Mcewen Inc. · NYSE:MUX
Mcewen — McEwen Mining — Shareholder Meeting (May 2012)
58 slides from Mcewen's shareholder meeting presentation, May 18, 2012
Slide 1: Annual General Meeting
Annual General Meeting Favse mux Ts
Slide 2: Agenda
AGENDA 1. Formal Meeting 2. Financial Overview 3. Operational + Exploration Update 4. Gold Market Overview 2
Slide 3: Nils Engelstad, VP Corporate Affairs & Secretary
NILS ENGELSTAD Vice President, Corporate Affairs & Secretary 3
Slide 4: Perry Ing, Chief Financial Officer
PERRY ING Chief Financial Officer 4
Slide 5: Balance Sheet
Dec 31, 11 (UXG only) Mar 31, 12 (unaudited) Cash, Investments & Bullion 41.6 63.3 Mineral Properties and Investment in MSC 245.5 1,068.9 Total Assets 310.4 1,162.0 Deferred Tax Liability 78.8 274.6 Total Liabilities 91.1 290.1 Shareholder’s Equity 219.3 871.9 Balance Sheet USD Millions
Slide 6: Statement of Operations
Dec 31, 11 (UXG only) Dec 31, 11 (MUX pro-forma) Mar 31, 12 (unaudited) Income from MSC - 15.9 1.2 Exploration expense (43.0) (57.7) (11.8) General & admin (10.9) (13.1) (4.7) Other (expense) income (1.9) 3.8 1.5 Net loss (61.9) (64.4) (19.2) EPS (0.45) (0.24) (0.08) Statement of Operations USD Mill
Slide 7: Share Capital
Dec 31, 11 (UXG only) Dec 31, 11 (MUX pro-forma) Mar 31, 12 (unaudited) Common Shares 139.7 267.1 267.9 Options 4.3 6.0 5.5 Fully Diluted Shares 144.0 273.1 273.4 USD Millions Share Capital
Slide 8: Internally Funded Growth Estimates
Internally Funded Growth Estimates 8 Q2 2012 67 44 -16 -20 -8 $67 M 2013 67 83 -75 -30 -8 $37 M 2014 37 143 -125 -30 -8 $17 M (1) Includes silver/ gold bullion and marketable securities, estimates based on $1,700/oz gold, $34/oz silver (2) See also Endnotes Beginning Cash(1) Cash flow from operation
Slide 9: Minera Santa Cruz
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Remainder of 2012 Reported Income from MSC 11.3 13.5 13.1 7.1 1.2 TBD TBD Cash received from MSC 0.7 0.7 28.91 0 9.4 TBD ~ 30 In millions of USD; 2011 figures reported are US GAAP figures reported by Minera Andes 1 A further $32.4 million of project fi
Slide 10: Ian Ball, Senior Vice President
IAN BALL Senior Vice President 10
Slide 11: Cautionary Statement
11 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 p
Slide 12: McEwen Mining Strengths: World Class Assets
Cash & Cash Flow Exploration Upside Internal Growth Big CEO Ownership Strengths McEwen Mining 12 World Class Assets
Slide 13: Projected Gold Eq. Production Growth
Projected Gold Eq. Production Growth 13 0 75 150 225 300 2012E 2013E 2014E 2015E Gold Eq. Production (000’ oz Au Eq.) Estimated Cash Cost $700-800 /oz San José Mine El Gallo Gold Bar 285,000 oz 105,000 oz *See Endnotes
Slide 14: San José Mine (49%) Argentina
San José Mine (49%) Argentina $40 Million Est. Dividends 2012 14
Slide 15: San José Mine Highlights
15 Growing Resource 2012 Production Forecast 2012 Exploration Budget 2012 Q1 Production 192,500 Gold Eq. Cash Cost $750 / oz 46,000 Gold Eq. Cash Cost $720 / oz $14 Million 110,000 m Drilling Silver 68.6 M oz 22.4 M oz Gold 1.0 M oz 0.3 M oz *See Note 1 M&I: I: San José Mine Highlights*
Slide 16: El Gallo Phase 1 Mexico
El Gallo Phase 1 Mexico $10 Million Est. Cash Flow 2012 16
Slide 17: El Gallo Complex - 2 Phase Development
17 Production Start Capex Cash Cost Resource Update Phase 1 30,000 oz Gold / yr July 2012 $15 M $800 / oz Phase 2 105,000 oz Gold Eq. / yr 2014 $150 M $575 / oz Q2 - 2012 El Gallo Complex – Mexico 2 Phase Development *See Note 1 Total 135,000 oz Gold Eq. / yr $165 M $625 / oz
Slide 18: Potential Risks
18 Potential Risks
Slide 19: Governments
Governments 19
Slide 20: El Gallo Phase 2 Capex?
