Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (January 2015)
56 slides from Mcewen's investor presentation, Jan 21, 2015
Slide 1: McEwen Mining January 2015
McEwen # Minine Bnyse MUX Tsk January 2015
Slide 2: Forward-looking statements
2 This presentation 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 presentation, McEwen M
Slide 3: 3
3
Slide 4: U.S. Monetary Base
4 U.S. Monetary Base Source: Federal Reserve Bank of St. Louis. As of January 7, 2015.
Slide 5: U.S. Federal Debt as % of GDP
5 U.S. Federal Debt as % of GDP Source: Federal Reserve Bank of St. Louis, US, Office of Management and Budget. As of Q3 2014.
Slide 6: Velocity of U.S. Money
6 Velocity of U.S. Money Source: Federal Reserve Bank of St. Louis. As of Q3 2014.
Slide 7: Relative Performance
7 Relative Performance Source: MRG Advisors Gold Copper S&P 500 XAU TSX Gold
Slide 8: TSX Global Gold Index vs. Gold Price (10Y)
8 TSX Global Gold Index vs. Gold Price (10Y) Source: MRG Advisors TSX Gold (Index) 600 500 400 300 200 100 0 0 500 1,000 1,500 2,000
Slide 9: This Kind of Opportunity Is How Fortunes Are Made
9 This Kind of Opportunity Is How Fortunes Are Made It’s a bear market in junior miners (5 year chart) Source: www.stansberryresearch.com . As of January 16, 2015 S&P / TSX Venture Composite Index
Slide 10: High Beta, Large Upside, Big Insider Ownership, Liquid Trader
10 High Beta Large Upside Big Insider Ownership Liquid Trader McEwen Mining
Slide 11: Beta to Gold / Leverage to Gold
11 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3 Year Beta to Gold Leverage to Gold Source: Bloomberg. As of January 16, 2015.
Slide 12: Gold Shares: Lots of Upside!
12 0% 100% 200% 300% 400% 500% 600% 700% % to High (January 2010 to Present) Gold Shares: Lots of Upside! Source: Bloomberg. In US$. As of January 16, 2015.
Slide 13: Insider Ownership
13 0% 5% 10% 15% 20% 25% Insider Ownership Insider Ownership Source: Bloomberg. As of January 16, 2015 Cost $126 Million
Slide 14: Balance Sheet
14 Balance Sheet As of January 16, 2016. US$. $16 Million Cash & Gold
Slide 15: MUX Projected Annual Production
15 2014E 2015E Gold Silver MUX Projected Annual Production Production estimates based on internal estimates. Notes 1, 2, 3, 7, 13 & 15. 84.4 koz 96.5 koz 3.2 Moz 3.1 Moz
Slide 16: MUX Projected All-in Sustaining Cost (AISC)
16 2014E 2015E MUX Projected All-in Sustaining Cost (AISC) 2014 estimate based on a 66:1 silver/gold ratio. 2015 estimate based on a 75:1 ratio. Estimates for 2014-2015 based on internal estimates. See cautionary note regarding non-GAAP measures. Notes 1, 2, 3, 7 & 13. $1,325 / oz $1,125 / oz
Slide 17: Key Properties
17 Gold Bar (Nevada) Permitting El Gallo 1 (Mexico) Gold Producer El Gallo 2 (Mexico) Permitted Los Azules (Argentina) Large Copper Deposit San José (Argentina) Gold / Silver Producer Key Properties
Slide 18: Mexico: El Gallo Mine Production
18 Mexico EL GALLO MINE Production
Slide 19: El Gallo Mine: Sinaloa, Mexico
19 El Gallo Mine: Sinaloa, Mexico
Slide 20: El Gallo 1: Gold Production & Cost Forecasts
