Corporate Presentation Dec 15, 2017

Transcription

1 Corporate Presentation Dec 15, 2017

2 Past Life Building Goldcorp % Change Goldcorp vs Market CAGR 31% Goldcorp IBM Berkshire Hathaway Microsoft S&P 500 Dow Goldcorp vs Peers Goldcorp Barrick Kinross Newmont Glamis Meridian 2

3 Base Money inflation and the price of Gold in $US + Credit: in gold we trust.report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Bloomberg, Incrementum AG 3

4 Federal Funds Rate 6 % Source: Bloomberg. As of Oct 31,

5 GSCI/S&P500 ratio: Relative value equities vs commodities Gulf Crisis 1990 Equities Expensive Oil Crisis 1973/1974 GFC 2008 = Median: 4.1 Commodities Cheap Dotcom Bubble Credit: in gold we trust.report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Dr. Torsten Dennin, Incrementum AG 5

6 Gold s Performance - Depends on the Currency Since High of US$1,900/oz Sept 5, 2011 to Dec 11, 2017 USD -34% Euro -21% Pound -20% Canadian $ -14% Australian $ -9% Yen -3% As of Dec 15,

7 Bear markets compared: BGMI bear markets since 1942 (75 years) 08/ / / / / / / / / / / / /983-11/ / /2016 We are here! Duration - Number of Weeks Credit: in gold we trust.report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG 7

8 Bull markets compared: BGMI bull markets since 1942 (75 years) 10/ / / / / / / / / / / / / /2011 We are here! Here! Duration - Number of Weeks Credit: in gold we trust.report. Incrementum. June 1, 2017 by Ronald-Peter Stoeferle, Mark J. Valek Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG 8

9 Who Does This Consistently? Sell at the Top Buy at the Bottom 9

10 Someone who does it better than most says Time to buy gold is now Aug. 10, 2017 CNBC.com Ray Dalio, founder / manager of Bridgewater Associates, $160 Billion AUM, recommended investors have 5 to 10% of their assets in gold. November 13, 2017 Bloomberg reports In Q3, Bridgewater invested +$500 million in gold: buying 3.32 million SPDR Gold shares and 8.2 million ishares Gold shares. 10

11 Gold is Definitely under Owned Total Mkt Cap of all US Public Equity Companies Value Ray Dalio s recommended gold weighting of 5-10% Value if only ½ Ray s weighting goes into shares $29 Trillion $ Trillion $725 B Trillion Total Mkt Cap of S&P 500 companies as a % of Total Market Cap of all US Public Equity Companies 80% Value of 80% Mkt Cap of only gold stock in S&P 500 (Newmont Mining) $580 B Trillion $20 Billion # of Newmonts required if ½ of Ray s weighting occurs

12 99% of all the precious metal producers in the world are ineligible to be included in the S&P 500 Our Goal is to be in the S&P 500 MUX is Striving to Qualify 12

13 Cautionary Statement If you are risk adverse, don t buy our stock. The past is not a reliable predicator of the future. Unexpected events can change forecasts. This presentation contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of The forward-looking statements and information expressed, as at the date of this presentation, McEwen Mining Inc.'s (the "Company") estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, factors associated with fluctuations in the market price of precious metals, mining industry risks, political, economic, social and security risks associated with foreign operations, the ability of the corporation to receive or receive in a timely manner permits or other approvals required in connection with operations, risks associated with the construction of mining operations and commencement of production and the projected costs thereof, risks related to litigation, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves, risk of delisting from a public exchange, and other risks. The Company's dividend policy will be reviewed periodically by the Board of Directors and is subject to change based on certain factors such as the capital needs of the Company and its future operating results. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See McEwen Mining's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forwardlooking statements and information regarding the Company. All forward-looking statements and information made in this presentation are qualified by this cautionary statement. All currency information quoted in U.S. dollars. The technical contents of this presentation has been reviewed and approved by Nathan M. Stubina, Ph.D., P.Eng., FCIM, Managing Director and a Qualified Person as defined by Canadian Securities Administrators National Instrument "Standards of Disclosure for Mineral Projects". To see cautionary note regarding NON-GAAP measures, go to To see MUX reserves and resources table, go to 13

14 Growing in the Americas Activities 1. Acquired Production in 1 of the World s Great Gold Districts - Timmins 2. Construction Started Gold Bar, Nevada 3 Mines 2 Development Projects 3. Robust, Large, Long Life Asset Los Azules 4. Transitioning - Oxide to Sulfide Ore Mexico 1 Extreme Optionality 14

15 Black Fox Complex What the Seller had Invested 2014 Purchase Price +$300 million Plus Assumed Liabilities $140 million 2014 Q Capex & Exploration +$120 million US$560 million Our Purchase Price US$35 million 15

16 Black Fox Complex What did we buy? Prime gold real estate: On Destor-Porcupine Fault Zone 50,000 oz gold / year: Underground mine US$150 million tax pools Operating 2,400 tpd mill & permitted tailings pond with excess capacity for Lexam ore Gold resources 1 : M&I 1.2 million oz & Inferred 231,000 oz Multiple exploration properties 1 As at December 31, Primero s mineral reserves and mineral resources estimates, see appendix. 16

