|
|
Post by Entendance on Mar 11, 2023 8:14:08 GMT -5
|
|
|
|
Post by Entendance on Mar 14, 2023 5:38:52 GMT -5
Stage Is Now Set for Increased Production and Lower Costs in 2023
Welcoming Nuton & Stellantis as Shareholders of McEwen Copper
TORONTO, March 14, 2023 ( GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today reported fourth quarter and full year results for the period ended December 31, 2022.
“2022 was an important transition year for McEwen Mining. Our Fox operation in Timmins showed the largest improvement from 2021, with a 22% increase in gold production, 8% lower cash costs per ounce and steady all-in sustaining costs per ounce. Our operation in Nevada has now transitioned production to our Gold Bar South pit, a new mining contractor has been instated, and production is increasing,” commented Rob McEwen, Chairman and Chief Owner. “Our McEwen Copper subsidiary reached several milestones during 2022 and early 2023, including, building a seasoned Argentine management team, improving critical access to Los Azules with the completion of a second route to site, advancing technical studies, cementing our commitments to government and local stakeholders, and welcoming two strategic investors: Nuton (a Rio Tinto Venture and part of the world’s 2nd largest mining company) and Stellantis, the world’s 4th largest automobile manufacturer and mobility provider.”
Looking Ahead
For 2023, our production guidance is 150,000 to 170,000 GEOs (see Table 1).
Subsequent to the year end, a subsidiary of Stellantis N.V. invested ARS$ 30 billion, and Nuton LLC, a Rio Tinto Venture, agreed to increase its investment by $30 million, to acquire shares of McEwen Copper. Subsequent to these transactions, each of Stellantis and Nuton own 14.2% of McEwen Copper, and McEwen Mining owns 52%. As a result, the implied valuation of McEwen Copper is now approximately $550 million on a 100% basis.
Looking at 2022
Our McEwen Copper subsidiary completed three tranches of financing during 2021-2022, raising a total of $81.9 million for Los Azules exploration and pre-development activities.
In 2022, production was 133,300 gold equivalent ounces (GEOs)(1), slightly below our revised guidance range of 134,600 to 141,600 GEOs due to lower than planned production at the Fox Complex during the final days of the year (see Table 2).
Our 100%-owned mines (Fox Complex and Gold Bar) generated a cash gross profit of $19.2 million(2) in 2022 and a gross loss of $0.5 million. Cash gross profit is calculated by adding back non-cash depletion and depreciation to gross profit (loss).
We incurred advanced project expenditures of $41.3 million at Los Azules net of foreign exchange gains, or, on a gross basis, a $61.1 million contribution to net loss. Under U.S. GAAP, we continue to expense our Los Azules project costs.
Our consolidated net loss in 2022 of $81.1 million, or $1.71 per share, relates primarily to investment of $81.7 million in advanced projects and exploration (including 100% of Los Azules expenses) offset by a gain of $19.8 million on foreign exchange transactions, general and administrative costs of $11.9 million, tax expenses of $5.8 million, and a gross loss of $0.5 million from our operations (see Table 4).
Cash and liquid assets(2) at December 31, 2022 were $46.2 million.
Production costs per ounce for 2022 were $1,276 for cash costs(2) per GEO sold from our 100%-owned mines, representing a decrease of 12% compared to 2021, and $1,688 for all-in sustaining costs (AISC)(2) per GEO sold, representing an increase of 3% compared to 2021 (see Table 3).
We continued to invest aggressively in exploration, completing 181,100 feet (55,200 meters) of drilling at the Fox Complex, 16,900 feet (5,200 meters) of drilling at the Gold Bar Mine, and 73,500 feet (22,400 meters) at the Los Azules project.
A webcast will be held on Tuesday, March 14th at 11:00 am EDT. Please see the details further below.
Notes:
'Gold Equivalent Ounces' are calculated based on a gold to silver price ratio of 77:1 for Q4 2021, 72:1 for 2021, 85:1 for Q4 2022 and 84:1 for 2022. 2023 production guidance is calculated based on 85:1 gold to silver price ratio.
Cash gross profit, cash costs per ounce, all-in sustaining costs (AISC) per ounce, and liquid assets are non-GAAP financial performance measures with no standardized definition under U.S. GAAP. For definition of the non-GAAP measures see "Non-GAAP- Financial Measures" section in this press release; for the reconciliation of the non-GAAP measures to the closest U.S. GAAP measures, see the Management Discussion and Analysis for the year ended December 31, 2022 filed on Edgar and SEDAR.
McEwen Mining shares issued and outstanding at Dec 31, 2021 were 459,187,391 and at Dec 31, 2022 was 47,427,584, following a reverse share split effective July 28, 2022.
Represents the portion attributable to us from our 49% interest in the San José Mine.
Operations Update
Fox Complex, Canada (100% Interest)
Production from the Black Fox Mine stopped in Q4, 2021 and started at the Froome Mine. As a result, production in 2022 increased 22% year over year, costs were slightly lower, and the safety record improved.
In addition, Froome’s production exceeded mill capacity; therefore 120,000 tonnes of mineralized material was stockpiled at the end of 2022, ready for processing in 2023.
The Froome Mine produced 9,870 GEOs in Q4 2022, bringing the full year 2022 production to 36,650 GEOs. This represents increases of 4% and 22% respectively from the comparable periods in 2021.
Cash cost per GEO sold in 2022, was $1,020 and AISC per GEO was $1,465 compared to costs in 2021 of $1,108 and $1,461, respectively.
In recent years, we have invested significant capital in exploration. The principal focus has been on discovering resources adjacent to our existing operations in order to increase gold production, extend the mine life and shorten the payback period of the PEA. During 2022, we incurred $11.4 million in exploration activities at Fox. The exploration budget for 2023 at the complex is $15.0 million.
The Preliminary Economic Assessment (PEA) for the Fox Complex published on January 26, 2022 details our expansion plans for the Fox Complex, to occur after we complete mining at the Froome Mine. As a result of our investment in exploration, we have found sufficient new gold resources that allow for extending the mine life, planning a doubling of gold production and significantly reducing costs per ounce. The economics are attractive, providing for a mine life of an additional 9-years where the average annual gold production is 80,800 oz with average cash costs and AISC per ounce of $769 and $1,246, respectively.
Gold Bar Mine, USA (100% Interest)
A record safety milestone was achieved in 2022, operating for over 1,000 days without a lost-time incident.
Production at Gold Bar was adversely impacted by encountering carbonaceous ore that could not be processed and the delay in mining as we transitioned to a new mining contractor. As a result, the mine production was 39% lower year-over-year with 7,940 GEOs in Q4, and 26,620 in 2022.
Cash cost and AISC per GEO sold were $1,622 and $1,989 for the year 2022. The year-over-year 4% decrease in cash cost per GEO was primarily a result of reduced contract mining costs. AISC per GEO for the year 2022 was 14% higher due to expenditures on reclamation, exploration, plant and equipment, and securing environmental credits for the Gold Bar South (GBS) project.
In 2023, production has shifted to GBS, which does not contain carbonaceous ore, has a lower waste stripping ratio and a higher average gold grade compared to previous mined areas at Gold Bar. The change of the mining contractor in Q4 2022 is expected to drive improved production efficiencies in 2023.
In 2022, $4.8 million was invested in exploration, including drilling 16,900 feet (5,200 meters) of core and reverse circulation drilling focused on targets around the mine, such as near-mine extensions at Cabin North, Pick and potential extensions at the Atlas Pit. The exploration budget for 2023 is $5.5 million.
San José Mine, Argentina (49% Interest)
Our share of the San José mine production was 69,130 GEO in 2022, 10% lower than in 2021. The decrease is attributable to lower processed tonnes due to the impact of COVID-19 and mill availability issues in Q1 2022. Together with a decrease in gold and silver prices in 2022 compared to 2021, the dividend received was only $0.3 million in 2022, compared to $9.8 million received during 2021.
Q4 2022 cash costs and AISC per GEO of $1,321 and $1,701 respectively. These costs were still high but substantially better than in Q4 2021, decreasing by 23% and 17% respectively compared to Q4 2021. Production costs in 2021 were adversely impacted by COVID-19.
2022 cash costs and AISC per GEO were $1,306 and $1,714, an increase of 3% and 7% respectively compared to 2021, as a result of lower GEOs sold partially offset by lower production costs.
McEwen Copper (52% Interest)
On August 31, 2022, McEwen Copper completed a US$81.9 million offering including a $25 million investment by Nuton, a Rio Tinto Venture.
On October 24, 2022, McEwen Copper signed an option agreement with Kennecott Exploration Company (“Kennecott”), a subsidiary of Rio Tinto. By spending $18 million over up to seven years, Kennecott can earn a 60% interest in the Elder Creek property and form a 60:40 joint venture with McEwen Copper.
Subsequent to December 31, 2022, we announced the closing of an ARS $30.0 billion investment by FCA Argentina S.A., a subsidiary of Stellantis N.V. (“Stellantis”) to acquire shares of McEwen Copper and of a second investment of $30 million by Nuton that increases their investment to $55 million. The Stellantis transaction consisted of a private placement of 2,850,000 common shares, and the purchase of 1,250,000 common shares indirectly owned by McEwen Mining in a secondary sale. The Nuton transaction consisted of a private placement of 350,000 common shares, and the purchase of 1,250,000 common shares indirectly owned by McEwen Mining in a secondary sale. The proceeds of the private placement will be used to advance the development of the Los Azules copper project in San Juan, Argentina, and for general corporate purposes. Subsequent to the transactions, Stellantis and Nuton each own 14.2% of McEwen Copper, while McEwen Mining’s ownership is reduced to approximately 52%. McEwen Mining plans to use the proceeds from the secondary sales to reduce its debt by 38% and increase its treasury to fund production growth.
About Stellantis
Stellantis N.V. is one of the world's leading automakers and a mobility provider. Its storied and iconic brands embody the passion of their visionary founders and today’s customers in their innovative products and services, including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep®, Lancia, Maserati, Opel, Peugeot, RAM, Vauxhall, Free2Move and Leasys.
About Nuton
Nuton is an innovative new venture that aims to help grow Rio Tinto’s copper business. At the core of Nuton is a portfolio of proprietary copper leach-related technologies and capability – a product of almost 30 years of research and development. Nuton™ Technologies offer the potential to economically unlock copper sulphide resources, copper bearing waste and tailings, and achieve higher copper recoveries on oxide and transitional material, allowing for a significantly increased copper production.
Exploration Drilling
Drilling has focused on increasing drill hole density to upgrade the copper mineral resource classification to measured and indicated and to better define the payback pit design; providing metallurgical, hydrological, and geotechnical data to support mine design; and testing for potential extensions of the copper resource to the north, south and at depth. Drilling started in January and went to May, when it stopped for the winter in the southern hemisphere, then restarted in October and is currently ongoing. There were 6 drill rigs on site in 2022, and 5 more were added in early 2023.
From 2022 to date we have drilled over 105,000 feet (32,000 meters) in 98 drill holes. Recent results include 236 m of 1.39% Cu and 0.19 g/t Au including 42 m of 2.78% Cu (hole AZ23191) for delineation and 1,052 m of 0.29% Cu including 480 m of 0.42% Cu (hole AZ22174) for exploration.
A total of $61.2 million was spent in 2022 at the Los Azules project to advance drilling, engineering and project feasibility work. The first step is updating the PEA that is expected to be published in Q2 2023.
Road Construction
In 2022, a major advance was made that will accelerate the development of Los Azules with the completion of a new low altitude access road (maximum 11,155 feet ASL), which we share in part with other mining projects, including El Pachón and Altar. The importance of having a second road into the site at 2,000 feet lower altitude means we now have almost year-round access.
Technical Studies
The updated PEA will include all available information on drilling, assay and metallurgical testing obtained during the 2017, 2018 and 2022 exploration seasons. During the quarter we continued work on trade-off studies (related to power supply and the potential for renewables, mining methods and processing options), an updated glacier study, and initial geotechnical field of work for the design of heap leaching, tailings and waste storage facilities. Hydro-geological holes have commenced and complement the works on assessing historical information and re-establishing existing water monitoring locations.
Currently, we are developing a scenario for Los Azules as an open pit mine that initially processes leachable copper content in a heap leach, with a solvent extraction and electrowinning facility to produce LME Grade A copper cathodes. This scenario would greatly reduce capital expenditures as compared to 2017’s PEA using concentrator technology, in addition it would be more environmentally sensitive due to its much lower water consumption and carbon footprint. The project design makes use of renewable energy, reducing overall complexity and improves its financial attractiveness.
Metallurgical studies continue, including with Nuton’s technology for heap leaching of copper ore. Initial results show promising recoveries and reduced acid consumption for the scenario described above.
The Exploitation Environmental Impact Report preparation has been awarded to Knight Piesold, with the drafting of the report underway and on track for submitting to permitting authorities in April 2023.
El Gallo Mine and Fenix Project (100% Interest)
Activities at the El Gallo mine in 2022 were limited to residual leaching as part of closure and reclamation plans. The residual leaching activities of the El Gallo mine, ceased in July 2022.
The capital required to build the Fenix Project was reduced materially in September 2022 with the purchase of a second-hand gold processing plant and associated equipment for $2.8 million. The purchase includes substantially all the major components required to start the Fenix Project. This equipment was estimated at $25.3 million in our Fenix Project feasibility study, published in February 2021.
Multiple strategic alternatives continue to be evaluated for the project including financing options, lower capital costs, potential base metal evaluation.
Conference Call and Webcast Management will discuss our Q4 and Year-End 2022 financial results and project developments and follow with a question and answer session. Questions can be asked directly by participants over the phone during the webcast.
Tuesday
Mar 14 th 2023
11:00 AM EDT
Toll Free (US & Canada): (888) 330-2398
Outside US & Canada: (240) 789-2709
Conference ID Number: 67121
Event Registration Link: conferencingportals.com/event/ZSafhHZi
Webcast Link: events.q4inc.com/attendee/387697089
The webcast will be archived on McEwen Mining's website at www.mcewenmining.com/media following the call.
Technical Information
The technical content of this news release related to financial results, mining and development projects has been reviewed and approved by William (Bill) Shaver, P.Eng., COO of McEwen Mining and a Qualified Person as defined by SEC S-K 1300 and the Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Reliability of Information Regarding San José
Minera Santa Cruz S.A., the owner of the San José Mine, is responsible for and has supplied to the Company all reported results from the San José Mine. McEwen Mining’s joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates other than MSC do not accept responsibility for the use of project data or the adequacy or accuracy of this release.
CAUTIONARY NOTE REGARDING NON-GAAP MEASURES
In this release, we have provided information prepared or calculated according to United States Generally Accepted Accounting Principles (“U.S. GAAP”), as well as provided some non-U.S. GAAP ("non-GAAP") performance measures. Because the non-GAAP performance measures do not have any standardized meaning prescribed by U.S. GAAP, they may not be comparable to similar measures presented by other companies.
Cash Costs and All-in Sustaining Costs
Cash costs consist of mining, processing, on-site general and administrative costs, community and permitting costs related to current operations, royalty costs, refining and treatment charges (for both doré and concentrate products), sales costs, export taxes and operational stripping costs, and exclude depreciation and amortization. All-in sustaining costs consist of cash costs (as described above), plus accretion of retirement obligations and amortization of the asset retirement costs related to operating sites, sustaining exploration and development costs, sustaining capital expenditures, and sustaining lease payments. Both cash costs and all-in sustaining costs are divided by the gold equivalent ounces sold to determine cash costs and all-in sustaining costs on a per ounce basis. We use and report these measures to provide additional information regarding operational efficiencies on an individual mine basis, and believe that these measures provide investors and analysts with useful information about our underlying costs of operations. A reconciliation to production costs applicable to sales, the nearest U.S. GAAP measure is provided in McEwen Mining's Annual Report on Form 10-K for the year ended December 31, 2022.
Cash Gross Profit
Cash gross profit is a non-GAAP financial measure and does not have any standardized meaning. We use cash gross profit to evaluate our operating performance and ability to generate cash flow; we disclose cash gross profit as we believe this measure provides valuable assistance to investors and analysts in evaluating our ability to finance our ongoing business and capital activities. The most directly comparable measure prepared in accordance with GAAP is gross profit. Cash gross profit is calculated by adding depletion and depreciation to gross profit. A reconciliation to gross profit, the nearest U.S. GAAP measure is provided in McEwen Mining's Annual Report on Form 10-K for the year ended December 31, 2022.
Liquid Assets
The term liquid assets used in this report is a non-GAAP financial measure. We report this measure to better understand our liquidity in each reporting period. Liquid assets is calculated as the sum of the Balance Sheet line items of cash and cash equivalents, restricted cash and investments, plus ounces of doré held in precious metals inventories valued at the London PM Fix spot price at the corresponding period. A reconciliation to the nearest U.S. GAAP measure is provided in McEwen Mining's Annual Report on Form 10-K for the year ended December 31, 2022.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the date of this news release, McEwen Mining Inc.'s (the "Company") estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, effects of the COVID-19 pandemic, fluctuations in the market price of precious metals, mining industry risks, political, economic, social and security risks associated with foreign operations, the ability of the corporation to receive or receive in a timely manner permits or other approvals required in connection with operations, risks associated with the construction of mining operations and commencement of production and the projected costs thereof, risks related to litigation, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves, and other risks. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See McEwen Mining's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information regarding the Company. All forward-looking statements and information made in this news release are qualified by this cautionary statement.
The NYSE and TSX have not reviewed and do not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management of McEwen Mining Inc.