20 $1,000/oz Cash Cost $1,250/oz AISC 1.4 gpt 38,224 oz Au Production and cost estimates based on internal estimates. See cautionary note regarding non-GAAP measures. Notes 1, 2, 7, 13 & 15. 2.6 gpt 50,000 oz Au $550/oz Cash Cost $750/oz AISC 2014E 2015E El Gallo 1: Gold Production & Cost Forecasts
Slide 21: El Gallo 1: Potential Future Sources of Production
21 El Gallo 1: Potential Future Sources of Production
Slide 22: Mexico: El Gallo Awaiting Higher Silver Price
22 Mexico EL GALLO 2 Awaiting Higher Silver Price
Slide 23: El Gallo 2: Next Door + Ready to Build
23 Notes 1, 2, 5, 6, 7 & 14. El Gallo 2: Next Door + Ready to Build El Gallo 1 Mine 5 km Road El Gallo 2 $180 M Capex 2012 Feasibility Permitted Construction & Operation Required Financing $150 M Spent $10 M, Est. $20 M Savings
Slide 24: El Gallo 2: September 2012 Feasibility Study
24 El Gallo 2: September 2012 Feasibility Study 5.2 M oz Ag + 6,100 oz Au 2.6:1 Strip $13/oz AISC inc. $5 M/yr exploration Silver equivalent basis, 75:1 silver/gold ratio. See cautionary note regarding non-GAAP measures. Notes 1, 2, 5, 6 & 7. Annual Production 5,000 tpd Mill 84% Ag Recovery 7 Yrs Mi
Slide 25: El Gallo 2: Economics
25 El Gallo 2: Economics Sept 2012 Feasibility Study - Adjusted to Reflect Updated Capex and Mexican Tax Changes Silver Price / oz NPV 5% (M) Payback After Tax IRR $30.00 $211 1.7 43% $27.50 $167 2.0 39% $25.00 $123 2.3 31% $22.50 $78 2.7 23% $20.00 $34 3.5 13% Calculated on a 75:1 silver/gold ratio
Slide 26: San José Mine, Argentina: Gold & Silver Production
26 Santa Cruz Province SAN JOSÉ MINE Argentina Gold & Silver Production
Slide 27: San José: High Grade, Narrow Vein, Underground Mine
27 San José: High Grade, Narrow Vein, Underground Mine 51% Hochschild (Operator) 46.5 k oz Au + 3.1 M oz Ag MUX’s 2015E Share of Production Notes 1, 3, 4, 13 & 15. Receiving Dividends $30 M Since 2012 49% McEwen Ownership Argentina
Slide 28: San José: Comparison of High-Grade Mines
28 0 4 8 12 16 20 0 1 2 3 4 5 6 7 8 Grade (Au gpt Eq.) Size (Million Au Eq. oz) San José: Comparison of High-Grade Mines McEwen / Hochschild San José Goldcorp Red Lake Goldcorp Cerro Negro Kirkland Lake Macassa / SMC 75:1 silver/gold ratio. Estimated at different cut-off grades. Comparisons sourced
Slide 29: San José: Steady Costs
29 San José: Steady Costs 2014E 2015E $875 $825 Cash Costs All-in Sustaining Costs $1,200 $1,225 Gold equivalent basis. 2014 estimate based on a 66:1 silver/gold ratio. 2015 estimate based on a 75:1 ratio. See cautionary note regarding non-GAAP measures. Notes 1, 3, 4, 13 & 15. $900
Slide 30: San José: New Neighbor - Goldcorp's Cerro Negro Mine
30 San José: New Neighbor - Goldcorp’s Cerro Negro Mine $3.4 B Purchase Price $1.6 B Initial Capex 425,000 – 475,000 oz 2015 Production 25 km San José Mill Source: Goldcorp +
Slide 31: Nevada: Gold Bar Cortez Trend Mine Permitting
31 Nevada GOLD BAR Cortez Trend Mine Permitting 100% Owned
Slide 32: Cortez Trend, Nevada: Big Gold Country
32 Cortez Trend, Nevada: Big Gold Country
