Here's an great write up by JD400, a MUX fan. Ther

Here's an great write up by JD400, a MUX fan. There should be more DD within his post than you'll ever need.

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The Golden Roads Of McEwen Mining  
by JD400 ~ MUX Enthusiast 

McEwen Mining Inc. trades on the NYSE and TSX 

I'm starting a series called the Golden Roads of McEwen Mining. 

The following is some news stories I found to compile a mosaic of information and wealth of insights into the direction of what I call mining's high tech giant of the future. From the early wilderness days we are in now to the mountains of transfiguration my goal is to unlock all resources available. In this simple task faithfully done and persisted in bringing a reward of it's own for me as I serve my fellow investor friends on this IHUB stock board. All are welcomed here and as you read this series my hope is you too will see how the pavement of success is being laid. 

McEwen Mining, the product of the January fusion of US Gold and Minera Andes, said on Thursday its San Jose mine in Argentina produced 1.45-million ounces of silver and 20 934 oz of gold in the fourth quarter. 

The TSX- and NYSE-listed firm also said it held around one-third of its $78.8-million treasury in bullion, betting that prices will rise. 

CEO Rob McEwen followed a similar practice when he headed up Canada’s Goldcorp, and repeatedly forecast that gold prices would hit $5 000/oz by the middle of the decade, and silver $200/oz. 

Last year, Canadian fund manager Eric Sprott called on silver producers to hold some of their treasuries in the metal itself. 

McEwen Mining said it expected San Jose, which US-based Hochschild Mining owns 51% of, to produce 5.7-million ounces of silver and 85 000 oz of gold in 2012. 

The company said it was on track to complete construction at its El Gallo Phase 1 project in Mexico by the middle of the year, which was set to produce 10 000 oz of gold during the second half. 
McEwen owns 25% of the company, and receives no salary. 

Rob McEwen's McEwen Mining (the product of the recent US Gold/ Mindera Andes merger) has responded to our friend Eric Sprott's call to mining companies to believe in their own products by saving in bullion rather than dollars by holding 1/3rd of its $79 million treasury in gold and silver bullion. 
McEwen, who turned Goldcorp into an amazing success using similar practices, is calling for $200 silver and $5,000 gold by 2015. 

As Sprott's plan to hold company assets in bullion rather than cash or treasuries continues to gain momentum, it will be interesting to see whether the producers can eventually withhold sufficient physical silver from the market to wrestle the control of the market from the paper markets that currently wags the dog. 

McEwen Mining, the product of the January fusion of US Gold and Minera Andes, said on Thursday its San Jose mine in Argentina produced 1.45-million ounces of silver and 20 934 oz of gold in the fourth quarter. 

The TSX- and NYSE-listed firm also said it held around one-third of its $78.8-million treasury in bullion, betting that prices will rise. CEO Rob McEwen followed a similar practice when he headed up Canada’s Goldcorp, and repeatedly forecast that gold prices would hit $5 000/oz by the middle of the decade, and silver $200/oz.  Last year, Canadian fund manager Eric Sprott called on silver producers to hold some of their treasuries in the metal itself. McEwen Mining said it expected San Jose, which US-based Hochschild Mining owns 51% of, to produce 5.7-million ounces of silver and 85 000 oz of gold in 2012. 

Anonymous said... 

Hopefully Eric is going to soon announce 'The Silver Miners and Producers Union' that all miners will have no choice but to join if they want to sell their production anywhere in the world. The union's purpose is to fix the price of silver at a much higher price much the same was as Comex fixes it lower. This will separate the paper price from the physical price. I'm suggesting that the physical price start at 100.00 and fluctuate daily as does the current spot. Anyone not joining and co-operating with this will be boycotted and any company buying product from a renegade seller will have their web sites taken down by hackers 

This stock has been exceptionally volatile relative to many other producing mining firms, and so on days where there are strong sell-offs, there can be an especially favorable opportunity to acquire this stock. It is in production, has over $78 million in current assets (including gold and silver waiting to be sold at higher prices), and most importantly, is led by Rob McEwen, the mining entrepreneur who built up Goldcorp (GG). I was buying McEwen Mining at $5 several months ago, so I clearly think this stock is going much higher. It's current price near $4 a share is simply a great discount, as far as I'm concerned. 

