Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Shareholder Meeting (May 2019)
37 slides from Mcewen's shareholder meeting presentation, May 24, 2019
Slide 1: Rob McEwen, Chairman & Chief Owner - Introduction
2 Rob McEwen Chairman & Chief Owner Introduction
Slide 2: Carmen Diges, General Counsel - Formal Meeting
3 Carmen Diges General Counsel Formal Meeting
Slide 3: Andrew Iaboni, VP Finance - Financials
4 Andrew Iaboni Vice President, Finance Financials
Slide 4: Cost/Oz Forecast
Cost/Oz 5 Forecast Quarter Ending Quarter Ending Year Ending 2019 March 31, 2019 March 31, 2018 December 31, 2018 Gold Equivalent Sales (oz AuEq) El Gallo 13,000 4,450 19,074 51,750 Black Fox Complex 50,000 7,248 12,423 50,989 Gold Bar* 50,000 - - - McEwen Mining Operated Sites 113,000 11,698 31,497
Slide 5: Income Statement Highlights
Income Statement Highlights 6 Quarter Ending Quarter Ending Year Ending March 31, 2019 March 31, 2018 December 31, 2018 Average Gold Price ($/oz) $1,304 $1,329 $1,268 Average Silver Price ($/oz) $15.52 $16.77 $15.71 Sales $15,640 $41,285 $128,822 Costs Applicable to Sales ($13,168) ($26,394) ($93,32
Slide 6: Liquidity & Working Capital Highlights
Liquidity & Working Capital Highlights 7 Liquidity March 31, 2019 December 31, 2018 December 31, 2017 Cash $26,669 $30,441 $37,153 Gold/Silver Doré & Bullion 9,429 4,242 22,954 Investments - Junior Gold Equities 4,222 3,131 7,971 Total $40,320 $37,814 $68,078 Working Capital Cash and Cash Equivalent
Slide 7: Cash Flow Forecast
Cash Flow Forecast 8 2019 F 2020 F Production forecast (Gold Bar, Black Fox, El Gallo) 113,000 139,000 Production forecast (San Jose) 92,000 92,000 Total Production 205,000 231,000 Revenue $1,250/oz $138,000 $171,000 Cash flow forecast $1,150/oz ($19,100) $3,800 Cash flow forecast - Base Case $1,250
Slide 8: Annual General Meeting May 23, 2019
Annual General Meeting May 23, 2019 Insider Ownership, Production Growth, Exploration Excitement & Large Copper
Slide 9: Topics to Cover
Topics to Cover Contributions to society Gold – Why its future looks bright Gold equities Value-destroying practices of gold producers & explorers MUX Mining Rant – How you can help improve our markets 10
Slide 10: McEwen Leadership Program / McEwen School of Architecture
11 McEwen Leadership Program McEwen School of Architecture
Slide 11: # of Gold Ounces to Buy the DJIA
12 # of Gold Ounces to Buy the DJIA Source: Bloomberg. As of May 22, 2019. 20 oz May 22, 2019 Over the last 123 years
Slide 12: Russell 1000 Growth and Value Spread
Russell 1000 Growth and Value Spread 13 Source: Bloomberg. As of May 22, 2019 Dotcom Bubble -300 -200 -100 0 100 200 300 400 1980 1985 1990 1995 2000 2005 2010 2015 2020
Slide 13: MSCI World Value Index / MSCI World Growth Index
MSCI World Value Index / MSCI World Growth Index 14 Source: Bloomberg. As of May 22, 2019 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2000 2004 2008 2012 2016 2020
Slide 14: % of IPOs with Negative Earnings
% of IPOs with Negative Earnings % Source: Topdown Charts, Jay R. Ritter. 15
Slide 15: US Labour Market Confidence
US Labour Market Confidence 16 Source: Topdown Charts, Thomson Reuters. NFIB – National Federation of Independent Business, representing small & independent businesses. Small businesses: “hard to find workers” Consumers: “easy to find jobs”
