SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2017
McEWEN MINING INC.
(Exact name of registrant as specified in its charter)
150 King Street West, Suite 2800
Toronto, Ontario, Canada M5H 1J9
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number including area code: (866) 441-0690
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Colorado 001-33190 84-0796160
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
Item 2.02 Results of Operations and Financial Condition.
On May 4, 2017, McEwen Mining Inc. issued a press release announcing a summary of its first quarter 2017 financial and
operating results. A copy of the press release is attached to this report as Exhibit 99.1.
The information furnished under this Item 2.02, including the exhibits, shall not be deemed “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of
1933, except as shall be expressly set forth by reference to such filing.
Item 9.01 Financial Stat ements and Exhibits.
(d) Exhibits. The following exhibits are furnished with this report:
99.1 Press release dated May 4, 2017
Cautionary Statement
With the exception of historical matters, the matters discussed in the press release include forward-looking statements within
the meaning of applicable securities laws that involve risks and uncertainties that could cause actual results to differ materially from
projections or estimates contained therein. Such forward-looking statements include, among others, statements regarding future
exploration, development, and production activities. Factors that could cause actual results to differ materially from projections or
estimates include, among others, metal prices, economic and market conditions, operating costs, receipt of permits, receipt of working
capital and future drilling results, as well as other factors described in our Annual Report on Form 10-K for the year ended
December 31, 2016, and other filings with the United States Securities and Exchange Commission (“SEC”). Most of these factors are
beyond the Company’s ability to predict or control. The Company disclaims any obligation to update any forward-looking statement
made in the press release, whether as a result of new information, future events, or otherwise. Readers are cautioned not to put undue
reliance on forward-looking statements.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
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McEWEN MINING INC.
Date: May 4, 2017 By: /s/ Carmen Diges
Carmen Diges, General Counsel
Exhibit Index
The following is a list of the Exhibits furnished herewith:
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Exhibit
Number Description of Exhibit
99.1 Press release, dated May 4, 2017
Exhibit 99.1
MCEWEN MINING ANNOUNCES Q1 2017 OPERATING & FINANCIAL RESULTS
TORONTO, May 4, 2017 - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to report consolidated financial results
for the first quarter ended March 31, 2017. Increased investments in exploration and project development, particularly related to our
Los Azules copper project, were the key feature of the quarter. As a result, the Company reported a net loss of $3.0 million or $0.01
per share and negative cash flow of $8.6. million or $0.03 per share. During the quarter McEwen Mining achieved consolidated
production of 29,733 gold equivalent ounces(1). The Company remains on track to meet production and cost guidance for 2017. The
El Gallo mine produced 9,808 gold equivalent ounces(1) and reported earnings from mining operations of $8.2 million(2)(4) and the
San José mine produced 19,925 gold equivalent ounces(1) and reported earnings from mining operations of $5.7 million(2)(4).
Our quarterly management conference call will take place today at 11 am, EDT.
Webcast and call-in details are provided at the end of this news release.
Q1 2017 Operating & Financial Highlights
Comparative production and cost results for the first quarter, the same period last year, and our guidance for the full year 2017 are
shown in the table below. Cost guidance is disclosed on an individual mine basis due to regulatory requirements.
For our SEC Form 10-Q Financial Statements and MD&A refer to:
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000314203
(1) Silver production is presented as a gold equivalent. The silver to gold ratio used for 2016 and 2017 is 75:1.
(2) All amounts are reported in US dollars unless otherwise stated.
(3) Includes portion attributable to us from our 49% interest in the San José Mine.
(4) Earnings from mining operations, total cash costs per ounce, and all-in sustaining costs (AISC) per ounce are
non-GAAP financial performance measures with no standardized definition under U.S. GAAP. See “Cautionary
Note Regarding Non-GAAP Measures” for additional information, including definitions of these terms.
