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 form 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.
Phase 1: El Gallo Phase I achieved its first gold pour in September 2012. Commercial production was accomplished on January 1, 2013. Production is expected to average about 30,000 ounces of gold per year at a cost of $800 per ounce.
On January 1st, 2013, El Gallo 1 declared commercial production. In Q1 the mine produced 6,673 gold ounces and 5,640 silver ounces, representing 6,781 gold equivalent ounces. The mine remains on track to produce 27,300 gold equivalent ounces in 2013.
Gold equivalent cash costs equaled $742 per ounce. Costs were lower than estimated and the Company is lowering its expected costs at El Gallo from $1,135-$1,235 to $750-$850 per ounce for 2013.
All-in sustaining costs totaled $1,483 per gold equivalent ounce. This is higher for several reasons. First, pre-stripping was ahead of schedule. A total of $2.1 million (which added $260 per ounce) of additional pre-strip was completed. The strip ratio for the remainder of 2013 is expected to be less than Q1. Second, there was more exploration drilling than anticipated. Approximately $0.8 million (which added $100 per ounce) in additional expenses were incurred due to the Central discovery. The Company believes Central has the potential to increase the size of the Phase 1 mine life.
Key Operational Facts (Phase 1)
||Sinaloa State, Mexico
||350 (including contractors)
|Estimated Mine Life
||Crushing and heap leach
||3000 tonnes per day
|2013 Production Estimate
||27,310 gold oz
A feasibility study was completed in September 2012. Phase 2 is estimated to contribute an additional 105,000 ounces of gold equivalent for a total of 135,000 ounces of gold equivalent per year. The Company estimates a $600 per ounce cash cost with the start date of 2014. The Capex for Phase 2 is approximately $180 Million.
Current resources for the complex total 566,508 ounces of gold in the measured and indicated categories and 271,081 ounces of gold in the inferred. Silver resources total 53.1 million ounces in the measured and indicated categories and 31.0 million ounces in the inferred. Current reserves for the complex total 38,176,000 ounces of silver and 46,102 ounces of gold in the proven and probable categories.
The El Gallo information on this page was derived from the news release titled “McEwen Mining Provides Q1 2013 Operational And Development Update” released on May 9, 2013 by McEwen Mining Inc. To access the news release click here.
The El Gallo technical information on this page was derived from a report titled "El Gallo Complex Phase 2 Project, NI 43-101 Technical Report Feasibility Study, Mocorito Municipality, Sinaloa, Mexico" with an effective date of September 10, 2012. The report was prepared by Stanley Timler, P.E., John Read, C.P.G., Michael Hester, FAusIMM, Dawn Garcia, P.G., C.P.G., Richard Kehmeier C.P.G., Brian Hartman, P.Geo, Aaron McMahon, P.G. all of whom, but John Read, are considered independent of the Company as defined in Section 1.5 of NI 43-101. To access the report click here.
All resource and reserve estimates reported by McEwen Mining Inc. are calculated in accordance with 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral resources which are not mineral reserves do not have demonstrated economic viability.