- Cash and liquid assets(1) and working capital at
September 30 th, 2020 were $18.8 million(2) and positive $21.6 million, respectively. - Production rebounded during Q3 after the successful restart of all four of our operations, which were temporarily suspended during Q2, largely due to actions taken to prevent the spread of COVID-19 amongst our workers, business partners, and communities. Production for Q3 2020 was 23,100 gold ounces and 575,000 silver ounces, or 30,400 gold equivalent ounces(3)(GEOs), at the average gold:silver price ratio for the quarter of 79:1.
- For Q3 we spent
$8.5 million on exploration and advanced projects, and are reporting a net loss of $9.8 million, or ($0.0 2) per share, compared to a net loss of$11.5 million , or ($0.03 ) per share, in Q3 2019. - At Black Fox, development of the access to the Froome underground deposit has advanced 47% by the end of the quarter. We are on track to reach the deposit in the second quarter of 2021 and complete the necessary development work. Commercial production is expected by the fourth quarter of 2021.
- On
September 10 th we closed a private placement of 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 theTimmins region over the next 12 to 24 months. - Consolidated production guidance for Q4 2020 is 31,500-34,000 GEOs(4).
Anna Ladd-Kruger has joined the Company as our Chief Financial Officer. Anna is an accomplished mining executive with over 20 years of experience in leading mining organizations.- Our quarterly webcast will take place tomorrow, Friday, October 30th at
11 am EDT . Details are provided below.
“I am feeling much better this year than I did last year at this time because the bad news is behind us. 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. There are a number of companies that are still being largely ignored but appear to have considerable upside potential. I believe
Operations Update
San José Mine,
Our attributable production from San José in Q3 was 8,600 gold ounces and 571,000 silver ounces, for a total of 15,900 GEOs(5). For Q3, total cash costs(1) and all-in sustaining costs (AISC)(1) were
Production from Black Fox was 5,800 GEOs in Q3, at cash costs and AISC of
Black Fox – Underground Drilling
Delineation and definition drilling around the 240 m and 280 m level stoping areas in the central and west part of the
On the 240 Level 85.1 g/t Au over 4.8 m including 218.8 g/t Au over 1.8 m from hole 240-B226-11 14.7 g/t Au over 2.5 m including 19.8 g/t Au over 1.7 m from hole 240-B206-09 15.1 g/t Au over 1.7 m from hole 240-B196-08 On the 280 Level 19.3 g/t Au over 3.0 m including 71.6 g/t Au over 0.8 m from hole 280-F790-12 |
The positive results from these drill programs are being fast-tracked and evaluation for potential additions to mine planning inventory is ongoing.
A complete summary of new underground drilling results from Black Fox is available here: http://mcewenmining.com/files/doc_news/archive/2020/20201029_ug_comp_cog3.xlsx
Froome – Development
Development of the underground access to the Froome deposit, located a half mile (800 m) west of the Black Fox mine, is on track, having advanced 47% by the end of the quarter. We plan to reach the main deposit in Q2 2021 and expect to achieve commercial production from Froome in Q4 2021. Froome offers several benefits compared to Black Fox such as a straighter, more efficient haulage route and wider, more consistent mineralization that is amenable to lower cost bulk mining methods. We are targeting an average annualized production rate of 40-45,000 GEOs from Froome over a period of approximately 2.5 years.
Fox Complex Expansion – Economic Study
We have engaged an independent engineering group to complete a Preliminary Economic Assessment (PEA) for the
On
Whiskey Jack – Surface Drilling
Exploration drilling at Whiskey Jack continued to generate encouraging high grade results since our last update, from
31.2 g/t Au over 2.7 m and 6.0 g/t Au over 8.0 m from hole 20GF-1323 12.7 g/t Au over 11.2 m including 68.2 g/t Au over 2.0 m from hole 20GF-1325 |
A complete summary of new drilling results from Whiskey Jack is available here: http://mcewenmining.com/files/doc_news/archive/2020/20201029_wj_comp_cog1.xlsx
Gold Bar produced 6,800 GEOs in Q3 at cash costs and AISC of
Evaluation of the resource estimate continued in Q3. We expect to have new resource and reserve estimates and an updated feasibility study in Q4.
