Name and Location
El Gallo 2 gold/silver project, Sinaloa, Mexico.

Client
McEwen Mining.

Project Description
El Gallo 2 comprises several mineral deposits – Chapotillo, CSX, El Gallo, Haciendita, Las Milpas, Los Mautos, Mina Grande, Palmarito and San Jose Del Alamo – that are located outside of the El Gallo 1 mine.

The El Gallo 2 deposits contain measured and indicated silver resources of 34.3-million tonnes grading 57.99 g/t and inferred reserves of 8.5-million tonnes grading 52.72 g/t. Gold resources in the measured and indicated category total 34.3-million tonnes grading 0.18 g/t of gold and inferred resources of 8.5-million tonnes at 0.24 g/t of gold.

The feasibility study completed on the second phase of the El Gallo project envisages the use of openpit mining and conventional crushing and milling at an estimated rate of 5 000 t/d. Processing will consist of three-stage crushing and a ball mill, followed by agitated leaching and Merrill Crowe processing to recover the silver and gold to produce doré.

Sodium cyanide and lime consumption is expected to be 1.52 kg/t and 6.77 kg/t for leaching and tailings/detox. Over the mine life, production will total 11.7-million tonnes of ore at 101.3 g/t silver and 0.123 g/t gold for total recoverable silver and gold of 32-million ounces and 38 000 oz respectively.

El Gallo 2 is projected to produce an average of 5.2 million ounces of silver and 6 100 oz of gold during each of the first six years, at an estimated cash cost of $750 per gold equivalent ounce – gold equivalent ounces are calculated by converting silver into gold using a 60:1 exchange ratio.

Value
Initial capital expenditure is estimated at $178.05-million.

Duration
Not stated.

Latest Developments
The Secretariat of Environment and Natural Resources for the state of Sinaloa, in Mexico, has approved McEwen’s application for El Gallo 2. This final environmental permit allows for the construction and operation of the proposed mine.

McEwen Mining and its engineering contractors are conducting ongoing studies to reduce the estimated capital expenditures associated with the project. The company believes there can be a reduction of about $20-million in capital costs from previous estimates, with minimal impact on production, by reducing the number of leach tanks and transformers; building a smaller Merrill Crowe process plant/refinery; and using modular crushers. With these projected savings and taking into account the $10-million of the estimated final construction cost that has been spent to date, about $150-million will be required to complete the mine.

A final decision to proceed with the construction of El Gallo 2 has not been made. McEwen plans to complete its cost-savings studies and reviews of financing alternatives.

Although the company believes this is an ideal environment to build El Gallo 2, owing to the abundance of skilled labour and supplies, any decision to proceed will be based on securing financing on more attractive terms than those currently available.

The company believes receiving the final permit for El Gallo 2 will help facilitate this process.

The miner will provide an update during its fourth-quarter financial update, which is scheduled for early March.

Two additional permits associated with El Gallo 2 will be submitted in the first quarter of 2014.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
McEwen Mining investor relations, Sheena Scotland, tel +1 647 258 0395 ext 410, fax +1 647 258 0408 or
email info@mcewenmining.com.