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McEwen Mining Announces Q3 2017 Operating & Financial Results

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TORONTO, Nov. 02, 2017 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) reports its consolidated financial results for the third quarter ending September 30, 2017.

During Q3 2017 the El Gallo mine had earnings from mining operations of $5.1 million(2)(4) and the San José mine had earnings from mining operations of $4.5 million(4). The Company experienced increased cost and reduced income as a consequence of an unexpected drop in production at the El Gallo mine due to an equipment failure. Our portion of  income from the San José mine was also reduced on lower production. As a result, the Company reported a net loss of $8.1 million or $0.03 per share.

"During the third quarter we faced some challenges with our operations that resulted in disappointing performance. Production was approximately 17,500 gold equivalent ounces(5) in the month of October. This improved production level puts us on track for a stronger fourth quarter" said Rob McEwen, Chairman and Chief Owner.

Our quarterly management conference call will take place on November 3, 2017 at 11:00 am, EDT. Webcast and call-in details are provided at the end of this news release.

Q3 2017 Operating & Financial Highlights

Comparative production and cost results are shown in the table below. For our SEC Form 10-Q Financial Statements and MD&A refer to: http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000314203

  Q3 2017 Q3 2016 Year to Date
2017
  Guidance
2017
Corporate Total          
Gold ounces produced(3)   19,051   24,281   61,338     99,700
Silver ounces produced(3)   749,749   916,168   2,252,003     3,324,000
Gold equivalent ounces produced(1)(3)   29,047   36,496   91,364     144,000
El Gallo Mine – Mexico          
Gold ounces produced   7,189   11,754   26,633     49,700
Silver ounces produced   1,789   7,151   12,549     24,000
Gold equivalent ounces produced(1)   7,213   11,849   26,801     50,000
Gold equivalent total cash cost ($/oz)(1)(4) $ 832 $ 598 $ 695   $ 760
Gold equivalent co-product AISC ($/oz)(1)(4) $ 946 $ 680 $ 813   $ 900
San José Mine(3) - Argentina          
Gold ounces produced
  11,862   12,527   34,705     50,000
Silver ounces produced   747,960   909,017   2,239,454     3,300,000
Gold equivalent ounces produced(1)   21,834   24,647   64,563     94,000
Gold equivalent total cash cost ($/oz)(1)(4) $ 850 $ 707 $ 896   $ 780
Gold equivalent co-product AISC ($/oz)(1)(4)
$ 1,065 $ 850 $ 1,109   $ 990

Notes:
1.    Silver production is presented as a gold equivalent. The silver to gold ratio used for 2016 and 2017 is 75:1.
2.    All amounts are reported in US dollars unless otherwise stated.
3.    Includes portion attributable to us from our 49% interest in the San José Mine.
4.    Earnings from mining operations, total cash costs per ounce, and all-in sustaining costs (AISC) per ounce are non-GAAP financial performance measures with no standardized definition under U.S. GAAP. See "Cautionary Note Regarding Non-GAAP Measures" for additional information, including definitions of these terms.
5.    Production figures for October 2017 are preliminary and may change upon final reconciliation.

  At Sept. 30th At Oct 31st 
Treasury: 2016 2017  2017
Cash, Investments and Precious Metals at Spot Price ($ millions) 62.5
82.3  51.0
Debt nil nil nil
Earnings from Operations(4):      
El Gallo Mine ($ millions) 7.6 5.1   
San José Mine (49%) ($ millions) 11.2 4.5   
Consolidated Net Income:      
Net Income (Loss) ($ millions) 4.2 (8.1)  
Net Income (Loss) per Share ($) 0.01 (0.03)  
Cash Flow:      
 Net Cash Flow ($ millions) 2.1 44.2   
Gold & Silver Sales Prices:
     
El Gallo Mine - Gold ($/oz) 1,335 1,269   
San José Mine - Gold ($/oz) 1,323 1,281   
San José Mine - Silver ($/oz) 20.13 16.70   

Q3 & Subsequent Events

Ounces Produced
Q4 2017 has a strong start with approximately 17,500 gold equivalent ounces(5) produced in the month of October from El Gallo, San José and Black Fox mines.

Net Loss
The net loss in Q3 2017 was mainly due to a $2.2 million increase in production costs at our El Gallo mine, a $5.2 million decrease in income from our San José mine, and a $1.5 million increase in general and administrative expenses.

