McEwen Mining Q2 2022 Earnings Report
Key Takeaways
McEwen Mining reported its Q2 2022 results, with production at Fox reaching its highest quarterly level since Q3 2018. Gold Bar's production remained below expectations, while San José recovered from Q1 issues. McEwen Copper advanced the Los Azules project, closing a $15 million private placement tranche.
Fox Complex achieved its highest quarterly production since Q3 2018, producing 11,200 GEOs.
Gold Bar production was below expectations due to carbonaceous material and staffing shortages, but heap leach recovery rates are outperforming the model.
San José Mine's production recovered from COVID-19-related issues experienced in Q1, with attributable production of 19,600 GEOs.
McEwen Copper advanced the Los Azules project, with drilling concluding in late May and an updated study planned for Q1 2023.
McEwen Mining
McEwen Mining
Forward Guidance
The company anticipates continued improvements in mill throughput at the Fox Complex, contributing to strong H2 production. GBS is expected to contribute to Gold Bar production in Q4. The San José mine is expected to meet its production guidance of 69,500 to 77,500 GEOs (49%). Planning is underway for the next drilling season at Los Azules, starting in Q4 2022.
Positive Outlook
- Mill throughput at Fox Complex is expected to continue improving, resulting in strong H2 production.
- Drilling below the mineral resources envelope at Froome has been successful and is expected to extend the mine life.
- GBS is expected to contribute to Gold Bar production in Q4, with most of the ore mined in 2023 expected to be sourced from GBS.
- Heap leach recovery rates at Gold Bar are outperforming the model, potentially increasing leach pad inventory and assumed gold recovery.
- San José mine is expected to meet production guidance of 69,500 to 77,500 GEOs (49%).
Challenges Ahead
- Gold Bar production continued to be below expectations due to carbonaceous material being treated as waste and lower contract mining rates resulting from a staffing shortage.
- Fox Complex experienced mechanical issues at the mill and a COVID-related labour shortage at the start of 2022.
- The presence of carbonaceous material at Gold Bar is negatively impacting production.
- Lower contract mining rates at Gold Bar resulting from a staffing shortage.
- COVID-19-related issues impacted San José production in Q1.