TORONTO, ONTARIO--(Marketwired - June 12, 2013) - McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) is pleased to announce exploration results from two areas within the El Gallo Complex, located in Sinaloa, Mexico (Fig. 1). 1) Drilling continues to expand the Central Zone at the El Gallo 1 mine and 2) follow-up drilling at a regional prospect called CSX, has returned high silver grades over good widths.
Exploration Highlights ---------------------------------------------------------------------------- El Gallo 1 Mine El Gallo Complex Regional "Central Zone" "CSX Zone" ----------------------------------------------------------------------------MLX091: 3.5 gpt gold over 10.1 meters CSX031: 241 gpt silver over 5.8 meters ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX096: 3.3 gpt gold over 11.3 meters CSX031: 1,849 gpt silver over 10.5 meters ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX097: 1.2 gpt gold over 15.5 meters CSX033: 128 gpt silver over 25.0 meters ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX101: 1.4 gpt gold over 25.1 meters CSX036: 114 gpt silver over 17.6 meters ----------------------------------------------------------------------------
El Gallo 1 Mine - Central Zone
Central is situated between two known resources (Fig. 2), where mining began in Q2, 2013. The zone was discovered in April and has advanced quickly. Due to the exploration success at Central, the decision was made to increase the mine's capacity by 50% to 4,500 tonnes per day (estimated cost $5 million). This expansion will increase annual gold production from 27,300 ounces in 2013 to 75,000 ounces by 2016 at the mine.
Exploration holes disclosed in this release were designed to expand the zone horizontally along strike and to depth. In addition, holes MLX095 and MLX100 filled in an area between the historical, near surface drilling that tested for mineralization down to 20 meters (m) (encountering weak mineralization) and McEwen Mining's discovery holes, which intersected strong mineralization 80 m below surface. These holes were drilled to reduce the waste to ore ratio under the planned open pit.
Holes MLX096, MLX097 and MLX098 were drilled below the previous limits of the mineralization and have expanded the zone at depth. Highlights include 3.3 gpt gold over 11.3 m and 1.2 gpt gold over 15.5 m. These holes increased the vertical extent of Central by 25 m to 30 m in three separate areas. Central has now been traced to a vertical depth of 200 m.
Drilling to extend the strike length of Central shows the mineralization remains open to the northeast and southwest, but with less continuity than the initial discovery area. Highlights included hole MLX101 that returned 1.4 gpt gold over 25.1 m. Drilling will continue to explore for extensions of the zone along strike. There is 500 m of untested strike length that will be drilled over the coming three months to the northeast and southwest of Central (Fig. 2).
Regional Exploration - CSX Zone
McEwen Mining geologists first discovered CSX in 2012. The initial holes from last year were included in the Company's last resource estimate for Mexico (June 2012). Prior to the recent drilling, CSX contained a small open pit resource of 438,000 tonnes averaging 72.2 gpt for 1.0 million ounces of silver. CSX is located 2 km from the Company's proposed El Gallo 2 mine site and 7 km from the El Gallo 1 mine.
New drilling tested further to the east, west and south of the existing resource (Fig. 3). The most important item, realized through the new drilling, is that extremely high silver grades are present. Hole CSX031 intersected some of the highest silver grades inside of the El Gallo Complex, returning 1,849 gpt silver over 10.5 m, which included 3,425 gpt silver over 5.4 m. The high grade appears to occur in a previously unknown steeply dipping structure, which may be a "feeder" to the previously defined flat-lying deposit. Further drilling, which is underway, will look to better target this style of mineralization.
In addition to discovering high-grade, drilling expanded the resource to the east (Fig. 3). This drilling returned wide intersections of good grade, starting close to surface. Holes CSX033 and CSX036 intersected 128 gpt silver over 25.0 m and 114 gpt silver over 17.6 m. Follow-up drilling at both areas has commenced.
Twin Domes Update
On April 2, 2013, McEwen Mining announced initial results from a new discovery called Twin Domes. Drill and trenching results included 29.5 gpt gold over 2.0 m and 20.9 gpt gold over 12.7 m, respectively. Follow up work has included a series of trenches, which delivered similar results. Core drilling to further test the prospect has been slowed due to the Company's focus on expanding the Central Zone.
Resource Update Due in Coming Weeks
The updated El Gallo Complex resource will highlight two items: 1) the initial resource for the Central Zone at the El Gallo 1 mine and 2) the process of converting inferred resources to the measured and indicated categories. The updated resource is expected to be released at the end of Q2 or beginning of Q3.
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/silver producer focused in the Americas. McEwen Mining's principal assets consist of the San Jose 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 shares issued and outstanding. Rob McEwen, Chairman, President and Chief Owner, owns 25% of the shares of the Company (assuming all outstanding Exchangeable Shares are exchanged for an equivalent amount of Common Shares). As of May 30, 2013, McEwen Mining had cash and liquid assets of approximately US$50 million and is debt free.
TECHNICAL INFORMATION AND RISKS
There are significant risks and uncertainty associated with commencing production or changing production plans without a feasibility, pre-feasibility or scoping study. The proposed expansion to El Gallo Phase 1 has not and may not be explored, developed or analyzed in sufficient detail to complete an independent feasibility or pre-feasibility study and 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.
