Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — November 2014 Annual Global Metals & Mining / Steel Conference
55 slides from Mcewen's conference presentation, Nov 20, 2014
Slide 1: November 2014 Annual Global Metals & Mining / Steel Conference
November 2014 Annual Global Metals & Mining / Steel Conference
Slide 2: Forward-looking statements
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 presentation, McEwen Min
Slide 3: or ?
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Slide 4: Gold Shares: Lots of Upside!
Gold Shares: Lots of Upside! Source: Bloomberg. In US$. As of November 18, 2014. McEwen
Slide 5: Leverage to Gold
Leverage to Gold Source: Bloomberg. As of November 18, 2014. McEwen Comparison of Betas Market Cap. +$500 M
Slide 6: Insider Ownership
Insider Ownership McEwen Source: Bloomberg. As of November 18, 2014.
Slide 7: Industry Problems
Growth at any cost Shareholder dilution Excessive compensation Selling profit margins via streams & royalties Industry Problems
Slide 8: Balance Sheet
Balance Sheet As of November 18, 2014. $14 Million Cash & Gold
Slide 9: Asset value versus market cap
Los Azules $700 Million San Jose (49% Interest) El Gallo 2 Gold Bar Cash & Eq. MUX Internal Estimates MUX Market Cap $500 Million Internal estimates. As of November 18, 2014. El Gallo 1 Nevada (not inc Gold Bar)
Slide 10: Key Properties
Gold Bar (Nevada) Permitting El Gallo 1 (Mexico) Gold Producer El Gallo 2 (Mexico) Permitted Los Azules (Argentina) Large Copper Deposit San José (Argentina) Gold / Silver Producer Key Properties
Slide 11: MUX Projected Annual Production Growth
MUX Projected Annual Production Growth Based on thousands gold eq. oz. 60:1 silver/gold ratio. The silver/gold ratio does not take into account metallurgical recoveries. Production estimates for 2014-2015 based on internal estimates. Notes 1, 2, 3, 7 & 13. 131 koz 135 koz 145 koz
Slide 12: MUX Projected All-in Sustaining Cost (AISC)
MUX Projected All-in Sustaining Cost (AISC) Based on 60:1 silver/gold ratio. Estimates for 2014-2015 based on internal estimates. See cautionary note regarding non-GAAP measures. Notes 1, 2, 3, 7 & 13. $1,250 / oz $1,275 / oz $1,050 / oz
Slide 13: High Leverage to Gold
High Leverage to Gold Production and cost estimates based on internal estimates. See cautionary note regarding non-GAAP measures. Note 13 Summary 25% Insider Ownership Avg Daily Value Traded 12% 16% Production Costs 2013-2015E $7.2 M
Slide 14: El Gallo Mine, Mexico: Production
EL GALLO 1 MINE Mexico Production 14 14
Slide 15: El Gallo Mine: Sinaloa, Mexico
El Gallo Mine: Sinaloa, Mexico
Slide 16: El Gallo 1: Gold Production & Cost Forecasts
El Gallo 1: Gold Production & Cost Forecasts $1,000/oz Cash Cost $1,250/oz AISC 37,500 oz Au Production and cost estimates based on internal estimates. See cautionary note regarding non-GAAP measures. Notes 1, 2, & 7. 50,000 oz Au $550/oz Cash Cost $750/oz AISC 2014E 2015E
Slide 17: El Gallo 1: Actual + Forecast Production Grade
El Gallo 1: Actual + Forecast Production Grade 50k 37k Annual Gold Production (000 oz) 31k Internal estimate, not supported by a Technical Report. Notes 1, 2 & 13. Grade (gpt) 2015E 2014E 2013A 2015E 2014E 2013A 1.1 1.3 2.6
Slide 18: El Gallo 1: Potential Future Sources of Production
El Gallo 1: Potential Future Sources of Production
Slide 19: El Gallo, Mexico: Awaiting Higher Silver Price
