Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (July 2020)
43 slides from Mcewen's investor presentation, Jul 28, 2020
Slide 1: Gold / Copper Turnaround in Progress
Gold / / Copper Turnaround in Progress NYSE & TSX July 2020 Presentation By: Rob McEwen, Chief Owner & Chairman Peter Mah , Chief Operating Officer Sylvain Guerard, SVP Exploration
Slide 2: Cautionary Statement
MUX Cautionary Statement Risk adverse? Forget about buying our shares. Past performance is unreliable in predicting the future. Unexpected events can happen and can change forecasts. MUX
Slide 3: MUX Pros, Challenges, Goals and Strategy
MUX Pros x Asset Rich x Diversified - Au, Ag, Cu x Great Exploration Results x Organic Growth Pipeline x Large Insider Ownership x Challenges - Debt - High Costs - Short Mine Life - Rebuilding Trust Goals ▪ Production Growth ▪ Cost / oz ▪ Mine Life Turnaround Story Strategy x Refinance Debt • Operat
Slide 4: MUX's Portfolio
MUX MUX’s Portfolio Mines Gold & Silver Development Pipeline Gold & Silver Froome Grey Fox Stock Copper Los Azules Fenix Black Fox Argentina Mexico Nevada Ontario Gold Bar El Gallo San José
Slide 5: Organic Development Pipeline for Gold & Silver
MUX Froome 181 koz @ 5.1 g/t Au Production Q4 2021 Grey Fox 888 koz @ 7.1 g/t Au Scoping Study Q4 2020 Stock East: 121 koz @ 1.6 g/t Au Stock West Discovery Fenix Feasibility Study Q4 2020 Timmins, Canada Mexico 1. Resources presented are Measured & Indicated. Please see Appendix for more details. B
Slide 6: Prime Exploration Real Estate in Nevada
MUX Prime Exploration Real Estate in Nevada Cortez Nevada Gold Mines Cortez 50 Moz Au cluster 1 Fourmile Discovery Goldrush MUX Property NGM Property Faults Gold Bar 20 k m 1 . Includes past production and current resources. Under - Explored with Upside Potential x Surface Near Mine & De eper Target
Slide 7: Gold Pick Model Revision
MUX 2018 LOM pit June 2020 Pit Faults Gold Pick Model Revision ▪ 2018 model gold mineralization primarily stratigraphic control. ▪ 2020 preliminary model gold mineralization primarily structure controlled + some stratigraphic component. Gold Bar – Pit Shells 2018 & Preliminary 2020 2018 LOM Pit 2020
Slide 8: Gold Bar - 2020 West Pick Drilling Highlights
MUX Gold Bar - 2020 West Pick Drilling Highlights 0 500 1,000 ft 0 150 300 m West Pick East Pick Central Pick 2018 LOM pit June 2020 Pit Faults 5.1g/t Au / 64ft incl. 11.3g/t Au / 17ft 2.7g/t Au / 90ft incl. 4.9g/t Au / 45ft 1g/t Au / 100ft incl. 1.7g/t Au / 40ft 2.4g/t Au / 95.9ft incl. 4.38g/t Au
Slide 9: Gold Bar - Upside Exploration Near Mine & at Property
MUX Old Gold Bar Gold Bar - Upside Exploration Near Mine & at Property Scale Gold Bar South Pot Canyon Gold Canyon Cabin Creek Pick ▪ Extensions of known deposits (Gold Bar and Gold Bar South) ▪ Follow - up on positive drill intersections ▪ Deeper targets - “game changer” discovery potential Hunter
Slide 10: Gold Bar South drill results highlights
MUX North Area Infill South Extension 300 m Gold Bar South 2019 drill results highlights 2020 drill results highlights Satellite Deposit Near Surface Mineralization Production Expected H2 2021 Ongoing 2020 Trenching & Drill Program: ▪ Confirming shallow high grade mineralization (+2g/t Au) ▪ Extendi
Slide 11: Past Challenges - Gold Bar Operations Start Up Review