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Q1 2017 Q1 2016
Guidance
2017
Corporate Total
Gold ounces produced 20,096 28,975 99,700
Silver ounces produced 722,767 673,767 3,324,000
Gold equivalent ounces produced(1) 29,733 37,958 144,00 0
El Gallo Mine - Mexico
Gold ounces produced 9,730 20,015 49,700
Silver ounces produced 5,794 6,448 24,000
Gold equivalent ounces produced(1) 9,808 20,101 50,000
Gold equivalent total cash cost ($/oz)(1)(4) $ 564 $ 432 $ 760
Gold equivalent co-product AISC ($/oz)(1)(4) $ 668 $ 532 $ 900
San José Mine(3) - Argentina
Gold ounces produced 10,366 8,960 50,000
Silver ounces produced 716,973 667,319 3,300,000
Gold equivalent ounces produced(1) 19,925 17,857 94,000
Gold equivalent total cash cost ($/oz)(1)(4) $ 915 $ 762 $ 780
Gold equivalent co-product AISC ($/oz)(1)(4) $1 , 1 6 5 $ 9 3 6 $ 990
Treasury
As of March 31 , 2017 we had $55.1 million in cash, investments and precious metals valued at the spot prices; and no debt. This
compares to liquid assets of $58.8 million and no debt at the end of Q4 2016.
Ounces Produced
Consolidated gold equivalent production in Q1 2017 totaled 29,733 ounces, which consists of 9,808 gold equivalent ounces from
the El Gallo mine, and 19,925 gold equivalent ounces attributable to us from our 49% interest in the San José mine.
Production Costs
For our El Gallo mine in Q1 2017, total cash costs and all-in sustaining cash costs were $564 and $668 per gold equivalent ounce,
respectively. For our San José mine in Q1 2017, total cash costs and all-in sustaining costs were $915 and $1,165 per gold
equivalent ounce, respectively.
Earnings from Mining Operations
In Q1 2017, earnings from mining operations from our El Gallo mine were $8.2 million, compared to $12.4 million in the same
period in 2016; and earning from mining operations from our 49% interest in the San José mine were $5.7 million, compared to
$7.0 million in the same period in 2016.
Net Income/ Loss
Our consolidated net loss for Q1 2017 was $3.0 million, or $0.01 per share, compared to a net income of $13.0 million, or $0.04
per share for the same period in 2016. The net loss was mainly due to a $6.4 million decrease in sales of gold and silver by our El
Gallo mine; coupled with a $6.7 million increase in exploration costs, mostly related to the drilling campaign performed at the Los
Azules project, compared to the same period during 2016.
Cash Flow
Net cash used in operations was $6.9 million in Q1 2017, compared to net cash provided by operations of $14.7 million for the
same period in 2016. In Q1 2017, our El Gallo mine contributed $14.8 million in gold and silver sales to operating cash flow,
compared to $20.3 million in the same period in 2016. The significant change in cash flow quarter over quarter related mainly to a
reduction in the number of ounces sold from the El Gallo mine, coupled with lower VAT collection from our Mexican operations
and the increase in metals inventory. In Q1, 2017 our 49% interest in the San José mine contributed $2.5 million in dividends to
operating cash flows, compared to $2.6 million in the same period in 2016.
Average Realized Prices
Average realized prices in Q1 2017 were $1,220 per ounce of gold sold, and $17.54 per ounce of silver sold at our El Gallo mine;
and $1,253 per ounce of gold sold and $18.18 per ounce of silver sold for the San Jose mine. In comparison, the average realized
prices in the same period in 2016 were $1,171 per ounce of gold sold, and $14.64 per ounce of silver sold at El Gallo mine; and
$1,257 per ounce of gold sold and $15.29 per ounce of silver sold for the San Jose mine.
Return of Capital
The fourth return of capital installment of 1/2¢ per common share was paid on February 14, 2017. To date a total of $6 million has
been returned to share owners.
Production Guidance
Production for 2017 is expected to be 49,700 ounces of gold and 24,000 ounces of silver from the El Gallo mine, and 50,000
ounces of gold and 3,300,000 ounces of silver from the San José mine. Using a silver to gold ratio of 75:1 for the year 2017, this
represents projected consolidated production of 144,000 gold equivalent ounces.
Cost Guidance
For 2017, total cash costs and all-in sustaining costs at the El Gallo mine are forecast to be $760 and $900 per gold equivalent
ounce, respectively; and total cash costs and all-in
sustaining costs at the San José mine are forecast at $780 and $990 per gold
equivalent ounce, respectively. Our guidance is based on an average silver to gold ratio of 75:1.
