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McEwen Mining Announces Updated Preliminary Economic Assessment for the Los Azules Copper Project

(All Dollar Amounts in US Dollars)

TORONTO, ONTARIO - (September 23, 2013) - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to announce the results of an updated Preliminary Economic Assessment (“PEA”) on its 100% owned Los Azules Copper Project (the "Project") in San Juan Province, Argentina. The results from the PEA demonstrate that Los Azules has the potential to become one of the largest, lowest cost copper mines in the world. In addition, there remains excellent exploration potential to further expand the size of the existing mineral resource. Highlights from the PEA are shown below:

PEA Study Highlights*
($3.00/lb Copper and $1,300/oz Gold)

• Pre-tax Net Present Value (“NPV”) of $3.0 billion (8% discount rate) and an Internal Rate of Return (“IRR”) of 17.6%.


• After-tax NPV of $1.7 billion (8% discount rate) and an IRR of 14.3%.


• Annual copper production during years 1-5 to average 255,000 tonnes (563 million lbs), which would have placed it in the top 3%¹ of copper mines in the world during 2012. Life of mine (“LOM”) annual copper production to average 171,000 tonnes (377 million lbs) over 35 years.


• Cash operating costs during years 1-5 to average $0.87/lb copper (net of gold by-product), placing it in the bottom 14%¹ in the world during 2012. Cash operating costs over entire mine life to average $1.08/lb copper (net of gold by-product).


• Indicated resource of 5.4 billion pounds of copper and 0.8 million ounces of gold and Inferred resource of 14.3 billion pounds of copper and 2.6 million ounces of gold (please see Table 2 below for resource details).
  


• Initial capital costs to construct the mine and a 120,000 tonnes per day (“tpd”) process plant have been estimated at $3.9 billion.


• Capital payback on a pre-tax basis has been estimated at 3.8 years at $3.00/lb copper and $1,300/oz gold

¹ Based on internal market data.

“Our updated PEA is the result of a very successful exploration program which has significantly increased our resources. Combined with a change in the process method the estimated mine life has increased by 37%, total copper production by 44%, and production costs per pound of copper remain low. The new PEA includes plans for producing a copper cathode at site, which will greatly reduce export taxes and project risk by eliminating the need for a slurry pipeline,” stated Rob McEwen, Chief Owner.

The updated PEA contemplates the construction of a mine and process plant operating over a 35 year mine life at a throughput of 120,000 tonnes per day. The mine would produce a copper cathode via a pressure oxidative leach process, in addition to heap leaching the lower grade mineralized material. Compared to the previous PEA released in December 2010, there have been two significant improvements to the project:

1. 
   Resource Size: Indicated and Inferred resources have increased by 184% and 55% respectively, which were slightly offset with decreases in respective grades of 14% and 12%. Overall, this has led to a 37% increase in mine life and 44% increase in total copper production.


2. 
   Process Methodology: The current PEA plans to produce copper cathode at site whereas the 2010 PEA contemplated producing copper concentrate and transporting it via pipeline through Chile. The main advantages of producing copper cathode at site are that it eliminates this previously planned pipeline through Chile, which was a substantial risk for the project, as well as an overall increase in recovered metal, both copper and gold. Additional benefits include: i) a reduction in export taxes (5% payable on cathode versus 10% on concentrate) and, ii) the removal of treatment and refining charges from the smelting process.

Table 1: Pertinent Details of the PEA

Pre-tax NPV ($3.00/lb Cu, 8% discount rate)
$3.02 billion

After-tax NPV
$1.68 billion

Pre-tax IRR
17.6%

After-tax IRR
14.3%

Initial Capital Expenditure
$3.92 billion

LOM Sustaining Capital
$1.47 billion

LOM Average Operating Costs
$8.65/t ore

First 5 Years Average C-1¹ Cash Costs (net of by-product credits)
$0.87/lb Cu

LOM Average C-1 Cash Costs (net of by-product credits)
$1.08/lb Cu

Nominal Mill Capacity
120,000 tpd

Average Tonnes of Mineralized Material Processed Annually – Mill
43 million tonnes

Average Tonnes of Mineralized Material Processed Annually - Heap Leach
6 million tonnes

Mine Life
34.9 years

LOM Strip Ratio
0.76

LOM average annual copper production
171,000t or 377m lbs

First 5 years average annual copper production
255,000t or 563m lbs

¹ C-1 cash costs include at-mine cash operating costs, treatment and refining charges, mine reclamation and
closure costs, and copper cathode and gold doré transportation and freight costs.

