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McEwen anticipates fourth gold deposit near Matheson

Toronto miner gears up to expand mine life at its Fox Complex
McEwen Mining’s Black Fox Complex is located east of Timmins near the Town of Black River-Matheson. (Supplied photo)

McEwen Mining has high hopes of discovering more gold this year at its Fox Complex in the Black River-Matheson area.

The Toronto mining company held a conference call late last week on its 2022 first-quarter production results and updated its exploration plans in the Timmins mining camp. 

The company has three deposits at its Stock property, located 22 kilometres west of Matheson, that show gold potential at depth. Geologists believe there’s good opportunity to identify a fourth deposit once exploration drilling wraps up this year.

The goal of the drilling program is to extend mining life at the 7,000-hectare project site.

The Fox Complex is a series of gold properties extending along Highway 101, east of Timmins. The complex already has an active mine there as the Froome deposit was brought commercial production last September. Froome is regarded as bridging the life of mine at the complex before tapping into other nearby gold deposits.

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Earlier this year, McEwen released a preliminary economic assessment (PEA) of its Stock West deposit, with a projected nine-year mine life and a resource of 144,000 ounces in the indicated category with 111,000 ounces on the inferred side.

The company made the gold discovery at Stock West in 2019 near the site of the former Stock Mine.

Indicated and inferred resources have to do with the degree of confidence in a mineral resource with indicated being of higher confidence and inferred being lower. The company wants to do more drilling this year to move those inferred ounces into the indicated category.

A PEA is an important first-pass economic analysis of a mineral project's potential viability to be brought into production. Once that's posted, mining companies generally move on to a more in-depth pre-feasibility study.

McEwen has budgeted $10 million for exploration this year and $15 million for 2023.

The company considers the area, around the former Stock Mine, to be under-explored and believes the deposits they have are open to finding more gold at depth.

In a conference call last week, McEwen’s Exploration Vice President Stephen McGibbon called the PEA the “first step in a journey” that’s ultimately going to result in a “long term and meaningful” mining opportunity at Stock.

McGibbon said drilling planned for this year at Stock West will put them in a better position to make an economic decision about its future later year. 

The company is eyeing four key exploration targets near the Stock processing mill, deemed to have “excellent” potential to grow the resource.

The Stock Property covers eight kilometres of the Destor-Porcupine Fault Zone, a favourable geological structure to historically find gold in the area. 

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McGibbon said the areas east and west of the former Stock Mine had been “poorly explored” in the past by other companies.

Through examination of historic drilling performed by a previous company, McEwen mapped a target where there were drill interceptions showing gold grade up to 16.5 grams per tonne, located just west of its Stock West deposit.

At its Grey Fox deposit, 65 kilometres east of Timmins, host to McEwen’s largest and highest grade resources, McGibbon said there are attractive exploration targets to follow up. One drill intersection from last year returned 7.29 grams per tonne gold over 15.35 metres.

In commenting on quarterly production at the Fox Complex, company chair and founder Rob McEwen liked the higher production and lower cost per tonne but generally saw mixed results. Production at Fox started out strong but was slowed by workforce issues due to COVID-19, followed later by an equipment failure in the mill.

McEwen said the PEA, which outlined the future growth prospects at the Fox Complex, detailed a “bright future” with a nine-year mine life and attractive mining costs. The company is confident exploration will reveal improved economics with a faster payback period.

McEwen Mining is a gold and silver producer and explorer with operating mines in Nevada, Canada, Mexico and Argentina where it owns a large copper deposit.