ABOUT MCEWEN MINING
McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. In addition, it owns approximately 52% of McEwen Copper which owns the large, advanced stage Los Azules copper project in Argentina. The Company’s goal is to improve the productivity and life of its assets with the objective of increasing its share price and providing a yield. Rob McEwen, Chairman and Chief Owner, has personally provided the company with $220 million and takes an annual salary of $1.
|
|
|
|
Post by Entendance on Mar 15, 2023 6:15:21 GMT -5
McEwen Mining Inc. (NYSE:MUX) Q4 2022 Earnings Conference Call March 14, 2023 Company Participants
Rob McEwen - Chairman and Chief Owner
Perry Ing - Chief Financial Officer
William Shaver - Chief Operating Officer
Michael Meding - Vice President and General Manager of McEwen Copper
Stefan Spears - Vice President, Corporate Development
Conference Call Participants
Jake Sekelsky - Alliance Global Partners
Heiko Ihle - H.C. Wainwright
Mike Kozak - Cantor Fitzgerald
John Tumazos - John Tumazos Very Independent Research
Rob McEwen
Good morning, ladies and gentlemen.
Today, I'll start with a discussion about gold and then our share price performance and follow up with factors driving our future.
With all the uncertainties in the world, many people are asking why the price of gold hasn't climbed much higher. I believe that most investors feel that we have entered into a new era where very low interest rates and massive monetary stimulation are here to stay. And the gold's reputation as a store of wealth is no longer relevant or needed in a world of awash with easy money.
However, as we all know, the unexpected happens quickly. Rising interest rates and an unexpected bank failure are vivid reminders, gold still has a role to play in your portfolio. I suspect more investors will start adding gold and gold shares to their portfolio and they will follow the lead of a select number of central banks who became large gold buyers in 2022. In fact, their purchases were the largest purchases made in the past 50 years by central bankers. Perhaps they too are concerned about holding too much of their reserves in fiat currencies.
So, during 2022, the price of gold outperformed not only gold equities, but also the Dow Jones. Gold increased 1% year-over-year, and at the yesterday's close, it was up 6% since December 31, 2021. During that same period, the senior and junior gold equities as measured by the ETFs, the GDX and the GDXJ registered losses of 10.5% and 15%, respectively in 2022, while the Dow was down 3.7%. But if we look back another year to December 31, 2021, and come forward to yesterday's close, the GDX was down 9.1%, the GDXJ down 16.2%, and the Dow was down 12.4%.
We weren't as lucky in 2022. Our share price was hammered. It was down a painful 36%. Fortunately, it has recovered much of this loss and has increased an impressive 136% since the end of last year, December 31, 2022. And if we look back to December 31, '21, our share price is only down 13.1%, which is less than the GDX decline of 16.2%, and very close to the decline of the Dow Jones Industrial Average of 12.4%.
So, looking at our stock chart, from a technical perspective, it looks very promising. With our share price having broken out on the upside through its 50, 100, 300 day moving averages. Driving this price improvement is our demonstration of improving operational performance, good exploration results, production growth, and lower cost per ounce, along with the growing recognition that McEwen Copper's Los Azules project is a large copper resource with large strategic shareholders, Rio Tinto, the world's second largest mining company, and Stellantis, the world's fourth largest automobile manufacturer and mobility provider.
For 2023, we are looking at a production increase of 12.5% to 27.5% over what we did in 2022, and our costs are expected to decline by about 5%. In 2022, our Fox Complex and Gold Bar mines generated operating profits, but the accelerated activities at our subsidiary McEwen Copper and its Los Azules project and our heavy investment in exploration contributed significantly to our large reported loss.
I will now ask Perry to provide details on how we performed financially in 2022 and more importantly what we see going forward in 2023. He will be followed by our Director and Interim Chief Operating Officer, Bill Shaver, who will comment on our success in stabilizing our mine operations and where we see growth in those operations. Bill will be followed by Michael Meding, our Vice President and General Manager of McEwen Copper, who will outline our progress at Los Azules and the financings we recently completed and the strategic shareholders we have.
Perry, off to you.
Perry Ing
Thank you, Rob. Good morning, everyone.
As Rob mentioned, I'll provide an overview of our fourth quarter and full year results for 2022, and then I'll discuss the impact of the recent Stellantis and Nuton, Rio Tinto transactions for our balance sheet.
These transactions are, obviously, transformative for the company. We'll deleverage our balance sheet in a rising interest rate environment and allow the company to advance its Fenix project in Mexico, as well as continue to explore aggressively in Ontario and Nevada without issuing additional equity, especially at these current gold prices.
For the Los Azules project, these transactions will bring two things. First, it brings on a key partner in the project in Stellantis and strengthens the relationship with another in Rio Tinto. It also provides significant funding to Argentina to continue our aggressive exploration efforts and provide McEwen Copper further flexibility in the timing of a potential IPO.
First off though, I'll start with a review of McEwen Mining's consolidated results for the prior year. It is important to note that we report McEwen Copper as a consolidated entity and reflect 100% of its expenditures on Los Azules on our income statement. As a U.S.-listed company reporting under U.S. accounting standards, we do not have the option of capitalizing the exploration and development costs at the project or any of our other projects for that matter until we have a completed feasibility study and permits for development, unlike many of our Canadian listed peers that often capitalize these costs at a much earlier stage.
In terms of looking at our headline figures, we reported a loss for the quarter and year of $37.4 million and $81.1 million, respectively. This translates into $0.79 per share and $1.71 per share, respectively. As ** for the loss for the year is due to the expensing of costs at Los Azules net of foreign exchange gains realized. A further 25% roughly is due to exploration and development costs at our 100% owned properties. The remainder of the loss figures per share reflect our G&A costs and certain one-time tax charges. I also note that the per share amounts reflect the 10 for 1 share consolidations completed in July of last year, which re-established the company's compliance with NYSE share price listing requirements.
Looking at our 100% owned mines, we generated a cash gross profit of $7.9 million for the quarter and $19.2 million for the full year, respectively. On a gross profit basis, these operations were essentially breakeven, a significant improvement over 2021 performance.
Looking at gold equivalent production, production for the fourth quarter of 37,300 gold equivalent ounces was down just under 10% compared to the fourth quarter of 2021, driven by a decrease of approximately 2,000 ounces at Gold Bar as they transition into the new Gold Bar South pit during the quarter.
Full year production of 133,300 gold equivalent ounces was down approximately 14% year-over-year. Again, the decrease was primarily driven at Gold Bar due to carbonaceous ore issues experienced earlier in the year as well as the transition into Gold Bar South in the fourth quarter of the year.
At the San Jose mine, production was down approximately 10% year-over-year due to issues with COVID and at the mill in the first quarter of 2022. Bill Shaver will cover off these line operations in further detail.
So, the revenue and cost standpoint realized gold prices were roughly unchanged at the $1,800 level for both 2022 and the prior year. Gold prices were slightly lower in the fourth quarter of 2022, but appears to have rebounded well into the first quarter of this year so far.
Looking at costs, we noted significant improvement in cash costs at our 100% owned operations at $1,276 per ounce, which have decreased steadily since 2020, but lower cost reported at both the Fox Complex and Gold Bar compared to the prior year. All-in sustaining costs were largely consistent with the prior year and reflect the cost of bringing Gold Bar South into production at -- in Nevada. At the San Jose mine, both cash costs and all-in sustaining costs increased incrementally over the prior year, reflecting lower production due to the issues I noted previously.
Finally, looking at our treasury, at the end of the year, our cash and equivalent balance stood at $44 million compared to $60 million at the beginning of the year.
Now, I'll turn the attention to the recent transactions with Stellantis and Nuton, Rio Tinto and how it impacts our balance sheet and working capital on a go-forward basis. These transactions all closed within the past three weeks. The transaction included an offering of primary shares directly from the McEwen Copper and a component of secondary shares, which are the shares of McEwen Copper owned by McEwen Mining. The details are summarized in our news release, so I'll just try to encapsulate it at a high level.
Essentially, McEwen Mining, if we look at it as a standalone company, it receives $48 million. McEwen Copper receives approximately ARS30 billion. The price point of these transactions -- the price point at which these transactions are valued from McEwen Copper standpoint has nearly doubled the initial $10 per share amount when we did the investments in June and August of last year. Following these transactions, McEwen Mining's ownership of McEwen Copper reduces from approximately 68% at the end of 2022 to 51.9% today.
In terms of the proceeds to McEwen Mining, we intend to use $25 million of the proceeds to retire the secured debt to Sprott Lending, which will reduce our total debt from $65 million to $40 million, saving the company significant interest costs going forward.
With our enhanced treasury, we believe we now have the funds on hand to build Phase 1 of the Fenix project in Mexico and bring that operation into production within the next year without raising additional capital.
As far as McEwen Copper's treasury, the ARS30 billion is a significant amount. At official exchange rate, this is equivalent to over $150 million. Using less official measures, such as a Blue Chip Swap rate, this is approximately equal to about $80 million. With this round of financing completed, McEwen Copper is well positioned to execute its drilling and development program for the remainder of the year and into 2024, which Michael will outline.
So, based on these transactions, the urgency to complete an IPO in the first half of 2023 has been eliminated.
So, with that, I'll turn the presentation over to Bill Shaver.
William Shaver
Thank you very much, Perry. Good morning, shareholders.
This morning, I'd like to leave you with three messages with regard to our operations. We have improved mining operations at the Fox Complex and are improving milling operations, which will result in higher output and lower cash costs in 2023. At Gold Bar, we have successfully transitioned to a new contractor and we have moved the operations to Gold Bar South pit, which will produce most of the ore in 2023. And based on the first two months of production, we are fully transitioned on both fronts, that being the new contractor and full operations. Cash costs for these operations will be approximately $1,100 per ounce in 2023, which is a significant improvement of approximately 15% from 2022. And lastly, at the Fenix project, as Perry has mentioned, we have moved the plant -- that we purchased last year to the plant site and are at -- in the working stages of planning production in early 2024.
The last quarter of 2022 was challenging, but hard work by all our mining operations helped us overcome these hurdles, making Q4 a reasonable quarter. We are also making progress in stabilizing and improving operations, so we can obtain predictable outcomes for gold production and costs in 2023 and into the future. And so far, this year, we are on track.
On the safety front, in 2022, we had two low severity lost-time incidents in January and March at our El Gallo operations. And for the rest of the year, we were lost-time accident free. At the Fox Complex, we have operated for a full year in 2022 with no lost-time injuries. And at Gold Bar, we recently passed three years without a lost-time injury.
On the environmental front, we -- there were no environmental events recorded in 2022.
Now, I'll turn it over to each of the operations. At the Fox Complex, we had a very challenging year with our mill, which continued to have significant availability issues, which hampered our throughput. This resulted in us missing our gold production last year. At the same time, the mine had an excellent year, which resulted in a stockpile build up to 120,000 tonnes by year-end. This represents a value of approximately $15 million after milling and recovery.
On a positive note, we have now undertaken crushing of the ore at the mine prior to it being shipped to the mill. This lowers the amount of work that the mill needs to do in processing the ore. This decision was followed -- was following a test program to prove this concept last year. We have been able to get our production tonnage through the mill successfully in Q1 of 2023 and are looking forward to improving the throughput when we get the contract crushing plant that we have planned for the remainder of the year at Froome into place. This plant will be commissioned in early April, which will allow us to reduce the size of stockpile we have at the Fox mill, transforming it into gold and therefore cash. We anticipate we will meet our budgeted cash call for the year of $922 per ounce.
At the Gold Bar mine in Nevada, 2022 was also challenging with our issues of preg-robbing ore and our parting of ways with our mining contractor at the start of Q4. Notwithstanding these issues, we transitioned the mine plan successfully to main production in Q4, and we are happy to tell you we have successfully transitioned to a new contractor who is now in full production. We also completed the move to the Gold Bar South pit and are now in full production in this pit. Gold production from Gold Bar has been on budget for the first two months of this year and we're looking forward to a good year from operations.
At the Fenix project in Mexico, we have been able to develop an approach to get the Fenix project in production in a timely manner and at a significantly lower capital cost. We will reprocess the heap leach pad, which has a grade of 0.6 grams per tonne. To accomplish this, we have acquired a used 7,000 tonne per day gold processing plant, which operated recently at a local mining operation. We have moved 80% of this plant to our site. And for Fenix, we will initially assemble only the grinding circuit, the cyclones and the leaching portion of the plant and use the present El Gallo gold recovery circuit. This will reduce the CapEx to approximately $12 million with the potential to increase the throughput as we move into production and prove that this plant will give the required outputs. There are a few minor changes in our permits that are required, but we hope to have this plant operating late this year or early in 2024.
With that, I thank you very much. And now I'll turn it over to Michael for an update on our world-class Los Azules project.
Michael Meding
Thank you so much, Bill.
I will quickly highlight our financing and strategic importance of our new shareholders, then report on our drilling, exploration and study work, and finally mention what we did last year and in 2023 concerning our enhanced organizational and ESG competence in Argentina.
McEwen Copper completed $81.9 million offering, including a $25 million investment by Nuton, a Rio Tinto Venture, on August 31, 2022, followed on October 24, by an option agreement with Kennecott Exploration, another subsidiary of Rio Tinto, for potential earn in of 60% for Elder Creek by investing $18 million over seven years. Subsequent to December 31, 2022, we announced the closing of an ARS30 billion investment by Fiat Chrysler Argentina, a subsidiary of Stellantis, to acquire shares of McEwen Copper and of a second investment of $30 million by Nuton that increased the investment to $55 million.
Now, Nuton is an innovative new venture with the portfolio of proprietary copper heap leach related technologies and capabilities at the core, a product of almost 30 years of research and development. Those have the potential to economically unlock copper sulfide resources and achieve higher copper recoveries on oxide and transitional material. Rio Tinto is the world's second biggest mining company, bringing significant financial and technical resources to McEwen Copper and the Los Azules project.
Stellantis, on the other hand, is one of the world's leading automakers. It produces iconic brands such as Alfa Romeo, Chrysler, Citroen, Dodge, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, Vauxhall and others. And in Argentina, Stellantis produces about 160,000 cars yearly, has about 3,000 employees and is present with manufacturing in Buenos Aires and in Cordoba, Argentina. Partnering with Stellantis is an expression of a paradigm shift for downstream customers of copper. Companies realize that copper is a mineral critical to the green energy and mobility transition. And to my knowledge, it's the first time an automotive company has invested in a copper company.
Subsequent to those transactions, Stellantis and Nuton each own 14.2% of McEwen Copper. McEwen Mining's ownership is now approximately 52%.
Now I'm going to talk about drilling, exploration, site and study work. A total of $41.3 million was incurred in 2022 at the Los Azules project to advance drilling, engineering and project feasibility work. Drilling has focused on increasing drill hole density to upgrade the copper mineral resource classification to measured and indicated and to define the payback pit design better, to provide metallurgical, hydrological and geotechnical data to support mine design and [step-out] (ph) exploration testing for potential extensions of the copper resource to the north, south and the depth of this already vast deposit, which Mining Intelligence ranked in 2022 as the ninth largest undeveloped copper project by copper resource size.
In 2022, drilling started in January and went to May when it stopped for the winter in the southern hemisphere, then restarted in October and is currently ongoing. Since October 2022, there were six drill rigs on site and five more were added in early 2023. From 2022 to date, we have drilled over 105,000 feet, approximately 32,000 meters, in 98 drill holes to increase geological confidence and we see that drill results are generally consistent with our model.
Beyond our robust delineation results, published in January and March this year, we recently published our northern step-out exploration results with 1,052 meters of 0.29% copper including an interval of 480 meters of 0.42% copper, which demonstrates the potential of the deposits to the north. The updated PEA will include all available information on drilling, assay and metallurgical testing obtained until early 2023 and is now slated for publishing during Q2 this year.
We are developing a scenario for Los Azules as an open pit mine that initially processes leachable copper content in a heap leach, with a solvent extraction and electro winning facility to produce copper cathodes. This scenario is more environmentally sensitive due to its much lower water consumption and carbon footprint, and is de risking the project due to lower complexity. The project design makes use of renewable energy, which will allow for low carbon footprint production and improves financial attractiveness. While the PEA as a base case considers economic leaching without Nuton technology, we are excited to be able to test heap leaching using their technology, which could represent a very interesting upside scenario, and initial results are promising.
We are in preparation for the filing of the environmental permit application for the exploitation stage to the San Juan mining authorities. The drafting of the report is underway and on track for submitting it to the authorities in April 2023.
In 2022, a major advance was made that will accelerate the development of the Los Azules project with the completion of a new low altitude access roads, which goes to a maximum of about 11,000 feet or approximately 3,400 meters above sea level, which we share in part with other mining projects, including El Pachon from Glencore and Altar from Aldebaran Resources. The importance of having a second road into the site at more than 2,000 feet low altitude means that we now have almost year-round access to the site. In addition, we upgraded the exploration roads, the former existing roads, to allow for articulated 18 wheelers to get to site, a significant logistics improvement, lowering costs and quickening transports.
With regards to our organization, a strong and experienced management team was set up in Argentina in 2022. With management team members having a total of over 180 years of experience in Tier One operations, the majority in San Juan, Argentina where the project is located.
To further cement our relations with local communities, we opened up our community affairs office in Calingasta in San Juan where the project is located, to have even closer relations with the community we are operating in. And I can report that we are happy to receive ongoing support to develop our project there.
This concludes my report on McEwen Copper. Thank you for your attention and I will now turn it back over to Rob.
Rob McEwen
Thanks, Michael.
I'd like to say I've always felt that Los Azules was a tremendous asset for McEwen Mining. The problem was in 2022, our share price was scraping along the bottom and our treasury was small. But in order to advance Los Azules, we needed a lot of money. And the thought of trying to do a financing when we -- our share price was at historic lows was just not that attractive or possibly feasible.
