Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (February 2019)
34 slides from Mcewen's investor presentation, Feb 27, 2019
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: Gold Equities' Bear Markets Over the Last 77 Years
Gold Equities’ Bear Markets1 - Over the Last 77 Years 3 1 Credit: in gold we trust .report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG Duration (Number of Weeks) Apr 2011 - Jan 2016 Longest and Deepest Bear % Lo
Slide 3: Gold Equities' Bull Market Over the Past 77 Years
Gold Equities’ Bull Market1 - Over the Past 77 Years 4 1 BGMI - Barron's Gold Mining Index. Credit: in gold we trust .report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG. Updated as of Feb 15, 2019. 2 Last six go
Slide 4: Big Gains in the Past
Big Gains in the Past 5 HUI = NYSE Arca Gold BUGS Index. Source: Incrementum AG, Bloomberg. From Jan 31, 1996 – Feb 21, 2019. Mining Stocks Up 1,323% Mining Stocks Up 174% Gold Mining Stocks (HUI) / S&P 500 Ratio Potential +7x Ahead 0 0.1 0.2 0.3 0.4 0.5 0.6 1996 1998 2000 2002 2004 2006 2008 2010 2
Slide 5: MUX's Chief Owner's Past Life – Goldcorp - Building Share Performance
MUX’s Chief Owner’s Past Life – Goldcorp - Building Share Performance 6 % Change Goldcorp vs Market Goldcorp vs Peers 13 Yr CAGR1 31% % Change 1 CAGR - Compound annual growth rate 3,000 2,000 1,000 3,000 2,000 1,000 0 1000 2000 3000 1995 2000 2005 Goldcorp Barrick Kinross Newmont Glamis Meridian
Slide 6: MUX - Amplifies the Gold Price
MUX - Amplifies the Gold Price 7 Source: Bloomberg. As Feb 21, 2019. 1Three year average. High Beta1 To Gold 3.0x $1.99 26x 22x $0.65 Rob McEwen Becomes CEO US Gold McEwen Mining Share Price US$ 0 2 4 6 8 10 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Slide 7: Illustration that the Gold Bull Market is Underway
Illustration that the Gold Bull Market is Underway 8 Source: Bloomberg. From Jan 1, 2016 – Feb 21, 2019. 343% 300% % Jan 2016 - Present MUX + 88% DOW + 48% S&P 500 + 36% Gold + 25% GDXJ + 76% GDX + 68% -50 0 50 100 150 200 250 300 350 2016 2017 2018 2019
Slide 8: MUX's Alignment with Share Owners
MUX’s Alignment with Share Owners 9 Industry Low Insider Ownership Excessive CEO Pay 23% $161M Cost Base1 $1 / Yr No Bonus No Stock Options MUX vs 1 Rob McEwen share ownership. $136 M shares investment + $25 M loan investment, Aug 13, 2018 press release
Slide 9: MUX Growing in 5 of the World's Great Gold Districts
MUX Growing in 2 of the World’s Great Gold Districts 10 1 2 5 3 4 World’s Great Gold Districts Timmins, Canada Nevada, USA One of Highest Grade Mines in Americas Santa Cruz, Argentina Giant Copper Deposit San Juan, Argentina New Project with 12 Year Mine Life1 Sinaloa, Mexico 1 Press release July 9,
Slide 10: World Class Gold District - Nevada
MUX Gold Bar1 M&I 0.82 Moz Au Inferred 0.20 Moz Au Cortez Fault Cortez Hills Barrick’s 50Moz Au cluster Pipeline Fourmile Discovery Goldrush Wall Fault World Class Gold District - Nevada 11 Gold Bar 25 Miles South of ABX’s Cluster of Large Carlin Style Gold Mines & Recent Discoveries We like it Beca
Slide 11: Gold Bar – Site Plan
Gold Bar – Site Plan 12 http://mcewenmining.com/files/output-1/index.html Process Plant Refinery Fuel Island Administration Heap Leach Pad Screening & Agglomeration Process Ponds Pits Primary Crusher Power Plant Laboratory Warehouse
Slide 12: Gold Bar
Gold Bar 13 AISC - All-in Sustaining cost is calculated by dividing the Total Production Cost and the LOM sustaining capital cost by total ounces produced. 1Mar 30, 2018 - “Form 43-101F1 Technical Report Feasibility Study Eureka County, Nevada”. 2Using 5% discount rate. 3 Gold Bar & Gold Bar South r
