The Gold Bar Project is located within the Battle Mountain-Eureka-Cortez gold trend of Eureka County, Central Nevada. The property has seen historic mining from 1990 to 1994 by Atlas Precious Metals Inc. The nearest mines are Waterton Global’s Ruby Hill Mine at approximately 25 miles to the Southeast and Barrick’s Cortez Mine at approximately 35 miles to the Northwest. In 2015 the Cortez Mine produced 999,000 ounces of gold at all-in sustaining costs of $603 per ounce.
The Project is located on both patented lands and public lands managed by the Bureau of Land Management (BLM) Battle Mountain Field Office. The BLM and the Nevada Division of Environmental Protection will be the primary regulatory agencies responsible for ensuring environmental protection as the Gold Bar Project progresses through permitting and approval processes.
The Project was secured with approval from the Nevada Division of Water Resources for adequate water rights necessary to conduct mining activities. The approved water rights will be sufficient for life-of-mine operations.
The Plan of Operations submitted by the Company was assessed complete and the Bureau of Land Management (BLM) has determined that an Environmental Impact Statement (EIS) is necessary to fulfill the requirements under the National Environmental Protection Act. Upon completion of the environmental analysis the BLM will be able to proceed with the approval determination of the Plan of Operations. Stantec Consulting Services based in Reno, Nevada is the third-party contractor that will assist the BLM in the preparation of an EIS for the Gold Bar Project.
During 2015 $1.3 million were spent at the Gold Bar Project, primarily for the advancement and completion of the EIS, as well as an infill drill program of approximately 13,300 ft (4,000 m). The drill program was designed to increase the resource confidence level by converting certain portions of the pit resources from inferred to measured and indicated categories, consequently helping to drive stronger mine economics for the Mineral Resource Estimate and Feasibility Study released in 2015.
The scope of the feasibility study is a conventional open pit mine with oxide gold heap leach recovery circuit, with key estimates including initial capital of $60 million; after-tax internal rate of return of 20% at $1,150/oz gold; an average annual production of 65,000 ounces; and an estimated cash cost of $728 per ounce. The complete report was filed on December 4, 2015 on the Company's profile on SEDAR.
McEwen Mining continues to advance the permitting process for construction and production at Gold Bar. Formal notice from the BLM states that our Record of Decision for the Project is expected in January, 2017. All other applicable State and Local permits are expected to be also acquired in this timeframe. Once received, the Company can begin mine construction, which is anticipated to take approximately 10-12 months to complete.
Gold Bar development activities are to accelerate in areas such as final design engineering for the process plant and conveyor stacker system necessary for State and Federal permit documents. The 2016 budget for Gold Bar development is $3.5 million.
In January 2016 McEwen Mining acquired the Afgan-Kobeh property, which consists of 109 mining claims located approximately 3 miles (5 km) from the Gold Bar Project. Afgan-Kobeh hosts a near surface, oxide gold resource, having an immediate exploration potential with several historical higher-grade drill intersections open laterally and at depth. The Company plans to conduct a drill program beginning in May 2016, to test the property’s exploration potential with a budget of $1.1 million for a total of 16,000 ft (4,900 m) of drilling. The objective is to increase the known mineralization and further to develop Afgan-Kobeh into a satellite resource that can contribute to the future production from Gold Bar.
Gold Bar technical information on this page was derived from:
(1) the technical report titled “NI 43-101 Technical Report Gold Bar Project Feasibility Study, Eureka County, Nevada” dated December 03, 2015 with an effective date of September 19, 2015, prepared by Breese Burnley, PE., Kent Hartley, PE., Brooke Miller, CPG., Jay Pennington, CPG., Daniel Sepulveda, SME-RM., Justin Smith, SME-RM, PE., Mark Willow, SME-RM, CEM,, all of whom are qualified persons and all of whom are independent of McEwen Mining, each as defined by NI 43-101. To access the report click here.
(2) A news release titled "McEwen Mining Q3 Operating & Financials Results" released on November 10, 2014 by McEwen Mining Inc. To access the news release click here.
(3) A news release titled "McEwen Mining Reports 2015 First Quarter Operating & Financial Results" released on May 11, 2015 by McEwen Mining Inc. To access the news release click here. and
(4) A news release titled "McEwen Mining Announces Positive Feasibility Study for Gold Bar Project, Nevada" released on October 21, 2015 by McEwen Mining Inc. To access the news release click here.
(5) A news release titled "McEwen Mining Acquires Property in Nevada" released on February 24, 2016 by McEwen Mining Inc. To access the news release click here.
(6) A 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.
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.