EL GALLO 2 Mexico Awaiting Higher Silver Price 19 19
Slide 20: El Gallo 2: Ready to Build But on Hold
Notes 1, 2, 5, 6, 7 & 14. El Gallo 2: Ready to Build / But on hold El Gallo 1 Mine 5 km Road El Gallo 2 $180 M Capex 2012 Feasibility Permitted Construction & Operation Required Financing $150 M Spent $10 M, Est. $20 M Savings
Slide 21: El Gallo 2: September 2012 Feasibility Study
El Gallo 2: September 2012 Feasibility Study 5.2 M oz Ag + 6,100 oz Au 2.6:1 Strip $13/oz AISC inc. $5 M/yr exploration Silver equivalent basis, 60:1 silver/gold ratio. See cautionary note regarding non-GAAP measures. Notes 1, 2, 5, 6 & 7. Annual Production 5,000 tpd Mill 84% Ag Recovery 7 Yrs Mine
Slide 22: El Gallo 2: Postponed - Simply Economics
El Gallo 2: Postponed - Simply Economics Sept 2012 Feasibility Study - Adjusted to Reflect Updated Capex and Mexican Tax Changes Silver Price / oz NPV 5% (M) Payback After Tax IRR $30.00 $203 1.8 45% $27.50 $160 2.0 38% $25.00 $110 2.3 30% $22.50 $73 2.8 22% $20.00 $29 3.7 12% Notes 1, 2, 5, 6 & 7.
Slide 23: San José Mine, Argentina: Gold & Silver Production
23 SAN JOSÉ MINE Santa Cruz Province Argentina 23 Gold & Silver Production
Slide 24: San José: High Grade, Narrow Vein, Underground Mine
San José: High Grade, Narrow Vein, Underground Mine $825/oz 2014E Cash Cost $1,125/oz 2014E AISC 51% Hochschild (Operator) 40k oz Au + 3.3 M oz Ag MUX’s 2014 Share of Production Gold equivalent basis. See cautionary note regarding non-GAAP measures. Notes 1, 3, 4 & 13. Receiving Dividends $30 M Sinc
Slide 25: San José: Declining Costs
San José: Declining Costs Gold equivalent basis. See cautionary note regarding non-GAAP measures. Based on internal estimates. Notes 1, 3, 4 & 13. $1,125 $1,100
Slide 26: San José: Comparison of High-Grade Deposits
San José: Comparison of High-Grade Deposits McEwen / Hochschild San José Goldcorp Red Lake Goldcorp Cerro Negro Kirkland Lake 60:1 silver/gold ratio. Estimated at different cut-off grades. Comparisons sourced from company websites. Notes 1, 3 & 4. Yamana El Penon
Slide 27: San José: New Neighbor - Goldcorp's Cerro Negro Mine
San José: New Neighbor - Goldcorp’s Cerro Negro Mine $3.4 B Purchase Price $1.6 B Initial Capex 525,000 oz First Five Years Annual Production 25 km San José Mill Source: Goldcorp +
Slide 28: Gold Bar, Cortez Trend, Nevada: Mine Permitting
GOLD BAR Cortez Trend Nevada Mine Permitting 100% Owned 28
Slide 29: Cortez Trend, Nevada – Big Gold Country
Cortez Trend, Nevada – Big Gold Country South Roberts
Slide 30: Gold Bar: Open Pit, Heap Leach, Nevada, 100%
Gold Bar: Open Pit, Heap Leach, Nevada, 100% 8 Yr Mine Life $55 M Capex $700/oz Cash Cost $850/oz AISC See cautionary note regarding non-GAAP measures. Notes 1, 8, 12 & 13. Q2 2016 Final Permits Expected 50,000 oz Annual Gold Production Starting 2017 1.0 gpt Au Grade, Oxide Heap Leach Prefeasibility
Slide 31: Los Azules, San Juan Province, Argentina: Big Copper Deposit
LOS AZULES San Juan Province Big Copper Deposit Argentina 31
Slide 32: Los Azules: Copper – PEA Sept 2013 Highlights
Los Azules: Copper – PEA Sept 2013 Highlights Open Pit Development 100% Ownership 19.7 B lbs Cu IRR After-Tax 14.3% NPV (8%) $1.7 B @ $3/lb Cu Capex $3.9 B Notes 1 & 11. Based on $3.00/lb copper, $1,300/oz gold. PEA – Preliminary economic assessment. No Back-in Right
Slide 33: Los Azules: What Could it be Worth?
