Name: El Gallo mine.

Location: The El Gallo complex is located in Mexico’s Sinaloa state, along the foothills of the Sierra Madres.

Controlling Company: McEwen Mining owns its interest in El Gallo through its 100% ownership of Nevada Pacific Gold, which wholly owns Pangea Resources, which, in turn, owns 100% of Minera Pangea.

Brief History: Although there is a long history of mining in the area, only a minimal amount of mining appears to have occurred at El Gallo based on field observations. There is no recorded history of prior exploration having been conducted. In 2007, geologists from Nevada Pacific Gold visited the area as part of a reconnaissance programme, but no recorded samples were taken.

US Gold Corporation (now McEwen Mining) acquired El Gallo and the surrounding mineral concessions, including Magistral and the Palmarito, when it completed its takeover of Nevada Pacific Gold in 2007. US Gold initiated exploration in the district in January 2008. The first evidence of mineralisation at El Gallo occurred in the summer of 2008 when rock samples from surface outcropping returned encouraging silver values.

Initial rotary drilling occurred at El Gallo in October 2008, to test for the continuation of mineralisation at depth and, in November of the same year, McEwen Mining announced the initial discovery holes from the El Gallo silver/gold discovery.

El Gallo Phase 1 achieved its first gold pour in September 2012 and is being expanded to 4 500 t/d.

In the same month as El Gallo 1’s first gold pour, a feasibility study was completed on El Gallo 2 and, in January, the Secretariat of Environment and Natural Resources for the State of Sinaloa approved the company’s change of land use application for El Gallo 2. This final environmental permit allows for the construction and operation of the mine.

Brief Description: The El Gallo complex comprises multiple resource areas – El Gallo 1 and 2, Palmarito, Chapotillo, Haciendita, Mina Grande, Los Mautos, San Jose del Alamo, Las Milpas and CSX.

Geology/Mineralisation: The local geology in the El Gallo 1 mine area is dominated by late Cretaceous to early tertiary lower volcanic series rocks of dominant andesitic composition. The andesite package is intruded by a series of intrusions ranging in composition from diorite to quartz-monzonite. Andesitic and rhyolitic dikes are a minor component of the local geology.

The andesitic package at El Gallo 1 has been divided into four units based on textural variation: andesite, porphyritic andesite, agglomeratic andesite and “turkey track” andesite. With the exception of the texturally distinctive turkey track andesite, exact correlation of individual units between El Gallo 1 and 2 is difficult.

The El Gallo 2 deposit is situated within a region dominated by late cretaceous to early tertiary andesitic volcanic rocks of the lower volcanic series. It is situated near the north-eastern margin of a large exposure of Sinaloa Batholith that outcrops between the towns of Magistral and El Gallo and further to the south-east.

Resources: Total measured and indicated resources as at July 17, 2013, for El Gallo 1 were 13.9-million tonnes, grading 1.54 g/t of gold. Inferred resources were 400 000 t at 0.85 g/t of gold.

Total measured and indicated resources as at August 7, 2013, for El Gallo 2 were 34.3-million tonnes, grading 57.99 g/t of silver and 0.18 g/t of gold. Inferred resources were 8.5-million tonnes, grading 52.72 g/t of silver and 0.24 g/t of gold.

Products: Gold and silver.

Mining Method: The El Gallo 1 mine is a current operating openpit heap-leach gold operation. The El Gallo 2 mine will be an openpit operation, with conventional crushing and milling, using whole ore leaching.

Major Infrastructure and Equipment: El Gallo 1 includes a truck shop that comprises a large steel-frame building, with an overhead crane and four bays for servicing heavy mobile equipment. There is also a laboratory, a three-stage crushing plant and an adsorption, desorption and recovery process plant. The laboratory is equipped to process all assays (core, chips, soil) and incorporates fire-assaying and atomic absorption equipment. El Gallo 1 also includes a warehouse, a core logging facility, and a heap-leach pad and process ponds.

Prospects: McEwen Mining and its engineering contractors are conducting ongoing studies to reduce the estimated capital expenditures associated with El Gallo 2. The company believes that about $20-million in capital costs can be reduced from previous estimates, with minimal impact on production, by reducing the number of leach tanks and transformers, building a smaller Merrill Crowe process plant/refinery and using modular crushers. With these projected savings and taking into account the $10-million of the estimated final construction cost that has been spent to date, about $150-million will be required to complete the mine.

Contact Person: Investor relations, Sheena Scotland.

Contact Details:
McEwen Mining
Tel +1 647 258 0395 ext 410
Fax +1 647 258 0408
Email info@mcewenmining.com
Website www.mcewenmining.com