On November 3, 2016, McEwen Mining Inc. (NYSE:MUX, TSE:MUX), a mid-tier gold and silver producer with properties in the U.S., Mexico, and Argentina, reported higher net income and lower costs guidance. Production stalled, but costs declined.
Headquartered in Toronto, Canada, McEwen Mining reported a net income of $4.2 million, or $0.01 per share. In the same period a year ago, the net income was $2.6 million, or $0.01 per share. This represents an increase of 61.53% in net income. Earnings per share was unchanged. (Source: “McEwen Mining Third Quarter Report 2016,” McEwen Mining Inc., November 3, 2016.)
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As for liquidity, McEwen Mining generated $4.9 million in cash flow from operations, and ended the quarter with liquid assets of $62.5 million—cash of $38.8 million, precious metals worth $16.6 million, and marketable securities amounting to $7.1 million. McEwen Mining doesn’t have debt, hasn’t done any financings, hedged against precious metals, or sold any precious metal royalties.
In the third quarter of 2016, McEwen Mining’s gold production was 24,281 ounces and silver production was 916,168 ounces. In gold equivalent ounces terms, it produced 36,496. In the same period a year ago, it produced 43,390 gold equivalent ounces. McEwen Mining’s all-in sustaining costs to produce one gold equivalent ounce was $844. In the same period a year ago, these costs stood at $914.
Regarding its guidance for 2016, the company said “Our 2016 production guidance remains 99,500 gold ounces and 3.3 million silver ounces, or approximately 144,000 gold equivalent ounces. However, we are reducing our original guidance for total cash costs and all-in sustaining costs (“AISC”) from $780 and $935 per gold equivalent ounce, respectively, to $700 and $860. This is attributable to the reduced cost levels at the El Gallo Mine in the first nine months, which we expect to continue for the rest of this year.” (Source: Ibid.)
There were also changes to management taking place at McEwen Mining. Effective immediately, Xavier Ochoa, who served as the Chief Financial Officer (CFO), has been appointed as President and Chief Operating Officer (COO) of the company.
At the time of writing, MUX stock was trading at $3.44, up 2.69% from the previous day. Year-to-date, the stock price has increased 217.68%.