MUX Past Challenges • Lack of definition drilling and a grade control block model • Did not follow the feasibility study and mine plan • Too much clay in ore blend exacerbated by wet winter conditions • Pushed tonnage & clay beyond plant capacity – resulted in inefficient mining, excessive downtime
Slide 12: Gold Bar Operations – Become Profitable
MUX Gold Bar Operations – Become Profitable Turnaround Started & On - Track Q3 2020 x Operational review of people, processes, systems and assets x Preliminary resource model, pit optimization & 18 month mine plan x Improved clay blending and stockpile management x Crewed up and operating at 3000 TP
Slide 13: Black Fox Complex Located on Prime Segments of DPFZ
MUX ▪ +20 km of prospective structures ▪ Proven mineralized gold systems ▪ Underexplored – low maturity level ▪ Near infrastructure (Mine and Mill) Black Fox Complex Located on Prime Segments of DPFZ Black Fox Timmins, Canada Taylor mine Aquarius Matheson Destor - Porcupine Fault Zone (DPFZ) Grey Fo
Slide 14: Black Fox Complex Exploration Upside
MUX 1 Lengths presented are true widths. Please see Sep 4, 2019 and Sep 6, 2018 press releases. Ore Bodies McEwen Mineralization Zones Stock Mine 27.2 g/t Au / 7m incl. 311 g/t Au / 0.6m Black Fox Mine 55.1 g/t Au / 1.2m 232 g/t Au / 0.9m Black Fox Complex Kirkland Lake Timmins 1,000m 2,000m Surface
Slide 15: Black Fox Going West & Deep
MUX Structural Interpretation by David Rhys Panterra Geoservices Inc. Black Fox Going West & Deep Vertical Longitudinal Section - 500m - 1000m Froome 232g/t Au / 0.9m 60.7g/t Au / 2.9m, 91.2g/t Au / 0.9m 23.3g/t Au / 2.8m, 76.7g/t Au / 1m 13.9g/t Au / 5.3m 30.6g/t Au / 8m incl. 231.4g/t Au / 1m 32.5
Slide 16: Black Fox Complex Expansion Strategy
MUX Black Fox Complex Expansion Strategy 1 Grey Fox Stock Froome Production Growth Target +100 Koz / Year to Leverage Stock Mill Capacity Black Fox Mine - Current 2020 Improve & Sustain Production 2021 Near Term Production 2022 - 2023 Growth & LOM Exploration Discovery Contributing to Blue - Sky Gro
Slide 17: Black Fox – 2020 Mine Plan
MUX 840E 660HQZ 660 - 680 CZ 400 - 460CZ Black Fox West 280 - 300W 280E 240E 620E YE 2019 Resources Production Stopes Planned Development Actual Development Actual Mined Stopes Black Fox – 2020 Mine Plan New Opportunities Generated Active Ore Development & Definition Drilling What’s Different? 1. Re
Slide 18: Froome Twin Ramp Access – Average 30% Complete
MUX Froome Twin Ramp Access – Average 30% Complete ON TARGET EXPECT FIRST ORE Q2 2021 Black Fox Pit North Actual 375m Actual 262m Ventilation Ramp Remaining 637m Haulage Ramp Remaining 718m Haulage Ramp 27% Complete Ventilation Ramp 37% Complete July 15 th Actual Plan View Pit bottom Transverse & lo
Slide 19: Froome – Planned Production Q4 2021
MUX Froome – Planned Production Q4 2021 Froome vs Black Fox Important Advantages: • Shallower deposit, suited for low cost, productive ‘bulk mining’ and not beneath the pit • More consistent grades and continuity in a wide disseminated style mineralization • Wider expected mining widths ranging from
Slide 20: Froome Deposit – Typical Core Intersection
MUX Froome Deposit – Typical Core Intersection 4.55 g/t Au over 53m (from 127m) , incl. 8.92 g/t Au over 10.6m (Hole # 15PR - G031 ) Silicified metasediments cut by quartz - ankerite veinlets and breccias with up to 5% disseminated fine grained pyrite.