Los Azules: What Could it be Worth? First Quantum Bought Lumina for $433 M = 1.7¢ / lb Cu Note 11 and company websites. 0.35% cut-off grade. Does not include gold or molybdenum, includes measured, indicated and inferred resource categories. Company Deposit Cu lbs (B) Cu% McEwen Mining Los Azules 19.
Slide 34: Capital Structure
Capital Structure 305.5 M Fully Diluted Price / 52 Week $1.14 Low $1.64 Current 299.1 M Shares Outstanding Options $3.74 High $500 Million Market Cap As of November 18, 2014.
Slide 35: Shareholders: Largest Own 45%
Shareholders: 5 Largest Own 45% Source: Bloomberg, regulatory filings, Van Eck. As of November 18, 2014. 45% Five Largest Shareholder
Slide 36: High Leverage to Gold
High Leverage to Gold Production and cost estimates based on internal estimates. See cautionary note regarding non-GAAP measures. Note 13 Summary 25% Insider Ownership Avg Daily Value Traded 12% 16% Production Costs 2013-2015E $7.2 M
Slide 37: Collaborate. Create. Cure. Why?
Collaborate. Create. Cure. Why?
Slide 38: Appendix: Directors
Rob McEwen, CM Allen Ambrose Michele Ashby Dr. Leanne Baker, Ph.D Richard Brissenden, CA Gregory Fauquier Dr. Donald Quick Michael Stein Appendix: Directors Chairman of McEwen Mining, Founder and former Chairman and CEO of Goldcorp 30 years exploration & Discoveries Founder and former CEO of Denver
Slide 39: Appendix: Management
Rob McEwen, CM Nathan Stubina, Ph.D, P.Eng. William Faust, PE-Mining, MBA Perry Ing, CPA-CA, CPA, CFA Andrew Elinesky, CGA Nils Engelstad, LLM Simon Quick Craig Stanley, M.Sc. Nigel Fung, P.Eng. Luke Willis, P.Geo. Appendix: Management Chief Owner Managing Director Chief Operating Officer Chief Fina
Slide 40: Appendix: Heap Leach Gold Mines in the Americas
Appendix: Heap Leach Gold Mines in the Americas Comparison of Resource Grades El Gallo 1 (MUX) Source: Company reports. Silver: Gold ratio (60:1). The silver/gold ratio does not take into account metallurgical recoveries. Note 7.
Slide 41: Appendix: El Gallo 2: Defer Until Higher Silver Price
Appendix: El Gallo 2: Defer Until Higher Silver Price Ideal Sources of Capital US$ M Debt financing $50 Equity financing $100 TOTAL $150 Share price of equity financing Shares issued (M) shares outstanding Current Price $1.64 61 20% $2.00 50 17% $2.50 40 13% $3.00 33 11% $3.50 29 10% $4.00 25 8% Not
Slide 42: Appendix: San José - Annual Production
Appendix: San José - Annual Production *San José on a 100% basis - McEwen owns 49%. Notes 1, 3 & 4. Silver : Gold ratio (60:1)
Slide 43: Appendix: San José - Resource Ounces
Appendix: San José - Resource Ounces Resource Gold Eq. (M oz) Silver: Gold ratio (60:1), The silver/gold ratio does not take into account metallurgical recoveries. 100% basis, accounts for production depletion. Estimated at different cut-off grades. Notes 1, 3 & 4.
