McEwen Mining Inc
For the period ended Sep 30, 2024. Filed Nov 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 5, 2024
MUX$15.48+4.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001558370-24-011396
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperating and Financial HighlightsSelected Consolidated Financial and Operating ResultsConsolidated PerformanceConsolidated Operations ReviewLiquidity and Capital ResourcesUnited States SegmentGold Bar mine operating resultsExploration ActivitiesCanada SegmentFox Complex operating resultsExploration Activities Development ActivitiesMexico SegmentAdvanced-Stage Properties – Fenix ProjectMinera Santa Cruz Segment - ArgentinaMcEwen Copper Segment - ArgentinaLos Azules ProjectNon-GAAP Financial Performance MeasuresCritical Accounting PoliciesForward-looking StatementsRisk Factors Impacting Forward-looking StatementsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001558370-24-014459
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperating and Financial HighlightsSelected Consolidated Financial and Operating ResultsConsolidated PerformanceConsolidated Operations ReviewLiquidity and Capital ResourcesUnited States SegmentGold Bar mine operating resultsExploration ActivitiesTimberline AcquisitionCanada SegmentFox Complex operating resultsExploration ActivitiesStock Development ActivitiesMexico SegmentAdvanced-Stage Properties – Fenix ProjectMinera Santa Cruz Segment - ArgentinaMcEwen Copper Segment - ArgentinaLos Azules ProjectNon-GAAP Financial Performance MeasuresCritical Accounting PoliciesForward-looking StatementsRisk Factors Impacting Forward-looking StatementsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 134 previous paragraphs and 139 current paragraphs.
64 unchanged; 46 reworded; 28 added; 23 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 89 previous and 94 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
Q3/24 OPERATING AND FINANCIAL HIGHLIGHTS
Current report
Driven by a 36% increase in revenue from $38.4 million in Q3/23 up to $52.3 million in Q3/24, and slightly offset by a 12% increase in production costs, we reported a gross profit of $13.8 million in Q3/24, compared to a gross profit of $3.8 million for Q3/23.
Current report
Our cash, cash equivalents and restricted cash balance increased by $4.8 million during 2024, from $27.5 million as at December 31, 2023 to $32.3 million as at September 30, 2024.
Current report
Production costs applicable to sales increased 19% to $17.1 million in Q3/24 from $14.4 million in Q3/23. Higher mining rates, including for stripping, and contractor unit costs contributed to the increase in year-over-year costs.
Current report
Cash costs andAISC per GEO sold in Q3/24 were $1,281 and $1,822 respectively, compared to $1,529 and $2,160 in Q3/23, respectively. Unit costs generally improved due to the higher GEOs sold in Q3/24 relative to Q3/23, offset by higher mining costs, including for capital development.
Current report
At the Gold Bar mine, exploration activities focused on near-mine mine life extension opportunities at Cabin Creek, Gold Bar South and Hunter.
Current report
In Q3/24, exploration at the Cabin Creek pit included drilling and updating of the resource model to evaluate the economic feasibility of mining shallow oxide resources in 2025. Assays from this drilling returned 90 feet of oxidized gold mineralization grading 0.63 g/t, starting at a depth of 105 feet. Additional holes were drilled late in the quarter, to fill in data gaps in the model and extend open mineralization. Drilling is expected to continue into Q4/24.
Current report
At Gold Bar South, results from the North Zone drilling confirmed expansion of the near-surface gold resource. In the East Deep Zone, additional holes drilled during Q3/24 extended higher-grade oxidized gold mineralization along ENE-trending structural zones. This deeper mineralization remains open to the east and plans are being made for additional drilling.
Current report
At the Hunter exploration target, additional core drilling completed in Q3/24 defined the outer edges of the deposit and provided data to construct a geologic model in preparation for resource modelling. Development of the Hunter target is expected to result in production for 2026 onwards.
Current report
During August 2024, we closed the acquisition of Timberline Resources Corporation, which holds several exploration projects in Nevada, USA, two of which are located near current operations at the Gold Bar mine and have medium-term development potential. An initial phase of exploration is expected to begin at the historic Windfall project during Q4/24.
Current report
The Fox Complex produced 7,855 GEOs from the Froome mine in Q3/24, which represented a 30% decrease from the 11,174 GEOs produced in Q3/23. Mine production was affected by a shortfall in development meters in H1/24 due to a stope failure, limiting stope availability in Q3/24 and negatively impacting planned mined and milled gold grades. Additional development was completed during Q3/24 to accelerate stope availability in Q4/24, including at our historic Black Fox underground mine.
Current report
Production costs applicable to sales were $12.6 million, which increased in Q3/24 by $0.5 million from $12.1 million in Q3/23, driven primarily by higher mining contractor and labor costs required to complete work at Black Fox.
