McEwen Mining: Q2 2022 Results

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Overig advies 12/08/2022 06:19
TORONTO, Aug. 11, 2022 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today reported its second quarter (Q2) results for the period ended June 30th, 2022.

Fox Complex performed well, producing 11,200 GEOs, the highest quarterly production in over three years, at cash costs of $985 per GEO and AISC of $1,290 per GEO.

Average cash costs(2) per GEO sold from our 100%-owned mines in Q2 was $1,169, 15% below our guidance midpoint of $1,380 per GEO. Average all-in sustaining costs ("AISC")(2) per GEO sold from our 100%-owned mines was $1,549, 11% below our guidance midpoint of $1,740 per GEO.
Production was 27,600 gold ounces and 704,600 silver ounces, or 36,100 gold equivalent ounces(1) (GEOs)(see Table 1), compared to 40,700 GEOs during Q2 2021.
San José mine delivered solid results producing 19,600 GEOs at cash costs and AISC per GEO sold of $1,144 and $1,468, respectively.
Gold Bar mine progressed the development of the Gold Bar South deposit, which is expected to contribute to lower-cost production later this year and through 2023.
Our consolidated net loss in Q2 was $12.4 million, or $0.26 per share (giving effect to the 1-for-10 reverse share split on July 28th), which relates primarily to $14.4 million investment in our Los Azules copper project, $4.8 million in other exploration and advanced projects, and a gross profit of $4.2 million from our operations.

Our 100%-owned mines generated a cash gross profit(2) of $7.7 million in Q2 and a gross profit of $4.2 million. Cash gross profit is calculated by adding back depletion and depreciation to gross profit.

Cash and cash equivalents at June 30th, 2022, totaled $47.8 million.

We are saddened to announce that Dr. Donald R. M. Quick, a Director of the Company and its predecessors since 2008, passed away in July following a brief illness. Dr. Quick made important contributions to the boards of McEwen Mining and Minera Andes during his 14 years with the companies. Among his many qualities, he was a great friend and colleague, and will be dearly missed.

A webcast will be held on Thursday, Aug 11th at 11:00 am EDT. Please see the details further below.
Operations Update

Fox Complex, Canada (100% interest)

Fox produced 11,200 GEOs in Q2 at total cash costs and AISC of $985 and $1,290 per GEO sold, respectively. This compares to 7,100 GEOs at total cash costs and AISC of $917 and $1,088 per GEO sold, respectively, in Q2 2021.

Fox achieved the highest quarterly production since Q3 2018 of 11,200 GEOs, as the mine rebounded from a slow start to 2022, resulting from mechanical issues at the mill and a COVID-related labour shortage. Fox production benefitted from the large stockpile accumulated during Q1 and increased during Q2, and the effects of the ongoing mill debottlenecking process. Mill throughput is expected to continue to improve during the remainder of the year resulting in strong H2 production. Drilling below the mineral resources envelop at Froome has been successful and is expected to extend the mine life.

In Q2, we incurred $2.6 million for exploration. Our exploration spend at Fox for 2022 & 2023 is forecasted to be $10.0 million and $15.0 million, respectively. During the remainder of 2022, exploration will complete up to 39,000 m (128,000 ft) of drilling and will focus on:

Continuing delineation and expansion of the Stock West deposit, particularly toward the West;
Expansion of shallow mineralization identified near the Stock Mine;
Test areas of high grade from 2021 drilling at the Gibson and Whiskey Jack targets at Grey Fox to potentially expand the resource;
Follow up on deeper priority targets at the Stock property, where attractive results from initial drilling show significant potential.
The objective of all our work is to continue to improve upon the Preliminary Economic Assessment (PEA) for the Fox Complex (see news release dated January 26, 2022). The PEA presents estimates for a positive business case for the Fox Complex expansion project, with potential average gold production of 80,800 gold ounces per year over nine (9) years, after the depletion of Froome. The economic analysis estimates an after-tax IRR of 21% at a gold price of $1,650 per ounce and average cash costs and AISC per ounce of gold sold of $769 and $1,246, respectively. Ongoing exploration is designed to reduce the funding requirements and improve the payback period by delineating additional resources in strategic locations to facilitate a greater degree of internal funding.

Recent encouraging drill results at the Stock Property that may support improvement to the PEA include:
see &

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