Table 1 below provides production and costs for Q1, Q2, Q3 and 9 months ending
Table 1: Production and Costs
Q1 | Q2 | Q3 | 9 Months to | |||||
2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | |
Total Production | ||||||||
Gold (oz) | 27,000 | 29,200 | 36,200 | 15,700 | 35,000 | 23,100 | 98,200 | 68,000 |
Silver (oz) | 703,200 | 553,200 | 850,500 | 359,400 | 947,100 | 575,000 | 2,500,800 | 1,487,600 |
GEOs(3) | 36,300 | 35,000 | 45,900 | 19,200 | 45,900 | 30,400 | 128,100 | 84,600 |
Gold (oz) | 10,600 | 9,000 | 13,500 | 5,500 | 13,600 | 8,600 | 37,700 | 23,100 |
Silver (oz) | 701,300 | 551,900 | 848,300 | 358,700 | 943,000 | 571,000 | 2,492,600 | 1,481,600 |
GEOs(3) | 19,900 | 14,900 | 23,200 | 9,000 | 24,500 | 15,900 | 67,500 | 39,800 |
Cash Costs ($/GEO)(1)(3) | 749 | 1,138 | 960 | 1,280 | 915 | 1,269 | 883 | 1,232 |
AISC ($/GEO)(1)(3) | 1,115 | 1,592 | 1,207 | 1,476 | 1,204 | 1,538 | 1,179 | 1,536 |
GEOs(1)(7) | 5,400 | 2,700 | 5,400 | 1,900 | 3,000 | 1,900 | 13,800 | 6,500 |
GEOs(3) | 8,900 | 8,300 | 9,400 | 2,200 | 7,400 | 5,800 | 25,800 | 16,300 |
Cash Costs ($/GEO)(1)(3) | 805 | 838 | 837 | 3,121 | 941 | 1,581 | 859 | 1,440 |
AISC ($/GEO)(1)(3) | 1,454 | 1,339 | 1,196 | 3,332 | 1,363 | 1,644 | 1,326 | 1,750 |
Gold Bar Mine, | ||||||||
GEOs(3) | (8) | 9,100 | 7,900(8) | 6,100 | 11,000 | 6,800 | 21,000 | 22,000 |
Cash Costs ($/GEO)(1)(3) | - | 1,887 | 901 | 1,772 | 1,088 | 1,585 | 1,014 | 1,762 |
AISC ($/GEO)(1)(3) | - | 2,177 | 1,088 | 2,462 | 1,235 | 1,769 | 1,200 | 2,132 |
Notes:
- Cash costs per ounce, all-in sustaining costs (AISC) per ounce, and liquid assets are non-GAAP financial performance measures with no standardized definition under
U.S. GAAP. For definition of the non-GAAP measures see "NonGAAP Financial Measures" section in this press release. For the reconciliation of the non-GAAP measures to the closestU.S. GAAP measures, see the Management Discussion and Analysis for three months endedSeptember 30, 2020 and for the year endedDecember 31, 2019 contained in our Form 10-Q and 10-K, respectively. - All amounts are reported in US dollars unless otherwise stated.
- 'Gold Equivalent Ounces' are calculated based on a gold to silver price ratio of 75:1 for Q1 2019, 88:1 for Q2 2019, 87:1 for Q3 2019, 94:1 for Q1 2020,104:1 for Q2 2020 and 79:1 for Q3 2020.
- Consolidated production guidance for Q4 2020 assumes an average gold:silver ratio of 80:1.
- Represents the portion attributable to us from our 49% interest in the San José Mine.
