Welcome to El Gallo Complex Mine Tour                                        1
Ian Ball – Senior Vice PresidentIntroduction                       2
Taking a Phased Approach       Original PlanEl Gallo + Magistral + Palmarito       Production 2014                        ...
Taking a Phased Approach       A Better Way Forward   Magistral      El Gallo + Palmarito   Phase 1              Phase 2Pr...
Key Benefits•  Cash flow now•  Build operational team•  Test costs assumptions (labour, mining, etc.)•  Prove success thro...
Magistral Mine 2007                      6
Background•  Operated 2002-2005•  Produced 70,000 oz Gold•  Placed on care maintenance•  Operating permit remained in plac...
Background•  2007: McEwen Mining acquired project•  2009: El Gallo Phase 2 discovered•  2012: Rebuilt Phase 1•  2012: Posi...
Past Operational Issues1.  Poor recoveries: crush size / soluble copper2.  Long leach times3.  Low mining rates4.  Minimal...
What Did We Do?1.  Installed 3 stage crusher: 3/8 inch2.  Cold strip for soluble copper3.  Contract mining4.  Strong balan...
How Did We Do? Great!   Budget: $15 Million Final cost: $13.5 MillionCompletion date: Q3, 2012Under Budget, On Schedule   ...
El Gallo Phase 1, 2013                         12
El Gallo IEPCM Contractor Overview    Sonoran Resources                           13
Sonoran Resources Previous ProjectsCerro Prieto Project                          Santa Elena MineSonora Mexico            ...
Initial Assessment - September 2011                                      15
Key Areas of Rebuild  1.  Process Plant  2.  Crushers  3.  Heap Leach Expansion  4.  Process Pond Upgrade                 ...
Process PlantBefore                   After                                 17
Assay LaboratoryBefore                      After                                    18
RefineryBefore              After                            19
VaultBefore           After                         20
GeneratorsBefore                After                              21
Installed Cold Strip & Acid Wash Circuit                                           22
Crushers2 Stage Before              3 Stage After                                            23
Heap Leach PadBefore                    After                                  24
Increased Capacity and Gold Recovery                                       25
Process Ponds                26
Increased Capacity and Reliability                                     27
Gold Pour            28
El Gallo 1     A Team That     Builds Success!                   29
John Read – Senior GeologistExploration                    30
Phase IResources                                        M&I	  Resource	                                                   ...
LupitaDeposit + Pit Design                       0            200                           Meters         N              ...
NW	                                                                  SE	   Lupita          46.1m	  @	  2.1	  g /t	  Au	   ...
NW	                                          SE	   Lupita  DepositSECTION LUP-58                                          ...
McEwen	          Sonora      ChihuahuaExploraGon	                                         El	  Gallo	    Project	         ...
Mines inWestern Mexico         N                 36
El Gallo ComplexProduction Areas + New Potential                                   37
Mina	  Grande	                                 Haciendita	                      	  0             500                      ...
Blast	  Hole	  Rig	     Diamond	  Drill	  Rig	                                                           39
40
Haciendita Exploration Project                                       SECTION HC-10      SW	                               ...
Mina	  Grande	                                          Haciendita	                            	  0            500        ...
43
Mina Grande Exploration Project                             SECTION MG-13       SW	                                       ...
Patricia Angulo – Human ResourcesCommunity Relations                 45
Mining brings prosperity to communities where economicactivities are limited.                                             ...
Compañía Minera Pangea       in Region since 1995McEwen Mining Acquired Project 2007                                      47
Three main municipalities surround the mine:Mocorito, Salvador Alvarado and Sinaloa.                                      ...
Villages Around                                                                     the Mine              Los Becos       ...
MissionTo develop profitable mineral  deposits and enhance the community where we work.                                50
Since 2007McEwen Mining Contributed      US $3,000,000                            51
McEwen Mining helps sponsor traditional holidays such as:Child´s Day, Mothers Day, Teacher’s day, and Christmas.          ...
Providing Water for theLocal Community                          53
In 2010 US$20,000 donated to 24 schoolsConsisting :Air ConditionersWater CoolersConstruction MaterialFansEducation Materia...
Schools Donation Program                       Children’s Day School Supplies                                        Chris...
