Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (May 2017)
35 slides from Mcewen's investor presentation, May 9, 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: Improving Financial Results
Improving Financial Results 3 Cash provided by operating activities, which is presented on the consolidated statement of cash flow, for the 2017 10-Q and 2016, 2015, 2014 10-K. Cash & liquid assets in cash, investments and precious metals at market price. This non-GAAP disclosure is defined in 2017,
Slide 3: Treasury: No Debt, No Streaming, No Financing
4 1 Treasury in cash, investments and precious metals at market price. As of March 31, 2017. US$ Millions Treasury No Debt No Streaming No Financing Anti-Royalties Treasury1 $55 M $0 $20 $40 $60 Dec-31 Dec-31 Dec-31 31-Mar 2014 2015 2016 2017
Slide 4: 2017E and 2019E Production
5 Gold / silver ratio 75:1. Based on internal estimates. Excludes Timmins properties. 2017E Production 31% 69% 40% 60% 2019E Production Silver 3,324,000 oz Gold 99,700 oz Silver 7,250,000 oz Gold 147,000 oz
Slide 5: Insider Ownership Aligned with Share Owners
Cost Base $127M Insider Ownership Aligned with Share Owners 6 Rob McEwen Chief Owner 25% $1 Annual salary No cash bonus No options
Slide 6: Production Growth – Gold Equivalent Ounces
Production Growth – Gold Equivalent Ounces 8 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 9koz production. (Estimated 75koz annualized) 2 2019 includes El Gallo Si
Slide 7: Capital Distribution to Shareowners
Next Payment August 2017 Capital Distribution to Shareowners 9 1¢ Per Share Paid Semi-Annually In February & August Tax Free in US & Canada We have a Yield
Slide 8: Production Cost / oz
Production Cost / oz 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 201
Slide 9: Growth Drivers
Gold Bar, Nevada El Gallo Complex, Mexico Los Azules, Argentina 4 Projects in Timmins, Canada 11 Growth Drivers:
Slide 10: Development Pipeline: Gold Bar – Gold
Development Pipeline: Gold Bar – Gold 12 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 Very Positive Economics at $1,150 / oz Gold1 Low Capex, Open Pit, Heap Leach, 1.1 gpt oxide ore Upside – Oct 2015 Feasibility Study 1Feasibility S
Slide 11: Development Pipeline: Gold Bar
Tonkin Gold Bar BMX Cortez Silver Standard Marigold Waterton Ruby Hill Battle Mountain Cortez Trend Cortez Pipeline Gold Rush Discovery 0 10 20 Km N Development Pipeline: Gold Bar 13 Barrick’s Biggest Gold Mine Cortez Trend Nevada, USA Great Address Open Pit, Heap Leach 0.032 opt (1.1 gpt) Annual Av
Slide 12: Gold Bar Exploration Potential
Gold Bar Exploration Potential 14 N 10 5 Km 0 Legend Cortez Trend Nevada, USA Exploration Targets Gold Bar (3 pits) M&I 611 koz Au Gold Bar South Indicated 66 koz Au Inferred 55 koz Au 34 m @ 2.16 gpt 20 m @ 1.44 gpt 14 m @ 0.9 gpt
Slide 13: El Gallo Complex Exploration Potential – El Encuentro
El Gallo Complex Exploration Potential – El Encuentro 15 El Gallo Mine 4.5 km 60 core holes 2.94 gpt / 38.2 m 9.59 gpt / 9.1 m 1.82 gpt / 31.5 m 7.82 gpt / 5.4 m 1.85 gpt / 15.2 m 7.66 gpt / 2.2m 1.60 gpt / 12.7m 9 core holes 1.2 gpt / 15.3 m 0.62 gpt / 6.9 m 0.54 gpt / 3.9 m Open Open Mineralizatio
Slide 14: El Gallo Complex Exploration Potential – Mina Grande
El Gallo Complex Exploration Potential – Mina Grande 16 Resource areas Drill target areas 0 1 km Extensive areas of alteration, structures and mineralization Surface-rock results and old mine workings Resource areas remain open El Gallo Mine Mina Grande 7.2 m @ 5.93 gpt 14.1 m @ 1.41 gpt 16.4 m @ 2.
