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TORONTO, ONTARIO -- (Marketwire) -- 03/11/13 -- (All Amounts in US Dollars Unless Otherwise Stated)
McEwen Mining Inc. (NYSE: MUX)(TSX: MUX) is pleased to provide a summary for its fourth quarter and full year operating results, including 2013 production and cost guidance, for its mines and projects in Argentina, Mexico and Nevada.
HIGHLIGHTS
-- Gold equivalent production in the fourth quarter totaled 32,220 ounces (17,578 gold ounces and 761,377 silver ounces). Full year production totaled 105,050 gold equivalent ounces (48,876 gold ounces and 2,921,242 silver ounces), meeting 2012 guidance.-- Cash costs totaled $728 per gold equivalent ounce in the fourth quarter. Full year cash costs totaled $739 per gold equivalent ounce, below 2012 guidance of $750 per gold equivalent ounce.-- The Company ended the year with $79 million in cash and liquid assets and no debt.-- Estimated 2013 production is expected to grow by 24% to 130,000 gold equivalent ounces (72,310 gold ounces and 3,000,000 silver ounces) at a cash cost between $800 - $900 per gold equivalent ounce. All-in sustaining costs are estimated at $1,200 - $1,325 per gold equivalent ounce. All-in sustaining costs include operational, development, exploration, royalties and reclamation costs.-- On January 1, 2013, El Gallo Phase 1 in Mexico achieved commercial production. The mine is currently operating at full capacity.-- El Gallo Phase 2 remains on schedule for construction and will become the Company's third and largest mine.-- Four new resource updates are due by the end of the second quarter, building on the Company's large resource base.
"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 gold equivalent ounces, and second, financing and construction of our third mine, El Gallo Phase 2, is scheduled to commence during the third quarter," stated Rob McEwen, Chairman and Chief Owner.
Balance Sheet
At the end of the fourth quarter, McEwen Mining had cash and liquid assets of $79 million, comprised of cash of $71 million and gold and silver (produced and purchased) with a market value of $8 million. Our cash balance reflects the completion of our rights offering in December 2012, for total proceeds of $60.4 million. The Company remains debt free.
During the quarter, the Company received a dividend of $5 million from its 49% owned San Jose mine in Argentina. Proceeds from the dividend remained in Argentina to help fund exploration at the Los Azules Copper project. The Company expects to receive dividends from San Jose in 2013. Although the amounts and timing are beyond McEwen Mining's control, it is anticipated that dividends in the first and second quarter will be less than the fourth quarter, 2012. This is due to retirement of local credit lines, income taxes payable, equipment purchases related to the mine's 10% expansion, and the temporary shutdown experienced in February due to worker illnesses. Any dividends received during the first half of the year would be spent locally at Los Azules. Dividends are expected to be higher during the second half of 2013. The Company anticipates using these dividends to help offset construction costs in Mexico, associated with El Gallo Phase 2.