Making Schools BetterBefore                       After                         DESPUES	     56
El Gallo Multipurpose Court   In 2011 a multipurpose court was built        for the El Gallo community.                   ...
El Valle Road Paving (2 km)   Investment US$650,000   ANTES	             2012                                       58
El Valle Paving Road InaugurationApril 2012                          59
El Magistral, Mocorito, SinaloaIn 2012, 4 houses built to relocate residents                                              ...
61
Bill Faust – COO / Fernando Aguilar – Operations ManagerEl Gallo Phase 2                                                  ...
El Gallo Complex                   63
El Gallo Phase 2•  Conventional Open Pit, Mill, Agitated Leach•  Est. Capex $180 Million•  Est. production 5 Million silve...
Looking North Towards Process Plant                                      65
Looking South Towards Open Pit                                 66
Stoc                                    Leach Ore                 kpile                         Open Pit                  ...
View of Historic Palmarito Pit 68                              68
Open Pit                                  Waste Dump                 NPalmarito Open Pit Design                           ...
El Gallo Phase 2 Reserve                              Tonnes    Silver   Gold     Silver     GoldClassification           ...
El Gallo - Construction•  Pits mined using contractor•  Permitting underway submittal Q1 2013•  EPCM Contractor – M3 Engin...
CYCLONE                 CLUSTERS                 Process Flowsheet              3-STAGE STOCKPILE             CRUSHING    ...
Tailings StorageMill  Open Pit                     N                                    Surface RightsEl Gallo Phase 2 Sit...
Surface Rights                                                 Boundary                                  Substation       ...
Planned Site for Process Plant                                 75
Dry Stacked Tailings                       76
Future Substation Site – Project Power                                         77
Ian Ball – Senior Vice PresidentEl Gallo Phase 2 Economics         78
El Gallo Phase 2 Initial Capital - $180 M           Process                  US Dollars (x000)           Site Prep.       ...
El Gallo Phase 2 Operating Costs     Production Cost $10 / oz Silver                                              Cost Per...
El Gallo Phase 2 Mine Plan               Avg 5.2 Million oz Silver / yr          Silver     Silver      Gold      Gold    ...
El Gallo Phase 2 Metallurgical Testing        Area          Silver Recovery   Gold Recovery                             (%...
El Gallo Phase 2 Financial Returns      After Income Tax         Base Case       Spot Case                              ($...
Simon Quick – VP ProjectsPermitting, Water Rights and Supply   84
Experienced TeamPermit Specialist:            Water Rights + Supply: Patricia Aguayo                Dr. Miguel Rangal•  MS...
Sinaloa Permitting FavourableMarlin Gold permit submitted:                                El Gallo Complex(May   1st,   20...
3 Required Permits:(MIA) Manifestacion de Impacto Ambiental   •  EIS equivalent USA(ETJ) Estudio Justificativo Para Cambio...
Permitting ScheduleMIA                                                          (60 – 120 Days)ETJ                        ...
Regulators Like Safe & Simple        Dry Tailings   Eliminates dam failureReduces environmental impact  Lowers reclamation...
  Water rights secured: 1 Million M3 / Year x 2  Water requirements satisfied: 17 l/s                                   ...
