McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today
reported its first quarter (Q1) results for the period ended March
31st, 2021.
- Production was
23,300 gold ounces and 493,200
silver ounces, or 30,600 gold equivalent ounces(1)
(GEOs)(see Table 1), at the
average gold:silver price ratio for the quarter of 68:1.
- Cash and liquid assets(2) and
positive working capital at March 31st, 2021, were $52.5
million and $35.3 million,
respectively.
- Two financings were completed for
aggregate net proceeds of $42 million.
- We invested $6.8
million on exploration and advanced projects, and reported
a net loss of $12.5 million, or
($0.03) per share, compared to a net loss of $99.2
million, or ($0.25) per share, in Q1 2020.
- We invested $5.0
million on exploration drilling and other exploration
work, with the primary focus on growing the Fox Complex resource
base.
- All operations delivered production
results in line with our expectations. Production is expected to
increase throughout 2021 and end 20 to 40% higher
than 2020.
- We successfully reached the first
development horizon at the new Froome deposit, part of the Fox
Complex.
- A Preliminary Economic Assessment
(PEA) to expand the production from the Fox Complex is expected to
be released at the end of Q2 2021.
- Stephen McGibbon
has joined as the Executive Vice President of Exploration, and
Ruben Wallin has joined as the Vice President of
Environment, Health, Safety and Sustainability.
- Our quarterly
webcast will take place on Monday, May
10th at 11 am EDT.
Please see the details below.
Operations Update
San José Mine, Argentina (49%
Interest)
Our attributable production from San José in Q1
was 9,500 gold ounces and 492,300
silver ounces, for a total of 16,700 GEOs. For Q1,
total cash costs(2) and all-in sustaining costs (AISC)(2) were
$1,088 and $1,328 per GEO,
respectively. This compares to 14,900 GEOs at total cash costs and
AISC of $1,138 and $1,592 per GEO,
respectively, in Q1 2020.
We received $5 million in dividends in Q1,
compared to no dividends during the same period in 2020.
In 2021, the
exploration budget is $10 million. Recent exploration results
generated by our partner and mine operator have been encouraging,
including an outstanding result from the Escondida vein:
62.5 g/t gold and 5,571
g/t silver over 2.0 meters – hole
SJM-529
Gold Bar Mine, USA (100%
Interest)
Gold Bar
produced 7,400 GEOs in Q1 at total cash
costs and AISC
of $1,865 and $1,934 per
GEO, respectively. This compares to 9,100 GEOs at total cash costs
and AISC of $1,887 and $2,177 per GEO,
respectively, in Q1 2020. Production for the remainder of the year
is expected to increase, and correspondingly costs are expected to
decrease. Updated resource and reserve estimates were completed.
The exploration budget for 2021 is $5 million and is focusing on
testing near-mine targets and further defining oxide resources on
the neighboring Tonkin property.
Near-mine exploration during Q1 has delivered
encouraging results from the North Ridge target, which will be
provided in an upcoming exploration update.
Fox Complex, Canada (100%
Interest)
Black Fox
produced 5,200 GEOs in Q1 at total cash
costs and AISC
of $1,262 and $1,560 per
GEO, respectively. This compares to 8,300 GEOs at total cash costs
and AISC of $838 and $1,339 per GEO,
respectively, in Q1 2020. Mining at Black Fox has begun
transitioning to the Froome deposit, where a progressive ramp-up is
planned through Q3, with commercial production expected in Q4.
Costs are expected to fall considerably towards the latter
half of the year as production rates increase to reach commercial
production in Q4.
At the Stock property, surface exploration is
underway with four drills at the Stock West target, and one drill
at the historic Stock Mine. We spent $3.4 million in Q1 of the
total $9 million exploration budget for 2021.
A Preliminary Economic Assessment (PEA) to
expand the production from the Fox Complex will be released late in
Q2. We are targeting improved production and cost profiles at the
Fox Complex leveraging the potential for operational synergies
through shared resources and infrastructure, a longer life of mine,
and expanded production scale for the combined projects.
