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Edited Transcript of MUX earnings conference call or presentation 17-Mar-20 6:00pm GMT

Q4 2019 McEwen Mining Inc Earnings Call

TORONTO Apr 4, 2020 (Thomson StreetEvents) -- Edited Transcript of McEwen Mining Inc earnings conference call or presentation Tuesday, March 17, 2020 at 6:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Christopher Stewart; President & COO

* Merushe Verli

McEwen Mining Inc. - CFO

* Robert Ross McEwen

McEwen Mining Inc. - Chairman, CEO & Chief Owner

* Sylvain Guérard

McEwen Mining Inc. - SVP of Exploration

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Conference Call Participants

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* Adam Philip Graf

B. Riley FBR, Inc., Research Division - Senior Mining Analyst & MD

* Bhakti Pavani

Alliance Global Partners, Research Division - Senior Research Analyst

* Heiko Felix Ihle

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research and Senior Metals & Mining Analyst

* Jacob G. Sekelsky

Roth Capital Partners, LLC, Research Division - Director & Research Analyst

* John Charles Tumazos

John Tumazos Very Independent Research, LLC - President and CEO

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Presentation

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Operator [1]

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Hello, ladies and gentlemen. Welcome to McEwen Mining's Q4 and Full Year 2019 Operating and Financial Results Conference Call. Present today from the company are Rob McEwen, Chairman and Chief Owner; Chris Stewart, President and Chief Operating Officer; Meri Verli, Chief Financial Officer; and Sylvain Guérard, Senior Vice President of Exploration. (Operator Instructions)

I will now turn the call over to Mr. Rob McEwen, Chief Owner.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [2]

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Thank you, operator. Good afternoon. For our shareholders, past and present, our management and myself, last year was a terrible year. We all know our share price fell out of the sky, and I want to start this call with a very sincere apology to everyone. We gave you guidance throughout the year for our operational performance, and we failed miserably. We did not deliver.

By the end of the year, it was impossible to believe any forecast we provided for operations. This was very unfortunate because considerable success was made on the exploration front at Black Fox. This success was completely overshadowed by the bad news from operations. I know it's going to take many quarters of delivering on guidance before we gain your confidence, and I can say that last year was the worst year I have ever experienced in business, and I'm sure the experience was very unpleasant for you. And I want to assure you that we're working hard not to repeat it.

Today, we are going to provide our perspectives on our 2019 operating, financial and exploration results and talk about what 2020 looks like.

I will now turn the call over to Meri, who will start by providing a high-level overview of our financial results.

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Merushe Verli, McEwen Mining Inc. - CFO [3]

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Thank you, Rob. Good afternoon, everyone. During 2019, our consolidated production was 174,400 gold equivalent ounces, approximately equal to our production last year, and total sales were 175,500 ounces. Our total sales were comprised of 85,100 gold equivalent ounces from our 100% owned mines, Black Fox, Gold Bar and El Gallo Gold; and 90,300 ounces were attributable to our 49% interest in the San Jose mine.

2019, revenue from our 100% owned mines totaled $170 million, approximately 9% lower than in 2018. If we included the revenue attributable to our 49% interest in San Jose, that would have added $129 million. But revenue from San Jose is not included in our income statement because we use the equity method of accounting for this asset. We have created a new metric that is designed to help you evaluate our operations ability to generate cash flow. It is a non-GAAP measure disclosed in our Form 10-K called cash gross profit.

Cash gross profit is calculated by adding back depletion and depreciation to gross profit. For 2019, cash gross profit from our 100% owned operation was $33.7 million compared to GAAP gross profit of $9 million. Cash gross profit attributable to our 49% interest in San Jose was $51 million compared to GAAP gross profit of $16.6 million. However, we do not consolidate San Jose as mentioned earlier.

During 2019, we received $8.9 million in dividends from our interest in San Jose.

I'll now discuss the main components contributing to our net loss in 2019. During the year, we invested $37.7 million in exploration with 90% spent at the Black Fox complex and the balance at the Gold Bar in Nevada. Depreciation and depletion expenses were $24.8 million. We spent $9.5 million on growth projects, including spending for advancing the Froome Project in Timmins, Ontario, Fenix Project in Mexico, engineering and permit work at the Gold Bar South property in Nevada and preproduction expenditures at the Gold Bar mine.

We included a loss of $8.8 million on our 49% investment in the San Jose joint venture company, bringing the book value of our investment in the joint venture to $110 million. We incurred interest expense of $6.8 million related primarily to our debt and G&A expenses of $12.8 million. We also realized the gain on the sale of marketable securities of $5.3 million, a gain on the recovery of taxes of $3.8 million and $2 million in other income. In total, our consolidated net loss for 2019 was $59.7 million or $0.17 per share.

Financing activities during 2019 included the issuance of 54.9 million common shares and 29.8 million warrants for gross proceeds of $77 million for an average of $1.4 per share. Share issuances for cash during 2019 resulted in equity dilution of 16% based on shares outstanding at the end of 2018.

At December 31, 2019, liquid assets increased to $49.7 million from $37.8 million at the end of 2018. Working capital increased to $43.2 million from $23.4 million at the end of '18. Debt outstanding remained at $50 million.

Looking ahead to 2020, we expect a significant reduction in our exploration expenses to under $10 million, spending on growth projects of approximately $14 million primarily at the Black Fox Complex, debt repayment and interest expense will increase to $14.7 million.

We are currently making adjustments to our budget, given the expected lower-than-planned production from Gold Bar mine in 2020, but we do not have details yet of these changes.

I'll now turn the call over to Chris Stewart for a discussion on mining operations.

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Christopher Stewart; President & COO, [4]

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Thank you, Meri. I will start by going over the operational highlights for each operation, starting with San Jose. Our San Jose joint venture mine in Argentina had a good year in 2019, meeting our guidance for gold and silver production. For 2020, our share of production from San Jose is expected to be 45,700 ounces of gold and 3.2 million ounces of silver, for a total of 82,000 gold equivalent ounces at an average gold:silver ratio of 88:1. Midpoint cash costs and all-in sustaining costs are $975 and $1,225 per gold equivalent ounce, respectively.