Filter Press – Dry Stack Tailings                                    91
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El Gallo Analysts Tour Presentation

  1. 1. Welcome to El Gallo Complex Mine Tour 1
  2. 2. Ian Ball – Senior Vice PresidentIntroduction 2
  3. 3. Taking a Phased Approach Original PlanEl Gallo + Magistral + Palmarito Production 2014 3
  4. 4. Taking a Phased Approach A Better Way Forward Magistral El Gallo + Palmarito Phase 1 Phase 2Production 2012 Production 2014 4
  5. 5. Key Benefits•  Cash flow now•  Build operational team•  Test costs assumptions (labour, mining, etc.)•  Prove success through phased approach 5
  6. 6. Magistral Mine 2007 6
  7. 7. Background•  Operated 2002-2005•  Produced 70,000 oz Gold•  Placed on care maintenance•  Operating permit remained in place 7
  8. 8. Background•  2007: McEwen Mining acquired project•  2009: El Gallo Phase 2 discovered•  2012: Rebuilt Phase 1•  2012: Positive Phase 2 feasibility study 8
  9. 9. Past Operational Issues1.  Poor recoveries: crush size / soluble copper2.  Long leach times3.  Low mining rates4.  Minimal working capital Could we fix it? YES! 9
  10. 10. What Did We Do?1.  Installed 3 stage crusher: 3/8 inch2.  Cold strip for soluble copper3.  Contract mining4.  Strong balance sheet 10
  11. 11. How Did We Do? Great! Budget: $15 Million Final cost: $13.5 MillionCompletion date: Q3, 2012Under Budget, On Schedule 11
  12. 12. El Gallo Phase 1, 2013 12
  13. 13. El Gallo IEPCM Contractor Overview Sonoran Resources 13
  14. 14. Sonoran Resources Previous ProjectsCerro Prieto Project Santa Elena MineSonora Mexico Sonora Mexico• EPCM – Gold Silver Mine • Procurement and Construction Management• Oversaw permitting • Constructed and commissioned mine• Negotiations for surface and water rightsOatman Mine Mesquite MineArizona U.S.A. California U.S.A.• Dewatering underground • Construction of ADR Plant• Upgrades to electrical • Recommissioned refinery• Recommissioning ventilation • Development of truck shop • Electrical upgradesGolden SummitAlaska U.S.A. La Bolsa Project• Fabricated gravity circuit Sonora Mexico• Installed crushing circuit • Prefeasibility Study • Scoping Study 14
  15. 15. Initial Assessment - September 2011 15
  16. 16. Key Areas of Rebuild 1.  Process Plant 2.  Crushers 3.  Heap Leach Expansion 4.  Process Pond Upgrade 16
  17. 17. Process PlantBefore After 17
  18. 18. Assay LaboratoryBefore After 18
  19. 19. RefineryBefore After 19
  20. 20. VaultBefore After 20
  21. 21. GeneratorsBefore After 21
  22. 22. Installed Cold Strip & Acid Wash Circuit 22
  23. 23. Crushers2 Stage Before 3 Stage After 23
  24. 24. Heap Leach PadBefore After 24
  25. 25. Increased Capacity and Gold Recovery 25
  26. 26. Process Ponds 26
  27. 27. Increased Capacity and Reliability 27
  28. 28. Gold Pour 28
  29. 29. El Gallo 1 A Team That Builds Success! 29
  30. 30. John Read – Senior GeologistExploration 30
  31. 31. Phase IResources M&I  Resource   345,000  oz  Au   Samaniego   Pit   M&I  Resource   San  Rafael  Pit   113,350  oz  Au   Lupita  Pit   M&I  Resource   46,600  oz  Au  0 500 Meters N Sagrado  Corazon  Pit   31
  32. 32. LupitaDeposit + Pit Design 0 200 Meters N 32
  33. 33. NW   SE   Lupita 46.1m  @  2.1  g /t  Au   Incl.  5m  @  9.9  g /t   Deposit 44.4m  @  1.1  g /t  Au  SECTION LUP-74 Incl.  2.5m  @  9.5  g /t   12.8m  @  3.0  g /t  Au   Incl.  1.1m  @  23.3  g /t   0 100 Meters 33
  34. 34. NW   SE   Lupita DepositSECTION LUP-58 11m  @  0.96  g /t  Au   41.2m  @  1.3  g /t  Au   65.2m  @  0.5  g /t  Au   Incl.  1.7m  @  13.4  g /t   0 100 Meters 34
