McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reported its second quarter and first half results for the period ended June 30th, 2021.
Table 1. Production and costs Q2 & H1 2021 ended June 30th, 2021 compared Q2 & H1 2020
|% Increase (Decrease)
2021 vs. 2020
|Production (GEOs)(1)||Cash Costs ($/GEO)(2)||AISC ($/GEO)(2)|
|Gold Bar Mine, Nevada||131||%||41||%||(17||%)||(13||%)||(34||%)||(25||%)|
|Fox Complex, Canada||223||%||17||%||(71||%)||(22||%)||(67||%)||(29||%)|
|San José Mine, Argentina(3)||102||%||46||%||(14||%)||(9||%)||2||%||(8||%)|
|El Gallo Project, Mexico||(32||%)||(46||%)||Residual leaching(4)|
Table 2. Liquidity at June 30th, 2021 and December 31st, 2020
|(Millions of Dollars)||Q2 2021 ended
June 30th, 2021
|Q4 2020 ended
Dec 31st, 2020
|Cash and cash equivalents||42.2||20.8|
|Long-term debt principal||50.0||50.0|
Table 3. Financial results Q2 & H1 2021 ended June 30th, 2021 compared Q2 & H1 2020
|(Millions of Dollars)||2021||2020|
|Cash gross profit (loss)||9.6||9.7||(4.1||)||(1.1||)|
|Gross profit (loss)||4.1||(0.9||)||(8.9||)||(12.6||)|
|Net loss per share||(0.01||)||(0.04||)||(0.05||)||(0.30||)|
Gold Bar Mine, USA (100% Interest)
Gold Bar produced 14,100 GEOs in Q2 at total cash costs(2) and all-in sustaining costs (AISC)(2) of $1,463 and $1,619 per GEO sold, respectively. This compares to 6,100 GEOs in Q2 2020 at total cash costs and AISC of $1,772 and $2,462 per GEO, respectively. The cost decrease is driven by the increase in production and by the significant operational improvements we have been continuing to work through over the past year. We expect to see this trend continue into the second half of 2021.
Exploration is focusing on testing near-mine targets and further defining oxide resources on the neighboring Tonkin property. During the quarter we incurred exploration expenses of $1.3 million of a total $5.0 million budget for 2021.
Fox Complex, Canada (100% Interest)
Black Fox produced 7,100 GEOs in Q2 at total cash costs and AISC of $917 and $1,088 per GEO sold, respectively. This compares to 2,200 GEOs in Q2 2020 at total cash costs and AISC of $3,121 and $3,332 per GEO, respectively. Mining has transitioned to the Froome deposit and is performing to plan, commercial production expected in Q4 2021.
We remain focused on our principal exploration goal of cost-effectively discovering and extending gold deposits adjacent to our existing operations to contribute to near-term gold production. During the quarter we incurred exploration expenses of $3.5 million of a total $9.0 million budget for 2021.
A Preliminary Economic Assessment to expand the production from the Fox Complex is expected to be released in the second half of the year, following additional drilling and resource estimate updates at the Stock and Grey Fox properties.
San José Mine, Argentina (49% Interest)
Our attributable production from San José in Q2 was 9,300 gold ounces and 607,000 silver ounces, for a total of 18,200 GEOs(3). For Q2, total cash costs and AISC were $1,105 and $1,500 per GEO sold, respectively. This compares to 9,000 GEOs in Q2 2020 at total cash costs and AISC of $1,280 and $1,476 per GEO, respectively. In Q2 2020, operations at San José were adversely impacted by government-imposed COVID-19 restrictions.
We received $2.6 million and $7.6 million in dividends in Q2 and H1, respectively, compared to $0.3 million dividends received during the same periods in 2020.
El Gallo Project, Mexico (100% Interest)
In Q2, El Gallo produced 1,300 GEOs from residual leaching of the heap leach pad. Incremental residual leaching cost for the period was $2.7 million(4). The residual leaching activities at El Gallo are expected to wind down in early 2022.
Los Azules Copper Project, Argentina (100% Interest)
On July 6, 2021, we announced the formation of a wholly-owned subsidiary to hold the Los Azules Copper project (“McEwen Copper”) and to raise financing to advance the project to a preliminary feasibility study and to construct a road to the project providing year-round access compared to the current 5-month seasonal access window. McEwen Copper will hold the Los Azules assets as well as the Elder Creek exploration project in Nevada. McEwen Copper is seeking to raise up to $80 million in a private offering.
Table 4 below provides production and cost results for Q1, Q2 and H1 2021 and comparative results from 2020:
|Gold (oz)||23,300||29,200||31,700||15,700||55,000||44,900||110,500 – 127,900|
|Silver (oz)||493,200||553,200||611,700||359,400||1,104,900||912,600||2,300,000 – 2,450,000|
|GEOs(1)||30,600||35,100||40,700||19,200||71,300||54,200||141,000 – 160,400|
|Gold Bar Mine, Nevada|
|GEOs(1)||7,400||9,100||14,100||6,100||21,500||15,200||37,000 – 45,000|
|Cash Costs ($/GEO)(1)(3)||1,865||1,887||1,463||1,772||1,598||1,840|
|Fox Complex, Canada|
|GEOs(1)||5,200||8,300||7,100||2,200||12,300||10,500||27,500 – 32,500|
|Cash Costs ($/GEO)(1)(3)||1,262||838||917||3,121||1,066||1,369|
|San José Mine, Argentina (49%)(4)|
|Gold (oz)||9,500||9,000||9,300||5,500||18,800||14,500||41,500 – 44,500|
|Silver (oz)||492,300||551,900||607,000||358,700||1,099,600||910,600||2,300,000 – 2,450,000|
|GEOs(1)||16,700||14,900||18,200||9,000||34,800||23,900||72,000 – 77,000|
|Cash Costs ($/GEO)(1)(3)||1,088||1,138||1,105||1,280||1,097||1,207|
|El Gallo Project, Mexico|
|GEOs(1)(6)||1,300||2,700||1,300||1,900||2,500||4,600||4,500 – 5,900|
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
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 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.
The 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.”
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.
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