McEwen Mining Inc. (MUX, Financial) updated the market with its financials concerning the second quarter of 2017.
The operating results of the quarter were already released by the Canadian mid-tier gold and silver producer last month July 13.
Here you can read my article where I recapped the most important figures about McEwen production of gold and silver for the second quarter as well as the company’s guidance on production and costs for the full year 2017.
McEwen Mining closed the quarter that ended June 30 with a net loss of 1 cent (U.S. Dollar) or $1.7 million. This was a negative turnaround from the comparable quarter of last year when the Canadian miner closed with a net profit of 3 cents or $8.4 million.
Data on cash flow from operations were also disappointing at the end of the period in question. The cash flow from operations was negative at $4.1 million, down more than 295% from 2016, when the company generated a positive cash flow of $2.1 million from its operation in the comparable quarter.
The worsening in the company’s financial performance – on a consolidated basis – compared to the second quarter of last year, was attributed by McEwen Mining to an increase in the amount of funds used during for the advancement of mineral projects and exploration activities.
Two of the most important mineral projects McEwen Mining is advancing are Los Azules Project in Argentina and the Gold Bar project in Nevada. In Argentina, the company spent about $0.8 million for the completion of a drilling campaign, results or which will be included into a new Preliminary Economic Assessment (or PEA) that is expected to be released by McEwen Mining sometime during the third quarter. In Nevada, McEwen Mining spent approximately $0.6 million to obtain the necessary building permits from local authorities to construct the mine. The formal decision document is expected to be recorded sometime during the second part of 2017.
Concerning the Canadian miner’s balance sheet, McEwen Mining is a debt-free company with $44 million in cash on hand and securities as of June 30.
GuruFocus gives McEwen Mining a financial strength rating of 8 out of a total of 10 and a profitability & growth rating of 4 out of 10.
McEwen Mining is currently trading around $2.42 per share on the New York Stock Exchange with a market capitalization of $755.1 million, a price-book ratio of $1.64, a price-earnings ratio of $142.42, a price-sales ratio of $13.85 and an EV/Ebitda ratio of -608.21.
McEwen has 621,000 ounces of gold and 13,328,000 ounces of silver in proven and probable reserves, equating to 798,707 ounces of gold equivalent.
The company has an enterprise value of $729.21 million that, divided by 798,707 ounces of gold equivalent, yields an EVO of $912.99.
Disclosure: I have no positions in any stock mentioned in this article.