Current report
During 9M/24, we invested $5.5 million in developing our Stock project. Earthworks have been completed in preparation for our mine portal construction later in 2024, with the objective of driving a ramp from the Stock East to the Stock West zones. We are also reviewing engineering plans for rehabilitation of the historic Stock shaft in 2025 to provide alternative means of access to the Stock ore bodies.
Current report
Production costs applicable to sales were $58.0 million during Q3/24, compared to $43.4 million during Q3/23. While cost inflation remained high from an Argentine perspective, the relative strength of the peso against the US Dollar continued to increase costs in US Dollar terms.
Current report
Cash costs andAISC per GEO sold were $2,173 and $2,675 in Q3/24, respectively, compared to $1,445 and $1,953 in Q3/23, respectively. Negative foreign exchange impacts, combined with temporary lower than expected mined grades, resulted in higher than expected unit costs.
Current report
At Los Azules, infill drilling has upgraded resource classifications, validated the geological model, and confirmed the high-grade zone. During the 2023-24 drilling season, over 70,000 meters (m) were completed, enhancing the interpretation of the geological model and extending mineralization of the supergene enrichment zone both at its edges and at depth. Drill highlights include:
Current report
The 2023-2024 drill campaign successfully met its objectives by infilling existing drill hole data to facilitate the conversion of resources to Measured or Indicated Mineral Resources for inclusion in the Los Azules Feasibility Study. Additionally, the campaign included geotechnical, metallurgical, hydrogeological, and condemnation drilling.
Current report
McEwen Copper Inc. has reached an agreement with YPF Luz to power its Los Azules copper project in San Juan, Argentina, with renewable energy. The companies signed a Memorandum of Understanding to negotiate the energy supply, which will come from YPF Luz’s renewable assets connected to the Argentine Interconnection System. YPF Luz will also develop, construct, and finance a high-voltage transmission line to connect the project to the grid, ensuring a sustainable energy supply for the copper project.
Current report
The Regime of Incentives for Investment aims to attract domestic and foreign investment to a number of sectors in Argentina, including mining, enhancing resource exploration and production while creating job opportunities and increasing energy security. The regime offers various benefits to companies, including reduced income tax rates, stability agreements for a predictable regulatory environment, and legal protections for investments. Additionally, RIGI facilitates access to mineral and energy resources providing clearer regulatory guidelines, and ensuring that companies can secure the necessary permits and licenses to operate, and provides a stable framework that reduces investment risks.
Current report
The fiscal and financial tax benefits associated with the RIGI are expected to lead to a significant enhancement of the overall economics of the Los Azules project, positively impacting both its net present value and internal rate of return.
Removed paragraphs (23)
Previous report
Q2/24 OPERATING AND FINANCIAL HIGHLIGHTS
Previous report
Driven by an increase in the average realized price per GEO sold from $1,951 in Q2/23 to $2,355 in Q2/24, we reported a gross profit of $10.8 million in Q2/24, compared to a gross loss of $3.5 million for Q2/23. Sales volumes remained consistent across comparative periods, increasing to 35,182 GEOs in Q2/24 from 35,051 GEOs in Q2/23.
Previous report
Our cash and cash equivalents balance increased by $17.7 million during H1/24, from $23.0 million as at December 31, 2023 to $40.7 million as at June 30, 2024.
Previous report
Production costs applicable to sales of $19.2 million during Q2/24 were comparable to $17.1 million during Q2/23. This increase was primarily driven by higher mining and processing costs arising from a 35% increase in the volume of processed mineralized material.
Previous report
Cash costs andAISC per GEO sold in Q2/24 were $1,532 and $1,634, respectively, compared to $2,113 and $2,585 in Q2/23, respectively. The reduction in cash costs and AISC per GEO sold was primarily driven by higher GEOs sold, as noted above.
Previous report
In Q2/24, exploration efforts at Cabin Creek focused on drilling, geologic modeling, and resource assessment to evaluate the economic feasibility of near-term mining of shallow oxide resources. Assay results from the Phase 1 drilling over 17 holes demonstrated 40 feet of oxide gold mineralization, grading 0.58 g/t, starting at a depth of 70 feet.
Previous report
At Gold Bar South, the Q2/24 drilling program was focused on three areas: North Zone, East Zone, and East Deep Zone. In the North Zone, additional near-surface mineralization was followed by Phase 2 drilling, potentially expanding our mineral resource. These results are expected to be included in geology and block model updates later in 2024. Drilling in the East Zone revealed extensions of mineralization from the existing pit, prompting further testing. In the East Deep Zone, assay results indicated higher-grade oxidized gold mineralization, prompting additional drilling planned for Q3/24.