This news release has been reviewed and approved by John Read, CPG, McEwen Mining's consulting geologist, who is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by the Company at its Mexican exploration properties. Samples from the core drilling were split on-site at the Company's El Gallo 1 mine. One half of the split drill core is shipped to ALS Chemex for sample preparation and analysis by fire assay for gold and 4-acid digestion with ICP determination for silver. Samples returning greater than 10 ppm gold or 1500 ppm silver were re-analyzed using gravimetric fire assay. Standards and blanks were inserted every 20 samples. All holes were drilled with HQ bits and reduced to NTW where required. Samples were taken based on lithologic and/or mineralized intervals and vary in length. The true width of the mineral zone has not been determined. For additional information see also the technical report titled "El Gallo Complex Phase II Project, NI 43-101 Technical Report Feasibility Study, Mocorito Municipality, Sinaloa, Mexico" with an effective date of September 10, 2012, prepared by M3 Engineering along with a team of associates (the "Phase II Report"). The Phase II Report is available under the Corporation's profile on SEDAR (
www.sedar.com). The authors of the Phase 2 Report, Stan Timler - M3 Engineering, Mike Hester - Independent Mining Consultants (Reserves), Dawn Garcia - SRK Consulting (Environmental), Richard Kehmeier and Brian Hartman - Pincock Allen & Holt (El Gallo Deposit Resource), John Read - McEwen Mining consultant (Palmarito Insitu, Historic Waste Dumps and Historic tailings Resource), all of whom are qualified persons and all of whom but John Read are independent of McEwen Mining, each as defined by NI 43-101.
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.
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, technical, 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, technical 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, projected permitting timelines 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.
Table 1. El Gallo 1 Mine - Central Zone Drill Hole Results -------------------------------------------------------------------------------------------------------------------------------------------------------- From To Thickness (1) Gold Grade Hole (meters) (meters) (meters) (Grams per Tonne) --------------------------------------------------------------------------------------------------------------------------------------------------------MLX091 158.2 168.3 10.1 3.5 Including 159.9 161.0 1.1 9.8 Including 164.5 165.5 1.1 10.5 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX092 80.7 83.3 2.6 4.1 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX094 27.7 28.7 1.0 1.1 And 161.1 162.0 0.9 2.4 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX095 54.5 60.2 5.7 1.1 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX096 218.5 229.7 11.3 3.3 Including 225.7 228.6 2.9 7.6 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX097 106.1 121.6 15.5 1.2 Including 110.3 111.2 0.9 13.5 And 172.9 184.8 12.0 0.6 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX098 203.3 220.8 17.5 1.0 Including 213.7 216.8 3.2 3.8 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX099 145.6 148.4 2.8 0.9 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX100 60.1 64.8 4.8 1.3 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX101 89.0 114.1 25.1 1.4 --------------------------------------------------------------------------------------------------------------------------------------------------------Table 1. El Gallo 1 Mine - Central Zone Drill Hole Results -------------------------------------------------------------------------------------------------------------------------------------------------------- Dip (2) Azimuth (3) Easting (4) Northing (4) Hole (Degrees) (Degrees) (UTM) (UTM) --------------------------------------------------------------------------------------------------------------------------------------------------------MLX091 -50 325 217021 2835723 Including Including ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX092 -50 325 216961 2835767 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX094 -50 325 217003 2835718 And ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX095 -50 325 217030 2835858 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX096 -50 325 217073 2835707 Including ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX097 -50 325 217099 2835762 Including And ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX098 -50 325 217100 2835714 Including ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX099 -50 325 217099 2835799 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX100 -50 325 216972 2835808 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------MLX101 -50 325 217085 2835827 --------------------------------------------------------------------------------------------------------------------------------------------------------(1) May not add due to rounding (2) Dip = Angle of drill hole, (3) Azimuth =Direction of drill hole, (4) Coordinates Table 2. El Gallo Complex - CSX Zone Drill Hole Results -------------------------------------------------------------------------------------------------------------------------------------------------------- From To Thickness (1) Silver Grade Hole (meters) (meters) (meters) (Grams per Tonne) --------------------------------------------------------------------------------------------------------------------------------------------------------CSX023 6.1 21.4 15.3 44.1 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX024 0.8 6.7 5.9 138.8 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX025 0.0 16.4 16.4 63.1 And 30.3 37.6 7.3 85.8 Including 36.3 36.8 0.5 596.0 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX026 11.9 12.6 0.7 69.7 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX027 18.4 20.3 2.0 47.0 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX028 44.5 45.5 1.0 56.4 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX029 - - - - ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX030 17.1 28.1 11.1 46.0 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX031 43.0 48.8 5.8 241.3 And 61.0 71.4 10.5 1,848.9 Including 62.1 67.4 5.4 3,424.7 Including 67.0 67.4 0.5 11,076.0 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX032 - - - - ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX033 17.7 42.7 25.0 128.1 Including 31.6 36.4 4.8 340.4 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX034 36.6 37.4 0.8 40.5 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX035 0.0 2.2 2.2 144.1 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX036 6.5 24.1 17.6 114.2 -------------------------------------------------------------------------------------------------------------------------------------------------------- Table 2. El Gallo Complex - CSX Zone Drill Hole Results -------------------------------------------------------------------------------------------------------------------------------------------------------- Dip (2) Azimuth (3) Easting (4) Northing (4) Hole (Degrees) (Degrees) (UTM) (UTM) --------------------------------------------------------------------------------------------------------------------------------------------------------CSX023 -55 360 214252 2844390 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX024 -60 360 214270 2844376 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX025 -75 360 214339 2844363 And Including ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX026 -75 360 214390 2844377 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX027 -70 360 214419 2844374 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX028 -75 360 214386 2844328 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX029 -85 360 214331 2844320 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX030 -75 360 214308 2844324 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX031 -60 360 214274 2844331 And Including Including ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX032 -65 360 214246 2844296 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX033 -65 360 214404 2844422 Including ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX034 -70 180 214368 2844460 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX035 -55 360 214223 2844387 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------CSX036 -65 360 214430 2844420 --------------------------------------------------------------------------------------------------------------------------------------------------------(1) May not add due to rounding (2) Dip = Angle of drill hole, (3) Azimuth =Direction of drill hole, (4) Coordinates
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