McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to report additional positive drill results from Grey Fox, part of the Black Fox Complex, located in the prolific Timmins gold district, Canada (see Figure 1). Highlights of the new results are shown below in Table 1. Q4 and FY2019 cost estimates for our Black Fox and Gold Bar mines are also updated below.
“These results highlight the potential to find additional gold mineralization across the one square kilometer Grey Fox Deposit area,” said Sylvain Guerard, SVP Exploration.
The Grey Fox Area is comprised of four deposits: 147, 147NE, Contact and South. Drill results in this news release are confirming the continuity of the main gold mineralized shoot at 147NE and suggest the presence of two intriguing new areas of mineralization at the South Zone and Whiskey Jack (see Figure 2).
Table 1 – Selected Drill Results from South Zone, Whiskey Jack, 147NE and 147 Zone
|HOLE-ID||From (m)||To (m)||Core Length (m)||Estimated True Width (m)||Gold Grade (g/t)||Gold Grade (opt)||Zone|
|g/t – grams per tonne, opt – Troy ounces per metric tonne, ND – not determined.|
Geological Explanation (see Figure 2)
At 147NE, we have observed that higher grades and thicker mineralization occur where northwest dipping structures intersect favorable iron-rich volcanic host rocks, for example 5.7 g/t Au over 8.2 m, including 19.3 g/t Au over 2.2 m (Hole 19GF-1173). This zone is exposed at surface and has been drill tested to a depth of 350 m where mineralization is offset by a fault.
Our knowledge and success drilling 147NE resulted in the generation of targets with the same characteristics, which were drilled at Whiskey Jack and South Zone.
Whiskey Jack is a new exploration target located 1 km north of the South Zone intercepts, where drilling began in mid-September. Assays for one hole have been received to date, which returned a very encouraging result of 14.1 g/t Au over 8.4 m, including 59.1 g/t Au over 1.3 m core length, with multiple occurrences of visible gold in quartz-carbonate veins and breccias overprinted by faulting. Additional drilling in this area is underway to confirm the orientation, thickness and continuity of the vein.
South Zone drilling has improved our knowledge of the structural controls on the replacement-style mineralization. Drill hole 19GF-1198 returned 10.9 g/t Au over 18.8 m core length, including 15.9 g/t Au over 10.0 m, and contained visible gold associated with 2-10% disseminated pyrite in silica-albite-hematite alteration (replacement-style mineralization). Both styles of mineralization occur preferentially in iron-rich volcanic rocks.
Additional drilling at the 147 Zone was done to reinforce our confidence in the geometry of the mineralization for modeling purposes and to provide additional drill intersections perpendicular to some of the mineralization controlling structures.
Complete assay results from the latest drilling on the Grey Fox area:
Updated Cost Estimates for Black Fox and Gold Bar
For Black Fox, cash costs(1) for the full year 2019 are expected to be in line with our guidance(2) of $905 per GEO, and AISC(1) are expected to be higher than our guidance(2) of $1,080 per GEO(3). Actual cash costs and AISC for Q3 YTD 2019 are $859 and $1,326 per GEO, respectively. Management’s AISC estimates for Q4 2019 and the full year 2019 are $1,100-1,200 and $1,250-1,300, respectively.
Cash costs have been well controlled at Black Fox in 2019, and higher AISC are a result of higher than expected sustaining capital expenses related to underground development, improvement projects, and additional capital spending associated with our transition to owner-operated crushing at the Stock Mill. We plan to scale back production in 2020 to enable greater freedom to explore in the mine, and free resources to advance development of the Froome underground deposit adjacent to Black Fox.
For Gold Bar, cash costs and AISC for the full year 2019(4) are expected to be higher than our guidance(2) of $930 and $975 per GEO, respectively. Actual cash costs and AISC for Q3 YTD 2019 are $1,014 and $1,200 per GEO, respectively. Management’s cash costs estimates for Q4 2019 and the full year 2019 are $1,000-1,050 and $1,000-1,050 per GEO, respectively; and AISC for Q4 2019 and the full year 2019 are $1,250-1,350 and $1,200-1,300 per GEO, respectively.
Higher cash costs and AISC at Gold Bar are a result of the delayed mine startup, and higher than expected operating expenses and sustaining capital expenses required to correct plant deficiencies and improve performance. We plan to increase production in 2020 to 65,000-70,000 gold ounces, and expect costs to moderate and then decline as our improvements take effect.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and explorer with operating mines in Nevada, Canada, Mexico and Argentina. It also owns a large copper deposit in Argentina. McEwen’s goal is to create a profitable gold and silver producer focused in the Americas.
McEwen has approximately 362 million shares outstanding. Rob McEwen, Chairman and Chief Owner, owns 22% of the shares.
Technical information pertaining to geology and exploration contained in this news release has been prepared under the supervision of Ken Tylee, P.Geo. Mr. Tylee is a “qualified person” within the meaning of NI 43-101.
The technical information under the heading ‘Clarification of Black Fox and Gold Bar Q4 2019 Cost Estimates’ in this news release has been reviewed and approved by Chris Stewart, P.Eng., President & COO of McEwen Mining and a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects.”
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