McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reported fourth quarter and full year results for the period ended December 31, 2021.
Table 1. Production for Q4 & 12 months ended December 31, 2021, compared to Q4 & 12M ended December 31, 2020.
|2021 vs 2020||Increased Production in Q4 2021||Increased Production in 2021|
|Q4 2021||Q4 2020||Q4 2021
|Gold Bar Mine, Nevada||9,950||6,000||+66||%||43,850||28,000||+57||%|
|Fox Complex, Canada||9,500||8,000||+18||%||30,060||24,400||+23||%|
|San José Mine, Argentina||20,200||14,600||+38||%||76,800||54,500||+41||%|
Table 2. Cash costs and AISC per ounce sold for 12M ended December 31, 2021, compared to 12M ended December 31, 2020.
|2021 vs 2020||Cash Costs||AISC|
|Gold Bar Mine, Nevada||1,687||2,106||-20||%||1,753||2,459||-29||%|
|Fox Complex, Canada||1,108||1,397||-21||%||1,461||1,650||-11||%|
|San José Mine, Argentina||1,262||1,233||+2||%||1,603||1,514||+6||%|
Table 3. Liquidity on December 31st, 2021 and December 31st, 2020.
|(Millions of Dollars)||Dec 31st, 2021||Dec 31st, 2020|
|Cash and cash equivalents||$54.3||$20.8|
Table 4. Financial results Q4 & 12M 2021, compared to Q4 & 12M 2020.
|(Millions of Dollars)||Q4||12M||Q4||12M|
|Cash gross profit (loss)(2)||1.2||17.3||(6.9)||(4.0)|
|Gross profit (loss)||(5.9)||(6.5)||(13.7)||(27.0)|
|Net loss per share||(0.05)||(0.12)||(0.06)||(0.38)|
Fox Complex Canada (100% Interest)
Fox production for Q4 and 12M 2021 was 18% and 23% higher, respectively, compared to Q4 and 12M 2020. Cash costs and AISC per ounce sold for the 12M period both dropped by 21% and 11%, respectively, compared to 12M 2020.
Black Fox mine wound down during 2021 as production shifted to the Froome mine. We realized a milestone on September 19th, 2021 when commercial production was reached at the Froome mine, three months ahead of schedule. To date, mineralized material extracted from the Froome mine produced grades that are consistent with the resources model and mine plan.
On January 26, 2022, we announced the results of our PEA for the Fox Complex. The PEA presents estimates for a positive business case for the Fox Complex expansion project, with potential average gold production of 80,800 gold ounces per year over nine (9) years, after the depletion of the current resources at Froome. The economic analysis estimates an after-tax IRR of 21% at a gold price of $1,650/oz, and average cash costs and AISC per ounce of gold of $769 and $1,246, respectively. Additional exploration work on the Fox Complex properties will be conducted throughout 2022 to support ongoing studies necessary to advance the expansion project and shorten the payback period.
We remain focused on our principal exploration goal of cost-effectively discovering and extending gold deposits adjacent to our existing operations, that can contribute to near-term gold production. During 2021, we incurred $15.0 million in exploration initiatives at Fox. The exploration budget for 2022 at the complex is $10.0 million.
Gold Bar Mine, USA (100% Interest)
Gold Bar production for Q4 and 12M 2021 was 66% and 57% higher, respectively, compared to Q4 and 12M 2020. Production increased significantly in 2021, primarily due to improved heap leach operating efficiencies and no materially adverse COVID-19 impacts on operations. Cash costs and AISC per ounce sold for the 12M period dropped by 20% and 29%, respectively, compared to 12M 2020.
The permitting process to access ore at Gold Bar South satellite deposit is ongoing and we anticipate receiving the permit in Q1 of 2022. The initiation of gold production from Gold Bar South is planned for the second half of 2022.
In 2021, we spent $4.2 million on exploration activities, including metallurgical, geotechnical and drilling programs for a cumulative 8,620 feet (2,627 m) at Ridge and Tonkin Rooster. Delineation drilling programs were conducted at Atlas Pit, SW Pick Extension, and Cabin North, with a cumulative 8,629 feet (2,632m) completed. Delineation drilling at Cabin North and the SW Pick Extension is ongoing. The Gold Bar exploration budget for 2022 is $2.5 million.
