Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Shareholder Meeting (May 2015)
35 slides from Mcewen's shareholder meeting presentation, May 28, 2015
Slide 1: AGM May 28, 2015
AGM MAY 28, 2015 1.866.441.0690 x410 • info@mcewenmining.com • www.mcewenmining.com 1
Slide 2: Agenda
AGENDA 1. Formal Meeting 2. Financials 3. Update 4. Gold Market 2
Slide 3: Cautionary Statement
CAUTIONARY STATEMENT 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 pre
Slide 4: Directors Experience Venn Diagram
DIRECTORS Experience Venn Diagram Leanne Don Michele Financial Richard Mike Rob Operations Exploration Allen Greg 4
Slide 5: Summarized Financial Information
SUMMARIZED FINANCIAL INFORMATION Three months Three months Year ended ended ended Dec 31, 2014 Mar 31, 2015 Mar 31, 2014 Gold and silver sales from El Gallo 1 $22,882 $11,130 $45,303 Production costs applicable to sales from El Gallo 1 (10,454) (8,527) (40,608) Gross margin $12,428 $2,603 $4,695 54%
Slide 6: Earnings from Mining Operations - Clear Improvement!
EARNINGS FROM MINING OPERATIONS* - CLEAR IMPROVEMENT! Q1 2015 Q1 2014 YE 2014 Realized Gold / oz $1,213.00 $1,319.00 $1,248.00 Realized Silver / oz $17.02 $20.15 $17.68 El Gallo – Mexico Sales $22,882 $11,130 $45,303 Production costs applicable to sales (10,454) (8,527) (40,608) Amortization 322 322
Slide 7: Summarized Balance Sheet – Debt Free!
SUMMARIZED BALANCE SHEET – DEBT FREE! March 31, 2015 December 31, 2014 Cash and cash equivalents $16,569 $12,380 VAT receivable 10,405 11,739 Inventories 12,931 12,404 Mineral Properties 287,490 287,812 Investment in San José 177,347 177,018 Total Assets $526,733 $522,958 Deferred Tax Liability 50,6
Slide 8: Summary of Liquid Assets – Rebuilding Cash Reserves
SUMMARY OF LIQUID ASSETS – REBUILDING CASH RESERVES May 27, Mar 31, Dec 31, Dec 31, 2015 2015 2014 2013 Cash $15,962 $16,569 $12,380 $24,321 Inventories – Gold / Silver doré & bullion(1) $4,967 $818 $4,875 $1,724 Total $20,929 $17,387 $17,255 $26,045 In thousands of US dollars. (1) Based on London P
Slide 9: Share Capital – Resisting the Temptation to Dilute You!
SHARE CAPITAL – RESISTING THE TEMPTATION TO DILUTE YOU! Mar 31, 2015 Dec 31, 2014 Dec 31, 2013 Common & Exch. Shares 300,530 300,100 297,159 Options 3,116 3,090 4,398 Fully Diluted Shares 303,646 303,190 301,557 In thousands. 9
Slide 10: Looking Ahead: 2015 Projected Cash Flow – Growing!
LOOKING AHEAD: 2015 PROJECTED CASH FLOW – GROWING! (Assumes $1,215 Au, $16 Ag/oz) 2015 Q1 2015 2016 Actual Forecast Forecast Q2 to Q4 Earnings from Mine Operations – El Gallo 1 $12,750 $19,876 $32,701 Dividends Received from San Jose - 550 - El Gallo 2 Development Costs (174) (2,779) (300) Gold Bar
Slide 11: 2014 Worst: Share price underperformed
2014 Worst Why? Share price underperformed • Removed from GDX Index Gold 2% Sector (GDXJ) 23% • Argentina San José contribution MUX 43% 4 • Mexico Q3 broke momentum 3 • Concerns about possible financing 2 1 0 Jan June Dec 11
Slide 12: 2014 Best
2014 Best • 2nd Year of operations Mexico • Increased production • Permit to build & operate El Gallo 2 • Didn’t borrow, hedge, sell royalties, metal streams or dilute shares 12
Slide 13: On Track for 2015 Guidance
ON TRACK FOR 2015 GUIDANCE Q1 & Q2 Strong Performance @ El Gallo Despite Gold Robbery 2015 Looking Like A Record Year 13
Slide 14: What Have We Done to Discourage Another Robbery?