So, we decided the best way to advance Los Azules and build its value and surface the value for McEwen Mining and allow it to access financing was to create McEwen Copper and fund it separately. And I believe we have been successful in surfacing value. We've attracted the second largest mining company in the world as a shareholder and the fourth largest automobile manufacturer in the world. So, both did extensive due diligence on this, on Los Azules, and just confirming that we do have a very large, very attractive copper projects that will likely be one of the larger copper mines in the world when it is built.
So, last August, we raised $82 million at a share price of $10. And now seven months later, we've completed an even larger financing of $30 million and ARS30 billion at an average price of approximately $18.75. As a result, the implied value of Los Azules has increased from $260 million to $550 million. And that's excluding the 1.25% royalty that McEwen Mining holds on this property. So, now behind every share of McEwen Mining, on a fully diluted basis, is a value of $5.70 from Los Azules. Back in mid-2020, our share price was around $3 a share.
Looking ahead, with our operations performing much better than they have in the past, with prospects of growth at our Fox Complex where we can see the potential to double production and further reduce cost to below $900 an ounce; mining at Gold Bar, we're in a new deposit that is higher grade and lower strip, and assuming the winter doesn't frustrate our plans, we'll be increasing production by better than 50%; and we're looking at the Fox Complex increasing production anywhere from 15% to 30% and keeping its costs around a $1,000 an ounce, we're looking at 150,000 to 170,000 gold equivalent ounces, representing an increase between 13% to 28%.
McEwen Mining trades at a significant discount to its peer group and our objective is to get up and exceed that peer group economic value for gold equivalent ounce. And when we do that, along with continuing to progress our Los Azules project, I think that the value behind McEwen Mining is going to increase and I see a value of somewhere between $7 and $28 a share.
And you might be wondering how I got that number. There are -- and it's really the sum of the parts. We have Los Azules in there. And compared to two other copper projects in the same province in Argentina, we're at a lower altitude closer to the infrastructure, then they are roads powered. Based on the published resources, we have a larger resource and a higher copper grade than either of those two properties, yet, one has a value -- was purchased at $485 million last April and the other one has a market cap of about $1.9 billion.
So, you could see -- I think we are in a position to be somewhere between that $500 million and $2 billion for the value for Los Azules. We have five royalties -- non-producing royalties, 1.25% on Los Azules, 1.25% on McEwen Coppers, other copper project, Elder Creek, which you heard earlier has been optioned by Rio's exploration arm Kennecott Copper, and then we have our gold assets that are trading well below our peer group. So, I think there's quite a bit of room to grow. And I think we're in really good position to push forward on that front.
The investment that we have brought in recently into McEwen Copper, although it reduced our interest -- our ownership interest, it increased the value significantly of that asset. And it allowed us to reduce McEwen Mining's debt and put money in the treasury of McEwen Mining to further the development of our Fox Complex, expand down in Mexico and fund our exploration program.
So, if any of you are interested in buying -- getting exposure to McEwen Copper, right now, the best way to do it is through the shares of McEwen Mining or wait for the IPO of McEwen Copper.
Jake Sekelsky Alliance Global Partners
Hey, Rob and Perry.
Rob McEwen
Hi, Jake.
Jake Sekelsky
Thanks for taking my question.
Rob McEwen
Go ahead.
Jake Sekelsky
So, just starting with Gold Bar, you mentioned the change of contract during Q4. Can you give us any color on the improvements you've seen since making that switch, and if you're able to quantify them at all?
Rob McEwen
Sure. I'll ask Bill to address that question.
William Shaver
Thanks very much for the question. Yes, I guess, there's two aspects to the improvement. The first aspect is that we have a significantly different contractual arrangement with this group. And that, along with their performance, has brought the relationship to a very professional relationship, which is contractually, I guess, not complicated. And that has been nice to see from my perspective and also from the site's perspective.
And they have successfully transitioned in a relatively short time, approximately three months from the time we first started talking to them until we had a contract in place and they were on site. And they are now totally ramped up as the Gold Bar South project, which is a new mining operation. If you were there a year ago, it was a big hill out in the middle of the desert. And now, it's a full-scale mining operation, producing about 100,000 tonnes of ore a month and between 300,000 and 400,000 tonnes a month of waste.
So, it's been a relatively smooth transition. We've had this fall and early winter, I guess, the toughest winter that they've had in the decade in Nevada from the perspective of snow and rain. So, with those challenges and seeing the success of the first two months where we're basically right on budget, I think that tells me we're on the road to seeing better performance as the year goes on. As the contractor becomes more comfortable and also as the amount of workspace that we have in the pits expanding, because right now it's a very small pit, because of the fact that we're just starting.
I hope that answers the question.
Jake Sekelsky
That's helpful. And then, just looking at Los Azules, obviously, looking at the recent financing and increased cash position from McEwen Copper, I'm just wondering if this has changed your thinking on the IPO timeline with a longer cash run. Obviously, I think you have a bit more flexibility and kind of take a market [indiscernible] approach. Any thoughts here would be helpful.
Rob McEwen
Sure, Jake. With the financing -- well, I'll go back a bit. We had thought we'd complete the updated PEA and use it as the basis for going public in this first half of the year. And as you mentioned, with the financing now completed, the urgency to do a financing is no longer there. And so, we'll have the ability to think of it financing later this year or into early next year, but in a more buoyant marketplace.
Jake Sekelsky
Got it. Okay. That makes sense. That's all on my end. Thanks again.
Rob McEwen
Thank you.
Heiko Ihle, H.C. Wainwright
Hey, Rob. Thanks for taking my questions.
Rob McEwen
Hi, Heiko. Go ahead.
Heiko Ihle
[indiscernible] last week. One of our questions or primary question really is the contractor at Gold Bar South. I mean, you got new people there. What kind of efficiencies have they brought with them already to improve production? How much more do you think you can see? And even more importantly, do you think any of those efficiencies can be extrapolated to other sites?
Rob McEwen
Bill, once again, could you jump in?
William Shaver
Yes. So, I guess the potential upside at Gold Bar South is that we will have -- once we get up to full operations, which we're very close to now, we will have the ability to ramp up production to a higher level. I don't think we've completely figured out exactly what that capability is. And one of the things we have to be a bit careful with is that the life of this pit is relatively short. It's between 12 and 18 months. So, we want to make sure that we run the operation is -- in a very efficient manner to make sure that we optimize the -- optimize not necessarily maximize the production out of the pit. And we also have to make sure that we get the right recoveries from the operation. At the same time, at Gold Bar, we also need to expand our leach pad this year, and that work is now getting underway and will be completed sometime in the late summer, August, September.
So those are some of the complicating factors, But, so far, as I mentioned earlier, we're right on budget and on schedule in terms of production. And it's -- now, I guess, the thing we're not absolutely clear on is what the recovery will be from this ore, although early indications are that the recovery will be higher than what we have in our study. So, I think, we're looking good for the future. It's a question of managing all of our operating costs. We need a little bit of cash to do some exploration work. And I think all of that can happen out of Gold Bar to ensure we know where we're going next after Gold Bar South.
Rob McEwen
Heiko, in terms of applying what we're doing at other sites, this contractor is specific to this mine and I don't think they'll go -- we'll be using them at other sites at this point.
Heiko Ihle
No, I didn't mean physically move them over. I meant, more of the techniques. But that was helpful nonetheless.
My next question was going to be pointing out your market cap, still you own 52% of McEwen Copper and that's $286 million right there, which puts a $100 million on the rest of the company. Including net debt, you're still looking at $100 million, $120 million, $130 million or whatever. You did a, I think, terrific job describing how you plan on unlocking all of this earlier on the call, to that I thank you. The one thing I think I'd like to see just a touch more color on is the management time priorities for the senior team for the company. I assume there's at least some people that are going to have some overlap, and how you expect time priorities to be spent, please?
Rob McEwen
Michael has done a wonderful job of assembling a very seasoned Argentinian management team, which are handling much of what's going on in McEwen Copper at Los Azules. And then, we have oversight from Toronto on the financing and also the other property, Elder Creek, which is largely being run -- the program will be run by Rio Tinto's Kennecott copper arm over the next number of years.
Michael, perhaps you could talk about the team you've assembled and their backgrounds?
Michael Meding
Yes, sure, Rob. No problem. So, what Rob has said, is that we set up a local management team. So, in Argentina, we have myself or the majority of my time. I have about 16 years in Latin America and 10 in San Juan in Argentina. I spent about seven years with Barrick being responsible in financing operations for their -- for all of their assets in Argentina.
Then, we have our project director, who's American, but who also relocated to San Juan in Argentina to be directly connected with the team. And then, the next line of management from human resources with a person more than 16 years in Tier One, Tier Two operations to our legal manager, 20 years of experience with Barrick and -- in natural resources. Our environmental and health and safety manager, [20] (ph) years of experience in Tier One operations with Barrick.
Through all the different functions, we have a very, very strong team that is capable of bringing this project from where it currently is over to feasibility, engineering and construction and operation. Rob?
Rob McEwen
Yes. So, Heiko, does that covers your...
Heiko Ihle
Yes, it does. Thank you very much. Appreciate it.
Rob McEwen
Thank you.
Mike Kozak, Cantor Fitzgerald
Yes, good afternoon, everybody. Thanks for hosting the call. A couple of questions from me. First one, you put out 2023 cash cost and ASIC guidance in your December 21 press release last year. But I -- that guidance was noticeably absent from your press release this morning. Was that just an unplanned omission? Or should I interpret that as your previous 2023 cash cost guidance should no longer be relied upon?
Rob McEwen
I'm sorry to say, an omission.
Mike Kozak
Okay. So, you can just say reiterate the cost guidance. Good. All right. Second one, yes, so -- and Michael you mentioned that the PEA at Los Azules is now expected in Q2, which is small delay from Q1 before. Now on the site visit a few weeks ago, it's abundantly clear just how much work is going on there right, exploration drilling, met testing, the geotech drilling, new iterations of the life of mine plan that seem to be changing like almost constantly. So, my question is by pushing the PEA to Q2 from Q1, how much and what type of extra data might you be able to jam into that PEA that you otherwise wouldn't have been able to -- that could presumably improve the project economics there?
Rob McEwen
I was just going to say one aspect is deciding on the base case. We've done a number of optimization runs and we're just finalizing that base case and getting agreement across the board on all of our consultants.
Mike, do you want to add further information?
Michael Meding
Sure. Yes. What we looked at beginning of this year was that we had some interesting additional drilling information that we wanted to include. And this requires update on the work around the mineral resource estimate from the works of the [geostatisians] (ph) over to the geos to the mine planning. And while we said, well, we're going to publish -- we're going to complete the PEA by end of Q1. We now think, okay, we are going to complete it end of this month, beginning of next month depending on the optimization work that Rob just mentioned, because we still think that we can do some further work that will run a couple of weeks later publishing of the PEA, especially in the framework of the obtained financing that gives us more headroom to look for, as Rob said before, a buoyant financial market. So, we have the time we want to make sure that we get the best possible outcome for this PEA. I think we owe that to our shareholders.
Mike Kozak
No, that makes perfect sense. Thanks for that color. Maybe just one follow-up. And you touched on this briefly. I was going to ask on it anyway. But you mentioned that now you've upgraded that exploration road, so that you can get 18-wheeler trucks in there. Can I then assume that if you wanted to you would now be able to winterize the camp? I'm not saying if you will or if you won't, but is that possible now to enable drilling year-round?
Michael Meding
Yes. So, as we had highlighted before, and Rob had mentioned in prior press release, one of the things that is critical for us is access to site. And access to site we have through the exploration road and through the southern road. And on top of that, we upgraded the exploration road, as you said, to bring tractor trailers to site. Now this means that a potential construction of a winter camp, a true four-season camp with fixed installations, is now possible much more efficiently. So, should we decide to go forward and construct this camp, then we could think about winter drilling this season, but we're currently evaluating that and look for what is the most cost effective and efficient solution and also what is required from a study program point of view to be able to complete the feasibility study by end of 2024.
Mike Kozak
Okay. Very good. Very helpful. Thanks. That's all from me.
Rob McEwen
Thanks, Mike.
John Tumazos, Very Independent Research
Thank you very much, and congratulations on all the progress. In your press release, you mentioned 42 meters of 2.78% copper and hole AZ23191 on Los Azules. Could you tell us how deep that was? And whether it was oxide leach mill open pit or underground ores?
Rob McEwen
Mike, care to cover that question?
Michael Meding
Sure. The section is in our press release where you can see where the copper mineralization is. So, best is to open that up. The 174, the exploration one, is mostly primary, and the 3191 is mostly secondary, and then goes into primary.
John Tumazos
Is primary mill ore or leach ore?
Michael Meding
Primary would be either mill ore or using a technology such as Nuton's heap leaching technology or [indiscernible] technology.
John Tumazos
So, it's not an old fashioned leech, but it might be a tomorrow heap leech?
Michael Meding
No.
Rob McEwen
Yes. Today, it's the mill. It would be a mill today. But thinking that there is advances taking place in recovering metals, that -- we're hoping we'll see a heap leach alternative.
John Tumazos
Thank you for clarifying and helping me. Could you just repeat the 2023 cost guidance that was omitted from the release? I didn't get it that quickly.
Stefan Spears
Hi, John. It's Stefan Spears on the line. Yes, so in December, we guided on a consolidated basis, so that's 100% owned operations cash costs of $1,200 and all-in sustaining of $1,500; Gold Bar, we guided cash cost of $1,400, all-in sustaining of $1,680; Fox was $1,000 cash cost and $1,320 all-in sustaining; and San Jose at $1,250 cash costs and $1,550 all-in sustaining.
John Tumazos
Thank you. Concerning the mill at El Gallo and the ramp at Stock, could you give some indication as to what month in 2024 or early or late 2023 that might begin production and what the monthly production rate might be?
Rob McEwen
Bill, could you address that question?
William Shaver
Yes. So, with regard to Fenix, we anticipate that we would have that plant running, say, in the first quarter of 2024. And the tonnes per day is somewhere around 3,500 to 4,000 tonnes a day.
And with regard to Fox and the start of the ramp there, what we hope to be able to do is to construct the portal in the last quarter of this year and then be in production sometime in the first -- late in the first quarter or the second quarter of next year from ore that's relatively close to surface that we have been drilling feverishly over the last couple of months.
I guess, basically what I'm saying is that there is ore very close to surface, which will take something less than three months to develop. And then, we'll continue driving the ramp down towards -- well, towards Stock West, but also with a possibility of heading to Stock East where we also have some ore that's relatively close to surface. And of course, as you probably know the better ore in the Stock West deposit is quite deep anywhere from 200 to 400 meters deep.
John Tumazos
Bill, if I could follow-up. Maybe it's too much to ask you what the gold output could be in 2024 from Stock since you're still infilling the gold to finalize the grade. Concerning El Gallo at 3,500 tonnes per day, how much gold per month or per quarter would that be given the grades and recoveries?
William Shaver
With regard to Fox, we anticipate that we would be able to continue production at the same rate as we are planning for 2023 at Fox. So that's somewhere in the range of about 4,000 ounces per month. And to tell you the truth, I don't remember the production number from El Gallo, but it's [496, 24 times 30] (ph)...
Unidentified Company Representative
1,500 a month?
William Shaver
Yes, it's about 1,500 ounces per month from Fenix project.
Yes. So, it'll -- from a cash generation perspective, Fenix will be a very, very good project with a relatively short payback period, because we've basically worried the capital cost down to something in the range of $12 million.
John Tumazos
Thank you for all those explanations, Michael and Bill.
William Shaver
No problem.
Michael Meding
Pleasure.
Rob McEwen
You're welcome, John.
Unidentified Analyst
Yes. Thanks for such a great conference call today. But question on the Stock. I know you were planning to do quite a bit of drilling and it sounds like from Bill's recent comments that you're planning to drive a shaft down and then start producing ore. I guess, is this at the point where Froome production is I guess continue to go forward? Or is this going to be produced along with Froome?
William Shaver
So that's a really good question. So, just for your interest, we'll do 100,000 meters of drilling this year at Stock with possibly some of that, in fact, not at Stock, but at Grey Fox and a couple of other projects, but a substantial amount of drilling will be completed at Stock. So, conceptually at this point, Froome will continue at least to the first quarter of 2026.
And so, the transition across to Stock will be one where we will be mining at Stock before we're out of ore at Froome. And so, that's where we hope to increase the tonnage in 2024 -- increase the tonnage coming from the Fox Complex, which will increase the total amount of coal that we are producing. However, at this point, I can't tell you what that coal production might look like, in part because we haven't all of the resources put together in mine plans for that period of time. But I would venture that it will be a couple of thousand ounces a month once we get it ramped up.
Unidentified Analyst
Okay. And so, you would -- the idea would be that, I mean, it sounds like Froome is still a fair amount of exploration that it keeps getting extended as far as its terminal date. It sounds like there's still a fair bit of exploration you're planning to do there. And so, would this -- would additional adjustments need to be made to the mill to accommodate this ore? Or is that in your plans for this year to accommodate ore -- the increased throughput since it sounds like that's kind of a bottleneck as of right now?
William Shaver
That's correct. The mill has been a bottleneck. Crushing the ore at the mine has significantly lifted the pressure on that, because we're basically -- the plan going forward there is to basically crush down to 6 millimeters, haul that across and put it directly into the ball mill and leaching part of the circuit.
What we have to determine this year is what the long-term configuration of that mill will actually be. Will we go to crushing at the Stock site as well? Or will we do something innovative at the front end of that plant, such as a larger ball mill, some other kind of tower mill to do grinding? But at the present time, we're -- part of our task this year is to figure out what that long-term solution is and then to implement that so that we can take advantage of not only ore from Froome, but also of course Stock, but also to have a view on what the future might hold at Grey Fox.
Unidentified Analyst
Okay. And one last question. As far as getting back on track in San Jose, I know there was a drop off in production last year. What changes are -- Hochschild or -- and you and Hochschild planning to make to kind of get production back up, or is it planning to operate at a lower level this year?
