Strong Performance At San Jose Mine And Other Operations

 

TORONTO, ON - McEwen Mining Inc. reported final production results for the San JosÄ mine, in Argentina, during the Fourth Quarter totaled 1,453,580 ounces of silver and 20,934 ounces of gold (100% basis). Cash Costs on a co-product basis during the period totaled US$13.10 per silver ounce and US$689 per gold ounce. These costs on a by-product basis (netting the revenue from gold against the cost to produce an ounce of silver) totaled negative US$1.02 per silver ounce. The average grade of ore processed during the Fourth Quarter was 412 gpt silver and 5.68 gpt gold. Estimated 2012 production is expected to total 5.7 million silver ounces and 85,000 gold ounces (100% basis).

A new reserve-resource estimate for the San JosÄ mine is currently being finalized and is expected to be released shortly. The updated estimate will reflect approximately 55,000 meters of additional diamond drilling completed during 2011. In 2012, a total of 110,500 meters of diamond drilling is scheduled at the San JosÄ mine, of which 68,000 meters will be exploration for new resources and 42,500 will be for infill. This represents more than double of the exploration budget that was completed last year.

El Gallo, in Mexico reported Phase 1 construction is on schedule (completion expected by mid-2012) and on budget (US$15 million). To date, approximately 40% of the capital required to complete Phase 1 has been spent. Key areas of advancement include the crushing plant (50% complete), process plant (40% complete), and heap leach pad expansion (35% complete). Since December, 1.5 million tonnes of material has been mined. The majority of this material relates to pre-stripping. A total of 63,700 tonnes of material averaging 1.71 gpt gold has been stockpiled for future processing. In addition, a number of key management positions have recently been filled, including Mine Manager, Process Manager, Chief Mine Geologist and Senior Project Engineer.

El Gallo Phase 1 is expected to produce 10,000 ounces of gold during the second half of this year and continue at 30,000 of gold per year after ramp-up. Once Phase 2 construction is completed by 2014, El Gallo is forecasted to produce 5 million ounces of silver and 40,000 ounces of gold per year.

A resource update for the El Gallo Complex is expected to be released by the end of April. The resource update will include an additional 98,000 meters of diamond drilling. In 2012, a total of 55,000 meters of diamond drilling is scheduled at the El Gallo Complex. The majority of this drilling will be used to expand known resources and to identify new veins.

Drilling is underway at Los Azules undeveloped copper deposits in Argentina. Due to ground conditions and equipment problems, drilling has been slow. The focus of this year's drilling program is to target a geophysical anomaly located 250 meters west of the known resource, where the initial hole in the area drilled during the 2011 drill season returned 0.50% copper over 269 meters, including 0.95% copper over 45 meters. The initially anticipated program for 2012 was to complete 8,000 meters. To date, however, only 1,700 meters have been completed. The company does not anticipate meeting the planned meters during this field season.

In order to overcome the conditions present at Los Azules, the company has been in contact with a number of firms that supply larger drill rigs, capable of reaching Los Azules' target depths. Due to the winter season (May-November), these firms will not begin drilling until the end of the year.

During the fourth quarter of 2011, a total of 8,800 meters of core drilling was completed on two of McEwen Mining's 100% owned exploration properties in Santa Cruz province, Argentina. These properties are not part of the 100% owned claim package adjacent to the San JosÄ mine. Despite attractive surface samples, encouraging results were not encountered with this drilling.

The company's address is 181 Bay Street, Suite 4750, Toronto, ON M5J 2T3, email: [email protected].