WHAT HAVE WE DONE TO DISCOURAGE ANOTHER ROBBERY? • Fortified facilities & perimeter • Changed procedures • Hired the state police to provide armed security • Authorities still investigating 14
Slide 15: Chief Owner
Chief Owner GOAL $126M Cost Takes no salary, Shareholder friendly Qualify No Hedging, base no bonus No change of control for S&P 500 metal streaming, payments dilution or royalties 15
Slide 16: Q&A with Your Management
Q&A WITH YOUR MANAGEMENT Rob McEwen Chief Owner Perry Ing Nathan Stubina CFO Managing Director Bill Faust Andrew Elinesky COO Simon Quick VP, Argentina VP, Projects 16
Slide 17: Catalysts for a Great Year
CATALYSTS FOR A GREAT YEAR (& Springboard for Future Growth) 2015 Performance Cash Growing Deliverables Exploration Success Possible Source of Funds 17
Slide 18: El Gallo (100% Owned)
Sinaloa EL GALLO (100% OWNED) State Gold Silver Property Outline ( 300,000 acres) El Gallo 2 El Gallo 1 Production Exploration Mine Targets 0 5 10 N km Based on internal estimates. See cautionary note regarding non-GAAP measures. 18
Slide 19: El Gallo Exploration
Site of Current Mining EL GALLO El Gallo Mine EXPLORATION Resource Existing Lupita Resource Open San Miguel Target Lupita • Large strong soil anomaly close to existing resource • Drilling planned San Miguel Open Au in Soil anomalies Open 19
Slide 20: Gold Bar Recent Drilling Results
GOLD BAR RECENT DRILLING RESULTS Surface Cortez Trend Nevada, USA Existing Resource Blocks Existing Current Pit Outline Resource Blocks 4.65 gpt / 41.1m 20
Slide 21: Gold Bar Recent Drilling Results
GOLD BAR RECENT DRILLING RESULTS Surface Cortez Trend Current Pit Outline Nevada, USA Existing Resource Blocks Existing 2.2 gpt / 52m Resource Blocks 21
Slide 22: Annual Gold Equivalent Production and Production Costs
ANNUAL GOLD EQUIVALENT PRODUCTION PRODUCTION COSTS 130koz 138koz 138koz $1,200 100koz $1,125 $820 $725 2012A 2013A 2014A 2015E 2014A 2015E San José El Gallo Cash Cost All-in Sustaining Cost Production estimates based on internal estimates. Gold / silver ratio 75:1. Notes 1, 2, 3, 4, 5, 6 & 7. 22
Slide 23: Beta to Gold: MUX vs Peers (3 Yr)
BETA TO GOLD MUX VS PEERS (3 YR) If You Believe in a Higher Gold Price MUX Should be in your portfolio 2.7 2.5 2.4 2.3 2.2 2.1 2.0 1.8 1.7 1.7 1.6 1.3 Source: Bloomberg. As of May 27, 2015 23
Slide 24: Significant Upside Potential
SIGNIFICANT UPSIDE POTENTIAL % Increase from Current Market to Reach 2010 Highs 843% 595% 459% 375% 219% 246% 172% 180% 18% 60% Source: Bloomberg. As of May 27, 2015 24
Slide 25: Outlook for Gold
Outlook for Gold 25
Slide 26: Gold Performance in World Currencies
GOLD PERFORMANCE IN WORLD CURRENCIES From Sept 5, 2011 Peak ($1,900) to Present Source: Bloomberg. As of May 27, 2015 26
Slide 27: Gold Price: Future Direction Up
GOLD PRICE Future Direction Up 1. Currency Turmoil – Battle to Replace $US as Reserve Currency 2. Supply (cost, permitting, tax, financing) 3. Government Debt – Enormous 4. Monetary Expansion – Massive 5. Lack of Trust – Widespread 6. Terrorism - Spreading 27
Slide 28: Inflation
INFLATION But it Has Not Worked Product of Enormous Government to Encourage Debt & Massive Monetary Expansion Consumer Spending U.S. Monetary Base U.S. Federal Debt as % of GDP Velocity of U.S. Money (Billions of dollars/year) (Percentage of GDP/year) (Ratio/year) Source: Federal Reserve Bank of St.
Slide 29: But Signs of Inflation Are Everywhere!
BUT SIGNS OF INFLATION ARE EVERYWHERE! Stock Markets Performance 2009 - 2015 Real Estate - Prices going through the roof $500 M 300 INDU NIKKEI FTSE HANG SENG 200 Art - Speaking volumes about inflation $300 M $180 M 100 2009 2010 2011 2012 2013 2014 2015 29
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Slide 31: Not All Gold Stocks Are Equal
NOT ALL GOLD STOCKS ARE EQUAL Be Cautious of Companies That: 1. Hedge, sell royalities or metal streams. They are trading future earnings for current $ - giving away profits clearly shown by share performance of royalty companies vs. producers. 100 Franco Nevada Royal Gold 0 Gold GDX GDXJ -100 02/08
Slide 32: Thank You for Being a MUX Shareholder
THANK YOU FOR BEING A MUX SHAREHOLDER Share Price is Coming Off the Bottom – Lots of Upside Production Cost Cash Reserves No Debt Exploration Success Extending Mine Life Protected Future Earnings Well Poised for Next Step of Our Growth 32
Slide 33: End Notes: Technical Disclosure and Cautionary Guidance
End Notes Technical Disclosure and Cautionary Guidance 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 stan
Slide 34: Resource Table: Cont'd.
Resource Table: Cont’d. Gold Bar (5) 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 18.8 0.94 0.57 probable reserves) M&I 19.5 0.95 0.59 Inferred 7.0 0.94 0.21 Mineral resources, which are not mineral reserves, d
Slide 35: Cautionary Note Regarding Non-GAAP Measures
Cont’d Note 6: Press release titled “McEwen Mining Q3 2014 Financial & Operating Results” released on November 10, 2014 by McEwen Mining Inc. Note 7: Press release titled “McEwen Mining Reports Record Production in 2014” released on January 15, 2015 by McEwen Mining Inc. The technical contents of th