McEwen Mining Inc. [MUX-TSX, NYSE] has reached an agreement with Primero Mining Corp. [PMR-TSXV; PMNRF-OTC; DYD-FSE] to purchase its Black Fox Complex and associated assets and liabilities located in the world-famous gold mining camp of Timmins, northeast Ontario, Canada. The underground gold mine is 8 km east of Matheson and 40 km east of Timmins.
The agreed purchase price is US $35 million, subject to closing adjustments. Definitive documentation is expected to be completed before the end of this month.
“Buying the Black Fox Complex provides fantastic synergies with our recently acquired Timmins deposits. Our objective is to build a long-term production platform with a robust pipeline of production, development and exploration assets, all feeding into a single processing facility. This acquisition will add immediately to our gold production, but is just the beginning of a new chapter of growth for McEwen Mining,” said Rob McEwen, Chairman and Chief Owner. “Black Fox comes with a talented operating team, an underground mine producing 50-60,000 ounces of gold in 20171, a processing facility with excess capacity, two future development opportunities, and excellent exploration potential. Combined with our existing portfolio of Timmins deposits, I believe this is a logical and potent combination.”
In Primero Mining’s Q2 2017 report, the company stated that Black Fox outperformed on higher than expected underground grades. Black Fox produced 20,731 ounces of gold in Q2 2017, compared to 15,172 ounces in Q2 2016. Underground mining was primarily focused on production from the Deep Central Zone, with underground gold grades averaging 7.09 g/t and a daily average mining rate of 747 tonnes per day of high-grade ore. All-in sustaining costs of $827 per ounce in Q2 2017 were significantly lower than the $1,362 per ounce realized in Q2 2016. The mine generated positive cash flows during the second quarter of 2017, and remains on track to achieve 2017 production guidance of between 50,000 and 60,000 ounces of gold.
The objective of McEwen Mining is to qualify for inclusion in the S&P 500 Index by creating a high growth gold and silver 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 Gold Mine and El Gallo Silver Project in Mexico, the Gold Bar Project in Nevada, the Timmins projects in Canada and the Los Azules Copper Project in Argentina. McEwen Mining has a total of 312 million shares outstanding. Rob McEwen, Chairman and Chief Owner, owns 25% of the company.