El Gallo Project, Mexico (100%
Interest)
In Q1, El Gallo
produced 1,300 GEOs from residual
leaching of the heap leach pad. Operations were disrupted for three
weeks by a blockade of the mine entrance by members of the local
community, which has been resolved. A new 10-year agreement was
reached between the El Gallo operation and the neighboring
communities.
Los Azules Copper Project, Argentina
(100% Interest)
Work continued on
engineering and developing cost estimates to advance the proposed
low altitude all-year access route to the project. Work is also
progressing on identifying opportunities to accelerate the
development and improve the economics of Los
Azules. Concurrently, two strategic alternatives are being
aggressively evaluated to determine what we believe will be the
optimal way to finance the rapid development of Los Azules to
create the greatest long-term value from this large copper resource
for Argentina, the nearby communities, our shareholders, and
employees.
Table 1 below provides
production and cost results for Q1 2021 and 2020.
|
Q1 |
|
2021 |
2020 |
Consolidated Production |
|
|
Gold (oz) |
23,300 |
29,200 |
Silver (oz) |
493,200 |
553,200 |
GEOs(1) |
30,600 |
35,100 |
San José Mine, Argentina (49%) |
|
|
Gold production (oz)(3) |
9,500 |
9,000 |
Silver production (oz)(3) |
492,300 |
551,900 |
GEOs(1)(3) |
16,700 |
14,900 |
Cash Costs ($/GEO)(1) |
1,088 |
1,138 |
AISC ($/GEO)(1) |
1,328 |
1,592 |
Gold Bar Mine, Nevada |
|
|
GEOs(1) |
7,400 |
9,100 |
Cash Costs ($/GEO)(1) |
1,865 |
1,887 |
AISC
($/GEO)(1) |
1,934 |
2,177 |
Black Fox Mine, Canada |
|
|
GEOs(1) |
5,200 |
8,300 |
Cash Costs ($/GEO)(1) |
1,262 |
838 |
AISC
($/GEO)(1) |
1,560 |
1,339 |
El Gallo Mine, Mexico |
|
|
GEOs(1) |
1,300 |
2,700 |
Cash Costs ($/GEO)(1) |
(4) |
(4) |
AISC
($/GEO)(1) |
(4) |
(4) |
Notes:
- 'Gold Equivalent Ounces' are
calculated based on a gold to silver price ratio of 68:1
for Q1 2021, 94:1 for Q1 2020, 86:1 for the FY 2020, and
75:1 for 2021 Production Guidance.
- Cash gross profit, cash costs per ounce, all-in sustaining
costs (AISC) per ounce, and liquid assets are non-GAAP financial
performance measures with no standardized definition under U.S.
GAAP. For a description of the non-GAAP measures see
"Non-GAAP Financial Measures" section in this press release;
for the reconciliation of the non-GAAP measures to the closest U.S.
GAAP measures, see the Management Discussion and Analysis for the
year ended December 31st, 2020 filed on Edgar and SEDAR.
- Represents the portion attributable
to us from our 49% interest in the San José Mine.
- Both cash costs and AISC per GEO no longer represent key
metrics used by management to evaluate residual leaching at the El
Gallo Project. For this reason, the Company has ceased relying on,
and disclosing, cash costs and all-in-sustaining costs per ounce as
a key metric.
For the SEC Form 10-Q Financial Statements and MD&A refer
to:
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000314203
Conference Call and Webcast
Management will discuss our Q1 2021 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.
|
To call into the conference call over the phone, please
regis ter here: |
Monday, May 10th,
2021 |
http://www.directeventreg.com/registration/event/2562066 |
|
|
at 11:00 am EDT |
Audience URL: |
|
https://event.on24.com/wcc/r/3082266/913742C4F6945BAA9039EE61980F124A |
The webcast will be archived on McEwen Mining's
website at https://www.mcewenmining.com/media following the
call.
