Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (June 2020)
41 slides from Mcewen's investor presentation, Jun 25, 2020
Slide 1: Gold / Copper Turnaround in Progress
Gold / / Copper Turnaround in Progress NYSE & TSX June 2020
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: Pros, Challenges, Goals and Strategy
MUX Pros x Good Real Estate x Development Pipeline x Successful Exploration x Large Insider Ownership x Diversified – Au, Ag, Cu Challenges - Debt - High Costs - Short Mine Life - COVID - 19 Goals ▪ Refinance Debt ▪ Production Growth ▪ Cost / oz ▪ Mine Life Turnaround Story Strategy • Operational Im
Slide 4: MUX's Portfolio
MUX MUX’s Portfolio Gold & Silver Mines Gold & Silver Development Pipeline Froome Grey Fox Stock Copper Looking for JV Los Azules Fenix Black Fox Argentina Mexico Nevada Ontario Gold Bar El Gallo San José
Slide 5: Organic Development Pipeline for Gold & Silver Production
MUX Froome 181koz @ 5.1 g/t Au Grey Fox 888 koz @ 7.1 g/t Au Stock East: 121 koz @ 1.6 g/t Au West Discovery Fenix Feasibility Study Pending Timmins, Canada Mexico 1. Please see Appendix for more details. Black Fox Mine 255 koz @ 7.6 g/t Au Gold Bar South 64 koz @ 1.1 g/t Au Nevada, USA Organic Deve
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. Exploration Potential » Surface Near Mine & De eper Targets » Oxide & Sulfi
Slide 7: Gold Bar Pick Model Revision
MUX West Pick East Pick 1.7g/t Au / 61.8ft 2018 LOM Pit Mineralized lenses 2020 Hole Drilled 2020 Prelim. Pit Faults Gold Pick Model Revision 2018 model gold mineralization mostly stratigraphically controlled. 2020 preliminary model gold mineralization structurally controlled (+ limited stratigraphi
Slide 8: Gold Bar Pit Shells 2018 & Preliminary 2020
MUX > 50 30 to 50 20 to 30 10 to 20 5 to 10 Au GXM < 5 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 / 46.5ft 0.6g/t Au / 170ft 1.9g/t Au / 108ft incl. 2.7g/t Au / 72ft 2.9g/t Au / 82ft incl
Slide 9: Old Gold Bar Upside Exploration
MUX Old Gold Bar Upside Exploration Near Mine & Property Scale Gold Bar South Pot Canyon Gold Canyon Cabin Creek Pick Extensions of known deposits Follow - up on positive drill intersections Deeper targets - “game changer” discovery potential (only 3 deep holes drilled in the district) Hunter Taurus
Slide 10: Gold Bar South 2019 Drill Results
MUX Gold Bar South Showing 2019 drill results . 10 North Area Infill Potential South Extension Resource Pit Outline 1.0g/t Au / 125ft incl. 1.8g/t Au / 20ft 1.7g/t Au / 125ft incl. 3.1g/t Au / 15ft 2.5g/t Au / 105ft incl. 5.4g/t Au / 25ft 1.7g/t Au / 185ft incl. 4g/t Au / 40ft 2.1g/t Au / 155ft incl
Slide 11: Gold Bar Operations – Start Up
MUX Gold Bar Operations – Start Up Gold Bar Nevada Past Challenges • Lack of definition drilling and a grade control block model (BM) • 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 –
Slide 12: Gold Bar Operations - Going Forward
MUX Gold Bar Operations - Going Forward Turnaround Plan • Restructured management and worforce to align with feasibility • Operational review to develop the turnaround and ramp up plan – Phase 1 'Roadmap' complete end July – Phase 2 Implementation targeted August • New resource model & pit optimizat
Slide 13: Black Fox Complex Located on Prime Segments of DPFZ
MUX Taylor mine Aquarius Matheson Destor - Porcupine Fault Zone (DPFZ) ▪ Proven mineralized gold systems at each property ▪ +20 km cumulative strike length prospective structures ▪ Major splay faults intersect the main Destor - Porcupine Fault Zone (DPFZ) ▪ Still underexplored and near infrastructur
Slide 14: Black Fox Exploration Potential Near Surface & Depth
MUX Black Fox Timmins, Canada Black Fox Exploration Potential Near Surface & Depth Other mines with similar geological settings go much deeper 1 Lengths presented are true widths. Please see Sep 4, 2019 and Sep 6, 2018 press release. Stock Mine 27.2 g/t Au / 7m Incl. 311 g/t Au / 0.6m Black Fox Mine
Slide 15: Black Fox Going West & Deep
MUX Vertical Longitudinal Section Black Fox Going West & Deep - 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 32.5g/t Au / 3.5m incl. 68.3g/t Au / 1.05m, 97.7g/t Au / 1m, 283.3g/t
Slide 16: Black Fox Property Resources
MUX 2 km 1.2 miles N Please see Appendix for more details. Black Fox Property 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
Slide 17: 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 18: Grey Fox – 888,000 Ounces Gold Indicated
MUX 1 Km (0.6 miles) 1.5km 1.5km 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 19: Grey Fox – Abundant Visible Gold
MUX Grey Fox – Abundant Visible Gold
Slide 20: Grey Fox - High Grade, Near Surface, Good Ground
