McEwen Mining Financial & Operating Results
Q4 Production 37,167 Gold Eq. Oz. - Cash Cost $751/oz - All-In
Sustaining Cost $1,102/oz
2013 Full Production 139,445 Gold Eq. Oz.
TORONTO, ONTARIO--(Marketwired - Mar 10, 2014) -
(All Amounts in US Dollars
Unless Otherwise Stated)
McEwen Mining Inc. (NYSE:MUX)(TSX:MUX) is pleased to provide a
summary of the Company's Q4 2013 financial and operating
results.
Q4 Highlights
- Company reported a net loss of $11.3 million ($0.04 per share)
in Q4. The loss included an $18.8 million, ($0.06 per share), net
of tax write-down of exploration properties in Nevada. Excluding
the write-down, the Company earned an adjusted net income of $7.5
million ($0.03 per share).
- Earnings from mining operations* during Q4 totaled $6.5
million. Despite record production, this is down from $19.2 million
in Q4 2012 and $16.3 million in Q3 2013 due to lower average
realized prices for both gold and silver of $1,200/oz. and
$19.45/oz., respectively.
- Gold equivalent production** increased to 37,167 ounces (20,686
gold ounces and 857,011 silver ounces). This is 15% higher than Q4
2012 and 2% higher than Q3 2013.
- Full-year production exceeded guidance by 7%, totaling 139,445
gold equivalent ounces. Production was also 33% higher than in
2012.
- Total cash costs and all-in sustaining costs were $751 and
$1,102 per gold equivalent ounce. Total cash costs were 12% lower
than Q4 2012 and consistent with Q3 2013. All-in sustaining costs
were 4% higher than Q3 2013 due to increased exploration expenses
and pre-development activities in order to access future mining
areas.
- El Gallo 1 mine expansion is ahead of schedule with completion
expected in early April. The estimated cost of the expansion has
been reduced to $3 million from $5 million.
- The El Gallo 2 Environmental Impact Statement (EIS) and Change
of Land Use were both approved by the Mexican government.
- At December 31, 2013, the Company had $25.6 million in liquid
assets and no debt. During the first two months of 2014, McEwen
Mining received an additional $4 million in dividends from the San
Jose mine in Argentina. The majority of the dividends have been
repatriated to the Company's head office in Canada.
* Adjusted net income (loss) and earnings from mining operations
are financial performance measures with no standardized definition
under generally accepted accounting principles in the United States
of America ("Non-GAAP measure"). See "Cautionary Note on Non-GAAP
Measures" for additional information.
** Gold equivalent calculated by converting silver into gold
using a 52:1 exchange ratio. This ratio was established on January
30, 2013 and was used to budget the Company's 2013 gold equivalent
production. The silver/gold ratio does not take into account
metallurgical recoveries.
Financial Highlights
During Q4 2013 McEwen Mining reported a loss of $11.3 million
($0.04 per share) versus a loss of $26.3 million ($0.10 per share)
in the comparable period in 2012 and net income of $3.3 million
($0.01 per share) in Q3 2013. The loss during the quarter included
an $18.8 million ($0.06 per share) net of tax, write-down, related
to certain exploration properties in Nevada. Excluding this, the
Company would have earned an adjusted net income of $7.5 million
($0.03 per share).
Earnings from mining operations during the quarter totaled $6.5
million versus $19.2 million in Q4, 2012 and $16.3 million in Q3
2013. Earnings from mining operations were down despite record
production due to lower average realized prices for gold and silver
of $1,200/oz. and $19.45/oz., respectively.
At December 31, 2013, McEwen Mining had cash and liquid assets
of $25.6 million, comprised of cash totaling $24.3 million and gold
and silver of $1.3 million. The Company remains debt free. In
addition, McEwen Mining is owed $11.6 million from the Mexican
government in the form of a tax refund. The Company believed the
refund would have been received by year-end. Due to delays by the
Mexican government, the Company now expects to receive all or part
of the refund in Q2. Subsequent to year-end McEwen Mining received
$4.0 million in dividends from the San José mine with the majority
having been repatriated back to the Company's head office in
Canada.
Major expenditures in Q4 included $0.7 million for the El Gallo
1 mine expansion, $2.8 million in exploration costs, $0.5 million
in annual land payments and $3.1 million in general and
administrative expenses.
