McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today released its financial and operational results for the third quarter ended September 30, 2024. 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)
Operational Highlights
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 Developments
McEwen 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:
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.
Wednesday November 6th2024 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 | 2024 Guidance |
|||
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 | |||||
GEOs(1) | 11,200 | 7,900 | 34,200 | 23,600 | 40,000-42,000 |
Cash Costs per GEO Sold(2) | 1,078 | 1,572 | 1,129 | 1,572 | $1,225-1,325 |
AISC per GEO Sold(2) | 1,288 | 1,953 | 1,321 | 1,909 | $1,450-1,550 |
San José Mine, Argentina (49%)(3) | |||||
GEOs(1) | 17,800 | 13,700 | 46,400 | 41,300 | 50,000-60,000 |
Cash Costs per GEO Sold(2) | 1,445 | 2,173 | 1,505 | 1,788 | $1,300-1,500 |
AISC per GEO Sold(2) | 1,953 | 2,675 | 1,971 | 2,194 | $1,500-1,700 |
Notes:
Technical Information
The technical content of this news release related to financial results, mining and development projects has been reviewed and approved by William (Bill) Shaver, P.Eng., COO of McEwen Mining and a Qualified Person as defined by SEC S-K 1300 and the Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects.”
Reliability of Information Regarding San José
Minera Santa Cruz S.A (MSC)., the owner of the San José Mine, is responsible for and has supplied the Company with 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.
Three months ended September 30, 2024 | Nine months ended September 30, 2024 | |||||||||||||||||
Gold Bar | Fox Complex | Total | Gold Bar | Fox Complex | Total | |||||||||||||
(in thousands, except per ounce) | (in thousands, except per ounce) | |||||||||||||||||
Production costs applicable to sales (100% owned) | $ | 17,078 | $ | 12,604 | $ | 29,682 | $ | 49,515 | $ | 37,343 | $ | 86,858 | ||||||
Mine site reclamation, accretion and amortization | 328 | 162 | 490 | 943 | 433 | 1,376 | ||||||||||||
In‑mine exploration | 165 | — | 165 | 647 | — | 647 | ||||||||||||
Capitalized mine development (sustaining) | 5,246 | 2,870 | 8,116 | 5,246 | 7,275 | 12,521 | ||||||||||||
Capital expenditures on plant and equipment (sustaining) | 1,459 | — | 1,459 | 2,438 | — | 2,438 | ||||||||||||
Sustaining leases | 17 | 24 | 41 | 70 | 290 | 360 | ||||||||||||
All‑in sustaining costs | $ | 24,293 | $ | 15,660 | $ | 39,953 | $ | 58,860 | $ | 45,341 | $ | 104,200 | ||||||
Ounces sold, including stream (GEO) | 13.3 | 8.0 | 21.3 | 38.0 | 23.8 | 61.8 | ||||||||||||
Cash cost per ounce sold ($/GEO) | $ | 1,281 | $ | 1,572 | $ | 1,390 | $ | 1,302 | $ | 1,572 | $ | 1,406 | ||||||
AISC per ounce sold ($/GEO) | $ | 1,822 | $ | 1,953 | $ | 1,871 | $ | 1,548 | $ | 1,909 | $ | 1,687 |
Three months ended September 30, 2023 | Nine months ended September 30, 2023 | |||||||||||||||||
Gold Bar | Fox Complex | Total | Gold Bar | Fox Complex | Total | |||||||||||||
(in thousands, except per ounce) | (in thousands, except per ounce) | |||||||||||||||||
Production costs applicable to sales – Cash costs (100% owned) | $ | 14,399 | $ | 12,069 | $ | 26,468 | $ | 41,446 | $ | 38,597 | $ | 80,043 | ||||||
Mine site reclamation, accretion and amortization | — | — | — | — | — | — | ||||||||||||
In‑mine exploration | 1,457 | — | 1,457 | 3,054 | — | 3,054 | ||||||||||||
Capitalized underground mine development (sustaining) | — | 2,227 | 2,227 | — | 6,058 | 6,058 | ||||||||||||
Capital expenditures on plant and equipment (sustaining) | 4,478 | — | 4,478 | 7,655 | — | 7,655 | ||||||||||||
Sustaining leases | 8 | 124 | 132 | 237 | 523 | 760 | ||||||||||||
All‑in sustaining costs | $ | 20,342 | $ | 14,420 | $ | 34,762 | $ | 52,392 | $ | 45,178 | $ | 97,570 | ||||||
Ounces sold, including stream (GEO) | 9.4 | 11.2 | 20.6 | 23.8 | 34.2 | 58.0 | ||||||||||||
Cash cost per ounce sold ($/GEO) | $ | 1,529 | $ | 1,078 | $ | 1,284 | $ | 1,743 | $ | 1,129 | $ | 1,381 | ||||||
AISC per ounce sold ($/GEO) | $ | 2,160 | $ | 1,288 | $ | 1,686 | $ | 2,203 | $ | 1,321 | $ | 1,683 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
San José mine cash costs (100% basis) | (in thousands, except per ounce) | |||||||||||||||
Production costs applicable to sales – Cash costs | $ | 58,031 | $ | 43,380 | $ | 154,136 | $ | 131,434 | ||||||||
Mine site reclamation, accretion and amortization | 338 | — | 1,003 | 386 | ||||||||||||
Site exploration expenses | 1,605 | 2,538 | 4,926 | 7,336 | ||||||||||||
Capitalized underground mine development (sustaining) | 7,045 | 11,890 | 21,425 | 27,939 | ||||||||||||
Less: Depreciation | (616 | ) | (909 | ) | (2,036 | ) | (2,162 | ) | ||||||||
Capital expenditures (sustaining) | 5,031 | 1,718 | 9,674 | 7,119 | ||||||||||||
All‑in sustaining costs | $ | 71,434 | $ | 58,617 | $ | 189,128 | $ | 172,052 | ||||||||
Ounces sold (GEO) | 26.7 | 29.8 | 86.2 | 87.5 | ||||||||||||
Cash cost per ounce sold ($/GEO) | $ | 2,173 | $ | 1,445 | $ | 1,788 | $ | 1,505 | ||||||||
AISC per ounce sold ($/GEO) | $ | 2,675 | $ | 1,953 | $ | 2,194 | $ | 1,971 |
Adjusted EBITDA and adjusted EBITDA per share
Adjusted earnings before interest, taxes, depreciation, and amortization is a non-GAAP financial measure and does not have any standardized meaning. We use adjusted EBITDA to evaluate our operating performance and ability to generate cash flow from our wholly owned operations in production; we disclose this metric as we believe this measure provides valuable assistance to investors and analysts in evaluating our ability to finance our precious metal operations and capital activities separately from our copper exploration operations. The most directly comparable measure prepared in accordance with GAAP is net loss before income and mining taxes. Adjusted EBITDA is calculated by adding back McEwen Copper’s income or loss impacts on our consolidated income or loss before income and mining taxes.