Slide 13: Gold Bar Exploration
2.5 gpt Au / 12.2m 1.6 gpt Au /13.7m 0.7 gpt Au / 27.4m 1.9 gpt Au / 15.2m 1.4 gpt Au / 24.4m 2.5 gpt Au / 7.6m 1.8 gpt Au / 24.4m 2.7 gpt Au / 13.7m 1.4 gpt Au / 16.8m 1.0 gpt Au / 25.9m 1.1 gpt Au / 18.3m 1.4 gpt Au /12.2m Au 1.1 gpt Au / 4.6m 2018 Budget $5 M Drilled 17,134 m Near-pit resources i
Slide 14: Gold Bar Property - Exploration Targets
Gold Bar Property - Exploration Targets Shallow & Deep 15 Pot Canyon Taurus ML Roberts Mtns & Hanson Creek Formations McColley Cyn Formation Wall Fault Lone Mountain Formation Vinini Formation Devils Gate – Denay Formations Lower Plate Upper Plate Proposed Open pits Shallow targets Deep high grade t
Slide 15: World Class Gold District - Timmins
World Class Gold District - Timmins 16 Paid $35M for $560M1 Spent (Acquired Oct 2017) Black Fox & Grey Fox Complex Mine & Mill 50 koz Gold production 2019E + 1.31 Moz Gold Eq. M&I resource US$180 million tax pools Exploration potential: Right geology, targets-rich, under-explored Stock Taylor Mathes
Slide 16: Black Fox - 2018 Surface Exploration
Black Fox - 2018 Surface Exploration 17 Multiple new gold occurrences High grade intersections New increases of indicated resources: - Tamarack to 127 Koz AuEq (+127 Koz) - Froome to 181 Koz Au (+22 Koz) Froome FW 493g/t Au / 1m Black Fox Depth Extension 55.1g/t Au / 1.2m Froome +22Koz 181Koz @ 5.09
Slide 17: 2018 Black Fox Underground Exploration Results
4.40 g/t Au / 5.38m 4.90 g/t Au / 6m 25.5 g/t Au / 3.35m 83.9 g/t Au / 4.92m 187.8 g/t Au / 1.12m Inc. 320.7 g/t Au / 0.6m 161.9 g/t Au / 1.2m Inc. 320.7 g/t Au/ 0.6m 34.8 g/t Au / 3m 6.68 g/t Au / 8m 27.3 g/t Au / 3.33m 147.4 g/t Au / 0.53m 27.8 g/t Au / 8.1m 44.1 g/t Au / 1.2m, 12.7 g/t Au / 7m 25
Slide 18: Grey Fox
Grey Fox 19 No stream Grey Fox Resources: Indicated 465Koz @ 6.64g/t Au Inferred 100Koz @ 6.8g/t Au 147 NE: New high grade zone Gibson: Vein past production: 27Koz @ 27.7g/t New breccia zone discovered 35g/t Au / 3.3m Gibson Breccia 3.1g/t / 34m Incl. 9.7g/t /7m 13.4g/t / 3m 639g/t Au / 0.7m Gibson
Slide 19: Reason for Testing for Depth Extension of Mineralization
Reason for Testing for Depth Extension of Mineralization 20 1,000m 2,000m HG Young Campbell Red Lake Red Lake Black Fox Stock Stock East Macassa Kirkland Teck Hughes Lake Shore Wright- Hargreaves Sylvanite Toburn Kirkland Lake Timmins Camp Hollinger Dome Bell Creek Hoyle Pond Deepest Drill Hole MUX
Slide 20: Black Fox Complex – Stock Property
Black Fox Complex – Stock Property 21 Stock Taylor Matheson Destor-Porcupine Fault Lexam Black Fox Timmins Timmins-Matheson Region +70Moz gold McEwen Mining Project Mill Mine 700 meters from mill Near surface potential Over 2 km strike length Stock Mine Past Production 137 Koz @ 5.5 gpt Au (1989 - 2
Slide 21: Stock Property – A Pleasant Surprise
500m Gap 4.82gpt Au / 16.3m Inc. 19.23g/t Au / 2.9m 2.38gpt Au / 20.4m Inc. 3.89g/t Au / 9m 3.05g/t Au / 14m Inc. 9.51g/t Au / 1m & 4.02g/t Au / 6.5m 10.85g/t Au / 1m 0.92g/t Au / 33.1m 22.15g/t Au / 2m 5.58g/t Au 3.30m Inc. 14.80g/t Au / 1m 7.01g/t Au / 3.80m Inc. 30.10g/t Au / 0.80m 3.76g/t Au / 4
Slide 22: Stock - 2019 Exploration Plan
Stock - 2019 Exploration Plan 23 Vertical Longitudinal Section - Looking NW (Az 350) Stock Mine 137Koz 500m 0m 1000m 4.7 miles Shoot? Planned drill holes fences 1km Stock East Ind 60Koz Inf 90Koz Gap Winter West Winter East Shoot? Increase Resources, Define New Shoots Upgrade / growth Stock East Res
Slide 23: San José Mine - Gold & Silver
San José Mine - Gold & Silver 24 Gold / silver ratio 75:1. 149% basis. 2As of Dec 31, 2018, production estimated to end in 2025. 3 February 21, 2019 - “McEwen Mining Reports 2018 Full Year and Q4 Results" 4 August 15, 2018 – Hochschild Mining “Interim Results”. Drill results in grams of gold equival
