TORONTO, Oct. 11, 2018 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reports consolidated production for Q3 2018 of 33,806 gold ounces and 745,172 silver ounces, or 43,742 gold equivalent ounces(1)(“GEOs”), using a 75:1 gold to silver ratio. Consolidated production for the nine months ended Sept. 30, 2018 was 135,344 GEOs, which is 48% higher than the comparable period in 2017.
Consolidated Production Summary
Q3 YTD Full Year2018 Guidance
2017 2018 2017 2018
Gold (oz) 19,051 33,806 61,338 105,834 128,000
Silver (oz) 749,749 745,172 2,252,003 2,213,254 3,225,000
GEOs(1) 29,047 43,742 91,364 135,344 171,000
Learn more about our management team, properties, and potential by watching our Sept. 6, 2018 investor day presentation here: MUX Investor Day on YouTube
Highlights of the third quarter from our mines, including our newest mine in Nevada that is under construction, are as follows:
Gold Bar Mine, Nevada, USA (100%)
Construction is advancing on schedule for completion by the end of 2018, targeting production in Q1 2019. Activities at Gold Bar in Q3 focused on completion of the heap leach pad and crushing circuit, and advancing the process facility. All major equipment and bulk materials are either on site or purchased. Engineering for the project is complete and 97% of contracts are awarded. During the first three years of operation beginning with 2019, Gold Bar is projected to produce 55,000, 74,000 and 68,000 ounces of gold respectively.
During Q3 we announced an updated and increased resource estimate reflecting changes since the last Gold Bar Feasibility Study was published in March 2018. Measured and Indicated resources increased by 92,000 gold ounces to 721,000 gold ounces at 0.92 g/t, and Inferred resources increased by 82,000 gold ounces to 197,000 gold ounces at 0.90 g/t. Combined with the nearby Gold Bar South deposit the total resources on the Gold Bar Property are now 822,000 gold ounces in the Measured and Indicated category, and 202,000 gold ounces in the Inferred category. An updated mineral reserve estimate will be completed in Q1 2019.
We have committed $5 million to exploration in 2018 to further increase gold resources and test new exploration concepts at the Gold Bar Property, located along the prolific Battle Mountain - Cortez Gold Trend, Nevada.
Black Fox Mine, Timmins, Canada (100%)
Black Fox produced 11,618 GEOs in Q3, and 37,751 GEOs year to date, in line with our full year production guidance for 2018 of 48,000 GEOs. During Q3 we announced new resource estimates for both the Froome and Stock East deposits, as well as encouraging exploration results from the ongoing $15 million exploration program at the Black Fox Complex near Timmins, Ontario.
The updated Indicated Mineral Resource for Froome increased 14% to 181,000 gold ounces at a grade of 5.09 g/t, and the initial Inferred Mineral Resource for Stock East contains 114,000 gold ounces at a grade of 2.54 g/t.
Significant high-grade drill results from the Black Fox Complex included:
•Froome Footwall Target: 53.93 g/t gold over 8.29 m including 322.86 g/t gold over 1.34 m
•Pike River Target: 35.04 g/t gold over 3.30 m
•Stock East Deposit: 25.16 g/t gold over 2.09 m
•Grey Fox Deposit– 147 Zone cross structure: 13.41 g/t gold over 2.82 m including 27.70 g/t gold over 0.94 m
•Black Fox Mine depth extension: 35.08 g/t gold over 1.69 m
For additional information on exploration refer to two news releases published on Sept. 6, 2018 on our website www.mcewenmining.com.
San José Mine, Argentina (49%(2))
Production is in line with our full year guidance for 2018 of 91,000 GEOs. Q3 attributable production from San José was 11,768 gold ounces and 743,100 silver ounces, for a total of 21,676 GEOs. Year to date our attributable production is 34,729 gold ounces and 2,204,349 silver ounces, for a total of 64,120 GEOs.
El Gallo Project, Mexico (100%)
Production has exceeded our full year production guidance for 2018 of 32,000 GEOs. Residual heap leaching at El Gallo resulted in 10,448 GEOs in Q3, and 33,473 GEOs year to date when combined with prior period mining activity. Q3 was strong as a result of ore stacked on the heap leach pad at the end of Q2, however, residual leaching is expected to taper significantly in Q4 to be more in line with our longer term recovery expectations. By the end of Q2, mining and crushing activities at El Gallo ceased. Closure, reclamation and residual heap leach activities are ongoing and will continue for several years.
A new Preliminary Economic Assessment (PEA) study on the potential restart of production from the El Gallo was published on July 9, 2018. The proposed development plan evaluated in the PEA is called Project Fenix. The key outcomes of Project Fenix include an average annual production rate of 47,000 ounces gold equivalent, a 12-year mine life, low initial capital cost of $41 million for Phase 1 and $30 million for Phase 2, and pay-back period of 4.1 years. At current gold and silver prices the after-tax internal rate of return (IRR) is 28%, and the net present value (NPV) at a 5% discount rate is $60 million.
Capital cost estimates for Project Fenix are to a level of accuracy that is consistent with a PEA technical report. During the next 11 months we will continue to review mineral processing, mine sequencing, material transportation and tailings storage options; and the flow sheet will be optimized by undertaking trade-off studies, updating cost models and additional metallurgical testwork.
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