Slide 15: El Gallo Complex Exploration Potential: Samaniego North Extension
El Gallo Complex Exploration Potential Samaniego North Extension Potential 17 Section A – A’ Au Cu 13.9m @ 3.81g/t Au 39.5m @ 0.91% Cu Potential North Extension Samaniego Open Pit A A’ Ore Zones with Au Ore Zones with Cu Ore Zones with Zn El Gallo Mine MUX Property Outline Samaniego Gold and copper
Slide 16: Development Pipeline: El Gallo Silver
Development Pipeline: El Gallo Silver 18 Based on internal estimate. Sinaloa State Mexico N 0 5 10 km El Gallo Silver MUX Property Outline El Gallo Mine Location Near Our Existing Operations Grade 125 gpt Silver Potential Avg Annual Production 3.5 Moz Silver / Yr Silver Price Sensitive Opportunities
Slide 17: Los Azules – Significant Copper
19 San Juan Province, Argentina Los Azules – Significant Copper Total Resources: 19.7 Billion lbs Cu @ 0.55% + Gold & Silver1 Big! Gold Equivalent +40 Moz Improved Economics: Lower Taxes Better Capex & Opex New PEA in August 2017 Key Features 1August 1, 2013 NI 43-101 Technical Report, Los Azules Po
Slide 18: Los Azules - Panoramic View
Los Azules - Panoramic View1 Excellent site for Project Infrastructure Preliminary Locations Proposed for Mine Facilities and Infrastructure 20 Northern Waste Dumps Los Azules Mine Primary Crusher Coarse Ore Conveyor Concentrator Facilities Tailings Pond Air Strip Tailings Dam 1Looking South
Slide 19: Development Pipeline: Timmins, Canada - Gold
Development Pipeline: Timmins, Canada - Gold 21 1NI 43-101 Resource, 2013, see appendix for tonnage, grade, ounces Sinaloa State Great address Near several producing mines 70 million ounces of gold produced in Timmins Camp 2. Four Projects Total Resource1 M&I: 1,468,500 oz Au (total open pit and und
Slide 20: Drilling Highlights
22 Drilling Highlights 1) Davidson Tisdale 38.55 gpt Au / 4.4 m 341.1 gpt Au / 3.4 m 197.3 gpt Au / 4.6 m 29.86 gpt Au / 3.5 m 2) Fuller Deposit 18.28 gpt / 7.9 m 5.76 gpt / 16.6 m 3.37 gpt Au / 80.8 m 3) Buffalo Ankerite 13.63 gpt Au / 9.1 m 19.62 gpt Au / 6.3 m 2.21 gpt Au / 25.0 m 4) Paymaster 18
Slide 21: Timmins Historical Gold Production and Exploration Upside
Timmins Historical Gold Production and Exploration Upside¹ 23 Goldcorp McEwen Goldcorp Delnite 920 koz Au Aunor 2.5 Moz Au Paymaster #5 1.2 Moz Au 18Moz Au 30Moz Au Mined out McEwen Resource Limit Mine Development Buffalo Ankerite 1.2 Moz Au Fuller 50 koz Au Exploration Potential Hollinger / McIntyr
Slide 22: Timmins Historical Gold Production and Exploration Upside
Timmins Historical Gold Production and Exploration Upside ¹ 24 Hollinger 19.3Moz Au Mined out Davidson Tisdale 100koz Exploration Potential ¹Longnitudinal Section ² NI 43-101 in appendix outlining tonnage, ounces and grade. McIntyre 10.7Moz Au Coniarum 1.1Moz Au Broulan Reef 500koz Au Bonetal Mine 5
Slide 23: Market Facts: NYSE & TSX
5.1 M US$836 M @$2.68 Market Cap 317 M 312 M Common Shares 25 Source: Bloomberg. US$. As of May 5, 2017. 1Share volume NYSE and TSX combined. 3 Month Avg. Daily Share Volume Trading Liquidity1 NYSE & TSX MARKET FACTS Weekly Volume (Million Shares) Shares Outstanding Fully Diluted 25% 35% 40% Ownersh
