McEwen Mining’s president discussed innovation, why the company has not cut back on exploration and why more young people should consider a career in mining.
Ian Ball spoke with MINING.com in early March while he was preparing to meet shareholders before the Prospectors & Developers Association of Canada convention. McEwen Mining is gold and silver miner operating in the Americas. The company was founded by mining legend Rob McEwen, the founder and former Chairman and CEO of Goldcorp. McEwen Mining’s stated goal is to qualify for inclusion in the S&P 500.
While miners cut back on exploration expenses during the drop in commodity prices last year, Ball said McEwen Mining’s (NYSE:MUX) programs were kept in place since the company believe that is how it would ultimately out-perform its peers. He pointed to the company’s Gold Bar project.
“In Nevada we have a property package near Barrick’s Cortez Mine, which is the world’s largest gold mine, and we are exploring there on a consistent basis,” said Ball.
Ball says exploration is a high risk, high return practice, but when the company has the world’s biggest gold mine on your door step, the company will keep exploring.
“If you look at the history of this industry whether it is Gold Strike for Barrick or Red Lake for Goldcorp, [exploration] has been one of the few ways you can generate real wealth for investors is through organic growth and that comes through exploration.
“If you cut your exploration you just become a cash flow and people can easily quantify that, discount it and you are just a function of the gold price, so you got to break out of that and exploration is what delivers the value.
The company is expecting a jump in silver from its El Gallo 1 mine this spring.
“El Gallo 1 is a mine we have Sinaloa State Mexico. We are expanding that now by 50% and that is going to be completed in April, and we are going to see that mine go from 40,000 oz of gold to 75,000 oz of gold next year, as well as seeing a big drop in cost from $750 on a cash cost basis to $575, because we have better economics with the expansion and we are having the grade double from one gramme a tonne to two grammes a tonne.”
Ball, who is in his early 30s, believes more people should look at mining as a career. Ball says the industry is also ripe for innovation and change, and the sector would benefit from a new perspective.
“Why should someone youthful get into the mining industry? If you walk down University Avenue here in Toronto, you go to the Munk Cardiac Centre, you have the McEwen stem cell, you have Lassonde engineering program, the Schulich School of Business. All of that wealth came from mining.
Regarding some immediate innovation that the industry could adopt, Ball picked out haul trucks and a shift to electric vehicles.
“Most trucks use diesel to fuel themselves. If you can convert to all electric, [it’s] two-thirds cheaper to generate the same amount of power than diesel.”
Ball says it costs $2 per tonne to transport rock using diesel. All electric could reduce the costs to $1 per tonne.