Grey Fox emerges as McEwen’s growth driver

McEwen Mining (NYSE, TSX: MUX) is banking on the Grey Fox deposit to drive production growth at its Fox Complex just outside Timmins, Ontario.McEwen plans to lift Fox Complex output from roughly 30,000–35,000 gold-equivalent oz. today to about 60,000 oz. by 2027 and 120,000–150,000 oz. by 2030, the company said Thursday in a statement. That’s about half of McEwen’s projected total output of 225,000–255,000 GEOs by then. The rest will come from the Gold Bar mine in Nevada and the company’s 49% stake in Argentina’s San José mine.“We are currently developing a pre-feasibility study for Grey Fox that will better define its potential and production timeline,” chief owner Rob McEwen said in a press release. The study is expected later this year.The Timmins mining camp is booming. Newmont’s (NYSE: NEM, TSX: NGT) Porcupine operations – an underground and open‐pit complex that produced 223,000 attributable oz. last year – sits immediately west of the city.Pan American Silver (TSX: PAAS; NYSE: PAAS) operates the Timmins West and Bell Creek mines, which supply the Bell Creek mill, located just south of town. Discovery Silver (TSX: DSV) is working on tailings retreatment at the Hollinger Tailings project on Timmins’ east side, while Moneta Gold (TSX: ME; US-OTC: MEAUF) is drilling at its Tower project within the camp’s area.McEwen has raised $110 million in the last three months by selling 5.25% convertible notes due in 2030. This funding will support development of the Stock deposit and boost the Fox Complex project pipeline. Earlier this month, McEwen secured a closure plan permit for the Stock development, which positions the company to start mining next year and paves the way for Grey Fox to follow. The plan aims to more than double the Fox Complex’s output by the decade’s end.After rising at the open, McEwen’s Toronto-traded shares fell 5.6% to C$7.39 in Toronto Thursday. That gave the company a market capitalization of C$395.3 million.Production boostMcEwen acquired the Black Fox, Stock and Lexam assets in 2017 and set out to rebuild production at the Fox Complex.In early 2021 the Froome deposit came online three months ahead of plan, delivering 24,300 gold-equivalent ounces. Output climbed to 36,700 oz. in 2022 and 44,400 oz. in 2023 before dipping to 30,200 oz. last year as frosty weather and labour shortages hit operations.A January 2022 economic assessment planned a phased production rollout at the Stock, Grey Fox and Fuller deposits. Yet, permitting delays pushed back building Stock’s ramp access to most of this year and delayed commercial production until early 2026.Development pipelineMining at Froome will wind down this year, clearing the way for Stock to ramp up and for Grey Fox to enter prefeasibility.Froome produced 5,520 gold-equivalent oz. in the first quarter compared with 7,486 oz. a year earlier. McEwen expects to meet the operation’s 2025 guidance of 30,000 – 35,000 oz. as Stock advances.McEwen’s first-quarter gross profit rose to $10.1 million from $6 million a year earlier, while adjusted EBITDA climbed to $8.7 million, or 16¢ per share, from $6.3 million, or 13¢. The net loss narrowed to $3.9 million from $20.4 million.Cash and equivalents jumped to $68.5 million from $17.5 million, and working capital swung to $61.1 million from negative $6.5 million. Debt rose to $130 million from $40 million, reflecting the convertible note issue to fund Fox Complex growth.Exploration upsideDrilling work continues. Recent assay results from Grey Fox revealed that hole 25GF-1539 intersected 10.7 metres (true width) at 12.4 grams gold per tonne starting from 90.6 metres depth in the Gibson Zone. This included 4.5 metres (true width) at 27.9 grams of gold and 30.1 metres (true width) at 4 grams of gold in a wider lens. This confirms the potential to expand the resource within 300 metres of the surface, according to the company.Drill hole 25GF-1537 intersected 7.8 metres (core width) at 6.2 grams gold per tonne from 575.3 metres deep. It also found 16 metres (core width) at 4.4 grams gold from 607.1 metres. This suggests a new exploration corridor. There could be orogenic-style mineralization below Grey Fox, McEwen noted.“These encouraging results reinforce our confidence that Grey Fox, our next project in the production pipeline, will become a cornerstone asset for us for years to come,” McEwen said.Based on figures released in February, Grey Fox’s updated resource stands at 13.1 million tonnes indicated at 3.6 grams gold per tonne for 1.5 million oz. of gold and about 4.3 million tonnes inferred at 3.3 grams gold for 458,000 oz. of metal. The indicated and inferred resources increased 32% and 95% respectively over the prior 2021 estimate.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com