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12th March 2013 

 

TORONTO (miningweekly.com) – McEwen Mining this week said it was prepared for a 24% increase in gold-equivalent production this year, as an optimisation plan was completed at its 49%-owned San Jose mine, in Argentina, that would increase processing capacity by 10% from 1 500 t/d to 1 650 t/d, and a full year of production is expected from its El Gallo Phase 1 mine, in Mexico.


The company on Monday reported gold-equivalent production for the fourth quarter ended December 31, totalled 32 220 oz, comprised of 17 578 oz gold and 761 377 oz silver.


For the full year the company produced attributable gold-equivalent ounces (GEO) of 105 050 oz, comprising of 48 876 oz of gold and 2.92-million ounces of silver, which was in line with the company’s 2012 guidance. 


Cash costs totalled $728/GEO in the fourth quarter and full-year cash costs totalled $739/GEO, which was below the 2012 guidance of $750/GEO. 


The company had $79-million in cash and liquid assets and no debt as at the end of the financial year.


McEwen said it expected production to grow this year to 130 000 GEOs, comprising 72 310 oz of gold and three-million ounces of silver, at a cash cost of between $800/GEO to $900/GEO.


The company expected all-in sustaining costs to range between $1 200/GEO and $1 325/GEO. All-in sustaining costs include operational, development, exploration, royalties and reclamation costs.


“Last year was significant for McEwen Mining. We successfully merged US Gold and Minera Andes, achieved record production at our San Jose mine, completed construction and commissioned El Gallo Phase 1, published a feasibility study for El Gallo Phase 2, and resolved the litigation surrounding the Los Azules copper project.


“This year will also be an important year for the company. First, we expect to see production grow by 24% to 130 000 GEO, and second, financing and construction of our third mine, El Gallo Phase 2, is scheduled to commence during the third quarter,” chairperson and chief owner Rob McEwen said.


The company said the El Gallo Phase 2 was on schedule for construction and would become the company’s third and largest mine. 


Four new resource updates were due for release by the end of the second quarter.


The company’s TSX-listed stock on Tuesday traded 7.52% higher at C$2.86 apiece.

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