Previous report
At the Hunter Target, exploration drilling across six holes was targeting the geologic controls and potential for near-surface mineralization in legacy drill holes. Q2/24 drilling results demonstrated indicated higher-grade oxidized gold mineralization, with additional drilling planned to continue in Q3/24.
Previous report
The Fox Complex produced 8,297 GEOs from the Froome mine in Q2/24, which represented a 20% decrease from the 10,351 GEOs produced in Q2/23. Due to development delays occurring in Q1/24 and early Q2/24 that reduced access to available stopes and resulted in a lower volume of mined material during the quarter, we processed low-grade stockpile inventory to maintain steady mill throughput. As a result, we realized a 14% decline in average head grades processed. We have engaged a mining contractor to address development concerns at the end of Q2/24 and expect to improve mining production in H2/24 accordingly.
Previous report
Production costs applicable to sales were $12.9 million, which increased in Q2/24 by $0.4 million from $12.5 million in Q2/23, driven by the processing of higher cost stockpiled material. This increase in costs was offset by reduced contractor costs for crushing activities.
Previous report
In H1/24, we invested $4.3 million in the Stock Project. The earthworks construction at the portal entrance is expected to be completed in H2/24. Following construction of the portal, an underground ramp will be developed to access the Main, East and West zones of the Stock deposit.
Previous report
In supporting the Fenix Project, we purchased a secondhand gold processing plant and associated equipment in September 2022, which includes all of the major components contemplated in Phase 1 of our feasibility study. As of the end of 2023, most of the equipment necessary for the plant has been mobilized to our project site to undergo a comprehensive refurbishment program. This will allow us to maximize the utilization of the acquired equipment, with the mills and its main components being the first to be mobilized and refurbished, now ready for installation.
Previous report
Production costs applicable to sales were $48.2 million during Q2/24, compared to $46.9 million during Q2/23. The increase in production costs was driven by higher personnel, processing, and mining expenses, primarily due to Argentine inflation pressures and the regulated official exchange rate. Additionally, higher commercial discounts resulting from increased commodity prices contributed to the rise in costs.
Previous report
Cash costs andAISC per GEO sold were $1,624 and $2,032 in Q2/24, respectively, compared to $1,362 and $1,811 in Q2/23, respectively. The increase in cash costs and AISC per GEO sold primarily resulted from higher production costs and lower GEOs sold as described above.
Previous report
McEwen Copper spent $37.5 million dollars in Q2/24 advancing the following exploration activities:
Previous report
Our drilling initiative for this season commenced in October 2023 and concluded in June 2024. During the 2023-2024 drilling campaign, we successfully completed approximately 230,800 feet (70,364 meters) of drilling. The Los Azules drill hole database for Q2/24 now totals approximately 710,000 feet (217,000 meters).
Previous report
Preliminary assay results from the 2023-2024 drilling season have been received and analyzed during H1/24. These assay results include significant copper values over wide intercepts and align with those predicted by the resource block model used in the June 2023 Preliminary Economic Assessment (“PEA”) for Los Azules. Drill highlights include:
Reworded paragraphs (46)
Previous wording
The discussion also analyzes our results of operations for the three and six months ended June 30, 2024 and compares those to the results for the three and six months ended June 30, 2023. Regarding properties or projects that are not in production, we provide some details of our plan of operation. We suggest that you read this discussion in conjunction with MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and our audited consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, 2023.
Current wording
The discussion also analyzes our results of operations for the three and nine months ended September 30, 2024 and compares those to the results for the three and nine months ended September 30, 2023. Regarding properties or projects that are not in production, we provide some details of our plan of operation. We suggest that you read this discussion in conjunction with MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and our audited consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, 2023.
Previous wording
For a reconciliation of these non-GAAP measures to the amounts included in ourConsolidated Statements of Operations and Comprehensive Loss for the three months ended June 30, 2024, and 2023 and to ourConsolidated Balance Sheets as of June 30, 2024, and December 31, 2023, and certain limitations inherent in such measures, please see the discussion under “Non-GAAP Financial Performance Measures,” beginning on page 31.
Current wording
For a reconciliation of these non-GAAP measures to the amounts included in ourConsolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024, and 2023 and to ourConsolidated Balance Sheets as of September 30, 2024, and December 31, 2023, and certain limitations inherent in such measures, please see the discussion under “Non-GAAP Financial Performance Measures,” beginning on page 33.
