McEwen shares up on Black Fox update

Successful exploration at the Stock East and West areas will provide additional feed for the Fox complex in northern Ontario. Credit: McEwen Mining

McEwen Mining (NYSE: MUX) (TSX: MUX) has reported progress with the turnaround at its Black Fox mine, in Timmins, Canada.

Consultants are working on a preliminary economic assessment to expand production from the current short mine life producing 30 000 oz/y to 40 000 oz/y, to a ten-year mine life producing 100 000 oz/y to 150 000 oz/y.

“Early results are encouraging,” the company said on Friday in a progress update.

The Fox Complex has a combined resource base of 3 million oz of gold.

Shares of McEwen Mining rose 19% by 2 p.m. in New York

“The turnaround at the Black Fox Mine is progressing, with development of the underground access to the Froome deposit ahead of schedule. The first ore from Froome is planned to be delivered to the mill later this quarter and commercial production is expected to begin in Q4 of this year,” the company said in a press release.

Underground drilling at the Black Fox Mine returned encouraging high-grade intercepts, including 64.7 g/t gold over 2.0 m core length from hole 300-F892-03, and 50.8 g/t gold over 5.6 m core length from hole 460-L249-02.

The company also updated resource and reserve numbers for its Gold Bar mine in Nevada. As a result of a 16% overall reduction in estimated reserves, an updated Feasibility Study has been completed and the report will be published by February 23rd.

The San José mine in Argentina, which is operated by our joint venture partner Hochschild Mining, has resumed production after being temporarily closed during Q4 2020 due to government-imposed quarantine measures.

“We are pleased to report that we have just received our first dividend for the year from our 49% interest in the San José mine,” McEwen said in a press release.

On January 20th, Hochschild released exploration drilling results from San José including: 1.3 m @ 13.8 g/tAu and 3,149 g/tAg (SJD-2188, Ramal HVNX vein), and 1.6 m @ 5.6 g/t Au and 648 g/tAg (SJD-2210, Isabel vein).

At Los Azules copper project, the company expects to provide an update on the construction of a new access road to the project in the coming months.

The Fenix Feasibility study, that envisions a gold and silver mine with a 9.5-year life in Mexico, will be published by February 15th.

McEwen reported last month that its production for the full year of 2020 was 92,100 gold ounces and 2.02 million silver ounces, or 115,600 gold-equivalent ounces (GEOs). This represents a decline of 33% from the 174,400 GEOs produced in 2019.

Shares of McEwen Mining rose 19% by 2 p.m. in New York. The company’s market capitalization stands at $614 million.

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