McEwen sinks to quarterly loss

JOHANNESBURG (miningweekly.com) – Precious metals producer McEwen Mining has reported a first-quarter loss of $3-million, or $0.01 a share, compared with net income of $13-million in same period of 2016.

The net loss was mainly the result of a $6.4-million increase in gold and silver sales from the El Gallo mine, in Mexico, and a $6.7-million increase in exploration costs relating to a drilling campaign at Los Azules, in Argentina, the Colorado-incorporated miner reported on Thursday.

McEwen spent $6.3-million at the Los Azules project on a combination of infill and exploration drilling, the results of which will be finalised in the second half of the year.

Consolidated gold equivalent production decreased to 29 733 oz, consisting of 9 808 gold equivalent ounces from the El Gallo mine and 19 925 gold equivalent ounces attributable to the company from its 49% interest in the San José mine, in Argentina. This compares with gold-equivalent production of 37 958 oz in the first quarter of 2016.

At El Gallo, total cash costs increased to $564/oz of gold equivalent, from $432/oz, while all-in sustaining costs (AISC) increased to $668/oz of gold equivalent, from $532/oz in the first quarter of 2016.

Costs also rose at San José, with total costs increasing to $915/oz of gold equivalent, from $762/oz, and AISC increasing to $1 165/oz, from $936/oz in the first quarter of 2016.

McEwen expects to deliver consolidated production of 144 000 gold-equivalent ounces in 2017, comprising 49 700 oz of gold and 24 000 oz of silver from the El Gallo mine, and 50 000 oz of gold and 3.3-million ounces of silver from the San José mine.

For 2017, total cash costs and AISC at the El Gallo mine are forecast to be $760/oz and $900/oz of gold equivalent, respectively. Total cash costs and AISC at the San José mine are forecast at $780/oz and $990/oz of gold equivalent, respectively.