Cash Flow
The significant change in cash flow in Q3 2017 related to the equity financing completed for net proceeds of $43.2 million.

Return of Capital
A return of capital installment of a ½ cent per share was paid to shareowners on August 17, 2017.

Operations & Projects

El Gallo Mine, Mexico – On-track For Better Performance in Q4

Production in Q3 was below our forecast as a result of a serious mechanical failure at the end of July that removed the crushing circuit from operation. As a result we were unable to crush and place fresh ore to leach on the leach pad which accounted for the drop in gold production. The crusher was fully repaired in September, and with the addition of a supplemental mobile crusher, there is currently almost twice the normal crushing capacity available. El Gallo operations were significantly improved during the month of October, with approximately 5,100 gold equivalent ounces(5) produced. We anticipate that production in Q4 will partially compensate for the shortfall experienced to date.

San José Mine, Argentina (49%(3)) – Improving Production in Q4

Production during the month of October was improved, with approximately 8,700 gold equivalent ounces(5) attributable to us.

Black Fox, Timmins – Enhanced Growth Strategy

Our growth strategy in the Timmins region, which started in April 2017 with the acquisition of Lexam VG Gold, reached a second important milestone on October 6, 2017 with the purchase of the Black Fox Complex. The Black Fox mine is operating as expected, with production during the month of October of approximately 3,700 gold equivalent ounces(5).

Gold Bar, Nevada – Major Permitting Milestone

The Gold Bar Project has achieved a major milestone in the permitting process with the publication by the Environmental Protection Agency (EPA) of the Notice of Availability of the Final Environmental Impact Statement (EIS) in the Federal Register. Following a regulated waiting period, a signed Record of Decision will be delivered and published, signifying the completion of the National Environmental Policy Act (NEPA) process. The Record of Decision is expected in early November this year and development of Gold Bar is planned to begin upon receipt, in line with our earlier estimates. Gold Bar is expected to contribute an average of 65,000 ounces to our annual gold production beginning in 2019.

Los Azules, Argentina – Robust Economics in New PEA

The results of the 2017 PEA demonstrate that Los Azules could become a robust, high margin, rapid pay-back, and long-life open pit mine at current copper, gold and silver prices. Financial highlights from the 2017 PEA, assuming a $3.00 per pound copper price, are: 1) $2.2 billion after-tax net present value (NPV@8%), 2) an internal rate of return (IRR) of 20.1%, and 3) a payback period of 3.6 years and a total mine-life of 36 years. Estimated average annual copper production is 415 million lbs. at a cash cost of $1.14/lb. during the first 13 years of mining operations. The PEA report is available for review on our website (www.mcewenmining.com/operations/los-azules-exploration) and SEDAR (www.sedar.com).

Q3 Results Conference Call

We invite you to join our conference call, where management will discuss the Q3 2017 results and follow with a question and answer session. Questions can be asked directly by participants over the telephone or can be emailed in advance to info@mcewenmining.com

Friday, Nov 3rd, 2017
11:00 AM (ET)
Toll Free US & Canada: (844)-630-9911
Outside US & Canada: (210)-229-8828
Conference ID Number: 4286358
Webcast Link: https://edge.media-server.com/m6/p/txj3wnsf

An archived replay of the webcast will be available for one week after it takes place. Access the replay using the link https://edge.media-server.com/m6/p/txj3wnsf or calling (855)-859-2056 (North America) / (404)-537-3406 (International), Conference ID Number 4286358.

About McEwen Mining (www.mcewenmining.com)

McEwen has the goal to qualify for inclusion in the S&P 500 Index by creating a profitable gold and silver producer focused in the Americas. McEwen's principal assets consist of the San José mine in Santa Cruz, Argentina (49% interest), the El Gallo Gold mine and El Gallo Silver project in Mexico, the Black Fox mine in Timmins, Canada, the Gold Bar project in Nevada, and the Los Azules copper project in Argentina.

McEwen has a total of 333 million shares outstanding. Rob McEwen, Chairman and Chief Owner, owns 24% of McEwen.

Technical Information
The technical contents of this news release has been reviewed and approved by Nathan M. Stubina , Ph.D., P.Eng., FCIM, Managing Director and a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects".

Reliability of Information Regarding San José
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 Not

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