McEwen Secures EIA Extension for El Gallo Mine Restart

Canada-based mining company McEwen Mining announced that the Mexican government has granted an extension to the Environmental Impact Assessment (EIA) for its El Gallo Mine in Sinaloa. The regulatory approval marks a pivotal step for the company, clearing the way for the construction of the Phase 1 mill at the complex.

With the permit secured, McEwen has outlined a timeline to resume operations, targeting a construction start date in mid-2026 and an initial gold pour by mid-2027.

McEwen noted the first phase of the restart focuses on reprocessing material from the mine's historical leach pad. The company estimates this operation will yield approximately 20,000oz/y AuEq once commercial production is achieved.

According to McEwen, the project benefits from existing infrastructure, including a ball mill that has already been purchased and is on-site. The remaining capital costs required to complete construction are estimated at US$25 million. Because the material to be processed has already been mined, the company anticipates no significant development or exploration costs for this phase, a factor expected to support free cash flow.

McEwen has initiated work on Phase 2, which aims to tap into the project's in-situ silver deposits. The company stated that this second phase could extend the operational life of El Gallo significantly beyond the 10 years initially projected for Phase 1.

The El Gallo complex holds substantial historical silver resources. According to a 2012 Feasibility Study (FS), the site contains 53.1Moz Ag in the Measured and Indicated categories and 31Moz in the Inferred category within areas not yet mined.

McEwen noted that these figures are historical in nature and have not yet been classified as current mineral resources by a qualified person. The company plans to update its resource estimates in 2026 to reflect known resource areas.

Fenix Project 

The resumption of operations at El Gallo is part of the Fenix Project, a multi-stage development plan designed to extend the productive life of the complex to approximately 10 years. While Phase 1 focuses on gold production from the reprocessing of gold-bearing material from the historical leach pad, Phase 2 targets the transition to silver production from in-situ silver deposits, specifically the El Gallo Silver, Palmarito, and El Gallo deep deposits.

An FS for Fenix highlighted the economics for the project, estimating an after-tax internal rate of return (IRR) of 28% and a net present value (NPV) of US$32 million at an 8% discount rate, using base case prices of US$1,500/oz for gold and US$17/oz for silver. Under an upside scenario with prices of US$1,900/oz for gold and US$25/oz for silver, the study projected an IRR of 56% and an NPV of US$98 million.