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El Gallo Complex Exploration

McEwen Mining recently put together a new district-scale prospecting model, which largely ties together all the known deposits in the area.

The deposits at Palmarito, El Gallo Mine and El Gallo Silver are characterized by being proximal to a large, outcropping granodiorite intrusive body, shown in light pink in the geological map of Figure 1. From an airborne geophysical study done in 2011, we know that this intrusion is partly surrounded by areas of variably intense potassic alteration, with the more intense alteration represented in dark pink patches in Figure 1. The expectation is that the next prospective areas in the district are likely to be found in these areas of stronger potassic alteration in between the two ellipses shown on the map.

The map highlights the locations of the known resource areas at El Gallo, Palmarito and El Gallo Silver and the exploration areas of the recently acquired El Encuentro project and Texcalama to the northwest.

Outside of this area, the known Mina Grande project in the northeast is close to the same intrusive body, however in this location the intrusion is buried, but the area is still characterised by similar alteration patterns and lends itself to a high degree of prospectivity.

The mineralised bodies previously identified at the El Gallo Silver and Mina Grande areas are not the traditionally steeply dipping veins characteristic of the low-sulfidation epithermal deposits found elsewhere in Mexico, but are relatively shallow dipping (approximately 20⁰) breccia sheets. As well as the deposits being related to the intrusive body, they also show characteristics of typical IOCG (iron-oxide-copper-gold) deposits, which can be very large and very high in grade. Similarities include the very strong potassium alteration seen in the airborne radiometric surveys that is also seen in our drill cores, the fact that the principal ore mineral at the El Gallo Mine is specular hematite (an iron oxide mineral), and the fact that at El Gallo Silver and Mina Grande we see these sheet-like breccia bodies, which are relatively parallel to the underlying intrusions.

The district is permissive to significant discoveries. In the next months we are completing a significant Controlled Source Audio-Magnetotelluric (CSMAT) resistivity survey over most of the district, represented by the lines in red in Figure 2. CSMAT is similar to IP resistivity, but has higher resolution to changes in electrical resistivity in the underlying rock units.

We hope that the mapping will identify more of the shallow dipping breccia bodies, seen at El Gallo Silver or Mina Grande. At the very least, we hope to map the contact between the underlying intrusive rock and the overlying favourable host rock andesites.

The first targets for drilling are El Encuentro, El Gallo Silver and Mina Grande. The last target area is Texcalama, located northwest of the other deposits. Although the potassic alteration signature here is weaker than elsewhere, the host rocks are different. The intrusive body here is the same age as the intrusives of the Guerrero Gold Belt in southern Mexico, where multi million ounce deposits are found, and interestingly, it is those same host rocks that we also see at Texcalama.

For 2017 we have established a $6 million exploration budget at the El Gallo Complex, together with drill targets amenable to adjustments based on the new results that will be progressively obtained throughout the year. Three drill rigs are currently active in the area of the mine works.

Encuentro South Drill Results

In 2016 exploration drilling at the El Gallo Complex has been concentrated primarily on three prospective areas; one area called Encuentro South has returned particularly encouraging results at shallow depths. Highlights are summarized below:

    Hole ID Gold Grade (gpt)
Intercept Width (m)
1.85 15.2
        including  3.99  5.0
    ENX-021  1.66  12.7

Encuentro South is located 7 miles (11 km) southwest of the El Gallo Mine. The project area lies on an important 4 mile (7 km) long, regional NW-SE mineral trend that also hosts two of our other exploration targets (Las Milpas and Twin Domes). Extensive exploration along this trend has identified favorable alteration signatures and abundant anomalous gold and silver mineralization in surface rock and soil samples.

A total of 51 core holes (8,980 metres) have been drilled in the project area, with 42 of those (7,522 metres) at the Encuentro South prospect. Initial interpretations indicate that the favourable gold assays occur in at least three distinct zones that are either shallow dipping NW, or sub-vertical NS structures and are still open along strike and at depth. Mineralization has been identified from surface to a depth of 130 metres. The known length (or strike) of the zone is approximately 230 metres. For full results of the recently drilled holes at Encuentro South see Table 1 here.

Mineralization at Encuentro South is characterized primarily by structurally controlled, multi-event quartz breccias and stockwork zones hosted by propolytically altered meta-andesites. Minor silicification and hematisation alteration is also seen locally. The mineralization is considered to be of the low-sulphidation, epithermal style as seen elsewhere on the property. Very early stage test results show that the gold mineralization at Encuentro South is potentially amenable to heap leaching.

The information on this page was derived from:

(1) A presentation by Hall Stewart, Consulting Geologist at McEwen Mining’s Annual Meeting from May 31, 2016. To access the video presentation, click here

(2) A news release titled "McEwen Mining Reports Q3 Production, Mexico Exploration Drill Results" released on October 13, 2016 by McEwen Mining. To access the news release click here

For additional technical information on the El Gallo Complex, see a report titled "Resource Estimate for the El Gallo Complex, Sinaloa State, Mexico" with an effective date of June 30, 2013. The report was prepared by John Read, C.P.G., and Luke Willis, P. Geo. Both Mr. Read and Mr. Willis are not considered independent of the Company as defined in Section 1.5 of NI 43-101. To access the report click here.

Cautionary Note

This website contains certain forward-looking statements and information and investors are encouraged to review our "Cautionary Note Regarding Forward Looking Statement".

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