“I am feeling much better this year than I did last year at this time because the bad news is behind us,” chairman and chief owner Rob McEwen said in a quarterly report to shareholders.
“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.”
“I am feeling much better this year than I did last year at this time because the bad news is behind us”
Rob McEwen, chairman and chief owner
Production from Black Fox, where development of the access to the Froome underground deposit has advanced 47% by the end of the quarter, reached 5,800 GEOs in Q3 at cash costs and AISC of $1,581 and $1,644 per GEO, respectively.
The Northern Ontario operation benefited from additional development work completed during Q2, which increased mining flexibility, and the company expects production to continue to trend higher next quarter while the company transitions to mining the Froome deposit. McEwen said it expects to reach the main deposit in Q2 2021, with commercial production from Froome beginning in Q4 2021.
At the San José mine in Argentina, attributable production to the company in Q3 was 8,600 gold ounces and 571,000 silver ounces, for a total of 15,900 GEOs. Total cash costs and AISC were $1,269 and $1,538 per GEO, respectively.
Meanwhile, the company is preparing a preliminary economic assessment (PEA) on the Fox Complex, which host nearly three million gold ounces in measured and indicated resources. Results of this study are expected to be available in Q4 2020.
The plan to grow the Fox Complex to an annual production of 100,000-150,000 ounces of gold at a cash cost of $800/oz and AISC of $1,100/oz over a 10-year life, with production envisioned to start ramping up from 2022.
Shares of McEwen Mining were down 3.8% by 1 p.m. EDT Friday following its Q3 2020 results. The company’s market capitalization is approximately $380.2 million.
“I believe McEwen Mining is one of those companies whose share price has a lot of catching up to do,” chairman McEwen stressed.
“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. Our problems were many, some were due to non-recurring events and others were operational.”