Stefan Spears
Sure. So, it's Stefan speaking. So, production should rebound. Obviously, they're not anticipating any of the issues they had in early 2020 to be repeated in 2023. And our partner Hochschild is projecting a significantly lower cost as well relative to last year. If you look at Hochschild's guidance, I believe they're guiding around $1,400 all-in sustaining. And yes, so I'd say overall a substantial improvement at San Jose.
Unidentified Analyst
Are you -- will this potentially -- are you expecting dividends? I guess, if production goes where things do rebound, is that something that they'd give guidance on so far?
Stefan Spears
It's certainly something we're expecting. But we don't have the ability to provide any real color on that at this point.
Rob McEwen
Okay. Thank you so much.
So, it was a year of big numbers. Over the past 15 months, large losses that were largely a function of the consolidation of the work being done at Los Azules. And we will expect that to continue as long as McEwen Mining is over 52% of the ownership and up to the feasibility study at Los Azules, which we expect to have at the end of '24. But we consolidate all of the expenditures, as Perry said, that occur in Los Azules and it has an adverse impact on our earnings.
We also have a large exploration program this year that probably will not be as large next year at our other properties and that contributed to the loss. The mines are generating operating profit. So -- and we're looking at increased production and an improved cost per ounce.
I do think the copper assets will play -- continue to play a very large role in building the value of McEwen Mining, but I'm not discounting at all, the precious metal assets catching up and we hope to surpass our peer group valuation.
With that, I'd like to thank everyone for attending and look forward to our next exploration updates.
|
|
|
|
Post by Entendance on Mar 22, 2023 3:18:30 GMT -5
|
|
|
|
Post by Entendance on Apr 1, 2023 4:32:46 GMT -5
|
|
|
|
Post by Entendance on Apr 5, 2023 6:10:53 GMT -5
April 5, 2023 McEwen Copper:
Los Azules – New Assay Results
Significant Infill Intercepts
0.50% Cu over 502 m, including 0.87% Cu over 172 m (AZ22181)
1.00% Cu over 282 m, including 1.40% Cu over 172 m (AZ22186)
0.66% Cu over 500 m, including 0.92% Cu over 276 m (AZ22184A)
TORONTO, 5 April 2023 – McEwen Copper Inc., 52%-owned by McEwen Mining Inc. (NYSE: MUX) (TSX: MUX), is pleased to report the latest assay results from Los Azules, where an ongoing drilling program continues to deliver consistent infill results. Located in San Juan, Argentina, the Los Azules Project has many features comparable to world-class copper-gold deposits in South America, including a thick blanket of higher-grade Enriched (or Supergene) mineralization. Highlights
Hole AZ22183 returned an Enriched zone intercept of 0.87% Cu over 152 m (est. true thickness) which expands mineralization from adjacent high-grade results drilled in prior programs (Figure 1 and 2). In hole AZ22184A, an Enriched zone interval grading 0.92% Cu over 276 m (est. true thickness) occurs in a hydrothermal magmatic breccia within the core of the deposit (Figure 3). This breccia unit acts as a conduit for mineralizing fluids, sometimes forming higher grades within the broader porphyry mineralization at Los Azules.
Hole AZ22181 returned an Enriched zone intercept of 0.87% Cu over 172 m (est. true thickness) and fills a gap between high-grade holes drilled earlier in 2022 (Figure 4).
Hole AZ22186 includes an interval grading 1.00% Cu over 282 m (true thickness of 247 m) in the Enriched zone nearby a historic high-grade‑ intercept (Figure 5).
“We have four different drilling contractors with 13 drills turning,” commented Michael Meding, Vice President and General Manager of McEwen Copper. “This initiative also involves training and optimizing the entire value chain, with the significant engagement of local suppliers and services.”
After resuming the exploration program in October 2022, drilling has now reached the 25,000 meters initially planned and will continue until the end of the field season. Key objectives of the program include:
Increasing drilling density to upgrade the classification of shallower copper resources to measured and indicated categories.
Providing metallurgical, hydrological and geotechnical data for the feasibility study mine design to be completed in late 2024.
Testing for extensions of Los Azules mineralization to the north, south and at depth... |
|
|
|
Post by Entendance on Apr 11, 2023 5:28:53 GMT -5
Canada concentrates ~75% of🌎world's mining companies.
🇨🇦Canada's Ambassador in Argentina Reid Sirrs and 🇦🇷San Juan Minister of Mines Carlos Astudillo visited Los Azules, a worldwide top 10 copper project by resource as ranked in 2022 Mining Intelligence.
|
|
|
|
Post by Entendance on Apr 20, 2023 5:13:52 GMT -5
|
|
|
|
Post by Entendance on Apr 21, 2023 2:31:39 GMT -5
|
|
|
|
Post by Entendance on May 1, 2023 8:19:53 GMT -5
|
|
|
|
Post by Entendance on May 2, 2023 1:55:53 GMT -5
|
|
|
|
Post by Entendance on May 3, 2023 10:11:53 GMT -5
McEwen Mining Q1 2023 Results Conference Call
May 3, 2023
TORONTO, May 03, 2023 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) invites you to join our conference call following the release of our Q1 2023 financials results on Tuesday, May 9th, 2023 at 11:00 AM EDT, where management will discuss our financial results and project developments and follow with a question-and-answer session. Questions for the call can be emailed in advance to info@mcewenmining.com, or can be asked directly by participants over the phone during the webcast.
Tuesday May 9 th 2023
at 11:00 AM EDT
Toll Free (US & Canada): (888) 330-2398
Outside US & Canada: (240) 789-2709
Conference ID Number: 67121
Event Registration Link: conferencingportals.com/event/ZSafhHZi
Webcast Link: events.q4inc.com/attendee/775071696
An archived replay of the webcast will be available approximately 2 hours following the conclusion of the live event. Access the replay on the Company’s media page at www.mcewenmining.com/media. |
|
|
|
Post by Entendance on May 5, 2023 10:33:28 GMT -5
McEwen Copper: Los Azules – New Assay Results
May 5, 2023
Significant Infill Intercepts
231 m of 0.97% Cu , including 188 m of 1.09% Cu (AZ22182A)
550 m of 0.50% Cu , including 216 m of 0.72% Cu (AZ23196) TORONTO, May 05, 2023 -- McEwen Copper Inc., 52%-owned by McEwen Mining Inc.(NYSE: MUX) (TSX: MUX), today reports the latest assay results from Los Azules, where an ongoing infill drilling program continues to delineate copper mineralization in the core of the deposit. Infill drilling serves several purposes: providing better data density to upgrade confidence in the mineral resources, providing material and data for metallurgical, geotechnical, and hydrological studies, and potentially defining higher grade mineralization by drilling inclined holes across vertical structures (such as breccias).
Located in San Juan, Argentina, the Los Azules Project has many features comparable to world-class copper-gold deposits in South America, including a thick blanket of higher-grade Enriched mineralization.
Highlights
Hole AZ22182A intercepted an Enriched zone of 231 m of 0.97% Cu (est. true thickness) and a Primary zone with mineralization that remains "open" at depth.
Hole AZ23196, returned an overall intercept of 550 m of 0.50% Cu (est. true thickness) and included 216 m of 0.72% Cu within the Enriched zone portion.
Drilling completed during the current season to April 30th stands at 32,758 m in 125 holes, having exceeded the 25,000 meters initially planned. Drilling will continue until the end of the field season in May and will resume in October, at the end of winter in Argentina.
More here |
|
|
|
Post by Entendance on May 7, 2023 3:48:56 GMT -5
|
|
|
|
Post by Entendance on May 8, 2023 6:35:32 GMT -5
High Grades Near Surface in Proximity to the Proposed Ramp System to Stock West
Hole SM23-145: 18.9 g/t Au over 9.4 m
Hole SM22-116: 18.7 g/t Au over 3.0 m
Hole SM23-133: 11.9 g/t Au over 2.6 m
|
|
|
|
Post by Entendance on May 9, 2023 3:39:54 GMT -5
TORONTO, May 08, 2023 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) today reported its first quarter (Q1) results for the period ended March 31st, 2023.
“This quarter we completed a series of large financing transactions involving shares of our McEwen Copper subsidiary, which has increased the market value attributable to our copper business to $550 million (for 100%) from $257 million at the conclusion of the prior financing round in August 2022. As 52% owner, McEwen Mining shareholders are benefitting from this value accretion, which validates the strategy we set out in July 2021 to surface value from Los Azules by funding it independently,” said Rob McEwen, Chairman and Chief Owner. “Our 100% owned precious metal mines generated a gross profit this quarter, although McEwen Copper expenses obscures our improved performance on a net basis. We continue to invest in exploration as the most cost-effective means to extend the life of our operations with positive results.”
Financial Results
Notice to reader: Under US GAAP, McEwen Mining consolidates 100% of the accounts of its wholly-owned and majority owned subsidiaries in its reported financial results, including McEwen Copper. Entities over which we exert significant influence but do not control, such as Minera Santa Cruz S.A. (“MSC”), are presented as an equity investment on our balance sheet.
Our gross profit in Q1 was $4.4 million and our cash gross profit(1) was $11.3 million, compared to a gross loss of $6.0 million and cash gross loss of $2.3 million in Q1 2022. The increase in gross profit and cash gross profit directly resulted from improvements in productivity across our Fox Complex and Gold Bar mine operations.
Adjusted net loss(1) was $6.4 million, or $0.14 per share in Q1, compared to an adjusted net loss of $13.1 million, or $0.28 per share in Q1 2022. Adjusted net income or loss is a new non-GAAP financial measure intended to provide readers with a metric to evaluate our 100% owned precious metal business, excluding McEwen Copper (52%) and MSC (49%), which owns the San José mine.
We reported a consolidated net loss of $43.1 million, or $0.91 per share in Q1, compared to a net loss of $20.7 million, or $0.45 per share in Q1 2022. The largest contributor to our net loss was $31.9 million spent on exploration at our Los Azules project, which we expensed under US GAAP. We also incurred $5.9 million in exploration expenses at our Fox Complex and Gold Bar mine operations.
Liquidity and Capital Resources
Consolidated cash and equivalents increased to $190.8 million(2) at the end of Q1 with the completion of a primary and secondary offering of common shares in McEwen Copper. These transactions brought in 30 billion Argentine Pesos from FCA Argentina (a subsidiary of Stellantis) and $30 million from Nuton (a Rio Tinto venture).
McEwen Mining received $47.5 million in available funds from the secondary sale of 8.7% of McEwen Copper, which will be used to reduce our senior secured debt, for project development spending and general corporate purposes. The balance of the funds raised from the primary issuance will be used by McEwen Copper for Los Azules project spending, predominantly drilling and other feasibility-oriented work programs to advance the project towards an updated Preliminary Economic Assessment (PEA) in Q2 2023 and a Feasibility Study by the end of 2024.
Total debt was $65 million at the end of Q1. Management intends to reduce this amount by $25 million through the repayment in full of the portion of the senior secured credit facility owed to Sprott Lending.
Gold & Silver Production
Production from our three operating mines was 30,400 gold equivalent ounces (GEOs) (3) in Q1, compared to 25,200 GEOs in Q1 2022. Production guidance remains 150,000-170,000 GEOs for 2023.
Individual Mine Performance (See Table 1):
Fox performed well in the quarter and achieved its budgeted production at costs in-line with our guidance for the year. This is a significant improvement over Q1 last year when the mine struggled with effects of the pandemic and equipment failures. The Fox team’s diligent efforts have resulted in much improved operating performance and cash generation.
Gold Bar continued to ramp-up mining from the Gold Bar South deposit in Q1, and successfully placed 15,000 contained gold ounces on the heap leach pad. Extreme snow and rainfall in the southwestern United States this winter resulted in flooding around Gold Bar, temporarily restricting access to the mine. Despite these challenges the Gold Bar team kept costs under control and remained focused on delivering ore to the heap leach pad and production is steadily increasing. Mining resumed at the Pick pit in April, which will continue to add gold inventory to the heap leach pad, contributing to the increase of production in the balance of the year.
San José usually has a lower production in the beginning of the year because of holidays closure and a planned annual shutdown for maintenance during Q1. This quarter’s production was additionally hindered by negative grade reconciliation to the mine model, which is attributed to variability around the margins of the mined veins. From a financial perspective, lower production in Q1 was offset by higher than budgeted realized gold and silver prices, which allowed the San José team to adjust their plans for 2023 by accelerating development and definition drilling to access new mining areas. McEwen management visited San José in April to review the 2023 plan and exploration activities.
Exploration
Exploration results from flow-through funded drilling at the Fox Complex were published in a separate press release on May 8th; drilling will continue during the rest of the year, focusing on prospective zones at the Stock property and the Grey Fox property.
Infill and exploration results from Los Azules were published on January 26th, March 6th, April 5th, and May 5th. Drilling at Los Azules is expected to continue until the end of May and then resume in October, after the South American winter.
Gold Bar exploration activities were focused on defining the boundaries of our oxide resources at the Pick deposit, and on testing the Benmark target, located immediately southwest of the leach pad. Drilling at the Cabin South target is expected to be underway shortly. If results are successful in these areas, they each have potential to positively impact the mine plan in the near-term.
San José’s drilling programs to define additional resources and reserves have a long history of success due to a high vein density, aided by good geophysical response from hidden veins. Exploration drilling to discover and extend veins is occurring in several areas with success to the North of the mine, where two potentially economic veins (Maura NW and Maura SW) are returning good results. Drilling at the Telken target in the South of the property, and adjacent to Newmont’s Cerro Negro mine, is planned for Q3.
McEwen Copper
We own a 52% interest in McEwen Copper Inc., which holds a 100% interest in the Los Azules copper project in San Juan, Argentina, and the Elder Creek exploration project in Nevada, USA.
On February 23, 2023, we closed an ARS $30 billion investment by FCA Argentina S.A., a subsidiary of Stellantis N.V., and on March 15, 2023, we closed a $30 million investment by Nuton LLC, a Rio Tinto Venture and existing McEwen Copper shareholder. Subsequent to these transactions Stellantis and Nuton each own 14.2% of McEwen Copper.
During Q1, McEwen Copper spent $31.9 million to advance a major drilling campaign involving up to 15 rigs, ongoing road maintenance and improvements, hyperspectral scanning of the entire drill core library, technical studies necessary for the updated PEA, environmental baseline work, project optimization and trade-off studies including renewable power supplies and mining methods, and metallurgical test work.
On April 14, 2023, the Los Azules Environmental Impact Report for Exploitation was submitted by McEwen Copper to the Argentinian authorities for review.
Drilling at the Elder Creek project conducted by Kennecott Exploration Company, a subsidiary of Rio Tinto, is expected to begin in May. Kennecott has the option to earn a 60% interest in Elder Creek by investing $18 million over a maximum of seven years.
Management Conference Call
Management will discuss our Q1 financial results and project developments and follow with a question and answer session. Questions can be asked directly by participants over the phone during the webcast.
Tuesday
May 9 th , 2023
at 11:00 AM EDT
Toll Free (US & Canada): (888) 330-2398
Outside US & Canada: (240) 789-2709
Conference ID Number: 67121
Event Registration Link: conferencingportals.com/event/ZSafhHZi
Webcast Link: events.q4inc.com/attendee/775071696
An archived replay of the webcast will be available approximately 2 hours following the conclusion of the live event. Access the replay on the Company’s media page at www.mcewenmining.com/media. |
|
|
|
Post by Entendance on May 10, 2023 2:07:31 GMT -5
McEwen Mining Inc. (MUX) Q1 2023 Earnings Call
Company Participants
Rob McEwen - Chairman and Chief Owner
Perry Ing - Chief Financial Officer
William Shaver - Chief Operating Officer
Michael Meding - Vice President and General Manager, McEwen Copper
Stefan Spears - Vice President, Corporate Development
Jeff Chan - Vice President, Finance
Conference Call Participants
Jake Sekelsky - Alliance Global Partners
Marcus Giannini - H.C. Wainwright
Joseph Reagor - ROTH Capital Partners
John Tumazos - Very Independent Research
Rob McEwen
Welcome and good morning, ladies and gentlemen. I’ll make this quick. We have gotten our mojo back. From September 1 of last year to last Friday, May 5th, our share pricing has increased by 200%. That represents an increase 4 times greater than the GDX and the GDXJ indices, 11 times greater than the price of gold and 15 times greater than the price of copper, and isn’t it about time and we still have much to regain.
This outperformance was driven by a number of factors, which you’ll hear in greater detail as we go on today. But the big ones were a ARS30 billion investment in McEwen Copper by Stellantis, who is the world’s fourth largest automobile manufacturer and also an investment by the world’s number two mining company, Rio Tinto, their technology arm. They increased their investment by $30 million to $55 million.
Also factoring in was our increase in gold production and decreasing cost per ounce at our Fox and Gold Bar mines. We also had encouraging drill results from Fox and Los Azules, and we benefited from an improving gold, silver and copper price.
We’re going to be improving our balance sheet, deleveraging it by reducing our debt by 38% on Friday of this week and I believe the best is yet to come.
I will now ask Bill Shaver, our Director and Chief Operating Officer, to speak of our operations and growth projects for next year. And just before we start, he will be -- after Bill, will be Stefan Spears, our VP Corporate Development, he’ll speak about our exploration progress, followed by Perry Ing, our CFO; and Jeff Chan, our VP, Finance, to address our finances, and we’ll conclude with Michael Meding, our VP and General Manager of McEwen Copper. Bill?
William Shaver
Thank you very much, Rob. Good morning, shareholders. This morning, we are happy to report our operational and financial results for Q1, which have improved dramatically over last year and are expected to continue to incrementally improve based on changes we are making in our operations.
