Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Investor Presentation (May 2018)
60 slides from Mcewen's investor presentation, May 29, 2018
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: Three Year Financial Summary
Three Year Financial Summary 3 2015 2016 2017 Q1 2018 Consolidated Production (Gold Eq. oz) 154,529 145,530 152,330 44,344 Average Gold Price ($/oz) $1,145 $1,239 $1,257 $1,311 Average Silver Price ($/oz) $15.06 $17.28 $16.88 $15.96 Earnings per Share, Diluted ($/share) ($0.07) $0.07 ($0.03) ($0.02)
Slide 3: Above Average Returns
Above Average Returns 4 Average, 25% El Gallo Silver (2012), 26%(3) El Gallo Silver (2013-16), ~10%(3) Wahgnion, 15% Eagle, 30% Tocantinzinho, 17% Coffee, 30% Castle Mountain, 30% El Gallo Gold (to 2017), 50%(1) Gold Bar, 23%(2) Refer to the Notes and Assumptions for more details. Fenix, 25%(4)
Slide 4: Gold Bar Construction video
5 Gold Bar Construction video https://youtu.be/dEAMop9-SCM
Slide 5: Growth Drivers: Operations – Substantial Multi-Stage Portfolio
6 Growth Drivers: Operations Substantial Multi-Stage Portfolio El Gallo, Mexico El Gallo 1 Gold Mine Fenix Project Gold Bar Project Mine Exploration Gold Bar, Nevada Black Fox Mine 3 Projects Deep Exploration Exploration Study Stage Permitting San José Mine Exploration Minera Santa Cruz JV Timmins,
Slide 6: Operations Update
Operations Update Corporate Total Q1 2018 FY 2018 Guidance Gold equivalent co-product AISC ($/oz) El Gallo San José Black Fox El Gallo San José Black Fox $764 $1,155 $1,285 Gold equivalent ounces produced 44,344 171,000 7 Operations performing as planned Q1 production by mine (oz. AuEq) San Jose 20,
Slide 7: Operating Portfolio: Gold Bar – Gold
Operating Portfolio: Gold Bar – Gold 8 Gold Price $1,250 $1,350 After Tax IRR 23% 32% Payback 3 yrs 2.5 yrs Very Positive Economics at $1,250 / oz Gold1 Low Capex, Open Pit, Heap Leach, 1.1 gpt oxide ore Average LOM production of 62.8k oz /yr for 7 years Tangible opportunity for LOM extension throug
Slide 8: Gold Bar Progress To Date and Next Steps
9 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Engineering Procurement Receive Record of Decision Site Mobilization & Preparation Site Works Begin Construction Ore Mining & Pad Loading Plant Commissioning / 1st Dore Progress To Date and Next Steps Cortez Trend Nevada, USA Project
Slide 9: Operating Portfolio: Black Fox – Evolving Producer
Operating Portfolio: Black Fox – Gold 10 Evolving Producer Timmins Ontario Q4 2017 after acquisition Today Q2 Q4 2018 E 2019 E Stagnant outlook – depleting reserves High costs No future plans No exploration Active cost containment Aggressive exploration Growth plans being developed Cost improvement
Slide 10: Black Fox – Long Term Outlook
Operating Portfolio: Black Fox – Gold 11 Evolving Producer Timmins Ontario Long term outlook integrated approach leveraging know Black Fox resources & acquired with Lexam Maximizing utilization of the Black Fox Stock Mill Fuller Grey Fox Black Fox Froome Deep Black Fox Other Lexam Properties Explora
Slide 11: Operating Portfolio: El Gallo 1 – Gold
