Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Shareholder Meeting (May 2015)
36 slides from Mcewen's shareholder meeting presentation, May 29, 2015
Slide 1: MUX AGM May 28, 2015
MUX AGM MAY 28, 2015 1 1.866.441.0690 x410 • info@mcewenmining.com • www.mcewenmining.com
Slide 2: Agenda
AGENDA Formal Meeting Financials Update 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
Operations DIRECTORS Experience Venn Diagram 4 Exploration Allen Financial Rob Michele Richard Greg Don Mike Leanne
Slide 5: Summarized Financial Information
SUMMARIZED FINANCIAL INFORMATION Three months ended Mar 31, 2015 Three months ended Mar 31, 2014 Year ended Dec 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, 2015 Mar 31, 2015 Dec 31, 2014 Dec 31, 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 Actual 2015 Forecast Q2 to Q4 2016 Forecast 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 Gold Sector
2014 11 Worst Share price underperformed Gold Sector (GDXJ) MUX Why? 2% 23% 43% Removed from GDX Index Argentina San José contribution Mexico Q3 broke momentum Concerns about possible financing Jan June Dec 0 1 2 3 4
Slide 12: 2014 Best: 2nd Year of Operations
2014 12 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
Slide 13: On Track for 2015 Guidance
ON TRACK FOR 2015 GUIDANCE 13 Despite Gold Robbery 2015 Looking Like A Record Year Q1 & Q2 Strong Performance @ El Gallo
Slide 14: What Have We Done to Discourage Another Robbery?
WHAT HAVE WE DONE TO DISCOURAGE ANOTHER ROBBERY? 14 Fortified facilities & perimeter Changed procedures Hired the state police to provide armed security Authorities still investigating
Slide 15: Chief Owner, Shareholder Friendly
25% Chief Owner Shareholder friendly No change of control payments Qualify for S&P 500 Takes no salary, no bonus Cost base GOAL $126M 15 No Hedging, metal streaming, dilution or royalties
Slide 16: Q&A With Your Management
Q&A WITH YOUR MANAGEMENT 16 Rob McEwen Chief Owner Bill Faust COO Nathan Stubina Managing Director Perry Ing CFO Andrew Elinesky VP, Argentina Simon Quick VP, Projects
Slide 17: Catalysts for a Great Year
CATALYSTS FOR A GREAT YEAR (& Springboard for Future Growth) 17 2015 Performance Cash Growing Deliverables Exploration Success Possible Source of Funds
Slide 18: El Gallo (100% Owned)
Based on internal estimates. See cautionary note regarding non-GAAP measures. Sinaloa State EL GALLO (100% OWNED) Production 18 Gold Property Outline ( 300,000 acres) Exploration Targets El Gallo 2 El Gallo 1 Mine N 0 5 10 km Silver
Slide 19: El Gallo Exploration
EL GALLO EXPLORATION 19 El Gallo Mine Resource Open Open Open Au in Soil anomalies Existing Lupita Resource Lupita San Miguel San Miguel Target Large strong soil anomaly close to existing resource Drilling planned Site of Current Mining
Slide 20: Gold Bar Recent Drilling Results
GOLD BAR RECENT DRILLING RESULTS 20 4.65 gpt / 41.1m Surface Existing Resource Blocks Existing Resource Blocks Current Pit Outline Cortez Trend Nevada, USA
Slide 21: Gold Bar Recent Drilling Results
GOLD BAR RECENT DRILLING RESULTS 21 2.2 gpt / 52m Surface Existing Resource Blocks Existing Resource Blocks Current Pit Outline Cortez Trend Nevada, USA
Slide 22: Annual Gold Equivalent Production and Production Costs
22 $725 $1,125 $820 $1,200 138koz 138koz 130koz 100koz ANNUAL GOLD EQUIVALENT PRODUCTION PRODUCTION COSTS Production estimates based on internal estimates. Gold / silver ratio 75:1. Notes 1, 2, 3, 4, 5, 6 & 7. 2012A 2013A 2014A 2015E San José El Gallo 2014A 2015E Cash Cost All-in Sustaining Cost
Slide 23: MUX Projected Gold Eq. Annual Production
MUX PROJECTED GOLD EQ. ANNUAL PRODUCTION Assumptions Production estimates based on internal estimates. Assumes El Gallo 2 and Gold Bar commence production in 2018. Gold / silver ratio 75:1. Notes 1, 2, 3, 4, 5, 6 & 7. 23 138 koz 138 koz 137 koz 132 koz 207 koz 223 koz 2014 2015 2016 2017 2018 2019 S
Slide 24: Beta to Gold: MUX vs Peers (3 Yr)
BETA TO GOLD MUX VS PEERS (3 YR) 24 Source: Bloomberg. As of May 27, 2015 McEwen If You Believe in a Higher Gold Price MUX Should be in your portfolio
Slide 25: Significant Upside Potential
SIGNIFICANT UPSIDE POTENTIAL % Increase from Current Market to Reach 2010 Highs 25 Source: Bloomberg. As of May 27, 2015 McEwen 18% 60% 172% 180% 219% 246% 375% 459% 595% 843%
Slide 26: Outlook for Gold
26 Outlook for Gold
Slide 27: 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 27
Slide 28: Gold Price Future Direction Up
GOLD PRICE 28 Future Direction Up Currency Turmoil – Battle to Replace $US as Reserve Currency Supply (cost, permitting, tax, financing) Government Debt – Enormous Monetary Expansion – Massive Lack of Trust – Widespread Terrorism - Spreading
Slide 29: Inflation: Product of Enormous Government Debt
Source: Federal Reserve Bank of St. Louis. As of May 27, 2015. U.S. Federal Debt as % of GDP (Percentage of GDP/year) Velocity of U.S. Money (Ratio/year) 29 U.S. Monetary Base (Billions of dollars/year) INFLATION Product of Enormous Government Debt & Massive Monetary Expansion But it Has Not Worked
Slide 30: But Signs of Inflation Are Everywhere!
BUT SIGNS OF INFLATION ARE EVERYWHERE! 30 Stock Markets Performance 2009 - 2015 Real Estate - Prices going through the roof Art - Speaking volumes about inflation 2009 2010 2011 2012 2013 2014 2015 $300 M $180 M $500 M 100 200 300 INDU NIKKEI FTSE HANG SENG
Slide 31: Gold $5,000
Gold $5,000 31
Slide 32: Not All Gold Stocks Are Equal
NOT ALL GOLD STOCKS ARE EQUAL 32 Be Cautious of Companies That: 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. Franco Nevada Royal Gold Gold GDX GDXJ Prepared to mass
Slide 33: Thank You for Being a MUX Shareholder
THANK YOU FOR BEING A MUX SHAREHOLDER 33 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
Slide 34: End Notes
End Notes 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 standards are different from the standards genera
Slide 35: Resource Table (Gold Bar)
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 probable reserves) 18.8 0.94 0.57 M&I 19.5 0.95 0.59 Inferred 7.0 0.94 0.21 Resource Table: Cont’d. Mineral resources, which are not mineral reserves, d
Slide 36: End Notes and Non-GAAP Cautionary Note
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 this pres