Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (March 2017)
30 slides from Mcewen's investor presentation, Mar 8, 2017
Slide 1: Cautionary Statement
Cautionary Statement 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 pr
Slide 2: Investing in Mining Shares: Here is What I Look At
Investing in Mining Shares Here is What I Look At: 3 Financial Strength Operating Mines Revenue Management’s Investment Growth Market Liquidity Wildcards
Slide 3: MUX Scorecard (US$)
MUX Scorecard (US$) 4 Financial Strength? US$55M, No Debt Operating Mines? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg Dail
Slide 4: Improving Financial Results
Improving Financial Results 5 Cash provided by operating activities, which is presented on the consolidated statement of cash flow, for the 2016, 2015, 2014 10-Q. Cash & liquid assets in cash, investments and precious metals at market price. This non-GAAP disclosure is defined in 2016, 2015, 2014 10
Slide 5: Capital Distribution to Shareowners
Next Payment August 2017 Capital Distribution to Shareowners 6 1¢ Per Share Paid Semi-Annually In February & August Tax Free in US & Canada We have a Yield
Slide 6: MUX Scorecard (US$)
MUX Scorecard (US$) 7 Financial Strength? US $55M, No Debt Operating Mines? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg Dai
Slide 7: Generating Positive Free Cash Flow
Generating Positive Free Cash Flow 8 1 Treasury in cash, investments and precious metals at market price. As of February 27, 2017. US$ Millions US$ Millions Treasury No Debt No Streaming No Financing Anti-Royalties $25.2M $15.6M Treasury1 $55.2 M $0 $20 $40 $60 Dec-31 Dec-31 Dec-31 27-Feb 2014 2015
Slide 8: Production Estimates by Metal
9 Gold / silver ratio 75:1. Based on internal estimates. 2017E Production 31% 69% 42% 58% 2019E Production Silver 3,324,000 oz Gold 99,700 oz Silver 7,300,000 oz Gold 137,000 oz
Slide 9: Decreasing Costs
Decreasing Costs 10 US $ / oz Au Eq Gold / silver ratio 75:1. 2017 based on internal estimates. $990 $780 $954 $760 $900 $760 $610 $524 Total Cash Cost All in Sustaining Cash Costs 0 200 400 600 800 1000 1200 2013A 2014A 2015A 2016A 2017E El Gallo Mine 0 200 400 600 800 1000 1200 2013A 2014A 2015A 2
Slide 10: MUX Scorecard (US$)
MUX Scorecard (US$) 11 Financial Strength? US $55M, No Debt Operating Mines? ? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg
Slide 11: MUX Scorecard (US$)
MUX Scorecard (US$) 12 Financial Strength? US $55M, No Debt Operating Mines? ? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg
Slide 12: Big Insider Ownership: Strong Alignment with Shareowners
Cost Base $127M Big Insider Ownership Strong Alignment with Shareowners 13 Rob McEwen Chief Owner 25% $1 Annual salary No cash bonus No options
Slide 13: Building Management for Growth
Building Management for Growth 14 Xavier Ochoa Extensive experience with all stages of feasibility, development and operations of large scale projects: Antamina, Las Bambas and Antapaccay in Peru, and El Pachon. Former Vice President of Projects for Glencore and Construction Manager for Bechtel. Mas
Slide 14: MUX Scorecard (US$)
MUX Scorecard (US$) 15 Financial Strength? US $55M, No Debt Operating Mines? ? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg
Slide 15: Production Growth – Gold Equivalent Ounces
Production Growth – Gold Equivalent Ounces 16 154koz 127koz 121koz 88koz Production in gold equivalent ounces. Gold / silver ratio 75:1. 2017-2020 based on internal estimates. 1 2018 includes ramp-up production from Gold Bar of 10koz production. (Estimated 75koz annualized) 2 2019 includes El Gallo
Slide 16: Development Pipeline: Gold Bar – Gold