Moving to Mexico, our El Gallo heap leach is still residual leaching. During 2019, we produced 16,333 gold equivalent ounces at an attractive residual leaching cost of $688 per gold equivalent ounce sold. In 2020, our guidance is 12,000 gold equivalent ounces.

Moving to the Timmins area, our Black Fox Mine encountered several one-off events at the beginning of 2019 that we have discussed in detail in prior quarters. Due to these challenges, production was delayed and mining flexibility was restricted during 2019. As a result, reduced our -- we reduced our production guidance during the year. Total production was 35,700 gold equivalent ounces in 2019 compared to 48,900 in 2018. Of note is that despite the reduction in ounces, our team was able to decrease our cash costs to $825 per GEO from $845 in 2018, and to contain the increase in our all-in sustaining costs to $1,225 per gold equivalent ounce from $1,137 in 2018.

Looking ahead to 2020, at Black Fox, our production guidance is 35,000 to 40,000 gold ounces at midpoint cash costs and all-in sustaining costs of $1,075 and $1,200 per gold equivalent ounce, respectively. This guidance is given with the benefit of over 2 years of operating expertise since the acquisition and a revised forecasting approach, which includes risk factors assigned to each mining area planned during the year.

With respect to capital spending, at Black Fox, we are actively developing the access ramp from the Black Fox open pit to the nearby Froome ore body. Froome is expected to have associated development expenses of $21 million over approximately the next 15 months and to provide ore production for approximately 2 years beginning in Q4 of 2020.

The mineralization at Froome is different from Black Fox and that it is much thicker and more homogeneous, thus enabling more productive transverse mining method, which should reduce our costs. The schematic on the slide illustrates the difference between the longitudinal mining methods, which is used at Black Fox and the transverse mining method, which we will be employing at Froome.

Using the transverse mining method, our internal studies and schedules call for Froome to produce 65,000 gold equivalent ounces in 2022 and 45,000 gold ounces in 2023. Froome cash costs are estimated to be approximately $850 and all-in sustaining costs of $926 per ounce.

With Froome, the life of the Black Fox Complex is then extended to 2023. Moreover, our objective is to expand production by drawing ore from multiple sources to fill our mill and extend the mine life substantially. Today, we're going to introduce a conceptual plan, which is at various stages of engineering. Key to our plan is the exploration success that Sylvain and team have delivered over the last 2 years.

I'm going to turn it over to Sylvain to discuss the exploration and resource definition at Black Fox, Grey Fox and Stock properties.

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [5]

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Thank you, Chris. Key highlights from our 2019 exploration program in payments include discovery of Stock West, an important new zone of mineralization, a significant increase and indicated resource at Grey Fox and highly positive drill intersection at several targets in the area and positive drill results near existing active mining areas at Black Fox.

A bit more detail about Stock West. Our drilling last year led to the discovery and early definition of an impressive new zone of mineralization. We have a total of 31 drill holes into this area. Mineralized intersection averaged around 5 gram per tonne gold over average widths ranging from 15 to 20 meters. These strong drill results occur in an area measuring 265 meter along strike and 200 meter vertically. The new mineralized zone is located less than 350 meter from existing underground development and less than a kilometer from our mill.

The Stock West zone remains open in all directions, and our 2020 exploration program is designed to produce an initial mineral resource estimate and also to test the extension of the mineralization in order to assess the potential size of the discovery.

Additionally, at Stock, the historical Stock mine is an opportunity to explore below the existing working. Review and interpretation of the historical data and drill program planning are currently underway.

Moving to Grey Fox, drilling generated a high rate of success, leading to an increase of 33% or 155,000 ounces to the indicated resource estimate for a total of 620,000 ounces at an average grade of 7.2 gram per tonne gold. Our approach was to focus on drilling mineralized cross structures that were previously not well understood or drill tested, which led us to multiple exciting intersection over a 1.5 square kilometer area.

Outside of the resource areas at the Whiskey Jack target, drill results including a reason -- a recent intersection of 53 gram per tonne gold over 6.7 meter, indicate a strongly mineralized system with very good potential to define a new zone of mineralization.

We (technical difficulty) resource at Grey Fox.

At the Black Fox mine now, we have underground drill platforms to explore the West and depth extension of the mine. High-grade results were intersected on the upper Western extension of the mine such as 79 gram per tonne over 2.6 meter, 41 gram per tonne over 3.3 meter and 78 gram per tonne over 1.8 meter. These positive drill results indicate the potential to extend mining in this area.

Mineralization contains high-grade drill intersection extending as far as 120 meter to the West of the nearest mining phase. A high-grade intersection of 105 gram per tonne over 1.5 meter was also recently intersected close to mining development on the depth extension of the mine. The intersection is halfway down, launched towards the deepest 55 gram per tonne exploration pit at the mine's 1,050 meter level, suggesting continuity of the high-grade mineralization on the depth extension of the mine.

On this, back to Chris.

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Christopher Stewart; President & COO, [6]

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Thanks, Sylvain. As you have heard, our rate of exploration success suggests that the Black Fox Mine has the potential to produce for several more years. Our vision is to use the window we have during the next 12 to 24 months to begin putting in place the development needed to produce from 2 to 3 deposits concurrently. By stacking multiple sources of production, we could reach a 100,000 to 125,000 ounce production level in 5 years.

Grey Fox has grown since the acquisition. We are commencing a feasibility study on the project, looking initially at an open pit mining that would eventually transition to an underground operation similar to our current Black Fox Mine. This schematic illustrates potential open pits on the contact in 147 Zones, which is the extent at what we have studied so far. The 147 Northeast Zone also comes to surface, and it may be included in the open pit plan. Preliminary analysis shows that the 2 high-grade pits around 3 grams per tonne would provide significant ore feed for our mill over a 5- to 7-year life. We anticipate having the feasibility study completed in Q4 of this year. Currently, permitting is being carried out simultaneously with the feasibility study work.

This schematic shows the development involved with gaining access to the old Stock Mine and additional development to access the Stock West Zone. We envision a portal and a new ramp from surface to access the old mine workings as the existing shaft is no longer usable for personnel transport.

