On August 7, 2024, McEwen Mining Inc (MUX, Financial) released its 8-K filing detailing the financial results for the second quarter (Q2) and half year (H1) ended June 30, 2024. McEwen Mining Inc is a mining and minerals production and exploration company focused on precious and base minerals in Argentina, Mexico, and the United States. The company's overall revenue is principally derived from the production of gold and silver. The company owns and operates the wholly-owned El Gallo 1 mine in Mexico, and has a minority shareholding in the company that operates the San Jose mine in Argentina. More than half the company's gold output is produced by the El Gallo 1 mine. The remaining gold production, and the majority of silver production, is produced by the San Jose mine. Geographically, the majority is from Canada.
Performance and Challenges
McEwen Mining Inc (MUX, Financial) reported a net loss of $13.0 million, or $0.26 per share, for Q2 2024, compared to a net loss of $21.6 million, or $0.46 per share, in Q2 2023. This result fell short of the analyst estimate of -$0.22 per share. The company's revenue for the quarter was $43.9 million, matching the analyst estimate of $43.90 million. The increase in revenue was driven by a 21% increase in realized gold prices and a 13% increase in gold equivalent ounces (GEOs) sold.
Financial Achievements
McEwen Mining Inc (MUX, Financial) achieved a gross profit of $10.8 million and an Adjusted EBITDA of $7.2 million in Q2 2024, compared to a gross loss of $3.5 million and an Adjusted EBITDA of negative $5.8 million in Q2 2023. The company's improved financial performance was attributed to higher revenues and increased production efficiency.
Income Statement Highlights
Key details from the income statement include:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $43.9 million | $31.8 million |
| Gross Profit | $10.8 million | -$3.5 million |
| Net Loss | $13.0 million | $21.6 million |
| Adjusted EBITDA | $7.2 million | -$5.8 million |
Balance Sheet and Cash Flow
As of June 30, 2024, McEwen Mining Inc (MUX, Financial) reported consolidated cash and cash equivalents of $40.7 million, debt of $40.0 million, and consolidated working capital of $29.1 million. This compares to $23.0 million in cash and cash equivalents, $40.0 million in debt, and $22.7 million in working capital as of December 31, 2023.
Production and Costs
Production from the company's three operating mines was 35,265 GEOs in Q2 2024, compared to 35,658 GEOs in Q2 2023. The company's production guidance remains 130,000-145,000 GEOs for 2024. Cash costs and all-in sustaining costs (AISC) per GEO sold in Q2 2024 were $1,532 and $1,634, respectively, compared to $2,113 and $2,585 in Q2 2023.
Commentary
“I’m delighted that this quarter was the most profitable since 2016 as measured by Adjusted EBITDA for our mining operations and Q3 is off to a good start. Production costs increased 8% quarter-over-quarter, but revenue grew by 38%,” commented Rob McEwen, Chairman and Chief Owner.
Analysis
McEwen Mining Inc (MUX, Financial) has shown significant improvement in its financial performance, driven by higher gold prices and increased production efficiency. However, the company continues to face challenges, including rising production costs and ongoing expenses related to the McEwen Copper project. The company's ability to manage these challenges while maintaining revenue growth will be crucial for its future performance.
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Explore the complete 8-K earnings release (here) from McEwen Mining Inc for further details.