MUX 4.40 124.0 79.7 25.8 52.9 33.6 61.4 13.2 Whiskey Jack: 53 g/t Au over 7.4 m (Hole 19GF - 1293 from 147 m) Grey Fox - High Grade, Near Surface, Good Ground Gold grade in g/t
Slide 21: 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)
Slide 22: Stock - Significant Intersections Over 3 KM Trend
MUX Stock West Stock Mine Stock East 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 2018 - 2019 Exploration Focused on a 3 km Mine Trend along the DPFZ x Stock East Resource x Stock Mine Depth Extension x Stock West Discovery Stock - Significant Intersecti
Slide 23: Stock 2019 Drill Results Highlights
MUX Area Project Hole Number Gold (g/t) Width (m) From (m) Including Au_GXM STOCK Stock West S19 - 101 6.37 42.0 494 267 S19 - 106 7.72 25.0 536 11.2 g/t Au over 16.2m 193 S19 - 98 5.63 30.0 472 9.09 g/t Au over 13m 169 S19 - 105 5.62 29.1 475 164 S19 - 113 6.30 19.0 482 120 Stock East SEZ19 - 35 63
Slide 24: Significant Intersections Over a 3 KM Trend
MUX - 200m - 400m - 600m - 800m - 1000m - 1200m - 200m - 400m - 600m - 800m - 1000m Significant Intersections Over a 3 KM Trend, Strong Upside Potential Stock West Stock Mine Stock East 1000 m 121 Koz Au Indicated Resource OP: 83 Koz @ 1.26 g/t Au UG: 38 Koz @ 3.19 g/t Au Mineralized Areas / Targets
Slide 25: Significant Intersections Over a 3 KM Trend, Stock Deep
MUX - 200m - 400m - 600m - 800m - 1000m - 1200m - 200m - 400m - 600m - 800m - 1000m Stock West Stock Mine Stock East Stock Deep 1000 m 0 Past Production: 137 Koz Au High grade intersections on depth extension Significant Intersections Over a 3 KM Trend, Strong Upside Potential S19 - 95 27.2g/t Au /
Slide 26: Significant Intersections Over a KM Trend, Strong Upside Potential
MUX Significant Intersections Over a 3 KM Trend, Strong Upside Potential - 200m - 400m - 600m - 800m - 1000m - 1200m - 200m - 400m - 600m - 800m - 1000m Stock West Stock Mine Stock East 1000 m 0 16,350 m from 31 holes drilled Avg: grade 5 g/t Au, widths 15 - 20 m Area: 265 m along strike, 100 - 200
Slide 27: Strong, Consistent Mineralized Intersections
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 22.3
Slide 28: 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 29: Strategy for the Future
MUX Strategy for the Future Black Fox Complex Expansion Based on Existing 1.5 Moz M&I Grey Fox 2022 - 2023 GROWTH • Growing into a long - life core asset • Evaluating open pit & underground scenarios • Environmental baseline work underway • Identify preferred business case for expansion Stock INCREM
Slide 30: Froome – Developing Near Term Production
MUX Froome Deposit Black Fox Deposit Section Looking North - East Froome – Developing Near Term Production • Twin decline access provides early ventilation • 720 m straight line remaining to reach the deposit • Low ramp gradient for efficient haul • Achieving rate 8 m / day - improvements • Consiste
Slide 31: 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 Goldcorp 2018 Management Discussion & Analysis. 6. Hoc hsc hil
Slide 32: Los Azules: De-Risking to Attract JV Partner
Source: Oct 16, 2017 – “NI 43 - 101 Technical Report - Preliminary Economic Assessment Update for the Los Azules Project, Argentina”. 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 b
Slide 33: Los Azules - Robust at $3/lb Copper
MUX Los Azules - Robust at $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%: Average Annual Production 1st 13
Slide 34: Investment Highlights
MUX Diversified Production Base – 4 Mines Near - Term Organic Growth Production Potential High Beta to Gold Large Insider Ownership 1 2 3 4 6 5 Investment Highlights Exploration Upside Turnaround in Progress
Slide 35: What Makes MUX Unique?
MUX What Makes MUX Unique? $16 5 M 2 1 % $1/ Y r Investment 1 Ownership Salary Avg. Daily Share Vol 2 : Shares Outstanding: Fully Diluted: Share Price: Market Cap : 4.9 million 400 million 435 million US$ .96 US$ 384 million Rob McEwen 21% Institutional 20% Retail 59% Stock Ownership 1 Rob McEwen’s:
Slide 36: Discovery Story Obscured by Operational Challenges
MUX -80 -60 -40 -20 0 20 40 60 Oct/2017 Feb/2018 Jun/2018 Oct/2018 Feb/2019 Jun/2019 Oct/2019 Feb/2020 Jun/2020 Discovery Story Obscured by Operational Challenges Turnaround in Progress % MUX - 54% Source: Bloomberg. From Oct 6, 2017 – Jun 23 , 20 20 . Operational Issues @ Black Fox & Gold Bar GDX 5
Slide 37: Appendix
Appendix
Slide 38: 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 39: 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 40: 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 41: 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