Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (September 2020)
41 slides from Mcewen's investor presentation, September 2020
Slide 1: Turnaround in Progress
NYSE & TSX Gold / / Copper Turnaround in Progress Presentation By: Rob McEwen, Chief Owner & Chairman Peter Mah, Chief Operating Officer September 2020
Slide 2: Cautionary Statement
Cautionary Statement Executive Summary: If you are risk adverse, don’t buy our shares. Past performance is unreliable in predicting the future. Unexpected events do happen and will change forecasts. MUX
Slide 3: Gold & Silver Gaining Attention Again!
Gold & Silver Gaining Attention Again! 100% 80 Nasdaq 68% 60 Silver 52% 40 Gold 47% S&P 36% 20 Dow 24% 0 -20 -40 2017-09-11 2018-09-11 2019-09-11 2020-09-11 Gold Silver S&P 500 DOW Nasdaq MUX Source: Bloomberg. From Sep 11, 2017 – Sep 11, 2020.
Slide 4: Eye Catching Performance – Exploration / Development / Royalties
Eye Catching Performance – Exploration / Development / Royalties Abitibi Royalties RZZ.V Great Bear GBR.V Amex Exploration AMX.V $25 $20 $4 $20 $15 $3 $15 $10 $2 $10 $5 $1 $5 $0 $0 $0 2014 2015 2016 2017 2018 2019 2020 2018 2019 2020 2018 2019 2020 Pure Gold PGM.V HighGold HIGH.V Free Gold FVL.TO $3
Slide 5: MUX - Considerable Upside
MUX - Considerable Upside MUX vs GDXJ Sep 2015 – Sep 2020 GDXJ MUX $70 $5.00 $60 Outperformed GDXJ $4.00 $50 $3.00 $40 Big Gap = Opportunity $30 $2.00 $20 Trouble Starts $1.00 $10 $0 $0.00 Sep-2015 Sep-2016 Sep-2017 Sep-2018 Sep-2019 Sep-2020 GDXJ MUX MUX Source: Bloomberg. From Sep 11, 2015 to Sep
Slide 6: High Vol & Beta
High Vol & Beta MUX Share Price US$ $10 $8 $6 $4 $2 $0 2005 2010 2015 2020 MUX Source: Bloomberg. Monthly close from May 01, 2005 – Sep 11, 2020.
Slide 7: In the Last 3 Months MUX Has Started to Outperform
In the Last 3 Months MUX Has Started to Outperform 70% 60 50 40 MUX 38% GDXJ 33% 30 HUI 30% GDX 26% 20 Gold 12% 10 S&P500 10% DOW 8% 0 -10 2020-06-11 2020-07-11 2020-08-11 2020-09-11 MUX Source: Bloomberg. From Jun 11, 2020 – Sep 11, 2020.
Slide 8: MUX is a Turnaround Story
MUX is a Turnaround Story Strengths Weaknesses Opportunities ü Asset-Rich - Grade Control § Decrease Costs / oz ü Gold & Silver Production - Operational Efficiencies § Increase Production ü Exciting Exploration Results - Short Mine Life § Extend Mine Life ü Organic Growth Pipeline - Rebuilding Trust
Slide 9: MUX’s Diversified Portfolio
MUX’s Diversified Portfolio Mines Development Pipeline Gold & Silver Gold & Silver Black Fox Ontario Froome Grey Fox Gold Bar Nevada Stock El Gallo Mexico Fenix San José Copper Los Azules Argentina MUX
Slide 10: Black Fox Complex Exploration Focus
Black Fox Complex Exploration Focus Black Fox § Near surface & depth potential Timmins, Canada § Other gold mines in the area go much deeper Black Fox Complex Timmins Stock Black Fox Kirkland Lake Surface 1,000m 3,300ft 2,000m 6,600ft Stock West Stock East Grey Fox 6.7 g/t Au / 39m 63.6 g/t Au / 6.2
Slide 11: Black Fox Complex - Prime Segments of DPFZ
Black Fox Complex - Prime Segments of DPFZ Black Fox Timmins, Canada § +20 km of prospective underexplored structures § Near existing infrastructure (mine & mill) 70 Moz Stock Produced Property Black Fox Timmins (mill) Destor-Porcupine Fault Zone (DPFZ) Property Mining (mine) Camp1 Taylor mine Black
Slide 12: Grey Fox Deposit
Grey Fox Deposit Black Fox Property Grey Fox 888 Koz Indicated Black Fox Mine @ 7.1 g/t Au Froome 173 Koz Inferred 181 Koz Indicated @ 5.1 g/t Au @ 6.6 g/t Au Tamarack 127 Koz Indicated @ 5.1 g/t GEO 1.2 miles 2 km N MUX Please see Appendix for more details.
