McEwen Mining: Q3 2024 Results
TORONTO, Nov. 05, 2024 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) today released its financial and operational results for the third quarter ended September 30, 2024 ("Q3"). The Company achieved significant improvements in revenue and operating profitability, driven by higher gold prices and strong production. The results reflect McEwen Mining's ongoing commitment to expanding gold and silver production, advancing its large copper project and robust investment in exploration programs.
Financial Highlights (Q3 2024 vs Q3 2023)
Revenue increased 36% to $52.3 million due to higher realized gold prices and an increase in gold equivalent ounces (GEOs) produced for our 100%-owned mines. Average gold price sold was $2,499 per ounce in Q3 vs $1,920 in Q3 2023.
Gross profit increased 268% to $13.8 million due to higher gold prices, improved operational efficiencies and higher production.
Net loss significantly decreased to $2.1 million or $0.04 per share, compared to a net loss of $18.5 million or $(0.39) per share in Q3 2023, reflecting the Company's focused efforts on cost controls and lower expenditures at the Los Azules copper project.
Operating cash flow increased to $23.2 million or $0.45 per share, compared to negative operating cash flow of $2.3 million or $(0.04) per share in Q3 2023, primarily reflecting the improvement in gross profit above.
Adjusted EBITDA(1) increased 586% to $10.5 million or $0.20 per share, compared to $1.5 million or $0.03 per share in Q3 2023. Adjusted EBITDA excludes the impact of McEwen Copper's results and reflects the operating earnings of our mining assets, including the San José mine. This measure underscores McEwen Mining's success in improving cash flow and operating performance across its production portfolio.
Operational Highlights
Gold Bar Mine, Nevada: Production reached 13,640 oz Au(1) in Q3, a 43% increase compared to the same period in 2023, driven by higher gold grades and improved recovery rates. The site is on track to meet its annual production guidance of 40,000 to 43,000 oz Au.
Fox Complex, Canada: Production totaled 7,855 oz Au(1) down 30% year-over-year, impacted by a temporary shortfall in development due to a stope failure in Q2 2024 that limited stope availability. However, the Company anticipates enhanced stope availability in Q4 2024, which will support increased production. The Fox Complex is expected to produce approximately 15-20% fewer ounces compared to its annual guidance of 40,000 to 42,000 oz Au.
San José Mine, Argentina: The 49% share of production from the San José Mine in Argentina was 13,684 GEOs(1)(3). Lower than anticipated grades contributed to a 23% decrease from Q3 2023. Nevertheless, Hochschild plc, as operator of the San José mine, expects to achieve its annual guidance for San José, which stands at 50,000 to 60,000 GEOs for McEwen Mining's attributable share. The improved metal price environment has allowed the San José mine to build a strong liquidity position, with an increase of $40.4 million in working capital from $34.1 million at September 30, 2023 to $75.5 million at September 30, 2024, while also investing $8.5 million in exploration and $3.5 million in expanding the mill during 2024.
Strong safety record:
Time Since Last Lost Time Injury (LTI)
Gold Bar mine
54 months no LTI
Fox Complex
33 months no LTI
Los Azules project
1.3 million manhours no LTI
Corporate DevelopmentsMcEwen Copper recently raised $56 million at $30 per share to fund the ongoing development of its Los Azules copper project in Argentina. Of the total raised, $14 million was contributed by McEwen Mining, $5 million by Rob McEwen, $35 million by Nuton LLC, a Rio Tinto venture, and $2 million by two individual investors. Following these investments, McEwen Mining's ownership in McEwen Copper now stands at 46.4% and the post-money market value of McEwen Copper is now $984 million. Over $350 million have been invested in exploration to develop Los Azules as a world-class copper deposit, including amounts spent by Minera Andes Inc. until 2012 and McEwen Mining until 2021.
McEwen Mining completed the acquisition of Timberline Resources in August, thereby expanding our exploration and potential production footprint in Nevada. This acquisition includes three properties in Nevada: Eureka, which is close to our Gold Bar Mine, and contains an oxide gold resource of 423,000 oz (Measured and Indicated) and 84,000 oz (Inferred) plus attractive exploration targets; Paiute, which is adjacent to McEwen Copper's Elder Creek project; and Seven Troughs, which is purported to host the highest grade historical gold mine in the State of Nevada(4), with production starting from 1907. All represent opportunities for long-term growth.
Exploration and Development Investments Driving Future Growth
The investment in exploration and development continued in the quarter with $6.1 million on the Los Azules copper project and $5.3 million across Gold Bar and Fox Complex. Activities during the quarter were:
Los Azules Copper Project, Argentina: Our flagship copper development project is moving steadily towards completion of the feasibility study scheduled for publication in the first half of 2025. The latest private placement funding of $56 million will allow McEwen Copper to complete this study. Additional funding will support other initiatives, including discovery-oriented exploration programs.
Gold Bar Mine, Nevada: Exploration activities are focused on near-mine drilling, aimed at extending the mine life and identifying new resource areas. A mine plan is in place to extend production from Gold Bar into 2029, and additional opportunities at the Eureka property, obtained through the Timberline acquisition, could potentially contribute to production beginning in 2027, depending on permitting and exploration outcomes.
