Ms. Christina McCarthy reports
MCEWEN MINING: Q3 2019 RESULTS
McEwen Mining Inc. has released its results for the third quarter ended Sept. 30, 2019. Total production during Q3 was 35,042 gold ounces and 947,145 silver ounces, or 45,930 gold equivalent ounces using the average gold:silver price ratio for Q3 of 87:1. The company's four producing mines generated earnings from mining operations of $9.4-million
during the quarter. The company continued to invest in exploration and development, spending $15.8-million on advanced projects during Q3, which contributed to the company's consolidated net loss of $11.5-million, or three cents per share.
Q4 2019 and 2020 outlook
During Q4 2019, the company expects to produce between 42,000 and 46,000 AuEq ounces, placing the company near the midpoint of its guidance range for the year. Cash costs and AISC (all-in sustaining costs) will be elevated at Gold Bar due to improvements and repairs to the conveying systems and process plant. Cash costs at Black Fox are expected to return to the levels the company guided for the year, and AISC is expected to remain above guidance due to additional sustaining capital expenditures.
For 2020, the company expects an overall improvement in AuEq ounces produced and the company's global cost per AuEq ounce compared with 2019, as Gold Bar is forecast to produce 65,000 to 70,000 gold ounces during the year. Production and cost guidance for 2020 will be provided with the company's Q4 results.
San Jose mine, Argentina (49-per-cent interest)
The mine is on track to achieving the company's full-year guidance for 2019 of 49,000 gold ounces and 3,225,000 silver ounces. The company's attributable production from San Jose in Q3 was 13,575 gold ounces and 943,037 silver ounces, for a total of 24,415 AuEq ounces, compared with 21,676 AuEq ounces in 2018. Cash costs and all-in sustaining costs (AISC) were $915 and $1,204 per AuEq ounce, respectively, in line with the company's guidance for the year. During the third quarter the company received $2-million, and subsequent to the end of the quarter the company received a further $3-million, in dividends from the company's interest in the San Jose mine.
Black Fox mine, Canada (100-per-cent interest)
In Q3, Black Fox produced 7,427 gold ounces, compared with 11,618 gold ounces in 2018. Cash costs and AISC were $941 and $1,363, respectively. AISC was above the company's guidance primarily due to lower-than-expected gold production.
The company's 2019 exploration budget for the Black Fox complex is $18-million. For detailed information about the company's continuing exploration at the Black Fox complex, refer to the company's news releases dated July 10 and July 25, Sept. 4, Sept. 10 and Sept. 30, and Oct. 28.
Gold Bar mine, USA (100-per-cent interest)
The third quarter was the first full quarter of commercial production at Gold Bar. Production during Q3 was 11,030 gold ounces. Cash costs and AISC were above guidance at $1,088 and $1,235 per AuEq ounce, respectively, primarily due to operational challenges during the first half of the year.
The company's 2019 exploration budget for the Gold Bar property is $5-million. Drilling focused on Gold Bar South in order to advance permitting, with the objective of having development begin in late 2020. The company also drilled two deep holes to test the potential of the property for Carlin-type gold deposits. For detailed information about the company's Nevada exploration program, refer to the company's news releases date Aug. 20, and Oct. 15.
El Gallo mine, Mexico (100-per-cent interest)
The mine is on track to achieving the company's full-year production guidance for 2019 of 16,000 gold ounces. During Q3, the mine produced 3,057 gold equivalent ounces. Cash costs and AISC were $1,153 and $1,177 per AuEq ounce, respectively. Production from residual leaching decreased due to depletion of the leachable gold content and the normal impact of the wet season. The company is evaluating several methods of enhancing and extending the existing operation.
Work on the Fenix project feasibility study and permitting is progressing. During Q3 environmental permits were received for phase 1 plant development and in-pit tailings storage.
Los Azules project, Argentina (100-per-cent interest)
During Q3, the company continued to advance permitting efforts, preliminary engineering and cost estimating for the proposed low-altitude all-year access route.
The associated table provides production and cost results for Q1, Q2 and Q3 2019 and comparative results from 2018 along with production and cost guidance for the full year 2019.
PRODUCTION AND COSTS
Q1 Q2 Q3 2019 guidance
2018 2019 2018 2019 2018 2019
Gold (oz) 35,068 26,938 36,959 36,216 33,806 35,042 131,000-138,000
Silver (oz) 695,651 703,219 772,432 850,525 745,172 947,145 3,225,000
GEO 44,344 36,315 47,258 45,881 43,742 45,930 169,000-176,000
San Jose mine,
Gold (oz) 10,822 10,559 12,139 13,518 11,768 13,575 49,000
Silver (oz) 692,052 701,341 769,197 848,268 743,100 943,037 3,225,000
GEOs 20,049 19,910 22,395 23,157 21,676 24,415 87,000
Cash costs ($/GEO) $934 $749 $806 $960 $856 $915 $860
AISC ($/GEO) 1,148 1,115 1,065 1,207 1,028 1,204 1,120
El Gallo mine, Mexico
GEOs 12,217 5,432 10,808 5,354 10,448 3,057 16,000
Cash costs ($/GEO) 691 967 783 926 671 1,153 875
AISC ($/GEO) 753 989 816 939 683 1,177 915
Black Fox mine, Canada
GEOs 12,078 8,943 14,055 9,430 11,618 7,427 36,000-40,000
Cash costs ($/GEO) 849 805 771 837 932 941 905
AISC ($/GEO) 1,188 1,454 1,056 1,196 1,285 1,363 1,080
Gold Bar mine, Nevada
GEOs - 2,030 - 7,940 - 11,030 30,000-33,000
Cash costs ($/GEO) - - - 901 - 1,088 930
AISC ($/GEO) - - - 1,088 - 1,235 975
Q3 2018 Q3 2019 Q3 YTD 2018 Q3 YTD 2019
Liquid assets ($ millions) $54.0 $18.5 $54.0 $18.5
Working capital ($ millions) 37.9 16.5 37.9 16.5
Debt (term loan) ($ millions) 50.0 50.0 50.0 50.0
Earnings (loss) from mining operations
Black Fox mine (loss) ($ millions) (0.3) 0.1 6.9 1.9
San Jose mine (loss) (49%) ($ millions) (1.7) 6.4 3.7 9.6
El Gallo mine ($ millions) 6.8 1.1 24.5 4.9
Gold Bar mine ($ millions) - 1.8 - 3.9
Consolidated net income
Net (loss) ($ millions) (13.3) (11.5) (23.9) (34.6)
Net (loss) per share ($) (0.04) (0.03) (0.07) (0.10)
Cash provided by (used in)
operating activities ($ millions) (1.4) (12.8) (0.8) (21.9)
Conference call and webcast
The company invites you to join its conference call, where management will discuss the company's Q3 financial results and project developments and follow with a question-and-answer session. Questions can be asked directly by participants during the webcast. The webcast will be archived on the McEwen website following the call:
- Wednesday, Oct. 30, 2019, 11 a.m. Eastern Daylight Time;
- Toll-free U.S. and Canada: 1-866-211-4128;
Outside U.S. and Canada: 1-647-689-6724;
Conference ID: 3788346.
Management will reference slides from a presentation during the conference call.
About McEwen Mining Inc.
McEwen Mining is a diversified gold and silver producer with operating mines in Nevada, Canada, Mexico and Argentina. It also owns a large copper deposit in Argentina. McEwen's goal is to qualify for inclusion in the S&P 500 Index by creating a profitable gold and silver producer focused in the Americas.
We seek Safe Harbor.
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