Fuel drifts would be developed to connect the Stock West Zone to the existing mine. Great benefit we have at Stock is that this is a permitted site. Therefore, we can quickly develop an underground mining plan. At the moment, it seems that this plan could be implemented relatively soon after access to Froome is established. The exploration program of 2019 define the mineral inventory at Stock West, and we are planning to continue the exploration at this zone and to complete a compliant resource estimates in 2020.

Moving to Gold Bar, we produced 30,700 gold equivalent ounces in 2019 compared to our original guidance of 55,000 ounces. Cash costs and all-in sustaining costs were $1,101 and $1,282 per gold equivalent ounce, respectively. It is important to understand the various factors that contributed to the shorter fall of 24,300 ounces versus our original plan and the higher costs we incurred.

There were 5 principal reasons. First was the delay. Commercial production was planned to begin in March 2019, but was not achieved until May. This resulted in fewer ounces on the heap leach pad and less time to recover them.

Second was gold grade. We moved approximately the number of tonnes we planned in 2019. But in order to achieve that, we needed to mine some lower-grade stockpiles and the pre-stripping in the Pick pit contained lower grading tons than predicted in our model.

Third was the recovery. Experts in the field of heap leach believe we will achieve the expected ultimate recovery on crushed and agglomerated material, but we expect it to take much longer to reach that number. Also as a factor was our decision to selectively stack run-of-mine material, which, by definition, will not recover as well as crush material.

Fourth was our decision to exploit the Cabin Creek ore body ahead of our original schedule to improve cash flows. This decision caused several complications with the ore handling system because of the higher clay content and wet winter weather.

And fifth were deficiencies to overcome with the engineering and construction of the mine infrastructure. For example, an amount of preg-robbing [carbon containing carbonaceous] material was used in the heap leach pad construction. Picking errors in the process plant resulted in carbon attrition but also caused preg-robbing on the heap leach pad.

Recently, we have encountered another significant hurdle at Gold Bar. Our initial experienced mining from the 2 Cabin Creek pits was positive in that -- in the sense that they contained about 8% more gold than was predicted by our reserve model. This is not unusual, and it was a pleasant result for us.

Recently, we have transitioned to mining almost exclusively from the Pick deposit, specifically the Pick West pit. There's quite a bit of waste stripping associated with Pick West, and we have been working our way closer to the ore zones and advancing about 120-foot bench per month. Our experience finding from Pick West has been that the reconciliation to the reserve model has been very poor for ore tons as well as gold grade. The pit has now advanced to a point where we are mining some better material. And what we see is our actual tonnes are still down relative to the model and grade is up, although we don't have enough data yet to reliably predict the differences. This triggered a reevaluation of the resource reserve modeling, which we have been advancing at the maximum pace possible. We have an initial draft resource interpretation completed. And while our geological team does not think of it as optimized, we know enough to understand that the resource reserve estimates will likely decrease and the mine plan will change. There are several mitigating circumstances that may partially offset the reduction in containing the ounces, which I will mention, so people are aware.

First, fewer ore tonnes to process and higher gold grades potentially gives us a higher margin on each tonne of ore placed on the heap leach. Higher grades also tend to recover better. And secondly, certain capital costs such as an expansion of the heap leach pad may not need to take place. As some of you will appreciate that geological -- a geologic explanation of what we see in the pit that has caused us to refine our modeling criteria for Gold Pick, I'm going to hand over to the discussion to Sylvain to present you with some details.

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [7]

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Thank you, Chris. We've been using new information from pit mapping and in-pit drilling to revise and refine our resource model for gold bar. Previous modeling rely mainly on bedding control, which means the gold mineralization was mostly distributed and confined to specific favorable beds of the Gold Bar deposit. Recently, a better understanding of the structural controls to locate and consideration was developed as a key component to the bedding control, resulting in what we believe is a more robust model.

The updated structural control to mineralization led to the identification of several near-mine targets that were not incorporated in previous or current resource models due to low drill density. McEwen geological and resource teams are working with SRK Consulting to incorporate the revised structural and mineralization control in addition to the bedding control and update the mineral resource at the Gold Pick deposit. The preliminary model have been completed and McEwen and SRK are continuing work to adjust and optimize the model. The revised model is expected to be completed in Q2.

We are also working to incorporate the Gold Bar South satellite deposit into mine plan. Gold Bar South provides an attractive opportunity to add a new ore source to the Gold Bar Mine. It is a near-surface deposit located to the Southeast of the leach pad. During 2019, Gold Bar South was drilled and the resource was upgraded to measure an indicated category, totaling now 63,000 ounces of gold at an average grade of 1.1 gram per tonne. There is upside potential to grow the resource and additional drilling is planned over the Southeast -- the South extension, which remain open, and over the North portion of the deposit, which has recently become fully accessible for drilling.

Over to Rob.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [8]

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Thank you, Sylvain. Let me leave you with 4 thoughts: Gold Bar is still facing challenges. And as a result, we are reworking gold reserves and resources along with the mine plan. This will take us some time, and we are moving as quickly as possible to resolve this issue; second, San Jose is forecasted to deliver another solid year. However, the very recent big change in the silver:gold ratio, if it were to persist, the mine will be generating fewer dividends; three, exploration at the Black Fox Complex has grown our existing resources and discovered a new resource. We are optimistic that our investment in exploration has provided us with the opportunity to increase production and extend the mine life on the Black Fox property; and four, the massive injection of capital now being deployed to combat the spread and deal with the adverse economic damage being caused by the coronavirus will over time be extremely inflationary. I believe that in an environment with 0 interest rates, and this new worldwide quantitative easing will over this year accelerate the flow of investment dollars into gold.

Now I'd like to open the session for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

Our first question comes from Jake Sekelsky with Roth Capital Partners.

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Jacob G. Sekelsky, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [2]

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Just a few quick questions on my end, starting at Gold Bar. I know details here are still work in process. But I'm just wondering should we expect 2020 guidance to be issued at Gold Bar once the updated reserve and mine plan are out? I'm just trying to get a handle on what things might look like going forward?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [3]

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Absolutely. But that won't be for a month or more.

