McEwen Mining posts loss; operations now restarted
McEwen Mining Inc. [MUX-TSX, NYSE] reported its third quarter (Q3) results for the three months ended September 30, 2020. Cash and liquid assets and working capital at September 30 were $18.8-million and positive $21.6-million, respectively.
Production rebounded during Q3 after the successful restart of all four of the company’s operations, which were temporarily suspended during Q2, largely due COVID-19. Production for Q3 2020 was 23,100 gold ounces and 575,000 silver ounces, or 30,400 gold equivalent ounces at the average gold:silver price ratio for the quarter of 79:1.
For Q3 McEwen Mining spent $8.5 million on exploration and advanced projects, and are reporting a net loss of $ 9.8 million, or $0.02 per share, compared to a net loss of $11.5 million, or $0.03 per share, in Q3 2019.
At Black Fox near Timmins, development of the access to the Froome underground deposit had advanced 47% by the end of the quarter. Work is on track to reach the deposit in Q2 2021 and complete development work. Commercial production is expected by Q4 2021.
On September 10, a private placement was closed for flow-through common shares at a price of $1.65 per share (representing a premium of 21% over the share price) for gross proceeds of $10.4 million. These funds will be used exclusively for exploration activities in the Timmins region over the next 12 to 24 months.
Consolidated production guidance for Q4 2020 is 31,500-34,000 ounces of gold.
“I am feeling much better this year than I did last year at this time because the bad news is behind us,” commented Rob McEwen, Chairman and Chief Owner. “Our operations are starting to turn around and improve; the financial pressure on our balance sheet has been alleviated; and our future growth is becoming much brighter. Investment capital is still in the early stages of moving into precious metals. Yes, last year was a nightmare and as shareholders we all suffered great frustration and confusion over the large loss of share value at a time when the price of gold was climbing ever higher. Over the next several quarters we expect to deliver better operating results along with exploration news that we hope will start to close the price performance gap.”