McEwen Mining Receives Final Environmental Permit for Construction and Operation of El Gallo 2 Project

TORONTO, ONTARIO--(Marketwired - Jan. 21, 2014) - McEwen Mining Inc. (NYSE:MUX)(TSX:MUX) is pleased to announce that the Secretariat of Environment and Natural Resources (SEMARNAT) for the State of Sinaloa, Mexico, has approved the Company's Change of Land Use application for El Gallo 2. This final environmental permit allows for the construction and operation of the proposed mine. El Gallo 2 is projected to produce an average of 95,000 gold eq. ounces per year (5.2 million ounces of silver and 6,100 ounces of gold) at an approximate cash cost of $750 per gold eq. ounce (including all pre-strip and Mexican royalties). All in sustaining costs have been estimated at approximately $800 per gold eq. ounce (including an estimated $5 million per year on exploration). Gold equivalent ounces are calculated by converting silver into gold using a 60:1 exchange ratio.

McEwen Mining and its engineering contractors are conducting on-going studies in order to reduce the estimated capital expenditures associated with El Gallo 2. The Company believes that approximately $20 million in capital costs can be reduced from previous estimates with minimal impact on production by: 1) reducing the number of leach tanks; 2) building a smaller Merrill Crowe process plant / refinery; 3) using modular crushers; and, 4) reducing the number of transformers. To date $10 million of the estimated final construction cost has been spent. With these projected savings and taking into account the funds spent to date, approximately $150 million would be required in order to complete the mine.

"We would like to congratulate our teams in Toronto and Mexico for their dedication and hard work. In addition, McEwen Mining wishes to extend its sincere gratitude and thanks to the SEMARNAT offices in Sinaloa State and Mexico City. This process took 5 months from start to finish and shows what is possible when the public and private sectors work together to achieve a common goal," stated Rob McEwen, Chairman and Chief Owner and Ian Ball, President.

A final decision to proceed with the construction of El Gallo 2 has not been made. The Company plans to complete its cost savings studies and review financing alternatives. Although the Company believes this is an ideal environment to build El Gallo 2 due to the abundance of skilled labour and supplies, any decision to proceed would be based on securing financing on more attractive terms than those currently available. The Company believes receiving the final permit for El Gallo 2 will help facilitate this process. The Company will provide an update during its Q4 financial update, which is scheduled for early March. At December 31, 2013, McEwen had cash and gold/silver bullion totaling $26 million and was debt free.