In comparing the economics to the 2010 PEA, the pre-tax NPV discounted at 8% has increased from $2.8 billion to $3.0 billion and the IRR has decreased from 21.4% to 17.6%. In addition, the payback of pre-production capital has increased from 3.1 years to 3.8 years from the start of production. The previous PEA did not include economics that were calculated on an after-tax basis.

The PEA contains a cash flow model based upon the geological and engineering work completed to date and technical and cost inputs developed by Samuel Engineering, Inc., Ausenco Vector, WLR Consulting, Inc., and MTB Project Management Professionals, Inc. The base case was developed using long term forecast metal prices of $3.00/lb for copper and $1,300/oz for gold. The Canadian National Instrument 43-101 (“NI 43-101”) technical report summarizing the results of the updated PEA will be filed on SEDAR and the Company’s website within 45 days of this press release.

Table 2: Los Azules Mineral Resource Estimate

Cut-off Grade
Tonnage
Cu Grade
Cu lbs
Au Grade
Au Oz

(Cu%)
(million tonnes)
(%)
(billions)
(grams per tonne)
(millions)

Indicated Resource

0.35
389
0.63
5.39
0.07
0.84

Inferred Resource

0.35
1,397
0.46
14.3
0.06
2.58

* The PEA is preliminary in nature and includes the use of inferred resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Thus, there is no certainty that the results of the PEA will be realized. Actual results may vary, perhaps materially. The level of accuracy for the estimates contained within the PEA is approximately +/- 35%.

The following chart shows the sensitivity of the base case's pre-tax NPV (8% discount rate) and IRR to changes in the copper price:

The following chart shows the sensitivity to copper price, operating costs, and capital costs. The graph shows that the project pre-tax NPV is much more sensitive to copper price than to capital or operating costs.

ABOUT MCEWEN MINING (www.mcewenmining.com)

The goal of McEwen Mining is to qualify for inclusion in the S&P 500 by creating a high growth gold producer focused in the Americas. McEwen Mining's principal assets consist of the San José mine in Santa Cruz, Argentina (49% interest); the El Gallo 1 mine and El Gallo 2 project in Sinaloa, Mexico; the Gold Bar project in Nevada, US; the Los Azules project in San Juan, Argentina and a large portfolio of exploration properties in Argentina, Mexico and Nevada.

McEwen Mining has 297,114,359 shares issued and outstanding at September 13, 2013. Rob McEwen, Chairman, President and Chief Owner, owns 25% of the shares of the Company (assuming all outstanding Exchangeable Shares are exchanged for an equivalent amount of Common Shares).

TECHNICAL INFORMATION

The information presented in this press release has been reviewed and approved by Richard Kunter, FAusIMM CP, QP, Steven Pozder, PE, Robert Sim, P.Geo., Bruce Davis, PhD, FAusIMM, James K. Duff, P.Geo., William Rose, PE, and Scott Elfen, PE, all of whom are qualified persons and all of whom but James K. Duff are considered independent of McEwen Mining, as defined by Canadian National Instrument 43-101 “Standards of Disclosure for Mineral Projects” (“NI 43-101”). The PEA has been prepared in accordance with the standards set out in NI 43-101 and was prepared by the following consortium of independent professionals and technical firms:

Consultant
Contribution

MTB Project Management Professionals, Inc.
PEA study manager, provided input on project infrastructure, owner’s costs, mine capital and operating costs (in collaboration with William Rose of WLR Consulting), and cash flow modeling.

Richard Kunter of Samuel Engineering, Inc.
Review of metallurgical testing and mineral processing.

Steven Pozder of Samuel Engineering, Inc.
Review of cash flow modeling, project infrastructure, operating costs and economic evaluation.

Robert Sim of SIM Geological, Inc.
Bruce Davis of BD Resource Consulting
Mineral resource estimate.

Bruce Davis of BD Resource Consulting
Quality control for the assaying of the Los Azules drill core.

William Rose of WLR Consulting, Inc.
Development of the mine plan and production schedule.

Scott Elfen of Ausenco Vector
Project infrastructure, geotechnical facilities design, capital and operating costs.

James K. Duff
Information about the geology and mineralization, exploration, and environmental liabilities, studies and permitting.

All drill core samples were collected in accordance with industry standards. Splits from the drill core samples were submitted to the ACME sample preparation laboratory in Mendoza, Argentina, and then transferred to ACME's laboratory in Santiago, Chile for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays. .

