Mr. Rob McEwen reports
MCEWEN MINING Q2 2014 PRODUCTION RESULTS
McEwen Mining Inc. has released production results for second quarter 2014. Production in the second quarter was 31,200 gold equivalent ounces comprising 18,863 gold ounces and 740,276 silver ounces, consistent with guidance. This is a decrease of 8 per cent compared with second quarter 2013 and 3 per cent compared with first quarter 2014. Full-year guidance remains unchanged at 135,000 to 140,000 gold equivalent ounces as production is expected to increase in fourth quarter, due to 50 per cent more processing capacity at El Gallo 1 and higher grades at San Jose. Production costs will be reported in August, 2014, with second quarter financials.
COMPANY-WIDE OPERATING RESULTS
Year to
date
Q2 2014 Q1 2014 Q2 2013 2014
San Jose -- 49 per cent
Gold produced (oz) 10,750 10,767 12,549 21,517
Silver produced (oz) 737,001 720,830 771,967 1,457,831
Gold equivalent produced
(oz) 23,033 22,781 25,415 45,814
El Gallo 1
Gold produced (oz) 8,113 9,295 8,439 17,408
Silver produced (oz) 3,275 4,195 6,341 7,470
Gold equivalent produced
(oz) 8,167 9,365 8,545 17,532
Total production
Gold produced (oz) 18,863 20,062 20,988 38,925
Silver produced (oz) 740,276 725,025 778,308 1,465,301
Gold equivalent produced
(oz) 31,200 32,146 33,960 63,346
San Jose Mine, Argentina (49 per cent)
McEwen Mining's attributable production from the San Jose mine during second quarter 2014 was 23,033 gold equivalent ounces (10,750 gold ounces and 737,001 silver ounces). This is 9 per cent lower than the comparable period in 2013 and 1 per cent higher than first quarter 2014. Production was lower year over year due to lower gold and silver grades. Production was up slightly quarter over quarter due to more tonnes milled and processed. McEwen Mining's share of production from San Jose in 2014 is forecasted to be 97,500 gold equivalent ounces (44,000 gold ounces and 3.2 million silver ounces), with approximately 51,500 gold equivalent ounces being produced in the second half of the year.
SAN JOSE MINE OPERATING RESULTS
Year to
date
San Jose -- 100 per cent Q2 2014 Q1 2014 Q2 2013 2014
Ore production (tonnes) 142,074 134,589 140,816 276,663
Average grade gold (g/t) 5.45 5.77 6.34 5.60
Average head silver (g/t) 378 391 407 385
Average gold recovery (%) 87.6 88.1 89.3 88.1
Average silver recovery (%) 87.1 86.9 85.5 87.0
Gold produced (oz) 21,938 21,974 25,610 43,912
Silver produced (oz) 1,504,084 1,471,081 1,575,442 2,975,165
Gold equivalent produced (oz) 47,006 46,492 51,867 93,498
McEwen Mining -- 49-per-cent share
Gold produced (oz) 10,750 10,767 12,549 21,517
Silver produced (oz) 737,001 720,830 771,967 1,457,831
Gold equivalent produced (oz) 23,033 22,781 25,415 45,814
El Gallo 1 mine, Mexico (100 per cent)
In second quarter 2014 the El Gallo 1 mine produced 8,167 gold equivalent ounces (8,113 gold ounces and 3,275 silver ounces). This is 4 per cent lower than the comparable period in 2013 and 13 per cent lower than first quarter 2014. Production was lower due to lower gold grades and temporary downtime at the process plant that was associated with commissioning of the expansion. The expansion, which will increase the processing capacity from 3,000 to 4,500 tonnes per day, was completed mid-May and commissioning is under way. The mine is expected to be operating at its full capacity by the start of fourth quarter. In 2014, El Gallo 1 is forecasted to produce 37,500 gold equivalent ounces (37,000 gold ounces and 25,000 silver ounces), with approximately 20,000 gold equivalent ounces being produced in the second half of the year.
EL GALLO 1 MINE OPERATING RESULTS
Year to
Q2 2014 Q1 2014 Q2 2013 date 2014
Ore production (tonnes) 368,223 359,402 346,896 727,620
Average grade gold (g/t) 1.10 1.16 1.34 1.13
Gold produced (oz) 8,113 9,295 8,439 17,408
Silver produced (oz) 3,275 4,195 6,341 7,470
Gold equivalent produced (oz) 8,167 9,365 8,545 17,532
Expected Los Azules impairment charge
The company is conducting an impairment test of its Los Azules project in Argentina as a result of the recently announced acquisition of Lumina Copper Corp. by First Quantum Minerals Ltd., for approximately $470-million. Lumina's only significant asset is the Taca Taca copper project located in Salta, Argentina. While there are some notable differences between Taca Taca and Los Azules, the company believes the similarities in project scale and location within Argentina warrant consideration for the Lumina transaction to be a triggering event for impairment analysis. The company's preliminary analysis, which places a substantial weighting on the announcement day value of the Lumina transaction to value Los Azules, indicates a pretax asset impairment charge in the range of approximately $90-million to $135-million. The actual amount, when the company has completed the final impairment assessment, will be reported in the company's quarterly 10-Q which is due to be filed on Aug. 7, 2014.
"With First Quantum acquiring Lumina Copper and their Taca Taca project, Los Azules moves to the forefront in terms of world-class, undeveloped, high-grade copper assets not owned by a major mining company. As we have said in the past, Taca Taca serves as a good proxy for the value of Los Azules and we believe this transaction demonstrates value in projects located in Argentina," said Rob McEwen, chief owner, chairman and chief executive officer.
We seek Safe Harbor.
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