TORONTO, Oct. 29, 2020 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today reported its third quarter (Q3) results for the period ended September 30th, 2020.
•Cash and liquid assets(1) and working capital at September 30th, 2020 were $18.8million(2) and positive $21.6 million, respectively.
•Production rebounded during Q3 after the successful restart of all four of our operations, which were temporarily suspended during Q2, largely due to actions taken to prevent the spread of COVID-19 amongst our workers, business partners, and communities. Production for Q3 2020 was 23,100 gold ounces and 575,000 silver ounces, or 30,400 gold equivalent ounces(3)(GEOs), at the average gold:silver price ratio for the quarter of 79:1.
•For Q3 we spent $8.5 million on exploration and advanced projects, and are reporting a net loss of $9.8 million, or ($0.02) per share, compared to a net loss of $11.5 million, or ($0.03) per share, in Q3 2019.
•At Black Fox, development of the access to the Froome underground deposit has advanced 47% by the end of the quarter. We are on track to reach the deposit in the second quarter of 2021 and complete the necessary development work. Commercial production is expected by the fourth quarter of 2021.
•On September 10th we closed a private placement of flow-through common shares at a price of $1.65 per share (representing a premium of 21% over the share price) for gross proceeds of $10.4 million. These funds will be used exclusively for exploration activities in the Timmins region over the next 12 to 24 months.

•Consolidated production guidance for Q4 2020 is 31,500-34,000 GEOs(4).
•Anna Ladd-Kruger has joined the Company as our Chief Financial Officer. Anna is an accomplished mining executive with over 20 years of experience in leading mining organizations.
•Our quarterly webcast will take place tomorrow, Friday, October30th at 11 am EDT. Details are provided below.

“I am feeling much better this year than I did last year at this time because the bad news is behind us. Our operations are starting to turn around and improve; the financial pressure on our balance sheet has been alleviated; and our future growth is becoming much brighter. Investment capital is still in the early stages of moving into precious metals. There are a number of companies that are still being largely ignored but appear to have considerable upside potential. I believe McEwen Mining is one of those companies whose share price has a lot of catching up to do. Yes, last year was a nightmare and as shareholders we all suffered great frustration and confusion over the large loss of share value at a time when the price of gold was climbing ever higher. Our problems were many, some were due to non-recurring events and others were operational. Our senior management at both head office and at our mines are focused on improving operating efficiencies and profit margins. Over the next several quarters we expect to deliver better operating results along with exploration news that we hope will start to close the price performance gap,” commented Rob McEwen, Chairman & Chief Owner.

Operations Update

San José Mine , Argentina (49% Interest)

Our attributable production from San José in Q3 was 8,600 gold ounces and 571,000 silver ounces, for a total of 15,900 GEOs(5). For Q3, total cash costs(1) and all-in sustaining costs (AISC)(1) were $1,269 and $1,538 per GEO, respectively. During Q3, government-imposed COVID-19 travel restrictions limited the mobilization of personnel resulting in the mine continuing to operate below normal capacity.

Black Fox Mine , Canada (100% Interest )

Production from Black Fox was 5,800 GEOs in Q3, at cash costs and AISC of $1,581 and $1,644 per GEO, respectively. The operation is benefitting from the additional development work completed during Q2, which increased mining flexibility. We expect production to continue to trend higher during Q4, and mining from Black Fox to continue into Q1 2021, while we transition to mining the Froome deposit.

Black Fox – Underground Drilling

Delineation and definition drilling around the 240 m and 280 m level stoping areas in the central and west part of the Black Fox Mine has recently returned impressive grades including:

On the 240 Level

85.1 g/t Au over 4.8 m including 218.8 g/t Au over 1.8 m from hole 240-B226-11

14.7 g/t Au over 2.5 m including 19.8 g/t Au over 1.7 m from hole 240-B206-09

15.1 g/t Au over 1.7 m from hole 240-B196-08

On the 280 Level

19.3 g/t Au over 3.0 m including 71.6 g/t Au over 0.8 m from hole 280-F790-12

The positive results from these drill programs are being fast-tracked and evaluation for potential additions to mine planning inventory is ongoing.