Right from the beginning I was impressed with this company’s strong leadership headed by Rob McEwen, who also has a 22% ownership in the company. In an interview at King World News Mr. McEwen stated that he does not take a salary as the CEO, and plans to make all his money in stock appreciation just like all other investors. 

McEwen has a long and impressive track record in the industry, and he is perhaps most known as the former Chairman and CEO of Goldcorp, which he grew from a penny stock into a major mining company that it is today. While leading Goldcorp, McEwen averaged a 31% annual return for shareholders, and grew the company’s market cap from $50 million to $8 billion. 

TNR Gold vs McEwen Mining: SEC 10-K: "The Los Azules copper project...we may lose all or part of our interest in the pr. We have the very interesting development in litigation case for Los Azules: TNR Gold vs McEwen Mining and Xstrata. McEwen Mining was very modest in litigation risk assessment before, so you can imagine our surprise - and, must be, that other shareholders involved have the same feelings - by the recent statement: McEwen Mining Inc. (MUX) 10-K filed 3/12/2012.

The Los Azules copper project is subject to ongoing legal proceedings with the potential that we may lose all or part of our interest in the project. 



Minera Andes is currently subject to ongoing litigation regarding the Los Azules Copper Project. TNR Gold Corp ("TNR Gold") and its subsidiary, Solitario Argentina S.A. ("Solitario" and together with TNR Gold, "TNR") claim that certain properties that comprise the LosAzules Copper Project were not validly transferred to Minera Andes and therefore should be returned to TNR. In the alternative, TNRclaims that even if Minera Andes validly owns the Los Azules Copper Project, TNR has a 25% back-in right to a substantial portion of theLos Azules project underlying known mineral resources that may be exercised to acquire a 25% interest in such part of the property. TNRhas also claimed damages. We estimate that the Los Azules Copper Project represents approximately 50% of the total assets acquired, not counting liabilities assumed, in the acquisition, based on our preliminary estimate of the fair value of all identifiable assets acquired and liabilities assumed. 




Minera Andes has stated that it is not able to estimate the potential financial impact of this claim. If resolved adversely to Minera Andes, this litigation could materially adversely affect the value of Minera Andes by reducing or terminating its interest in a significant portion of the Los Azules Copper Project and its ability to develop the Los Azules Copper Project. Alternatively, Minera Andes could be subject to a significant damages award. Such a result would have a significant negative impact on the value of the combined company and could have a significant impact on our stock price. In addition, on a consolidated basis we will inherit the legal liabilities and costs associated with the litigation and the claims surrounding the Los Azules Copper Project, including the risk of loss of a significant portion of the Los Azules Copper Project. See Item 3. Legal Proceedings." 



We knew that Northern Half of the Los Azules project is at stake in litigation now and TNR Gold claims that its former properties to be returned back to TNR Gold. This part can represent up to 2/3 of the Los Azules metal value - the high grade core appeared to be based on former TNR Gold properties. But now McEwen Mining is talking about the Risk to lose all Los Azules deposit?! Latest TNR Gold presentation shows Los Azules maps and cross sections with the former TNR Gold properties claimed to be return to TNR Gold now. 

TORONTO, ONTARIO--(Marketwire - March 15, 2012) - McEwen Mining Inc. (TSX:MUX)(NYSE:MUX) is pleased to provide an operational and development update for its projects in Argentina, Mexico and Nevada. 

Healthy Balance Sheet - $78.8 Million Liquid Assets - No Debt 

As of February 29, 2012, McEwen Mining had cash and liquid assets of US$78.8 million, comprised of cash of US$51.5 million, marketable securities of US$1.4 million, and silver and gold bullion at market value of US$25.9 million. The company continues to hold a significant portion of its treasury in bullion with the belief that prices will continue to rise. The company remains debt free. 

