Development Of Access To Froome Underground Deposit Advanced

TORONTO - McEwen Mining Inc. reported that production rebounded during Q3 after the successful restart of all four of our operations, which were temporarily suspended during Q2, largely due to actions taken to prevent the spread of COVID-19 amongst our workers, business partners, and communities. Production for Q3 2020 was 23,100 gold ounces and 575,000 silver ounces, or 30,400 gold equivalent ounces(GEOs), at the average gold:silver price ratio for the quarter of 79:1. At the Black Fox, development of the access to the Froome underground deposit has advanced 47% by the end of the quarter. We are on track to reach the deposit in the second quarter of 2021 and complete the necessary development work. Commercial production is expected by the fourth quarter of 2021. The attributable production from San Jose in Argentina was 8,600 gold ounces and 571,000 silver ounces, for a total of 15,900 GEOs in Q3.

Production from Black Fox was 5,800 GEOs in Q3. The operation is benefitting from the additional development work completed during Q2, which increased mining flexibility. We expect production to continue to trend higher during Q4, and mining from Black Fox to continue into Q1 2021, while we transition to mining the Froome deposit.

Delineation and definition drilling around the 240 m and 280 m level stoping areas in the central and west part of the Black Fox Mine has recently returned impressive grades including: On the 240 Level - 85.1 g/t Au over 4.8 m including 218.8 g/t Au over 1.8 m from hole 240-B226-11; 14.7 g/t Au over 2.5 m including 19.8 g/t Au over 1.7 m from hole 240-B206-09; 15.1 g/t Au over 1.7 m from hole 240-B196-08; and On the 280 Level - 19.3 g/t Au over 3.0 m including 71.6 g/t Au over 0.8 m from hole 280-F790-12.

The positive results from these drill programs are being fast-tracked and evaluation for potential additions to mine planning inventory is ongoing.

Development of the underground access to the Froome deposit, located a half mile (800 m) west of the Black Fox mine, is on track, having advanced 47% by the end of the quarter. We plan to reach the main deposit in Q2 2021 and expect to achieve commercial production from Froome in Q4 2021. Froome offers several benefits compared to Black Fox such as a straighter, more efficient haulage route and wider, more consistent mineralization that is amenable to lower cost bulk mining methods. We are targeting an average annualized production rate of 40-45,000 GEOs from Froome over a period of approximately 2.5 years.

The company has engaged an independent engineering group to complete a Preliminary Economic Assessment (PEA) for the Fox Complex that includes Grey Fox, Black Fox, Stock and Lexam resources all utilizing our existing or potentially expanded central milling capacity. The PEA results are expected to be available in Q4 2020 and will suggest the optimal business case on which to complete a feasibility study in 2021. Combined, the Fox Complex deposits host nearly 3.0 million gold ounces in Measured and Indicated resources, and an additional 1.0 million gold ounces in Inferred resources. The objective of the upcoming PEA is to develop a plan for the Fox Complex to grow to an annual production of 100-150,000 ounces of gold, at a cash cost of $800/oz and an all-in sustaining cost (AISC) of $1,100/oz, over a 10-year life, with production envisioned to start ramping up from 2022.

The Gold Bar produced 6,800 GEOs in Q3. Operations at Gold Bar continued to ramp up during September, and savings from operational improvement initiatives are taking effect. For example, the combined average contractor and owner unit mining costs per ton of ore and waste moved decreased from $3.42/t in Q2 to $2.45/t in Q3, for a 28% decrease quarter on quarter. We expect costs to continue to trend lower in future quarters.

Evaluation of the resource estimate continued in Q3. We expect to have new resource and reserve estimates and an updated feasibility study in Q4.

The El Gallo produced 1,900 GEOs from residual leaching of the heap leach pad, compared to 1,900 GEOs in Q2 2020. Incremental residual leaching costs for Q3 were $3.1 million(7), or $1,505 per GEO. An updated feasibility study for the Fenix Project is being finalized, and we expect to release the results in late Q4.