Fox Complex, Canada: During the first nine months (9M) of 2024, $5.5 million was invested developing our Stock project at the Fox Complex. Earthworks have been completed in preparation for our mine portal construction later in 2024, with the intent of driving a ramp connecting the Stock East, Stock Main and Stock West zones. Rehabilitation of the historic Stock shaft is being considered to provide alternative means of accessing these zones to facilitate increased production.
Individual Mine Performance (See Table 1):
Gold Bar production increased 43% to 13,640 oz Au(1) in Q3, compared to 9,507 oz Au in Q3 2023 due to higher mined grades and recovery rates. During 9M 2024, gold production was 37,654 oz Au and the mine remains on track to meet annual costs per ounce guidance and production of 40,000 to 43,000 oz Au.
Cash costs and AISC per GEO sold(2) in Q3 were $1,281 and $1,822, respectively, due to higher planned stripping costs in the quarter. Operations are expected to deliver on full-year cost guidance.
Gold Bar Mine($ millions)
Q3 2024
Q3 2023
9M 2024
9M 2023
Revenue from gold sales
33.3
18.0
88.2
45.5
Cash costs
17.1
14.4
49.5
41.5
Gross margin
16.2
3.6
38.7
4.0
Gross margin %
48.6
%
20.0
%
43.9
%
8.8
%
Fox gold production was 7,855 oz Au(1), a 30% decrease compared to 11,174 oz Au in Q3 2023 due to a stope failure in Q2 2024, which led to a shortfall in development and limited stope availability during the quarter. During 9M 2024, gold production was 23,600 oz Au vs 34,200 oz Au in 9M 2023. While stope availability is expected to improve during Q4 2024, resulting in higher gold production compared to prior quarters in 2024, annual production is projected to be 15-20% below our guidance of 40,000 to 42,000 oz Au.
Cash costs and AISC per GEO sold(2) in Q3 were $1,572 and $1,953, respectively. Accelerated development costs to improve stope availability for Q4 2024 increased unit costs during the third quarter. While we expect production to improve in the fourth quarter, including by adding new production from our Black Fox mine, we expect unit costs to be 15 to 20% higher than guidance.
Fox Complex($ millions)
Q3 2024
Q3 2023
9M 2024
9M 2023
Revenue from gold sales
19.0
20.3
51.5
61.9
Cash costs
12.6
12.1
37.3
38.6
Gross margin
5.9
8.2
14.2
23.2
Gross margin %
33.7
%
40.4
%
27.5
%
37.5
%
San José's attributable production was 13,684 GEOs, a 23% decrease from 17,798 GEOs in Q3 2023. Production was impacted by lower gold and silver grades mined. Production is expected to increase during Q4 2024. During 9M 2024, 41,290 attributable GEOs were produced. Hochschild Mining, our joint venture partner and mine operator, asserts that the mine remains on track to meet annual production guidance, with our attributable portion at 50,000 to 60,000 GEOs.
Cash costs per GEO sold(2) in Q3 was $2,173 and AISC per GEO sold was $2,675. While cost inflation remained high from an Argentine perspective, the relative strength of the Peso against the US Dollar continued to increase costs in US Dollar terms. Combined with temporary lower than expected mined grades, unit costs were higher than planned. While production is expected to recover in Q4 2024 through mining from new areas, unit costs are expected to remain above guidance due to macroeconomic factors.
San José Mine—100% basis($ millions)
Q3 2024
Q3 2023
9M 2024
9M 2023
Revenue from gold and silver sales
70.4
64.5
210.6
179.4
Cash costs
58.0
43.4
154.1
131.4
Gross margin
12.4
20.8
44.2
25.4
Gross margin %
35.1
%
32.2
%
21.0
%
14.2
%
Management Conference Call
Management will discuss our Q3 financial results and project developments and follow with a question-and-answer session. Questions can be asked directly by participants over the phone during the webcast.
WednesdayNovember 6th 2024 at 11:00 AM EST
Toll-Free Dial-In North America:
(888) 210-3454
Toll-Free Dial-In Other Countries:
https://events.q4irportal.com/custom/access/2324/
Toll Dial-In:
(646) 960-0130
Conference ID Number:
3232920
Webcast Link:
https://events.q4inc.com/attendee/716235143/guest
An archived replay of the webcast will be available approximately 2 hours following the conclusion of the live event. Access the replay on the Company's media page at https://www.mcewenmining.com/media.
Table 1 below provides production and cost results for Q3 & 9M 2024 with comparative results for Q3 & 9M 2023 and our Guidance for 2024.
Q3
9M
2024Guidance
2023
2024
2023
2024
Consolidated Production
GEOs(1)
38,500
35,200
104,400
103,500
130,000-145,000
Gold Bar Mine, Nevada
GEOs(1)
9,500
13,600
23,800
37,700
40,000-43,000
Cash Costs per GEO Sold(2)
1,529
1,281
1,743
1,302
$1,450-1,550
AISC per GEO Sold(2)
2,160
1,822
2,203
1,548
$1,650-1,750
Fox Complex, Canada