COVID-19
All our operations have implemented rigorous
health and safety measures to prevent the spread of the COVID-19
virus. Currently, the COVID-19 pandemic is not materially affecting
our operations, or our future plans and objectives.
Reliability of Information Regarding San
JoséMinera 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.
Technical InformationThe
technical contents of this news release have been reviewed and
approved by G. Peter Mah, P.Eng., COO of McEwen Mining and a
Qualified Person as defined by Canadian Securities Administrators
National Instrument 43-101 "Standards of Disclosure for Mineral
Projects."
CAUTIONARY NOTE REGARDING NON-GAAP
MEASURESIn this release, we have provided information
prepared or calculated according to United States Generally
Accepted Accounting Principles ("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.
Cash Costs and All-in Sustaining CostsCash costs
consist of mining, processing, on-site general and administrative
costs, community and permitting costs related to current
operations, royalty costs, refining and treatment charges (for both
doré and concentrate products), sales costs, export taxes and
operational stripping costs, and exclude depreciation and
amortization. All-in sustaining costs consist of cash costs (as
described above), plus accretion of retirement obligations and
amortization of the asset retirement costs related to operating
sites, sustaining exploration and development costs, sustaining
capital expenditures, and sustaining lease payments. Both cash
costs and all-in sustaining costs are divided by the gold
equivalent ounces sold to determine cash costs and all-in
sustaining costs on a per ounce basis. We use and report these
measures to provide additional information regarding operational
efficiencies on an individual mine basis, and believe that these
measures provide investors and analysts with useful information
about our underlying costs of operations. A reconciliation to
production costs applicable to sales, the nearest U.S. GAAP measure
is provided in McEwen Mining's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2021.
Cash Gross ProfitCash gross profit is a non-GAAP
financial measure and does not have any standardized meaning under
GAAP. We use cash gross profit to evaluate our operating
performance and ability to generate cash flow; we disclose cash
gross profit as we believe this measure provides valuable
assistance to investors and analysts in evaluating our ability to
finance our ongoing business and capital activities. The most
directly comparable measure prepared in accordance with GAAP is
gross profit or loss. Cash gross profit is calculated by adding
back the depreciation and depletion expense to gross profit or
loss. A reconciliation to gross profit, the nearest U.S. GAAP
measure is provided in McEwen Mining's Quarterly Report on Form
10-Q for the quarter ended March 31, 2021.
Liquid assetsThe term liquid assets used in this
report is a non-GAAP financial measure. We report this measure to
better understand our liquidity in each reporting period. Liquid
assets is calculated as the sum of the Balance Sheet line items of
cash and cash equivalents, restricted cash and investments, plus
ounces of doré held in precious metals inventories valued at the
London PM Fix spot price at the corresponding period. A
reconciliation to the nearest U.S. GAAP measure is provided in
McEwen Mining's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2021.
CAUTION CONCERNING FORWARD-LOOKING
STATEMENTSThis 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, effects of the COVID-19 pandemic, 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, 2020 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 the management of
McEwen Mining Inc.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and
explorer focused in the Americas with operating mines in Nevada,
Canada, Mexico and Argentina. It also owns a large copper deposit
in Argentina.
CONTACT INFORMATION: |
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Investor
Relations: |
Website:
www.mcewenmining.com |
150 King
Street West |
(866)-441-0690 Toll Free |
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Suite 2800,
P.O. Box 24 |
(647)-258-0395 |
Facebook:
facebook.com/mcewenmining |
Toronto, ON,
Canada |
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Facebook:
facebook.com/mcewenrob |
M5H 1J9 |
Mihaela Iancu ext. 320 |
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Twitter:
twitter.com/mcewenmining |
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info@mcewenmining.com |
Twitter:
twitter.com/robmcewenmux |
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Instagram:
instagram.com/mcewenmining |
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