Slide 13: Grey Fox 2019 Exploration Highlights
Grey Fox 2019 Exploration Highlights Near surface mineralization, multiple zones, drill assay values Area Project Hole # Gold (g/t) Width (m) From (m) Including Au_GxM 19GF-1253 265 1.20 56 318 19GF-1121 261 0.60 168.7 157 19GF-1123 39.5 3.80 325 143 g/t Au over 1m 150 147NE 19GF-1151 10.0 13.2 229.
Slide 14: Grey Fox – Abundant Visible Gold
Grey Fox – Abundant Visible Gold § Near surface § Good grades, widths and continuity § More competent rock than Black Fox § Open Pit + Underground potential MUX
Slide 15: Grey Fox – Already Sizeable Resource & Growing
Grey Fox – Already Sizeable Resource & Growing Sedimentary rocks § Structurally controlled Apr 30, 2020 Resource Update Whiskey Indicated Jack Fa Syenite 888 Koz @ 7.05 g/t Au ul Mafic Intrusion Contact § Large mineralized t Volcanic Rocks Zone Mafic Inferred Volcanic 173 Koz @ 6.58 g/t Au system Ro
Slide 16: Grey Fox – Whiskey Jack
Grey Fox – Whiskey Jack High Grade Intersected at Shallow Depth From 147 m: 53 g/t Au over 7.4 m (hole 19GF-1293) Gold grade (g/t) Drilling started in September 2020 3 new holes completed, assays pending MUX
Slide 17: Grey Fox – South Zone
Grey Fox – South Zone From 280 m: 9.4 g/t Au over 22 m, including 19.6 g/t Au over 6 m § High grades over significant widths § Replacement-disseminated style mineralization § Occurring when C-breccia quartz-carbonate vein structures cross favourable host rock unit (variolitic mafic volcanic) Gold gr
Slide 18: Stock Property
Stock Stock Property Property (mill) Destor-Porcupine Fault Zone (DPFZ) Black Fox Property (mine) Taylor mine Matheson Black Fox Aquarius Froome Mine Grey Fox Gold Deposits GK 6 miles Fa ult Splay Structures 2018 - 2019 Exploration Success ü Stock West Stock East Discovery Sediments Stock Mine Stock
Slide 19: Stock Property - Significant Gold Intersections
Stock Property - Significant Gold Intersections Stock West Stock Mine Stock East (care & maintenance) S19-112A 4.2 g/t Au / 14.5m incl. 12.2 g/t Au / 3.4m S19-98 5.6 g/t Au / 30m-200m -200m incl. 9.1 g/t Au / 13m S19-113 6.5 g/t Au / 19m-400m -400m incl. 7 g/t Au / 17m S19-105 SEZ19-35 SEZ19-28 5.5
Slide 20: Stock West Drill Results
Stock West Drill Results Strong, Consistent Mineralized Intersections 21.4 g/t Visible Gold VG 5.6 g/t Au over 30 m MUX
Slide 21: Black Fox Complex Conceptual Expansion Strategy
Black Fox Complex Conceptual Expansion Strategy1 Production Growth Steps to Target +100 Koz / Yr. Leveraging Stock Mill’s Capacity Step 1. Black Fox Mine Improve operations & drill Step 2. Froome Production in 12-14 months Bridging gold production for next 2-3 years Step 3. Grey Fox Growth & increas
Slide 22: Black Fox Mine – New Opportunities Generated
Black Fox Mine – New Opportunities Generated Black Fox 240 East Complex West Stoping started This is What’s New: 240E Performing to plan 280-300W 280E 1. Reassessment leading to production 2. Increased working faces, shorter haul & flexibility 400- 460CZ 3. Improved timing and mine plan attainment 6
Slide 23: Froome – Planned Production Q4 2021
