On Wednesday, McEwen Mining Inc. (MUX, Financial) (TSX:MUX, Financial) tumbled 7.98% to $1.96 on the New York Stock Exchange and 7.14% to $2.60 Canadian dollars on the Toronto Stock Exchange after posting third quarter results for fiscal 2018.
The miner missed expectations on GAAP net earnings by 2 cents per share after posting a 4-cent loss. The miss produced a 100% negative surprise, which impacted the market value of the stock. As seen in the chart below powered by GuruFocus, the share price is now trading below the 200-, 100- and 50-day simple moving average lines.
For the 52 weeks through Oct. 31, the stock has increased 2% to $661.08 million market capitalization. McEwen Mining has beaten the Van Eck Vectors Gold Miners by 18% over the same period.
As of Wednesday, the stock has a price-book ratio of 1.34 versus an industry median of 1.74 and an EV-Ebitda ratio of 9.02 compared to an industry median of 9.3.
The company produced 33,806 ounces of gold and 745,172 ounces of silver for a third-quarter consolidated production of 43,742 ounces of gold equivalent, reflecting a 50.6% increase year-over-year. The growth is the result of the addition of the Black Fox mine in Canada to the portfolio of assets.
The production of gold equivalent was made at an all-in sustaining cost of approximately $1,017 per ounce of gold equivalent compared to an AISC of about $1,035.45 per ounce produced in the same trimester of 2017.
Lower metal prices have weighed on the bottom line. The bullion averaged $1,212.75 per troy ounce and silver averaged $14.9927 per troy ounce on the London market during the third quarter of 2018. The yellow metal decreased 5% and silver decreased nearly 11% from the comparable of 2017.
The company incurred operating cash outflow of $1.4 million in the third quarter of 2018, while in the same trimester of 2017 the company reported operating cash inflow of $200,000.
The balance sheet of McEwen has $54 million in cash on hand and total debt of $50 million as of Sept. 30. Compared to the financial situation of a year ago, production means are now also financed with borrowed capital.
Disclosure: I have no positions in any securities mentioned in this article.
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