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Jacob G. Sekelsky, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [4]

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Okay. That's helpful. And looking at Gold Bar South, I know you guys are talking about potentially bringing that into the mine plan. How quickly would you say that can be brought online if that's the decision that's made over the next couple of quarters?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [5]

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We're moving forward with the permitting and that's supposed to be about a year, maybe a little bit longer. Once we get the permit, then we'd open it up. The nice thing about Gold Bar South is it's located at a lower altitude, and we've had issues processing the ore during the winter and mining up on the hill just due to snow and that. So it's lower altitude. It's a slight uphill drive from -- to the pad, but about same distance, so you don't have the weather impacting as much.

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Jacob G. Sekelsky, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [6]

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Okay. That's helpful. And then just at Black Fox, it looks like exploration is still the focus here. And Froome starting to look like the next leg of growth. Are there -- I'm just wondering, are there any remaining permits you guys need there to move forward with that conceptual mine plan that was spoken about earlier?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [7]

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Over at Stock, the mine is permitted. It's currently -- the status is temporarily suspended. It's a shallow mine. Now it goes down to about 330 meters. It has been dewatered in the past. And we heard the last time they dewatered it, it took about 4 months to do that. We don't know the state of the underground, and that's why Chris was talking about driving a ramp off to it and then linking up with the underground system to provide ventilation and further access.

So in terms of timing, we'd like to get a better handle on the Stock West Zone, put some more drilling in there, so we could come forward with a more comprehensive plan. But what we've already seen so far is wide widths, consistent grades, both in close proximity to the existing workings of the old mine. We're also seeing values at depth below the old workings. And in fact, we have a drill hole down there that's about 600 meters below the past working, so it was quite an attractive grade suggesting that the ore body continues below. We're also looking at areas around the existing workings that appear to have resources that weren't mined.

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Jacob G. Sekelsky, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [8]

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So it sounds like it can be advanced fairly quickly.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [9]

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Yes.

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Operator [10]

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And your next question is from Heiko Ihle with H.C. Wainwright.

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Heiko Felix Ihle, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research and Senior Metals & Mining Analyst [11]

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I'm going to build a little bit on the question that Jake asked. So I went through your MD&A on SEDAR this morning. And on Page 44, you state, and this is a quote, "With respect to the Gold Bar mine, a significant reduction in cash flow results from changes to the reserve estimate at the mine plan." As discussed on Page 45, it may be necessary to curtail, defer or suspend operational expenditures and/or raise capital through various financing methods. I guess, sort of the question here, is this the risk mitigation or are there real contingency plans you guys are already looking at?

And if you are looking at certain scenarios, I mean, can you just sort of give us an idea at least of like a base negative and hopeful case scenario? And what kind of gold prices you use in those scenarios, please?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [12]

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Sure. Thank you, Heiko. You were reading from the risk factors we set out in the 10-K.

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Heiko Felix Ihle, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research and Senior Metals & Mining Analyst [13]

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Correct. It was the MD&A in -- on SEDAR.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [14]

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Yes. It's repeated in the 10-K. But in there, there is concern that we could be losing ounces and tonnage. The tonnage initially seems to be -- it's very preliminary, but we think there'll be a reduction in tonnage announcement. We don't know the extent.

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Heiko Felix Ihle, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research and Senior Metals & Mining Analyst [15]

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Okay. Fair enough. The -- and I assume you haven't answered to this one yet either. You don't know the spend on exploration activities on -- at Gold Bar for 2020, right? I mean, you quoted 2018 and 2019 in release, but 2020, I just saw a work in progress because nobody knows.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [16]

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We had some numbers, but a lot of things being thrown up in the air. We don't know what -- I think the entire industry, and for that matter, all the industries are being disrupted by coronavirus. So it's becoming a little difficult to predict what is the impact if the site was infected and shut down for a while.

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Heiko Felix Ihle, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research and Senior Metals & Mining Analyst [17]

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Fair enough. You've actually -- just -- because it lead through to my next question because I was going to ask more or less exactly that. What precaution and/or changes to the organization have happened thus far? Is everybody working from home? Is the office about to shutdown? I mean, travel, international travel, especially is extremely curtailed. Frankly, it should be. What changes have been made? And should we expect to see anything out of you guys in the next couple of weeks in regards to that, please?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [18]

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We haven't had any reported incidences of coronavirus in the firm. I thought, I might have been exposed to it during the PDAC, but my 14 days has passed and no symptoms. Our office is operating on a skeleton staff right now. Chris has plans in place at our operations to deal with anything occurring there.

As you mentioned, international travel has been stopped. Most travel has been stopped at the moment. And we're taking it very seriously. Chris, would you like to add anything to that?

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Christopher Stewart; President & COO, [19]

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Yes. No. Thanks, Rob. Echo, yes. We're more or less following along as other mining companies are, ensuring that our mine sites and operations are protected. We're checking temperatures of people coming to the site. We restricted visitors. No unnecessary visitors are allowed on site.

And yes, we've put in a lot of information to our people as well, links to sort of keep track of this, and we are providing updates to our people on sites on a daily basis. And we've educated them on self-monitoring. If they have traveled, we're putting them home for 14 days to self-quarantine and monitor themselves. So we're taking all the proper precautions to ensure that we can hopefully avoid having this crop up at our operations level.

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Operator [20]

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Your next question is from Adam Graf with B. Riley.

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Adam Philip Graf, B. Riley FBR, Inc., Research Division - Senior Mining Analyst & MD [21]

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Just a quick question following up on corona preparedness. Have you guys taken account of supplies, grinding media, cyanide, other spare parts in case supply chains get cut off that you can continue operations without running out of a key supply?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [22]

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Over to you, Chris.

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Christopher Stewart; President & COO, [23]

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Yes, thanks. We've been in contact, and we continue to be in regular contract -- contact with our suppliers. And as of now, again, they're taking similar precautions as to what we are, and they're open for business.

With respect to stockpiling or -- cyanide, we don't have containment. We have additional cyanide on site. A lot of these chemicals, you have your containments and that's what you have. And you can't get permits overnight to essentially store more. So we are relying on our supplier network to continue. And as the virus spreads, pretty hard to determine what the overall impact will be to our business, but we're certainly maintaining regular contact with our suppliers and assuring that we're getting -- stockpiling what we can on site within reason. And we'll have to sort of keep monitoring this and make adjustments as we go here.