Froome – Planned Production Q4 2021 Froome Is Better Than Black Fox Because: • Shallower deposit - suited for low cost, productive ‘bulk mining’ at pit level • Wide disseminated style mineralization - more consistent grades and continuity • Wider mining widths - ranging from 15-40 m most of deposit
Slide 24: Froome Deposit – Typical Core Intersection
Froome Deposit – Typical Core Intersection Silicified metasediments cut by quartz-ankerite veinlets & breccias with up to 5% disseminated fine grained pyrite Shown below is an example core interval of the wide zone, favorable ground conditions expected From 127 m: 4.55 g/t Au over 53 m, incl. 8.92 g
Slide 25: Grey Fox – Growing Into a Potential Long-Life Core Asset
Grey Fox – Growing Into a Potential Long-Life Core Asset Grey Fox Potential high grade open pit § NORTH Conceptual Pits Whiskey Jack (+3g/t)* Gibson Contact § Potential underground (7g/t)* Portal Pit § Awarded scoping study 147 NE Gibson § Includes scoping requirements South Pit 147 Pit for the Stoc
Slide 26: Stock Property Advantages
Stock Property Advantages • No metal stream, 1% NSR only on Stock Main, 100% owned • Water permit received 2020 • Closure plan active • Short timeframes to modify permits • Operating mill and tailings management facility with capacity • Near surface resource and highly prospective exploration target
Slide 27: Nevada, Prime Real Estate for Gold
Nevada, Prime Real Estate for Gold Gold Bar Nevada, USA On Trend - Similar Geology Nevada Gold Mines Cortez Cortez & Criteria 50 Moz Au Gold Bar cluster1 Cortez Large footprint, Fourmile ü Co Discovery shallow oxide gold rt Goldrush ez Host rock, alteration, Fa ü ult mineralization style Major fault
Slide 28: Gold Bar – Exploration Potential
Gold Bar – Exploration Potential Ro § Extensions of known deposits be rts (Gold Bar and Gold Bar South) Gold Bar Cr ee Horse Gold Stone kF Canyon au Pot Canyon Ridge § Follow-up on positive drill lt Pick Gold Canyon Taurus intersections Rutabaga Cabin Creek Hunter § Deeper targets – game-changer W a
Slide 29: Gold Bar Operations – Ramp up Going Well
Gold Bar Operations – Ramp up Going Well Turnaround On-Track Q3 2020 ü Recruitment key personnel nearly completed Gold Bar Nevada ü Resource model and pit optimizations completed; mine plan and scheduling underway ü Mining efficiencies improving ü Operating on day and night shifts ü Ramp-up of gold
Slide 30: San José Mine: Production Since 2007
San José Mine: Production Since 2007 High Grade Silver & Gold (49% Owned) San José § Large Property Argentina San José § High Grade Mine Mine § Surrounds Newmont Reserve Grade1 459 gpt Silver 7.3 gpt Gold Newmont Cerro Negro Mine Production 20192,3 3.4 Moz Silver Production 20195 52 Koz Gold 334,000
Slide 31: Significant Optionality to Copper
Significant Optionality to Copper Los Azules: De-Risking Los Azules Argentina Tonnes Copper Gold Silver Drill Intersections Highlights: 962 10.2 1.7 55.7 Indicated: Billion lbs Million oz Million oz 221 m (725 ft) @ 1.62% Cu Million @ 0.48% @ 0.06 gpt @ 1.8 gpt 200 m (656 ft) @ 0.89% Cu 240 m (787 f
Slide 32: Los Azules - Robust @ $3/lb Copper
