Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (October 2020)
44 slides from Mcewen's investor presentation, Oct 8, 2020
Slide 1: Gold / Copper Closing the Gap
Gold / / Copper Closing the Gap October 2020
Slide 2: Cautionary Statement
MUX Cautionary Statement Executive Summary: If you are r isk - averse , don’t buy our shares. Past performance is unreliable in predicting the future. Unexpected events do happen and will change forecasts. MUX
Slide 3: Introduction to Senior Management
MUX Introduction to Senior Management Peter Mah COO Rob McEwen Chairman & Chief Owner Anna Ladd - Kruger CFO Rob has $1/ year salary, is invested $165M in McEwen Mining and owns 20% of the outstanding shares. He in the founder of Goldcorp, was awarded the 2001 PDAC Developer of the Year, the Order o
Slide 4: Gold & Silver Gaining Attention Again!
MUX -40 -20 0 20 40 60 80 100 10/6/17 10/6/18 10/6/19 10/6/20 Gold Silver S&P500 Nasdaq Dow Gold & Silver Gaining Attention Again! Silver 37% % Source: Bloomberg. From Oct 6, 2017 – Oct 6 , 20 20 . Gold 47% S&P 32% Dow 22% Nasdaq 69%
Slide 5: Eye Catching Performance – Exploration / Development / Royalties
MUX $1 $2 $3 Aug/2020 Sep/2020 Oct/2020 New Found Gold $0 $1 $2 $3 Mar/2020 Jun/2020 Sep/2020 HighGold $0 $1 $2 $3 Mar/2020 Jun/2020 Sep/2020 Pure Gold $0 $1 $2 $3 $4 2018 2019 2020 Amex Exploration $0 $5 $10 $15 $20 2018 2019 2020 Great Bear $0 $10 $20 $30 2014 2015 2016 2017 2018 2019 2020 Abitibi
Slide 6: MUX – Targeting to Close the Gap
MUX $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $0 $10 $20 $30 $40 $50 $60 $70 Oct/2015 Oct/2016 Oct/2017 Oct/2018 Oct/2019 Oct/2020 GDXJ MUX Outperformed GDXJ Trouble starts Gap to close MUX – Targeting to Close the Gap MUX vs GDXJ Oct 2015 – Oct 2020 GDXJ MUX Source: Bloomberg. From Oct 6, 2015 to Oct 6 ,
Slide 7: MUX is Closing the Gap
MUX Strengths x Gold & Silver Production x World Class Jurisdictions for Exploration, Production & Growth x Huge Copper Deposit x Large Insider Ownership Objectives ▪ Decrease Cost / oz ▪ Increase Production ▪ Extend Mine Life MUX is Closing the Gap
Slide 8: MUX's Diversified Portfolio
MUX MUX’s Diversified 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 9: Strategic Organic Growth Pipeline Targeted Gold Equivalent Production to 300,000 oz/Year
MUX 5 Year Strategic Organic Growth Pipeline Targeted Gold Equivalent Production to 300,000 oz / Year 170 210 300 300 300 2020F 2021E 2022E 2023E 2024E 2025E Production (koz Au Eq) Fox Complex Gold Bar El Gallo San Jose Based on internal management estimates and dependent on technical studies to be
Slide 10: Fox Timmins, Canada – Exploration Focus
MUX 1 Lengths presented are true widths. Please see Sep 4, 2019 and Sep 6, 2018 press releases. McEwen’s current deposits outlines Ore bodies Headframe / shaft Fox Complex Kirkland Lake Timmins 1,000m 2,000m Surface 3,300ft 6,600ft Stock Black Fox Fox Complex Exploration Focus ▪ Near surface & depth
Slide 11: Fox Complex on Prime Segments of DPFZ
MUX ▪ +20 km of underexplored, prospective structures ▪ Near our existing mine & mill infrastructure Fox Complex on Prime Segments of DPFZ Fox Timmins, Canada Taylor mine Aquarius Matheson Destor - Porcupine Fault Zone (DPFZ) Grey Fox Stock Property (mill) Froome 70 Moz Produced Timmins Mining Camp
Slide 12: Grey Fox Deposit
MUX 2 km 1.2 miles N Please see Appendix for more details. Grey Fox Deposit Froome 181 Koz Indicated @ 5.1 g/t Au Black Fox Property Grey Fox 888 Koz Indicated @ 7.1 g/t Au 173 Koz Inferred @ 6.6 g/t Au
Slide 13: Grey Fox 2019 Exploration Highlights
MUX Area Project Hole # 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 19GF
Slide 14: Grey Fox – Abundant Visible Gold
MUX Grey Fox – Abundant Visible Gold ▪ Near surface deposit ▪ Good grades, widths and continuity ▪ More competent rock than Black Fox ▪ Open Pit + Underground potential