On February 24, 2012 McEwen Mining received its first dividend payment from its 49% ownership in the San Jose mine, totaling US$9.4 million. The dividend represents proceeds from the mine's operations during the Fourth Quarter. We expect dividends from the mine to continue on a quarterly basis. 

In 2012, company wide exploration and construction expenditures, including downpayments on long lead time equipment for El Gallo Phase 2, are expected to total approximately US$57.5 million. This amount will be funded with existing cash and liquid asset balances, dividends from the San Jose mine and cash flow from Phase 1 of the El Gallo Complex, which is expected to commence production during the second half of the year. 

Strong Performance - San Jose Mine, Argentina (49%) 

Final production results for the San Jose mine during the Fourth Quarter totaled 1,453,580 ounces of silver and 20,934 ounces of gold (100% basis). Cash Costs on a co-product basis during the period totaled US$13.10 per silver ounce and US$689 per gold ounce. These costs on a by-product basis (netting the revenue from gold against the cost to produce an ounce of silver) totaled negative US$1.02 per silver ounce. The average grade of ore processed during the Fourth Quarter was 412 gpt silver and 5.68 gpt gold. Estimated 2012 production is expected to total 5.7 million silver ounces and 85,000 gold ounces (100% basis). 

A new reserve-resource estimate for the San Jose mine is currently being finalized and is expected to be released shortly. The updated estimate will reflect approximately 55,000 meters of additional diamond drilling completed during 2011. In 2012, a total of 110,500 meters of diamond drilling is scheduled at the San Jose mine, of which 68,000 meters will be exploration for new resources and 42,500 will be for infill. This represents more than double of the exploration budget that was completed last year. 

New Revenue Source - El Gallo Complex, Mexico 

El Gallo Phase 1 construction is on schedule (completion expected by mid-2012) and on budget (US$15 million). To date, approximately 40% of the capital required to complete Phase 1 has been spent. Key areas of advancement include the crushing plant (50% complete), process plant (40% complete), and heap leach pad expansion (35% complete). Since December, 1.5 million tonnes of material has been mined. The majority of this material relates to pre-stripping. A total of 63,700 tonnes of material averaging 1.71 gpt gold has been stockpiled for future processing. In addition, a number of key management positions have recently been filled, including Mine Manager, Process Manager, Chief Mine Geologist and Senior Project Engineer. 

El Gallo Phase 1 is expected to produce 10,000 ounces of gold during the second half of this year and continue at 30,000 of gold per year after ramp-up. Once Phase 2 construction is completed by 2014, El Gallo is forecasted to produce 5 million ounces of silver and 40,000 ounces of gold per year. (A photo library showing bi-weekly progress can be viewed by clicking here: www.mcewenmining.com/Media-Events/Galleries/El-Gallo-photos/default.aspx .) 

A resource update for the El Gallo Complex is expected to be released by the end of April. The resource update will include an additional 98,000 meters of diamond drilling. In 2012, a total of 55,000 meters of diamond drilling is scheduled at the El Gallo Complex. The majority of this drilling will be used to expand known resources and to identify new veins. 

Gold Bar Project, Nevada 

In November 2011, the final Preliminary Feasibility Study (PFS) for the Gold Bar project was completed by SRK Consulting. Gold Bar is forecasted to produce 50,000 ounces of gold per year at a cash cost of US$665 per ounce. The Gold Bar project is located on public lands managed by the Bureau of Land Management (BLM). The BLM and the Nevada Division of Environmental Protection will be the primary regulatory agencies responsible for approving the permit to mine. Management anticipates an 18 - 36 month permitting phase followed by a 10 - 12 month construction period.

Looking to Grow - Los Azules Copper Project, Argentina 

Drilling is underway at Los Azules, one of the world's largest undeveloped copper deposits. Due to ground conditions and equipment problems, drilling has been slow. The focus of this year's drilling program is to target a geophysical anomaly located 250 meters west of the known resource, where the initial hole in the area drilled during the 2011 drill season returned 0.50% copper over 269 meters, including 0.95% copper over 45 meters (See news release dated June 27, 2011 issued by Minera Andes Inc.) The initially anticipated program for 2012 was to complete 8,000 meters. To date, however, only 1,700 meters have been completed. The company does not anticipate meeting the planned meters during this field season. 