12 Oxide, leachable ore mined out in Q2, 2018 Stockpile crushing & stacking on heap completed by mid-Q3, 2018 Residual heap leaching to continue through 2022 Oxide mine closure activities to be started Oxide Mining and Heap Leaching Ending Sinaloa State Mexico Samaniego Pit Central Pit Operating Por
Slide 12: Operating Portfolio: El Gallo 2 – Gold
13 Abandoning the separate project approach of the past Adopted an integrated approach Uses existing infrastructure, limits future environmental closure liabilities and substantially reduces capital requirements and intensity 2 Stage Milling Project to add 10-12 years of mine life Sinaloa State Mexi
Slide 13: Operating Portfolio: Project Fenix – Gold & Silver
14 Average annual production of 47koz AuEq 10-yr LOM producing 47koz /yr (Total 559 koz payable) 2 Stage Milling Project +10 years life & mining El Gallo Silver Sinaloa State Mexico Operating Portfolio: Project Fenix – Gold & Silver Base Case $ 1 , 250 /oz gold $ 16 /oz silver Upside Case $ 1,300 /o
Slide 14: Project Fenix – Next Steps
15 Sinaloa State Mexico Operating Portfolio: Project Fenix – Gold & Silver Next Steps PEA filing in early Q3. Permitting for In-pit tailings disposal to be started in Q3 Permits expected for Phase 1 in Q4, 2018, Phase 2, in Q3, 2019 PFS in early 2019 Phase 1 Construction in 2019 Phase 2 Construction
Slide 15: Operating Portfolio: Production Growth
16 Operating Portfolio: Production Growth Production in gold equivalent ounces. Gold / silver ratio 75:1. 2018-2019 based on internal estimates. 154 127 121 88 152 171 146 206 San José El Gallo Black Fox Complex Gold Bar Nevada
Slide 16: Black Fox
17 Black Fox https://youtu.be/lPqRsuBU5wM
Slide 17: McEwen Mining Exploration Focus
McEwen Mining Exploration Focus 18 Black Fox post-acquisition program Gold Bar exploration reactivation San José Argentina Production Black Fox Canada Production Los Azules Argentina PEA Stage El Gallo, Mexico Production & PEA Stage Gold Bar, Nevada Development Stage
Slide 18: Black Fox Complex
Black Fox Complex Strategic land position Black Fox and Stock properties Significant exploration upside Stock Taylor Matheson Destor-Porcupine Fault Pipestone Fault Lexam Black Fox Timmins Timmins-Matheson Region +80Moz gold Destor - Porcupine Fault Zone +80Moz Larder Lake - Cadillac Fault Zone +100
Slide 19: Black Fox Property
Black Fox Property 20 Black Fox Property Black Fox Froome Grey Fox Indicated Resources Tamarack Black Fox Mine Multiple deposits and mineralized structures
Slide 20: Black Fox Mine - Potential Near-Term Impact on Life of Mine
* Indicated Resources are taken from the SRK technical report dated 6 April 2018 Ounces conversion: Resource: 538Koz @ 7.80 gpt Au Reserve: 113Koz @ 8.88 gpt Au Black Fox Mine Longitudinal Section - Looking NE Open Pit Resource Reserve Mined out Black Fox Mine - Potential Near-Term Impact on Life of
Slide 21: Resource Expansion: Far West Extension
* Indicated Resources are taken from the SRK technical report dated 6 April 2018 Ounces conversion: Resource: 538Koz @ 7.80 gpt Au Reserve: 113Koz @ 8.88 gpt Au Resource Expansion: Far West Extension Black Fox Depth Central 27.76gpt Au / 6.12m Black Fox Mine Longitudinal Section - Looking NE 7.24gpt