Slide 44: Appendix: San José - Steady Production Costs Despite Inflation
Appendix: San José - Steady Production Costs Despite Inflation Silver: Gold ratio (60:1), 49% MUX interest. See cautionary note regarding non-GAAP measures. Notes 1, 3, 4 & 13. $1,217 $873 Cash costs Au eq oz US$/oz
Slide 45: Appendix: Los Azules - Size & Grade
Appendix: Los Azules - Size & Grade Comparison of Copper Porphyry Deposits Grade (Cu % / tonne) Attributable Total Resources Billions lbs Copper Taca Taca Los Azules Vicuna Rosemont Copper Creek Cotabambas Canariaco Norte Vizcachitas Pumpkin Hollow Harper Creek North Star Florence Caspiche Casino No
Slide 46: Appendix: Los Azules - Next Steps
Appendix: Los Azules - Next Steps Examine potential for smaller / higher-grade mine and mill Additional metallurgical testing on potential for bio-leaching
Slide 47: End Notes
End Notes Note 1: Guidance to US Investors: McEwen Mining prepares its resource estimates in accordance with standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in Canadian National Instrument 43-101 (NI 43-101). These standards are different from the standards genera
Slide 48: Resource Table: San José and El Gallo 1
San José Mine (49%) (4) Tonnes (M*) (100%) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) (100%) Au (M oz*)(100%) Proven 0.95 597 7.82 18.23 0.24 Probable 0.86 426 6.15 11.82 0.17 Measured (inclusive of P+P) 1.5 640 8.9 31.36 0.43 Indicated (inclusive of P+P) 2.9 448 6.7 41.40 0.62 Inferred 1.9 455 7.2 27
Slide 49: Resource Table: Gold Bar and El Gallo 2
Gold Bar (8) Tonnes (M*) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) Au (M oz*) Probable 15.1 1.00 0.48 Measured 0.7 1.19 0.03 Indicated (inclusive of probable reserves) 18.8 0.94 0.57 M&I 19.5 0.95 0.59 Inferred 7.0 0.94 0.21 El Gallo 2 (7) Tonnes (M*) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) Au (M oz
Slide 50: Resource Table: Los Azules, Limo and Tonkin
Los Azules (11) Tonnes (M) Cu Grade (%) Au Grade (g/t) Ag Grade (g/t) Cu (B lbs) Indicated 389 0.63 0.07 1.8 5.4 Inferred 1,397 0.46 0.06 1.9 14.3 Resource Table: Cont’d Limo (10) Tonnes (M*) Ag Grade (g/t) Au Grade (g/t) Ag (M oz*) Au (M oz*) Measured 5.9 0.89 0.17 Indicated 3.7 0.61 0.07 Inferred
Slide 51: Resource notes
Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The foregoing reports are available under the Corporation's profile on SEDAR (www.sedar.com). Inferred resources are too speculative geologically to have economic considerations applied to them. The cumul
Slide 52: Technical report notes
Note 7: For the current technical report on the El Gallo Project see: "Resource Estimate for the El Gallo Complex, Sinaloa State, Mexico" dated and effective June 30, 2013, prepared by John Read , CPG, McEwen Mining's Senior Consultant, and Luke Willis, P.Geo, McEwen Mining's Director, Resource Mode
Slide 53: Notes 12-14
Note 12: There are significant risks and uncertainty associated with commencing production without a feasibility study. The Gold Bar project has not and may not be explored, developed or analyzed in sufficient detail to complete an independent feasibility or pre-feasibility study and may ultimately
Slide 54: Cautionary Note Regarding Non-GAAP Measures
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 any standardized meaning presc
Slide 55: Contact Information
Contact Information Director, Investor Relations 1.866.441.0690 x.410 info@mcewenmining.com facebook.com/mcewenrob twitter.com/mcewenmining Sheena Scotland
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