San José Mine, Argentina (49%)
Production for McEwen Mining's share in the San José mine during
Q4 2013 was 29,407 gold equivalent ounces (converting silver into
gold using a 52:1 ratio), consisting of 12,999 gold ounces and
853,225 silver ounces. This was 15% higher than the comparable
period in 2012 and 3% higher than Q3 2013. For the full-year San
José produced 108,326 gold equivalent ounces exceeding 2013
guidance for the third consecutive year by 5%. In addition,
full-year production was 10% higher than 2012.
Gold equivalent total cash costs in Q4 2013 equaled $747 per
ounce. This is 12% lower than Q4 2012 and 3% higher than Q3 2013.
Costs fell year-over-year due to increased production and a
declining Argentinian peso, and were up slightly over the previous
quarter due to lower gold and silver grades processed. All-in
sustaining costs totaled $1,014 per gold equivalent ounce and were
17% lower than Q4 2012 and 4% higher than Q3 2013. The movements in
all-in sustaining costs are due to the change in total cash costs
noted above and fluctuations in exploration, pre-development and
capital expenditures from quarter-to-quarter. The average realized
prices for gold and silver during Q4 2013 were $1,187 oz. and
$19.44 oz., respectively.
Production guidance for San José in 2014 is estimated at 97,500
gold equivalent ounces. Gold equivalent production is lower than
2013 due to a higher silver to gold ratio being used to calculate
gold equivalent production (60:1 in 2014 versus 52:1 in 2013). Cash
costs and all-in sustaining costs are estimated at $750 and $1,100
per gold equivalent ounce in 2014.
An updated reserve and resource estimate for the San José mine
is expected to be released by the end of March.
San José Mine
Production Results
San José - 100%* |
Full-Year 2013 |
Full-Year 2012 |
Q4 2013 |
Q3 2013 |
Ore production (tonnes processed) |
536,937 |
509,851 |
156,150 |
131,592 |
Average grade gold (gpt) |
6.42 |
5.79 |
6.03 |
6.59 |
Average head silver (gpt) |
425 |
417 |
399 |
446 |
Average gold recovery (%) |
89.2 |
90.4 |
87.6 |
91.9 |
Average silver recovery (%) |
86.7 |
87.0 |
87.0 |
89.5 |
Gold produced (ounces) |
98,827 |
85,768 |
26,529 |
25,610 |
Silver produced (ounces) |
6,356,801 |
5,952,534 |
1,741,275 |
1,689,237 |
Gold sold (ounces) |
94,758 |
84,282 |
25,254 |
24,713 |
Silver sold (ounces) |
6,277,837 |
5,897,098 |
1,742,030 |
1,655,699 |
Co-product total cash cost Au (US$/oz) |
876 |
835 |
832 |
814 |
Co-product total cash cost Ag (US$/oz) |
13.71 |
15.28 |
13.15 |
12.52 |
Gold equivalent total cash cost (US$/oz) |
785 |
811 |
747 |
723 |
Co-product all-in sustaining cash cost Au (US$/oz) |
1,182 |
1,231 |
1,129 |
1,100 |
Co-product all-in sustaining cash cost Ag (US$/oz) |
18.49 |
22.54 |
17.84 |
16.93 |
Gold equivalent co-product all-in sustaining cash cost
(US$/oz) |
1,058 |
1,197 |
1,014 |
976 |
McEwen Mining - 49% Share |
|
|
|
|
Gold produced (ounces) |
48,425 |
42,027 |
12,999 |
12,549 |
Silver produced (ounces) |
3,114,833 |
2,916,741 |
853,225 |
827,726 |
Gold equivalent produced (ounces) |
108,326 |
98,118 |
29,407 |
28,467 |
* McEwen Mining holds a 49% attributable interest in
the San José mine. |
El Gallo 1 Mine, Mexico (100%)
In Q4 2013 the El Gallo 1 mine produced 7,760 gold equivalent
ounces, consisting of 7,687 gold ounces and 3,786 silver ounces. In
its first full-year of production the mine exceeded guidance by 14%
producing 31,129 gold equivalent ounces.