On the safety front, our safety record continues to be the cornerstone of our plans going forward. Our three mining operations worked without a lost time incident in Q1. We did have a minor medical aid in February when a diamond drill contractor employee cut his finger on a sharp piece of metal. But other than that, there were no injuries to people or contractors working for the organization.
On an operational front, at the Fox Complex, we have continued our operational improvement process, which has resulted in a higher gold production and lower costs in Q1. We processed 17,500 tonnes of ore and produced 12,929 ounces of gold in the first quarter versus 68,000 tonnes of ore processed and 7246 ounces in Q1 of 2022. Thus, a very significant improvement of 57% on tonnage and 78% on ounces.
Costs have also improved by approximately 30% over Q1 of 2022. We now have cash cost of $1,088 and all-in sustaining cost of approximately $1,300 per ounce.
The Fox Complex is basically continuing a path of incremental improvement that began in Q2 of 2022 and have made steady improvement since that. We hope to continue this improvement over the remainder of the year.
At Gold Bar, we completed the transition to a new contractor in January as planned and on schedule. We also moved the operation, the open pit operation that is run by the contractor to the Gold Bar South pit, which produced most of the ore in Q1. In part of this transition was done because of the very heavy snowfall that we had over the winter in the Pick pit, which is at a higher elevation.
In Q1, we placed 578,600 tonnes of ore on the leach pad versus a budget of 459,000 tonnes. We produced 6,456 ounces of gold versus our budget of 8,952 ounces. The cash cost per ounce sold was $1,491 and is a significant improvement from 2022 of $284 and ASIC was $17.25 versus $26.33 in Q1 of last year.
The shortfall of 2,496 ounces was due in part to the slower beaching rate of the Gold Bar South ore, but also due to a record snow over the winter, as well as a very wet and rainy spring. The very heavy snowfall over the winter led to high -- very high snow melt along with very heavy spring range, which resulted in a diluted gold grade in our solution that goes back and forth from the leach pad to the gold recovery plant. This had some impact on our recovery.
The very high spring runoff also interrupted production and site access for approximately three days in the quarter. During that time, our two access roads were flooded and getting to the site involve boat and helicopter for a few days. With the help of our own people and our contractors were able to mitigate the impact of these unusual weather events.
We are working diligently to get our production back on track and we have returned to work in the Pick pit in mid-April where the ore has much better leaching kinetics, which will allow the gold to be released much quicker. This will improve our gold production in the remainder of the year.
In Mexico, at the El Gallo Phoenix project, we have moved the plant that we purchased last year to the site and are planning for production in early 2024. We are presently working on three important aspects of the project. Number one, the permitting modifications required by the revised plant configuration and production rate, the construction, engineering and scheduling for the project and the financing for this construction.
As you might remember, we will reprocess the heap leach pad, which has a grade of 0.6 grams per tonne. To accomplish this, we acquired a use 7,000 tonne per day gold processing plant, which was recently operating at another mining operation. We have moved this plant to our site and we will assemble the front end of the plant, meaning the grinding cyclones and leaching portion of the plant and used the present El Gallo gold recovery circuit when we start production.
This -- the acquisition of this equipment reduces the capital cost for the project down to approximately $12 million with potential to allow us to increase production as we move into -- as we move to production. We see this plant operating later this year or early in 2021. In all of our operations, we are continuing our progress in stabilizing and improving operations so we can obtain predictable outcomes for gold production and cost in 2023 and into the future.
Thank you very much and now I’ll turn it over to Stefan Spears for an update on our exploration efforts.
Stefan Spears
Thank you very much, Bill. I’ll start by highlighting exploration results from projects in the Timmins region. We have a large exploration and resource delineation program ongoing at the Stock property, the site of our mill, as well as the past producing Stock Mine.
To-date, in 2023, we’ve completed 42,800 meters or approximately 140,000 feet of diamond drilling. Yesterday, on May 8th, we published an exploration update, which you can reference for complete results and diagrams.
We had a positive outcome from our drilling near surface up plunge along the historic Stock Mine trend. This mineralization occurs just below the bedrock surface very close to the proposed ramp access to Stock West and our mill, with strong gold grades and widths in eight holes. Two highlights are 18.9 grams per tonne gold over 9.4 meters, including 103 grams per tonne over 0.9 meters. And in the second hole, 18.7 grams per tonne gold over 3 meters, including 53 grams per tonne over 1 meter, results are true width and uncut.
Drilling also returned positive results from the Stock Mine trend down plunge below the historic mine workings, as well as step-out drilling at Stock West, where additional intersections carrying visible gold are currently in the lab.
We also encountered a potential new hanging wall zone above Stock West, which returned an intersection of 5.7 grams per tonne gold over 5.9 meters true width. Exploration drilling in Timmins will continue throughout the year at Stock with drilling also allocated to Grey Fox to follow up on positive results received last year.
Moving to Nevada. Exploration is just getting ramped up after the winter and a very wet spring period. We look forward to reporting on progress at several near-mine exploration targets during our next call.
In Argentina, the McEwen Mining management team visited the San Jose joint venture mine in April to tour the site and received presentations on the production plan for 2023 and exploration progress. Drilling to define new veins is ongoing with a focus in 2022 and 2023 on two veins to the north of the mine.
The first called Mora Northwest located approximately 750 meters north of the nearest underground infrastructure, had an initial resource defined in 2022 with additional potential along strike.
The Mora Southwest located approximately 250 meters from the nearest infrastructure, returned encouraging drill results, such as 390 grams per tonne silver and 1.8 grams per tonne gold over 1.8 meters true width and the local geological team believe this vein has good potential for additional resource growth.
In the second half of this year, drilling is planned at the Telken North target, which is adjacent to the Cerro Negro mine, targeting the extension of the Northwest trending vein system that exists on Newmont’s property. We intend to highlight exploration opportunities and results from San Jose more actively in our disclosure going forward.
Finally, moving to Los Azules. We have published four drilling updates so far in 2023. Most of the drilling has been devoted to delineating the deposit and improving our knowledge of the geologic controls metallurgy, rock quality, hydrology, et cetera, which is essential as we move to more advanced engineering studies.
The area around Los Azules deposit remains underexplored with numerous geophysical targets never tested by drilling. One deep exploration hole testing a geophysical anomaly to the north and below the deposit was published on March 6th. It was highly successful returning an intersection of 1,052 meters of 0.29% copper, including 480 meters grading 0.24% copper.
Copper grade in this hole increased below 500 meters with grades up to 1.46% copper over 26 meters in early mineral porphyry with coat stainless, which is typical of the high grade core of the resource.
Thank you. I’ll now turn the call over to Perry Ing, CFO.
Perry Ing
Thanks, Stefan. I’ll provide a brief overview of our first quarter results for 2023, following on from Bill’s overview of our operating results. Jeff and I will then discuss our liquidity and the impact of the Stellantis and Nuton Rio Tinto transactions, which closed late in the first quarter.
So starting with McEwen Mining’s consolidated results. We reported a GAAP net loss of $43 million or $0.91 a share, which compares to a GAAP net loss of $20.7 million or $0.45 per share for the same period in 2022.
Given that the reported loss is primarily a function of the Los Azules exploration expenditures at McEwen Copper, we have introduced a new metric this quarter of adjusted net earnings loss, which is a non-GAAP measure focusing on the results of our 100% owned gold operations and excludes the results of both McEwen Copper and the San Jose mine.
Accordingly, our adjusted net loss on this basis was $6.4 million or $0.14 per share for the quarter, compared to $13.1 million or $0.28 per share in the first quarter of 2022. Our adjusted net loss improved significantly despite acceleration spending on our 100% owned properties, nearly doubling from $3 million to $6 million this quarter.
This demonstrates a significant improvement in our operations, particularly at the Fox Complex during the quarter. This is reflected also in the improvement in our reported gross profit and cash gross profit figures on a quarter-over-quarter basis.
So looking at our operations and characterizing our results, build in a thorough job reviewing our operational successes and challenges at our properties. I’ll also add continuing on from Stefan’s discussion about San Jose that, at the San Jose mine, first quarter production was generally disappointing.
It came in at 23,000 gold equivalent ounces, which while slightly ahead of the first quarter of 2022, was significantly below budget expectations with resulting all-in sustaining costs coming in over $200 above realized gold equivalent sales prices.
This is primarily a result of lower grade process as they experienced a high level of mining dilution and also processed lower-grade stockpiles because of -- or shortfalls from underground mining. The average gold and silver grades processed were approximately one-third lower than the comparative period in 2022. Tonnage to the plant was 108,000 tonnes, which was slightly ahead of the 103,000 tonnes processed in the comparative period.
We will work with the team at San Jose and our partner, Hochschild Mining, to monitor the execution of the drilling and recovery plan that I’ve outlined to better define the mining resources and access new areas of ore, not in the original mine plan, as Stefan outlined. This should have a positive impact for San Jose both in 2023 and 2024.
Adding the results of the three operations together leaves us consolidated production of roughly 30,000 gold equivalent ounces for the quarter, compared to 25,000 ounces for the first quarter of 2022.
Again, while slightly ahead of where we were last year, we still have a fair amount of work ahead of us to meet guidance for the year. But based on the plans outlined by Bill, we believe we could do so and can also deliver these results profitably, especially at current gold prices.
From a liquidity standpoint, the transactions, which Rob outlined leaves the company in much better shape in terms of cash and working capital as evidenced by our balance sheet. We are currently in the process of retiring $25 million with our -- of our debt with front lending, which should close in the coming days, as Rob mentioned, and this will further deleverage our balance sheet.
Now I’ll turn it over to Jeff Chan, our VP Finance.
Jeff Chan
Thank you, Perry. During Q1, we raised a total of $185 million, consisting of private placements and secondary common share sales. These transactions brought in ARS30 billion from FCA Argentina, a subsidiary of Stellantis and US$30 million from Nuton, Rio Tinto Venture.
McEwen Mining as a standalone company received $47.5 million in consideration of its 8.7% interest in McEwen Copper. The balance of the funds will be used by McEwen Copper to advance the Los Azules Copper project. The pricing of the recent transaction implies the market value for our copper business of $550 million.
From an accounting perspective, the cash raise is fully reflected on our balance sheet, hence the reported cash balance of $190 million. As we described in Note 4 to our financial statements, as of March 31st, McEwen Copper held ARS29.5 billion at an official exchange rate of ARS209 to $1.
We are prudently managing our Argentine peso balances to mitigate inflation and devaluation risks, investing in low-risk liquid securities. As a result, our investments in Argentina yielded $9 million in interest income during Q1 against $7 million in devaluation impact on our peso balances.
I’ll now hand things over to Michael Meding to discuss our Los Azules Copper project.
Michael Meding
Thank you, Jeff. In McEwen copper, we had a remarkable quarter this year. In a challenging market, and as mentioned by Rob, we have been able to win the support and investment of Stellantis, the world’s fourth biggest car maker by an equity investment of ARS30 billion, obtaining a stake of 14.2% in McEwen Copper.
This is remarkable, because to my knowledge, it is the first time a car makers invested in a copper developer. This is testimony to a trend shift in the mining sector and validates the value that Los Azules and Stellantis represents.
Car makers realize the eye-watering amount of natural resources required to shift toward a greener energy metrics and electromobility and the need to secure supply. Los Azules presents a unique opportunity, a future mine that is aimed to be a paradigm shift in the mining world.
A mine entirely built towards minimized environmental and carbon footprint with low water consumption aiming to produce copper cathodes that have direct industrial applications also in Argentina and are very attractive from an ESG perspective.
It is remarkable because it is strategic beyond the essential but near financing. Stellantis produced about 160,000 cars in Argentina, half of which are exported, has approximately 24,000 employees in Argentina direct and indirect. 24,000 families that depend on Stellantis, which produced in Buenos Aires and Córdoba.
Urban centers that do not have the same appreciation of mining as the more distant mining provinces in Argentina. Now we’ll have a significant amount of exposure to our copper development, not only through the sharing of future tax income, but also directly through Stellantis participation in McEwen Copper. With Stellantis, we now bring mining to those urban centers, an essential component of our ESG strategy.
Rio Tinto, the world’s second biggest mining company through the copper technology arm Nuton, also took the opportunity to invest another ARS30 million acquiring a percentage, which now makes them equal shareholders to Stellantis, owning 14.2% of McEwen Copper.
As highlighted by Jeff, this together means that the implied market value of McEwen Copper increased from approximately $260 million to $550 million, while the share ownership of McEwen Copper decreased from 68.1% to 51.9%. This represents an overall value accretion of 80% for McEwen Mining shareholders from $160 million to $290 million. Rio Tinto has ratified the value of McEwen Copper and our important of Los Azules project.
So far, we have an environment where there was a scarcity of drill rigs, secured 15 drill rigs. This, including four new Boart Longyear LF160, we own ourselves and part of which we dedicated to local supply development. We have drilled 34.4 kilometers in 127 holes or 11 -- 111,500 feet so far and have delivered and communicated strong inflow results in this year’s press releases with more to come.
Stefan has mentioned in their exploration update our promising results regarding the stabbed exploration, showing the potential to increase to further out our already vast deposits laterally and at depth. We have improved our existing roads. Our exploration road now can support 18 wheelers, which we have successfully tested with commercial loads to the site for the first time since the project inception. This is important because it makes future logistics so much more cost efficient.
Argentina has become relatively more attractive compared to jurisdictions such as Chile or Peru. It shares thousands of kilometers of border in the Andes Mountains ridge were significant copper deposits are located.
Testimony to this increase of interest in Argentina, especially Sao Juan, was the attendance of our event at PDAC, where we invited the Vice Governor of San Juan, the Mining Minister of San Juan and the Ambassador of Argentina to Canada and representatives of the financial sector and which was very well attended.
This, as well as the recent visit of the Canadian Ambassador to Argentina at which together with the Minister of Mines of San Juan we travel to our projects. We demonstrated our progress at the Los Azules project in Andes, the first project the Ambassador visited in this province. Both indications that Canada and Argentina are interested in working together to bring mining projects forward that play in a central role in the future energy transition.
We have made remarkable strides also on the permitting side and filed for our environmental permit application for exploitation with San Juan authorities. And event, including the Governor, the Minister of Mines and representatives of the National Secretary of Mines and Legislators on the 14th of April and which is the primary permit application to furthering our projects.
Another milestone was the recent Memorandum of Understanding we signed with YPF Luz. YPS is one of the biggest companies in Argentina and the majority state-owned national oil, gas and energy companies.
This memorandum signed between McEwen Copper and YPF Luz sets out the framework to deliver appropriate solutions to provide 100% renewable energy for the operation of Los Azules and San Juan, aimed to prepare Los Azules for carbon neutrality by 2038.
Our competent management team in Argentina with powerful local experience is prepared to drive the project call the Build Our Vision, a green, sustainable mine with an accelerated time line.
Chemical exploration on the other hand, the Rio Tinto Company, is expected to start drilling at our Elder Creek properties during this month. Kennecott is slated to invest $18 million over seven years to be able to earn 60% of Elder Creek.
Thank you for your attendance. I will turn the conversation back to Rob.
Rob McEwen
Thank you, Michael. Okay. Operator, we’re going to go to a question-and-answer period. And we have two questions that came in online. The first one from Glenn Wesure [ph], the shareholder. He asked what measures, we’re taking to minimize the potential losses from a declining Argentinian peso. I’ll ask Michael to reply to this question.
Michael Meding
Sure. So we invest in low-risk and highly liquid investments in Argentina. In Q1, we gained about $9 million of interest income versus a devaluation of $7 million. So we made about $2 million versus the devaluation of the peso, which is a good outcome. We also invest the lower amount in CDRs about ARS4 billion to further our potential upside versus the devaluation of the peso.
Rob McEwen
Thank you, Michael. Glenn also asked another question about contractors. We read in the 10-Q that we use drilling contractors and the reason for that is they have the expertise that we lack to do the exploration drilling. We also -- he also wondered about the contractor at Gold Bar and that has always been part of the Gold Bar plan. It was a way to reduce the upfront capital development costs. We have a new contractor there that is working very well for us.
The next question came in from Valeria Bittencourt [ph] of FP Wealth Management in London, England, on behalf of her Managing Director, Brent Fitzgerald. Three parts. So, one, is there a price target available via research/analyst report. There are fur currently out there and they range from $9.50 a share to $11, two $11, one at $10.50 and one at $9.50. And they are alliance partners, H.C. Wainwright, ROTH and Cantor Fitzgerald.
The second question, will we be looking to raise additional capital by the issuance of new shares this year? The answer is no, assuming current gold and silver prices stay where they are. And we haven’t looked at going outside. There could be M&A activity or other projects. But at the moment, all of the projects that Bill mentioned will be financed by internally generated funds.
The third question had to do with our share structure, asking, are there any restricted shares due to mature? There are none, warrants, all of the warrants that are outstanding, of which there’s 1.9 million warrants. They’re out of the money at the moment and there’s options of about $0.4 million. We have no convertible debt or convertible financing proposed. And the last number for the short position was 1.7 million shares.
And I don’t believe there are any other online questions at this point. Operator, are there any -- do you have any questions in the queue?
Jake Sekelsky, Alliance Global Partners
Hey, Rob and team. Thanks for taking my question.
Rob McEwen
Hello, Jake.
Jake Sekelsky
So you’ve had some exploration success at Fox recently. Can you just remind us the size of the exploration program there for this year? And maybe just what’s left as far as flow-through dollars still that you have left to spend in 2023?
Rob McEwen
Bill probably have to handle the exact number, but the flow-through commitment is around US$ 14 million, of which we’ve spent...
William Shaver
We’ve spent about…
Rob McEwen
$4 million.
William Shaver
Yeah. $5 million -- at the end of April about $5 million. So we still have $10 million -- approximately $10 million to spend through the remainder of the year. And at the present time, we have seven drills operating and basically growing approximately 10,000 meters per month.
