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MUX

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Gold Bar

About Gold Bar

Located in Eureka County, Central Nevada

The upcoming Gold Bar mine is located in the southern Roberts Mountains of the Battle Mountain-Eureka-Cortez gold trend in Eureka County, Central Nevada.

Within the Gold Bar property, the Gold Pick, Gold Ridge and Cabin Creek gold deposits have been included in McEwen Mining's plans of open pit operations, with Gold Bar South now also considered for addition to the mining plan. Historical production in the area from 1991 to 1994 includes 134,000 gold ounces from Gold Pick and Gold Ridge at an average mining grade of 0.074 ounces per ton (2.5 grams per tonne).

25 miles southeast of the Gold Bar property is Waterton Global’s Ruby Hill Mine and 25 miles north and northwest is the Barrick Nevada operation, with a 2018 cumulative production of 2.1 million ounces of gold from its Cortez and Goldstrike mines.

About Diagram About Diagram
Gold pile

 

MEASURED & INDICATED

819,000 OZ AU

INFERRED

201,000 OZ AU

As of Dec 31, 2018 (see press release dated Feb 21, 2019).

Overview

The Gold Bar property is located on patented lands and public lands managed by the Bureau of Land Management (BLM) Battle Mountain Field Office. Since 2013 McEwen Mining has been through an ongoing pursuit to build the Gold Bar mine. During this time, the Company has overcome many challenges involved in bringing a new mining project to fruition. A signed Record of Decision on the Final Environmental Impact Statement published by BLM in November 2017 marked the completion of the National Environmental Protection Act process. Gold Bar is the first new gold mine in Nevada to gain permit approval in several years.

In January 2016 McEwen Mining acquired Gold Bar South, a property consisting of 109 mining claims located approximately 3 miles (5 km) from the Gold Bar Project, hosting a near surface, oxide gold resource and with immediate exploration potential laterally and at depth, based on several historical higher-grade drill intersections. Gold Bar South is seen as a satellite resource that can contribute to future Gold Bar mine production.

During the mine permitting years, exploration at Gold Bar has been limited. After obtaining the permit approval in late 2017, a property-wide exploration program was started, with the objective to extend the life of the mine by expanding the mineral inventory surrounding the planned open pits and testing new targets.

Exploration delivered encouraging results, through initial drilling focused on three areas: northwest of the planned Gold Pick open pit, northwest of the planned Gold Ridge open pit, and in-between Gold Pick and Gold Ridge. A new shallow oxide zone of mineralization has been identified in Hole GB257, which returned 0.040 opt (1.4 gpt) gold over 55 ft (16.8 m) starting at a depth of 30 ft (9 m). Holes that encountered significant mineralization had a weighted average grade and thickness of 0.030 opt (1 gpt) gold over 50 ft (15.2 m), comparable to the average grade of the deposit (click here for a table summarizing the new drilling results).

In February 2018 we announced an updated feasibility study for Gold Bar (click here for the press release), prepared in accordance with the requirements of the Canadian National Instrument 43-101 “Standards of Disclosure for Mineral Projects”. Key changes to the implementation strategy of the Gold Bar mine, such as the addition of a crushing, conveying and agglomeration plant and changes in heap leach pad construction, were made with the goal of reducing overall project risk, while maintaining the highest capital efficiency. The resulting increase in capital costs over the previous estimate was offset by a 20% increase in total gold production.

Our $5 million exploration program for 2018 resulted in an increase in the gold reserves of 8%, which extended the mine’s estimated life from 6.3 years to 7.4 years. It is expected that a portion of the resources at Gold Bar South will be converted to reserves once the permits for development are in place, which would further extend the mine’s life. (see press release from February 21, 2019 for updated mineral resource and reserve estimates).

The Company's 2019 exploration budget for the Gold Bar property is $5 million. The exploration drilling program will target both near surface and deep Carlin-type mineralization.

By the end of 2018 we had invested $72 million in constructing the mine, approximately 89% of the total construction budget of $81 million, the balance of which will be spent in Q1 2019. Gold Bar's production guidance is 55,000 gold ounces at cash costs and all-in sustaining costs per ounce of $930 and $975, respectively. The first gold ingot, weighing 390 ounces was poured on February 16, 2019. Commercial production is marked by the mine’s systems reaching a steady state. The recent heavy snowfall in the area has impacted our operating activities, delaying the ramp-up of the crushing plant. As a consequence, we expect to achieve commercial production at Gold Bar in Q2 2019.

Highlights
of the
Feb 2018
Feasibility
Study

The updated feasibility study, "Gold Bar Project - Form 43-101F1 Technical Report Feasibility Study, Eureka County, Nevada" is available here to download.

Oxide ore will be mined from three open pits, Gold Pick, Gold Ridge Cabin Creek, transported, crushed, screened, conveyor-stacked on a heap leach pad, agglomerated and processed by an ADR carbon plant.

Capex $81 million
Pay-Back Period 3 years @ $1,250/oz gold, 2.5 years @ $1,350/oz gold
After-Tax IRR 23% @ $1,250/oz gold, 32% @ $1,350/oz gold
After-Tax NPV-5% $54 million @ $1,250/oz gold, $87 million @ $1,350/oz gold
Production Rate 8,000 tons ore/ day
Production Profile 62,800 oz gold/ year
Costs per Ounce $770/oz Cash Cost, $843/oz All-in Sustaining Cost
Life of Mine Production 16.5 M tons @ 1.0 gpt for 397,700 oz gold*

*Based on the Dec 31, 2018 reserve estimate update, the Life of Mine is now extended to 7.4 years.
BASE CASE
($1,250 / oz gold)
UPSIDE CASE
($1,350 / oz gold)
IRR (%) 23 32
NPV @ 5% Discount ($ millions) 54 87
Average Annual Cash Flow ($ millions) 21 27
Average Operating Margin Per Ounce ($) 364 457
Payback Period (years) 3.1 2.5

The Feasibility Study's base case uses a gold price of $1,250 per ounce and generates a Life-of-Mine (LoM) after-tax free cash flow of $150 million, an internal rate of return (IRR) of 23%, an after-tax net present value (NPV-5%) of $54 million, an average annual after-tax cash flow from operations of $21 million per year, an average operating margin per ounce of $364 and a payback period of 3.1 years.

The results of the study are disclosed on an after-tax basis.