Total cash costs in Q4 2013 equaled $765 per gold equivalent
ounce, 2% higher than Q3 2013 due to lower gold grades processed in
the quarter. All-in sustaining costs totaled $1,071 per gold
equivalent ounce in Q4 2013, which was 11% higher than Q3 2013 due
to increased exploration drilling at the mine. The average realized
prices for gold and silver during Q4 2013 were $1,270/oz. and
$20.55/oz., respectively.
In 2014, El Gallo 1 is forecast to produce 37,500 gold
equivalent ounces (converting silver into gold using a 60:1 ratio).
Total cash costs and all-in sustaining costs have been estimated at
$750 and $1,100 per gold equivalent ounce.
El Gallo 1 is currently being expanded from 3,000 to 4,500
tonnes per day. The expansion is ahead of schedule with completion
expected in early April versus late June 2014. The cost to complete
the expansion has been reduced to $3 million from $5 million. The
cost is lower than expected due to a large contingency that was
initially included but has since been reduced. The increased
capacity, combined with higher grades as mining moves deeper in the
pit, is expected to increase production from 37,500 gold equivalent
ounces in 2013, to 75,000 gold equivalent ounces in 2015. Cash
costs and all-in sustaining costs are forecasted to fall from $750
to $575 per gold equivalent ounce and $1,100 to $850 per gold
equivalent ounce in 2015.
El Gallo Phase 1
Mine Production Results
|
Full-Year 2013 |
Q4 2013 |
Q3 2013 |
Ore production (tonnes processed) |
1,255,314 |
323,863 |
289,382 |
Average grade gold (gpt) |
1.22 |
1.17 |
1.31 |
Gold produced (ounces) |
30,733 |
7,687 |
7,934 |
Silver produced (ounces) |
20,635 |
3,786 |
4,868 |
Gold equivalent produced (ounces) |
31,129 |
7,760 |
8,027 |
Gold sold (ounces) |
32,705 |
7,980 |
8,743 |
Silver sold (ounces) |
22,700 |
5,500 |
3,000 |
Gold equivalent total cash cost (US$) |
749 |
765 |
747 |
Gold equivalent co-product all-in sustaining cash cost (US$) |
1,164 |
1,071 |
967 |
* Gold recoveries are projected to reach 70% through
on-going leaching. |
El Gallo 2, Mexico (100%)
On January 21, 2014, the Company announced that the Secretariat
of Environment and Natural Resources (SEMARNAT) for the State of
Sinaloa, Mexico had approved McEwen Mining's Environmental Impact
Statement (EIS) and Change of Land Use permit for El Gallo 2. These
are the major permits required before construction can proceed. El
Gallo 2 is projected to produce an average of 95,000 gold
equivalent ounces per year (5.2 million ounces of silver and 6,100
ounces of gold) at an approximate cash cost of $750 per gold
equivalent ounce (including all pre-strip and Mexican royalties).
All-in sustaining costs have been estimated at approximately $800
per gold equivalent ounce (including an estimated $5 million per
year on exploration). Gold equivalent ounces have been calculated
by converting silver into gold using a 60:1 exchange ratio.
The Company has made a temporary decision to defer the
construction of El Gallo 2 due to low silver prices. The Company
believes silver prices would have to equal $25 per ounce before the
rate of return would be high enough to move forward with
construction. In order to prepare for a possible construction
decision later this year, the Company has been evaluating possible
debt financing alternatives while advancing the construction of the
ball mill, which is the longest lead time item associated with the
project. The ball mill is 60% complete and expected to be delivered
in Q3 2014.
Studies have now been completed in order to reduce the estimated
capital expenditures associated with El Gallo 2. Approximately $20
million in savings is expected in the following areas: 1) reduction
in leach tanks, 2) smaller process plant / refinery, 3) modular
crushers, and 4) reduction in transformers. These changes are
expected to have minimal impact on annual production. To date $10
million of the final construction cost has been spent. Provided the
Company realizes on these projected savings and factoring in the
funds that have been spent to date, approximately $150 million
would be required in order to complete the mine.