  35. 35. McEwen   Sonora ChihuahuaExploraGon   El  Gallo   Project   Complex   Baja California Durango Sinaloa Zacatecas McEwen   Pacific Ocean ExploraGon   Guamuchil   100 Project   0 N Nayarit Km Jalisco 35
  36. 36. Mines inWestern Mexico N 36
  37. 37. El Gallo ComplexProduction Areas + New Potential 37
  38. 38. Mina  Grande   Haciendita    0 500 N Meters 38
  39. 39. Blast  Hole  Rig   Diamond  Drill  Rig   39
  40. 40. 40
  41. 41. Haciendita Exploration Project SECTION HC-10 SW   NE   16.4m  @  2.07  g /t  Au   23.8m  @  1.3  g /t  Au   5.4m  @  1.49  g /t  Au   17.8m  @  1.78  g /t  Au   0 100 Meters 41
  42. 42. Mina  Grande   Haciendita    0 500 N Meters 42
  43. 43. 43
  44. 44. Mina Grande Exploration Project SECTION MG-13 SW   NE   4.65m  @  12.35  g /t  Au   Incl.    1m  @  44.1  g /t   12.5m  @  6.43  g /t  Au   Incl.  1.2m  @  49  g /t   5.1m  @  5.72  g /t  Au   Incl.  1.3m  @  18.6  g /t   0 100 Meters 44
  45. 45. Patricia Angulo – Human ResourcesCommunity Relations 45
  46. 46. Mining brings prosperity to communities where economicactivities are limited. 46
  47. 47. Compañía Minera Pangea in Region since 1995McEwen Mining Acquired Project 2007 47
  48. 48. Three main municipalities surround the mine:Mocorito, Salvador Alvarado and Sinaloa. 48
  49. 49. Villages Around the Mine Los Becos Projects El Tule de Arriba VillagesCerro Agudo El Tule El Mezquite San Miguel Los Medina Las Milpas de los Gonzalez 49
  50. 50. MissionTo develop profitable mineral deposits and enhance the community where we work. 50
  51. 51. Since 2007McEwen Mining Contributed US $3,000,000 51
  52. 52. McEwen Mining helps sponsor traditional holidays such as:Child´s Day, Mothers Day, Teacher’s day, and Christmas. 52
  53. 53. Providing Water for theLocal Community 53
  54. 54. In 2010 US$20,000 donated to 24 schoolsConsisting :Air ConditionersWater CoolersConstruction MaterialFansEducation MaterialSports Equipment 54
  55. 55. Schools Donation Program Children’s Day School Supplies ChristmasEducational Material 55
  56. 56. Making Schools BetterBefore After DESPUES   56
  57. 57. El Gallo Multipurpose Court In 2011 a multipurpose court was built for the El Gallo community. 57
  58. 58. El Valle Road Paving (2 km) Investment US$650,000 ANTES   2012 58
  59. 59. El Valle Paving Road InaugurationApril 2012 59
  60. 60. El Magistral, Mocorito, SinaloaIn 2012, 4 houses built to relocate residents 60
  61. 61. 61
  62. 62. Bill Faust – COO / Fernando Aguilar – Operations ManagerEl Gallo Phase 2 62
  63. 63. El Gallo Complex 63
  64. 64. El Gallo Phase 2•  Conventional Open Pit, Mill, Agitated Leach•  Est. Capex $180 Million•  Est. production 5 Million silver oz / year•  Est. cash cost $10 / oz•  Mine life est. 6.5 years 64
  65. 65. Looking North Towards Process Plant 65
  66. 66. Looking South Towards Open Pit 66
  67. 67. Stoc Leach Ore kpile Open Pit Waste DumpEl Gallo Open Pit Design 67
  68. 68. View of Historic Palmarito Pit 68 68
  69. 69. Open Pit Waste Dump NPalmarito Open Pit Design 69
  70. 70. El Gallo Phase 2 Reserve Tonnes Silver Gold Silver GoldClassification (000’) (g/t) (g/t) (000’oz) (oz)Proven Mineral Reserve 11,185 101.0 0.125 36,336 44,816Probable Mineral Reserve 534 107.2 0.075 1,840 1,286Proven and Probable Reserve 11,719 101.3 0.123 38,176 46,102 70
  71. 71. El Gallo - Construction•  Pits mined using contractor•  Permitting underway submittal Q1 2013•  EPCM Contractor – M3 Engineering•  Construction start expected Q3 2013 71