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Strategic Acquisition of Timmins Projects
On April 26, 2017 the acquisition of Lexam VG Gold Inc. was completed. This represents a strategic acquisition of former producing
mine properties (brownfield sites) in the heart of the world class Timmins gold mining district in Canada. Situated within a mile radius
around our newly acquired assets are large former and currently producing mines with past gold production in excess of 55 million
ounces.
Our Timmins brownfield sites have good access to roads, power and nearby experienced workforce. Some of the properties have mine
infrastructure in place, such as existing shafts, ramps and pits from previous mining activities. This should reduce future development
costs. The current NI 43-101 resources are: 1.5 million gold ounces in the Measured and Indicated categories, and 1 million gold
ounces in the Inferred category. For 2017, we have budgeted $3.0 million for exploration and development related activities in
Timmins. Of particular interest are the high grade drill intercepts of past exploration programs.
Operations & Projects
Mexico
El Gallo Gold Mine (100%)
Production at the El Gallo Gold mine for Q1 2017 declined quarter over quarter by 51% to 9,808 gold equivalent ounces, due to
slower than planned access to higher grade ore. However, the mine is on track to meet our 2017 production guidance of 50,000 gold
equivalent ounces. The El Gallo gold mine is a mature operation that has mined and depleted most of its oxide resources. While ore
grades processed during Q1 2017 averaged 1.28 gpt gold, compared to 3.62 gpt gold in Q1 2016, Optimization
Exploration efforts are now focused on defining resources in sulfide and transitional mineralization that could extend the asset life,
and, as such, we have budgeted a total of $1.8 million for exploration activities at the El Gallo mine, and $2.0 million for sustaining
capital expenditures for 2017.
El Gallo Silver Project (100%)
During Q1 2017, work continued on the El Gallo silver project to identify opportunities to reduce the initial capital investment
required to start the project and reduce its projected operating cost. Our 2017 budget for El Gallo Silver is approximately $7.8 million,
comprised of $4.8 million for exploration and $3.0 million for development.
Argentina
San José Mine (49%)
Gold and silver production attributable to us from our 49% interest in the San José mine for Q1 2017 increased quarter over quarter by
12% to 19,925 gold equivalent ounces. During Q1 2017 we received $2.5 million in dividends from the San José mine.
For the remainder of 2017 we expect to continue to receive dividends from our 49% interest in San José. We anticipate receiving
dividends totaling $10.0 million or more, with the final amount being determined by the mine’s profitability, treasury position, and
decisions on capital and exploration investments.
Los Azules Project (100%)
During Q1 2017 we spent $6.3 million at the Los Azules project on a combination of infill and exploration drilling, significant
advances were made in determining the best logistics, power and infrastructure options and further economic and engineering
modeling of the production. Results from the drilling campaign are expected to be finalized during the second half of 2017.
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Gold Bar Project, Nevada, U.S. (100%) — Advancing Towards Construction
the US Bureau of Land Management (“BLM”) published the Draft Environmental Impact Statement in the Federal Register on
March 3 , 2017 and subsequently closed the 45-day public comment period. Comments received during the public comment period
are now being addressed and will be incorporated in the final Environmental Impact Statement.
During Q1 2017 we spent $0.9 million on various requirements to complete our permitting process for Gold Bar. We also expect to
spend an additional $1.1 million in permitting activities during the remainder of 2017.
McEwen Mining will be hosting a conference call to discuss the
Q1 2017 results and project developments
Q1 2017 Conference Call Details
Thursday, May 4, 2017 at 11:00 am EDT
WEBCAST:
http://edge.media-server.com/m/p/j7quncwr
TELEPHONE:
Participant Dial-in numbers: (844) 630-9911 (North America) / (210) 229-8828 (International)
Conference ID: 16037372
REPLAY:
Dial-in numbers: (855) 859-2056 (North America) / (404) 537-3406 (International)
Conference ID: 16037372
From 05/04/2017 14:00 EDT to 05/11/2017 14:00 EDT
About McEwen Mining (www.mcewenmining.com)
McEwen Mining has the goal to qualify for inclusion in the S&P 500 Index by creating a high growth gold and silver producer
focused in the Americas. McEwen Mining’s principal assets consist of the San José mine in Santa Cruz, Argentina (49% interest), the
El Gallo Gold mine and El Gallo Silver project in Sinaloa, Mexico, the Gold Bar project in Nevada, USA, the Timmins projects in
Ontario, Canada and the Los Azules copper project in San Juan, Argentina.