The following tables present a reconciliation of adjusted EBITDA:
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Adjusted EBITDA | (in thousands) | (in thousands) | ||||||||||||||
Net loss before income and mining taxes | $ | (1,267 | ) | $ | (28,617 | ) | $ | (39,578 | ) | $ | (110,873 | ) | ||||
Less: | ||||||||||||||||
Depreciation and depletion | 8,921 | 8,506 | 24,009 | 24,286 | ||||||||||||
Loss from investment in McEwen Copper Inc. (Note 9) | 1,852 | — | 36,680 | — | ||||||||||||
Advanced Projects – McEwen Copper Inc. | — | 18,478 | — | 78,883 | ||||||||||||
General, interest and other – McEwen Copper Inc. | — | 2,179 | — | (3,033 | ) | |||||||||||
Interest expense | 983 | 982 | 2,928 | 4,007 | ||||||||||||
Adjusted EBITDA | $ | 10,489 | $ | 1,528 | $ | 24,039 | $ | (6,730 | ) | |||||||
Weighted average shares outstanding (thousands) | 51,953 | 47,471 | 50,380 | 47,442 | ||||||||||||
Adjusted EBITDA per share | $ | 0.20 | $ | 0.03 | $ | 0.48 | $ | (0.14 | ) |
Average realized price
The term average realized price per ounce used in this report is also a non-GAAP financial measure. We prepare this measure to evaluate our performance against the market (London P.M. Fix). The average realized price for our 100% owned properties is calculated as gross sales of gold and silver, less streaming revenue, divided by the number of net ounces sold in the period, less ounces sold under the streaming agreement.
The following table reconciles the average realized prices to the most directly comparable U.S. GAAP measure, revenue from gold and silver sales. Ounces of gold and silver sold for the San José mine are provided to us by MSC.
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
Average realized price – 100% owned | (in thousands, except per ounce) | |||||||||||
Revenue from gold and silver sales | $ | 52,250 | $ | 38,404 | $ | 140,954 | $ | 107,551 | ||||
Less: revenue from gold sales, stream | 349 | 527 | 1,283 | 1,567 | ||||||||
Revenue from gold and silver sales, excluding stream | $ | 51,901 | $ | 37,877 | $ | 139,671 | $ | 105,984 | ||||
GEOs sold | 21.3 | 20.6 | 61.8 | 58.0 | ||||||||
Less: gold ounces sold, stream | 0.6 | 0.9 | 2.1 | 2.7 | ||||||||
GEOs sold, excluding stream | 20.8 | 19.7 | 59.6 | 55.3 | ||||||||
Average realized price per GEO sold, excluding stream | $ | 2,499 | $ | 1,920 | $ | 2,342 | $ | 1,916 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
Average realized price – San José mine (100% basis) | (in thousands, except per ounce) | |||||||||||
Gold sales | $ | 41,739 | $ | 38,563 | $ | 125,422 | $ | 105,319 | ||||
Silver sales | 28,622 | 25,932 | 85,214 | 74,124 | ||||||||
Gold and silver sales | $ | 70,361 | $ | 64,495 | $ | 210,636 | $ | 179,443 | ||||
Gold ounces sold | 15.8 | 18.0 | 51.3 | 51.5 | ||||||||
Silver ounces sold | 928 | 994 | 2,957 | 2,979 | ||||||||
GEOs sold | 26.7 | 30.0 | 86.2 | 87.3 | ||||||||
Average realized price per gold ounce sold | $ | 2,639 | $ | 2,138 | $ | 2,445 | $ | 2,044 | ||||
Average realized price per silver ounce sold | $ | 30.83 | $ | 26.08 | $ | 28.82 | $ | 24.88 | ||||
Average realized price per GEO sold | $ | 2,635 | $ | 2,149 | $ | 2,443 | $ | 2,055 |
ABOUT MCEWEN MINING
McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. In addition, it owns 46.4% of McEwen Copper which owns the large, advanced-stage Los Azules copper project in Argentina. The Company’s objective is to improve the productivity and life of its assets with the goal of increasing its share price and providing an investor yield. Rob McEwen, Chairman and Chief Owner, has a personal investment in the companies of US$225 million. His annual salary is US$1.
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