Currently 10 trenches are being completed over the length of the mineralization in order to gain a better understanding of 1) the nature of the high-grade, 2) the geology and 3) the orientation of the veins. This work, including final assays, is expected to be completed by the end of April. A core drill program is being planned in order to target the mineralization below 50 meters, which is the current limit of the known mineralization. In addition, McEwen Mining has completed an aeromagnetic survey over the discovery, which will be reassessed based on the new results.
Historical Mining in the Area
The nearby city of Mocorito was built on the back of mining, beginning with the Palmarito Mineral district (now owned by McEwen Mining) in the mid 1500s. Gold mining in the Magistral area (El Gallo Phase 1) began in the late 1800s, with production continuing sporadically until the 1950s. Mining was focused on narrow, high-grade quartz veins, locally present in the structural zones. Historic production from the Magistral mill has been estimated at 180,000 ounces of gold at a grade of 20 gpt. In addition, there were several small, high-grade mines, which operated until the late 1990s. These mines closed when the local government-owned mill was shut down due to low precious metal prices. The majority of these past mines are now owned by McEwen Mining and form part of the El Gallo Complex.
About El Gallo
The El Gallo Complex is located in Sinaloa State, Mexico. Phase 1 construction was completed in September and the mine is now producing gold and is expected to average 30,000 ounces of gold per year. Phase 2, where a feasibility study was recently completed, is forecasted to add an additional 5,200,000 ounces of silver (105,000 ounces of gold equivalent) once in production. Combined, both phases are scheduled to produce approximately 135,000 ounces of 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 gold producer focused in the Americas. McEwen Mining's principal assets consist of the San Jose mine in Santa Cruz, Argentina (49% interest); the El Gallo complex in Sinaloa, Mexico; the Gold Bar project in Nevada, US; the Los Azules project in San Juan, Argentina and a large portfolio of exploration properties in Argentina, Mexico and Nevada.
McEwen Mining has 296,024,859 shares issued and outstanding. Rob McEwen, Chairman, President and Chief Owner, owns 25% of the shares of the Company (assuming all outstanding Exchangeable Shares are exchanged for an equivalent amount of Common Shares). As of December 31, 2012, McEwen Mining had cash and liquid assets of approximately US$79 million and is debt free.
This news release has been reviewed and approved by John Read, CPG, McEwen Mining's consulting geologist, who is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by the Company at its Mexican exploration properties. Samples from the core drilling were split on-site at the Company's El Gallo Complex. One half of the split drill core is shipped to ALS Chemex for sample preparation and analysis by fire assay for gold and 4-acid digestion with ICP determination for silver. Samples returning greater than 10 ppm gold or 1500 ppm silver were re-analyzed using gravimetric fire assay. Standards and blanks were inserted every 20 samples. All holes were drilled with HQ bits and reduced to NTW where required. Samples were taken based on lithologic and/or mineralized intervals and vary in length. Trenches were constructed by back-hoe and the walls were channeled sampled in continuous intervals. Samples were analyzed by ALS Chemex using the same methods as for drill core samples. The true width of the mineral zones has not been determined. For additional information see the technical report titled "El Gallo Complex Phase II Project, NI 43-101 Technical Report Feasibility Study, Mocorito Municipality, Sinaloa, Mexico" with an effective date of September 10, 2012, prepared by M3 Engineering along with a team of associates (the "Phase II Report"). The Phase II Report is available under the Corporation's profile on SEDAR (www.sedar.com). The authors of the Phase 2 Report, Stan Timler - M3 Engineering, Mike Hester - Independent Mining Consultants (Reserves), Dawn Garcia - SRK Consulting (Environmental), Richard Kehmeier and Brian Hartman - Pincock Allen & Holt (El Gallo Deposit Resource), John Read - McEwen Mining consultant (Palmarito Insitu, Historic Waste Dumps and Historic tailings Resource), all of whom are qualified persons and all of whom but John Read are independent of McEwen Mining, each as defined by NI 43-101.
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