Slide 21: Grey Fox Deposit
MUX 2 km 1.2 miles N Please see Appendix for more details. Grey Fox Deposit Black Fox Mine Froome 181,000 oz Indicated @ 5.1 g/t Au Grey Fox 888,000 oz Indicated @ 7.1 g/t Au 173,000 oz Inferred @ 6.6 g/t Au Black Fox Property
Slide 22: Grey Fox 2019 Drill Results Highlights
MUX Area Project Hole Number Gold (g/t) Width (m) From (m) Including Au_GxM GREY FOX 147NE 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 19GF - 1151 10.0 13.2 229.8 133 19GF - 1134 6.98 15.5 466 108 19GF - 1175 148 0.71 189.1 105 GF South
Slide 23: Grey Fox – 888,000 Ounces Gold
MUX 1 km (0.6 miles) 1.5 km 1.5 km Sedimentary rocks Syenite Intrusion Mafic Volcanic Rocks Mafic Volcanic Rocks 147 Zone Contact Zone Gibson South Zone 147NE Whiskey Jack Apr 30, 2020 Resource Update: 888 Koz @ 7.05 g/t Au Indicated 173 Koz @ 6.58 g/t Au Inferred Ultramafic volcanic rocks Grey Fox
Slide 24: Grey Fox – Abundant Visible Gold
MUX Grey Fox – Abundant Visible Gold ▪ Starting at surface ▪ Good grade, widths and continuity ▪ Less deformed than Black Fox, more competent rock ▪ Open Pit + Underground potential
Slide 25: Grey Fox - High Grade, Near Surface, Good Ground
MUX Grey Fox - High Grade, Near Surface, Good Ground Grey Fox South: 9.4 g/t Au over 22 m, incl. 19.6 g/t Au over 6 m (Hole 19GF - 1198 from 280 m) ▪ Replacement - disseminated style mineralization ▪ Occurring when C - breccia quartz - carbonate veins structures cross favourable host rock unit (vari
Slide 26: Grey Fox – Whiskey Jack
MUX Whiskey Jack: 53 g/t Au over 7.4 m (Hole 19GF - 1293 from 147 m) Grey Fox – “ New ” High Grade, Near Surface Gold grade (g/t) ▪ Newest drill success at Grey Fox ▪ Follow - up on historical isolated drill hits ▪ Improved understanding on control of mineralization (very high grade intersected at s
Slide 27: Grey Fox – Growing Into a Potential Long-Life Core Asset
MUX Gibson Portal 147 NE Contact Pit 147 Pit Gibson South Pit 1km Whiskey Jack NORTH ▪ Potential high grade open pit (+3g/t)* ▪ Potential underground (7g/t)* ▪ Scoping study Q4 2020 ▪ Includes scoping requirements for the Stock mill, infrastructure, environment, etc. Grey Fox – Growing Into a Potent
Slide 28: Stock Property Exploration Success
MUX Stock Property Exploration Success Driving Organic Growth Opportunities Timmins, Canada Taylor mine Aquarius Matheson Destor - Porcupine Fault Zone (DPFZ) Grey Fox Stock Property Froome Timmins Mining Camp Gold Deposits Black Fox Property Black Fox Mine ▪ Hosts Mill & Historical Producing Mine 6
Slide 29: MUX Exploration Success: Stock Significant Intersections
MUX 2018 - 2019 MUX Exploration Success: Stock - Significant Intersections Over a 3 Km Trend Strong Upside Potential 62g/t Au / 0.38m 41.5g/t Au / 0.24m 16.5g/t Au / 1.53m 5.3g/t Au / 1.83m 8.6g/t Au / 1.53m Sediments Volcanics Stock West Stock Mine Stock East 6500 ft x Stock West Discovery x Stock
Slide 30: Stock - Significant Intersections Over a 3 Km Trend
MUX - 200m - 400m - 600m - 800m - 1000m - 1200m - 200m - 400m - 600m - 800m - 1000m Stock - Significant Intersections Over a 3 Km Trend - Strong Upside Potential Stock West Discovery Stock Mine Extension Stock East Resource 1000 m 0 16,350 m Drilling from 31 Holes Avg: Grade 5 g/t Au, Widths 15 - 20
Slide 31: Strong, Consistent Mineralized Intersections
MUX Strong, Consistent Mineralized Intersections Length Au g/t Cog 1Cog 3 475m 1.0 6.6 1.0 3.0 1.0 1.8 1.0 2.3 1.0 3.5 1.0 2.3 1.0 3.1 1.0 2.5 1.0 7.7 1.0 8.7 1.0 2.4 1.0 3.3 1.0 5.1 1.0 1.6 1.0 5.5 1.0 4.0 1.0 4.5 1.0 5.2 1.0 2.6 1.0 0.9 1.0 4.1 1.0 2.1 1.2 3.1 0.8 1.2 1.0 6.2 1.0 22.8 1.0 8.3 1.0