A complete summary of new underground drilling results from Black Fox is available here: http://mcewenmining.com/files/doc_news/archive/2020/20201029_ug_comp_cog3.xlsx

Froome – Development

Development of the underground access to the Froome deposit, located a half mile (800 m) west of the Black Fox mine, is on track, having advanced 47% by the end of the quarter. We plan to reach the main deposit in Q2 2021 and expect to achieve commercial production from Froome in Q4 2021. Froome offers several benefits compared to Black Fox such as a straighter, more efficient haulage route and wider, more consistent mineralization that is amenable to lower cost bulk mining methods. We are targeting an average annualized production rate of 40-45,000 GEOs from Froome over a period of approximately 2.5 years.

Fox Complex Expansion – Economic Study

We have engaged an independent engineering group to complete a Preliminary Economic Assessment (PEA) for the Fox Complex that includes Grey Fox, Black Fox, Stock and Lexam resources all utilizing our existing or potentially expanded central milling capacity. The PEA results are expected to be available in Q4 2020 and will suggest the optimal business case on which to complete a feasibility study in 2021. Combined, the Fox Complex deposits host nearly 3.0 million gold ounces in Measured and Indicated resources, and an additional 1.0 million gold ounces in Inferred resources(6). The objective of the upcoming PEA is to develop a plan for the Fox Complex to grow to an annual production of 100-150,000 ounces of gold, at a cash cost of $800/oz and an all-in sustaining cost (AISC) of $1,100/oz, over a 10-year life, with production envisioned to start ramping up from 2022.

Grey Fox and Stock – 2020 Exploration

On September 10th we completed a flow-through financing, which provides US$10 million for exploration activities in the Timmins region over the next 12 to 24 months. The initial focus is on two high-potential targets within 2 miles (3.2 km) of our existing operations at the Fox Complex: Stock West and Whiskey Jack. Both of these targets returned very encouraging results during the 2018-2019 drilling campaigns, and we are looking forward to continued exploration programs at these exciting discoveries, with the objective of defining additional resources.

Whiskey Jack – Surface Drilling

Exploration drilling at Whiskey Jack continued to generate encouraging high grade results since our last update, from October 16th, 2020 (for press release click here). Visible gold was observed in 8 of the 15 shallow holes drilled to date. Highlights of two new drill holes at the Whiskey Jack target are as follows:

31.2 g/t Au over 2.7 m and 6.0 g/t Au over 8.0 m from hole 20GF-1323

12.7 g/t Au over 11.2 m including 68.2 g/t Au over 2.0 m from hole 20GF-1325

A complete summary of new drilling results from Whiskey Jack is available here: http://mcewenmining.com/files/doc_news/archive/2020/20201029_wj_comp_cog1.xlsx

Gold Bar Mine, USA (100% Interest)

Gold Bar produced 6,800 GEOs in Q3 at cash costs and AISC of $1,585 and $1,769 per GEO, respectively. Operations at Gold Bar continued to ramp up during September, and savings from operational improvement initiatives are taking effect. For example, the combined average contractor and owner unit mining costs per ton of ore and waste moved decreased from $3.42/t in Q2 to $2.45/t in Q3, for a 28% decrease quarter on quarter. We expect costs to continue to trend lower in future quarters.

Evaluation of the resource estimate continued in Q3. We expect to have new resource and reserve estimates and an updated feasibility study in Q4.

El Gallo Project, Mexico (100% Interest)

El Gallo produced 1,900 GEOs from residual leaching of the heap leach pad, compared to 1,900 GEOs in Q2 2020. Incremental residual leaching costs for Q3 were $3.1 million(7), or $1,505 per GEO. An updated feasibility study for the Fenix Project is being finalized, and we expect to release the results in late Q4.

Table 1 below provides production and costs for Q1, Q2, Q3 and 9 months ending September 30, 2020 and comparative results from 2019:

Table 1 : Production and Costs
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