McEwen Mining Inc. has announced a new gold discovery, called Twin Domes, within its 100% owned El Gallo Complex, Sinaloa, Mexico. The high gold grades encountered are reminiscent of historical mining grades that occurred throughout the El Gallo Complex between 1800-1950, where approximately 180,000 ounces of gold at 20 grams per ton were mined.
Over the next two weeks, McEwen Mining will be releasing new drill results from several additional areas within the El Gallo Complex, according to a company press release.
“The historical record of high-grade in this region has always intrigued me,” said Rob McEwen, the company’s chief owner.
“Due to my involvement in Goldcorp’s Red Lake discovery, which became the richest gold mine in the world, I have witnessed the power that high-grade can have on a Company’s profitability,” McEwen said. “For me, exploration is the vital R&D of the mining industry.”
McEwen added that while the probability of making a major discovery is low, “the wonderful aspect of the mining industry is the possibility of making a discovery, which is real, and often comes from an area where it is least expected. McEwen Mining’s exploration team has been actively exploring the Company’s large land position (+500,000 acres) around El Gallo. We are very encouraged by our recent exploration results.”
Twin Domes is located 14 kilometers (8.5 miles) west of El Gallo 1 and 2. Although there is minor evidence of small-scale mining, the majority of the discovery area is covered by agricultural land, according to the company announcement.
Twin Domes was identified as a prospective target based on previous exploration that was completed by a predecessor company. High-grade gold mineralization has been identified from surface to a depth of 50 meters. The known length (or strike) of the high-grade is approximately 375 meters. Both core drilling and surface trenches were used to target the mineralization.
Currently 10 trenches are being completed over the length of the mineralization in order to gain a better understanding of the nature of the high-grade, the geology, and the orientation of the veins, the McEwen Mining reports. 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.
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 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.
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.
McEwen Mining has announced that its goal 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 José 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 reports cash and liquid assets of approximately US$79 million and is debt free.