Slide 24: Significant Leverage to Gold Price
26 Source: Bloomberg. US$. As of May 5, 2017. 1Three year average. High Beta1 To Gold 2.8x Significant Leverage to Gold Price $9.50 $9.15 $0.42 $0.36 $2.68 26x 22x $0.65 Rob McEwen Becomes CEO US Gold McEwen Mining Share Price US$ +4x Since July 2015 0 2 4 6 8 10 2000 2004 2008 2012 2016
Slide 25: Reasons why gold looks good now
Reasons why gold looks good now 27
Slide 26: # of Gold Ounces to Buy the DJIA
28 # of Gold Ounces to Buy the DJIA Source: Bloomberg. As of May 5, 2017 17 oz May 5, 2017
Slide 27: The Mining Industry is Marked by Cyclicality
The Mining Industry is Marked by Cyclicality 29 Period 1 Rise of Japan Period 2 Post-Japan reversion and plateau Period 3 Rise of China Period 4 Post-China plateau Source: 2016 World Bank forecasts published on July 26th 2016. Innovation state of play.
Slide 28: One Example of The Developed World's Attempt to Get the Economy Moving
30 Student Loan $1T Food Stamps Federal Debt $20T Money Printing $4T Home Ownership Velocity of M2 Money Supply One Example of The Developed World’s Attempt to Get the Economy Moving THE IMPACT As of April 27, 2017 Source: Federal Reserve Bank of St. Louis. As of Mar 31, 2017 As of Mar 9, 2017 As of
Slide 29: Total US Consumer Debt & Composition
Total US Consumer Debt & Composition 31 $ Trillion 2016 Q4 Total: $12.6 Trillion Source: FRBNY Consumer Credit Panel / Equifax. As of Dec 31, 2016. 2003 Q1 Total: $7.2 Trillion
Slide 30: The World Sets a Record
The World Sets a Record The Debt Level Surged to an All-time high of $152 Trillion, data from the IMF shows 32 % Without US, China Weighted global average Source: IMF, OECD, Bank for International Settlements and Dealogic, Bloomberg.
Slide 31: Small Speculators Net Position vs Gold
Small Speculators Net Position vs Gold 33 Source: CFTC. As of March 17, 2017 Speculators Gold Price
Slide 32: GDX & GDXJ Creation / (Redemption) Summary
GDX & GDXJ Creation / (Redemption) Summary 34 Source: Cantor Fitzgerald and Bloomberg
Slide 33: Gold Shares Offer Better Upside Potential Than Gold
Gold Shares Offer Better Upside Potential Than Gold 35 Source: Bloomberg. US$. 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 34: Timmins NI 43-101 Resource Estimates
Timmins NI 43-101 Resource Estimates Note on Resources Projects: BA - Buffalo Ankerite, DT - Davidson Tisdale (M - Main Zone, S - S Zone), F - Fuller, P - Paymaster. The resources are net to Lexam, calculated at ownership interests: 100% for BA, DT, F and 60% for P. Cut-Offs: Open Pit - 0.51 gpt (BA
Slide 35: Appendix: Timmins NI 43-101 Resource Estimates
Appendix: Timmins NI 43-101 Resource Estimates DIN Oss as ——-95,500 | om 002 3,800 peeseaned ors oss 59,800 os 3257 282800 | ea 327 500,200 P 200 161 145,000 | 033 61/000 Ca] F 533168 290,000 | om oot 6,500 om ov 24313500 | ors__—_—oa 60,400 Total Messed w2s7 191,776,800 441 488 681,700 aa 281 405 3