Gold Bar Production Ramp Up To Full Production Is Progressing

TORONTO - McEwen Mining Inc. reported consolidated production for Q2 2019 of 36,216 gold ounces and 850,525 silver ounces, or 45,881 gold equivalent ounces. The San José and El Gallo mines, which accounted for 62% our total gold and silver production in Q2, exceeded targets. The other two operations, the Gold Bar and Black Fox mines, performed better than in Q1, but below our forecast. Looking ahead, our production guidance for the year 2019 has been reduced by 6% for gold and is unchanged for silver. On a gold equivalent basis, silver is forecast to represent 20% of our 2019 consolidated production of 190,000 GEOs.

Rob McEwen, Chairman, said, “The big events in Q2 were achieving commercial production at Gold Bar in late May and the high-grade exploration results from the Black Fox properties. Production results in the quarter were mixed. San José and El Gallo, which accounted for 62% of our Q2 production, performed well this quarter. At Gold Bar and Black Fox, we have had our head down and were pushing hard all quarter long. While both mines delivered better production in Q2 than in Q1, we didn’t achieve our forecast numbers. As a result, we have reduced our 2019 production guidance for gold by 6%.”

Commercial production was achieved at Gold Bar on May 23, 2019. Gold Bar produced 7,940 gold ounces in Q2. The ramp-up to full production is progressing but the delays in Q1 adversely impacted our gold production in Q2 and our forecast for 2019. In essence, less ore was placed onto the heap leach pad than planned, which in turn has delayed the application of solution to the ore, and subsequently the recovery of gold. Gold production is increasing, and we expect much better performance in the second half of 2019. Ore grade and tonnage are reconciling positively to the block model, and the gold recovery curves are tracking well compared to our budget. The revised plan is to produce 15,000 gold ounces in Q3 and 17,000 gold ounces in Q4. Guidance for 2019 has been reduced from 50,000 to 42,000 gold ounces as a result of the slower than expected ramp-up.

The 2019 exploration budget for the Gold Bar property is $5 million. Drilling started mid-May with an initial focus on Gold Bar South in order to provide data necessary to advance economic studies and permitting. Our objective is to incorporate Gold Bar South into the mine plan this year and have permitting in place so that development could begin in late 2020. Starting in July, drilling will be testing the deep potential of the property for Carlin-type gold deposits.

Black Fox produced 9,420 gold ounces in Q2. Production was adversely affected by water infiltration into the mine due to an unusually heavy spring run-off. In order to protect the main infrastructure of the underground operation, the western part of the mine was allowed to flood temporarily. This action reduced production by limiting access to some areas where Q2 production was planned. As a result, production guidance for 2019 has been reduced from 50,000 to 45,000 gold ounces. The 2019 exploration budget for the Black Fox Complex is $18 million and includes surface and underground drilling. Drilling started in April and there are currently 10 surface drill rigs and one dedicated underground drill rig actively exploring on the Black Fox and Stock properties.

The San José mine is on-track to achieve our full year guidance for 2019 of 49,000 gold ounces and 3,225,000 silver ounces. Our attributable production from San José in Q2 was 13,518 gold ounces and 848,268 silver ounces, for a total of 23,158 GEOs. Based on the improved leaching performance from process plant modifications completed in Q2, the company is  increasing full year guidance for 2019 at El Gallo to 16,000 gold ounces from residual leaching. El Gallo produced 5,340 gold ounces in Q2.

The work on the Fenix Project feasibility study and permitting is progressing. The permit is expected to be approved and the feasibility study to be completed in Q3 2019.

The company’s address is 150 King Street West suite 2800, Toronto, ON M5H 1J9, (647) 258-0395, www.mcewenmining.com.