McEwen Mining looks to have found a way to prolong its operations at the El Gallo Complex in Sinaloa, Mexico, with the feasibility study for its 100%-owned Fenix project highlighting a 9.5-year operational blueprint.
Using gold and silver prices of $1,500/oz and $17/oz, McEwen has estimated an operation able to produce 26,000 oz of gold production in phase one (years one to six) and 4.2 Moz of silver-equivalent in phase two (years seven to nine-and-a-half).
Phase one comes with an initial capital bill of $42 million and an all-in sustaining cost (AISC) estimate of $1,042/oz of gold. Phase two would require a $24 million incremental capital injection in year six, with the AISC calculated at $14.28/oz of silver-equivalent.
The company’s El Gallo mine (pictured) produced 240,000 oz of gold and 125,000 oz of silver from 2012-2017, yet, due to the transition to deeper sulphide mineralisation not amenable to heap leaching, mining and crushing activities ceased in the June quarter of 2018.
While residual heap leaching is set to continue to produce gold for several years, the company has been working on a new project for the El Gallo Complex, which is where Fenix comes in.
The Fenix 2018 preliminary economic assessment evaluated the potential extension of production in the complex, based on a two-phased transformation of the processing from the El Gallo mine, innovative in-pit tailings disposal and sourcing from several deposits.
The latest feasibility study has run with that plan, with the critical path environmental permits in hand for the first phase of production, according to Rob McEwen, Chairman and Chief Owner of McEwen Mining.
“Our next steps will involve detailed engineering, assessment of procurement options and the evaluation of financing alternatives,” Rob McEwen said.
He added: “The project will incorporate an environmentally progressive method of tailings management, using in-pit storage that creates multiple benefits, most importantly a secure containment of tailings, enabling better reclamation results.”