Slide 15: Grey Fox – Already Sizeable Resource & Growing
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 Indicated 888 Koz @ 7.05 g/t Au Inferred 173 Koz @ 6.58 g/t Au Ultramafic volcanic rocks Grey Fox –
Slide 16: Grey Fox – Whiskey Jack High Grade Intersected at Shallow Depth
MUX From 147 m: 53 g/t Au over 7.4 m (hole 19GF - 1293) Grey Fox – Whiskey Jack High Grade Intersected at Shallow Depth Gold grade (g/t) ▪ Drilling started in September 2020 ▪ Of 9 new holes completed, 7 have visible gold assays pending
Slide 17: Stock Property - Significant Gold Intersections
MUX - 200m - 400m - 600m - 800m - 1000m - 1200m - 200m - 400m - 600m - 800m - 1000m Stock Property - Significant Gold Intersections Stock West Stock Mine (care & maintenance) Stock East 1000 m 0 Mineralized areas/ targets S19 - 95 27.2 g/t Au / 7m incl. 311 g/t Au / 0.6m S18 - 31 5.6 g/t Au / 3.3m,
Slide 18: Stock West Drill Results - Strong, Consistent Mineralized Intersections
MUX Stock West Drill Results - Strong, Consistent Mineralized Intersections VG 21.4 g/t Visible Gold 5.6 g/t Au over 30 m Drill core from hole S19 - 98.
Slide 19: Operations Challenges & Solutions
MUX Operations Challenges & Solutions Mine Challenges Solutions Black Fox Contractor crusher fire Flood grade control Low active ore headings Life Of Mine – Fox Complex Expansion x x x Purchased in - house crusher New water control measures More development In - house resource estimation – drilling
Slide 20: Fox Complex Project Location – Central Processing Strategy
MUX Fox Complex Project Location – Central Processing Strategy Black Fox (Stock Mine) Mill Black Fox Mine Matheson McEwen Timmins Properties Rail Lines Rail Lines Railway to Kirkland Lake, North Bay and Sudbury Trans - Canada Hwy 28 Miles by Road N 6 Mile Spur (not existing) Timmins 20 Miles by Road
Slide 21: Fox Complex Conceptual Expansion Strategy
MUX Fox Complex Conceptual Expansion Strategy 1 Production Growth Steps to Target +100 Koz / Yr Leverage Stock Mill Capacity 1 Based on existing 1.5 Moz Measured & Indicated Resource. Step 1. Black Fox Mine Improve operations , profitability & drill 2020 - 21 Step 2. Froome Set up commercial product
Slide 22: Fox Complex Expansion – Targeted Business Objectives
MUX Fox Complex Expansion – Targeted Business Objectives □ Identify the optimal business case to complete a Feasibility in 2021 x Increase Timmins gold production to 100,000 - 150,000 oz/ year x Extend mine life to 10 years or better x Centralize ore processing at the Stock Mill x Centralize support
Slide 23: Black Fox Mine – Production Areas 2020 - 2021
MUX 840E 660HQZ 660 - 680 CZ 400 - 460CZ Black Fox West Flank 280 - 300W 280E 240E 620E YE 2019 Resources Production Stopes Planned Development Actual Development Actual Mined Stopes Black Fox Mine – Production Areas 2020 - 2021 Black Fox Deep - areas where production is realized What’s New? 1. More
Slide 24: Froome – Commercial Production Expected Q4 2021
MUX Froome – Commercial Production Expected Q4 2021 Froome Is Better Than Black Fox Because: • Shallower deposit - more efficient haulage and reduced underground congestion • Wide disseminated style mineralization - more consistent grades and continuity • Wider mining widths - ranging from 15 - 40 m
Slide 25: Froome Deposit – Typical Core Intersection
MUX Numbers in yellow represent grams per tonne values over sample length 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, favorabl
Slide 26: Fox Complex Expansion – Potential for Open Pit & Underground
MUX Gibson Portal 147 NE Contact Pit 147 Pit South Pit » Expansion study underway » Potential mining scenarios for the Grey Fox deposit: - High grade open pits (+3g/t*) - Underground mining (7g/t*) Fox Complex Expansion – Potential for Open Pit & Underground Grey Fox Conceptual Pits * Resource estim
