Inventus Mining has reached a Memorandum of Understanding with McEwen Mining (MUX, Financial) to explore processing opportunities at the Stock Mill for gold extracted from Inventus' Pardo Gold Project, situated 65 km east of Sudbury, Ontario. The MOU aims to assess the feasibility of processing bulk samples in terms of regulatory compliance, operational efficiency, and economic viability.
Under the current agreement, Inventus plans to process up to 45,000 tonnes of material over the next year, leveraging a permit that allows for a 50,000-tonne bulk sample. Past sampling efforts at Pardo yielded gold grades of 3.4 gpt from 5,000 tonnes in 2022 and 4.2 gpt from 1,000 tonnes in 2017. If the evaluation confirms feasibility, processing can commence shortly.
McEwen will be tasked with obtaining necessary regulatory approvals and will process the material in batches, with gold credits going to Inventus. Inventus will handle the delivery of compliant materials and cover milling costs. Both companies will maintain their environmental responsibilities and share relevant data for transparency. The MOU remains valid until March 31, 2026, with options for extension. This collaboration remains non-exclusive, allowing both parties to explore other opportunities.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for McEwen Mining Inc (MUX, Financial) is $15.06 with a high estimate of $18.00 and a low estimate of $12.50. The average target implies an upside of 93.11% from the current price of $7.80. More detailed estimate data can be found on the McEwen Mining Inc (MUX) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, McEwen Mining Inc's (MUX, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for McEwen Mining Inc (MUX, Financial) in one year is $9.15, suggesting a upside of 17.31% from the current price of $7.8. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the McEwen Mining Inc (MUX) Summary page.
MUX Key Business Developments
Release Date: March 18, 2025
- Gold Equivalent Production: 135,884 ounces, 12% lower than 2023.
- Selling Price Increase: 24% higher than the previous year.
- Adjusted EBITDA: $29.2 million or $0.57 per share, up from $7.7 million or $0.16 per share in 2023.
- Net Loss: $43.7 million, primarily due to expenditures at Los Azules.
- Exploration Expenditure: $16.5 million, totaling $19.8 million.
- Depreciation: $10 million.
- Debt Increase: From $40 million to $130 million via capped call convertible debenture.
- Cash Position: Approximately $62 million.
- Fox Complex Exploration: Increased indicated and inferred resources to over 2 million ounces.
- Los Azules Valuation: Implied value of $984 million, with a 46% interest equating to $457 million.
- San Jose Mine Investment: 49% interest, expecting to pay a dividend soon.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- McEwen Mining Inc (MUX, Financial) reported a significant increase in adjusted EBITDA, which was 3.8 times higher than the previous year, reaching $29.2 million.
- The company achieved a 24% higher selling price for its production, despite a 12% decrease in consolidated production.
- Exploration efforts at the Fox Complex have increased indicated and inferred resources to over 2 million ounces, allowing for future production expansion.
- The Los Azules project has seen a substantial increase in implied value, now estimated at $984 million, with plans for an IPO contingent on market conditions.
- The San Jose mine, in which McEwen Mining Inc (MUX) holds a 49% interest, is expected to pay a dividend soon, benefiting from higher metal prices.
Negative Points
- McEwen Mining Inc (MUX) posted a net loss of $43.7 million, primarily due to significant investments in the Los Azules project.
- The company's debt increased from $40 million to $130 million through a capped call convertible debenture.
- There is ongoing uncertainty regarding the approval of the Los Azules project under Argentina's RIGI scheme, with no clear timeline for a decision.
- The company faces a legal claim from an indigenous group concerning property interests in Timmins, which it believes is without merit.
- Permitting timelines for the Timberline properties and other projects remain unpredictable, potentially delaying production increases.
