El Gallo Phase 1 generated $2.1 million in operating cash flows, after incurring costs associated with removal of overburden to access future mineralization, during the fourth quarter. During the quarter, the mine was focused on increasing throughput levels towards its designed rate. The mine is now operating at full capacity.
Major expenditures during the quarter included $13.1 million for exploration at Los Azules, $3.8 million for exploration at the Company's other projects, and $0.7 million related to El Gallo Phase 2.
San Jose Mine, Argentina (49%)
Solid Year of Production
Final production results for McEwen Mining's share in the San Jose mine during the fourth quarter, was 11,024 gold ounces and 757,009 silver ounces, representing 25,582 gold equivalent ounces (converting the silver into gold using a 52:1 exchange ratio).
For the full year, San Jose met its production guidance, with McEwen Mining's share totaling 42,026 gold ounces and 2,916,742 silver ounces or 98,117 gold equivalent ounces. In 2013, McEwen Mining's share of production has been forecasted at 102,700 gold equivalent ounces (45,000 gold ounces and 3,000,000 silver ounces). Production is expected to increase in 2013 as an optimization plan was completed that will increase processing capacity by +10% from 1,500 tonnes to 1,650 tonnes per day.
For the quarter, cash costs equaled $728 per gold equivalent ounce. Cash costs were flat versus the third quarter and less than the first half of the year, as the team at San Jose has done an excellent job dealing with industry-wide cost escalation. For the full year, cash costs were below guidance of $750 per gold equivalent ounce at $739. Cash costs and all-in sustaining costs per equivalent gold ounce for 2013 have been estimated at $725 - $825 and $1,150 - $1,275, respectively.
An updated reserve and resource estimate for the mine will be released in the coming weeks. The updated resource will include approximately 98,000 meters of additional core drilling.
San Jose Mine Production Comparison-------------------------------------------------------------------------------------------------------------------------------------------------------- Full-Year Full-Year 4th Quarter 3rd Quarter San Jose - 100%(i) 2012 2011 2012 2012----------------------------------------------------------------------------Ore production (tonnes) 509,851 462,825 128,940 136,577----------------------------------------------------------------------------Average grade gold (gpt) 5.79 5.86 6.00 5.24----------------------------------------------------------------------------Average head silver (gpt) 417 444 422 402----------------------------------------------------------------------------Average gold recovery (%) 90.4 92.9 90.4 91.1----------------------------------------------------------------------------Average silver recovery (%) 87.0 88.8 88.3 87.9----------------------------------------------------------------------------Gold produced (ounces) 85,786 80,948 22,498 20,967----------------------------------------------------------------------------Silver produced (ounces) 5,952,534 5,869,564 1,544,917 1,552,000----------------------------------------------------------------------------Gold equivalent(1) produced (ounces) 200,240 193,824 52,208 50,813----------------------------------------------------------------------------Gold sold (ounces) 84,292 82,420 23,161 29,126----------------------------------------------------------------------------Silver sold (ounces) 5,897,099 6,087,525 1,553,077 2,165,000----------------------------------------------------------------------------Co-product total cash cost Au (US$) 760 628 770 766----------------------------------------------------------------------------Co-product total cash cost Ag (US$) 13.90 13.63 13.35 14.66----------------------------------------------------------------------------Gold equivalent total cash cost (US$) 739 675 728 764----------------------------------------------------------------------------Co-product all-in sustaining cash cost Au (US$) 1,208 962 1,228 1,126----------------------------------------------------------------------------Co-product all-in sustaining cash cost Ag (US$) 22.11 20.89 21.29 21.54----------------------------------------------------------------------------Gold equivalent co-product all-in sustaining cash cost (US$) 1,174 1,035 1,160 1,122---------------------------------------------------------------------------- McEwen Mining - 49% Share----------------------------------------------------------------------------Gold produced (ounces) 42,026 39,665 11,024 10,274----------------------------------------------------------------------------Silver produced (ounces) 2,916,742 2,876,086 757,009 760,480----------------------------------------------------------------------------Gold equivalent(1) produced (ounces) 98,117 94,974 25,582 24,898--------------------------------------------------------------------------------------------------------------------------------------------------------(i)McEwen Mining holds a 49% attributable interest in the San Jose mine.
