|Rob McEwen, Chairman and Chief Executive Officer McEwen Mining Inc.|
(Kitco News) - McEwen Mining Inc. (TSX, NYSE: MUX) swung to profit in the third quarter of 2013, posting a profit of $3.3 million, or 1 cent per share, compared to a loss of $2.7 million, or -1 cent per share, in last year’s comparative quarter.
Gold equivalent production jumped 45% to 36,494 ounces of gold year-on-year, breaking down to 20,483 ounces of gold and 832,594 ounces of silver, the company said.
Rob McEwen, chairman and chief executive officer of McEwen Mining, was blunt about the past few years for precious metals investors on a conference call late Friday morning.
“The past 24 months for precious metals investors has been brutal, but I feel like we’re nearing a bottom,” McEwen said on the call. “We had a brief and explosive rally in August, which I see as a good indication of a potential for large gains going forward.
“And despite a decidedly ugly mood amongst investors, analysts and market commentators, I believe it is an excellent time to be a contrarian,” he added.
The company posted a solid production quarter, and McEwen maintained that the company will meet its 2013 gold equivalent production guidance of 130,000 ounces.
He also highlighted McEwen Mining’s performance during the mining industry’s race to cut costs.
“While our cash cost production and all-in sustaining costs per ounce are in line with industry averages, we have been out-performing the industry in terms of bringing mines into production,” said McEwen.
The company’s cash cost for gold equivalent ounce produced was $749 an ounce in the quarter. All-in sustaining cost per ounce was $1,081, the company said.
McEwen Mining’s El Gallo 1 mine expansion is ahead of schedule with completion expected near the end of the first quarter of 2014, instead of the second quarter of 2014. The estimated cost to complete the expansion has been reduced to $3 million from $5 million, the company said.
“We have delivered on schedule, and below budget. Financially we are better positioned than most in the industry, we are not under any financial pressure,” said McEwen. “We have no debt. We entered the quarter with $32 million in cash, an amount sufficient to complete the expansion at El Gallo 1, fund out current operations and explorations into 2015, assuming these prices don’t change.”
McEwen also noted that El Gallo 2 silver mine is the company’s focus. The project received two of its three final permits to construct and operate the mine. McEwen said once the final permit is in, the company will be able to begin construction.
In his concluding statement, McEwen said he forecasts a bounce back in metal prices.
“[B]efore the end of 2013, I expect we’re going to see higher gold, silver and copper prices, which will be positive for us, and the industry,” McEwen said. “An important point I’d like to stress is that we have not sold our future earnings to royalty and metals streaming companies, and we have no plans to hedge.”
To contact me regarding a story or feedback, please follow my Twitter account @alex_letourneau
By Alex Létourneau of Kitco News firstname.lastname@example.org