The El Gallo Complex is located in Mexico’s Sinaloa State, along the foothills of the Sierra Madres. McEwen Mining announced the initial discovery holes from the El Gallo silver/gold discovery in November 2008. The complex includes the El Gallo and Palmarito silver deposits and the Magistral gold deposit, located within a 13 km (8 mile) radius.
El Gallo Mine: The El Gallo Mine achieved first gold pour in September 2012 and commercial production in January 2013. In 2015 the mine had another record production of 63,366 gold equivalent ounces, 64% higher than the previous year. Full year guidance for El Gallo Mine in 2016 is of 55,000 gold equivalent ounces (estimated at 75:1 gold-to-silver ratio).
El Gallo Mine Key Operational Facts
||Sinaloa State, Mexico
||350 (including contractors)
|Estimated Mine Life
||Crushing and heap leach
||4,500 tonnes per day
||62,967 gold oz & 29,917 silver oz
El Gallo Silver: The El Gallo Silver project is located within 7 kilometers from the producing El Gallo Mine. According to the last feasibility study, the project is designed to produce an average of 95,000 gold equivalent ounces per year (5.2 million ounces of silver and 6,100 ounces of gold) at an approximate cash cost of $750 per gold equivalent ounce (including all pre-strip and Mexican royalties). All-in sustaining costs have been estimated at approximately $800 per gold equivalent ounce (including an estimated $5 million per year on exploration). Gold equivalent ounces have been calculated by converting silver into gold using a 60:1 exchange ratio.
The El Gallo Silver project is fully permitted and ready to build. The updated feasibility study will examine the potential for utilizing used equipment and a different processing technique that increases recoveries while reducing retention times, consumables and the number of tanks. We are targeting reduction of capital expenditures, down from the $180 million anticipated by the 2012 feasibility study.
During the second quarter of 2016 we completed a positive internal
economic scoping study on a new development plan for the El Gallo Silver
project. Given prevailing silver prices,
we are undertaking a new feasibility study on the project, which is expected to
be completed later in 2016.
Current resources for the El Gallo Complex total 428.4 thousand ounces of gold in the measured and indicated categories and 70.2 thousand ounces of gold in the inferred. Silver resources total 64.8 million ounces in the measured and indicated categories and 14.5 million ounces in the inferred.
The El Gallo information on this page was derived from:
(1) news release titled “McEwen Mining Reports 2015 Full Year and Q4 Results", released on March 11, 2016 by McEwen Mining Inc. To access the news release click here.
(2) news release titled “McEwen Mining 2014 Operating & Financial Results", released on March 9, 2015 by McEwen Mining Inc. To access the news release click here.
(3) news release titled “McEwen Mining Q2 2016 Operating & Financial Results", released on August 4, 2016 by McEwen Mining Inc. To access the news release click here.
(4) technical report titled "Resource Estimate for the El Gallo Complex, Sinaloa State, Mexico" dated August 30, 2013 with an effective date of June 30, 2013, prepared by John Read, C.P.G., and Luke Willis, P. Geo. Both Mr. Read and Mr. Willis are not considered independent of the Company as defined in Section 1.5 of NI 43-101. To access the report click here.
McEwen Mining reports its resource estimates in accordance with standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in Canadian National Instrument 43-101 ("NI 43-101"). These standards are different from the standards generally permitted in reports filed with the SEC. Under NI 43-101, McEwen Mining reports measured, indicated and inferred resources, measurements which are generally not permitted in filings made with the SEC. According to Canadian NI 43-101 criteria, the estimation of measured resources and indicated resources involve greater uncertainty as to their economic feasibility than the estimation of proven and probable reserves. Under SEC Industry Guide 7 criteria, measured, indicated and inferred resources are considered Mineralized Material. The SEC considers that in addition to greater uncertainty as to the economic feasibility of Mineralized Material compared to proven and probable reserves, there is also greater uncertainty as to the existence of Mineralized Material. U.S. investors are cautioned not to assume that measured or indicated resources will be converted into economically mineable reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources.
Mineral resources which are not mineral reserves do not have demonstrated economic viability.