Jake Sekelsky
Okay. That’s helpful. And then just switching gears to Los Azules. You mentioned in the release that the environmental impact report was submitted. Are you able to just provide any high level color on sort of what that process looks like in the time line of events on that?
Rob McEwen
Sure. Michael.
Michael Meding
Sure. Jake, so start on the 14th of April. What is going to happen now is the following. The Minister of Mines is having a commission of an additional 14 different entities will evaluate the different aspects of the report, and then hopefully, within a relatively short period of time, issued the approval for us to be able to basically start with construction and future operation of this mine.
To give you a comparison, Josemaria from Lundin Mining’s evaluation took about a year and it’s a little bit more of a complex project than ours. So to give you a frame of reference in terms of timing.
Jake Sekelsky
Okay. Very good. That’s all on my end and thanks again and congrats on a strong quarter.
Rob McEwen
Thanks, Jake. Next question?
Marcus Giannini, H.C. Wainwright
Hey. It’s actually Marcus calling in for Heiko. Thanks for taking my question. So in terms of McEwen Copper, with the implied value you mentioned of $550 million and your 52% ownership, this yield, $286 million value that the original McEwen still has, which is well over half your market cap. The idea McEwen Copper was to surface value and you can easily argue that that’s exactly what’s happened thus far. So, I guess, just looking ahead, is there a price for which you’d sell the remaining 52%. And again, it’s a decent chunk of your market cap. So while you lose an important asset, you’d also be able to return a significant amount of cash to shareholders?
Rob McEwen
That’s an interesting question. We haven’t pondered the sale of it, but we have wondered about the value. There are two public values out there for copper projects within the same province we’re in in Argentina, the Josemaria property that Lundin bought for $485 million. And there’s the Filo project that has a market cap in excess of $2 billion.
We are larger than both of those projects. Our copper grade is higher than both of those projects. We are located at lower altitude than those projects and we are closer to infrastructure, power and highways. So I look at it, the value is somewhere between what we’ve just come up to and the $2 billion. So that will give you a range.
Marcus Giannini
Okay. Fair enough. Yeah. Those are fair comps for sure. And then just changing gears here a bit. When you described your gross profit and cash gross profit, you talk about improvements at Fox and Gold Bar, we’re now essentially halfway through Q2. Can you give some color on what exactly led to these savings? What improvements were undertaken? What continues to bear fruit in Q2 and what are your expectations for the remainder of the year? Is there anything else you’re working on implementing?
William Shaver
So, this is Bill Shaver. Yes. We’re -- at Fox, we’re actually working on a process that will increase the tonnes through the mill by 2 -- something in the order of 1,400 tonnes per day. And we’re doing that in a very organized fashion.
In the last quarter of last year, we did a bunch of test work on crushing at the mine and delivering to the mill material that was already crushed. That experiment was successful and we have now, I guess, engaged a contractor to crush all of the ore that we’re producing at Froome down to even a slightly smaller size than we did the test work on and we’ll -- so we’ll be able to feed that into the mill at a slightly higher tonnage.
So we’re only this month at a point where we’re starting to put that process into place and the results will be what the results turn out to be. But we anticipate that, that’s going to increase the throughput in the mill by approximately 10% and we have some more optimistic views of what that might be. But I think 10% is a pretty conservative number.
So that would increase the gold production by, say, a little over 1,000 ounces per quarter. So although that doesn’t sound like a great a great amount of money in a year, it’s going to result in $10 million. So that’s kind of the plan going forward.
In the case of Gold Bar, we’re finding the leaching time on the Gold Bar South are to be a little bit longer than we anticipated. Though it’s still early days, because the first ore from Gold Bar South was put on the leach pad in the middle of the winter.
So the leaching is always better once the weather gets warmer, and of course, we’ve had a lot of rainfall and snowfall which resulted in dilution of our leaching capabilities. So we anticipate that getting us back into the Pick pit will allow us to put or on to the pad that leaches more quickly and hopefully bring that back into line.
So optimistically, I would say, we’re going to improve in both of those sites and we’re going through the process of getting Phoenix constructed and that we’ll be able to produce something in the order of the cash flow out of that process, which we won’t see until next year is estimated at something in the order of $10 million per year.
So I think there’s lots of potential upside in operations that were incrementally changing in a manner that has very low risk and very low capital impact to effect. So that’s kind of where the planning is going.
Marcus Giannini
Okay. Perfect. Yeah. That was an incredibly comprehensive answer. I appreciate all the color. That’s it for me. Thank you.
William Shaver
Thanks.
Rob McEwen
Thanks, Marcus.
Joseph Reagor, ROTH Capital Partners
Hi. Thanks for taking the questions. I guess some of the things I want to touch on were already hit on, but a few left. First, Los Azules, what’s the total budget for this year?
Perry Ing
It’s $132 million.
Joseph Reagor
And will that all be expensed, I guess, through the income statement?
Perry Ing
Yes.
Rob McEwen
Yeah.
Joseph Reagor
Okay. Then shifting over to Gold Bar, the processing rate in the first quarter is about 580,000 tonnes just shy of that. Do you guys feel that that’s sustainable with the new contractor. Obviously, it’s quite a bit better than the old contractor on a quarterly basis, but is it sustainable, was there any factors that led to a higher processing rate in Q1? Could we do better than that? Just any color there would be great.
William Shaver
Yeah. So I would say that, because of -- well, to be perfectly honest, I haven’t looked at that particular issue. However, in the first quarter, there was a significant amount of snow and rain, and of course, operating in the winter is a little more challenging than the rest of the year. So I would say we did a really nice job in the first quarter.
So far this quarter, we’re basically pretty much on schedule to continue at something over 100,000 tonnes per month to 120,000 tonnes per month. So I don’t see that in a lot of jeopardy. There is slightly more stripping to do as we move forward with Gold Bar South, just because it’s kind of a -- the ore body there is partly a kind of a pretty high hill and so the stripping in the early part of the mine life is very low and as you get lower, the stripping increases.
But on the other hand, the waste that we’re stripping is basically moving something like between like between -- like about a quarter of a mile. So it’s not moving very far. Where the ore is, in fact, from Gold Bar South of the mill is about 5 miles. So that is a long way.
But the road is relatively level for the most part. So the truck speeds are very good. The road is about 50 meters wide. So there’s no issue with traffic control or anything else and there’s no -- except for trucks and utility vehicles and so and there’s no other traffic on that road. So I think you can expect that the performance going forward will be the same.
Joseph Reagor
Okay. Thanks. And then last thing for, Rob, on MSC, I mean, it seems like an annual thing lately that there’s like a quarter that’s rough happened to be the first quarter last year as well. it seems that that’s preventing any cash dividends from coming out. Do you have any kind of long-term thoughts about that asset or how you can start actually getting some cash out of it?
Rob McEwen
Good question, Joe. Traditionally, the first quarter is the toughest quarter since the mine started, which is holidays and starting up. We were down there. A number of us were down there in the last month, looking at their operations. They have a large land package. They’re still finding new veins.
And we’re optimistic with the silver price where it is today. They should be able to generate attractive earnings. We’re hopeful we’ll see a dividend coming out of it. We have made some observations and providing them some comments how they might be able to help that or improve the operations, just having a different set of eyes looking at it.
So I think it still has -- it has an interesting life ahead of it. We have asked them if they want to sell it. They said, not at a price that we were ready to, jump at. And we asked them if they wanted to buy our share and they didn’t offer a price that was attractive that we want to jump on.
So at the moment, it’s as it stands. There is Newmont just below it that has a processing facility in a larger mine and some of their veins appear to come right up to the boundary of our property. And they might think that, that might be an operation they should add to their package. But at the moment, nothing in the works.
Joseph Reagor
Okay. Thanks for the color. I will turn it over.
Bill Powers, Private Investor
Yes. Hi, Rob. Thanks for taking my call and congrats to all of you guys on a quite a good quarter. I was very impressed. But my question today really revolves around the Stock development, the ramp that was put in the most recent presentation and that was put out in the news release. And I guess, my question would be is, if you could just give us a little view of the timing of the ramp, the cost, as well as what this might bring production at the total Fox Complex up to should -- Froome continue to produce once the -- it goes into production in the Stock Mine?
William Shaver
Yeah. So thanks very much for the question. And I guess, the answer is a little bit complex, but let me just take a stab at it here. So, first of all, we have the Froome mine, which eventually will run out of ore. And we are doing an extensive review of the Froome operation at this point to absolutely put a pin in when we’ll run out of ore at the Froome mine. And so based on the gold price that we have today, the number of tonnes that will come out of Froome will be more than we have in our resources and reserves at this point.
So what we’re trying to do is kind of thread the needle between the transition from Froome to the transition to Stock. And at the same time, we’re making improvements on the milling process that we have in place at Stock to without spending significant amounts of money and with the help of a contractor crushing the material to push that tonnage up as high as we can get it.
So and then it’s a question of managing cash flow and expenditures. But we’re in the midst now of putting a study together in terms of the capital and operating cost of the Stock Mine. And we hope to start that ramp at Stock in -- as early as late in the third quarter, so that we might perhaps get underground before winter sets in.
And then we’ve been fortunate enough to find some ore pretty close to surface. And there’s also some ore in the old parts of the Stock Mine where there is potential ore. And of course, we’re finding ore all the way down to 400 meters and 600 meters below surface.
So that’s kind of the transition that we’re seeing. So it’s improved the Stock mill get as many tonnes out of Froome as we can, start mining at Stock as soon as reasonable and keep our cash flow in a positive position through all of that. And I think we see a way to do that, which kind of checks all the boxes and gets us transitioned without any ore production.
In other words, we’re not going to have a miss between the end of Froome and the start-up Stock. So there’s lots of balls in the air, but I think we’re at a position where we’re in the midst of making that into a more concrete plan that we can get back to the shareholders with sometime probably late in the second quarter.
John Tumazos, Very Independent Research
Thank you. I’m just following up on the previous gentleman’s question to Bill. And I’m thinking of the Odyssey ramp that Agnico is moving into this year, where they have 98,000 ounces of reserves, but they say they’re going to produce about 50,000 ounces. And as you move into this ramp without a lot of documentation, but you expect to hit ore given the drill results you’ve had. Which month might there be gold ounces and how many tonnes per month do you think is going to be taken from the ramp to the mill. I’m not asking you able to predict the gold output or the gold grade. If you just tell us how many tonnes you’re going to take out of the ramp that might be ore, then we can make some guesses on our own?
William Shaver
Yeah. So we don’t have a definitive number on what that’s going to look like. And it’s in part because we’re still in the midst of taking the diamond drill results and converting those into resources and reserves and putting mine plans to them.
So I guess what we’re hoping is that, we will be able to at least continue without interruption at the tonnage that we’re putting through the mill at the present time, which is something like a little over 100,000 tonnes a quarter.
And we’re doing, as I said a little bit earlier, significant work to try and understand what the upside is in the processing plant. If we do the crushing down to a final -- smaller size so that we optimize the work that can be done by the crushing plant, and at the same time, relieve some of the work that’s being done in the ball mills so that we can put more tonnes through the mill.
The other aspect of this, which is not obvious in anything we’ve said so far is that the ore at Stock is a little bit softer than Froome. So the work index at Froome is somewhere between 21 and 23, and we expect the work index at Stock to be something in around 16 or 17 range.
So that will allow us to have a mill that where the tonnage is a little higher than we’re thinking about now. So that’s the process that we’re going through in order to try and figure out what the optimum looks like eventually.
John Tumazos
So, Bill, is the ramp in Stock 3 meters by 3 meters or 5 meters by 5 meters or tell us a little bit about how big the ramp is?
William Shaver
Well, there -- I mean, there is no ramp up Stock at the present time. So the planning for the ramp now is probably a ramp that’s somewhere in the order of 4.8 meters by 4.8 meters. And the reason that it can be a little bit smaller than a traditional ramp is the fact that we have the old Stock mine there, which will allow us to connect to the old parts of the mine to give us ventilation as we drive the ramp down. So that basically means that the vent tubes that we have to carry with the development of the ramp, don’t have to be 2-foot, 4-foot diameter vent tubes. It will -- they’ll be smaller, and therefore, the heading can be a little bit smaller.
John Tumazos
So, how many stopes do you think you’re going to try to develop and how many tonnes per day might come out of the ramp, 200 tonnes a day, 400 tonnes a day?
William Shaver
No. I think…
John Tumazos
What are you guessing?
William Shaver
Yeah. I mean I think we’re looking for the same kind of tonnage that’s coming out of Froome today. Basically, Froome has probably three stopes involved in operations on a continuous basis at different points in the mining process being drilling, blasting, marking, so on. And so I think you’re going to look at something like 1,200 tonnes a day coming out of the Stock per annum.
John Tumazos
Super. Super. That’s very exciting. And I apologize for asking you these detailed questions a couple of months before you’re going to have all the answers.
William Shaver
Well, we don’t have all the answers. We’ve got all the questions. And so there’s -- all of those things numbers I gave you, put a little question mark beside them and -- but that’s part of what you have to do at this phase is to try and understand what does an optimization look like. And it will again depend on the resources that we find and how fast we can drive the ramp and all of those wonderful things.
John Tumazos
Thank you.
Rob McEwen
Thanks, John. Thank you everyone for attending and the rest is yet to come. Thank you.
|
|
|
|
Post by Entendance on May 23, 2023 15:48:35 GMT -5
McEwen Mining Reduces Debt by 39%
May 23, 2023
TORONTO, May 23, 2023 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) (“McEwen Mining” or the “Company”) today reported that it has repaid $25 million of its senior secured debt payable to Sprott Resource Lending (“Sprott”) and Sprott is no longer a lender.
Prior to the repayment, the Company had $50 million in senior secured debt and a $15 million unsecured promissory note, for a total debt of $65 million. Concurrent with the repayment to Sprott, the senior secured debt was amended and restated in the amount of $40 million bearing monthly interest at 9.75% per annum, and the promissory note was extinguished. The Company’s sole lender is now an entity owned by our Chairman and Chief Owner Rob McEwen.
As a result of the debt reduction, McEwen Mining’s annual borrowing costs will decrease by approximately $2.2 million or 36%.
Certain provisions of the amended and restated credit agreement have been modified, with the approval of the independent directors, specifically:
The schedule of principal repayments will now begin with amortization of $1 million per month starting on January 31st, 2025, with the remaining principal due at maturity on August 31st, 2026;
The loan can be repaid at any time, in any amount, without penalty;
The security package has been amended to exclude certain non-core assets; and
Certain other covenants, restrictions and events of default have been deleted.
The reduction of debt was funded through the secondary sale of McEwen Copper shares to FCA Argentina S.A. (Stellantis) and Nuton LLC, which closed in February and March 2023, and raised $47.5 million in gross proceeds to McEwen Mining.
|
|
|
|
Post by Entendance on Aug 10, 2023 5:25:21 GMT -5
August 10, 2023
TORONTO, Aug. 10, 2023 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reported its second quarter (Q2) and half year (H1) results for the period ended June 30th, 2023.
“The year started with operational challenges at both Gold Bar and San Jos é . San Jos é appears to have turned the corner and we are confident that the plan in place for Gold Bar will do the same. Fox Complex has delivered another solid quarter and we expect even better results in the second half of the year. We thank our operating teams for their hard work. The story at Los Azules keeps getting better and better! With a strong financing, an updated Preliminary Economic Assessment (PEA) showing robust economics, unparalleled partners in Rio Tinto (through Nuton) and Stellantis, and potentially game changing copper leaching technology, we could see Los Azules provide a model for how the mine of the future should look,” said Rob McEwen, Chairman and Chief Owner.
Second Quarter Highlights and Building Our Future:
Fox Complex: Record daily mill throughput of 1,250 tonnes per day, generating $6 million in cash gross profit in Q2. Sustained higher throughput and improved grade expected to result in stronger production and margins in H2.
San José: Production increased 54% with cash costs/oz declining 24% compared to Q1, as the revised mine plan continues to be executed.
Gold Bar: Higher mining rates and gold grades, together with faster recovery and lower strip ratio from the Pick deposit setting stage for improved production and margins in H2/23 and beyond. Higher costs/oz during Q2 included the additional costs associated with the heap leach pad expansion, which is expected to be completed in Q3.
Fenix Project: We continue to advance towards a formal construction decision. During the quarter, we initiated a sonic drilling campaign, advanced permitting applications and engaged a project manager.
McEwen Copper: PEA for the Los Azules copper project issued in June 2023 with NPV8% of $2.7 Billion and payback period of 3.2 years, assuming a copper price of $3.75/lb. Based on the financing closed in Q1/23, our 52% ownership of McEwen Copper has now an implied value of $285 million, which is equal to 67% of our current market capitalization.
Early retirement of $25 million or 39% of our outstanding debt in Q2; reduction of debt service of $2.2 million annually.
We continued our safety track record of no lost time incidents at our 100% owned operating mines during Q2.
Exploration update across the portfolio to be delivered later in Q3.
Mr. McEwen continued, “At McEwen Mining, quarterly production from our mines delivered a marked improvement in terms of ounces produced over Q1. At the Fox Complex its AISC was 8% lower than the comparable period in 2022. Gold Bar continued with high costs per ounce, however we expect to see much better performance in H2 as a result of a lower strip ratio and increased mined ore grades. At San José production got back on track in Q2. We anticipate all our mines will deliver stronger results in H2 and finish the year in line with our production guidance. We are advancing two important development projects, at the Fox Complex in Canada and at the Fenix project in Mexico, both designed to extend the mine lives by 9 years.