In order to overcome the conditions present at Los Azules, the company has been in contact with a number of firms that supply larger drill rigs, capable of reaching Los Azules' target depths. Due to the winter season (May-November), these firms will not begin drilling until the end of the year. 

Looking for the Next San Jose Mine - Santa Cruz Exploration, Argentina 

During the fourth quarter of 2011, a total of 8,800 meters of core drilling was completed on two of McEwen Mining's 100% owned exploration properties in Santa Cruz province, Argentina. These properties are not part of our 100% owned claim package adjacent to the San Jose mine and Goldcorp's Cerro Negro project. Despite attractive surface samples, encouraging results were not encountered with this drilling. Drilling permits for the company's Celestina project, near Anglo Ashanti's Cerro Vanguardia mine (Annual production: 230,000 gold ounces - 0.9 million silver ounces) have been received and drilling is scheduled to commence this week. Additional drill permits, which will be used to target extensions of Goldcorp's Cerro Negro veins to the northwest, are currently being prepared and are expected to be submitted to the provincial authorities during the coming week. 

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 
Jose 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 July 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 Jose 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. 

TECHNICAL AND OPERATING INFORMATION 

This news release has been reviewed and approved by William Faust, P.E, McEwen Mining's Chief Operating Officer, who is a Qualified Person as defined by National Instrument 43-101. 

El Gallo: For additional information about the El Gallo Complex see the "Preliminary Economic Assessment for the El Gallo District, Sinaloa State Mexico" dated February 11, 2011 and prepared by Paul Gates, PE, Richard Addison, PE, Aaron McMahon, PG of Pincock Allen & Holt of Denver, Colorado ("El Gallo PEA"). All three individuals are Qualified Persons as defined by NI 43-101 and are independent of McEwen Mining as defined in Section 1.4 of NI 43-101 and Section 3.5 of Companion Policy 43-101CP. Mr. McMahon verified the mineral resource data contained in the El Gallo PEA by conducting a site visit, which included verifying drill hole locations and survey data, reviewing sampling handling, data collection procedures, partial audit of the assay database, review of the QA/QC data and analysis of core recovery and drill logs and their relations to assay values. Available on SEDAR ( www.sedar.com ). The El Gallo PEA is not a feasibility or pre-feasibility study and contains no mineral reserves. The mineral resource figures referred to in this press release and the El Gallo PEA are estimates and therefore insufficient to allow meaningful application of the technical and economic parameters to enable an evaluation of technical or economic viability and no assurances can be given that the indicated levels of gold will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the resource estimates included in this press release and the El Gallo PEA are well established, by their nature, resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such estimates are inaccurate or 

are reduced in the future, this could have a material adverse impact on the Company. In addition, the El Gallo PEA includes inferred resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the El Gallo PEA will be realized. 

The satellite gold deposits were originally planned to be mined in conjunction with the larger El Gallo silver resource. A feasibility study for the combined areas was scheduled for the end of 2011. Permitting and work related to finalizing the silver production schedule will continue, although changes to the study will be made to incorporate a phased production approach. 

There are significant risks and uncertainty associated with commencing production without a feasibility or pre-feasibility study. The area proposed for Phase 1 of El Gallo production has not been explored, developed and analyzed in sufficient detail to complete an independent feasibility or pre-feasibility study and may ultimately be determined to lack one or more geological, engineering, legal, operating, economic, social, environmental, and other relevant factors reasonably required to serve as the basis for a final decision to complete the development of all or part of the El Gallo project for mineral production. 

Gold Bar Project: For further information about the Gold Bar Project see the technical report titled "NI 43-101 Preliminary Feasibility Study of US Gold Corporation's Gold Bar Project" with an effective date of November 28, 2011, prepared by J. Pennington, Frank Daviess, Eric Olin, Herb Osborn, Joanna Poeck, Kent Hartley, Mike Levy, Evan Nikirk, Mark Willow and Neal Rigby, each a qualified person as defined under NI 43-101. Available on SEDAR ( www.sedar.com ). 