El Gallo Phase 2 | Capex 20 ?
Slide 21: Opportunities
Opportunities Dal
Slide 22: Los Azules Copper Argentina
22 Los Azules Copper Argentina BIG 35 EXPLORATION
Slide 23: Los Azules vs Undeveloped Copper Deposits
23 Los Azules vs Undeveloped Copper Deposits* Resource Size Grade Annual Production Mine Life 7th 2nd 5th 6th *See Note 2
Slide 24: Los Azules Exploration Highlights
24 Los Azules Exploration Highlights *See Note 3
Slide 25: Los Azules High Grade @ Depth
Los Azules High Grade @ Depth 25 *See Note 4
Slide 26: Los Azules Strategy
Los Azules Strategy Test Expansion Potential Monetize Asset - JV - Cash up front - Outright Sell Cash to Fund: - Growth - Dividends 26
Slide 27: Los Azules - Comparable Copper Projects Sold
27 Los Azules - Comparable Copper Projects Sold Buyer Target Project Location Value Global CuEq Resources (Blbs) Value / lb CuEq Date 2010 2011 2011 2012 First Quantum Hudbay Capstone Stillwater Antares Norsemont Far West Peregrine Haquira Constancia Santo Domingo Altar Peru Peru Chile Argentina Avg
Slide 28: San José Argentina: Next Cerro Negro?
28 San José Argentina ? Next Cerro Negro 35
Slide 29: Excitement @ San José: New High-Grade Results
29 Excitement @ San José: New High-Grade Results *See Note 5
Slide 30: San José vs Cerro Negro Grade Comparison
San José vs Cerro Negro Grade Comparison 30 Gold (gpt) Silver (gpt) Gold Equivalent (gpt) Cerro Negro San José *Gold Eq. calculated using of 53:1 silver gold ratio See note 6, information pertaining to Cerro Negro obtained from Goldcorp’s website 15.6 10.0 457 62 7.0 8.8
Slide 31: Nevada Scoping Studies Tonkin & Limo Q4 2012
Nevada Scoping Studies Tonkin & Limo Q4 2012 31
Slide 32: Projected Gold Eq. Production Growth
Projected Gold Eq. Production Growth 32 0 75 150 225 300 2012E 2013E 2014E 2015E Gold Eq. Production (000’ oz Au Eq.) San José Mine El Gallo Gold Bar 285,000 oz 105,000 oz *See Endnotes
Slide 33: Rob McEwen, Chief Owner
ROB McEWEN Chief Owner 33
Slide 34: Gold is Money
34 Gold is Money
Slide 35: The Ultimate Currency
The Ultimate Currency Performance in Major Currencies 35 US Dollar Rand Pound RMB Euro Canadian Swiss Australian Source: Bloomberg. As of May 16, 2012 502% 518% 437% 360% 317% 286% 228% 193% 2001- Present
Slide 36: Ballooning Debt Rapidly Debasing Currencies
36 Ballooning Debt Rapidly Debasing Currencies Source: Bloomberg. As of May 16, 2012 25 55
Slide 37: It Has Happened Many Times Before
It Has Happened Many Times Before Source: Bloomberg 37
Slide 38: Gold vs Stock Markets
Gold vs Stock Markets 2001 - Present Source: Bloomberg, As of May 16, 2012 38
Slide 39: No Opportunity Cost - Gold vs Interest Rates
No Opportunity Cost – Gold vs Interest Rates 1954 – Present (57 Years) Source: Bloomberg, As of May 16, 2012 55 60 65 70 75 80 85 90 95 00 05 10 39