Gold Bar Project, Nevada (100%)
McEwen Mining continues to advance the Gold Bar permitting
process for construction and production. Gold Bar is forecasted to
produce 50,000 ounces gold per year for 8 years at a cash cost of
$700 per ounce and an all-in sustaining cost of $850 per ounce. The
project is located primarily on public lands managed by the Bureau
of Land Management (BLM). The BLM and the Nevada Division of
Environmental Protection (NDEP) are the primary government agencies
responsible for approving the permits that would allow the Company
to begin construction. In Q4 2013, the Company submitted its Plan
of Operations (PoO) for Gold Bar to the BLM. The BLM has provided
the Company with its comments and the Company's responses were
resubmitted at the end of February. Once accepted as complete, the
PoO will serve as the basis for the National Environmental Policy
Act analysis. McEwen Mining is targeting final approval by the end
of Q2, 2015 in order to begin construction.
Exploration Activities
1) Grass Valley Project, McEwen Mining (70%) and Nevada
Exploration Inc. (30%)
In Q1 2014, McEwen Mining and its joint venture partner, Nevada
Exploration Inc., completed one deep hole at the Grass Valley
project located south of Barrick's Cortez mine - one of the world's
largest gold operations. This hole did not contain any gold nor did
it encounter the rock formation that is typically associated with
large gold deposits in Nevada. Although the Company is still
evaluating the results from this hole, it is not planning any
additional exploration activities at this project.
2) Keystone (100%), Nevada
McEwen Mining recently completed a water geochemical sampling
program around its 100% owned Keystone project, located 25 km
southeast of Barrick's Cortez mine. Although higher-risk
exploration, the Company believes Keystone represents an
interesting untested drill target along the same geologic trend as
the Cortez mine. Drilling is planned for Q2 2014.
3) Tonkin Project (100%), Nevada
The Tonkin project has a current resource of 1.4 million gold
ounces in the measured and indicated categories (32.3 million
tonnes @ 1.39 gpt gold) and 0.3 million gold ounces in the inferred
(8.4 million tonnes @ 1.13 gpt gold). On-going tests have been
completed in order to identify an economic process alternative to
extract the gold. Test results indicated that approximately 50-55%
of the gold would report to a concentrate. In order to increase
this percentage SGS performed sub-microscopic test work in Q4 2013
to determine the reason for the low gold recoveries. The results
indicate that sulphide mineralization may have been already
oxidized prior to this test work starting since the samples used to
perform the test were several years old. McEwen Mining is reviewing
proposals that would include fresh mineralization that would
require drilling three additional holes in order to rerun the
flotation tests.
Metallurgical tests are currently underway to determine if there
is an economic method to process the Tonkin mineralization.
Addition to McEwen Mining's Management Team
McEwen Mining is pleased to announce that it has strengthened
its management team with the recent hiring of Nathan Stubina as
Vice President - Technology.
Nathan joins McEwen Mining from Byron Capital Markets where he
served as a Precious and Base Metals Analyst. During his time at
Bryon Capital, he was responsible for leading research initiatives
in the mining and metallurgical areas. Prior to his role at Byron
Capital, Nathan worked for Barrick Gold as Senior Manager - Barrick
Technology Centre where he was responsible for leading a technical
team. Nathan has also worked for Falconbridge Limited and Noranda
Inc. He holds a Ph.D, Metallurgy and Materials Science from The
University of Toronto and is a member of the Association of
Professional Engineers of Ontario. Nathan is the current VP
International of the CIM (Canadian Institute of Mining, Metallurgy
and Petroleum) and a Past-President of MetSoc (Metallurgy and
Materials Society).
Q4 Conference Call Details |
|
McEwen Mining will be hosting a conference call to discuss the Q4
2013, results and project developments on Tuesday March 11, 2014 11
am EST |
|
WEBCAST: |
http://www.gowebcasting.com/lobby/5325 |
|
TELEPHONE: |
Participant dial-in number(s): 416-340-2218 / 866-223-7781 North
American Toll Free |
|
REPLAY: |
Dial-in number(s): 905-694-9451 / 800-408-3053 |
Pass code: 5937907 |
ABOUT MCEWEN MINING (www.mcewenmining.com)
The goal of McEwen Mining is to qualify for the S&P 500 by
creating a high growth gold/silver producer focused in the
Americas. McEwen Mining's principal assets consist of the San José
mine in Santa Cruz, Argentina (49% interest), the El Gallo 1 mine
and El Gallo 2 project in Sinaloa, Mexico, the Gold Bar project in
Nevada, USA, and the Los Azules copper project in San Juan,
Argentina.