Los Azules: The June 27, 2011 Minera Andes Inc. news release referenced above was prepared by James K. Duff, then Chief Operating Officer of Minera Andes Inc. and current Consultant to the Company. Mr. Duff is a geologist and Qualified Person as defined under NI 43-101. 

San Jose Mine: Minera Santa Cruz S.A., the owner of the San Jose mine, is responsible for and has supplied to the Company all reported results from the San Jose mine. Production and cash cost information is provided by Minera Santa Cruz S.A. (MSC). The Company's joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates other than MSC do not accept responsibility for the use of the data provided or the adequacy or accuracy of this release. As the Company is not the operator of the San Jose mine, there can be no assurance that production information reported to the Company by MSC is accurate, the Company has not independently verified such information or determined that cash cost information reconciles with US GAAP and readers are therefore cautioned regarding the extent to which they should rely upon such information. 

Company is poised to become the highest yielding gold mining company in the industry. 

Rob McEwen is back on the road and talking about one of the largest Copper deposits in the world at PDAC2012 in Toronto! We are exited as well and will help to fill the gaps in this story. 


“It is an intriguing project to me because it is an order of magnitude bigger than anything that I have ever been involved with,’’ said McEwen. 

CEO Scott Baxter says Nevada has earned his loyalty. That’s where Baxter’s former company, Tone Resources, hit paydirt — not just for himself, but for Rob McEwen’s US Gold (now McEwen Mining (TSX:MUX)). McEwen acquired Tone in 2007. “I made him a huge return on his investment,” Baxter says. “And you know what? Today’s a new day, and I want to do it all over again.” 

Now the majors are looking at Sniper’s flagship Weepah Gold Property. Initial results announced March 5 coincided with PDAC and, Baxter says, “generated interest instantly on arrival.” As a result, “Three of the top 10 mining companies asked me for CAs [confidentiality agreements] specific to Weepah.” 
Located in Nevada’s Walker Lane Mineral Belt 

David R. Hembree, PGeo, Nevada Exploration Manager, a Qualified Person as defined under National Instrument 43-101, has reviewed and verified the information provided on the Taylor Project. 

Gold Standard Royalty Portfolio 2011 Fiscal Year The Company is also pleased to provide a report on its royalty portfolio for the recently completed fiscal year. The Company received advance royalty payments totalling over $850,000, as well as 9.998 troy ounces of gold, bringing the total gold held on account at Johnson Matthey to 143.072 troy ounces. 

The advance royalty payments include monies received from Midway Gold Corporation (tsx.v:MDW) for the Pan and Gold Rock properties, and Barrick Gold Corporation CA:ABX -1.17% for the Duke-Trapper-Royale area of the Bald Mountain property. The Company anticipates significant production royalty on these projects as they enter commercial production. The gold payment reflects residual gold production from the Mooney Basin operation of Barrick. 

Sale of Tonkin Springs Project During the period the Company sold its 5% Gross Smelter Royalty covering a portion of the Tonkin Springs project to US Gold Corp. (now mcewen mining inc. (tsx:MUX) for $5.85 million (previously reported in GPD NR11-28 dated July 21, 2011). The Company retains a 1.4% NSR on all production from the claims sold in excess of the previously reported resources. 

No clear acquisitive history but see scale of ambition and past achievements below. 
Led by Rob McEwen who built Goldcorp into a major force. Holds large 25% personal stake, aligning interests with shareholders. 
Bill Cara has great belief in McEwen. 
Declared intention to enter S&P500 with a market cap >$5bn by 2015. McEwen sees gold at $5000/oz 
Sees 130k oz gold production and 8m oz silver production by 2015 and a much higher silver price. Looks to gold silver ratio at 16. Disputed control of large copper project. 
Exploration budget $36m in 2012. Includes drilling surrounding Goldcorp's Andean acquisition where they paid $3.6bn. 

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 Q2 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 and CEO, owns 25% of the outstanding shares of McEwen Mining. As at December 31, 2011 the company has $80 Million USD in cash and bullion and no bank debt.