Slide 22: Resource Expansion: Nearby Deposits
* Indicated Resources are taken from the SRK technical report dated 6 April 2018 Ounces conversion: Resource: 538Koz @ 7.80 gpt Au Reserve: 113Koz @ 8.88 gpt Au Resource Expansion: Far West Extension Black Fox Depth Central Nearby deposits: Froome: 159Koz @ 5.26 gpt Au Tamarack: 127Koz @ 5.08 gpt Au
Slide 23: Exploration Highlights
Exploration Highlights 24 Stock East: Significant mineralization confirmed Tamarack: First base metal & updated gold resource Black Fox Property Black Fox Tamarack 127Koz @ 5.08gpt AuEq Froome Grey Fox Indicated Resources Stock East Tamarack
Slide 24: Black Fox Exploration Highlights - Gibson SW
Black Fox Exploration Highlights -Gibson SW 25 New high grade structure VG Black Fox Property Black Fox Tamarack 127Koz @ 5.08gpt AuEq Grey Fox Gibson Target: Froome Indicated Resources Gibson SW: 639gpt Au / 0.7m (hole #1062) Gibson SW: 639gpt Au / 0.7m
Slide 25: Black Fox Exploration Highlights - Grey Fox
Black Fox Exploration Highlights - Grey Fox 26 Black Fox Property Black Fox Tamarack 127Koz @ 5.08gpt AuEq Froome Grey Fox Indicated Resources Potential extensions of main deposits and cross-structures 5.4gpt Au / 14.7m 46.3gpt Au / 1m 16.1gpt Au / 3m Grey Fox Contact Zone: 5.4gpt Au / 14.7m (hole #
Slide 26: Black Fox Exploration Highlights - Froome
Black Fox Exploration Highlights - Froome 27 Resource extension potential and adjacent mineralization Black Fox Property Black Fox Tamarack 127Koz @ 5.08gpt AuEq Froome Grey Fox 5.4gpt Au / 14.7m 46.3gpt Au / 1m 16.1gpt Au / 3m 8.61gptAu / 7m incl. 52.7 Au / 1m, 1.8 Au / 22.8m, 13 Au / 0.8m Froome N
Slide 27: Black Fox Exploration Highlights - Multiple targets
Black Fox Exploration Highlights - Multiple targets 28 Drilling follow-up on positive intersections and at new targets Black Fox NW and Gibson-Kelore mineralized structure Black Fox Property Black Fox Tamarack 127Koz @ 5.08gpt AuEq Froome Grey Fox 8.61gptAu / 7m incl. 52.7 Au / 1m, 1.8 Au / 22.8m, 1
Slide 28: Stock Exploration
Stock Exploration 29 6.5Km of the Destor-Porcupine Fault Site of Black Fox Stock Mill & Stock Mine (137Koz @ 5.5gpt Au -historical production) Strong exploration potential 29 Destor Porcupine Fault Stock Mine & Mill Stock East Other Targets
Slide 29: Significant mineralization defined near our Mill
Significant mineralization defined near our Mill Open along strike and at depth VG VG Hole 10 Stock East Vertical Longitudinal Section -Looking NW 2.8gpt Au / 20.8m Incl. 52.4gpt Au / 0.8m 4.8gpt Au / 16.3m Incl. 26.5gpt Au / 2m 3.98gpt Au / 12.1m Incl. 15.9gpt Au / 0.6m 1.3gpt Au / 22.3m 3gpt Au /
Slide 30: Stock Exploration - Looking Forward
Stock Exploration - Looking Forward 31 Stock East Stock Mine Geophysical targets Schematic composite Longitudinal Section Stock Mine – Stock East 200m Mined 140Koz @ 5.5gpt Au 2.8gpt Au / 20.8m Inc. 52.4gpt Au / 0.8m 3.98gpt Au / 12.1m Inc. 15.9gpt Au / 0.6m 3.00pt Au / 14m incl.9.51 gpt Au / 1 m 9.
