McEwen posts positive Q3 results, as El Gallo ops gather pace

TORONTO (miningweekly.com) – TSX- and NYSE-listed McEwen Mining has reported positive headline earnings for the three months ended September 30, as a spirited performance by its 100%-owned El Gallo mine, in Mexico, boosted output and drove down costs.

Excluding the impact of impairment of mineral properties, foreign exchange fluctuations and income tax recoveries, McEwen reported an adjusted net profit of $300 000, or nil per share, compared with an adjusted net loss of $8.3-million, or $0.03 a share, in the comparable period a year earlier.

Consolidated net income for the period was $2.6-million, or $0.01 a share, compared with a net loss of $13-million, or $0.04 a share.

Earnings from mining operations were $13.4-million, or $0.04 a share, compared with a loss of $800 000, or nil per share, for the third quarter of 2014, mainly owing to increased output at El Gallo.

The net cash flow generated totalled $8.5-million, or $0.03 a share, in the period, driven higher by increased gold and silver sales of $22.5-million from El Gallo.

Output rose 34% year-on-year to 43 390 gold-equivalent ounces (GEO), which included 23 832 GEOs attributable to the company through its 49% interest in the San José mine, in Argentina, and 19 558 GEOs from the El Gallo mine.

Third-quarter sales totalled 41 829 GEOs, which included 21 789 GEOs attributable to the company from San José, and 20 040 GEOs from El Gallo.

The average realised prices of gold and silver sold during the third quarter were $1 106/oz and $14.05/oz, respectively.

McEwen lifted its 2015 production guidance to 108 500 oz of gold and 3.12-million ounces of silver, or 150 000 GEOs, at aan ll-in sustaining cost of $1 125/GEO.

The company on Friday announced that chief owner Rob McEwen was appointed interim CFO, while it continued its search for internal and external candidates to fill the position permanently.

McEwen's NYSE-listed stock fell 3.77% on Friday to $0.81 apiece, in line with most other gold stocks, as the gold price softened by nearly 1.5% by noon to $1 088/oz.