- Resources and Reserves for all the
McEwen Mining projects can be found on our website at: https://www.mcewenmining.com/operations/reserves-and-resources/default.aspx - Both cash costs and AISC per GEO no longer represent key metrics used by management to evaluate residual leaching at the
El Gallo Project . For this reason, the Company has ceased relying on, and disclosing, cash costs and all-in-sustaining costs per ounce as key metrics for this operation. - Gold Bar commercial production was attained on
May 23, 2019 , with cash costs and AISC reported from Q2 2019. Pre-commercial production at Gold Bar during Q1 2019 was 2,030 GEOs.
Conference Call and Webcast
We invite you to join our conference call, where management will discuss our Q3 2020 financial results and project developments and follow with a question and answer session. Questions can be asked directly by participants over the phone during the webcast. The webcast will be archived on McEwen Mining’s website at https://www.mcewenmining.com/media following the call.
Friday, October 30th, 2020 at | To call into the conference call over the phone, please register here: http://www.directeventreg.com/registration/event/8496507 |
Audience URL: https://event.on24.com/wcc/r/2626382/F6EB601267855511C284ED941E9AF3C6 |
For SEC Form 10-Q Financial Statements and MD&A refer to: http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000314203
Reliability of Information Regarding San José
Technical Information
The technical contents of this news release has been reviewed and approved by
Technical information pertaining to
CAUTIONARY NOTE REGARDING NON-GAAP FINANCIAL MEASURES
In this release, we have provided information prepared or calculated according to United States Generally Accepted Accounting Principles (“U.S. GAAP”), as well as provided some non-
Cash Costs and All-in Sustaining Costs
Cash costs consist of mining, processing, on-site general and administrative costs, community and permitting costs related to current operations, royalty costs, refining and treatment charges (for both doré and concentrate products), sales costs, export taxes and operational stripping costs, and exclude depreciation and amortization. All-in sustaining costs consist of cash costs (as described above), plus accretion of retirement obligations and amortization of the asset retirement costs related to operating sites, sustaining exploration and development costs, sustaining capital expenditures, and sustaining lease payments. Both cash costs and all-in sustaining costs are divided by the gold equivalent ounces sold to determine cash costs and all-in sustaining costs on a per ounce basis. We use and report these measures to provide additional information regarding operational efficiencies on an individual mine basis, and believe that these measures provide investors and analysts with useful information about our underlying costs of operations. A reconciliation to production costs applicable to sales, the nearest
Liquid Assets
The term liquid assets used in this report is a nonGAAP financial measure. We report this measure to better understand our liquidity in each reporting period. Liquid assets are calculated as the sum of the Balance Sheet line items of cash and cash equivalents, restricted cash and investments, plus ounces of doré held in precious metals inventories valued at the London PM Fix spot price at the corresponding period. A reconciliation to the nearest
CAUTIONARY NOTE TO US INVESTORS REGARDING RESOURCE ESTIMATION
McEwen Mining Inc. is required to prepare reports under the Securities Exchange Act of 1934 and the Canadian Securities Administrators’ National Instrument 43101 “Standards of Disclosure for Mineral Projects” (“NI 43101”), under the Canadian securities laws because we are listed on the
Under NI 43101, we report measured, indicated and inferred resources, which are measurements that are generally not permitted in filings made with the
Canadian regulations permit the disclosure of resources in terms of “contained ounces” provided that the tonnes and grade for each resource are also disclosed; however, the
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the date of this news release, contain
The NYSE and TSX have not reviewed and do not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management of
ABOUT
CONTACT INFORMATION: | ||
Investor Relations: (866)-441-0690 Toll Free (647)-258-0395 info@mcewenmining.com | Website: www.mcewenmining.com Facebook: facebook.com/mcewenmining Facebook: facebook.com/mcewenrob Twitter: twitter.com/mcewenmining Twitter: twitter.com/robmcewenmux Instagram: instagram.com/mcewenmining | Suite 2800, P.O. Box 24 M5H 1J9 |
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