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Operator [24]

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Your next question comes from Bhakti Pavani with Alliance Global Partners.

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Bhakti Pavani, Alliance Global Partners, Research Division - Senior Research Analyst [25]

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Just a quick one. Last year, you had some very high-grade drill intercepts at Black Fox Mine. I'm curious, are you guys planning to go back and explore more this year in your exploration budget for 2020?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [26]

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Yes, Bhakti, that's a good question. And yes, we have recently good success on the West Flank at the Black Fox Mine. As you know, we've been developing underground to provide better access to drill the West and depth extension of the mine. So we've been drilling there and got positive intersection

(technical difficulty)

at 1,050 level, and we have a new hit high-grade intersection of 105 gram per tonne in between, where we are mining right now in the deepest intersection. Again, typical Black Fox high-grade mineralization really strongly demonstrating that the system remain open and mining can extend both on the West -- potentially on the West Flank and also on the depth extension of the mine. And we keep drilling underground, so we have 4 rigs drilling underground.

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Bhakti Pavani, Alliance Global Partners, Research Division - Senior Research Analyst [27]

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Got it. And in the past, you have kind of talked about Froome being an additional deposit where the production would be coming from in addition to Black Fox Mine. Do you still seeing that exploration results that you have in place? Or do you think once -- in 2022, you would be exclusively mining from Froome deposit at this point?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [28]

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Your question, Bhakti, if I understand well, it's about the mining of Froome or exploration around Froome?

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Bhakti Pavani, Alliance Global Partners, Research Division - Senior Research Analyst [29]

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It's combined with both. I mean, with Black Fox, the mineral reserve update that you published yesterday, it has about less than 2 years of mine life at Black Fox. And Froome is expected to come online in fourth quarter of 2020. So I'm wondering, given the exploration results at the Black Fox Mine itself, do you see the mine life extending beyond the end of next year? Or do you think you would be exclusively mining from Froome starting 2022?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [30]

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Chris, do you want -- that part of our conceptual plans, would you like to just go over that again?

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Christopher Stewart; President & COO, [31]

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Yes, sure. So the -- so yes, I mean, we've had a lot of exploration success looking at on the Western Flank. We've got a lot of really good holes 150 meters away from current development. So we're pretty excited about what we're seeing on the Western Flank, but we do need to continue to drill that and build that into a new resource and then a reserve. And what we view with Stock, we think we can sort of keep Black Fox moving along until Froome comes into play, and then Froome gives us a couple of years of production. And then at that point in time, right now, our current plan, barring any -- barring a whole bunch of more success and growing the resource significantly. Our plan is to essentially slow down or stop at Black Fox and give the drills an opportunity to really drill and build that resource. We believe there's -- we're pretty bullish on Black Fox and believe there's a lot more gold there, but we need the time to allow the drills to get there instead of drilling on top of development on top of mining, which is not efficient as everyone knows when you're trying to run a mine.

So Froome is planned to do 1,500 tonnes per day. It does have a bit of a harder work index than Black Fox, and our mill's capacity is around 2,400 tonnes per day. So we do have some flexibility when we're in Froome. If we can pick up some additional ore at Black Fox, we had certainly looked to put that through the mill. But our main focus at Black Fox, once we get Froome started, would be to build our resource into what we think it can actually be.

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Bhakti Pavani, Alliance Global Partners, Research Division - Senior Research Analyst [32]

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Got it. That's very helpful. And with regards to development of Froome, could you maybe walk us through how long would it take for the development to complete? And what else needs to be done before you bring Froome into production in fourth quarter of 2020 -- 2021, I'm sorry?

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Christopher Stewart; President & COO, [33]

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Sure, yes. So at Froome, we're basically driving twin drifts. We call it the portals in the fall, and we just got started driving the drifts here in March. We are -- we have slowed the contractor down slightly right off the start because we've got about 5,000 ounces on the Western edge of the Black Box pit, which is in our mine plan for 2020 for the underground. So we've actually got them to power the drifts, and where we're going to drive the ramps to access those ounces because we can't get there from the current underground workings.

So we've got that done, and now they'll be heading down the hill over to Froome. And that we expect will take us until the end of -- we should be down there late Q1 of 2021. And then, of course, we have the mine to develop and get the stooping set up. And we'd be looking at moving into production in Q4 2021.

With respect to -- there's no permits required. Everything's permitted. We're ready to go. It's basically just get down there and get ourselves set up and then we can start mining. We already have our ventilation circuit set up. That's why we're driving twin ramps, so that we'll have fresh air and return air and escape ways and everything. We'll be all set, and we're driving -- we've positioned the ramp, so it comes right in to sort of the bottom third of the mine, so that we can basically hit the high-grade zone and the thicker zones right off the bat to ramp up our production quickly.

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Bhakti Pavani, Alliance Global Partners, Research Division - Senior Research Analyst [34]

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And just one more follow-up. If I correctly understand, you previously mentioned the production from Froome is going to be 65,000 ounces the first year and 45,000 in the second year? Correct?

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Christopher Stewart; President & COO, [35]

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Correct.

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Bhakti Pavani, Alliance Global Partners, Research Division - Senior Research Analyst [36]

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Okay. Moving to Gold Bar. I know you said that you are reevaluating and remodeling the reserve for the Gold Pick deposit. The Gold Ridge is kind of small. What are your thoughts on reevaluating or redetermining the resource there?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [37]

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Yes. What we are focusing right now, Bhakti, is -- as a priority aspect, the Pick model. But right after that, we keep doing the same type of exercise with the information we have at Gold Ridge. The big advantage, if you want, that we have right now at Gold Pick is having access to new exposure in the pit. We also have, of course, the mining going and grade control information.

So a lot more details than what we had in the past. And we are using this information to be incorporated to the model to really update and refine the understanding of what we have there regarding style of mineralization and controls.

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Bhakti Pavani, Alliance Global Partners, Research Division - Senior Research Analyst [38]

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Got it. And just 1 follow-up. Did you guys mine at Gold Pick East at all during this time?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [39]

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No, not yet. The mining is at Gold Pick West currently.

