El Gallo Phase 1 Production Area Drilling Encounters More Gold: 1.3 gpt Gold Over 41.2 Meters Plus New Zinc, Silver & Lead Intercepts
TORONTO, ONTARIO--(Marketwire - Aug. 8, 2012) - McEwen Mining Inc. (NYSE:MUX)(TSX:MUX) is pleased to announce exploration results from its 100% owned El Gallo Complex, in Sinaloa State, Mexico, where on-going drilling continues to expand the resource within the Phase 1 production area (Fig. 1).
"Exploration results from inside of the Phase 1 production area have generated very interesting results. Our drilling continues to open up new areas for resource expansion," stated Rob McEwen, Chief Owner.
El Gallo Phase 1 Exploration Drill Results
Drilling Expands Gold Resource
Drilling designed to expand the current gold resource (M&I: 566,508 gold ounces; Inferred: 271,081 gold ounces) and extend the mine life (approx. 6-7 yrs) commenced during the second quarter. On July 19th, the Company announced a drill hole intersected 1.1 gpt gold over 71.3 m. The first follow up hole to this result intersected 1.3 gpt gold over 41.2 m, including 4.3 gpt gold over 8.8 m. This hole is located 30 m south of the initial result and 200 m southwest of the planned open pit (Fig. 2 & 3). The results show continuity between the two intercepts and that the zone may continue deeper.
Holes MLX-018 and MLX-020 were drilled to infill the resource at surface. Both of these holes were successful.
Zinc, Lead and Silver Discovered
A surprising 41.0 m intercept, containing 4.2% zinc, 0.9% lead, 0.5 gpt gold and 8.6 gpt silver, that included 7.7% zinc, 1.1 lead, 0.6 gpt, 11.0 gpt silver over 16.9 m was drilled near the northeast corner of planned pit design (Fig. 2). Although it has been known that the area contains elevated zinc and lead, base metal mineralization of this grade has not been previously encountered. The values are encouraging because there is no further drilling to the south and east, representing a new exploration target.
Drilling along trend, 150 m northeast of the resource limits, has intersected encouraging silver values, plus gold (Fig. 2). The silver and gold is shallow, starting 15 meters below surface. The mineralization is believed to be a continuation of the same structure that hosts part of the Phase 1 resource. However, the higher silver to gold ratio represents a departure from previously drilled mineralization.
About El Gallo
The El Gallo Complex is located in Sinaloa State, Mexico. Phase 1 is currently being commissioned, with production scheduled to begin during the third quarter. Phase 1 production is forecasted to produce an average 30,000 ounces of gold per year. Phase 2, where a feasibility study is currently being completed and scheduled to be released during the third quarter, is forecasted to add an additional 100,000 ounces of gold and gold equivalent. Combined both phases of production are scheduled to produce approximately 130,000 ounces of gold and gold equivalent.
About McEwen Mining (www.mcewenmining.com)
The goal of McEwen Mining is to qualify for inclusion in the S&P 500 by 2015 by creating a high growth, low-cost, mid-tier silver and gold producer focused in the Americas. McEwen Mining's principal assets consist of the San José mine in Santa Cruz, Argentina (49% interest); the El Gallo Complex in Sinaloa, Mexico; the Gold Bar Project in Nevada, US; the Los Azules Copper Project in San Juan, Argentina and a large portfolio of exploration properties in Argentina, Nevada and Mexico. In 2012, McEwen Mining is planning to spend approximately US$40 million on exploration.
McEwen Mining has 267,084,203 shares issued and outstanding. Rob McEwen, Chairman, President and CEO, owns 25% of the shares of the Company. As of March 31, 2012, McEwen Mining had cash and liquid assets of US$66.7 million, comprised of cash of US$41.1 million, silver and gold bullion at market value of US$21.4 million and marketable securities of US$1.1 million. The Company continues to hold a significant portion of its treasury in bullion with the belief that prices will continue to rise.
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August 8, 2012 (Source: Marketwire)
Disclosure: McEwen Mining Inc. is a past Vulture Bargain Candidate of Interest (VBCI)