Previous wording
Throughout this Management’s Discussion and Analysis (“MDA”), the reporting periods for the three months ended June 30, 2024, and 2023 are abbreviated as Q2/24 and Q2/23, respectively, and the reporting periods for the six months ended June 30, 2024, and 2023 are abbreviated as H1/24 and H1/23, respectively.** **
Current wording
Throughout this Management’s Discussion and Analysis (“MDA”), the reporting periods for the three months ended September 30, 2024, and 2023 are abbreviated as Q3/24 and Q3/23, respectively, and the reporting periods for the nine months ended September 30, 2024, and 2023 are abbreviated as 9M/24 and 9M/23, respectively.** **
Previous wording
In addition, in this report, gold equivalent ounces (“GEO”) includes gold and silver ounces calculated based on a gold to silver ratio of 81:1 for Q2/24 and 83:1 for Q2/23, which approximates the average price during each fiscal quarter.
Current wording
Disclosed gold equivalent ounces (“GEO”) includes gold and silver ounces calculated based on a gold to silver ratio of 85:1 for Q3/24 and 82:1 for Q3/23, and 85:1 for 9M/24 and 83:1 for 9M/23, which is based on the average per ounce price of gold and silver during each period.
Previous wording
The Company owns a 100% interest in the Gold Bar mine in Nevada, United States, the Fox Complex in Ontario, Canada, the Fenix Project in Sinaloa, Mexico and a portfolio of exploration properties in the United States, Canada, Mexico and Argentina. As of June 30, 2024, the Company also holds a 47.7% interest in McEwen Copper Inc. (“McEwen Copper”), which owns the Los Azules copper project in San Juan, Argentina and the Elder Creek exploration project in Nevada, United States, and a 49.0% interest in Minera Santa Cruz S.A. (“MSC”), which owns the producing San José silver-gold mine in Santa Cruz, Argentina and is operated by MSC’s majority owner, Hochschild Mining plc. The Company reports its investments in McEwen Copper and MSC as equity investments.
Current wording
The Company owns a 100% interest in the Gold Bar mine in Nevada, United States, the Fox Complex in Ontario, Canada, the Fenix Project in Sinaloa, Mexico and a portfolio of exploration properties in the United States, Canada, Mexico and Argentina. As of September 30, 2024, the Company also holds a 48.3% interest in McEwen Copper Inc. (“McEwen Copper”), which owns the Los Azules copper project in San Juan, Argentina and the Elder Creek exploration project in Nevada, United States, and a 49.0% interest in Minera Santa Cruz S.A. (“MSC”), which owns the producing San José silver-gold mine in Santa Cruz, Argentina and is operated by MSC’s majority owner, Hochschild Mining plc. The Company reports its investments in McEwen Copper and MSC using the equity method of accounting.
Previous wording
In this report, “Au” represents gold; “Ag” represents silver; “oz” represents troy ounce; “t” represents metric tonne; “g/t” represents grams per metric tonne; “ft” represents feet; “m” represents meter; “sq” represents square; C$ refers to Canadian dollars; and ARS refers to Argentine pesos. All of our financial information is reported in United States (U.S.) dollars unless otherwise noted.
Current wording
In this report, “Au” represents gold; “Ag” represents silver; “oz” represents troy ounce; “t” represents metric tonne; “g/t” represents grams per metric tonne; “ft” represents feet; “m” represents meter; “sq” represents square; and CAD refers to Canadian dollars. All of our financial information is reported in United States (U.S.) dollars unless otherwise noted.
Previous wording
Highlights for Q2/2024 are summarized below and discussed further under “Consolidated Performance”:
Current wording
Highlights for Q3/2024 are summarized below and discussed further under “Consolidated Performance”:
Previous wording
The following tables present selected financial and operating results of the Company for the three and six months ended June 30, 2024 and 2023:
Current wording
The following tables present consolidated selected financial and operating results of the Company for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Supported by our improvement in gross margin described above, we reported a net loss of $13.0 million (or $0.26 per share) and adjusted EBITDA of $7.2 million (or $0.15 per share) in Q2/24, compared to a net loss of $21.6 million (or $0.46 per share) and adjusted EBITDA of negative $5.8 million (or negative $0.12 per share) in Q2/23.
Current wording
Supported by our improvement in gross profit described above, we reported a net loss of $2.1 million (or $0.04 per share) and adjusted EBITDA of $10.5 million (or $0.20 per share) in Q3/24, compared to a net loss of $18.5 million (or $0.39 per share) and adjusted EBITDA of $1.5 million (or $0.03 per share) in Q3/23.
Previous wording
Production from our 100% owned mines of 20,594 GEOs in Q2/24 increased by 2,327 GEOs, from 18,267 GEOs produced in Q2/23. At the Gold Bar mine, the production increase of 4,381 GEOs in Q2/24 compared to Q2/23 was primarily attributable to a 48% increase in tonnes processed, as well as higher processed gold grades. This was offset by a decrease in Fox Complex production of 2,054 GEOs in Q2/24 compared to Q2/23 driven by lower mine production, slightly offset by the processing of our stockpile inventory, resulting in a 14% decrease in average head grades processed.
