McEwen’s Stock project hikes gold resource by a third

McEwen Mining (TSX: MUX; NYSE: MUX) says inferred gold ore tonnage increased by 33% last year at its Stock project in northern Ontario while drilling cut a bonanza interval in a nearby zone. 

The Main and West zones, which form the past-producing Stock mine at the Fox Complex near Timmins, rose to 1.4 million inferred tonnes grading 2.96 grams gold per tonne for 132,000 oz. contained metal, McEwen said on Wednesday. That compares with 1.1 million inferred tonnes at  3.3 grams for 111,000 oz. gold in a 2022 preliminary economic assessment. 

The Toronto-based miner, which also has operations in Nevada, Mexico and Argentina, reported drilling at the site’s East zone returned 0.4 metre grading 121.5 grams in hole SEZ24-86, 10.2 metres at 6.5 grams in hole SEZ24-84 and 10.4 metres at 4.5 grams in hole SEZ24-88. 

Drilling in late 2023 and continuing this year was designed to assess the East zone’s potential to be a shallow source of near-term revenue during the construction stage of the access ramp at Stock West, the company said. The East zone is also important because of its location near the splay point of two faults, the northeast-to-southwest Nighthawk Lake and the east-to-west Destor-Porcupine. 

“Such splays are known in the district to be good traps for gold mineralization,” the company said in a release. “Stock East is a shallow deposit positioned just 400 metres from the proposed ramp to Stock West, that could be quickly and inexpensively accessed.”

Two structures

Two main geological structures from the historical Stock mine plunge to depth and control the West and Main zone’s mineralization, McEwen said. These structures account for most of the West and Main resource increase and could add more growth, the company said. 

The former Stock mine produced 137,000 oz. of gold from an underground operation between 1989 and 2005. McEwen acquired the Fox complex in 2017 and its exploration so far has defined the East and West zones on either side of the mine. They’re on a 3-km mineralized trend along the Destor-Porcupine fault.

This month, McEwen reported total 2023 production of 128,650 oz. of gold and 2.2 million oz. of silver or 154,600 gold-equivalent oz., including 44,450 gold-equivalent oz. from the Fox Complex. All were in-line with guidance. 

The 2022 Fox PEA envisions roughly doubling annual output to 80,800 ounces in a project with an after-tax net present value of $175 million at a 5% discount rate and an internal rate of return of 21%.

McEwen forecasts a company-wide production range this year of 130,000 to 145,000 gold-equivalent oz. The reduction compared to 2023 is mainly due to lower expected output from Fox and San José in Argentina, which is operated by partner Hochschild Mining (LSE: HOC).

Shares in McEwen Mining fell 1% by mid-Wednesday in Toronto to $8.15 apiece, valuing the company at $297.4 million. They’ve traded in a range of $8.05 to $13.36 in the last 52 weeks.