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McEwen Mining Announces Resource and Reserve Increases at the San Jose Mine in Argentina
TORONTO, ONTARIO--(Marketwire - March 19, 2012) - McEwen Mining Inc. (NYSE:MUX)(TSX:MUX) is pleased to announce an updated resource and reserve estimate for the San José mine (49%). The San José mine had a great 2011. Not only was it the forth-consecutive year that silver and gold resources continued to grow, but it also was the highest yearly production to date, producing 5.9 million ounces silver and 80,000 ounces gold. It is worth noting that the resource and reserve estimates were calculated using conservative metal prices of US$18 per ounce silver and US$1,080 per ounce gold. The estimates were independently audited by P&E Mining Consultants Inc.
San José Mine Resources & Reserve Highlights 2011
- Measured and Indicated silver and gold resources up 47% and 56% respectively, to 68.6 million ounces silver and 1.04 million ounces gold (100% basis).
- Measured and Indicated resource grades remain consistent with 2010 at 457 gpt silver (475 gpt silver-2010) and 6.95 gpt gold (6.80 gpt gold-2010).
- Proven and Probable silver and gold reserves up 5% and 15% respectively, to 22.3 million ounces silver and 0.344 million ounces gold (100% basis).
A major goal of the 2011 exploration program was to increase the Measured and Indicated resource categories by identifying new veins and upgrading Inferred resources. This was successfully achieved. The Measured and Indicated resources increased by 47% for silver and 56% for gold, to an estimated 4.7 million tonnes at a grade of 457 gpt silver and 6.95 gpt gold, for a total of 68.6 million ounces silver and 1.04 million ounces gold.
Last year, significant portions of the Inferred resources were upgraded to the Measured and Indicated categories. This lead to a 38% and 46% decrease of silver and gold contained in Inferred resources. Inferred resources now total 1.8 million tonnes at a grade of 384 gpt silver and 5.30 gpt gold, for a total of 22.4 million ounces silver and 0.31 million ounces gold.
DOUBLING EXPLORATION IN 2012
A total of US$14 million will be invested in exploration at the San José mine in 2012 by McEwen Mining (49%) and its joint venture partner Hochschild Mining (51%). The goal is to complete 110,600 meters of diamond drilling of which the majority will be exploration for new resources and the remainder will be for infill. This represents doubling of the exploration budget that was completed last year.
Audited San José Mineral Resource Estimates, December 31, 2011
| Category | Tonnes (1,000) |
Ag (g/t) |
Au (g/t) |
Ag (M oz) |
Au (K oz) |
| Measured | 1,155 | 560 | 8.21 | 20.80 | 305 |
| Indicated | 3,513 | 423 | 6.53 | 47.78 | 738 |
| Measured and Indicated | 4,668 | 457 | 6.95 | 68.58 | 1,043 |
| Inferred | 1,813 | 384 | 5.30 | 22.38 | 309 |
| Notes: | |
| (1) | Represents 100% of the resources. McEwen Mining Inc. has a 49% attributable interest in the San José mine. |
| (2) | Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. |
| (3) | Mineral resources are inclusive of mineral reserves. |
| (4) | The quantity and grade of reported Inferred resources are uncertain in nature and there has been insufficient exploration to classify these Inferred resources as Indicated or Measured, and it is uncertain if further exploration will result in in upgrading them to an Indicated or Measured category. |
| (5) | Mineral Resources were estimated by Hochschild Mining Ltd. using the CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions. |
| (6) | Metal prices used were and $18/oz for Ag and $1080/oz for Au. |
| (7) | Resources were defined at a cutoff grade of 206 g/t AgEq, which is equivalent to a cutoff value of $88.31 per tonne. |
Audited Mineral Reserve Estimates, December 31, 2011
| Category | Tonnes (1,000) |
Ag (g/t) |
Au (g/t) |
Ag (M oz) |
Au (K oz) |
| Proven | 805 | 475 | 6.99 | 12.29 | 181 |
| Probable | 876 | 354 | 5.79 | 9.97 | 163 |
| Proven and Probable | 1,681 | 412 | 6.36 | 22.26 | 344 |
| Notes: | ||
| (1) | Represents 100% percent of the reserves. McEwen Mining Inc. has a 49% attributable interest in the San José mine. | |
| (2) | Metal prices used were $1080/oz for Au and $18/oz for Ag (same as for resources). | |
| (3) | Reserves were defined at a cutoff $88.31/tonne, which is the same cutoff value used for resources. | |
| (4) | Average internal dilution was 7%. Average mining and geotechnical dilution was 22%. | |
| (5) | Mineral Reserves were estimated by Hochschild Mining Ltd. using the CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions. |
ABOUT McEWEN MINING ( www.mcewenmining.com )
The objective of McEwen Mining is to qualify for inclusion in the S&P 500 by 2015 by creating a high growth, low-cost, mid-tier silver producer focused in the Americas. McEwen Mining's principal assets consist of the following:
- Production: a 49% interest in Minera Santa Cruz SA, owner of the San José Silver-Gold Mine that is located near Goldcorp's Cerro Negro project in Argentina.
- Development: The El Gallo Complex in Sinaloa, Mexico (first phase of production expected mid-2012) and the Gold Bar Project in Nevada; as well as the Los Azules Copper Deposit in San Juan, Argentina.
- Exploration: The Company has a large portfolio of exploration properties in Santa Cruz province Argentina, surrounding the San José Mine and Goldcorp's Cerro Negro project in addition to significant land packages in Nevada adjoining Barrick's Cortez mine and surrounding our El Gallo Complex in Mexico.
Rob McEwen, Chairman, President and CEO, owns 25% of the outstanding shares of McEwen Mining. As of February 29, 2012 the Company had US$78.8 million in cash (including silver/gold bullion) and no bank debt.
About Minera Santa Cruz: Minera Santa Cruz SA is a joint venture owned 51% by Hochschild Mining Argentina, a wholly owned subsidiary of Hochschild Mining plc, and 49% by Minera Andes S.A., a wholly owned subsidiary of McEwen Mining. The joint venture owns and operates the San José mine.