Current wording
Production from our 100% owned mines of 21,495 GEOs in Q3/24 increased by 814 GEOs, from 20,681 GEOs produced in Q3/23. At the Gold Bar mine, the production increase of 4,133 GEOs in Q3/24 compared to Q3/23 was attributable to a 21% increase in higher gold grades of stacked mineralized material, and higher heap leach recovery rates. At the Fox Complex, the production decrease of 3,319 GEOs in Q3/24 compared to Q3/23 was driven by a 9% decrease in tonnes processed and a 21% decrease in average head grades processed.
Previous wording
Our attributable share of the San José mine production was 14,672 GEOs in Q2/24, or 15% lower than 17,358 GEOs produced in Q2/23. The decrease was primarily driven by lower average gold grades processed.
Current wording
Our attributable share of San José mine production was 13,684 GEOs in Q3/24, or 24% lower than the 17,932 GEOs produced in Q3/23. The decrease was primarily driven by temporary lower than expected metal grades mined and processed.
Previous wording
Revenue from gold and silver salesfrom 100% owned operations increased to $47.5 million in Q2/24, compared to $34.4 million in Q2/23. This 38% increase was driven by an increase in average realized gold prices, and higher ounces sold at the Gold Bar mine. Our average realized gold price in Q2/24 was $2,355 per GEO, compared to $1,951 per GEO in Q2/23.
Current wording
Revenue from gold and silver salesfrom 100% owned operations increased to $52.3 million in Q3/24, compared to $38.4 million in Q3/23 due to higher average realized gold prices and consolidated gold sales, as described above. Our average realized gold price in Q3/24 was $2,499 per GEO, compared to $1,920 per GEO in Q3/23.
Previous wording
Production costs applicable to sales increased to $32.1 million in Q2/24, compared to $29.6 million in Q2/23. Production costs rose at Gold Bar compared to prior year, driven by higher mining contractor costs; tonnes mined increased by 31% year over year.
Current wording
Production costs applicable to sales increased to $29.7 million in Q3/24, compared to $26.5 million in Q3/23. Production costs increased primarily at Gold Bar compared to prior year, driven by higher mining rates and contractor unit costs.
Previous wording
Advanced project costswere $3.0 million in Q2/24, compared to $29.8 million in Q2/23. Advanced project costs primarily relate to the Fenix Project in both Q2/23 and Q2/24, and Los Azules in Q2/23. Following the deconsolidation of McEwen Copper in Q4/23, the Company’s attributable costs for Los Azules are recognized through theLoss from investment in McEwen Copper line item on ourStatement of Operations and are no longer recognized withinAdvanced Project Costs.
Current wording
Advanced project costswere $2.5 million in Q3/24, compared to $20.4 million in Q3/23. Advanced project costs primarily relate to the Fenix Project in both Q3/23 and Q3/24, and Los Azules in Q3/23. Following the deconsolidation of McEwen Copper in Q4/23, the Company’s attributable costs for Los Azules are recognized through theLoss from investment in McEwen Copper line item on ourStatement of Operations and are no longer recognized withinAdvanced Project Costs.
Previous wording
Exploration costs were $5.0 million in Q2/24, compared to $5.9 million in Q2/23. Exploration expenditures were primarily incurred at the Grey Fox project at the Fox Complex, and for a number of short and medium term targets at Gold Bar.
Current wording
Exploration costs were $5.3 million in Q3/24, compared to $4.7 million in Q3/23. Exploration expenditures focused on the Grey Fox project at the Fox Complex, and on near-term production targets and mine life extension opportunities at Gold Bar.
Previous wording
Income from investment in MSC increased to $4.7 million in Q2/24, compared to a loss of $0.9 million in Q2/23. This increase was a result of increased average realized gold prices, partially offset by higher production costs. Details of MSC’s operating results are presented in the “Operations Review” section of this MDA and Note 9 to theConsolidated Financial Statements.
Current wording
Loss from investment in MSC: During Q3/24 we recorded a loss of $1.2 million, compared to a loss of $2.7 million in Q3/23. Details of MSC’s operating results are presented in the “Operations Review” section of this MDA and Note 9 to theConsolidated Financial Statements.
Previous wording
Loss from investment in McEwen Copperof $16.8 million was recorded in Q2/24. Prior to Q4/23, the financial results of McEwen Copper were consolidated. The loss during Q2/24 represents our attributable portion of McEwen Copper’s costs, consisting primarily of expenditures to advance the Los Azules project to feasibility. Details of McEwen Copper’s operating results are presented in the “Operations Review” section of this MDA and Note 9 to theConsolidated Financial Statements.