  72. 72. CYCLONE CLUSTERS Process Flowsheet 3-STAGE STOCKPILE CRUSHING LEACH TANKS BALL MILL CCD CIRCUIT DORE REFINERY MERRILL CROWEDRY STACK TAILINGS 72
  73. 73. Tailings StorageMill Open Pit N Surface RightsEl Gallo Phase 2 Site Layout 73
  74. 74. Surface Rights Boundary Substation Water Storage CCD Tanks Crushers Ball Mill Leach Merrill Tanks Crowe NEl Gallo Phase 2 Process Plant Layout 74
  75. 75. Planned Site for Process Plant 75
  76. 76. Dry Stacked Tailings 76
  77. 77. Future Substation Site – Project Power 77
  78. 78. Ian Ball – Senior Vice PresidentEl Gallo Phase 2 Economics 78
  79. 79. El Gallo Phase 2 Initial Capital - $180 M Process US Dollars (x000) Site Prep. $3,867 Crushing $15,686 Ore Storage $3,435 Mill $12,836 Leaching $28,552 Merrill-Crowe $9,688 Refinery $4,168 Tailings $20,195 Water $4,765 Power $8,382 Reagents Tanks $3,570 Buildings $2,632 Freight $8,590 Subtotal $126,365 Indirect Costs Mobilization $1,856 EPCM $19,903 Commissioning / Spares $2,345 Owner’s Cost $8,766 Contingency (14.4%) $18,813 Subtotal $51,683 Total $178,048 79
  80. 80. El Gallo Phase 2 Operating Costs Production Cost $10 / oz Silver Cost Per Ore Tonne Processed Mining $7.40 Processing $21.37 Refining $1.43 Royalty $1.01 G&A $2.16 Gold By-Product Credit ($1,415 per ounce) ($4.63) Total Operating Costs $28.74 80
  81. 81. El Gallo Phase 2 Mine Plan Avg 5.2 Million oz Silver / yr Silver Silver Gold Gold Ore Production Grade Production Grade Strip Ratio TonnesYear (000’) (gpt) (oz) (gpt) (Waste:Ore) (000’) 1 6,113 135.1 4,030 0.095 1.99 1,669 2 5,540 113.4 11,754 0.248 2.65 1,825 3 5,562 113.6 6,189 0.123 2.89 1,825 4 4,241 86.0 5,271 0.106 3.22 1,825 5 4,632 94.4 4,949 0.099 2.53 1,825 6 4,749 95.5 4,152 0.088 1.84 1,825 7 1,182 47.8 1,964 0.078 2.22 925Total 32,019 101.3 38,309 0.123 2.61 11,719 81
  82. 82. El Gallo Phase 2 Metallurgical Testing Area Silver Recovery Gold Recovery (%) (%)Silver and Gold 84.3 83.2RecoveryCyanide (kg/tonnes) 1.52Lime (kg/tonne) 6.77 82
  83. 83. El Gallo Phase 2 Financial Returns After Income Tax Base Case Spot Case ($25 Silver / ($32 Silver / $1,415 Gold) $1,700 Gold) IRR 26% 44% NPV 0% $184 $354 NPV 5% $118 $248 NPV 10% $73 $174 Annual Cash Flow $56 $82 Payback (yrs) 2.6 1.8*Dollar figures in millions 83
  84. 84. Simon Quick – VP ProjectsPermitting, Water Rights and Supply 84
  85. 85. Experienced TeamPermit Specialist: Water Rights + Supply: Patricia Aguayo Dr. Miguel Rangal•  MS Chemical Engineering •  Ph.D. in hydrology•  Permitted: Alamo Dorado, •  Current projects: La Bolsa Mine Torex, Timmins Gold,•  Good relationship with Goldcorp. SERMANAT •  Specializes in Water Rights Registration 85
  86. 86. Sinaloa Permitting FavourableMarlin Gold permit submitted: El Gallo Complex(May 1st, 2012)•  Located in Sinaloa•  Granted 140 days•  Positive sign…! 86
  87. 87. 3 Required Permits:(MIA) Manifestacion de Impacto Ambiental •  EIS equivalent USA(ETJ) Estudio Justificativo Para Cambio Uso Suelo •  Change of Land Use(ER) Analisis de Riesgo •  Risk Analysis 87
  88. 88. Permitting ScheduleMIA (60 – 120 Days)ETJ (60 – 120 Days)ER (60 – 120 Days) Permit Submission Expected Approval Q1  2013   Q2  2013   Q3  2013   Q4  2013   88
  89. 89. Regulators Like Safe & Simple Dry Tailings Eliminates dam failureReduces environmental impact Lowers reclamation costs 89
  90. 90.   Water rights secured: 1 Million M3 / Year x 2  Water requirements satisfied: 17 l/s Well 5 Well 1 6.3 l/s 2.2 l/s Well 3 3.3 l/s Well 4 40.4 l/s - Production well l/s   Litre per second - 90
  91. 91. Filter Press – Dry Stack Tailings 91

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