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Operator [40]

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Your next question comes from John Tumazos with John Tumazos Very Independent Research.

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John Charles Tumazos, John Tumazos Very Independent Research, LLC - President and CEO [41]

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Does the stock indicated resource of 121,000 ounces include the benefit of the good drill results in the past year? Or how much of it doesn't include?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [42]

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John, Sylvain speaking. Yes, this is Stock East only, and this is an upgrade of the resource there. There's still scenario for open pit and underground that we'll be looking at. We have a lot better density in -- of drilling over this East deposit or targets, if you want. As you know, our focus at Stock has been over a 3-kilometer strike land that include the old Stock Mine. We see good potential right below the old mining there, compiling the information, historical information. This might have been shut down in low gold price, and there is a bunch of good intersections just below the mine. So that's probably the first place we'll be looking at in the short term when we advance Stock.

And going to the West, as you know, this Stock West is a significant new discovery. We don't know still the real size or potential of this zone. We want to go back in it to 2 main objectives: one is to infill the Stock West to bring it to a resource estimate; and also drill the extension of this new discovery to assess site's potential. So there's a 3-kilometer strike land with the mine in the middle and good potential right below the mines. And going to the West side, we believe we have -- this is the big price with Stock West. And we still have Stock East, this new upgraded resource that we have, that includes some high-grade mineralization into a lower-grade larger envelope of mineralization.

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John Charles Tumazos, John Tumazos Very Independent Research, LLC - President and CEO [43]

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Directing this question to Rob, if I may. Given that you don't have a production forecast for the moment from Gold Bar and the Black Fox Complex is going to be in a transition from the old mine to Froome, and the evaluation of Grey Fox. Do you think you should significantly cut the exploration spending? And put a project on ice just in case the Nevada or Ontario output isn't as good as you wish it was? A fewer balls in the air, given the uncertainty.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [44]

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Absolutely, John. We've been looking to rationalize our portfolio of properties and focusing.

It seems that Black Fox, which was considered not to have a lot of future by many, we've had good exploration results there just like we could build production. And Gold Bar, which was going to be a star is a little handicapped at the moment and hobbling along. So we're just looking to rein in some of our expenditures on exploration in other areas and focusing that we have the funds to develop these other sources of production.

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John Charles Tumazos, John Tumazos Very Independent Research, LLC - President and CEO [45]

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So do you think that dewatering and further evaluation of Stock should continue or be put on hold pending the subsequent performance in Nevada and at Black Fox?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [46]

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We're thinking about those matters. We'll have a better way of evaluating that once we get the Gold Bar numbers in hand.

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John Charles Tumazos, John Tumazos Very Independent Research, LLC - President and CEO [47]

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Sure. I apologize for posing the question, while you're in the evaluation phase.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [48]

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No. No. No, it's a very rational question to ask. Where the focus needs to be. So Sylvain, did you want to add something there?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [49]

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Yes. Maybe, John, I can add a few points to this question. I agree, the investment in exploration over the last 2 years actually have been quite important. But really quickly, this allow us to focus our efforts and exploration only in a few area where we've been quite successful. As you know, there's the Black Fox Mine itself that we keep drilling underground, and we see a potential to extend mineralization and, hopefully, mining. And we focus on the Grey Fox area where we've been quite successful, increasing significant -- resource of significant grade with mineralization coming to surface on our mine property. So that gave us a pretty interesting opportunity for open pit mining to start with at Grey Fox. And Stock have been moving up, if you want, as a project faster than expected, especially with the Stock West discovery. So right now, our focus is only at the Black Fox Mine, Stock West as a discovery. And we don't really see a need to any additional significant exploration right now at Grey Fox because we have a critical mass that allow us to keep advancing studies toward development. At Stock West, we would like to bring it to a resource stage. And based on it, we can really support additional studies and potential dewatering or development of the Stock project.

And Gold Bar, all of the exploration that we are planning at Gold Bar this year will be mine ex or near-mine exploration to keep drilling into the pits or around the pits to get ounces back into it or increase and Gold Bar South, because Gold Bar South is a quality satellite deposit, silica-rich, very limited alteration there, sub-cropping and decent grade, not far from our operation at lower elevation. So we see that as quite attractive. And Gold Bar South is open to the South. The last section to the South is in mineralization, and the Northern area is only partially drilled. So we see growth potential there.

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Operator [50]

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Your next question is from Adam Graf with B. Riley.

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Adam Philip Graf, B. Riley FBR, Inc., Research Division - Senior Mining Analyst & MD [51]

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Just a quick follow-up question regarding this slide here #7 with your conceptual plans for Timmins. You guys talked about it a little bit before. You guys clarified that Froome is permitted. And Stock, because it was never officially closed, it is permitted. Does that include all of Stock, the potential for the open pit, the Stock West, et cetera? And then, obviously, between -- in this conceptual plan between Stock and Froome is Grey Fox. And what, if any, permitting is necessary there?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [52]

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Froome is permitted. Stock, the mine is permitted. If we were to go underground to Stock West, that would be -- that's permitted going underground. Stock East, we don't know if that's open pit or underground. If you were underground, you'll be connecting with the existing mine, so that permit wouldn't be an issue. But if you wanted an open pit, it would be an issue. Only in that, it would take time. And then Grey Fox is on our property, and no permit.

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Adam Philip Graf, B. Riley FBR, Inc., Research Division - Senior Mining Analyst & MD [53]

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No permit. Okay. Okay. So it sounds to me, it's -- your -- it's really just about planning, engineering, drill density versus any type of regulatory hurdles per se?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [54]

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Well, on Grey Fox, you'd have to deal with water containment just where -- and runoff. You'd have to satisfy the regulators about that.

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Adam Philip Graf, B. Riley FBR, Inc., Research Division - Senior Mining Analyst & MD [55]

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And what kind of a process is that, Rob? And could that delay Grey Fox or swap around some of your conceptual plan here?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [56]

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It could take -- I don't know, you need to have some studies done and that might take the better part of 3 quarters of the year. They're just water and archeological issues to satisfy.