Current wording
Loss from investment in McEwen Copper:During Q3/24 we recorded a loss of $1.9 million representing our attributable portion of the costs of McEwen Copper to advance the Los Azules project to feasibility. Prior to Q4/23, the financial results of McEwen Copper were consolidated. Details of McEwen Copper’s operating results are presented in the “Operations Review” section of this MDA and Note 9 to theConsolidated Financial Statements.
Previous wording
Interest and other finance expense, netwas $1.7 million in Q2/24, a $21.3 million decrease compared to income of $19.6 million in Q2/23. During Q2/23, interest and other finance income was driven by McEwen Copper’s income earned from its investments of cash reserves not immediately required for exploration activities.
Current wording
Interest and other finance expense, netwas $1.1 million in Q3/24, a $11.4 million decrease compared to income of $10.3 million in Q3/23. During Q3/23, interest and other finance income was impacted by the consolidation of McEwen Copper’s financial results, which included income earned from its investments of cash reserves not immediately required for exploration activities.
Previous wording
Other income (expense) was $0.3 million in Q2/24, compared to an expense of $21.9 million in Q2/23. The increase was primarily attributable to a decrease in foreign exchange losses following the deconsolidation of McEwen Copper, as a significant portion of its treasury were held in Argentine pesos during Q2/23.
Current wording
Other expense was $0.1 million in Q3/24, compared to an expense of $10.1 million in Q3/23. The increase was primarily attributable to a decrease in foreign exchange losses following the deconsolidation of McEwen Copper, as a sizable portion of its treasury was held in Argentine pesos during Q3/23.
Previous wording
Income and mining tax recovery increased to $2.4 million in Q2/24, compared to $2.0 million in Q2/23. The increase resulted from a change in temporary tax differences on our investment in McEwen Copper and the amortization of the flow-through share premium.
Current wording
Income and mining tax expense was $0.8 million in Q3/24, compared to a recovery of $0.2 million in Q3/23. The decrease was primarily due to the Nevada net proceeds tax, partially offset by adjustments in temporary tax differences related to our McEwen Copper investment and the amortization of the flow-through share premium.
Previous wording
Cash from operating activities of $7.5 million during H1/24 reflects the net loss of $33.4 million for the period, as adjusted for non-cash impacts, including net losses from equity method investments of $28.8 million, depreciation, amortization, and depletion of $15.1 million, and income and mining tax recovery of $5.8 million. Further details are provided in the* Consolidated Statements of Cash Flows.*
Current wording
Cash from operating activities of $30.7 million during 9M/24 reflects the net loss of $35.5 million for the period, adjusted for non-cash impacts, including net losses from equity method investments of $31.9 million, depreciation, amortization, and depletion of $24.0 million, income and mining tax recovery of $6.3 million, an increase in non-cash working capital of $12.5 million, stock-based compensation of $2.1 million, and reclamation accretion and adjustments to estimate of $1.1 million. Further details are provided in the* Consolidated Statements of Cash Flows.*
Previous wording
Cash used in investing activities of $11.1 million during H1/24 consisted primarily of additions to mineral property interests and plant and equipment and was driven primarily by capital development at our Froome mine and Stock project in Canada.
Current wording
Cash used in investing activities of $45.1 million during 9M/24 consisted of additions to mineral property interests and plant and equipment of $30.3 million, driven primarily by capital development at the Fox Complex, and the investment of an additional $14.0 million in McEwen Copper during the 2024 period, notes receivable acquired of $1.9 million. This was slightly offset by $1.1 million of cash and restricted cash received from the acquisition of Timberline.
Previous wording
Cash provided by financing activities of $20.0 million during H1/24 represented the proceeds from flow-through common shares of $21.8 million, offset by issuance costs of $1.4 million and finance lease payments of $0.4 million.
Current wording
Cash provided by financing activities of $19.5 million during 9M/24 consisted of proceeds from the issuance of flow-through common shares of $20.4 million in June 2024, offset by finance lease payments of $0.9 million.
Previous wording
Working capital as at June 30, 2024 was $29.1 million, and increased by 25% from $22.7 million as at December 31, 2023. This improvement was primarily driven by the increase of cash and cash equivalents of $17.7 million described above, and a $1.8 million increase in other current assets. This was partially offset by an increase in current liabilities of $13.0 million, which primarily included $6.0 million in the current portion of long-term debt, $5.2 million in flow-through share premiums, and a $2.1 million increase in accounts payable and accrued liabilities.
Current wording
Working capital as at September 30, 2024 was $8.6 million, and decreased by 62% from $22.7 million as at December 31, 2023. The decrease in working capital was driven by the reclassification of $9.0 million of long-term debt to current liabilities, an increase in accounts payables and accrued liabilities of $6.2 million, a $4.7 million increase in flow-through share premium liabilities, offset by a $6.2 million increase in cash and cash equivalents described above, and a $0.7 million increase in other current assets.