Slide 32: Stock West Drill Results
MUX 5.6 g/t Au over 30 m Stock West Drill Results Strong, Consistent Mineralized Intersections Visible Gold VG
Slide 33: San José Mine: Production Since 2007
MUX 1. Hochschild Mining 2019 Annual Report. 2. 49% basis. 3. Mar 16, 2020 - “McEwen Mining Reports 2019 Full Year and Q4 Results". 4. Hochschild’s “Annual Report and Accounts 2018” McEwen Mining Reports 2019 Full Year and Q4 Results". 5. Newmont 2019 10 - K report. 6. Hochschild’s news releases - F
Slide 34: Los Azules: De-Risking
MUX Tonnes Copper Gold Silver Indicated: 962 Million 10.2 Billion lbs @ 0.48% 1.7 Million oz @ 0.06 gpt 55.7 Million oz @ 1.8 gpt Inferred: 2,666 Million 19.3 Billion l bs @ 0.33% 3.8 Million O z @ 0.04 gpt 135.4 Million Oz @ 1.6 gpt Source: Oct 16, 2017 – “NI 43 - 101 Technical Report - Preliminary
Slide 35: Los Azules - Robust @ $3/lb Copper
MUX Los Azules - Robust @ $3/lb Copper Highlights PEA 2017 (Hatch) Oct 16, 2017 – “NI 43 - 101 Technical Report - Preliminary Economic Assessment Update for the Los Azules Project, Argentina”. Initial Capex Payback Mine Life After - Tax IRR After - Tax NPV @ 8% Avg. Annual Production 1st 13 Years $2
Slide 36: What Makes MUX Unique?
MUX What Makes MUX Unique? $16 5 M 2 1 % $1/ Y r Investment 1 Ownership Salary Avg. Daily Share Vol 2 : Shares Outstanding: Fully Diluted: Share Price: Market Cap : 5.0 million 400 million 435 million US$ 1.08 US$ 432 million Rob McEwen 21% Institutional 20% Retail 59% Stock Ownership 1 Rob McEwen’s
Slide 37: Exploration Success Obscured by Operational Challenges
MUX -80 -60 -40 -20 0 20 40 60 80 Oct/2017 Jan/2018 Apr/2018 Jul/2018 Oct/2018 Jan/2019 Apr/2019 Jul/2019 Oct/2019 Jan/2020 Apr/2020 Jul/2020 Exploration Success Obscured by Operational Challenges - Turnaround in Progress % MUX - 49% Source: Bloomberg. From Oct 6, 2017 – Jul 10 , 20 20 . Operational
Slide 38: Turnaround Story & 2020 Priorities
MUX ▪ Closing the share performance gap by improving our operations ▪ Refinancing debt COMPLETED ▪ Rich diversified asset base, gold, silver and copper ▪ Major organic growth pipeline with Froome , Grey Fox and Stock ▪ Los Azules - big copper optionality Turnaround Story & 2020 Priorities
Slide 39: Appendix
Appendix
Slide 40: Appendix: Reserves & Resources - Mineral Reserves
MUX Appendix: Reserves & Resources Mineral Reserves Source: Company disclosure. Attributable Gold Reserves Proven Probable Proven + Probable 43 - 101 Au Reserves Tonnes (millions) Grams per tonne Contained Metal (Koz) Tonnes (millions) Grams per tonne Contained Metal (Koz) Tonnes (millions) Grams pe
Slide 41: Appendix: Reserves & Resources - Mineral Resources
MUX Appendix: Reserves & Resources Mineral Resources Attributable Gold Resources Measured Indicated Measured + Indicated Inferred 43 - 101 Au Resources Tonnes (millions) Grams per tonne Contained Metal (Koz) Tonnes (millions) Grams per tonne Contained Metal (Koz) Tonnes (millions) Grams per tonne Co
Slide 42: Appendix: Mineral Resources (Cont'd)
MUX Appendix: Reserves & Resources Mineral Resources (Cont’d) Source: Company disclosure. Note: Mineral Resources inclusive of Mineral Reserves (where applicable). Attributable Silver Resources Measured Indicated Measured + Indicated Inferred 43 - 101 Ag Resources Tonnes (millions) Grams per tonne C
Slide 43: Appendix: Cautionary Note Regarding Non-GAAP Measures
MUX Appendix: 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 a