Slide 31: Gold Bar - Nevada
Gold Bar - Nevada 32 Strategic land position Along trend, near Barrick giant gold deposits Exploration reactivated after 5 year hiatus 32 Elko Gold Rush Pipeline Cortez Hills Marigold Gold Bar Tonkin Getchell Trend Carlin Trend Battle Mountain Cortez Trend Golstrike Carlin Nevada Gold Trends +250Moz
Slide 32: Gold Bar – Priority Exploration Area
Gold Bar – Priority Exploration Area 33 Near development project exploration Resource update in Q3, 2018 Priority Exploration Area Drill Targets 12km Drill Hole 2.5gpt Au / 12.2m 1.6gpt Au / 13.7m 2.1gpt Au / 38.1m 2.5gpt Au / 10.7m 1.4gpt Au / 16.8m 2.7gpt Au / 6.1m 1.9gpt Au / 15.2m 1.6gpt Au / 12
Slide 33: Gold Bar Oxide and Sulfide Potential
Gold Bar Oxide and Sulfide Potential 34 Cabin Creek high-grade Au in sulfide: 8.77gpt Au / 6.7m (historical drill intersection) 0.721 ppm Au 5.92 ppm Au 9.69 ppm Au 8.51 ppm Au 7.55 ppm Au 8.55 ppm Au 9.98 ppm Au
Slide 34: Summary – Black Fox and Gold Bar Exploration
High quality projects in gold-rich mining regions 2018 Deliverables: Tamarack and Stock East initial resources Gold Bar resource update Life-of-Mine Extensions Potential new discoveries Summary – Black Fox and Gold Bar Exploration 35
Slide 35: Los Azules, Argentina
Los Azules, Argentina 36 Leverage to Copper, Huge Deposit, Quick Payback Excellent financials . ACHIEVEMENTS SINCE 2017 AGM TARGETTED GOALS FOR THE NEXT 12 MONTHS OUR PROJECT MASTER PLAN
Slide 36: Los Azules - San Juan, Argentina
Within the Andes Mountains ~6kms from the border with Chile. Existing Port access through Chile (~244km away) Pro-business Presidency Los Azules San Juan Province Los Azules - San Juan, Argentina Port of Coquimbo
Slide 37: Our Achievements in the last months
Our Achievements in the last 12 months 38 2017 Preliminary Economic Assessment Project De-Risking Completed Environmental Baseline, Commenced EIA - Permit Submission Defined Project Enhancements for: All year access road Improved low-altitude power transmission Confirmed Logistics via Chile and Port
Slide 38: Our Targeted Goals for the next months
Our Targeted Goals for the next 12 months: Submit the Application for Permit to Argentina Authorities in Q1 2019 Construct a Pioneer Road for the “Northern Route” Define and contract the Power Solution Complete all Agreements for logistics and exports through Chile Aircraft and Airstrip permits deve
Slide 39: Project Master Plan - Los Azules
Activity H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 PERMITTING PROJECT DE-RISKING INFILL DRILLING CHILE PORT & ROADS POWER LINE ARGENTINA ROAD ARGENTINA AIRSTRIP PRELIMINARY ENGINEERING INVESTMENT DECISION Project Master Plan - Los Azules 40 INCREASING INVESTOR INTEREST / INCREASING ASSET VALUE
Slide 40: Innovation = Need + Idea + Implementation
Improvement is doing things better. Innovation is doing things differently. Innovation = Need + Idea + Implementation 41
Slide 41: There's a myth that innovation is capital intensive
There’s a myth that innovation is capital intensive There’s never a shortage of good ideas or creativity; innovation fails because it doesn’t get implemented 42
Slide 42: This isn't a billboard. It's a power plant.
