McEwen sees Grey Fox adding 15 years to Ontario asset

McEwen (NYSE, TSX: MUX) said its Grey Fox project in northern Ontario will add significant gold production and extend the life of the company’s Fox Complex to 2041.

A newly released pre-feasibility study (PFS) on the project forecasts annual gold production of 87,000 oz. from 2028 through 2041, adding about 15 years to the Fox Complex’s projected mine life, McEwen said Monday in a statement. Annual production could reach as much as 100,000 oz. in 2029, the company said.

The new report confirms the project’s status as a long-term growth driver for Toronto-based McEwen. The Fox Complex, one of Canada’s most prolific gold camps, relies on production from the Froome mine and is supported by processing at the Stock mill.

Grey Fox‘s production profile is expected to support the company’s near-term goal of increasing its total annual output to 250,000–300,000 gold equivalent oz. (GEOs) by the end of this decade.

$181M cost

Based on gold prices of over $4,000 per oz., building a mine at Grey Fox mine is projected to cost about $181 million (C$252 million), the PFS says. Construction will mostly be funded internally, McEwen said.

Under the base-case scenario of $3,000 per oz. gold and a 5% discount rate, the project would have a post-tax net present value of $282 million, an internal rate of return of 25% and a payback period of 4.6 years. All-in sustaining cost over the life of mine is estimated at $2,212 per oz.

The PFS for Grey Fox is based on a current indicated resource of 18.8 million tonnes grading 3.28 grams per tonne gold for contained metal of nearly 2 million ounces. Nearly half of those, or 980,000 oz., were reserves included in the mine plan.

McEwen highlighted that the reserve accounts for only 40% of Grey Fox’s total resource count. As such, there is upside to grow the reserve through resource conversion. McEwen is planning to spend about $5 million on further drilling.

Construction in 2027

Next steps include detailed engineering and long-lead purchases and an amended water permit and closure plan. Construction is expected to begin in the spring of 2027, followed by underground development in the second half of the year.

If completed on schedule, commercial production would begin in 2029, as outlined in the PFS mine plan.

Mining at Grey Fox is expected to be a combination of two independent underground operations accessed from separate portals. The ore will be hauled to surface and driven to the Stock mill, where it will be blended with Stock mine material. Gold recovery has been estimated at 87.5% based on laboratory testing, according to McEwen.

McEwen shares rose 0.6% to C$25.63 in early afternoon Toronto trading Monday, pushing the company’s market capitalization to about $1.5 billion (US$1.1 billion).