McEwen Mining Inc. (MUX, Financial) updated its shareholders on the third-quarter production of silver, gold and gold equivalent.
Results have been released by the company via its website.
On a consolidated basis, McEwen produced a volume of 19,051 ounces of gold in the third quarter, a 14.1% decrease from the previous quarter and a 21.5% decline from the production of gold McEwen reported in the comparable quarter of fiscal 2016.
Third-quarter silver production also went down 3.8% to 749,749 ounces compared to the production of the previous quarter of this fiscal and down 18.16% compared to the production of the grey metal the mining company reported in the third quarter of fiscal 2016.
The production of gold and silver led to a production of a gold equivalent of 29,047 ounces in the quarter in question. This volume of gold equivalent ounces represents a 10.86% decline from the second quarter of the 2017 production of 32,584 ounces of gold equivalent and a decline of 20.41% from the production of gold equivalent in the same quarter of 2016. The volume of the gold equivalent (ounces) has been calculated according to a gold/silver ratio of 1:75.
The Argentinian San José Mine (49%) contributed to McEwen’s total production of gold with 11,862 ounces or 62.3% and to the company’s total production of silver with 747,960 ounces or 99.8% in the quarter. The volume of gold equivalent produced by the Canadian miner at San José Mine was 21,834 ounces or 75.2% of the total third-quarter production.
The Mexican El Gallo Mine contributed to McEwen’s total production of gold equivalent with 7,213 ounces or 24.8% in the third quarter. In Mexico the production of gold equivalent went down 39% on a year-over-year basis due to problems experienced by the operator with the crushing circuit.
As you can see in the following two charts, McEwen’s production of gold, gold equivalent and silver downtrended over the last five quarters.
Chart 1. Production of gold and gold equivalent of McEwen over the last five quarters:
Chart 2. Production of silver of McEwen over the last five quarters:
Over the last four quarters the production of gold equivalent totaled 159,381 ounces.
McEwen wants to bring the annual production of gold equivalent to a level of approximately 178,000 to 179,000 ounces already in 2018 thanks to the contribution of the recently acquired Black Fox asset.
With the contribution of Gold Bar, McEwen expects to add another 65,000 ounces of gold equivalent to the company’s total annual production starting 2019.
The company says that “as of Oct. 12 McEwen is debt-free with liquid assets of approximately $60 million.”
Complete financial results for the third quarter will be released by McEwen in the beginning of November.
McEwen is trading at $2.02 with a market capitalization of $672.71 million, a price-book (P/B) ratio of 1.32, a price-sales (P/S) ratio of 11.15 and an EV-EBITDA ratio of -61.68.
The Canadian junior gold mining company has a forward P/E ratio of 14.39.
Disclosure: I have no positions in McEwen.