As of March 10, 2014 McEwen Mining has an aggregate of
297,159,359 million shares of common stock outstanding and issuable
upon the exchange of the exchangeable shares. Rob McEwen, Chairman
and Chief Owner, owns 25% of the shares of the Company (assuming
all outstanding Exchangeable Shares are exchanged for an equivalent
amount of Common Shares).
TECHNICAL INFORMATION
This news release has been reviewed and approved by William
Faust, PE, McEwen Mining's Chief Operating Officer, who is a
Qualified Person as defined by National Instrument 43-101 ("NI
43-101).
El Gallo: for additional information about the El Gallo complex
see the technical report titled "Resource Estimate for the El Gallo
Complex, Sinaloa State, Mexico" dated August 30, 2013 with an
effective date of June 30, 2013, prepared by John Read, C.P.G., and
Luke Willis, P. Geo. Mr. Read and Mr. Willis are not considered
independent of the Company as defined by NI 43-101. Los Azules: for
additional information about the Los Azules project see the
technical Report titled "Los Azules Porphyry Copper Project, San
Juan Province, Argentina" with an effective date of August 1, 2013,
prepared by Richard Kunter, FAUSIMM, Robert Sim, PGeo, Bruce M.
Davis, PHD, FAUSIMM, James K. Duff, PGeo, William L. Rose, PE, and
Scott C. Elfen, PE, all of whom are qualified persons and all of
whom but James K. Duff are independent of McEwen Mining, each as
defined by NI 43-101. Tonkin Project: For information about the
Tonkin project see the technical report titled "Technical Report on
Tonkin Project" dated and with an effective date of May 16, 2008.
The report was prepared by Alan C. Noble, P.E., Ore Reserves
Engineering and Richard Gowans, Micon International, and Steven
Brown (then US Gold Corporation) all of whom are qualified persons
and all of whom but Mr. Brown are independent of McEwen Mining,
each as defined by NI 43-101. Gold Bar: For information about the
Gold Bar project see the technical report titled "NI 43-101
Technical Report on Resources and Reserves Gold Bar Project, Eureka
County, Nevada" dated February 24, 2012 with an effective date of
November 28, 2011, prepared by J. Pennington, C.P.G., MSc., Frank
Daviess, MAusIMM, Registered SME, Eric Olin, MBA, RM-SME, MSc, Herb
Osborn, P.E, Joanna Poeck, MMSA, B. Eng., Kent Hartley P.E. Mining,
SME, BSc, Mike Levy, P.E, P.G, MSc., Evan Nikirk, P. E., Mark Allan
Willow, M.Sc, C.E.M. and Neal Rigby, CEng, MIMMM, PhD, all of whom
are qualified persons and all of whom are independent of McEwen
Mining, each as defined by NI 43-101.
The foregoing news release and technical reports are available
under the Corporation's profile on SEDAR (www.sedar.com).
There are significant risks and uncertainty associated with
commencing production or changing production plans without a
feasibility, pre-feasibility or scoping study. The proposed
expansion to El Gallo Phase 1 has not and may not be explored,
developed or analyzed in sufficient detail to complete an
independent feasibility or pre-feasibility study and may ultimately
be determined to lack one or more geological, engineering, legal,
operating, economic, social, environmental, and other relevant
factors reasonably required to serve as the basis for a final
decision to complete the expansion of all or part of this
project.
RELIABILITY OF INFORMATION REGARDING THE SAN JOSÉ MINE
Minera Santa Cruz S.A., the owner of the San José mine, is
responsible for and has supplied to the Company all reported
results from the San José mine. McEwen Mining's joint venture
partner, a subsidiary of Hochschild Mining plc, and its affiliates
other than MSC do not accept responsibility for the use of project
data or the adequacy or accuracy of this release.
CAUTIONARY NOTE REGARDING NON-GAAP MEASURES
In this report, we have provided information prepared or
calculated according to U.S. GAAP, as well as provided some
non-U.S. GAAP ("non-GAAP") performance measures. Because the
non-GAAP performance measures do not have any standardized meaning
prescribed by U.S. GAAP, they may not be comparable to similar
measures presented by other companies.