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Adam Philip Graf, B. Riley FBR, Inc., Research Division - Senior Mining Analyst & MD [57]

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Would you -- Do you guys expect to sort of give us periodic revisions on this conceptual plan as your knowledge and plans evolve?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [58]

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Absolutely. No. We see that this is a bit of a light at the end of the tunnel. And...

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Adam Philip Graf, B. Riley FBR, Inc., Research Division - Senior Mining Analyst & MD [59]

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Yes. I think it would be very helpful to analysts and the market to stay up-to-date on how this can -- how the potential year can be unlocked.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [60]

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Yes. This change the story significantly. So we will be doing that. We'll be doing it eagerly, Adam.

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Operator [61]

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Your next question comes from [Bill Powers], private investor.

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Unidentified Participant, [62]

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I appreciate your candor at the beginning of the call most certainly. But I guess, I have a few questions. And I guess I'll start with kind of an easy one. For Grey Fox, when you did the call in December, I believe it was Ken, who had mentioned that he had found up to 12 significant or potentially strikes along Grey Fox, I guess, would be -- or right around by Whiskey Jack. And he also had mentioned that the -- and from what I can read from the most recent press releases is that the width seem to be wider than what you had been finding previously. I guess, on this topic, one, I guess, is that something that you've seen continue? And was this incorporated into the most recent resource update?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [63]

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Yes. For the question, [Bill], thank you. And you're right about Grey Fox. We've been successful intersecting mineralization. We have a very good geological understanding and model there. And our focus has been testing Northeast, Southwest trending structure that are quite high grade. And we've been adding a new zone 147 Northeast. It's on the slide there. It's a new discovery that we made in 2018 that we've been advancing, and there's about 100,000 ounces of new ounces found right in the middle of this Grey Fox area.

In addition to that, we've been also advancing with -- on many trends or structures, and the main ones are, again, shown on the slide there. And we have a high rate of drill success. So we know that more drilling will certainly bring more success, and we'll keep increasing the resource, assuming additional investment.

Currently, we stand at 620,000 ounces of gold and this is only an indicated category. I'm not including any infer here, and the grade is 7.2 gram per tonne, which is pretty good.

As I mentioned, some of the mineralization come to surface. So we have started a point where we could potentially drive and go both simple or potentially eventually open pit mining there. So we see Grey Fox quite a key asset in addition to what we have on the rest of the property at Black Fox and Froome. But currently, this is highly exciting, but there is already a significant resource defined there. And as I mentioned, probably good enough to advance with permitting and studies to see what the best way forward. And in parallel with that, we are quite excited by Stock, using the old mine to quickly fast track and reactivate and really trying to define what we are dealing with at the Stock West discovery. This is a zone that was never ever touched or drilled in the past. That was first drilled in the middle of this summer. The grade is good, thickness is good. It's a good style of mineralization that include high grade as part of those wide zone of 5 grams averaging intersection. So we see this as probably the most exciting new discovery we have in our Timmins complex right now.

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Unidentified Participant, [64]

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Yes. And as far as -- so as far as cost-wise, that would be, I guess, on par with Froome as far as bringing that? Or would you estimate that would be a far lower cost than something like Grey Fox as far as remediating the Stock property? Is that the initial estimate as far as the way you would see it?

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [65]

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Maybe I turn to Chris or Rob on this.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [66]

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Bill, it's still early. We don't have a good fix on the numbers yet.

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Unidentified Participant, [67]

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Okay. The other question I had was regarding Black Fox. According to your press release from yesterday or this morning, it appears that you had some areas that went -- came out of the resource or reserve estimate because they were inaccessible. And could you -- and it looks like -- I was a little surprised given the drill intercepts that you had along the West that you didn't have a little bit bigger of a growth. But could you give a little color on how much came out and how much was added? I'm guessing it's probably in your reserve report, but I wasn't able to locate it quickly.

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [68]

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Yes, we will look at the number. Chris, maybe you want to talk about those ounces that are not minable.

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Christopher Stewart; President & COO, [69]

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Yes.

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Sylvain Guérard, McEwen Mining Inc. - SVP of Exploration [70]

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And regarding increase in growth of the resource, the issue we were facing is access to drill more to the west side of the mine. So we didn't have proper drilling platforms. Now we do and we are adding holes to the west and the depth extension. And this will contribute to, hopefully, adding and increasing the resource.

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Christopher Stewart; President & COO, [71]

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Yes. So with respect to...

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Unidentified Participant, [72]

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Sorry, go ahead.

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Christopher Stewart; President & COO, [73]

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No. Go ahead.

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Unidentified Participant, [74]

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No. So it was -- you said you would think -- so I would say that you would estimate that it was -- how many -- approximately how many ounces became unminable is just what really the question was in -- at Black Fox, I guess, going into the most recent reserve update?

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Christopher Stewart; President & COO, [75]

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Yes. No. So what we did was an evaluation in 2019 of the reserves at Black Fox and about 16,000 ounces came out of the reserve as no longer minable. So we had areas -- essentially, when you sort of went and redid the math and looked at the cost of rehabilitating. Right now, at Black Fox, we're down to mining, for lack of a better word, I use sort of kibbles and bits, around the mine. We have a couple of main areas with some decent strike length and new stopes, but a lot of it is we're sort of running around picking up little stopes here and there to gather the remaining ounces that we sort of left behind. Given the increase in gold price, we're able to make some of these stopes economic. But at the same time, there's a number of stopes in there that were in the old workings of the mine, be it cave-ins, ground failures and stuff that essentially doesn't make it worthwhile going to get that to a stope that's got 500 ounces and it doesn't pay you to go get it when you have to do all this work. So we reevaluated all that and removed those ounces. And then -- so the growth -- so you're actually seeing probably a bit more growth than what you -- it sort of looks like on [first blush] when you're just looking at the numbers, given we removed ounces, we added them back in. And when you consider -- we mined 35,000 ounces at the end of the day, our reserve is down to, I think, 66 -- they're about 65. So we lost a bit, but we add it back in. So the Western Flank that we've had a lot of drilling success, as Sylvain mentioned, but we need the increase the density, get the proper drill platforms to drill it properly, which we now have in place. We worked hard on that in the latter half of 2019. So the exploration group's actually got proper drill stations to be drilling out -- to drill sort of perpendicular to the ore body, so that we can get good results. But that's what we're working on now is basically trying to build that out, and we'll have an update coming out of 2020. And given the success so far, we're optimistic that we can add some more ounces back in even when we're mining 35,000, 40,000 ounces this year.