San José Mine, Argentina (49% Interest)
San José attributable production(3) for Q4 and 12M was 38% and 41% higher, respectively, compared to Q4 and 12M 2020. Cash costs and AISC per ounce sold for the 12M period increased by 2% and 6%, respectively, compared to 12M 2020.
Gold and silver production increased in 2021 due to the lifting of COVID-19 restrictions that impacted operations throughout 2020. We received $10 million in dividends from our interest in San José in 2021, compared to $0.3 million received in 2020.
McEwen Copper (81% Interest)
Activities at Los Azules ramped up in Q4, with the opening of the seasonal exploration road, the activation of two camps, the start of construction of a new all-year access road, and the preparation of drill pads and roads to support the current drilling program. Drilling started in January 2022 and there are currently five rigs operating, increasing to seven in March.
On February 17th, 2022, Michael Meding joined as Vice President responsible for the overall direction and management of the Los Azules project. Mr. Meding has over 20 years of international experience, primarily with major mining companies such as Barrick Gold and Trafigura, including extensive experience with project development and operations in Argentina. While at Barrick Gold’s Veladero mine in Argentina, he played a key role in the turnaround, extension of the mine life, and subsequent strategic partnering with Shandong Gold.
An extensive team of experts have been engaged to advance the Los Azules project to a pre-feasibility stage, including the following:
Our overarching goal is to design a mine that will be the model for copper mining in the 21st century, one that supplies the raw material to enable a greener world, while incorporating the use of renewable energy sources and technological innovation for a low-carbon footprint and energy efficient mining.
Table 5 below provides production and cost results for Q4 and the full year 2021, with comparative results from 2020 and our guidance range for 2022.
|Q4||Full Year||Full Year 2022
|Gold Bar Mine, Nevada|
|Cash Costs ($/GEO)(1)||3,439||2,038||2,106||1,687|
|Fox Complex, Canada|
|Cash Costs ($/GEO)(1)||1,307||1,122||1,397||1,108|
|San José Mine, Argentina (49%)|
|Gold production (oz)(3)||8,700||11,300||31,800||40,900||34,500-38,500|
|Silver production (oz)(3)||531,500||682,700||2,013,000||2,572,500||2,520,000-2,800,000|
|Cash Costs ($/GEO)(1)||1,234||1,708||1,233||1,262|
Our El Gallo project produced 540 GEOs during Q4 and 3,700 GEOs for 2021. Residual heap leaching continues with production of 1,500 GEOs expected in 2022.
Resource and Reserve Updates
The following statements apply to the information contained in the resource and reserve tables below:
San José Mine
Hochschild Mining Plc our joint venture partner, prepared the mineral resource and mineral reserve estimates for the San José mine current as at December 31st, 2021.
These figures, reported on a 100% basis, were prepared by Hochschild and audited by P&E Mining Consultants Inc. whose audit letter dated February 11th, 2022, concluded that the estimates for the San José mine prepared by Hochschild at December 31, 2021 provide a reliable estimation of reserves and resources. The reserves as presented are in-situ and include mining dilution and mining losses, however they do not include allowances for mill or smelter recoveries.
Table 6.1: San José Mine – Mineral Reserve Estimate, December 31, 2021 – 100% Basis
|Total Proven & Probable||1,495||5.69||342||273||16.4|
Table 6.1 Notes:
Table 6.2: San José Mine – Mineral Resource Estimate, December 31, 2021 – 100% Basis
|Total Measured & Indicated||216||3.84||260||27||1.8|
Table 6.2 Notes:
The technical content of this news release has been reviewed and approved by Peter Mah, P.Eng., COO of McEwen Mining and a Qualified Person as defined by SEC S-K 1300 and the Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects.”
The technical information in this news release related to resource and reserve estimates has been reviewed and approved by Luke Willis, P.Geo., McEwen Mining’s Director of Resource Modelling and Qualified Person as defined by SEC S-K 1300 and Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects.”
Reliability of Information Regarding San José
Minera Santa Cruz S.A., the owner of the San José Mine, is responsible for and has supplied to the Company all reported results from the San José Mine. McEwen Mining’s joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates other than MSC do not accept responsibility for the use of project data or the adequacy or accuracy of this release.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and explorer focused in the Americas with operating mines in Nevada, Canada, and Argentina. It also has a large exposure to copper through its subsidiary McEwen Copper, owner of the Los Azules copper deposit in Argentina.
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