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Gold Bar (Development)

Highlights of the Pre-feasibility Study

(All amounts in US dollars)

  • Average annual production of approximately 50,000 ounces of gold over an 8-year mine life (total 397,000 ounces), at a cash cost of $700 per ounce (oz).
  • Open-pit mine with conventional oxide heap leach processing. Projected gold recovery of 82% after primary crushing to 5 centimeters (2 inches) and a 90-day leach cycle.
  • Estimated initial capital expenditures of $53.1 million and sustaining capital of $39.1 million, for total life-of-mine (LoM) capital expenditures of $92.2 million. Pay-back period of 2.1 years at LoM average $1,300 per oz gold, or 1.7 years based on the spot gold price ($1,700 per oz).
  • After-tax Net Present Value (NPV) of $45.1 million at $1,300 per oz gold (LoM average) and 8% discount rate, giving an Internal Rate of Return (IRR) of 34.4%. Based on today’s spot gold price ($1,700 per oz) the after-tax NPV and IRR increase to $98.3 million and 53% respectively.

PFS Summary

Mine Life 8 years
Production Profile 50,000 ounces of gold / year
Cash Cost $665 per ounce
Capex $55 million
NPV $109.1 million

Financial Analysis

The PFS calculates a Base Case (LoM average gold price of $1,300 per ounce) after-tax NPV of $45.1 million, an IRR of 34.4%, and average after-tax cash flow from operations of $19.4 million per year.

The financial metrics for the project are stated both pre-tax and after-tax. McEwen Mining has included pre-tax metrics for comparability with our peers, many of which have published preliminary economic studies on a pre-tax basis prior to recent NI 43-101 changes. Economic sensitivities at different metal prices and discount rates are calculated as follows:

After Income Tax
(Federal 35%, State 5%):
Base Case
(AvgLoM $1,300 oz gold)
Spot Case
($1,700 oz gold)
IRR (%) 34.4 53.3
NPV 0% Discount ($ millions) 93.2 189.5
NPV 8% Discount ($ millions) 45.1 98.3
Average Annual Cash Flow ($ millions) 19.4 31.2
Average Operating Margin Per Ounce ($) 568 941
Payback Period (years) 2.1 1.7
Before Income Tax: Base Case
(AvgLoM $1,300 oz gold)
Spot Case
($1,700 oz gold)
IRR (%) 40.1 63.7
NPV 0% Discount ($ millions) 130.7 276.3
NPV 8% Discount ($ millions) 64.2 144.6
Average Annual Cash Flow ($ millions) 23.8 41.7
Average Operating Margin Per Ounce ($) 568 941
Payback Period (years) 2.0 1.6


Capital costs for the PFS include all activities required prior to and during development of the mine. Initial capital is estimated at $53.1 million including $7.2 million (16%) for contingencies. Additional capital expenses such as a heap leach expansion pad, reclamation and closure obligations bring the total life-of-mine capital required to $92.2 million including $13.5 million (17%) for contingencies. The PFS assumes that a contract miner will be employed to operate the mining fleet, and that new capital equipment will be purchased for the operation. Capital costs are summarized as follows:

  Initial Capital
($ millions)
Heap Expansion
(Year 3) ($ millions)
Reclamation and Closure
($ millions)
Capitalized Pre-Stripping 16.3    
Access Roads 1.2    
Contractor Mobilization 0.5    
Mine Contingency (15%) 2.7    
Crushing & Pad Equipment 4.5    
Process Plant 8.7 0.3  
Mobile Equipment 0.9    
Process Contingency (15%) 2.1    
Leach Pads      
Mobilization, Administration, EPCM 1.5 1.3  
Heap Leach Pads 4.4 5.1  
Process Water Ponds 1.1    
Diversion Channels 0.1    
Miscellaneous 0.2    
Leach Pad Contingency (15%) 1.1 1.0  
Owner Costs      
Communication 0.2    
Mobile Equipment 1.1 0.5  
Buildings 1.3    
Power and Water 2.4    
EPCM 0.7    
Consumables Inventory 0.1    
Pre Production Activities 1.5    
Reclamation     25.8
Owner Costs Contingency (20%) 1.3   5.1
Capital Costs
(Without Contingency)
45.9 7.4 25.8
Contingency 7.2 1.1 5.2
Total Capital Cost 53.1 8.5 30.9