This isn’t a billboard. It’s a power plant. monemeslal There’s a myth that innovation is capital intensive There’s never a shortage of good ideas or creativity; innovation fails because it doesn’t get implemented
Slide 43: UAVs, Estimation and Inspection Technologies
Estimation Real-time, fragmentation analysis Inspection and monitoring Hyperspectral analysis UAVs 44
Slide 44: UAVs
UAVs Estimation Real-time, fragmentation analysis Inspection and monitoring Hyperspectral analysis
Slide 45: The Agriculture Revolution is in Full Swing
The Agriculture Revolution is in Full Swing 46
Slide 46: Bioleaching Using Proprietary Bio-Technology
Bioleaching After 3 Days in Heap Using Proprietary Bio-Technology After 12 Weeks in Heap Using Proprietary Bio-Technology 47
Slide 47: Water Only, Bio-Mine Strain #1, Bio-Mine Strain #2
Water Only Bio-Mine Strain #1 Bio-Mine Strain #2 48
Slide 48: Water Only, Bio-Mine Strains
Water Only Bio-Mine Strain #1 Bio-Mine Strain #2
Slide 49: Sensors
Sensors Dissolved Oxygen Compaction Cyanide pH Temperature Moisture 50
Slide 50: Gold & Commodities Are Cheap!
Gold & Commodities Are Cheap! GSCI/S&P500 Ratio: Relative Value Equities vs Commodities 51 Credit: in gold we trust .report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Dr. Torsten Dennin, Incrementum AG, Bloomberg, S&P Dow Jones Indicies. Updated as of May 23, 2018. C
Slide 51: Gold Equities: Downside Risk Appears Low!
Gold Equities: Downside Risk Appears Low! Bear Markets Compared: BGMI Bear Markets Since 1939 (77 years) 52 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)
Slide 52: Gold Equities Upside Potential is Compelling!
Gold Equities Upside Potential is Compelling! Bull Markets Compared: BGMI Bull Markets Since 1942 (76 years) 53 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 May 18,
Slide 53: Gold Moving In All Currencies
54 Source: Bloomberg. As of May 23, 2018. Gold Moving In All Currencies ARG Turk Pound USD AUD CAD EURO JPY RUS % -20 0 20 40 60 80 100 120 140 2016 2017 2018
Slide 54: Gold Equities Are Under Owned
Gold Equities Are Under Owned 55 Total Mkt Cap - All US Public Equity Companies $31 Trillion Mkt Cap S&P 500 Companies as % Total Mkt Cap 80% Value of 80% $24.8 Trillion Mkt Cap of Only Gold Stock in S&P 500 (Newmont) $21 Billion Newmont’s Mkt Cap as % Total S&P 500 Mkt Cap of 1% Total Mkt Cap - All
Slide 55: Gold Shares % of NYSE Market Cap
Gold Shares % of NYSE Market Cap 56 Homestake / Newmont NYSE % 1938 0.7 B 5.0 % 1987 2.7 B 4.5 % 2000 2.3 B 2.0 % 2011 69 B 0.6 % Today 21 B 0.08 %
Slide 56: MUX's Goal: Qualify for S&P 500
57 99% of all the precious metal producers in the world are ineligible to be included in the S&P 500 MUX’s Goal Qualify for S&P 500
Slide 57: MUX vs Gold, GDX and GDXJ – Impact of a High Beta
MUX vs Gold, GDX and GDXJ – Illustration of Impact of a High Beta Nov 2009 - Present 58 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bloomberg. US$. As of May 23, 2018. 1MUX beta to gold, 3 years % -56% GDX -18% MUX 10% Gold -70% GDXJ 2018 Beta1: 2.8x -100 -50 0 50 100 150 200 250
Slide 58: Comparative Performance – Jan. 2016 to Present
Comparative Performance – Jan. 2016 to Present 59 % Change Source: Bloomberg. As of May 24, 2018 115% MUX 43% Dow 33% S&P 500 -50 0 50 100 150 200 250 300 350 2016 2017 2018 MUX S&P 500 Dow
Slide 59: Notes and Assumptions
Notes and Assumptions 60 El Gallo Gold – Financial details presented were calculated using actual results disclosed in McEwen Mining’s 10-K and 10-Q filings on EDGAR and SEDAR from 2011 to present. Gold Bar – Information presented was obtained from the Gold Bar Project Feasibility Study, issued Marc
Slide 60: Notes and Assumptions
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