TORONTO -- McEwen Mining Inc. reported its consolidated production and gave updates on its projects in its third-quarter report released Oct. 18.

Gold Bar Project, Nevada

The Gold Bar Project achieved a major milestone in the permitting process with the publication by the Environmental Protection Agency of the Notice of Availability of the Final Environmental Impact Statement in the Federal Register. Following a regulated review period, a signed Record of Decision will be published, signifying the completion of the National Environmental Policy Act process.

The Record of Decision is expected in early November this year and development of Gold Bar is planned to begin upon receipt, in line with earlier estimates. Gold Bar is expected to contribute an average of 65,000 ounces to McEwen’s annual gold production beginning in 2019.

Black Fox, Timmins

The company’s growth strategy in the Timmins region, which started in April 2017 with the acquisition of Lexam VG Gold, reached a second important milestone on Oct. 6 with the purchase of the Black Fox Complex. Black Fox consists of: 1) the fully operational Black Fox underground gold mine, 2) the Black Fox-Stock mill, 3) an experienced workforce, and 4) the nearby Grey Fox and Froome development projects. The addition of Black Fox boosts the company’s global 2018 production guidance to between 172,000-185,000 gold equivalent ounces.

Los Azules, Argentina

The results of the 2017 PEA demonstrate that Los Azules could become a robust, high margin, rapid pay-back, and long-life open pit mine at current copper, gold and silver prices. Financial highlights from the 2017 PEA, assuming a $3 per pound copper price, are: 1) $2.2 billion after-tax net present value, 2) an internal rate of return of 20.1 percent, and 3) a payback period of 3.6 years and a total mine life of 36 years. Estimated average annual copper production is 415 million pounds at a cash cost of $1.11 per pound during the first 10 years of mining operations.

San José Mine, Argentina

The company’s attributable production from San José in Q3 was 11,862 gold ounces and 747,960 silver ounces, for a total of 21,834 gold equivalent ounces. Year-to-date attributable production was 64,563 gold equivalent ounces, 2.8 percent below the same period in 2016.

El Gallo Mine, Mexico

Production in Q3 was 7,213 gold equivalent ounces, compared to 11,849 gold equivalent ounces during the same period in 2016. Production in Q3 continued to be below expectations as a result of a serious mechanical failure at the end of July that removed the crushing circuit from operation. As a result, the company was unable to crush and place fresh ore to leach on the leach pad for a period of time.

McEwen has almost twice its normal crushing capacity available for the remainder of the year. Production is improving on account of the increased throughput, and access to better grades of ore in the pit that was predicted in the second half of the year. Increased production in Q4 will partially compensate for the shortfall experienced to date.


To purchase Black Fox and provide funding for further investment in capital spending and exploration, the company completed a financing in which a total of 20,700,000 shares and 10,350,000 warrants were sold at a price of $2.25 per share and associated one-half warrant, for aggregate gross proceeds of $46,575,000. Each whole warrant entitles the holder to purchase one share at an exercise price of $2.70 per share until Sept. 28, 2018.

Financial Results

Operating costs for the quarter ended Sept. 30 will be released with the company’s 10-Q quarterly financial statements in early November. As of Oct. 12, the company is debt-free with liquid assets of approximately $60 million.

For Q3 2017, the company produced 19,051 gold ounces and 749,749 silver ounces.