Operating Costs

Operating costs per ore tonne processed and per payable ounce (after refining) are as follows:

  Cost per ore tonne processed Cost per payable ounce produced
Mining $11.20 $425.95
Processing $6.22 $236.60
G&A $0.96 $36.48
Total Operating Costs $18.38 $699.03

Mining and Processing

The PFS evaluates the use of open pit mining and heap leach processing of oxide material at a rate of approximately 5,550 tonnes per day. Processing will consist of primary crushing to a size of 5 centimetres (cm) or 2 inches with agglomeration applied as required. Sodium cyanide and cement consumption are expected to be 0.25 kilograms (kg) per tonne (0.5 pounds (lbs) per ton) and 2.5 kg/tonne (5 lbs/ton) respectively. Over the mine life, production will total 15.1 million tonnes of ore at 1.0 gram per tonne (gpt) gold or 0.03 ounces per ton (opt) gold for total recoverable gold of 397,000 ounces (oz). The proposed production schedule is as follows:

Year Oxide Heap Leach Waste Tonnes (millions) Strip Ratio
Ore Tonnes (millions) Gold Grade (gpt) Contained Gold (oz) Recovered Gold (oz)
0         8.0 (Pre-strip)  
1 2.0 1.02 65,290 42,830 9.7 4.8
2 2.0 0.99 63,520 52,380 9.6 4.8
3 2.0 1.13 72,750 58,140 8.9 4.4
4 2.0 0.94 60,380 51,540 9.3 4.7
5 2.0 0.94 60,440 49,550 9.6 4.8
6 2.0 1.06 67,980 54,510 7.8 3.9
7 2.0 0.91 58,600 49,590 5.9 3.0
8 1.1 1.02 35,420 32,850 0.8 0.7
9       5,810    
LoM 15.1 1.00 484,380 397,190 61.7 4.7


The Gold Bar project, in Eureka County, Nevada, is located on public lands managed by the Bureau of Land Management (BLM) Battle Mountain Field Office, and on patented lands. The BLM and the Nevada Division of Environmental Protection (NDEP) will be the primary regulatory agencies responsible for ensuring environmental protection as the Gold Bar project progresses through approval and the final permitting process. McEwen Mining believes that both permitting processes (Federal and State) can be accelerated by completing certain activities concurrently when appropriate. The Gold Bar project will also require an environmental review pursuant to the National Environmental Policy Act (NEPA).

McEwen Mining believes that the level of detail in the PFS is sufficient to make a positive production decision without a full feasibility study being completed. The intention is therefore to proceed directly to the permitting phase and move towards productions as quickly as possible.

Gold Bar technical information on this page was derived from the technical report titled “NI 43-101 Technical Report on Resources and Reserves Gold Bar Project, Eureka County, Nevada” dated February 24, 2012 with an effective date of November 28, 2011, prepared by J. Pennington, C.P.G., MSc., Frank Daviess, MAusIMM, Registered SME, Eric Olin,, MBA, RM-SME, MSc, Herb Osborn, P.E, Joanna Poeck, MMSA, B. Eng., Kent Hartley P.E. Mining, SME, BSc, Mike Levy, P.E, P.G, MSc., Evan Nikirk, P. E., Mark Allan Willow, M.Sc, C.E.M. and Neal Rigby, CEng, MIMMM, PhD, all of whom are qualified persons and all of whom are independent of McEwen Mining, each asdefined by NI 43-101. To access the report click here.

Cautionary Notes
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.

This website contains certain forward-looking statements and information and investors are encouraged to review our "Cautionary Note Regarding Forward Looking Statement". 


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