Our biggest single asset with the greatest near-term potential to increase our share value is our 52% owned subsidiary McEwen Copper. Given my long association with gold, I view non-gold deposits in terms of their gold equivalent value. McEwen Copper’s most advanced property is its large Los Azules copper project. On June 20 th we published an updated PEA for Los Azules. Using the numbers of this PEA and a copper gold ratio of 500 to 1 (500 lbs of copper currently have the value of 1 oz of gold), Los Azules has a resource base equivalent to a 75 million ounce gold deposit with annual gold equivalent production of 800,000 oz in the 1 st 5 years, 644,000 oz over the following 22 years, low production costs of $535/oz cash costs and $820/oz AISC, generating the payback of its $2.5 Billion initial capex in 3.2 years (based on a $3.75/lb copper price). Notably, these impressive results are achieved from extracting the economically mineable portion representing just about one third of the current resource estimate, as determined by the present PEA.
Moreover, by implementing a sustainable approach, this potentially multi-generational asset could become a model for mines of the future. Compared to conventional copper mines, Los Azules is designed with a much lighter impact on the environment, emitting 1/3 the carbon initially to zero by 2038, utilizing ¼ the water, 100% powered by renewable energy sources, and producing sustainable copper cathode.
Investing with us in the future of Los Azules are two global companies, Rio Tinto and Stellantis (through their respective subsidiaries), the world’s 2 nd largest mining company and the world’s 4 th largest automaker, each owning 14.2% of McEwen Copper.
The updated Los Azules PEA surpasses the 2017 assessment in key areas, including: 1. Superior financial metrics, 2. Larger copper resource estimate, 3. Significantly lower water consumption and greenhouse-gas emission, 4. Substantial decrease in electricity consumption and 5. A design optimized for permitting and development in the next 5 years. We are now focused on our next milestone, which is to deliver a final Feasibility Study by late 2024 - early 2025.
We have invested heavily in exploration and the results have been most encouraging, particularly at Los Azules, where the resource base increased by 27%, and at the Fox Complex, where the results allow us to see the potential for significant increase in mine life. These large investments in exploration are treated on our income statement as expenses and are the primary reason for our consolidated loss this quarter. We will continue to report losses in McEwen Copper until Los Azules has reached a stage where costs can be capitalized under US accounting rules.”
Financial Results
Notice to reader: Under US GAAP, McEwen Mining consolidates 100% of the accounts of its fully owned and majority owned subsidiaries in its reported financial results, including McEwen Copper. Entities over which we exert significant influence but do not control (such as Minera Santa Cruz S.A. [MSC], the operator of the San José mine) are presented as an equity investment on our balance sheet.
Our cash gross profit(1) was $4.8 million and our gross loss in Q2 was $3.5 million, compared to a gross profit of $4.2 million and cash gross profit of $7.7 million in Q2 2022. Cash gross profit or loss excludes the non-cash depreciation included in the gross profit or loss. During Q2, gross loss was impacted by lower grades and longer recovery times at our Gold Bar mine operations, which are expected to reverse in H2, based on anticipated 25% higher mined grades, faster recoveries and a 33% lower strip ratio. This should result in higher production and improved margin expansion. Our gross loss was also impacted by an increase in non-cash depreciation rates at Gold Bar resulting from a reduction in our mineral reserve base at the end of Q4 2022. Our Fox Complex operations generated a $6.0 million cash gross profit in Q2, and we expect to build on this momentum during the second half of the year, as we mine higher grade material and maintain our higher mill throughput.
Adjusted net loss(1) was $13.0 million, or $0.27 per share in Q2, compared to $1.9 million, or $0.04 per share in Q2 2022. Adjusted net income or loss is a new non-GAAP financial measure intended to provide readers with a metric to evaluate our 100% owned precious metal business, therefore excluding McEwen Copper, with its copper assets (52% owned), and MSC, operator of the San José mine (49% owned). Together with our gross loss described above, we also invested $7.1 million in exploration and advanced project expenses, primarily at our Fox Complex operations, where we continue to develop our Stock West project. Exploration expenditures at Fox Complex are expected to decrease in the second half of the year as we complete our flow-through expenditure commitments.
We reported a consolidated net loss of $21.6 million, or $0.46 per share in Q2, compared to $12.5 million, or $0.26 per share in Q2 2022. This was driven by an investment of $28.5 million in our Los Azules project to complete our 2022-2023 drilling program and publish our updated PEA, which we expensed under US GAAP. As we progress towards feasibility at Los Azules, we expect to continue to report losses until we meet the US GAAP requirements for capitalization, which typically require a feasibility study establishing a mineral reserve estimate and permitting. As a result of our $130 million investment in exploration since 2021, we have increased the implied valuation of McEwen Copper on a 100% basis from $257 million to over $550 million.
Liquidity and Capital Resources
Consolidated cash and equivalents increased to $84.6 million(2) at the end of Q2 from $39.8 million at the end of 2022. Additionally, investments totalled $29.2 million, primarily in equity securities held in Argentina, to mitigate the impact of high inflation and devaluation. Consolidated working capital was $92.0 million at June 30, 2023.
During Q2, we decreased our total debt by $25 million to $40 million and entered into the Third Amended and Restated Credit Agreement effective May 23, 2023. As a result, our interest expenses associated with long-term debt were decreased by $2.2 million per year.
In addition, the Company’s 52% ownership of McEwen Copper has an implied market value of $285 million, based on the last financing round with Rio Tinto (through Nuton LLC) and Stellantis (one of the world’s leading automakers and owner of 14 iconic brands including such names as Alfa Romeo, Chrysler, Dodge, Fiat, Jeep and Maserati).
The Company also maintains a portfolio of royalties including a 1.25% net smelter royalty at both our Los Azules and Elder Creek properties, together with three other royalties on properties in Nevada and in Santa Cruz, Argentina.
Gold & Silver Production
Production from our three operating mines was 35,625 gold equivalent ounces (GEOs) (3) in Q2 and 66,100 GEOs in H1, compared to 36,218 GEOs in Q2 2022 and 61,200 GEOs in H1 2022. Our consolidated production guidance remains 150,000-170,000 GEOs for 2023. Details on how we plan to achieve guidance are outlined in the section below.
Individual Mine Performance (See Table 1):
Fox Complex: Timmins, Canada
Fox performed well in the quarter and achieved its budgeted production. Mill throughput in Q2 was 31% higher than in Q4 2022, reaching a record 1,250 tonnes per day, an important achievement by our team in Canada, as we aim to consistently maintain higher throughput. Cash costs were slightly higher than our annual guidance due to moving to contractor crushing in early 2023, however we expect AISC to remain in-line with guidance as a result of reduced capital expenditure requirements. Gold grades are expected to be approximately 10-15% higher in H2, which will also bring down our per ounce costs for the second half of the year.
Gold Bar: Nevada, USA
Despite the historic difficulties at Gold Bar, we are confident in our team’s plan at the mine to ramp up gold production during H2, which will also result in lower costs and increased profitability. This will be achieved by mining 25% higher grades by prioritizing material from the Pick open pit, which also allows for a 33% lower strip ratio and faster leaching recoveries. Based on these factors we expect Gold Bar to meet production guidance of 42,000 to 48,000 GEOs for the full year. With the anticipated improvements to gold production, we also expect to lower cash costs/oz and AISC/oz in H2, to meet our annual guidance figures.
San José: Santa Cruz, Argentina
San José had a difficult start to 2023 as seen in our Q1 results. The team at San José has been quick to respond by implementing operational changes that resulted in production increasing 54% and cash costs/oz decreasing by 24% in Q2 as compared to Q1. This was achieved through mining and processing more tonnes containing higher average gold and silver grades. As a result, San José’s revised production targets were met in the quarter, and production guidance of 66,000 to 74,000 GEOs(4) for the full year is reiterated. Although San José’s cash costs and AISC per ounce sold for the full year are forecast to remain 10-20% above guidance due to the difficulties encountered in Q1 and the additional investments required to de-risk mine production, the team deserves congratulations for all their efforts in identifying the operational issues and putting in corrective measures.
Exploration
Exploration results from the Fox Complex were published in a separate press release on May 8th and an additional update is planned in early September.
Gold Bar exploration activities are focused on discovering near mine resources. Two drills will be active on the property in H2, with one drill outside the mining area testing the Wall Fault, which is believed to be a primary feeder fault for the mineralization at Gold Bar.
McEwen Copper
Infill and exploration results from Los Azules were published on April 5th, May 5th, July 12th and Aug 1st. The drilling campaign at Los Azules ended mid-June and is expected to resume in October, after the South American winter.
Additional assay results from the recently completed drilling campaign will be published over the next months. All drilling information received after the December 31, 2022 cut-off date for the PEA will be incorporated in our upcoming feasibility study.
We own a 52% interest in McEwen Copper Inc., which holds a 100% interest in the Los Azules copper project in San Juan, Argentina, and the Elder Creek exploration project in Nevada, USA. The last financings completed by McEwen Copper with Stellantis and Rio Tinto (Nuton) gave the company an implied market value of $550 million. This translates to $285 million for McEwen Mining shareholders’ 52% ownership. This value is equal to approximately 67% of the current fully-diluted market capitalization of McEwen Mining.
During Q2, McEwen Copper spent $28.5 million to advance a major drilling campaign involving up to 15 rigs, ongoing road maintenance and improvements, hyperspectral scanning of the entire drill core data, technical studies necessary for the updated PEA, environmental baseline work, project optimization and trade-off studies (including renewable power supplies and mining methods), and metallurgical test work. The Environmental Impact Report for Exploitation was submitted during the quarter to the Argentinian authorities for review, and the team is now working on advancing Los Azules to the Feasibility Study level.
At the Elder Creek project operated by Kennecott Exploration Company, a subsidiary of Rio Tinto, six exploration drill holes have been completed with results pending. Kennecott has the option to earn a 60% interest in Elder Creek by investing $18 million over a maximum of seven years.
PEA Highlights
Please refer to our June 20, 2023 news release for summary results of the Los Azules PEA update. The technical report has been filed on SEDAR and on the Company’s website: www.mcewenmining.com/investor-relations/reports-and-filings/default.aspx
Base Case Highlights (Nameplate capacity of 175 kt per year of copper cathode production, $3.75/lb Cu price)
Updated independent mineral resource estimate, which increased to 10.9 billion (B) lbs. Cu Indicated (0.40% grade) and 26.7 B lbs. Cu Inferred (0.31% grade)
Average annual Cu cathode production of 401 million lbs. (182,100 tonnes) during the first 5 years of operation, and 322 million lbs. (145,850 tonnes) over the 27-year life of the mine (LOM)
Total Cu recoverable to cathode of 8.68 billion lbs. (3.94 million tonnes), based on the LOM extraction of mineralized material containing approximately 11.90 billion lbs. of total Cu (5.40 million tonnes), and average copper recovery of 72.8%
After-tax net present value (NPV8%) of $2.659 billion, internal rate of return (IRR) of 21.2%, and a payback period of 3.2 years
Initial capital expenditure of $2.462 billion, and a project capital intensity of $7.66 per lb. Cu ($16,880 per tonne Cu)(5)
Average C1(5) cash costs of $1.07 per lb. Cu and all-in sustaining costs(5) of $1.64per lb. Cu (AISC Margin of 56%)(5)
Average EBITDA(6) per year of $1.101 billion (Years 1-5) and $692 million (Years 6-27)
Estimated carbon intensity of 826 kg CO2 equivalentper tonne of Cu (CO2-e/t Cu)(7) for Scope 1&2 GHG Emissions, well below the industry average of 1,980kg CO2-e/t Cu(8). McEwen Copper’s goal at Los Azules is to be carbon neutral by 2038, a target achievable through the use of emerging technologies and offsets
Estimated site-wide water consumption of 137 liters per second (L/s) from Years 1 to 10, increasing to 163 L/s from Years 11 to 27. This compares to approximately 600 L/s(9) for a conventional mill producing copper concentrate
Upside case with the addition of Nuton™ technologies(10) increases NPV8% to $3.701 billion, IRR to 23.9%, and mine life to 39 years, and reduces payback to 2.7 years.
Management Conference Call
Management will discuss our Q2 financial results and project developments and follow with a question-and-answer session. Questions can be asked directly by participants over the phone during the webcast.
Thursday
Aug 10 th , 2023
at 11:00 AM EDT
Toll Free (US & Canada): (888) 210-3454
Outside US & Canada: (646) 960-0130
Conference ID Number: 3232920
Event Registration Link: events.q4inc.com/attendee/300718616
An archived replay of the webcast will be available approximately 2 hours following the conclusion of the live event. Access the replay on the Company’s media page at www.mcewenmining.com/media.
|
|
|
|
Post by Entendance on Aug 11, 2023 1:48:20 GMT -5
McEwen Mining Inc. Q2 2023 Earnings Conference Call August 10, 2023 11:00 AM ET
Company Participants
Rob McEwen - Chairman and Chief Owner
William Shaver - COO
Michael Meding - VP and General Manager, McEwen Copper
Perry Ing - CFO
Conference Call Participants
Jake Selesky - Alliance Global
Heiko Ihle - H.C. Wainwright
Bill Powers
Rob McEwen
Good morning and welcome, ladies and gentlemen.
Today, I will be discussing the highlights of our operating and financial results in Q2 and the first half of this year as well as our expectations for the balance of the year. Our press release of this morning discusses these matters in greater detail, and members of senior management are on the line to answer your questions.
As many of you are aware, our gold and silver assets had a weak start for the year. While activities at McEwan Copper's Los Azules project we're running at a rapid pace. I'm pleased to say that our mines delivered better results in Q2 than Q1 and the outlook for the second half of the year is significantly better.
But I'd like to share with you the highlights of the first quarter - this quarter that's passed second quarter. One, the Fox Complex generated gross profits of $6 million and is expected to deliver on our guidance. The San Jose performance was much stronger in Q2 than in Q1, and it too is expected to deliver on its production guidance, but costs will be 10% to 20% higher on a cost per ounce basis. At Gold Bar, the outlook, again, is looking significantly better as a result, and we are increasing the mining rate we'll be mining with a lower strip ratio and processing a higher grade of ore. McEwen Copper released in June, its updated preliminary economic assessment. It displays a project with robust economics, a long life, low production costs and based on an environmentally sensitive approach to mining.
Safety at all of our sites was the way we like it. No lost times at Fox and Gold Bar. We improved our balance sheet by reducing our debt by 39% to $40 million. And financially, we consolidate the financials of our 52% owned subsidiary, McEwen Copper. And as I said, we've invested heavily in exploration and other work in order to complete the updated PEA.
So our quarter end, our consolidated liquid assets were $85 million, with an additional $29 million in investments. Our working capital was $92 million, and our consolidated net loss in the quarter was $22 million and in the first half, $65 million, again, reflecting the very heavy investment in moving the Los Azules project forward. And we've increased the value of Los Azules significantly during this period, it now has a value of about $555 million implied based on the last financing we did. Our investment in exploration at Fox has given us a resource base and confidence to see a mine life being extended by 9 years. And in Mexico, construction of the Phoenix project is expected to start later this year and provide a 9 year mine life.
In terms of our share performance since the beginning of the year to present day, we're up just under 18% in U.S. dollars. And that compares against the GDX, which is down 1.8%, the GDXJ, down 5.2%. Gold's up 4%, the Dow's up 6%. And the NASDAQ is the early one of those that has outperformed. It's up 32%, largely driven appears by generative AI development. And I have to say that the mining world will be embracing generative AI as we go forward like many other industries.
I'd now like to open the conference call for questions.
Jake Selesky, Alliance Global So just starting off at the Fox Complex. You mentioned grades should tick a bit higher in the second half of this year. Are you able to quantify that at all? I'm just trying to get a handle on how that might impact costs for Q3 and Q4 heading into next year.
Rob McEwen
Bill, would you like to answer that?
William Shaver
Yes, sure. Yes, Jake, we expect that the grade in the second half of the year is going to be closer to 4 grams per tonne. The second quarter, the grade was closer to 3 grams per tonne. And that goes back to our original budget and mine plan for this year. So it - the original plan had us with a lower grade in the first half of the year and a little bit higher grade. And we're now into the higher grade to the stock we're in, right this week is the grade is more like 5 grams per tonne. So we'll see the grade increase, and so that will move our costs down by a significant amount. And so we'll finish the year following our guidance almost exactly right.
The upside, I would say, is the fact that the mill has run significantly better in the second quarter. We had some more or less record months of around 1,250 tonnes per day for the quarter. May and June was actually closer to 1,320 tonnes per day. So if there's upside, it's in the fact that we're - we've been able to increase the tonnage through the mill. And if the grade stays where we think it will, and there's no reason to think it won't be predictable, then we'll have a slightly better second half.
Jake Sekelsky
Okay. That's helpful. And good to see there. And just switching over to Los Azules. Any color on the work that's left for the feasibility study, the timing of the report and maybe the specifics that are milestones that need to be hit just to switch over from expensing investments there to capitalizing them.
Rob McEwen Michael?
Michael Meding
Sure. So we slate the delivery of the feasibility study to the end of 2024, beginning of 2025. We have confirmed the main consultants that are working with us to the delivery, mainly the most important one I would say, is [Semel engineering] and [indiscernible]. Semel has helped us in the PEA and as well as [indiscernible] was also delivering our environmental impact assessment report. So that is well under the way. We need to drill about 45,000 meters. We have secured already 16 drills to be able to do that. We own 4 drill rigs and bought another two and import permits. We're looking to get another two to ensure that we can get through the drilling program to be able to get all the information required to feasibility level of detail.
So I think we are very optimistic going forward. Now with regards to the capitalization criteria, especially the environmental permanent issues plus the feasibility study. Perry, I'm not sure whether you would like to give additional insights?
Perry Ing
Yes. Now, I think that's an accurate statement, Michael. And just for context, I mean, that's a result of us obviously being a U.S. GAAP reporter.
