8-K
McEwen Inc. (MUX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 2, 2021
McEWEN MINING INC.
(Exact name of registrant as specified in its charter)
| Colorado<br> (State or other jurisdiction of<br> incorporation or organization) | 001-33190<br> (Commission File<br> Number) | 84-0796160<br> (I.R.S. Employer<br> Identification No.) |
|---|
150 King Street West, Suite 2800
Toronto, Ontario, Canada M5H 1J9
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number including area code:
(866) 441-0690
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | MUX | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 7.01 | Regulation FD Disclosure |
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On February 2, 2021, McEwen Mining Inc. (the “Company”) issued a press release announcing production guidance for the year and plans for its Los Azules project. A copy of the press release is attached to this report as Exhibit 99.1.
The information furnished under this Item 7.01, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by reference to such filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. The following exhibit is furnished with this<br>report: |
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| 99.1 | Press release February 2, 2021 |
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| 104 | Cover Page Interactive Data File – the cover<br>page XBRL tags are embedded within the Inline<br>XBRL document (contained in Exhibit 101) |
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Cautionary Statement
With the exception of historical matters, the matters discussed in the press release include forward-looking statements within the meaning of applicable securities laws that involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained therein. Such forward-looking statements include, among others, statements regarding future exploration, development, construction and production activities. Factors that could cause actual results to differ materially from projections or estimates include, among others, the continuing effects of the COVID-19 pandemic and related governmental responses, metal prices, economic and market conditions, operating costs, receipt of permits, receipt of working capital, decisions of third parties over which the Company has no control and future drilling results, as well as other factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and other filings with the United States Securities and Exchange Commission. Most of these factors are beyond the Company’s ability to predict or control. The Company disclaims any obligation to update any forward-looking statement made in the press release, whether as a result of new information, future events, or otherwise. Readers are cautioned not to put undue reliance on forward-looking statements.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| McEWEN MINING INC. | ||
|---|---|---|
| Date: February 2, 2021 | By: | /s/ Carmen Diges |
| Carmen Diges, General Counsel |
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Exhibit 99.1
MCEWEN MINING: A Warm Welcome & 2021Production Guidance
TORONTO, February 2,2021 - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to extend a warm welcome to all our new shareholders, provide production guidance for 2021 of an expected 141,000 to 160,400 gold equivalent ounces (GEOs)^(1)^, and discuss one of our most valuable yet under-appreciated assets, the Los Azules copper project. Beyond the potential of our gold and silver assets, Los Azules provides MUX with large indirect exposure to the growth of the electric vehicle market, renewable energy and the continuing urbanization of Asia.
“Iwish to extend a warm welcome to all of our new shareholders. Some of you may not be familiar with our 100%-ownedLos Azules project. According to a study (Preliminary Economic Assessment published in 2017^(2)^),it has the potential to generate strong returns at a $3.00/lb copper price. Here are some of the highlights: a 36-year minelife; Capex of $2.4 Billion, a payback in 3.6 years; and annual production in the first 13 years of 410 Million lbs ofcopper at a cost of $1.14/lb. You may be interested to learn that in terms of value, using today’s metal prices of gold at$1,834/oz, silver at $26.17/oz and copper at $3.51/lb, that approximately 522 lbs of copper are equal to 1 oz of gold or 70 ozof silver, and 7.5 lbs of copper are equal to 1 oz of silver.
Los Azules does not have reserves, butit has Indicated and Inferred resources of:
| **** | **** | Average Grade | Contained Metal | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Tonnes | Cu lbs | Au oz | Mo lbs | Ag oz | ||||||||||||||
| (Millions) | Cu % | Au g/t | Mo % | Ag g/t | Billions | Millions | Millions | Millions | ||||||||||
| Indicated | 962 | 0.48 | 0.06 | 0.003 | 1.8 | 10.2 | 1.7 | 57.3 | 55.7 | |||||||||
| Inferred | 2,666 | 0.33 | 0.04 | 0.003 | 1.6 | 19.3 | 3.8 | 194.0 | 135.4 |
Cu = copper, Au = gold, Mo = molybdenum, Ag = silver
General Motors recentlyannounced that it will be aggressively shifting to electric vehicles, producing 30 new electric models within 4 years, and producingonly electric vehicles by 2035, which may be followed by the other auto manufacturers and create an increased demand for copperand other metals.
Plans for Los Azules
We are concurrently workingon two alternatives to fund the advancement and development of Los Azules. One alternative is to joint venture with a senior industryplayer to bring the project into production. The other alternative is to spin out Los Azules into a separate company and raisefunds for it to aggressively advance the project towards a production decision. With the increasing copper price, we have receiveda heightened level of interest in Los Azules from major mining companies.
Production Guidance
Weare forecasting our 2021 gold equivalent production to be in the range of 141,000to 160,400 gold equivalent ounces (GEOs) using a gold:silver ratio of 75:1. These production levels represent a 21% to 38% improvementover 2020. The table below provides the forecast production by mine site.
Operations Status
The turnaround at our operationsis the result of new leadership in our senior executive and operations teams. At our Fox Complex in Timmins, we have a well-fundedexploration program underway following on our successful exploration results from 2018-2020. Also, we are completing the accessramp to the Froome deposit in late Q1 and expect to reach commercial production in Q4.
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In Mexico, we have recentlyannounced the Feasibility Study for the Fenix^(3)^ gold-silver project, which at $1,800/oz gold and $25/oz silver generatesa 51% After-Tax IRR, $90.8 million NPV@8% and a 2.9 years payback, with average annual production of 26,000 ^(4)^ozgold in Phase 1 and 4,200,000 ^(5)^oz silver equivalent in Phase 2.
