McEwen receives permit for El Gallo mine

Executive Summary

• McEwen Inc. has secured the extension of its environmental impact assessment (Manifestacion de Impacto Ambiental) for the El Gallo mine in Mexico, a critical regulatory step allowing the company to proceed with Phase 1 mill construction.
• The company targets a mid-2026 start for Phase 1 construction and aims for its first gold pour by mid-2027.
• Phase 1 involves reprocessing historical leach pad material, with an expected production of approximately 20,000 gold-equivalent ounces (GEOs) annually and remaining capital costs estimated at $25 million.

Key Details

• Permitting Status: The Mexican government granted the extension of the environmental impact assessment for the El Gallo mine.
• Construction Timeline: Phase 1 mill construction is targeted to begin in mid-2026.
• Production Timeline: First gold pour is targeted for mid-2027.
• Equipment: The ball mill required for Phase 1 has been purchased and is currently on site at the mine.
• Phase 1 Production: Expected to produce approximately 20,000 GEOs annually once commercial production is achieved.
• Source Material: Production will come from reprocessing material from the historical leach pad.
• Capital Costs: Remaining capital costs to complete Phase 1 construction are estimated at $25 million.
• Cost Structure: No significant development or exploration costs are anticipated since the material was previously mined, which is expected to enhance free cash flow.
• Phase 2 Development: Work has started on Phase 2, which involves production from the project's in situ silver deposits. This phase could extend the mine life well beyond the initial 10 years contemplated for Phase 1.
• Historical Silver Resources:
  • Measured and Indicated: 53.1 million ounces.
  • Inferred: 31 million ounces.
  • Scope: El Gallo complex phase II project and district satellite deposits not currently mined.
  • Basis: National Instrument 43-101 technical report feasibility study dated Sept. 10, 2012.
  • Price Assumptions: Silver at $28.50/oz; Gold between $950 and $1,500/oz.
  • Disclaimer: These are historical estimates; a qualified person has not done sufficient work to classify them as current mineral resources.
• Future Resource Update: The company plans to update resource estimates for El Gallo in 2026 based on currently known resource areas.

Notable Quotes

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