17 Black Fox: Potential for Resource Growth Depth of Deposits & Past Production Meters Indicated: 151 koz Inferred: 12 koz Past Production: 821 koz M&I: 403 koz Inferred: 57 koz Inferred: 36 koz Base Metal Excluded M&I: 668 koz Inferred: 174 koz Froome Black Fox Tamarak Grey Fox ,100-1,300 Resource Depth Upside Potential Mineral Resources as of Dec 31, 2016 by Primero. Primero Mining press release titled Primero Reports Year-End 2016 Mineral Reserves and Resources dated February 22,

18 2017 Acquisitions Timmins Region: Prime Real Estate Along the Golden Highway Producing mine Centralized mill & tailings Large resources base Multiple exploration targets Davidson Tisdale Timmins Paymaster Buffalo Ankerite Fuller Timmins +70Moz Au Km 5 km along the fault N Black Fox - Stock Mill 7 km along the fault Matheson Present or past producing mine Destor-Porcupine Fault Zone Black Fox Mine 6 km along the fault Matheson +20Moz Au MUX Properties Black Fox Complex Oct 2017 Lexam Apr

19 Black Fox Mine Upside 821,000 oz gold produced Significant high grade mineralization Depths: - Production 780m - Resource 880m - Drilling 1,000m $10 million exploration program Longitudinal Section Grade (g/t Au) x Thickness (m) 120 Au / 7.9m Inc. 341 Au / 2.3m 105 Au / 8.8m Inc. 206 Au / 4.2m 114 Au / 7.5m Inc. 329 Au / 2.4m 159 Au / 5.4m Inc. 181 Au / 4.7m 226 Au / 2.7m 100 Au / 5.4m Inc. 352 Au / 1.3m Black Fox 34.4 Au / 0.7m 89 Au / 7m 205 Au / 4.6m Inc. 680 Au / 0.7m Inc Au / 0.5m Open 13 Au / 5.6m Inc. 60 Au / 0.7m 93 Au / 6m Inc. 235 Au / 2.3m 224 Au / 6.2m Inc. 436 Au / 3.1m Tamarak 19 Au / 4m Inc. 57 Au / 0.7m 16 Au / 3.6m 97 Au / 5.2m Inc. 330 Au / 0.3m & 597 Au / 0.6m 96 Au / 5.9m Inc. 175 Au / 3.1m 500 m Selected best historical drill results, grade (g/t Au) x estimated true width thickness (meters) 19

20 Large Resource Base Providing Multiple Development Opportunities Black Fox Mine Resource M&I 403,000 oz at 6.3 gpt (2.0 Mt) Inferred 57,000 oz at 6.9 gpt (0.3 Mt) Black Fox Mine Froome: 800m West of Black Fox, resource depth 350m Tamarak: 400m East of Black Fox, resource depth 400m (upper zone) Grey Fox: 4 km SE Black Fox (resource depth 420m) Froome Resource Indicated 151,000 oz at 5.5 gpt (0.9 Mt) 0 1 Km 2 Gibson Tamarak Grey Fox Resource M&I 668,000 oz at 4.4 gpt (4.7 Mt) Inferred 174,000 oz at 4.2 gpt (1.3 Mt) Primero Resource Dec

21 Well Mineralized Property Hosting High Grade Mineralization Black Fox: 164 / 15.9m 61.9 / 35.9m 224 / 7.8m 91.5 / 15.5m 103 / 13.5m Multiple structural trends: - Black Fox & Froome trends - Contact volcanic-sediment (Tamarak style target) Various mineralized styles and host rocks Low drilling density Froome: 4.86 / 86.7m 5.14 / 75.8m 5.49 / 68.6m 4.56 / 82.2m 5.08 / 73.5m Volcanic Tamarak: 12.8 / 9.0m 9.18 / 9.5m 4.55 / 18.1m Volcanic Sediment Grey Fox 95.4 / 16.4m 18.6 / 20.0m 19.7 / 15.5m 0 1 Km 2 Gibson: 3.46 / 57m 3.69 / 20.7m 5.42 / 13.5m 148 / 13m 56.0 / 13.3m 24.8 / 28m Selected best historical drill results, grades (g/t Au) x thickness (down hole meters) 21

22 Excellent Exploration Potential Mineralized Trends IP Anomalies Drill Targets Aggressive exploration program $10 million in 2018: 1. Extensions of known mineralized zones: - Black Fox Mine - Froome and Grey Fox - Tamarak and Gibson Froome Black Fox Volcanic Tamarak Volcanic Sediment 2. New targets defined on: - Black Fox and Froome trends - Contact volcanic-sediment Gibson Grey Fox Km 22

23 Resources Gold Equivalent oz. (Excluding Los Azules) 5 Pre-Timmins 5 4,830, % Post-Timmins ,139, ,500, % 1 315, M&I Inferred 0 M&I Inferred San José Mine (49%) El Gallo Gold Bar Timmins (Lexam & Black Fox) Accretive Based on Resources In gold equivalent ounces, gold / silver ratio 75:1. Excludes Los Azules resource - indicated: 10.2 billion lbs copper, 1.7 million oz gold, 55.7 million oz silver, inferred: 19.3 billion lbs copper, 3.8 million oz gold, million oz silver 23

