Mr. Rob McEwen reports
DRILLING EXPANDS NEW CENTRAL ZONE AT EL GALLO 1 MINE
McEwen Mining Inc.'s follow-up core holes at the new Central zone have expanded the gold mineralization in several directions. Central is located inside the company's El Gallo 1 mine in Sinaloa, Mexico. It is situated between two known resources, where mining began on April 1. Based on the results in this news release plus prior holes, there appears to be good potential to mine the area as one enlarged open pit rather than as two separate pits.
EL GALLO 1 MINE -- CENTRAL ZONE DRILL HIGHLIGHTS
Drill hole From To Thickness Gold grade
(m) (m) (m) (g/t)
MLX079 161.6 181.8 20.2 2.7
Including 166.5 167.6 1.1 18.0
MLX081 117.4 140.3 23.0 5.7
Including 118.2 120.1 1.9 50.0
Including 129.1 130.5 1.5 14.4
MLX082 73.1 94.3 21.2 2.5
Including 90.0 93.9 3.9 9.5
Including 90.0 91.0 1.0 17.5
MLX087 171.8 181.0 9.3 2.5
Including 171.8 173.1 1.3 14.0
MLX088 171.5 185.5 14.0 4.6
Including 174.7 178.7 4.0 11.7
MLX090 82.4 103.3 20.9 3.9
Including 90.1 92.1 2.0 12.2
Including 100.8 101.6 0.8 26.5
Drilling in this release was focused on three objectives:
- Extending the zone at depth;
- Extending the strike or length of the zone;
- Infilling an area between the historic near-surface drilling and McEwen Mining's discovery holes.
Drilling extends Central zone at depth -- 4.6 grams per tonne (g/t) gold over 14 metres
Holes MLX079, MLX087 and MLX088 targeted mineralization below the initial discovery holes announced on April 11, 2013. These new holes successfully extended the zone by 50 metres to a total depth of 180 metres below surface. The zone remains open for further expansion. Significant intercepts include 2.7 g/t gold over 20.2 metres, 2.5 g/t gold over 9.3 metres and 4.6 g/t gold over 14.0 metres. An additional three holes have been drilled to extend the zone, with assays pending.
Strike (or length of the zone) extended -- 5.7 g/t gold over 23.0 metres
Holes MLX081, MLX085 and MLX090 were drilled southwest and northeast of the initial discovery holes, extending the strike or length of the zone by 30 metres to the northeast and 20 metres to the southwest. Before drilling began at Central, the distance between the two resources where mining recently commenced was 1,000 metres. Based on these results and prior holes, the company believes the area can be mined as one enlarged open pit. Highlights from this drilling included 5.7 g/t gold over 23 metres, 1.1 g/t gold over 20.5 metres and 3.9 g/t gold over 20.9 metres. An additional six holes have been drilled with assays pending.
Infilling gaps and reducing strip -- 2.5 g/t over 21.2 metres
The last objective with the recent holes was to infill an area between the historic, near-surface drilling that tested for gold mineralization down to 20 metres (which encountered weak mineralization) and McEwen Mining's discovery holes, which start 80 metres below surface. The three holes from this area were in line with expectations, returning 2.5 g/t gold over 21.2 metres, 1.8 g/t over 12.1 metres and 0.8 g/t gold over 18.7 metres. This is an encouraging development as it shows the zone can be extended closer to surface, which should reduce the strip ratio. An additional two holes have been drilled with assays pending.
About El Gallo complex
The El Gallo complex is located in Sinaloa, Mexico. Phase 1 achieved commercial production in early January. It is forecasted to produce 30,000 ounces of gold per year. Phase 2, where a feasibility study was completed in 2012, is forecasted to add an additional 5.2 million ounces of silver (105,000 ounces of gold equivalent) once in production. Combined, both phases are scheduled to produce approximately 135,000 ounces of gold equivalent annually.
About McEwen Mining
The goal of McEwen Mining is to qualify for inclusion in the S&P 500 by 2015 by creating a profitable gold producer focused in the Americas. McEwen Mining's principal assets consist of the San Jose mine in Santa Cruz, Argentina (49-per-cent interest); the El Gallo complex in Sinaloa, Mexico; the Gold Bar project in Nevada; the Los Azules project in San Juan, Argentina; and a large portfolio of exploration properties in Argentina, Mexico and Nevada.
McEwen Mining has 297 million shares issued and outstanding. Rob McEwen, chairman, president and chief owner, owns 25 per cent of the shares of the company (assuming all outstanding exchangeable shares are exchanged for an equivalent amount of common shares). As of April 29, 2012, McEwen Mining had cash and liquid assets of approximately $50-million (U.S.) and is debt free.
EL GALLO 1 MINE -- DRILL HOLE RESULTS
Hole From To Thickness Gold grade
(metres) (metres) (metres) (g/t)
MLX079 161.6 181.8 20.2 2.7
Including 166.5 167.6 1.1 18.0
MLX080 118.6 130.4 11.8 1.0
MLX081 117.4 140.3 23.0 5.7
Including 118.2 120.1 1.9 50.0
Including 129.1 130.5 1.5 14.4
MLX082 73.1 94.3 21.2 2.5
Including 90.0 93.9 3.9 9.5
Including 90.0 91.0 1.0 17.5
MLX083 96.8 97.6 0.9 3.7
MLX084 48.1 66.8 18.7 0.8
MLX085 127.8 148.3 20.5 1.1
MLX086 - - - -
MLX087 171.8 181.0 9.3 2.5
Including 171.8 173.1 1.3 14.0
MLX088 171.5 185.5 14.0 4.6
Including 174.7 178.7 4.0 11.7
MLX089 55.3 67.4 12.1 1.8
MLX090 82.4 103.3 20.9 3.9
Including 90.1 92.1 2.0 12.2
Including 100.8 101.6 0.8 26.5
We seek Safe Harbor.
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