Slide 33: Gold Bar: Open Pit, Heap Leach, Nevada, 100%
33 Gold Bar: Open Pit, Heap Leach, Nevada, 100% 8 Yr Mine Life $55 M Capex $700/oz Cash Cost $850/oz AISC See cautionary note regarding non-GAAP measures. Notes 1, 8, 12 & 13. Q2 2016 Final Permits Expected 50,000 oz Annual Gold Production Starting 2017 1.0 gpt Au Grade, Oxide Heap Leach Prefeasibil
Slide 34: Los Azules, Argentina: Big Copper Deposit
34 San Juan Province LOS AZULES Argentina Big Copper Deposit
Slide 35: Los Azules: Size & Grade Comparison of Copper Porphyry Deposits
35 Los Azules: Size & Grade Comparison of Copper Porphyry Deposits Grade (Cu % / tonne) 0 5 10 15 20 25 30 0.1 0.2 0.3 0.4 0.5 0.6 Attributable Total Resources Billions lbs Copper Taca Taca Los Azules Vicuna Rosemont Copper Creek Cotabambas Canariaco Norte Vizcachitas Pumpkin Hollow Harper Creek Nor
Slide 36: Los Azules: A Rare Deposit – PEA Sept 2013 Highlights
36 Los Azules: A Rare Deposit – PEA Sept 2013 Highlights Open Pit Development 100% Ownership 19.7 B lbs Cu IRR 14.3% NPV (8%) $1.7 B @ $3/lb Cu Capex $3.9 B After tax basis. Notes 1 & 11. Based on $3.00/lb copper, $1,300/oz gold. PEA – Preliminary economic assessment. No Back-in Right
Slide 37: Los Azules: Recent Transaction
37 Los Azules: Recent Transaction First Quantum Bought Lumina for $433 M = 1.7¢ / lb Cu Note 11 and company websites. 0.35% cut-off grade. Does not include gold or molybdenum, includes measured, indicated and inferred resource categories. Company Deposit Cu lbs (B) Cu% McEwen Mining Los Azules 19.7
Slide 38: Capital Structure
39 Capital Structure 305.2 M Fully Diluted Price / 52 Week $0.90 Low $1.25 Current 300.1 M Shares Outstanding Options $3.74 High $382 Million Market Cap As of January 16, 2015. US$
Slide 39: Shareholders: Largest Own 36%
40 Shareholders: 5 Largest Own 36% Source: Bloomberg, regulatory filings, Van Eck. As of January 16, 2015. Rob McEwen 25% Van Eck 5% Jennison 2% Royce 2% BlackRock 2% 36% Five Largest Shareholder
Slide 40: Collaborate. Create. Cure.
41 Collaborate. Create. Cure.
Slide 41: Appendix: Directors
42 Rob McEwen, CM Allen Ambrose Michele Ashby Dr. Leanne Baker, Ph.D Richard Brissenden, CA Gregory Fauquier Dr. Donald Quick Michael Stein Appendix: Directors Chairman of McEwen Mining, Founder and former Chairman and CEO of Goldcorp 30 years exploration & Discoveries Founder and former CEO of Denv
Slide 42: Appendix: Management
43 Rob McEwen, CM Nathan Stubina, Ph.D, P.Eng. William Faust, PE-Mining, MBA Perry Ing, CPA-CA, CPA, CFA Andrew Elinesky, CGA Nils Engelstad, LLM Simon Quick Craig Stanley, M.Sc. Nigel Fung, P.Eng. Luke Willis, P.Geo. Appendix: Management Chief Owner Managing Director Chief Operating Officer Chief F
Slide 43: Appendix: Heap Leach Gold Mines in the Americas
44 0 0.4 0.8 1.2 1.6 Grade (g/t Au eq) Appendix: Heap Leach Gold Mines in the Americas Comparison of Resource Grades Source: Company reports. Silver: Gold ratio (75:1). The silver/gold ratio does not take into account metallurgical recoveries. Note 7.
