mendoza, Argentina, and then transferred to ACME's laboratory in Santiago, Chile for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays. The mineral resource estimate referenced in this press release was prepared in April and May 2013 by Robert Sim, P.Geo. and Bruce Davis, PhD, FAusIMM.
For additional information about June 2012 resource estimate and the Los Azules project generally see the Technical Report titled "Los Azules Porphyry Copper Project, San Juan Province, Argentina" dated August 1, 2012, with an effective date of June 15, 2012, prepared by D. Ernest Winkler, P.Eng., Robert Sim, P.Geo., Bruce Davis, PhD, FAusIMM and James K. Duff, P.Geo., all of whom are qualified persons and all of whom are independent of McEwen Mining, each as defined by NI 43-101. The foregoing report is available under the Corporation's profile on SEDAR (www.sedar.com).
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 Canadian 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 news 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 news 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, 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, 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, 2012 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.