McEwen Mining(MUX) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2024, consolidated production was 135,884 gold equivalent ounces, a decrease of 12% compared to 2023, while the selling price increased by 24% [4] - Adjusted EBITDA rose to $29.2 million or $0.57 per share, up from $7.7 million or $0.16 per share in 2023, marking a 3.8 times increase [4] - The company reported a net loss of $43.7 million, primarily due to equity accounting and expenditures at Los Azules [4] Business Line Data and Key Metrics Changes - Exploration expenses totaled $16.5 million, contributing to an increase in indicated and inferred resources to over 2 million ounces at the Fox complex [6] - The company plans to double production at Fox to 60,000 ounces by 2027, with potential further increases to 130,000 to 150,000 ounces [6] - The investment in the San Jose Mine is expected to yield dividends shortly, marking a positive change after years without dividends [6] Market Data and Key Metrics Changes - The company increased its debt from $40 million to $130 million through a convertible debenture, capitalizing on a premium over the share price at the time [7] - Current cash reserves are approximately $62 million, with significant portions allocated to increasing production at the Fox Complex and Gold Bar [7] Company Strategy and Development Direction - The company is focused on advancing the Los Azules project towards a feasibility study, with an expected completion by June [5][11] - Plans for an IPO of McEwen Copper are contingent on market sentiment towards copper prices, which are currently viewed positively [5] - The company is also exploring opportunities for mine life extension at Gold Bar and Timberline properties, with a focus on permitting and exploration [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing high gold and silver prices as beneficial for operations [6][20] - The company is actively working to ramp up production to take advantage of current high prices, with expectations of increased cash flow [20] - Management acknowledged the challenges of permitting timelines but remains hopeful for progress in both Canada and Mexico [73] Other Important Information - The company has received environmental permits for Los Azules and has completed hydrogeological tests to support sustainable water use [10] - A claim from an indigenous group regarding property in Timmins is being addressed constructively by management [13] Q&A Session Summary Question: Opportunities for mine life extension at Gold Bar - Management is conducting exploration work on Timberline properties and expects to apply for permits soon [16] Question: Future of royalty portfolio - Management is open to expanding the royalty portfolio and may consider monetization when appropriate [19] Question: Impact of high gold prices on mine planning - Management is focused on increasing production at Gold Bar and Timmins to capitalize on high gold prices [20] Question: Timeline for Los Azules approval - Approval is expected within two to four months, with the project being the second metal mining project filed for RIGI [24][25] Question: Financial implications of Los Azules investments - Without Los Azules investments, quarterly earnings would have been slightly positive [34][35] Question: ASIC expectations for 2025 - Projected ASIC is between $1,700 to $1,900 per GEO sold, with expectations of natural decreases over time [40] Question: Concerns about Rio Tinto's participation in McEwen Copper - Management reassured that Rio Tinto cannot squeeze out McEwen Copper due to existing shareholder rights agreements [56][57] Question: Progress at Stock Mine - Management reported that drilling and blasting are complete, with ramp driving expected to start soon [66][68] Question: Update on Mexico operations - Management is cautiously awaiting permits in Mexico, with readiness to move forward once approvals are received [73]