Slide 44: Appendix: El Gallo - Defer Until Higher Silver Price
45 Appendix: El Gallo 2 - Defer Until Higher Silver Price Ideal Sources of Capital US$ M Debt financing $50 Equity financing $100 TOTAL $150 Share price of equity financing Shares issued (M) shares outstanding Current Price $1.25 80 27% $2.00 50 17% $2.50 40 13% $3.00 33 11% $3.50 29 10% $4.00 25 8%
Slide 45: Appendix: San José Annual Production
46 0 1 2 3 4 5 6 7 0 20 40 60 80 100 2008 2009 2010 2011 2012 2013 2014A 2015E Silver Production (M oz) Gold Production (k oz) Gold (k oz) Silver (M oz) Appendix: San José Annual Production *San José on a 100% basis - McEwen owns 49%. Notes 1, 3, 4 & 15.
Slide 46: Appendix: San José - Resource Ounces
47 Appendix: San José - Resource Ounces Silver: Gold ratio (75:1), The silver/gold ratio does not take into account metallurgical recoveries. 100% basis, accounts for production depletion. Estimated at different cut-off grades. Notes 1, 3 & 4. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 2006 2007 2008 2009 2010 201
Slide 47: Appendix: Los Azules - Next Steps
48 Appendix: Los Azules - Next Steps Examine potential for smaller / higher-grade mine and mill Additional metallurgical testing on potential for bio-leaching
Slide 48: End Notes
49 End Notes Note 1: Guidance 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 gen
Slide 49: San José Mine and El Gallo 1 Resource Table
50 San José Mine (49%) (4) Tonnes (M*) (100%) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) (100%) Au (M oz*) (100%) Proven 0.95 597 7.82 18.23 0.24 Probable 0.86 426 6.15 11.82 0.17 Measured (inclusive of P+P) 1.5 640 8.9 31.36 0.43 Indicated (inclusive of P+P) 2.9 448 6.7 41.40 0.62 Inferred 1.9 455 7.
Slide 50: Gold Bar and El Gallo 2 Resource Table
51 Gold Bar (8) Tonnes (M*) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) Au (M oz*) Probable 15.1 1.00 0.48 Measured 0.7 1.19 0.03 Indicated (inclusive of probable reserves) 18.8 0.94 0.57 M&I 19.5 0.95 0.59 Inferred 7.0 0.94 0.21 El Gallo 2 (7) Tonnes (M*) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) Au (M
Slide 51: Los Azules, Limo and Tonkin Resource Table
52 Los Azules (11) Tonnes (M) Cu Grade (%) Au Grade (g/t) Ag Grade (g/t) Cu (B lbs) Indicated 389 0.63 0.07 1.8 5.4 Inferred 1,397 0.46 0.06 1.9 14.3 Resource Table: Cont’d Limo (10) Tonnes (M*) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) Au (M oz*) Measured 5.9 0.89 0.17 Indicated 3.7 0.61 0.07 Inferr
Slide 52: Resource notes
53 Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The foregoing reports are available under the Corporation's profile on SEDAR (www.sedar.com). Inferred resources are too speculative geologically to have economic considerations applied to them. The cu
Slide 53: Technical report notes
54 Note 7: For the current technical report on the El Gallo Project see: "Resource Estimate for the El Gallo Complex, Sinaloa State, Mexico" dated and effective June 30, 2013, prepared by John Read , CPG, McEwen Mining's Senior Consultant, and Luke Willis, P.Geo, McEwen Mining's Director, Resource M
Slide 54: Notes 12-15
55 Note 12: There are significant risks and uncertainty associated with commencing production without a feasibility study. The Gold Bar project has not and may not be explored, developed or analyzed in sufficient detail to complete an independent feasibility or pre-feasibility study and may ultimate
Slide 55: Cautionary Note Regarding Non-GAAP Measures
56 Cautionary Note Regarding NON-GAAP Measures In this presentation, we have provided information prepared or calculated according to U.S. GAAP, as well as provided some non-U.S. GAAP ("non-GAAP") performance measures. Because the non-GAAP performance measures do not have any standardized meaning pr
Slide 56: Contact Information
57 Contact Information Director, Investor Relations 1.866.441.0690 x.410 info@mcewenmining.com facebook.com/mcewenrob twitter.com/mcewenmining Sheena Scotland