McEwen Mining said officials at the Mexico’s Sinaloa State have approved its land use change application for its El Gallo 2 project. This final permit from the Secretariat of Environment and Natural Resources, the company said, allows for the proposed silver-gold project’s construction and operation following a financial review.
El Gallo 2 will produce an average of 5.2 million oz silver and 6,100 oz gold at $750 per gold eq. oz, including all pre-strip and Mexican royalties, said company officials. All-in sustaining costs have been estimated at approximately $800 per gold eq. oz, including $5 million per year for exploration.
McEwen seeks to cut previous expenses by $20 million through reducing leach tanks and building a smaller refinery while using modular crushers and minimizing transformers. To date, according to company officials, $10 million in construction costs have been spent; $150 million is needed for mine completion.
Chairman and Chief Owner Rob McEwen praised Mexican officials and the company for their efforts. “This process took five months and shows what is possible when the public and private sectors work together to achieve a common goal,” he said.
Although McEwen stressed El Gallo 2 would enjoy an abundance of skilled labor and supplies, company officials added in a release that savings and financing alternative studies remain under way for “more attractive terms than currently available.”