Development Pipeline: Gold Bar – Gold 17 Cortez Trend Nevada, USA Gold Price $1,150 $1,250 $1,350 After Tax IRR 20% 30% 40% Payback 3 yrs 2.4 yrs 1.9 yrs Positive Feasibility Study (Oct 2015) @ $1,150 / oz Open Pit, Heap Leach, 1.1 gpt oxide ore, Low Capex Economic Sensitivity
Slide 17: Development Pipeline: Gold Bar – Gold, Key Features
Tonkin Gold Bar BMX Cortez Silver Standard Marigold Waterton Ruby Hill Battle Mountain Cortez Trend Cortez Pipeline Gold Rush Discovery Premier McCoy-Cove 0 10 20 Km N Development Pipeline: Gold Bar – Gold 18 Barrick’s Biggest Gold Mine Cortez Trend Nevada, USA Great Address Open Pit, Heap Leach 0.0
Slide 18: MUX Scorecard (US$)
MUX Scorecard (US$) 20 Financial Strength? US $55M, No Debt Operating Mines? ? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg
Slide 19: Market Facts: Trading Liquidity and Ownership
4.3 M US$930 M @$3.10 Market Cap 304 M 300 M Common Shares 21 Source: Bloomberg. US$. As of March 6, 2017. 1Share volume NYSE and TSX combined. 2016 Avg. Daily Share Volume Trading Liquidity1 NYSE & TSX MARKET FACTS Weekly Volume (Millions Shares) Shares Outstanding Fully Diluted 25% 25% 11% 39% Own
Slide 20: Significant Leverage to Gold Price
22 Source: Bloomberg. US$. As of March 6, 2017. 1Three year average. High Beta1 To Gold 2.8x Significant Leverage to Gold Price $9.50 $9.15 $0.42 $0.36 $3.10 26x 22x $0.65 Rob McEwen Becomes CEO US Gold McEwen Mining Share Price US$ 5x Since July 2015 0 2 4 6 8 10 2000 2004 2008 2012 2016
Slide 21: MUX Scorecard (US$)
MUX Scorecard (US$) 23 Financial Strength? US $55M, No Debt Operating Mines? ? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg
Slide 22: Los Azules – Leverage to Copper
24 San Juan Province, Argentina Los Azules – Leverage to Copper 19.7 Billion lbs Cu @ 0.55% + Gold & Silver Resources1 Large Deposit1 Gold Equivalent +40Moz Government Tax Changes Big Impact on Capex & Opex New PEA Underway Key Features 1August 1, 2013 NI 43-101 Technical Report, Los Azules Porphyry
Slide 23: Los Azules - Panoramic View - Looking South
Los Azules - Panoramic View - Looking South Preliminary Locations Proposed for Mine Facilities and Infrastructure 25 Northern Waste Dumps Los Azules Mine Primary Crusher Coarse Ore Conveyor Concentrator Facilities Tailings Pond Air Strip Tailings Dam
Slide 24: Reasons why gold looks good now
Reasons why gold looks good now 26
Slide 25: Gold vs Dow YTD
27 Gold vs Dow YTD Source: Bloomberg. As of March 6, 2017 Gold Dow GDX GDXJ % -50 0 50 100 150 200
Slide 26: Federal Debt
28 Federal Debt Source: Federal Reserve Bank of St. Louis. As of Dec 22, 2016. $20 Trillion
Slide 27: # of Gold Ounces to Buy the DJIA
29 # of Gold Ounces to Buy the DJIA Source: Bloomberg. As of March 6, 2017 17 oz Mar 6, 2017
Slide 28: MUX Scorecard (US$)
MUX Scorecard (US$) 30 Financial Strength? US $55M, No Debt Operating Mines? 2016 Cash Flow $25M Earnings $21M Revenue Limits? None, Not Sold Metal Streams or Royalties Management’s Investment? Big, $127 Million Cost Base Growth? Yes, 2018 Gold Bar, 2019 El Gallo Silver Market Liquidity? 4.3M Avg Da
Slide 29: Gold Shares Offer Better Upside Potential Than Gold
Gold Shares Offer Better Upside Potential Than Gold 31 Source: Bloomberg. US$. 2010-2012 date & high closing price. 1. Percentage Increase (or decrease) needed to achieve 2010-12 highs. Franco Nevada 2012-10-05 $60.85. Royal Gold 2012-09-28 $99.83. Gold 2011-09-05 $1900. Agnico Eagle 2010-12-06 $87.
Slide 30: Gold Shares Offer Better Upside Potential Than Gold
Gold Shares Offer Better Upside Potential Than Gold Potential Gain’ Franco Nevada 3% Royal Gold Gold Agnico Eagle Newmont McEwen 178% 1012 hm rane Nn 20121905 8085 Ray Gd 201208285 ie ON 201-00 00 900.55 Gurienl casei aan