McEwen Mining Inc. (TSX: MUX) reported its financial results for Q3 2024, propelled by an uptick in gold prices and efficient cost management. Revenue rose to $52.3 million, a 36% increase over Q3 2023’s $38.4 million, with the average gold price per ounce sold at $2,499 compared to $1,920 last year.
Gross profit for the quarter increased dramatically, hitting $13.8 million, up 268% from $3.6 million in Q3 2023 and moderate quarter-over-quarter growth compared to Q2 2024’s gross profit of $11.9 million. However, much of this profit boost is attributed to higher gold prices rather than organic cost reductions.
Net loss decreased significantly to $2.1 million or $0.04 per share, down from a net loss of $18.5 million or $0.39 per share in Q3 2023 and a net loss of $4.5 million in Q2 2024. This steep reduction in losses reflects tightened cost control and slightly lower expenditures at its Los Azules copper projects.
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Operating cash flow showed notable improvement, turning positive with $23.2 million or $0.45 per share, compared to negative $2.3 million or $(0.04) per share in Q3 2023 and $18.6 million in Q2 2024. Adjusted EBITDA also surged, increasing 586% to $10.5 million or $0.20 per share from $1.5 million or $0.03 per share in Q3 2023.
At the Gold Bar Mine in Nevada, production increased by 43% year-over-year to 13,640 ounces, driven by higher grades and better recovery rates. Revenue from Gold Bar rose sharply to $33.3 million from $18.0 million in Q3 2023. Cash costs per ounce sold decreased to $1,281 from $1,529, and AISC dropped to $1,822 from $2,160, reflecting cost efficiency gains.
The Fox Complex in Canada experienced a production setback, with output dropping 30% year-over-year to 7,855 ounces, affected by a Q2 stope failure that limited development. Cash costs at Fox rose to $1,572 per ounce, up from $1,078 in Q3 2023, while AISC soared to $1,953 from $1,288. Revenue at Fox declined slightly to $19.0 million, down from $20.3 million in Q3 2023, and quarter-over-quarter revenue slipped marginally from $19.7 million in Q2 2024, reflecting the ongoing operational hurdles.
San José Mine in Argentina, operated by Hochschild Mining and in which McEwen holds a 49% stake, reported a 23% drop in attributable production to 13,684 GEOs, primarily due to lower grades. While revenue for San José was up 9% from Q3 2023 at $70.4 million, driven by high market prices, escalating costs are eroding margins. Cash costs per GEO sold increased sharply to $2,173, up from $1,445, while AISC per GEO jumped to $2,675 from $1,953. This inflation in Argentina—worsened by peso volatility—continues to inflate costs, putting pressure on profitability.
The Los Azules copper project, while promising in scale, remains a heavy expenditure for McEwen. The recent $56 million raised through a private placement for Los Azules aims to fund a feasibility study, set for publication in 2025. Although McEwen Copper now has a market valuation of $984 million, the project remains speculative and will require substantial additional capital to become operational.
McEwen Mining last traded at $12.71 on the TSX.
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