McEwen Mining: Q2 2024 Results

Core Insights - McEwen Mining reported its most profitable quarter since 2016, with a significant increase in revenue and adjusted EBITDA, despite rising production costs [2][3][4] - The company continues to face net losses influenced by McEwen Copper's expenses, but the value of its stake in McEwen Copper has increased significantly [2][22] - Production from operating mines showed slight decreases year-over-year, but the company remains on track to meet its annual production guidance [7][14][16] Financial Performance - Q2 gross profit was $10.8 million, with adjusted EBITDA of $7.2 million, a turnaround from a gross loss of $3.5 million and negative adjusted EBITDA of $5.8 million in Q2 2023 [3][4] - Revenue grew by 38% due to a 21% increase in realized gold prices and a 13% increase in gold equivalent ounces (GEOs) sold [3][4] - The net loss for Q2 was $13.0 million, or $0.26 per share, an improvement from a net loss of $21.6 million, or $0.46 per share in Q2 2023 [4] Production and Costs - Total production in Q2 was 35,265 GEOs, slightly down from 35,658 GEOs in Q2 2023, with production guidance for 2024 set at 130,000-145,000 GEOs [7][29] - Cash costs per GEO sold decreased to $1,532 and AISC to $1,634 in Q2, compared to $2,113 and $2,585 in Q2 2023, driven by higher GEOs sold [9][14] - Gold Bar mine produced 12,297 GEOs in Q2, a 56% increase compared to Q2 2023, while Fox mine faced challenges with a 20% decrease in production [8][14] Exploration and Development - The company invested $5.0 million in exploration activities and $6.7 million in capital expenditures during Q2, focusing on the Grey Fox property and Gold Bar mine [5] - McEwen Copper's Los Azules project is progressing towards a feasibility study expected by Q1 2025, with drilling completed [19][22] - The acquisition of Timberline Resources Corporation is aimed at enhancing McEwen Mining's growth potential and consolidating land around existing projects [20][21] Market Position and Future Outlook - McEwen Mining's stake in McEwen Copper is valued at approximately $457 million, representing 106% of the company's current fully diluted market capitalization [22] - Recent legislation in Argentina aims to attract foreign investment in infrastructure projects, which could benefit McEwen Mining's operations [24] - The company is preparing for a transition from the Froome mine to the Stock project, anticipating limited production by mid-2025 [13]