Slide 27: Nevada, Prime Real Estate for Gold
MUX Nevada, Prime Real Estate for Gold Cortez Nevada Gold Mines Cortez 50 Moz Au cluster 1 Fourmile Discovery Goldrush MUX Property NGM Property Faults Gold Bar Complex 20 k m 1 . Includes past production and current resources. Underexplored with Upside Potential x Surface near mine & deeper targets
Slide 28: Gold Bar – Exploration Potential
MUX Gold Bar – Exploration Potential Gold Bar South Pot Canyon Gold Canyon Cabin Creek Pick ▪ Extensions of known deposits (Gold Bar & Gold Bar South) ▪ Follow - up on positive drill intersections Hunter Taurus Horse Canyon Rutabaga Gold Stone Ridge 6,100 m Gold Bar
Slide 29: Gold Bar Operations Status
MUX Gold Bar Operations Status x Mining efficiency improvements reducing unit mining costs 20 - 30% x Agglomeration versus ROM - crushed under 3 rd party review x Over 20 km definition drilling completed in 2020 x Gold Bar South permitting underway x Follow up Gold Bar Pick resource - reserve, defin
Slide 30: San José Argentina
MUX San José Argentina 1. Hochschild Mining 2019 Annual Report. 2. Based on a 49% McEwen Mining ownership basis. 3. McEwen Mining press release Mar 16, 2020, “McEwen Mining Reports 2019 Full Year and Q4 Results". 4. Hochschild’s “Annual Report and Accounts 2018”. 5. Newmont 2019 10 - K r eport. Rese
Slide 31: San José Exploration
MUX N 20 k m Newmont Cerro Negro Mine 12 miles San José Argentina San José Exploration ▪ Adding new resource close to current mine at Emilia and Julia veins ▪ Titan geophysics completed – new potential drilling program to begin shortly ▪ Continuing to explore Telken area next to Cerro Negro – six ne
Slide 32: San José Exploration
MUX San José Exploration Source: Hochschild Mining
Slide 33: Los Azules – Significant Optionality to Copper
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 34: 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 $2.4 Billion Payback Mine Life After - Tax IRR After - Tax NPV @ 8% Average Annual Productio
Slide 35: What Makes MUX Unique
MUX What Makes MUX Unique $16 5 M 2 0 % $1/ Y r Investment 1 Ownership Salary Rob McEwen 20% Institutional 18% Retail 62% 1 - Rob McEwen’s: $1 40 M shares investment + $25 M loan investment, Aug 13, 2018 & Mar 29, 2019 press release. Share ownership. SEC filings. 2 - Average Daily Trading Volume ove
Slide 36: Financing and Liquidity Update
MUX Financing and Liquidity Update • US$50M debt facility amended, removing near term liquidity issue – Negotiated favorable repayment terms, diverting immediate cashflow into operations capital expenditure programs and working capital needs • US$10.4 M flow through financing closed in September to
Slide 37: Near Term Catalysts
MUX Near Term Catalysts • Improving operational performance and profit margins, driving down costs • Growth pipeline deliverables - technical reports Q4 2020: Fox Complex expansion PEA Fenix Feasibility Study Gold Bar Pick and South Resource, Reserve & Feasibility Study update • Exploration drill pr
Slide 38: Appendix
Appendix
Slide 39: Appendix: Froome Ramp Development
MUX Appendix: Froome Ramp Development On Target. 1 ST Ore Expected Q2 2021. Black Fox Pit Actual 546m Actual 395m Ventilation Ramp remaining 485m Haulage Ramp remaining 574m Haulage Ramp 41% Complete Ventilation Ramp 53% Complete Sept 30 th Actual Plan View North Pit bottom Transverse & longitudinal
Slide 40: 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 41: 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 42: 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 43: Appendix: Reserves & Resources – 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 44: 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