(1) Total Cash Costs and All-in Sustaining
Total cash costs consist of mining, processing, on-site general
and administrative costs, community and permitting costs related to
current explorations, royalty costs, refining and treatment charges
(for both doré and concentrate products), sales costs, export taxes
and operational stripping costs. All-in sustaining cash costs
consist of total cash costs (as described above), plus
environmental rehabilitation costs, mine site exploration and
development costs, and sustaining capital expenditures. In order to
arrive at our consolidated all-in sustaining costs, we also include
corporate general and administrative expenses. Depreciation is
excluded from both total cash costs and all-in sustaining cash
costs. Total cash cost and all-in sustaining cash cost per ounce
are calculated on a co-product basis by dividing the respective
proportionate share of the total cash costs and all-in sustaining
cash costs for the period attributable to each metal by the ounces
of each respective metal sold. We use and report these measures to
provide additional information regarding operational efficiencies
both on a consolidated and an individual mine basis, and believe
these measures provide investors and analysts with useful
information about our underlying costs of operations. A
reconciliation to the nearest U.S. GAAP measure is provided in
McEwen Mining's Annual Report on Form 10-K for the year ended
December 31, 2013.
(2) Adjusted net income (loss)
Adjusted net income (loss) excludes impairment charges and the
related income tax recovery relating to the Company's investment in
MSC, mineral property interests, and property and equipment from
net income (loss). We use and report this measure because we
believe it provides investors and analysts with a useful measure of
the underlying operating performance of our core mining business. A
reconciliation to the nearest U.S. GAAP measure is provided
below.
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
|
Year ended December 31, |
|
|
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
$ |
(33,683 |
) |
|
$ |
(38,610 |
) |
|
$ |
(201,107 |
) |
|
$ |
(93,898 |
) |
|
$ |
(62,052 |
) |
|
Impairment of investment in Minera Santa Cruz S.A. |
|
- |
|
|
|
- |
|
|
|
95,878 |
|
|
|
- |
|
|
|
- |
|
|
Impairment of mineral property interests and property and
equipment |
|
28,947 |
|
|
|
15,387 |
|
|
|
62,963 |
|
|
|
18,289 |
|
|
|
- |
|
|
Adjusted loss before income taxes |
|
(4,736 |
) |
|
|
(23,223 |
) |
|
$ |
(42,266 |
) |
|
$ |
(75,609 |
) |
|
$ |
(62,052 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery of income taxes |
|
22,340 |
|
|
|
12,325 |
|
|
|
53,365 |
|
|
|
27,244 |
|
|
|
180 |
|
|
Recovery of income taxes related to impairments |
|
(10,131 |
) |
|
|
(4,915 |
) |
|
|
(14,641 |
) |
|
|
(5,931 |
) |
|
|
- |
|
|
Adjusted recovery of income taxes |
|
12,209 |
|
|
|
7,410 |
|
|
$ |
38,724 |
|
|
$ |
21,313 |
|
|
$ |
180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) |
|
7,473 |
|
|
|
(15,813 |
) |
|
$ |
(3,542 |
) |
|
$ |
(54,296 |
) |
|
$ |
(61,872 |
) |
Adjusted net income (loss) per share - basic |
|
0.03 |
|
|
|
(0.06 |
) |
|
|
(0.01 |
) |
|
|
(0.21 |
) |
|
|
(0.42 |
) |
Weighted average common shares outstanding (thousands)
- basic |
|
297,159 |
|
|
|
274,295 |
|
|
|
297,041 |
|
|
|
261,223 |
|
|
|
147,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Earnings from mining operations
Earnings from mining operations consists of gold and silver
revenues from our El Gallo 1 mine and our 49% attributable share
from the San José mine, and deducts Production Costs Applicable to
Sales. It also includes depreciation and amortization expense
incurred at the mining operations, but does not include
amortization expense related to the fair value increments on
historical business acquisitions (fair value paid in excess of the
carrying value of the underlying assets and liabilities assumed on
the date of acquisition). We use and report this measure because we
believe it provides investors and analysts with a useful measure of
the underlying earnings from our mining operations. A
reconciliation to the nearest U.S. GAAP measure is provided
below.
