NYSE:
MUX

$2.03
+0.08 +4.1% Volume: 2,398,834 November 17, 2017
TSX:
MUX

$2.59
+0.12 +4.86% Volume: 158,531 November 17, 2017
Gold
$1,294.35
+0.00 +0% Volume: November 19, 2017
Silver
$17.06
+0.11 +0.63% Volume: 1 November 16, 2017
Copper
$3.04
-0.01 -0.18% Volume: 338 November 16, 2017

El Gallo MINE

About El Gallo MinE

Located in Mexico

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.

The El Gallo Mine achieved first gold pour in September 2012 and commercial production in January 2013. In 2016 the mine produced 55,265 gold equivalent ounces (75:1 gold-to-silver ratio).

About Diagram About Diagram

Production 2016

2016 Production

Estimates Silver
54,929
Au Oz
Estimates Gold
25,336
Ag Oz
Big Land
Package,
Exploration
Potential

EL GALLO MINE
KEY
OPERATIONAL
FACTS

Location Sinaloa State, Mexico
Workforce 350 (including contractors)
Estimated Mine Life +2.5 Years
Mining Type Open pit
Processing Method Crushing and heap leach
Crushing/Processing Capacity 4,500 tonnes per day
2017 Estimated Production 47,000 gold equivalent oz

Production

In 2016 we produced 54,929 gold ounces and 25,336 silver ounces. At a gold-to-silver ratio of 75:1, it equates to 55,266 gold equivalent ounces, in line with our guidance of 55,000 gold equivalent ounces for the year. The cost guidance per gold equivalent ounce for 2016 was $550 for total cash cost and $620 for all-in sustaining cost.

For 2017 our production guidance for El Gallo is 47,000 gold equivalent ounces. The gold equivalence is estimated at a 75:1 gold-to-silver ratio for both 2016 and 2017. 2017 guidance for costs per gold equivalent ounce is $760 total cash cost and $900 all-in sustaining cost.


Full Year 2016 FULL YEAR 2015 FULL YEAR 2014
Average gold grade mined 1.32 3.37 1.40
Ore production (thousand tonnes) 1,048 1,209 1,271
Average grade gold produced (gpt) 2.14 3.41 1.58
Gold produced (thousand oz) 54.9 63.0 38.2
Silver produced (thousand oz) 25.3 29.9 25.9
Gold equivalent produced (thousand ounces) 55.3 63.4 38.6
Gold sold (thousand ounces) 48.7 62.2 35.6
Silver sold (thousand ounces) 17.6 35.9 19.4
 Gold equivalent sold (thousand ounces)48.962.735.9
Gold equivalent total cash cost (US$) 524 440 875
Gold equivalent all-in sustaining cash cost (US$) 610 581 1,194
Gold pille

RESOURCES
& RESERVES

MEASURED & INDICATED

266,700 OZ

INFERRED

3,700 OZ

EL GALLO
COMPLEX

DISTRICT MODEL

New deposits of the same low sulfidation, epithermal style are most likely to be found where the potassic alteration occurs in favourable andesite.

District Model Figure 1

McEwen Mining recently put together a new district-scale prospecting model, which largely ties together all the known deposits in the area.

The deposits at Palmarito, El Gallo Mine and El Gallo Silver are characterized by being proximal to a large, outcropping granodiorite intrusive body, shown in light pink in the geological map of Figure 1. From an airborne geophysical study done in 2011, we know that this intrusion is partly surrounded by areas of variably intense potassic alteration, with the more intense alteration represented in dark pink patches in Figure 1. The expectation is that the next prospective areas in the district are likely to be found in these areas of stronger potassic alteration in between the two ellipses shown on the map.

The map highlights the locations of the known resource areas at El Gallo, Palmarito and El Gallo Silver and the exploration areas of the recently acquired El Encuentro project and Texcalama to the northwest.

Outside of this area, the known Mina Grande project in the northeast is close to the same intrusive body, however in this location the intrusion is buried, but the area is still characterised by similar alteration patterns and lends itself to a high degree of prospectivity.

The mineralised bodies previously identified at the El Gallo Silver and Mina Grande areas are not the traditionally steeply dipping veins characteristic of the low-sulfidation epithermal deposits found elsewhere in Mexico, but are relatively shallow dipping (approximately 20⁰) breccia sheets. As well as the deposits being related to the intrusive body, they also show characteristics of typical IOCG (iron-oxide-copper-gold) deposits, which can be very large and very high in grade. Similarities include the very strong potassium alteration seen in the airborne radiometric surveys that is also seen in our drill cores, the fact that the principal ore mineral at the El Gallo Mine is specular hematite (an iron oxide mineral), and the fact that at El Gallo Silver and Mina Grande we see these sheet-like breccia bodies, which are relatively parallel to the underlying intrusions.

ENCUENTRO
SOUTH DRILL
RESULTS

The 2016 exploration budget for Mexico is $3 million. Exploration drilling at the El Gallo Complex has been concentrated primarily on three prospective areas; one area called Encuentro South has returned particularly encouraging results at shallow depths. Highlights are summarized on the right:

Hole ID Gold
Grade (gpt)
Intercept
Width (m)
ENX-032 9.59 9.1
including 126.50 0.5
and 2.94 38.2
including 27.30 1.2
ENX-043 7.82 5.4
including 28.70 1.1
ENX-009 16.09 2.1
ENX-041 16.27 1.9
ENX-051 1.30 19.5
and 6.13 4.8
ENX-019 1.85 15.2
including 3.99 5.0
ENX-021 1.66 12.7

Encuentro South is located 7 miles (11 km) southwest of the El Gallo Mine. The project area lies on an important 4 mile (7 km) long, regional NW-SE mineral trend that also hosts two of our other exploration targets (Las Milpas and Twin Domes). Extensive exploration along this trend has identified favorable alteration signatures and abundant anomalous gold and silver mineralization in surface rock and soil samples.

A total of 51 core holes (8,980 metres) have been drilled in the project area, with 42 of those (7,522 metres) at the Encuentro South prospect. Initial interpretations indicate that the favourable gold assays occur in at least three distinct zones that are either shallow dipping NW, or sub-vertical NS structures and are still open along strike and at depth. Mineralization has been identified from surface to a depth of 130 metres. The known length (or strike) of the zone is approximately 230 metres. For full results of the recently drilled holes at Encuentro South see Table 1 here.

Mineralization at Encuentro South is characterized primarily by structurally controlled, multi-event quartz breccias and stockwork zones hosted by propolytically altered meta-andesites. Minor silicification and hematisation alteration is also seen locally. The mineralization is considered to be of the low-sulphidation, epithermal style as seen elsewhere on the property. Very early stage test results show that the gold mineralization at Encuentro South is potentially amenable to heap leaching.

The information on this page was derived from:

(1) A presentation by Hall Stewart, Consulting Geologist at McEwen Mining’s Annual Meeting from May 31, 2016. To access the video presentation, click here.

(2) A news release titled "McEwen Mining Reports Q3 Production, Mexico Exploration Drill Results" released on October 13, 2016 by McEwen Mining. To access the news release click here.

For additional technical information on the El Gallo Complex, see a report titled "Resource Estimate for the El Gallo Complex, Sinaloa State, Mexico" with an effective date of June 30, 2013. The report was 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.

Cautionary Note

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