In Argentina, our San JoséMine is a high-grade silver and gold producer with a large property package that nearly encircles Newmont’s rich Cerro Negromine,” commented Rob McEwen, Chairman and Chief Owner.
2021 Production Guidance
| 2021 Guidance Range | |
|---|---|
| Total Production | |
| Gold (oz) | 110,500 – 127,900 |
| Silver (oz) | 2,300,000 – 2,450,000 |
| GEOs^(1)^ | 141,000 – 160,400 |
| San José Mine, Argentina (49%)^(6)^ | |
| Gold (oz) | 41,500 – 44,500 |
| Silver (oz) | 2,300,000 – 2,450,000 |
| GEOs^(1)^ | 72,000 – 77,000 |
| Gold Bar Mine, Nevada | |
| GEOs^(1)^ | 37,000 – 45,000 |
| Black Fox Mine, Canada | |
| GEOs^(1)^ | 27,500 – 32,500 |
| El Gallo Mine, Mexico | |
| GEOs^(1)^ | 4,500 – 5,900 |
Notes:
| (1) | 'Gold Equivalent Ounces' are calculated based on an assumed gold to<br>silver price ratio of 75:1. |
|---|---|
| (2) | Download<br> the Los Azules PEA (2017) report here: https://s21.q4cdn.com/390685383/files/technical_reports/los_azules/LosAzulesPEA_Rev0_20171016.pdf |
| (3) | Refer to our news release dated December 31, 2020 for details. |
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| (4) | Estimated 26,000 oz Au per annum production assumes full<br>production from years 1 to 5. |
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| (5) | All references to silver<br>equivalent are based on an 88 Ag oz to 1 Au oz ratio. For Phase 1 silver accounts for 2% of total production. For Phase 2 gold<br>accounts for approximately 9% of total production. Average annual AgEq production is from years 5 to 9.5. |
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| (6) | The San José Mine is 49% owned by McEwen Mining Inc. and 51% owned and operated by Hochschild<br>Mining plc. |
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Technical Information
The technical content of this news release has been reviewed and approved by Peter Mah, P.Eng., COO of McEwen Mining and a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
The technical information in this news release related to resource estimates has been reviewed and approved by Luke Willis, P.Geo., McEwen Mining’s Director of Resource Modelling and Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Reliability of InformationRegarding San José
Minera Santa Cruz S.A., the owner of the San José Mine, is responsible for and has supplied to the Company all reported results from the San José Mine. McEwen Mining’s joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates other than MSC do not accept responsibility for the use of project data or the adequacy or accuracy of this release.
CAUTIONARY NOTE TO US INVESTORS REGARDINGRESOURCE ESTIMATION
McEwen Mining presently prepares its resource estimates in accordance with standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in Canadian National Instrument 43-101 (NI 43-101). These standards are different from the standards permitted in reports filed with the SEC under Industry Guide 7 (“Guide 7”). Under NI 43-101, McEwen Mining reports measured, indicated and inferred resources, measurements which are generally not permitted in filings made with the SEC under Guide 7. The estimation of measured and indicated resources involve greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that any part of measured or indicated resources will ever be converted into economically mineable reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. Therefore, U.S. investors are also cautioned not to assume that all or any part of inferred resources exist, or that they can be legally or economically mined.
| *McEwen Mining Inc.* | *Page 2* |
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Canadian regulations permit the disclosure of resources in terms of “contained ounces” provided that the tonnes and grade for each resource are also disclosed; however, under Guide 7, the SEC only permits issuers to report “mineralized material” in tonnage and average grade without reference to contained ounces. Under Guide 7, the tonnage and average grade described herein would be characterized as mineralized material. We provide such disclosure about our properties to allow a means of comparing our projects to those of other companies in the mining industry, many of which are Canadian and report pursuant to NI 43-101, and to comply with applicable disclosure requirements.
CAUTION CONCERNING FORWARD-LOOKINGSTATEMENTS
This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the date of this news release, McEwen Mining Inc.'s (the "Company") estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, effects of the COVID-19 pandemic, fluctuations in the market price of precious metals, mining industry risks, political, economic, social and security risks associated with foreign operations, the ability of the corporation to receive or receive in a timely manner permits or other approvals required in connection with operations, risks associated with the construction of mining operations and commencement of production and the projected costs thereof, risks related to litigation, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves, and other risks. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See McEwen Mining's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information regarding the Company. All forward-looking statements and information made in this news release are qualified by this cautionary statement.
The NYSE and TSX havenot reviewed and do not accept responsibility for the adequacy or accuracy of the contents of this news release, which has beenprepared by management of McEwen Mining Inc.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and explorer focused in the Americas with operating mines in Nevada, Canada, Mexico and Argentina. It also owns a large copper deposit in Argentina.
| CONTACT INFORMATION: | ||
|---|---|---|
| Investor Relations: | Website: www.mcewenmining.com | 150 King Street West |
| (866)-441-0690 Toll Free | Suite 2800, P.O. Box 24 | |
| (647)-258-0395 | Facebook: facebook.com/mcewenmining | Toronto, ON, Canada |
| Facebook: facebook.com/mcewenrob | M5H 1J9 | |
| Mihaela Iancu ext. 320 | ||
| Twitter: twitter.com/mcewenmining | ||
| info@mcewenmining.com | Twitter: twitter.com/robmcewenmux | |
| Instagram: instagram.com/mcewenmining |
| *McEwen Mining Inc.* | *Page 3* |
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