|
|
|
|
|
|
|
Year ended December 31, |
|
|
Year ended December 31, |
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
El Gallo 1 earnings from mining operations |
|
|
|
|
|
|
|
|
|
|
|
|
Gold and silver sales |
$ |
10,247 |
|
|
$ |
5,510 |
|
|
$ |
45,982 |
|
|
$ |
5,966 |
|
|
Production costs applicable to sales |
|
(7,816 |
) |
|
|
(3,742 |
) |
|
|
(34,594 |
) |
|
|
(3,861 |
) |
|
Less: Amortization related to fair value
increments on historical acquisitions |
|
287 |
|
|
|
- |
|
|
|
1,530 |
|
|
|
- |
|
|
El Gallo 1 earnings from mining
operations |
$ |
2,718 |
|
|
$ |
1,768 |
|
|
$ |
12,918 |
|
|
$ |
2,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San José earnings from mining
operations (49% attributable basis) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
28,759 |
|
|
$ |
38,194 |
|
|
$ |
117,954 |
|
|
$ |
142,516 |
|
|
Production costs applicable to sales |
|
(24,945 |
) |
|
|
(20,768 |
) |
|
|
(93,238 |
) |
|
|
(76,398 |
) |
|
San José earnings from mining
operations |
$ |
3,814 |
|
|
$ |
17,425 |
|
|
$ |
24,717 |
|
|
$ |
66,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated earnings from
mining operations |
$ |
6,532 |
|
|
$ |
19,193 |
|
|
$ |
37,635 |
|
|
$ |
68,222 |
|
CAUTIONARY NOTE TO US INVESTORS REGARDING RESOURCE
ESTIMATION
McEwen Mining prepares its resource estimates in accordance with
standards of the Canadian Institute of Mining, Metallurgy and
Petroleum referred to in Canadian National Instrument 43-101 (NI
43-101). These standards are different from the standards generally
permitted in reports filed with the SEC. Under NI 43-101, McEwen
Mining reports measured, indicated and inferred resources,
measurements, which are generally not permitted in filings made
with the SEC. The estimation of measured resources and indicated
resources involve greater uncertainty as to their existence and
economic feasibility than the estimation of proven and probable
reserves. U.S. investors are cautioned not to assume that any part
of measured or indicated resources will ever be converted into
economically mineable reserves. The estimation of inferred
resources involves far greater uncertainty as to their existence
and economic viability than the estimation of other categories of
resources.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements
and information, including "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
The forward-looking statements and information expressed, as at the
date of this news release, McEwen Mining Inc.'s (the "Company")
estimates, forecasts, projections, expectations or beliefs as to
future events and results. Forward-looking statements and
information are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and
competitive uncertainties, risks and contingencies, and there can
be no assurance that such statements and information will prove to
be accurate. Therefore, actual results and future events could
differ materially from those anticipated in such statements and
information. Risks and uncertainties that could cause results or
future events to differ materially from current expectations
expressed or implied by the forward-looking statements and
information include, but are not limited to, factors associated
with fluctuations in the market price of precious metals, mining
industry risks, political, economic, social and security risks
associated with foreign operations, the ability of the corporation
to receive or receive in a timely manner permits or other approvals
required in connection with operations, risks associated with the
construction of mining operations and commencement of production
and the projected costs thereof, risks related to litigation, the
state of the capital markets, environmental risks and hazards,
uncertainty as to calculation of mineral resources and reserves and
other risks. Readers should not place undue reliance on
forward-looking statements or information included herein, which
speak only as of the date hereof. The Company undertakes no
obligation to reissue or update forward-looking statements or
information as a result of new information or events after the date
hereof except as may be required by law. See McEwen Mining's Annual
Report on Form 10-K for the fiscal year ended December 31, 2013 and
other filings with the Securities and Exchange Commission, under
the caption "Risk Factors", for additional information on risks,
uncertainties and other factors relating to the forward-looking
statements and information regarding the Company. All
forward-looking statements and information made in this news
release are qualified by this cautionary statement.
The NYSE and
TSX have not reviewed and do not accept responsibility for the
adequacy or accuracy of the contents of this news release, which
has been prepared by management of McEwen Mining Inc.
McEwen MiningSheena ScotlandInvestor Relations(647) 258-0395 ext
410 or Toll Free: (866) 441-0690(647) 258-0408McEwen MiningMailing
Address181 Bay Street Suite 4750Toronto, ON M5J 2T3PO box
792info@mcewenmining.comMcEwen Mining Inc.Facebook:
www.facebook.com/mcewenrobTwitter:
www.twitter.com/mcewenminingwww.mcewenmining.com
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