Previous wording
The following table summarizes the operating results for the Gold Bar mine for the three and six months ended June 30, 2024, and 2023:
Current wording
The following table summarizes the operating results for the Gold Bar mine for the three and nine months ended September 30, 2024, and 2023:
Previous wording
The Gold Bar mine produced 12,297 GEOs in Q2/24, representing a 55% increase from 7,916 GEOs produced in Q2/23. The increase in quarterly production was a result of higher average grades processed (1.02 g/t Au in Q2/24 compared to 0.69 g/t Au in Q2/23) along with a 35% increase in tonnes stacked on our heap leach.
Current wording
The Gold Bar mine produced 13,640 GEOs in Q3/24, representing a 43% increase from 9,507 GEOs produced in Q3/23. The increase in quarterly production was a result of higher average gold grades in stacked material of 0.84 g/t Au in Q3/24 compared to 0.69 g/t Au in Q3/23, as well as higher recoveries realized during Q3/24 from previously stacked material.
Previous wording
Revenue from gold and silver saleswas $29.7 million in Q2/24, an improvement of 86%, compared to $16.0 million in Q2/23. The increase in revenue was the result of higher GEOs sold during Q2/24 (12,510 GEOs in Q2/24 compared to 8,100 GEOs in Q2/23) together with a higher average realized gold price ($2,355 per GEO in Q2/24 compared with $1,951 per GEO in Q2/23).
Current wording
Revenue from gold and silver sales increased 85% to $33.3 million in Q3/24, compared to $18.0 million in Q3/23. The increase in revenue was the result of higher GEOs sold during Q3/24 of 13,333 GEOs in Q3/24 compared to 9,420 GEOs in Q3/23 along with a higher average realized gold price of $2,499 per GEO in Q3/24 compared with $1,920 per GEO in Q3/23.
Previous wording
The Canada segment is comprised of the Fox Complex gold properties, which includes our Froome underground mine; the Stock Project (consisting of the West, East and Main zones); the Stock mill; the Grey Fox exploration project; a number of exploration properties located near the city of Timmins, Ontario, Canada; and the Black Fox mine.
Current wording
The Canada segment is comprised of the Fox Complex gold properties, which includes our Froome underground mine; the Black Fox underground mine, the Stock Project (consisting of the West, East and Main zones); the Stock mill; the Grey Fox exploration project; and a number of exploration properties located near the city of Timmins, Ontario, Canada.
Previous wording
The following table summarizes the operating results for the Fox Complex for the three and six months ended June 30, 2024, and 2023:
Current wording
The following table summarizes the operating results for the Fox Complex for the three and nine months ended September 30, 2024, and 2023:
Previous wording
Revenue from gold saleswas $17.8 million in Q2/24, or a decrease of $0.6 million compared to $18.4 million in Q2/23. The decrease is attributable to the reduced number of GEOs sold during Q2/24 as described previously. This was partially offset by an increase in the average realized gold price from $1,951 per GEO in Q2/23 to $2,355 per GEO in Q2/24. Realized gold prices at the Fox Complex are impacted by historic streaming arrangements, which require the sale of a portion of gold produced from the Froome mine at lower than market prices, or $601 per ounce as of Q2/24.
Current wording
Revenue from gold saleswas $19.0 million in Q3/24, a decrease of $1.3 million compared to $20.3 million in Q3/23, A 28% decrease in GEOs sold was largely offset by an increase in the average realized gold price from $1,920 per GEO in Q3/23 to $2,499 per GEO in Q3/24. Realized gold prices at the Fox Complex are impacted by historic streaming arrangements, which require the sale of a portion of gold produced from the Froome and Black Fox mines at $601 per ounce as of Q3/24.
Previous wording
Cash costs andAISC per GEO sold were $1,588 and $1,857 in Q2/24, respectively, compared to $1,237 and $1,371 in Q2/23, respectively. The increase in unit costs was driven primarily by lower GEOs sold as described above.
Current wording
Cash costs andAISC per GEO sold were $1,572 and $1,953 in Q3/24, respectively, compared to $1,572 and $1,909 in Q3/23, respectively. The increase in unit costs was driven primarily by lower GEOs sold as described above, as well as accelerated capital development costs to increase stope availability in respect of AISC.
Previous wording
In Q2/24, $2.4 million was incurred primarily for exploration at the Grey Fox property. The company drilled 55,433 feet (16,896 meters) at Grey Fox.
