Precious metals miner McEwen Mining on Wednesday lowered its gold production guidance by 6%, after its new Gold Bar and Black Fox mines, in Nevada and Ontario, respectively, performed weaker than expected in the second quarter.
The gold guidance for the year is now to produce 152 000 oz, which will still represent about 12% growth on the 135 203 oz produced in 2018.
The silver guidance for the year remains unchanged at 3.23-milion ounces, while on a gold-equivalent basis, the silver forecast will represent 20% of 2019’s consolidated production of 190 000 gold-equivalent ounces (GEOs).
In the second quarter, McEwen produced 36 216 oz of gold and 850 525 oz of silver, or 45 882 GEOs. Gold output was virtually unchanged from the second quarter of last year, while silver output increased by 10% year-on-year.
“Production results in the quarter were mixed. San José and El Gallo, which accounted for 62% of our second-quarter production, performed well this quarter. At Gold Bar and Black Fox, we have had our head down and were pushing hard all quarter long. While both mines delivered better production in the second quarter than in quarter one, we didn’t achieve our forecast numbers,” said chairperson Rob McEwen.
McEwen achieved commercial production at Gold Bar in late May. The company said that the ramp-up to full production was progressing, but noted that delays in the first quarter had an adverse impact on gold production in the second quarter, and on the forecast for 2019.
In essence, less ore was placed onto the heap leach pad than planned, which, in turn, has delayed the application of solution to the ore, and subsequently the recovery of gold, McEwen explained. Its revised plan for Gold Bar is to produce 15 000 oz of gold in the third quarter, increasing to 17 000 oz in the fourth quarter. Whereas the mine was initially forecast to produce 50 000 oz, it is now only expected to contribute 42 000 oz this year.
The miner also announced that it would spend $5-million on exploration at Gold Bar in 2019. Drilling started mid-May with an initial focus on Gold Bar South in order to provide data necessary to advance economic studies and permitting. The miner's objective is to incorporate Gold Bar South into the mine plan this year and have permitting in place so that development could begin in late 2020.
Starting in July, drilling will be testing the deep potential of the property for Carlin-type gold deposits.