McEwen Mining has a total of 312 million shares outstanding. Rob McEwen, Chairman and Chief Owner, owns 25% of the Company.
Technical Information
The technical contents of this news release has been reviewed and approved by Nathan M. Stubina , Ph.D., P.Eng., FCIM, Managing
Director and a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of
Disclosure for Mineral Projects”.
Reliability of Information Regarding San José
Minera Santa Cruz S.A., the owner of the San José mine, is responsible for and has supplied to the Company all reported results from
the San José mine. McEwen Mining’s joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates other than MSC
do not accept responsibility for the use of project data or the adequacy or accuracy of this release.
4
rd
Cautionary Note Regarding Non-GAAP Measures
In this report, we have provided information prepared or calculated according to U.S. GAAP, as well as provided some non-U.S.
GAAP (“non-GAAP”) performance measures. Because the non-GAAP performance measures do not have any standardized meaning
prescribed by U.S. GAAP, they may not be comparable to similar measures presented by other companies.
(1) Total Cash Costs and All-in Sustaining Costs
Total cash costs consist of mining, processing, on-site general and administrative costs, community and permitting costs related to
current explorations, royalty costs, refining and treatment charges (for both doré and concentrate products), sales costs, export taxes
and operational stripping costs. All-in sustaining cash costs consist of total cash costs (as described above), plus environmental
rehabilitation costs, amortization of the asset retirement costs related to operating sites, sustaining exploration and development costs,
and sustaining capital expenditures. Total cash cost and all-in sustaining cash cost per ounce sold are calculated on a co-product basis
by dividing the respective proportionate share of the total cash costs and all-in sustaining cash costs for the period attributable to each
metal by the ounces of each respective metal sold. We use and report these measures to provide additional information regarding
operational efficiencies on an individual mine basis, and believe that these measures provide investors and analysts with useful
information about our underlying costs of operations. A reconciliation to the nearest U.S. GAAP measure is provided in McEwen
Mining’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
(2) Earnings from mining operations
The term Earnings from Mining Operations used in this report is a non-GAAP financial measure. We use and report this measure
because we believe it provides investors and analysts with a useful measure of the underlying earnings from our mining operations.
We define Earnings from Mining Operations as Gold and Silver Revenues from our El Gallo Mine and our 49% attributable share of
the San José Mine’s Net Sales, less their respective Production Costs Applicable to Sales. To the extent that Production Costs
Applicable to Sales may include depreciation and amortization expense related to the fair value increments on historical business
acquisitions (fair value paid in excess of the carrying value of the underlying assets and liabilities assumed on the date of acquisition),
we deduct this expense in order to arrive at Production Costs Applicable to Sales that only include depreciation and amortization
expense incurred at the mine-site level. The San José Mine Net Sales and Production Costs Applicable to Sales are presented, on a
100% basis, in Note 5 of McEwen Mining’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
(3) Average realized prices
The term average realized price per ounce used in this report is also a non-GAAP financial measure. We report this measure to better
understand the price realized in each reporting period for gold and silver. Average realized price is calculated as sales of gold and
silver (excluding commercial deductions) over the number of ounces sold in the period (net of deduction units). A reconciliation to the
most directly comparable U.S. GAAP measure, Sales of Gold and Silver, is provided in McEwen Mining’s Quarterly Report on
Form
10-Q for the quarter ended March 31, 2017.
(4) Cash, investments and precious metals
The term cash, investments and precious metals used in this report is a non-GAAP financial measure. We report this measure to better
understand our liquidity in each reporting period. Cash, investments and precious metals is calculated as the sum of cash, investments
and ounces of doré held in inventory, valued at the London P.M. Fix spot price at the corresponding period. A reconciliation to the
most directly comparable U.S. GAAP measure, Sales of Gold and Silver, is provided in McEwen Mining’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2017.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements and information, including “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the
date of this news release, McEwen Mining Inc.’s (the “Company”) estimates, forecasts, projections, expectations or beliefs as to future
events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by management, are inherently subject to significant business, economic and competitive
uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate.
Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and
uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the
forward-looking statements and information include, but
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