Slide 16: The Drivers and The Impact: Developed World Economy
Student Loan +$1 Trillion Food Stamps Federal Debt $22 Trillion Money Printing $4 Trillion Home Ownership Velocity of M2 Money Supply THE DRIVERS One Example of The Developed World’s Attempt to Get the Economy Moving THE IMPACT As of May 8, 2019 Source: Federal Reserve Bank of St. Louis. As of Oct 1
Slide 17: One Example of The Developed World's Attempt to Get the Economy Moving
THE DRIVERS One Example of The Developed World’s Attempt to Get the Economy Moving eal Student Loan +$1 Trillion Money Printing $4 Trillion Federal Debt $22 Trillion THE IMPACT FRED jeer me Home Ownership = Food Stamps * Velocity of M2 My Federal Reserve Bank of 17
Slide 18: Gold Equities' Bear Markets Over the Last Years
Gold Equities’ Bear Markets1 - Over the Last 77 Years 19 1 Credit: in gold we trust .report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG Duration (Number of Weeks) Apr 2011 - Jan 2016 Longest and Deepest Bear % L
Slide 19: Gold Equities' Bull Market Over the Past Years
Gold Equities’ Bull Market1 - Over the Past 77 Years 20 1 BGMI - Barron's Gold Mining Index. Credit: in gold we trust .report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG. Updated as of May 17, 2019. 2 Last six g
Slide 20: Last Bull Market in Gold Equities - Next Bull Has Started
Last Bull Market in Gold Equities - Next Bull Has Started 21 HUI = NYSE Arca Gold BUGS Index. Source: Incrementum AG, Bloomberg. From Jan 31, 1996 – May 22, 2019. Gold Mining Stocks Up 1,323% Gold Mining Stocks (HUI) / S&P 500 Ratio 0 0.1 0.2 0.3 0.4 0.5 0.6 1996 1998 2000 2002 2004 2006 2008 2010 2
Slide 21: GDX/Gold & GDXJ/Gold Ratios Confirm Rising Strength of Gold Miners
GDX/Gold & GDXJ/Gold Ratios Confirm Rising Strength of Gold Miners 22 Peak: 0.067 Peak: 0.13 Source: Bloomberg. Incrementum AG. As of May 22, 2019 Trough:0.012 Trough:0.016 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 05/2006 05/2008 05/2010 05/2012 05/2014 05/2016 05/2018 GDX / Gold Ratio 0 0.02 0.04 0.06
Slide 22: Times When Gold Equities Were a Big % of NYSE Market Cap
Times When Gold Equites Were a Big % of NYSE Market Cap And These Times Will Return 23 Homestake / Newmont1 NYSE % S&P 500 % 1938 $0.7 Billion 5.0 % 6.3% 1987 $2.7 B 4.5 % 1.3% 2000 $2.3 B 2.0 % 0.2% 2011 $29 B 0.2 % 0.3% Today $26 B 0.1 % 0.1% As of May 22, 2019. 1Newmont replaces Homestake, as big
Slide 23: Next Bull Market in Gold Equities is Underway
Next Bull Market in Gold Equities is Underway 24 Source: Bloomberg. From Jan 1, 2016 – May 22, 2019. Jan 2016 - Present GDX + 48% Dow + 48% S&P 500 + 40% Gold + 20%
Slide 24: Streaming & Royalty Companies Have Stolen Gold Miners' Profit Margin
Streaming & Royalty Companies Have Stolen Gold Miners’ Profit Margin 25 GDX Franco Nevada Sandstorm Gold % Source: Bloomberg. As of May 22, 2019 Jan 2016 - Present -40 -20 0 20 40 60 80 100 120 140 160 2016 2017 2018 2019
Slide 25: Royalty & Streaming Companies Have Stolen the Gold Mining Industry's Performance
Royalty & Streaming Companies Have Stolen the Gold Mining Industry’s Performance Royalties vs GDX 26 Source: Bloomberg. As of May 15, 2019 Jan 2016 - Present Share Performance % Royalties 178% GDX 152%
Slide 26: Good News: Gold Producers & Explorers are About to Perform!