24 Development: Gold Bar - Under Construction Gold Bar Key Features 1. $60 M Capex 2. Open Pit, Heap Leach opt (1.1 gpt) 3. Average Annual Production 65 koz Gold 4. Cash Costs / AISC Costs $728/oz / $995/oz 5. Mine Life / M&I Resources 6 Years / 611 koz Silver Standard Marigold BMX Barrick s Giant Gold Deposits Cortez Pipeline Cortez Gold Rush Discovery Tonkin Gold Bar 6. Exploration Potential MUX Properties N Miles Waterton Ruby Hill 1 Notice of Availability published on September 29,

25 Gold Bar - Short Payback, Attractive Returns Gold Bar After Tax Return Sensitivity 1 Gold Price $1,150 $1,250 $1,350 After Tax IRR 2 20% 30% 40% Payback 3 yrs 2.4 yrs 1.9 yrs 1 Oct 2015 Feasibility Study. 2 Using 5% discount rate. 25

26 Los Azules Highlights of 2017 Preliminary Economic Assessment (PEA 1 ) Los Azules Resources 1 : Cu Au Ag 1. 1st 13 years avg annual production 415 million lbs $1.14/lb Indicated 10.2 Billion 0.48% 1.7 Million 0.06 gpt 55.7 Million 1.8 gpt 2. Initial Capex: $2.4 Billion Inferred 19.3 Billion 0.33% 3.8 Million 0.04 gpt Million 1.6 gpt $3.00/lb Cu: 3.6 Year Payback Mine Life: 36 Years 4. $2.2 Billion After-tax 8%: 20.1% IRR 1 September 7, Press release Copper Shines Brightly for McEwen Mining - Enhanced Economics of Los Azules. October 16, 2017 NI Technical Report-Preliminary Economic Assessment Update for the Los Azules Project, Argentina. 26

27 Los Azules Projected Payback & Copper Prices Payback (Years) $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 Copper Price (US$/lb) 27

28 Development: El Gallo Silver El Gallo Silver Key Features 1. Next to Existing Operations MUX Property Outline gpt Silver 3. Projected Avg Annual Production 2.7 Moz Silver / Yr 4. Requires +$18 / oz Silver El Gallo Silver Palmarito Km El Encuentro Mina Grande N El Gallo Mine Production Near Development Mineralized Zone Based on internal estimate. 28

29 Production: San José Mine - Gold & Silver Underground Mine, Narrow Vein, High Grade Key Features gpt Silver & 7.11 gpt Gold San José Mine San José Mine E Production MUX s 49% Share 94,000 oz Gold Eq. or 50,000 oz Gold & 3.3 Moz Silver 3. 5 Year Mine Life, Production Since 2007 Property Outline Goldcorp Cerro Negro 2017 Production koz Au Km N 1 Reserve grade 2 Production in gold equivalent ounces. Gold / silver ratio 75:1. 100% basis. 3 Goldcorp website, 2017 production estimate. 29

30 Production & Cost Estimates 2017 Cost / oz Cash AISC San José, Argentina El Gallo, Mexico Black Fox, Timmins $760 $780 $700 $900 $990 $1,100 29% Silver 69% Gold Gold / silver ratio 75:1. Based on internal estimates for El Gallo and San Jose. 1 Source: Primero public filings. 2 Based on internal estimates. 30

31 Historic & Projected Production Profile Gold Equivalent Ounces 000 s Timmins Nevada Mexico Argentina E 2018E 2019E 2020E Production in gold equivalent ounces. Gold / silver ratio 75: based on internal estimates. 31

32 Alignment with Share Owners Financial Discipline Executive Compensation Insider Ownership Treasury 1 : $51 m No Debt Yield: 0.5% Anti Royalties, Streams, Hedging Chairman/Chief Owner/CEO $1/year Salary No bonus, No options Aligned with shareholders Chairman/ Chief Owner/CEO Invested $133 million Owns 24% MUX 1 Cash, investments and precious metals valued at spot prices.. As of Oct 27,

33 Listed: Symbol: Avg Daily Vol. of Shares 1 : Shares Outstanding: Fully Diluted: Share Price: Market Cap: NYSE, TSX MUX 3,590, million 348 million US$2.09 US$696 million 48% Ownership 24% 28% CEO Institutional Retail / Other Beta 2 : 2.7x Source: Bloomberg. US$. As of Dec 15, Share volume NYSE and TSX combined, 3 months average. 2 Three years. 33

34 MUX vs GDX & GDXJ Los Azules Bought Deal Black Fox Definitive Agreement Black Fox Acquisition Completed Percentage Black Fox Announcement -5% GDX -6% GDXJ -10% MUX As of Dec 15,

35 MUX vs Gold, GDX and GDXJ Illustration of Impact of a High Beta Nov Present 250% GDX GDXJ Gold MUX 6% Gold -22% MUX -57% GDX -71% GDXJ Source: Bloomberg. US$. As of Dec 15,