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.
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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