And assuming if we IPO McEwen copper at some point, we could have a situation where if McEwen to report under IFRS, it would actually capitalize those costs. The criteria under IFRS are a lot looser, whereas McEwen Mining would still have to continue expensing those costs. So that's just a unique feature of the differences in accounting policies.
Jake Sekelsky
Got it. Okay. That makes sense. That's all on my end. Thanks again.
Rob McEwen
Thanks Jake.
Heiko Ihle, H.C. Wainwright Would you be able to provide me with the approximation of your labor cost increases from the past, call it, 6 or 12 months by asset. I assume there are some pretty meaningful differences in what you've seen between Timmins or I guess, rather Canada, Nevada and Argentina, please?
Rob McEwen
William, would you like to venture into that?
William Shaver
Yes. I guess that's a question I'm not totally prepared to answer. But I guess our cost in Canada in terms of labor cost is around 7% or 8%. And I would say our material costs are probably somewhere in the range of 10%. And I think we anticipated that we would see a higher fuel price than we're actually seeing. So I think there's some positives there. And I think there's some other, I guess, consumables that we're seeing, which seem to have smoothed out to some extent and not being steel in terms of grinding balls and also cyanide. So I think - if I had to say what the cost increase has been on a year-over-year basis, I'd say it's around 10% or maybe a little bit higher than that. But I think if you use 10%, you wouldn't be wrong.
Heiko Ihle
Moving on to drilling at Gold Bar a little bit. As per your release, your expiration for the second half of the year is on the nearby resources there. You're operating two drills there in the second half, if more is correct. And you were talking about the cedar halt. Now what exactly do you think that will do to the ore body? Are your geologists telling you that's more or less the same type of ore. So metallurgy would be the same? Or is this just creating else? What exactly is the goal, I guess, is what I'm saying. Thank you.
William Shaver
Yes. So the goal of that drilling program is kind of two or threefold. First, we're defining the parameters for ore that we will mine in the relatively near future, meaning next year and the year after. The second part is to find more ore that will - that we'll mine into the future. And it's to -- in both cases, we're trying to get a very good understanding of what the strip ratios are going to be and also where there might be carbon associated with some of these resources so that we're able to mine that in a proper fashion to make sure we can segregate the carbonaceous ore from the ore that doesn't have carbon
There's also of - there's also some deeper drilling that we're doing there where I would say we're kind of exploring for perhaps some elephants that are similar to some properties that are just north of us, say, about 20 kilometers away. So - but the focus of the drilling program is to make sure we know what we're doing over the next 18 to 24 months.
Heiko Ihle
I appreciate it. we'll get back in queue. Thank you, all.
Rob McEwen
Thanks Heiko.
Bill Powers Good morning. Thanks for setting this up today I just had a couple of questions. I guess, starting in Canada, you - during the AGM, you mentioned that you had a capacity of 1,400 tons per day. And I guess my question would be, is the stockpile has that been able to be reduced at all at the higher rate of mill running? Or is that just - or is that still there? And I guess, are you planning to move towards 1,400 tonnes per day in Q3 and the rest of the year?
William Shaver
Yes. So thanks for the question. The mill tonnage in May and June has increased up to about 1,320 tonnes a day. But meanwhile, the stockpile is still very close to 100,000 tonnes. So although we're increasing the tonnes through the mill, the mine is operating very well. The whole operation is kind of in a sweet spot in terms of the mining operation. So we're keeping up with the milling process even though we've increased it by something more than 15% over last year. So we would like to get the stockpile lower to transfer it over into actual cash. But we also want to keep the mine running at that sweet spot so that we get the optimum mining cost. So yes, I would say we're doing better on the milling where the mine is fine, keeping up and we're continuing to try to improve the throughput through the mill.
Bill Powers Okay. Thank you on that. As far as Nevada goes, I know there was some exploration around the Atlas pit that was done last year and seemed to have some promising results. Have those - has that been followed up on? And I guess, is that a target for later this year? Or is that something - or if you focus elsewhere you're drilling near term?
William Shaver
We're actually focusing on other portions of our property. The drill holes at the Atlas pit I guess, we found a small amount of ore in one pit wall that at some point, we may go and take, but we're talking about something in the order of 10,000. It hasn't turned out as positive as we hope.
Bill Powers And thank you for the update. And I guess my last question would be - I was a little late to the call this morning, but the - if you could - maybe you've gone over this, so this question was asked earlier. But the expansion of the ramp, I know you - are you still planning to put out a study for that? Or I guess, a larger study for that? Or is that something that is going to be moving forward in the balance of this year.
William Shaver
So yes, and we're talking now about the ramp at the stock mine?
Bill Powers Yes.
William Shaver
Yes, that ramp will be moving ahead. We're doing the final bit of delineation drilling with regard to that part of the project. And we are putting together, I guess, what we're calling an economic analysis, which we'll have early in - late in the third quarter or early in the fourth quarter. But we don't plan to do a revised PEA or pre-feasibility study on that. We're going to basically produce an economic analysis to make the final decision to go ahead. But at this point, we're basically working at full speed to move that project ahead.
Rob McEwen
Assuming the metal prices stay where they are and we're delivering on guidance, we don't anticipate having to come to the capital markets to fund any of our development projects. We're in a good position from our liquidity, and we're quite excited about the projects we're advancing. We - there will be exploration news coming out throughout this latter part of the summer and into the fall, both from Los Azules and coming from the Fox Complex. So quite excited by that.
Thank you very much, and have a great day.
|
|
|
|
Post by Entendance on Aug 15, 2023 0:58:54 GMT -5
|
|
|
|
Post by Entendance on Aug 17, 2023 7:21:08 GMT -5
Canadian mining entrepreneur Rob McEwen said he’s weighing financing options for a copper project in Argentina, with an initial public offering possible as soon as November. |
|
|
|
Post by Entendance on Aug 21, 2023 7:44:31 GMT -5
McEwen Mining Appoints a New Director
TORONTO, Aug 21st, 2023 - McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to welcome Michelle Makori as our newest member of our Board of Directors.
Michelle is an internationally acclaimed broadcast journalist, news anchor, reporter, and producer. Currently she is the Editor-in-Chief and Lead Anchor at Kitco News, focusing on commodities and precious metals. Michelle has worked as an anchor, reporter and producer for Bloomberg, CNN Money, i24News and SABC. As an anchor and reporter, Michelle has covered and analyzed the biggest global economic, financial, and geopolitical events of the past two decades. She has interviewed heads of state, CEOs of Fortune 500 companies, and other political, business, and entertainment leaders. Michelle also serves as MC, host and panel moderator for conferences and events around the globe.
“On behalf of our Board of Directors, we are very pleased to welcome Michelle as a new Director. I look forward to working with Michelle; she brings a valuable expertise and market insights to McEwen Mining” said Rob McEwen, Chairman & Chief Owner.
ABOUT MCEWEN MINING
McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. In addition, it owns approximately 52% of McEwen Copper which owns the large, advanced stage Los Azules copper project in Argentina. Rob McEwen, Chairman and Chief Owner, has a personal investment in the company of US$220 million. His annual salary is US$1.
|
|
|
|
Post by Entendance on Aug 24, 2023 3:27:23 GMT -5
|
|
|
|
Post by Entendance on Aug 25, 2023 7:06:20 GMT -5
|
|
|
|
Post by Entendance on Aug 31, 2023 0:59:54 GMT -5
The United States is in serious trouble after exporting a record amount of gold since 2001 while domestic mine supply collapsed. This will likely go down in history as one of the United States’ biggest Blunders. More here |
|
|
|
Post by Entendance on Sept 20, 2023 4:30:56 GMT -5
|
|
|
|
Post by Entendance on Oct 3, 2023 16:51:19 GMT -5
Potential Impact: Shorter Payback, Longer Mine Life
Drillhole SM23-201: 21.6 g/t Au over 5.1 m in the Ramp Portal Zone (Fig. 2)
Drillhole SM23-308: 38.5 g/t Au over 7.4 m Down-plunge of Stock West (Fig. 1)
Drillhole SM23-281: 98.8 g/t Au over 0.9 m in Footwall Timiskaming Sediments (Fig. 3)
TORONTO, October 3, 2023 -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to report new assay results from the Stock Property, part of the Fox Complex near Timmins, Ontario...
|
|
|
|
Post by Entendance on Oct 11, 2023 7:23:22 GMT -5
TORONTO, Oct. 11, 2023 McEwen Copper Inc., a subsidiary of McEwen Mining Inc. (NYSE: MUX) (TSX: MUX), is pleased to announce abinding agreement for an additional $10.0 million investment by Nuton LLC, a Rio Tinto Venture, and existing McEwen Copper shareholder.
Nuton has agreed to invest US$10.0 million to acquire shares of McEwen Copper in a two-part transaction expected to close by October 19th, 2023 (the “Nuton Transaction”) consisting of a private placement of 152,615 McEwen Copper common shares, and the purchase of 232,000 common shares owned by McEwen Mining in a secondary sale. Proceeds of the subscription and purchase are expected to be approximately $4.0 million to McEwen Copper and $6.0 million to McEwen Mining, respectively. The proceeds of the private placement will be used to advance the development of the Los Azules copper project in San Juan, Argentina, and for general corporate purposes.
After closing, Nuton will own 14.5% of McEwen Copper on a fully diluted basis, and McEwen Mining will own 47.7%. The transaction values McEwen Copper at approximately US$800 million.
In connection with the Transaction, McEwen Copper and certain of its affiliates agreed to amend the Nuton Collaboration Agreement to extend the period of exclusivity over novel, trade secret or patented copper heap leach technologies until February 1st, 2025.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Nuton
Nuton is an innovative new venture that aims to help grow Rio Tinto’s copper business. At the core of Nuton is a portfolio of proprietary copper leach-related technologies and capability – a product of almost 30 years of research and development. Nuton™ Technologies offer the potential to economically unlock copper sulphide resources, copper bearing waste and tailings, and achieve higher copper recoveries on oxide and transitional material, allowing for a significantly increased copper production. One of the key differentiators of Nuton is the potential to deliver leading environmental performance, including more efficient water usage, lower carbon emissions, and the ability to reclaim mine sites by reprocessing mine waste.
About McEwen Copper
McEwen Copper Inc. holds a 100% interest in the Los Azules copper project in San Juan, Argentina and the Elder Creek project in Nevada, USA.
Los Azules was ranked in the top 10 largest undeveloped copper deposits in the world by Mining Intelligence (2022). Its current copper resources are estimated at 10.9 billion pounds at a grade of 0.40% Cu (Indicated category) and an additional 26.7 billion pounds at a grade of 0.31% Cu (Inferred category). A PEA published in June 2023 estimated a $2.7 billion after-tax NPV8% at $3.75/lb Cu and a 27-year mine life.
After closing the Stellantis investment, also announced today, and the pending investment by Nuton, McEwen Copper will have 30,937,615 common shares outstanding, and its shareholders are: McEwen Mining Inc. 47.7%, Stellantis 19.4%, Nuton 14.5%, Rob McEwen 12.9%, Victor Smorgon Group 3.2%, and other shareholders 2.3%.
TORONTO, Oct. 11, 2023 -- McEwen Copper Inc., a subsidiary of McEwen Mining Inc. (NYSE: MUX) (TSX: MUX), is pleased to announce the closing of an additional ARS $42 billion investment by Stellantis, one of the world’s leading automakers and mobility providers with iconic brands including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep®, Lancia, Maserati, Opel, Peugeot, RAM, Vauxhall, Free2Move and Leasys.
Stellantis N.V. (“Stellantis”), which in February 2023 invested ARS $30 billion, has today invested an additional ARS $42 billion in Argentina to acquire shares of McEwen Copper in a private placement of 1,900,000 common shares. The proceeds of the private placement will be used to advance development of the Los Azules copper project in San Juan, Argentina, and for general corporate purposes.
Giving effect to the pending investment by Nuton LLC, also announced today, Stellantis increases its ownership to 19.4% of McEwen Copper and McEwen Mining owns 47.7% on a fully diluted basis. The Transaction values McEwen Copper at approximately US$800 million.
In connection with the Transaction, McEwen Copper and certain of its affiliates amended the Investor Rights Agreement with Stellantis (the "Stellantis IRA”) and the Copper Cathodes and Concentrates Purchase Rights Agreement (the “CCCPRA”), further described below.
The Stellantis IRA was amended to make the Carbon Neutral Commitment by 2028 not contingent on Stellantis maintaining a certain minimum ownership percentage in McEwen Copper. McEwen Copper intends to implement this commitment independent of Stellantis’ involvement in the Los Azules project.
The CCCPRA was amended to provide for a minimum 10,000 tonne per annum copper cathode offtake, subject to certain restrictions and exclusions, and further defined ‘market price’ to be paid by Stellantis on future copper cathode purchases pursuant to the CCCPRA.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About McEwen Copper
McEwen Copper Inc. holds a 100% interest in the Los Azules copper project in San Juan, Argentina and the Elder Creek project in Nevada, USA.
Los Azules was ranked in the top 10 largest undeveloped copper deposits in the world by Mining Intelligence (2022). Its current copper resources are estimated at 10.9 billion pounds at a grade of 0.40% Cu (Indicated category) and an additional 26.7 billion pounds at a grade of 0.31% Cu (Inferred category). A PEA published in June 2023 estimated a $2.7 billion after-tax NPV8% at $3.75/lb Cu and a 27-year mine life.
After closing the Nuton LLC investment, also announced today, McEwen Copper will have 30,937,615 common shares outstanding, and its shareholders are McEwen Mining Inc. 47.7%, Stellantis 19.4%, Nuton 14.5%, Rob McEwen 12.9%, Victor Smorgon Group 3.2%, and other shareholders 2.3%.
About Stellantis
Stellantis N.V. (NYSE: STLA / Euronext Milan: STLAM / Euronext Paris: STLAP) is one of the world’s leading automakers and a mobility provider. Its storied and iconic brands embody the passion of their visionary founders and today’s customers in their innovative products and services, including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep®, Lancia, Maserati, Opel, Peugeot, Ram, Vauxhall, Free2move and Leasys. Powered by our diversity, we lead the way the world moves – aspiring to become the greatest sustainable mobility tech company, not the biggest, while creating added value for all stakeholders as well as the communities in which it operates. For more information, visit www.stellantis.com.
Au and Ag in 2023  Gold is important to me because...
|
|
|
|
Post by Entendance on Oct 30, 2023 6:55:24 GMT -5
McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to report production for Q3 2023 was 38,600 gold equivalent ounces (“GEOs”) and 104,800 GEOs for the nine months ended September 30th, 2023. Our consolidated production guidance for 2023 is maintained, despite the Gold Bar Mine’s production forecast being 13% below its guidance range. Our forecast for the full year 2023 (see Table 1) reflects actual productions to September 30th and management's current estimates for Q4 2023.
Gold Bar Mine, Nevada
Good progress has been made at Gold Bar recovering from a challenging first half of the year, as demonstrated by steadily increasing production quarter after quarter. Gold Bar has also maintained an excellent safety record with 1,313 days without a lost time injury as of September 30th. Crushing and stacking of ore on the heap leach pad reached a rate of 9,300 tonnes per day (tpd) in September, a major improvement over the average in the prior eight months of 6,150 tpd. Year-to-date, ore containing 41,600 ounces of gold has been loaded onto the heap leach pad with an average expected recovery rate of 68%. Due to the gold inventory on the heap leach pad, we are confident in a reasonably strong Q4 continuing into the start of 2024. The 2023 production forecast is 13% below the guidance established in December 2022, due to a combination of factors including flooding and extreme weather in the Spring and a slower leach recovery rate of Gold Bar South ore.
Fox Complex, Timmins District
Fox performed well during Q3 and it is on track to slightly exceed the mid-point of our guidance range. Fox has achieved 738 days without a lost time injury as of September 30th. Mining at Froome is on track and the Stock mill continues to increase average throughput. We are pleased with the good exploration drilling results seen at our Stock Complex including the ‘Ramp Portal Zone’, which may represent an early mining horizon for our upcoming Stock West project (see news release dated October 3rd, 2023).
San José, Argentina
San José, which is operated by our joint venture partner Hochschild Mining, delivered Q3 production in line with our expectations for the quarter and guidance for the year. San José reported one lost time injury in August 2023, the worker has since recovered and returned to regular duty.
McEwen Copper
On October 11th our McEwen Copper subsidiary announced additional investments by Stellantis and Nuton of ARS$42 billion and US$10 million, respectively. Since the creation of McEwen Copper, shareholders have invested $397 million (including investments by Stellantis in Argentine Pesos at official exchange rates at the time of each transaction) to acquire shares even though that the Company has remained private. The recent transactions occurred at $26.00 per share of McEwen Copper, giving it a market value of approximately $800 million. McEwen Mining retains 47.7% ownership of McEwen Copper, with an implied market value of $380 million, this represents a value accretion for McEwen Mining shareholders of $98 million or two (2) dollars per share since March 2023.
McEwen Copper is now well financed for the remainder of 2023 and well into 2024. The funds raised will be used to advance the feasibility study on the Los Azules project and for other corporate purposes. McEwen Mining also received proceeds of $6 million to augment its balance sheet.
Currently, we have fourteen drill rigs on site at Los Azules, scaling up to 18 drill rigs for our drilling campaign targeting more than 45,000 meters. This program will generate all the remaining data required to complete the planned feasibility study by Q1 2025.
ABOUT MCEWEN MINING
McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. In addition, it owns approximately 47.7% of McEwen Copper which owns the large, advanced stage Los Azules copper project in Argentina. The Company’s goal is to improve the productivity and life of its assets with the objective of increasing its share price and providing a yield. Its Chairman and Chief Owner has personally provided the company with $220 million and takes an annual salary of $1.
|
|
banksters 
E. 