McEwen Mining Receives Final Environmental Permit for Construction
and Operation of El Gallo 2 Project
TORONTO, ONTARIO--(Marketwired - Jan 21, 2014) - McEwen Mining
Inc. (NYSE:MUX)(TSX:MUX) is pleased to announce that the
Secretariat of Environment and Natural Resources (SEMARNAT) for the
State of Sinaloa, Mexico, has approved the Company's Change of Land
Use application for El Gallo 2. This final environmental permit
allows for the construction and operation of the proposed mine. El
Gallo 2 is projected to produce an average of 95,000 gold eq.
ounces per year (5.2 million ounces of silver and 6,100 ounces of
gold) at an approximate cash cost of $750 per gold eq. ounce
(including all pre-strip and Mexican royalties). All in sustaining
costs have been estimated at approximately $800 per gold eq. ounce
(including an estimated $5 million per year on exploration). Gold
equivalent ounces are calculated by converting silver into gold
using a 60:1 exchange ratio.
McEwen Mining and its engineering contractors are conducting
on-going studies in order to reduce the estimated capital
expenditures associated with El Gallo 2. The Company believes that
approximately $20 million in capital costs can be reduced from
previous estimates with minimal impact on production by: 1)
reducing the number of leach tanks; 2) building a smaller Merrill
Crowe process plant / refinery; 3) using modular crushers; and, 4)
reducing the number of transformers. To date $10 million of the
estimated final construction cost has been spent. With these
projected savings and taking into account the funds spent to date,
approximately $150 million would be required in order to complete
the mine.
"We would like to congratulate our teams in Toronto and Mexico
for their dedication and hard work. In addition, McEwen Mining
wishes to extend its sincere gratitude and thanks to the SEMARNAT
offices in Sinaloa State and Mexico City. This process took 5
months from start to finish and shows what is possible when the
public and private sectors work together to achieve a common goal,"
stated Rob McEwen, Chairman and Chief Owner and Ian Ball,
President.
A final decision to proceed with the construction of El Gallo 2
has not been made. The Company plans to complete its cost savings
studies and review financing alternatives. Although the Company
believes this is an ideal environment to build El Gallo 2 due to
the abundance of skilled labour and supplies, any decision to
proceed would be based on securing financing on more attractive
terms than those currently available. The Company believes
receiving the final permit for El Gallo 2 will help facilitate this
process. The Company will provide an update during its Q4 financial
update, which is scheduled for early March. At December 31, 2013,
McEwen had cash and gold/silver bullion totaling $26 million and
was debt free.
Two additional permits associated with El Gallo 2 will be
submitted in Q1 2014. These permits will not prevent construction
from proceeding. One of these permits is to allow for the mining of
a satellite deposit, Palmarito, in 2016. The second permit is for a
right-of-way for electrical power to connect to the process plant.
Construction of the mine could begin with power provided by
generators with the option of later connecting to the electrical
grid.
About McEwen Mining (www.mcewenmining.com)
The goal of McEwen Mining is to qualify for inclusion in the
S&P 500 by creating a high growth 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, Mexico and Nevada.
McEwen Mining has 297,159,359 shares issued and outstanding at
January 21, 2014. Rob McEwen, Chairman, and Chief Owner, owns 25%
of the shares of the Company.
TECHNICAL INFORMATION:
This news release has been reviewed and approved by William
Faust, PE, McEwen Mining's Chief Operating Officer, who is a
Qualified Person as defined by National Instrument 43-101 ("NI
43-101"). For additional information about the El Gallo complex see
the technical report titled "Resource Estimate for the El Gallo
Complex, Sinaloa State, Mexico" dated August 30, 2013 with an
effective date of June 30, 2013, prepared by John Read, C.P.G., and
Luke Willis, P. Geo. Mr. Read and Mr. Willis are not considered
independent of the Company as defined by NI 43-101.
There are significant risks and uncertainty associated with
construction, commencing production or changing production plans
without a current feasibility, pre-feasibility or scoping study.
Although the subject of a 2012 feasibility study, the Company does
not have a current feasibility study on the El Gallo 2 project. As
such, El Gallo 2 may ultimately be determined to lack one or more
geological, engineering, legal, operating, economic, social,
environmental, and other relevant factors reasonably required to
serve as the basis for a final decision to complete the expansion
of all or part of this project.
The foregoing news release and technical reports are available
under the Corporation's profile on SEDAR (www.sedar.com).
CAUTIONARY NOTE TO US INVESTORS
McEwen Mining prepares 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. The estimation of measured resources and indicated
resources involve greater uncertainty as to their existence and
economic feasibility than the estimation of proven and probable
reserves. U.S. investors are cautioned not to assume that any part
of measured or indicated resources will ever 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.
CAUTIONARY NOTE REGARDING NON-GAAP MEASURES
In this news release, we have provided non-U.S. GAAP
("non-GAAP") performance measures. Because the non-GAAP performance
measures do not have any standardized meaning prescribed by U.S.
GAAP, they may not be comparable to similar measures presented by
other companies.
Total cash costs consist of mining, processing, on-site general
and administrative costs, royalty costs, refining and treatment
charges, sales costs and operational stripping costs. All-in
sustaining cash costs consist of total cash costs (as described
above), plus environmental rehabilitation costs, mine site
exploration and sustaining capital expenditures. Depreciation is
excluded from both total cash costs and all-in sustaining cash
costs. Total cash cost and all-in sustaining cash cost per ounce
are calculated on a co-product basis by dividing the respective
proportionate share of the total cash costs and all-in sustaining
cash costs for the period attributable to each metal by the ounces
of each respective metal sold.
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,
risks related to the receipt of required permits and other
governmental approvals, 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.
The NYSE and TSX have not reviewed and do not accept
responsibility for the adequacy or accuracy of the contents of this
news release, which has been prepared by management of McEwen
Mining Inc.
McEwen Mining Inc.Sheena ScotlandInvestor Relations(647)
258-0395 ext 410 or Toll Free: (866) 441-0690(647) 258-0408Mailing
Address:McEwen Mining Inc.181 Bay Street Suite 4750Toronto, ON M5J
2T3PO box 792info@mcewenmining.comMcEwen Mining Inc.Facebook:
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