Reports Q2 Production Results, Cash and Bullion Increase to $57 Million
Toronto, July 26, 2016 AEST (ABN Newswire) - McEwen Mining Inc. (
TSE:MUX) (NYSE:MUX) is pleased to announce that total production for the second quarter ("Q2") was 39,555 gold equivalent ounces using a gold to silver ratio of 75:1, or 27,888 gold ounces and 875,006 silver ounces. Production is on target to achieve our 2016 guidance of 144,000 gold equivalent ounces, or 99,500 gold ounces and 3,337,000 silver ounces.
Strong Balance Sheet
We have cash and bullion of approximately $57 million, and remain debt free. Our balance sheet continues to strengthen with the higher gold and silver prices. This positive impact is reflected in our net sales, our bullion inventory and increased dividends received from the San José Mine. During Q2, we purchased for $5.25 million the existing NSR royalty on our El Gallo property, which includes both the El Gallo Mine and our permitted silver project. In addition, we currently hold in excess of $4 million in marketable securities as investments.
"We have strived to ensure that our share owners enjoy the full benefit of higher gold, silver and copper prices. We have not sold any royalties or metal streams and we do not hedge our precious metal sales. I am pleased with our progress of building a strong balance sheet, which will allow us to fund the future development of our Gold Bar mine and El Gallo Silver mine with reduced financing requirements," stated Rob McEwen, Chairman and Chief Owner.
El Gallo Mine, Mexico (100%)
The El Gallo Mine continued to deliver solid results in Q2, producing 15,640 gold equivalent ounces, compared to 17,325 gold equivalent ounces during the same period in 2015. Production in Q2 was lower than the prior quarter due to lower ore grades, as we previously forecast (2.3 gpt in Q2 2016 vs. 3.6 gpt in Q1 2016). Our full year guidance for El Gallo remains 55,000 gold equivalent ounces; as such, the rate of production will be reduced in the second half of the year. The 2016 exploration budget for Mexico is $4 million, focusing on drilling and ground geophysics on several priority targets.
San José Mine, Argentina (49%)
The San José Mine increased production 10% quarter-over-quarter. Our attributable production from San José in Q2 was 12,352 gold ounces and 867,191 silver ounces, for a total of 23,915 gold equivalent ounces. Full year production guidance for San José in 2016 is 45,000 gold ounces and 3.3 million silver ounces, for a total of 89,000 gold equivalent ounces attributable to us. The 2016 exploration budget at San José on a 100% basis has been increased to $6.5 million.
Redemption of Exchangeable Shares
At our Annual Meeting held on June 6, 2016 shareholders of the outstanding shares of McEwen Mining - Minera Andes Acquisition Corp. (TSE:MAQ) (the "Exchangeable Shares") voted to allow the early redemption of their shares. On August 22, 2016 we will cause each remaining Exchangeable Share to be redeemed in exchange for one common share of McEwen Mining Inc. Notice will be mailed to holders of Exchangeable Shares, and copies of these documents will be filed on SEDAR at www.sedar.com. Holders of Exchangeable Shares may continue to exercise their normal retraction rights at any time before August 22, 2016.
Financial Results
Operating costs for the quarter ended June 30, 2016 will be released with our Quarterly Financial Statements in early August.
About McEwen Mining Inc
McEwen Mining (NYSE:MUX) (TSE:MUX) is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. McEwen Mining also holds a 48.3% interest in McEwen Copper, which is developing the large, advanced-stage Los Azules copper project in Argentina. The Company's goal is to improve the productivity and life of its assets with the objective of increasing the share price and providing a yield. Rob McEwen, Chairman and Chief Owner, has a personal investment in the Company of US$225 million.
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