For further information about the current Los Azules Mineral Resource, see the Company’s news release titled “McEwen Mining Continues to Expand Los Azules’ Large, High-Grade, Mineral Resource, dated February 5, 2013. The mineral resource estimate referenced in this news release was prepared in January 2013 by Robert Sim, P.Geo. and Bruce Davis, PhD, FAusIMM, each a qualified person and independent of McEwen Mining, as defined by NI 43-101. The foregoing mineral resource estimate was employed in the preparation of the PEA that is the subject matter of this news release and is the current mineral resource on the Los Azules Copper Project. For additional non-resource information about the Los Azules project see the technical Report titled "Los Azules Porphyry Copper Project, San Juan Province, Argentina" dated August 1, 2012, with an effective date of June 15, 2012, prepared by D. Ernest Winkler, PE, Robert Sim, P.Geo., Bruce Davis, PhD, FAusIMM and James K. Duff, P.Geo., all of whom are qualified persons and all of whom but James K. Duff are independent of McEwen Mining, each as defined by NI 43-101.

The foregoing news release and technical report are available under the Corporation’s profile on SEDAR (www.sedar.com).

The 2010 PEA is included for comparative purposes as it represents the most recent economic analysis completed on the Los Azules Copper Project prior to the PEA disclosed herein. Readers are cautioned that the 2010 PEA was superseded by the technical report and news release referenced immediately above. Historic information pertaining to the economic analysis disclosed in the 2010 PEA should not be relied upon. The 2010 PEA was disclosed in a technical report titled "Canadian National Instrument 43-101 Technical Report Updated Preliminary Assessment, Los Azules Project, San Juan Province, Argentina" with an effective date of December 1, 2010 (released December 16, 2010) was prepared by Kathleen Altman, Ph.D., PE, Robert Sim, P.Geo,. Bruce Davis, PhD, FAusIMM, Richard Jemielita, Ph.D., MIMMM, William Rose, PE, and Scott Elfen, PE. Each of the authors was at the time of publication independent of Minera Andes Inc. (now McEwen Mining Inc.) and Qualified Persons, as defined by NI 43-101. The 2010 PEA is available under the Minera Andes Inc.’s (acquired by McEwen Mining Inc. in 2012) profile on SEDAR (www.sedar.com).

swinter I wanted to chuck this out there as I wondered whether this would happen or not but keeping in mind this like lots is pure speculation.

What are others thoughts on this rise then fall in share price being attributed to the short interest ?

News comes out and some prepared traders - let share price rise to probably highest point and then short BUT cover the short prior to month end so listed volume on short basis does not show up from last posting as it is only posted so often. OR can someone post last two week short interest and changing daily volume so we can see any change or how it occurred.

Vette what are your thoughts !

Others have opinions ?

My concern is if this is the case - did we just see our new high at .57 cents for sometime.

NEWS never slipped out about Tecks JV back in - this increase is not because of a leaked drilling plan.

Why the rush to drill and increase the value of this at Teck's expense ?

They already have paid for the project basically and can move at their own pace so what makes you think they want to rush to prove up the FS ?

Sure there is a drill plan in place but I would be willing to bet that was made part of the JV agreement.

Who gets to chose were to drop the holes ? Teck has final say and what if they deccide to clear up some uncertainty by drilling somewhere more in question then someplace more likely. The east side is a big area.

I am also willing to bet that the money in the bank account doesn't go anywhere, because Ernesto as a backup will want it in the bank in case this project is shelved.

This is going no where fast regardless if the cycle is at a turning point. You still have mining construction costs way to high and I believe Teck will wait for those to start dropping.

Of course all IMO

After all the discussions of the Feasibility study and then the disappointment coupled with the old contract being thrown out the window, as well as district comments to now where we need more drills to improve economics to go forward - share price speaks for itself especially with a comment like todays environment for a junior are not what they use to be but we hope to see an improvement in a year.

What happens when in a year gold is $950 an ounce - which I know many are talking about

Silver is down and maybe copper.

I am a share holder and have been for a long time

I am an optimist

Know not what you wanted to hear and but even the lack of questions on a conference call this important sums it up as well.

I was so hoping today that we would hold that .72 - .77 cent mark which was a milestone breakout a couple years ago.

Have a look at where we are after Elmer holds a conference call after a great milestone ?

So frsutrated have to walk away and decide later how to handle

golfyeti,

I need to clarify this with an accountant but everyone talks about Stiefel buying at higher prices and now EE.

I know there are investors that come out a head when there is a loss on share price for them. I am not talking tax loss selling but an actual tax gain from them losing money. Could that have been the case with Stiefel at the higher limits.

Any help out there with this theory ?

I can't remember the name of a company but when ever they bought shares in a company you invested in you fled the scene as they typically only bought when they suspected a loss on share price from their entry point.

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

Regards

And yes still long on this third child of mine - CUU