McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reported its second quarter and first half results for the period ended June 30^th, 2021.

• Our operations delivered strong production results in line with our expectations, and we are on track to meet our 2021 production guidance of 141,000 to 160,400 GEOs.
• We continue to execute on our turnaround strategy and have made significant progress both from an operational and a financial perspective (see Tables 1-3 below). We expect this trend to continue to the remainder of 2021, as the Froome mine at the Fox Complex reaches commercial production in Q4.
• On July 6, 2021, we announced that a subsidiary that holds 100% of the Los Azules copper project will be raising financing for the continued development of that project, as well as to fund a modest exploration program for its Elder Creek copper exploration property in Nevada. McEwen Copper is seeking to raise up to $80 million in a private offering and Rob McEwen has committed the first $40 million dollars.
• Our quarterly webcast will take place on Thursday, August 5^th at 2 pm EDT. Please see the details below.

Table 1. Production and costs Q2 & H1 2021 ended June 30^th, 2021 compared Q2 & H1 2020

Table 2. Liquidity at June 30^th, 2021 and December 31^st, 2020

Table 3. Financial results Q2 & H1 2021 ended June 30^th, 2021 compared Q2 & H1 2020

Operations Update

Gold Bar Mine, USA (100% Interest)

Gold Bar produced 14,100 GEOs in Q2 at total cash costs⁽²⁾ and all-in sustaining costs (AISC)⁽²⁾ of $1,463 and $1,619 per GEO sold, respectively. This compares to 6,100 GEOs in Q2 2020 at total cash costs and AISC of $1,772 and $2,462 per GEO, respectively. The cost decrease is driven by the increase in production and by the significant operational improvements we have been continuing to work through over the past year. We expect to see this trend continue into the second half of 2021.

Exploration is focusing on testing near-mine targets and further defining oxide resources on the neighboring Tonkin property. During the quarter we incurred exploration expenses of $1.3 million of a total $5.0 million budget for 2021.

Fox Complex, Canada (100% Interest)

Black Fox produced 7,100 GEOs in Q2 at total cash costs and AISC of $917 and $1,088 per GEO sold, respectively. This compares to 2,200 GEOs in Q2 2020 at total cash costs and AISC of $3,121 and $3,332 per GEO, respectively. Mining has transitioned to the Froome deposit and is performing to plan, commercial production expected in Q4 2021.

We remain focused on our principal exploration goal of cost-effectively discovering and extending gold deposits adjacent to our existing operations to contribute to near-term gold production. During the quarter we incurred exploration expenses of $3.5 million of a total $9.0 million budget for 2021.

A Preliminary Economic Assessment to expand the production from the Fox Complex is expected to be released in the second half of the year, following additional drilling and resource estimate updates at the Stock and Grey Fox properties.

San José Mine, Argentina (49% Interest)

Our attributable production from San José in Q2 was 9,300 gold ounces and 607,000 silver ounces, for a total of 18,200 GEOs⁽³⁾. For Q2, total cash costs and AISC were $1,105 and $1,500 per GEO sold, respectively. This compares to 9,000 GEOs in Q2 2020 at total cash costs and AISC of $1,280 and $1,476 per GEO, respectively. In Q2 2020, operations at San José were adversely impacted by government-imposed COVID-19 restrictions.

We received $2.6 million and $7.6 million in dividends in Q2 and H1, respectively, compared to $0.3 million dividends received during the same periods in 2020.

El Gallo Project, Mexico (100% Interest)

In Q2, El Gallo produced 1,300 GEOs from residual leaching of the heap leach pad. Incremental residual leaching cost for the period was $2.7 million⁽⁴⁾. The residual leaching activities at El Gallo are expected to wind down in early 2022.

Los Azules Copper Project, Argentina (100% Interest)

On July 6, 2021, we announced the formation of a wholly-owned subsidiary to hold the Los Azules Copper project (“McEwen Copper”) and to raise financing to advance the project to a preliminary feasibility study and to construct a road to the project providing year-round access compared to the current 5-month seasonal access window. McEwen Copper will hold the Los Azules assets as well as the Elder Creek exploration project in Nevada. McEwen Copper is seeking to raise up to $80 million in a private offering.

Table 4 below provides production and cost results for Q1, Q2 and H1 2021 and comparative results from 2020:

Notes:

1. Gold Equivalent Ounces (GEOs) are calculated based on a gold to silver price ratio of 68:1 for Q1 and Q2 2021, 94:1 for Q1 2020, 104:1 for Q2 2020, and 75:1 for full year 2021 Production Guidance.
2. Cash gross profit, cash costs per ounce, all-in sustaining costs (AISC) per ounce, and liquid assets are non-GAAP financial performance measures with no standardized definition under U.S. GAAP. For a description of the non-GAAP measures see “Non-GAAP Financial Measures” section in this press release; for the reconciliation of the non-GAAP measures to the closest U.S. GAAP measures, see the Management Discussion and Analysis for the year ended December 31^st, 2020 filed on EDGAR and SEDAR.
3. Represents the portion attributable to us from our 49% interest in the San José Mine.
4. Both cash costs and AISC per GEO no longer represent key metrics used by management to evaluate residual leaching at the El Gallo Project. For this reason, the Company has ceased relying on, and disclosing, cash costs and all-in-sustaining costs per ounce as a key metric.

For the SEC Form 10-Q Financial Statements and MD&A refer to: http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000314203

COVID-19

All our operations have implemented rigorous health and safety measures to prevent the spread of the COVID-19 virus. Currently, the COVID-19 pandemic is not materially affecting our operations, or our future plans and objectives.

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.

T

echnical Information

The technical contents of this news release have been reviewed and approved by G. Peter Mah, P.Eng., COO of McEwen Mining and a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects.”

ABOUT MCEWEN MINING

McEwen Mining is a diversified gold and silver producer and explorer focused in the Americas with operating mines in Nevada, Canada, Mexico and Argentina.