Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- McEwen Mining Inc (MUX, Financial) reported a 36% increase in revenue, a 268% rise in gross profit, and a 586% boost in adjusted EBITDA compared to the previous year.
- The company achieved a significant improvement in operating cash flow, reaching $23 million from a negative $2.3 million in 2023.
- McEwen Mining Inc (MUX) maintained an excellent safety record, with no lost time accidents at several of its sites, including Gold Bar and Fox Complex.
- The company has successfully raised over $470 million privately for the development of Los Azules, with plans to complete a bankable feasibility study and IPO McEwen Copper in 2025.
- Exploration spending has extended the life of mines, with strategic investments at Fox and Gold Bar mines and the Los Azules project.
Negative Points
- McEwen Mining Inc (MUX) recorded a net loss of $2.1 million or $0.4 per share, partly due to exploration expenses being treated as costs.
- The company is facing challenges with lower production at Fox, leading to higher unit costs and impacting overall financial performance.
- There is uncertainty regarding the capital required for Los Azules and the details of the anticipated IPO in 2025, as feasibility studies are still incomplete.
- The company experienced lower than expected grades at the San Jose mine, although this issue is reportedly temporary.
- Higher all-in sustaining costs were reported at Gold Bar and Fox, attributed to aggressive stripping programs and lower production, respectively.
Q & A Highlights
Q: Are the higher production levels at Gold Bar over the last two quarters expected to continue into 2025?
A: Robert McEwen, CEO, explained that while they have increased material movement at Gold Bar, much of it is waste from a stripping operation. Therefore, gold production in 2025 is expected to be in line with 2024 levels, despite more tons being mined due to stripping.
Q: Can you provide details on the permitting process and timeline for the Timberline acquisition at Eureka?
A: Stefan Spears, VP of Corporate Development, stated that they are already working on the permitting process. Exploration has started, and they expect a quicker timeline of around two years for permitting on state land, while BLM permitting might take longer. Production is projected to start around 2027.
Q: What is the current cash balance in the Los Azules subsidiary post-equity issuance?
A: Jeff Chan, VP of Finance, reported that the cash balance is just north of $40 million.
Q: Why were the grades at San Jose lower than expected, and what are the expectations for Q4?
A: Perry Ing, Interim CFO, noted that the lower grades were temporary and due to reconciliation issues with the resource model, which have been rectified. Q4 is trending well, and the operation is on track to meet guidance.
Q: With the current silver price environment, would McEwen Mining consider monetizing Project Phoenix or its interest in the San Jose mine?
A: Robert McEwen, CEO, stated that they would consider selling at the right price and mentioned that there has been interest from potential buyers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