Good News: Gold Producers & Explorers are About to Perform! Time to Sell the Streaming & Royalty Companies Franco Nevada vs Barrick 27 Source: Bloomberg. As of May 15, 2019 Franco Nevada Barrick % Share Performance % Jan 2016 - Present
Slide 27: Insider Ownership, Production Growth, Exploration Excitement & Large Copper
Insider Ownership, Production Growth, Exploration Excitement & Large Copper
Slide 28: Cautionary Statement
Cautionary Statement 29 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 p
Slide 29: Cautionary Statement (cont'd)
Cautionary Statement (cont’d) 30 McEwen Mining Inc. is required to prepare reports under the Securities Exchange Act of 1934 and the Canadian Securities Administrators’ National Instrument 43-101 “Standards of Disclosure for Mineral Projects” (“NI 43-101”), under the Canadian securities laws because
Slide 30: MUX – Price History, Shows Leverage to Gold
MUX – Price History, Shows Leverage to Gold 31 Source: Bloomberg. Monthly closing chart. As May 22, 2019. 3.1x $1.25 26x 22x $0.65 Rob McEwen Becomes CEO US Gold McEwen Mining Share Price US$ $9.59 $9.15 0 2 4 6 8 10 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Slide 31: Diversified Portfolio: Production & Development with Exploration Upside
32 With Exploration Upside 1 2 5 Gold Silver Copper Diversified Portfolio Production & Development 3 4
Slide 32: Black Fox Appears Richer Than What is Being Recovered
4.40 g/t Au / 5.38m 4.90 g/t Au / 6m 25.5 g/t Au / 3.35m 83.9 g/t Au / 4.92m 187.8 g/t Au / 1.12m Inc. 320.7 g/t Au / 0.6m 161.9 g/t Au / 1.2m Inc. 320.7 g/t Au/ 0.6m 34.8 g/t Au / 3m 6.68 g/t Au / 8m 27.3 g/t Au / 3.33m 147.4 g/t Au / 0.53m 27.8 g/t Au / 8.1m 44.1 g/t Au / 1.2m, 12.7 g/t Au / 7m 25
Slide 33: Gold Deposit Types: Abundance of >3 Moz Deposits
Major Deposits Hollinger, Homestake Grasberg, Reko Diq Yanacocha, Rosia Montana Round Mountain, Porgera Muruntau Gold Strike La Ronde Deposit Types Greenstone Porphyry Cu-Au HS Epithermal LS Epithermal CSH Carlin Au-VMS Gold Bar current total endowment ~1.7 Moz Au Not highly abundant but 45% of the
Slide 34: San José Mine – High Grade Gold & Silver
San José Mine – High Grade Gold & Silver 35 Gold / silver ratio 75:1. 149% basis. 2As of Dec 31, 2018, production estimated to end in 2024. 3 Hochschild Mining 4 Goldcorp 2018 Annual Report. San José Mine N Goldcorp Cerro Negro 2018 Production4 489 koz Au San José Mine Argentina Agua Viva Exploratio
Slide 35: What's MUX Worth? Analysts NAV Estimates
36 High Low Average San José $3003 $1051 $177 Black Fox Complex $3281 $634 $147 Gold Bar $2074 $1551 $176 Mexico $1003 $102 $49 Los Azules $6804 $801 $282 Total $1,615 $413 $831 MUX’s Current Market Capitalization $500 1 Cantor Fitzgerald. 2 H.C. Wainright & Co 3 Roth Capital Partners. 4 Alliance Gl
Slide 36: Canadian Mining Journal: Time for a Mining Rant. By Rob McEwen
Canadian Mining Journal: Time for a Mining Rant. By Rob McEwen 37 It’s time for a mining rant! Our most important audience, our shareowners, need to be given more respect. We, the management of the mining industry, have allowed the securities regulators, stock exchanges, lawyers, accountants and gov
Slide 37: Canadian Mining Journal: Time for a Mining Rant. By Rob McEwen
Canadian Mining Journal: Time for a Mining Rant. By Rob McEwen Its me fr mining rat! Ow mest important audence, out shareownars,neud 10 be given mare respect. We, the management ofthe mining industry. have alowed he secures reuters, sock frchanges, lnjrs,socoutants and governments fo confuse, abuse