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Unidentified Participant, [76]

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Okay. And would you consider doing like a mid-year reserve update on -- given the importance of Black Fox to the operations at this point?

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Christopher Stewart; President & COO, [77]

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I would say there's a lot of factors around that. Again, with coronavirus and -- that we need to shut our operations down at some point here and it's pretty hard to sort of give you any color on that. We'll certainly -- as things progress, if we get the drill performance out of the bit and get the footage and everything is coming together, we'll certainly try and keep people apprised of our progress on Black Fox for sure because, yes, it is -- right now, it's our single source of production coming out of the Timmins camp, so...

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Unidentified Participant, [78]

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Yes. And one last quick question. I know there has been -- the Fenix Project, there's been -- getting that the study out the door. I know there's been some difficulty with that. As far as that goes, is that still on track for, I guess, first quarter or the first half of this year?

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Christopher Stewart; President & COO, [79]

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Yes. So the feasibility study is complete and the outcomes are not significantly different than that of the [PDAC]. So right now is if we're not going to construct it, then there's not a lot of benefit to publishing it right now, so...

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Unidentified Participant, [80]

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Okay. That's fine. I was just -- and I just wanted to say, thanks again for holding this call. I would also recommend that just as a quick side note, as far as potentially -- since you're not going to even -- not going to be going to any conferences or there are probably no conferences, I think everyone learned a lot from the December drilling update, and I don't know whether you're doing one of those once a quarter would be greatly appreciated until -- because I'm guessing that the public communication is going to be reduced given the availability. But I certainly would like to see more updates rather than fewer, if you could possibly manage that, that would be greatly appreciated. But thank you very much.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [81]

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Thank you for that suggestion, Bill. Thank you for your questions.

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Operator [82]

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And our last question comes from [Gary Metsa], shareholder.

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Unidentified Shareholder, [83]

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I've listened to all this stuff for years since I first bought, when you took over the company, Mr. McEwen, and appreciate your effort. So my questions don't have to do with all the mining stuff because I don't really understand that as much as I probably should. My main questions have to do with, where the stock price is sitting right now. New York Stock Exchange has a $1 limit as to when you stay on exchange. Is that correct?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [84]

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That's correct.

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Unidentified Shareholder, [85]

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How long does that last for?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [86]

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It may change with what's happened recently, but they usually notify you after a certain period with your stock below. If your stock...

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Unidentified Shareholder, [87]

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Okay. Because my question is, if that point is reached, do you have any idea as to whether or not you would do a reverse split on the stock? Because I know what's happened with reverse split stocks in the past what companies have done that. Is that anywhere in your plans? Are you considering that? Or are you not at liberty to say what you're planning to do on that because...

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [88]

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We're recently below $1. I hope not to stay down there. But if there were 30 consecutive days below $1, then the New York Stock Exchange will advise you that they don't want you on the stock exchange. And -- but you have 6 months to remedy that situation.

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Unidentified Shareholder, [89]

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Okay. I understand that now. We have 6 months to remedy the situation. The question is how do you go about remedying that because it does not appear the way the economy is and with this virus thing and everything that's going on, to be honest with you, I do not expect the McEwen stock to be over $1 in the near future, sitting probably around the $0.75 mark, and that's been where it's been hanging for a while. People just are not investing, and this is not a reflection on you or the company, but it's just a situation the way it is. People are just cashing out or running for the hills. That's why my estimate on it is that the stock is probably not going to reach that dollar threshold in the near term, even though, hopefully, it will in the longer term.

My question, again, comes back to, have you taken that into consideration as to what you may have planned to either stay on New York Stock Exchange or whatever else is option available at that point?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [90]

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Well, it's always our intention to stay on the New York Stock Exchange. We've only recently gone below $1 this year. We haven't been notified by the New York Stock Exchange. So -- and a share consolidation would be a last resort. And we -- and just by way of a bit of history, you're a long-term shareholder. You might remember we got -- when the gold share market just absolutely died back in 2015, hit its bottom, we were below $1 and didn't stay there and satisfied the New York requirements to remain listed on the exchange. So -- and I don't share your belief at the moment we'll stay below $1.

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Unidentified Shareholder, [91]

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Well, I hope you're right on that. But I just don't see people buying anything right now, and I don't see them buying anything in the near-term future.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [92]

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I would agree with you that in the very near future, all eyes are focused on coronavirus and trying to stay -- avoiding it and the economic repercussions of it. But governments around the world are making very large commitments to pump large amounts of money into the system, drop interest rates. They're working hard to ensure that this damage that's being sustained right now can be mitigated. And that, to me, is making their balance sheets look increasingly problematic. So...

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Unidentified Shareholder, [93]

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Yes, I understand how pumping money into the system works. I'm not too keen on understanding everything with all the gold reports that I've see in here every time I listen to this report, but I am very familiar with how money going into the system works. I just have 1 other question because I didn't hear anything at all mentioned today about Los Azules, which, to me, is -- as I looked at everything, is -- I still think it's a very significant holding, but I haven't heard a word about it today. Anything new on that?

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [94]

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No. Price of copper is down to $2.40. We're looking to put a road into the site, an alternative road that would give us 12-month access rather than the current 4-month -- 4-, 5-month access. Or -- there'll be some work done this year on the road to give the access. I think that's a critical component of moving that forward.

Argentina is still trying to figure out what it wants to do. It's experiencing high inflation. They've recently put a new government in. They would like to promote mining. Just unfortunate right now that base metals are under a lot of pressure and the actions that they have taken have discouraged a lot of capital investment -- foreign capital investment in their country.

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Operator [95]

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And there are no further questions at this time. Mr. Rob McEwen, I turn the call back over to you.

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Robert Ross McEwen, McEwen Mining Inc. - Chairman, CEO & Chief Owner [96]

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Thank you, operator. I just want to leave you a message, I wish that everyone stays healthy right now. Thank you very much.

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Operator [97]

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Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.