Slide 40: Investors' Choices for Gold
40 Investors’ Choices for Gold Physical – Cumbersome ETF – Easy Equities – Which One?
Slide 41: Explosive Growth of ETFs
41 Explosive Growth of ETFs Gold 2,380 tonnes Value $122 Billion Source: Bloomberg, As of May 15, 2012
Slide 42: Diverging Paths: Gold vs Gold Equities
42 Diverging Paths: Gold vs Gold Equities 2001 - Present Source: Bloomberg, As of May 16, 2012
Slide 43: Performance of Senior Gold Equities
43 Performance of Senior Gold Equities May 10, 2006 - Present Gold Price +119% Barrick Goldcorp Newmont Kinross AngloGold Production -10% +40% unch +60% -30% Share Price unch -19% -25% -42% -42% Dividend Yield 2.3% 1.7% 3.2% 2.2% 1.6% Source: Bloomberg. As of May 16, 2012
Slide 44: CEO's Share Ownership
McEwen Mining Rob McEwen - 25% $110 Million Cost No Alignment CEO’s Share Ownership 44 Source: Bloomberg. As of May 16, 2012
Slide 45: Gold Equities - But Which One?
Gold Equities – But Which One? 2800 Public Exploration / Developing / Mining Companies World Wide Investor Confusion 45
Slide 46: Be Aware, Volatility A Constant
46 Be Aware, Volatility A Constant Feb 2007 - Present Source: Bloomberg, As of May 16, 2012
Slide 47: Volatility Brings Uncertainty and Opportunity
Volatility Brings Uncertainty 47 and Opportunity
Slide 48: Big Gains Do Occur + Will Occur Again!
48 Big Gains Do Occur + Will Occur Again! Oct 2008 - Present Source: Bloomberg, As of May 16, 2012
Slide 49: Gold Equities Oversold
49 Gold Equities Oversold: Gold needed to Buy XAU December 1983 – March 2012 Source: James Turk - Gold Money King World News
Slide 50: Composite Performance of The XAU in Election Years
50 Recurring Event Composite Performance of The XAU in Election Years Source: Bloomberg and CIBC World Markets, reported April 17, 2012
Slide 51: Executive Order of the President, 1933
UNDER EXECUTIVE ORDER OF THE PRESIDENT issued April 5, 1933 all persons are required to deliver ON OR BEFORE MAY 1, 1933 all GOLD COIN, GOLD BULLION, AND GOLD CERTIFICATES now owned by them to a Federal Reserve Bank, branch or agency, or to any member bank of the Federal Reserve System. 51
Slide 52: FBI warns of threat from anti-government extremists
FBI warns of threat from anti-government extremists WASHINGTON | Mon Feb 6, 2012 7:21pm EST (Reuters) - Anti-government extremists opposed to taxes and regulations pose a growing threat to local law enforcement officers in the United States, the FBI warned on Monday. These extremists, sometimes know
Slide 53: Homestake Before + After Confiscation
53 Homestake Before + After Confiscation Source: www.longwave.com
Slide 54: Want to Repeat My Goldcorp Experience
54 Want to Repeat My Goldcorp Experience Source: Bloomberg
Slide 55: Ugly Performance
55 Ugly Performance Feb 2007 - Present Source: Bloomberg, as of May 16, 2012
Slide 56: 56
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Slide 57: Endnotes
Endnotes 57 The Company has included non-GAAP performance measures, total cash costs, by-product and co-product, per gold ounce, throughout this document on a historic and estimated forward looking basis. In the mining industry, these are common performance measures but do not have any standardized
Slide 58: Notes
Note 1: McEwen Mining ‘s news release titled “McEwen Mining Provides First Quarter 2012 Operational and Development Update” dated May 8, 2012. This news release has been reviewed and approved by William Faust, P.E, McEwen Mining's Chief Operating Officer, who is a Qualified Person as defined by Nati