McEwen Mining Update From Dec 11th Luncheon I attended

The following is strictly my opinion with a bit of spectulation thrown in, please do your own research.

I attended a McEwen Mining (MUX) luncheon today. Rob presented his standard presentation, with an update by Ian Ball on the status of the various projects. These luncheon’s are held at McEwen’s head office in Brookfield Place in their boardroom with about 10-12 people attending. Hence the reason you need to sign up fast to get spots. I had tried 2 times in the past but they were already booked. Most “seemed” to be analyst’s or mining industry people with 3-4 of us obviously being individual investors. They recently held one in Montreal and would like to expand these sessions to places like Vancouver also.

They commented on the rights offering and that, of the funds they need for El Gallo phase 2, the $60 million would cover the equipment costs for long lead time items. This is out of the $180 million total expenditure.

As with all these type of sessions, its the questions at the end that are the most interesting part. My main question was, in trying to realize some value in Los Azules, how much of an issue will it be to get funds out of Argentina. He noted that Los Azules is a separate corp entity and a deal could be done where this wouldn’t necessarily be an issue. Good to here. Another question was about the sources of inflation (20%+ in Argentina).

The other interesting comment that came up was Rob’s comment that they are basically looking at going from 100,000 oz of gold equivalent to about 300,000 oz of gold equivalent over the next 3 years but that this wouldn’t allow them to meet their S+P 500 inclusion goal by 2015. Rob noted that realistically they would need another 300,000 oz of gold equivalent and likely 250,000 oz of gold equivalent in the hopper. Implying more mergers to come and he basically said they are looking. Someone asked if he could shed some light, geographically where they’d be looking. Rob said the America’s where there are good laws and stable tax situations, implying North America and up into Canada. He mentioned that in the past many miners left North America due to regulation, and he considers this a great time to buy with the price depression of miners.

As disclosure I’m a shareholder in MUX but also a larger shareholder in Rubicon Minerals (RMX / RBY) which is hoping for gold production in 2014 timeframe of up to 180,000 oz/yr. One has to wonder, given Rob’s past interest in RMX and his knowledge of the Red Lake area, if he might take a swing at RMX at some point to fill some of that 300,000 oz he needs which happens to be in a safe jurisdiction. Pure speculation on my part. But would seem fitting to have Rob pick it up right under Goldcorp’s nose, being next door.

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