Current wording
During Q3/24, $1.8 million was incurred primarily for exploration at the Grey Fox property. This included 29,918 feet (9,119 meters) of drilling at Grey Fox as well as the initiation of a mineralogical study, including laser-induced breakdown spectroscopy, of lithologies at the Gibson and Whiskey Jack zones at Grey Fox to better understand the nature of the mineralization. An infill geophysics program will be conducted at Grey Fox in Q4/24 to check for Black Fox-style mineralization believed to be below Grey Fox.
Previous wording
On December 31, 2020, we announced the results of a feasibility study for the development of our 100%-owned Fenix Project, which includes existing heap leach material at the El Gallo mine and the El Gallo Silver deposit. Key environmental permits for Phase 1 were received in 2019, including the approval for an in-pit tailings storage facility and process plant construction.
Current wording
On December 31, 2020, we announced the results of a feasibility study for the development of our 100%-owned Fenix Project, which includes existing heap leach material at the El Gallo mine and the El Gallo Silver deposit. Key environmental permits for Phase 1 were received in 2019, including the approval for an in-pit tailings storage facility and process plant construction. We are currently awaiting the renewal of key mining permits prior to a construction decision.
Previous wording
The Minera Santa Cruz Segment is comprised of a 49% interest in the San José mine, located in Santa Cruz, Argentina.
Current wording
The Minera Santa Cruz Segment is comprised of a 49% interest in the San José mine, located in Santa Cruz, Argentina. Hochschild is the majority owner and operator of the San José mine.
Previous wording
The following table sets out certain operating results for the San José mine for the three and six months ended June 30, 2024, and 2023 on a 100% basis:
Current wording
The following table sets out certain operating results for the San José mine for the three and nine months ended September 30, 2024, and 2023 on a 100% basis:
Previous wording
On a 100% basis, the San José mine produced 29,942 GEOs in Q2/24 compared to 35,424 in Q2/23. The decrease in GEOs produced was driven by a 19% and 13% decrease in gold and silver head grades processed, respectively.
Current wording
On a 100% basis, the San José mine produced 27,927 GEOs in Q3/24, compared to 36,597 in Q3/23. The decrease in GEOs produced was driven by a 24% and 16% decrease in gold and silver head grades processed, respectively.
Previous wording
Revenue from gold and silver sales was $74.3 million in Q2/24 compared to $67.7 million in Q2/23. The increase was primarily due to a higher average realized gold price per ounce ($2,509/oz gold in Q2/24 compared with $1,966/oz gold in Q2/23).
Current wording
Revenue from gold and silver sales was $70.4 million in Q3/24, compared to $64.5 million in Q3/23. The increase was driven by a higher average realized gold price per ounce of $2,639/oz gold in Q3/24 compared with $2,138/oz gold in Q3/23, and offset by an 11% decrease in GEOs sold.
Previous wording
Our 49% attributable share of operations from our investment in MSC in Q2/24 resulted in income of $5.9 million, compared to a loss of $0.9 million in Q2/23.
Current wording
Our 49% attributable share of operations from our investment in MSC in Q3/24 resulted in a loss of $1.2 million, compared to a loss of $2.7 million in Q3/23. Despite higher than planned unit costs, the metals price environment has allowed the operation to strengthen its liquidity, improving its working capital balance to $75.5 million as at September 30, 2024, while also investing $8.5 million in exploration expenditures and $3.5 million in mill expansion costs during 2024.
Previous wording
As of June 30, 2024, we own a 47.7% interest in McEwen Copper Inc., which owns a 100% interest in the Los Azules copper project in San Juan, Argentina, and the Elder Creek exploration project in Nevada, USA. Including amounts spent by Minera Andes Inc. prior to 2012, and directly by McEwen Mining prior to 2021, we have invested over $350.0 million in exploration expenditures to develop Los Azules as a world-class copper deposit.
Current wording
As of September 30, 2024, we own a 48.3% interest in McEwen Copper, which owns a 100% interest in the Los Azules copper project in San Juan, Argentina, and the Elder Creek exploration project in Nevada, USA. Including amounts spent by Minera Andes Inc. prior to 2012, and directly by McEwen Mining prior to 2021, we have invested over $350 million in exploration expenditures to develop Los Azules as a world-class copper deposit.
Previous wording
The Los Azules project is one of the world’s largest undeveloped open-pit copper porphyry copper deposits and is located in the Province of San Juan, Argentina.
Current wording
The Los Azules project is one of the world’s largest undeveloped copper deposits and is located in the Province of San Juan, Argentina.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
revenues and expenses of MSC do not represent our legal claim to such items. The amount of cash we receive is based upon specific provisions of the Option and Joint Venture Agreement (“OJVA”) and varies depending on factors including the profitability of the operations.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
costs, export taxes and operational stripping costs, but exclude depreciation and amortization (non-cash items). The sum of these costs is divided by the correspondinggold equivalent ounces sold to determine a per ounce amount.