Slide 24: New Project at El Gallo Mine
New Project at El Gallo Mine 25 ¹June 30, 2018 PEA (filed on July 8, 2018) Fenix Fenix Project – Silver & Gold PEA Highlights1 12 Years Life of Mine 47,000 oz AuEq average annual production 559,000 oz AuEq Payable $704/oz AuEq Cash Cost Phase 1 $857/oz AuEq Cash Cost Phase 2 Base Case @ $1,250/ oz A
Slide 25: Los Azules - Big Optionality to Copper Price
Los Azules - Big Optionality to Copper Price 26 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 Infe
Slide 26: Los Azules - Robust PEA (2017)
Los Azules - Robust PEA (2017) 27 Oct 16, 2017 – “NI 43-101 Technical Report-Preliminary Economic Assessment Update for the Los Azules Project, Argentina”. 1st 13 years avg annual production 415 million lbs Cu @ Cash Cost $1.14/lb (+Au & Ag credits) Initial Capex: $2.4 Billion Payback: 3.6 Years Min
Slide 27: MUX Historic & Projected Production Profile
MUX Historic & Projected Production Profile 28 Production in gold equivalent ounces, 2019-2020 based on internal estimates. Gold / silver ratio 75:1. San José El Gallo Black Fox Complex Gold Bar Nevada 154,000 127,000 121,000 88,000 152,000 146,000 210,000 231,000 Targeting Future Organic Production
Slide 28: MUX Costs/oz
MUX Costs/oz 29 Cash and AISC in gold equivalent ounces. Gold / silver ratio 75:1. 2018 – Operations $877 $1,034 Historic $845 $1137 $851 $733 $1,061 $771 $- $200 $400 $600 $800 $1,000 $1,200 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019E Cash Cost AISC $0 $200 $400 $600 $800 $1,000 $1,200 El Gallo
Slide 29: Financial Highlights
Financial Highlights 30 Year Ended Dec 31, 2017 Year Ended Dec 31, 2018 Treasury Cash, Investments and Precious Metals ($ millions)(4) 68.1 37.8 Cash and Restricted Cash ($ millions) 37.2 30.5 Working Capital ($ millions) 49.2 23.4 Debt (Notes) ($ millions) nil 50.0 Earnings from Mining Operations(4
Slide 30: Capital & Exploration Expenditures
Capital & Exploration Expenditures1 31 2018 2019E2 Sustaining Capital $13 M $7 M Project Development $88 M $13 M Exploration $29 M $27 M3 Corporate G&A $13 M $12 M Site G&A and Property Holding Costs $12 M $11 M Debt Service $2 M $7 M 1 Costs related to MSC JV (49%) are excluded. 2 Based on internal
Slide 31: Share Structure and Ownership
Avg. Daily Vol. of Shares1: Shares Outstanding: Fully Diluted: Share Price: Market Cap: Beta2: 2.3 million 345 million 349 million US$1.99 US$687 million 3.0x 32 Source: Bloomberg. US$. As of Feb 21, 2019. 1Share trading volume NYSE and TSX combined, 3 months average. 2Three years, relative to gold.
Slide 32: 2019 Exploration Plan
2019 Exploration Plan 33 $27M global budget $17M Black Fox, Stock & Grey Fox $5 M Gold Bar $5 M1 San José ~ 165,000 drill meters 1Our attributable share of exploration on a 49% basis. US$. Black Fox, Stock & Grey Fox 63% Gold Bar 19% San José 19%
Slide 33: MUX Organic Growth
MUX Organic Growth 34 Black Fox & Grey Fox Areas: New mine plans, development project opportunities & large exploration budget with resource update Q1 2019 San Jose: Continue high grade Au-Ag production Gold Bar: To start production & resource & LOM update Q1 2019 Mexico – Fenix: Feasibility in Q2 2
Slide 34: MUX Organic Growth
MUX Organic Growt! Project Pipeline Black Fox & Grey Fox Areas: + New mine plans, development project opportunities & large exploration budget with resource update Q1 2019 Large Copper Major San Jose: Optionality Exploration * Continue high grade Au-Ag production Potential Gold Bar: + To start produ
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