McEwen grows Grey Fox gold resource by nearly 50%

McEwen Mining (NYSE: MUX; TSX: MUX) says the resource at its Grey Fox deposit in Ontario has grown by almost half after new discoveries and areas expanded since late 2021.

The indicated gold resource increased by 32% to 1.54 million oz., contained within 13.1 million tonnes at an average grade of 3.64 grams per tonne. The inferred resource nearly doubled to 458,000 oz., within 4.3 million tonnes grading 3.3 grams. Together, the total gold ounces are nearly 50% higher compared to three years ago.

The resources at Grey Fox are spread across six different zones. Of these, Gibson had the most growth, with a 181% increase in indicated resources to 290,000 oz. and an 80% increase in inferred resources at 245,000 ounces. Another notable zone is Whiskey-Jack, which had 97% indicated mineralization growth to 116,000 oz. gold, while also possessing the greatest average true widths and the highest grade of any zone at Grey Fox.

In addition to its exploration success, McEwen also attributed the resource growth to the market factors, namely a higher gold price (US$2,800 per oz. now versus US$1,750 per oz. in 2021), which also allowed it to use a lower cut-off grade (from 2.3 grams to 1.6 grams).

McEwen Mining’s shares closed 2.3% higher at $12.27 apiece in Toronto for a market capitalization of $651 million. They’ve traded in a 52-week range of $8.05 to $17.08.

Fox Complex

Grey Fox is part of McEwen’s proposed expansion of the Fox Complex in North Ontario. The expansion is centred on the sequential underground development and mining of several deposits that also include Froome, Stock West and Fuller.

“Our investment in exploration on the Fox Complex properties has successfully expanded our gold resources, which will enable us to both increase annual production and extend the mine life,” Rob McEwen, chairman and chief owner, said in a news release.

The Fox Complex encompasses three properties along 18 km of the Destor-Porcupine fault. Also known as the ‘Golden Highway’, the region has historically been associated with over 110 million oz. of gold production. The Grey Fox deposit lies within the easternmost Black Fox property, host to the Black Fox and Froome mines.

“Grey Fox is one of several exploration targets contributing to the growth of gold resources and enhancing the future production at our Fox Complex,” McEwen added.

According to a preliminary economic assessment from 2022, the Fox Complex expansion could produce 72,000 oz. annually for 12 years.