Issue link: http://resourceworld.uberflip.com/i/492982
10 www.resourceworld.com a p r i l / m a y 2 0 1 5 8 mcEwEn mining inc. [mUX-TSX, nYSE] McEwen Mining has interests in two pro- ducing gold mines (Mexico and Argentina); however, the company also has the Gold Bar open pit, heap leach, development project in the Battle Mountain-Eureka-Cortez gold trend, Eureka County, central Nevada. Total probable reserves stand at 15.1 million tonnes grading 1.0 g/t gold, for 484,379 oz. Measured and indicated resources are 19.5 million tonnes of 0.95 g/t gold, for 592,928 oz. Inferred resources are 7.0 million tonnes of 0.94 g/t gold, for 212,168 oz. A positive PEA showed an average annual production of approximately 50,000 oz gold over an 8-year mine life (total 397,000 oz), at a cash cost of US $700/ oz with an estimated initial capex of US $53.1 million and sustaining capital of US $39.1 million, for total life-of-mine (LoM) capex of US $92.2 million. Pay-back period is 2.1 years at LoM average US $1,300/oz gold, or 1.7 years based on a gold price of US $1,700/oz. After-tax NPV is US$45.1 million at US $1,300/oz gold (LoM average) and an 8% discount rate, giving an IRR of 34.4%. Based on a gold price US $1,700/oz, after- tax NPV and IRR increase to US $98.3 million and 53%, respectively. The Gold Bar Project is in the permitting phase with permits expected in 2016 to be followed by mine construction. McEwen Mining submitted the Plan of Operations (POO) during the fourth quarter of 2013 and the Bureau of Land Management (BLM) determined that an Environmental Impact Statement is necessary to fulfill require- ments under the National Environmental Protection Act. Upon completion of the environmental analysis, the BLM will be able to proceed with the approval determi- nation of the POO. McEwen Mining's 100%-owned Los Azules porphyry copper project in San Juan Province, Argentina hosts 14.3 bil- lion lbs copper (inferred) and 5.4 billion lbs copper (indicated). Gold resources are 840,000 oz indicated and 2.58 million oz inferred. Silver resources are 22.9 million oz indicated and 85.8 million oz inferred. PEA highlights at Los Azules (US $3.00/ lb copper and US $1,300/oz gold) showed a pre-tax NPV of $3.0 billion (8% discount rate) and an IRR of 17.6%. After-tax NPV is $1.7 billion (8% discount rate) and an IRR of 14.3%. Annual copper production for years 1-5 would average 255,000 tonnes (563 million lbs), life-of-mine annual cop- per production to average 171,000 tonnes (377 million lbs) over 35 years. Cash operating costs, years 1-5, would average $0.87/lb copper (net of gold by-product). Cash operating costs over entire mine life to average $1.08/lb copper (net of gold by-product). Initial capital costs to construct the Los Azules Mine and a 120,000 tonnes per day process plant are estimated at $3.9 billion. Capital payback on a pre-tax basis has been estimated at 3.8 years at US $3.00/lb copper and US $1,300/oz gold.