McEwen Mining Posts Q1 Gross Loss, Explores Alternate US Listing

McEwen Mining (TSX: MUX) last night reported its first quarter 2022 financial results. The company reported gold production of just 20,850 ounces, and gold equivalent ounces of 25,100.

Production declined significantly on both a quarter over quarter and year over year basis. On a quarter over quarter basis, production declined by 36.7% from 39,650 gold equivalent ounces to just 25,100 ounces. Year over year, production declined 18.0% from 30,600 ounces. The results put the firm a significant way out from their 2022 guidance of 153,000 to 172,000 gold equivalent ounces of production.

Cash costs for the quarter came in at $1,696 per gold equivalent ounce sold. While expensive, this figure was below previously issued guidance of being between $1,940 and $2,100 per ounce. All in sustaining costs meanwhile hit $2,146 per ounce, which despite again being below guidance of $2,340 to $2,560 per ounce, means that the company lost money on every ounce sold.

Looking to the income statement, the company recognized revenue from gold and silver sales of $25.5 million during the quarter, while production costs related to the sales ultimately amounted to $27.8 million. Combined with depreciation and depletion of $3.7 million, the company posted a gross loss of $6.0 million for the three month period.

With other operating expenses totaling out at $18.1 million, included $11.1 million attributable to advanced projects, the company posted an operating loss of $24.1 million for the three month period. Net loss overall amounted to $19.3 million, or negative $0.04 per share.

Moving to the balance sheet, the company reported cash and cash equivalents of $63.8 million as of the quarter end, while total current assets is pegged at $95.3 million. Accounts payable meanwhile is situated at $42.4 million, with total current liabilities sitting at $59.1 million.

Subsequent to the quarter end, the company also raised $15.1 million via a flow through financing, and a further $15.0 million from an unsecured subordinate promissory note.

As for its trouble related to its New York Stock Exchange listing, the company has indicated that the Board has not approved a reverse share split, and is “seeking other means of remaining on the NYSE.” McEwen also notes that if it becomes delisted by the exchange, it will continue to list on the TSX. Perhaps most notably, McEwen is “exploring transitioning to an alternate exchange or quotation system in the United States.”

Finally, the company provided no update on the search for a replacement CFO following the departure of Anna Ladd-Kruger that was announced earlier this month, nor was a replacement named for the chief operating officer, Peter Mah, whom tendered his resignation at the same time.

McEwen Mining last traded at $0.69 on the TSX.

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