McEwen Completes Feasibility Studies of Fenix Project in Sinaloa

McEwen Mining has announced the highlights of its feasibility study for its Mexico Fenix project in Sinaloa. The study revealed that the Fenix project expects to be operational for approximately 9.5 years.

The Fenix project is considered a redevelopment plan for the company’s El Gallo complex in Mexico, which involves constructing a mill at the mine site that initially will reprocess the existing heap leach material and later will transition to process ore from open pits at the El Gallo Silver, Palmarito, Carrisalejo and El Encuentro deposits.

In an interview with MBN, Adrian Blanco, General Manager of McEwen Mining, said El Gallo is a mining operation that is already in a state of decline, which means its resources are running out and have entered the stage of residual leaching. Blanco emphasized the company’s priority is to match the beginning of the Fenix project with the end of El Gallo’s productive life. Blanco explained the company is seeking to work simultaneously on both projects because McEwen wants to continue working with its talented staff from El Gallo, who are expected to later join the Fenix team.

The feasibility study was published on Dec. 31, 2020. During Phase 1, considered the first six years of the Fenix project, the company is expecting to have an annual production of 26,000oz pf gold. Meanwhile, for Phase 2, starting on the seventh year until the end of the mine life, it is expected to produce 4.2 million oz of silver-equivalent. During the first phase, cash costs are expected to be around US$1,035/oz of gold and all-in sustaining costs US$1,042/oz of gold. Meanwhile, for the second phase cash costs are expected to be US$14.20/oz of silver-equivalent and AISCs will come in at US$14.28/oz of silver-equivalent.

McEwen explained that the tailings produced in the Fenix project will be stored in a mined-out open pit at the El Gallo Gold Mine. The open pit brings several benefits to the company, including a strong security in the containment of tailings which will allow it to obtain better results. Moreover, the tailings deposition will have a delivery system to maximize tailings consolidation and water recovery.

Rob McEwen, Chairman and Chief Owner of McEwen, said that environmental permits are crucial for this project and that currently the company is assessing the procurement option, evaluating financing alternatives and involving detailed engineering.

The company reported that the El Gallo gold mine received SEMARNAT’s approval in September 2019 for Phase 1, which allows the company to add a mill and leach circuit near the existing facilities to reprocess material from the heap leach pad. Meanwhile, for Phase 2, the company has to expand the footprint of the processing plant and the haul road, while carrying out a deep examination of the tailings management.

McEwen said the company is expecting to target an annual production of 300,000 gold-equivalent oz in 2025, up from 160,000 to 170,000 gold-equivalent oz in 2021. This production is expected to come from El Gallo, its Fox complex in Canada, Gold Bar in the US and San Jose in Argentina.