Los Azules - Robust @ $3/lb Copper Highlights PEA 2017 (Hatch) Initial Capex $2.4 Billion Payback 3.6 years Mine Life 36 years After-Tax IRR 20% After-Tax NPV @ 8% $2.2 Billion Avg. Annual Production 415 Million lbs Cu @ cash cost 1st 13 years $1.14/lb + Au & Ag credits MUX Oct 16, 2017 – “NI 43-101
Slide 33: What Makes MUX Unique
What Makes MUX Unique $165M Investment1 20% Ownership $1/Yr Salary Stock Ownership Top 10 Holders3 Shares Outstanding: 409 M Rob McEwen 82.2 M Van Eck Associates 17.0 M Rob Fully Diluted: 443 M McEwen BlackRock 12.4 M 20% Mirae Asset Global Investments 6.2 M ADTV2: 5.6 M The Vanguard Group 6.0 M Ret
Slide 34: Near Term Catalysts
Near Term Catalysts • Improving operational performance • Growth pipeline milestones - technical reports Q4 2020 – Black Fox Complex expansion PEA – Fenix Feasibility Study – Gold Bar Pick and South Resource & Reserve update • Exploration drill programs at Grey Fox and Stock MUX
Slide 35: Appendix
Appendix
Slide 36: Appendix: Froome Ramp Development
Appendix: Froome Ramp Development On Target. 1st Ore Expected Q2 2021. Haulage Ramp 40% North Complete Sep 8th Actual Pit bottom Haulage Ramp remaining 586m Actual 385m Ventilation Ramp remaining 498m Actual 530m Black Fox Pit Fa ult zon Ventilation Transverse & longitudinal stope development light
Slide 37: Appendix: Stock West Drill Results
Length Au g/t Cog 1 Cog 3 494m 1.0 1.3 Length Au g/t Cog 1 Cog 3 Appendix: 1.0 1.0 1.6 2.4 475m 1.0 6.6 1.0 4.1 1.0 3.0 Stock West 1.0 1.0 6.6 2.8 1.0 1.8 536m Length 1.0 Au g/t 1.2 Cog 1 Cog 3 1.0 2.3 Drill Results 1.0 1.0 1.0 3.4 8.3 16.7 1.0 3.5 1.0 1.0 0.1 0.8 1.0 2.3 1.0 7.9 1.0 3.4 1.0 5.3 1.0
Slide 38: Appendix: Reserves & Resources
Appendix: Reserves & Resources Mineral Reserves Attributable Gold Reserves Proven Probable Proven + Probable Tonnes Grams per Contained Metal Tonnes Grams per Contained Metal Tonnes Grams per Contained Metal 43-101 Au Reserves (millions) tonne (Koz) (millions) tonne (Koz) (millions) tonne (Koz) Gold
Slide 39: Appendix: Reserves & Resources
Appendix: Reserves & Resources Mineral Resources Attributable Gold Resources Measured Indicated Measured + Indicated Inferred Tonnes Grams per Contained Tonnes Grams per Contained Tonnes Grams per Contained Tonnes Grams per Contained 43-101 Au Resources (millions) tonne Metal (Koz) (millions) tonne
Slide 40: Appendix: Reserves & Resources
Appendix: Reserves & Resources Mineral Resources (Cont’d) Attributable Silver Resources Measured Indicated Measured + Indicated Inferred Tonnes Grams per Contained Tonnes Grams per Contained Tonnes Grams per Contained Tonnes Grams per Contained 43-101 Ag Resources (millions) tonne Metal (Koz) (milli
Slide 41: Appendix: Cautionary Note Regarding Non-GAAP Measures
Appendix: Cautionary Note Regarding NON-GAAP Measures In this presentation, we have provided information prepared or calculated Earnings from Mining Operations according to U.S. GAAP, as well as provided some non-U.S. GAAP ("non- The term Earnings from Mining Operations used in this presentation is
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