Results for Q4 and Full-year 2014
Toronto, Mar 12, 2015 AEST (ABN Newswire) - McEwen Mining Inc. (
NYSE:MUX) (TSE:MUX) reports its operating and financial results for Q4 and full-year 2014.
The Company had record production in the fourth quarter and full-year 2014, beating both production and cost guidance. The strong operational performance in the fourth quarter is projected to continue throughout 2015.
2015 Guidance
For 2015, we forecast production of 96,500 gold oz. and 3.12 million silver oz. At a silver-to-gold ratio of 75:1, this equates to 138,100 gold equivalent oz. at all-in sustaining costs (Including corporate general and administrative costs) of $1,125 per gold equivalent oz.
At El Gallo 1, we expect to produce 50,200 gold equivalent oz. at all-in sustaining costs of $750 per gold equivalent oz. This significant improvement compared to 2014 is due to a much higher grade of 2.6 gpt Au, reduced crusher throughput and lower mining, blasting and cyanide costs.
At San Jose, the Company's 49% share of production is forecast to be 46,500 gold oz. and 3.1 million silver oz. At a silver-to-gold ratio of 75:1, this equates to 87,800 gold equivalent oz. at all-in sustaining costs of $1,225 per gold equivalent oz. This is similar to 2014 results calculated at a silver-to-gold ratio of 60:1.
Development Pipeline
We will deliver updated feasibility studies for both El Gallo 2 and Gold Bar in the third quarter of 2015.
The El Gallo 2 project is fully permitted and ready to build. The updated feasibility study will examine the potential for utilizing used equipment and a different processing technique that increases recoveries while reducing retention times, consumables and the number of tanks. We are targeting capital expenditures of $130 million, down from the $180 million in the 2012 feasibility study.
For Gold Bar, the 2011 prefeasibility study outlined an open pit, heap leach operation utilizing two-stage crushing for average annual production of approximately 51,000 ounces of gold over an 8-year mine life at an estimated initial capital expenditure of $56 million. The 2015 feasibility will examine the potential for utilizing used equipment and run-of-mine ore processing.
Financials
Liquidity
At March 6, 2015 the Company had $22 million in cash and precious metals and no bank debt. The cash on hand and projected to be generated in 2015 is sufficient to fund our exploration, operations and G&A expenses.
2014 Annual Results
We performed a strategic review of our property holdings taking into account the current metal prices, the carrying values, our future exploration and development plans and our treasury and decided to focus on our most prospective assets. As a result, we decided to significantly reduce the carrying value of our properties. Although these impairments represent large accounting losses, they do not impact the cash flow of the Company.
We reported a consolidated net loss of $312 million, or $1.05 per share, in 2014 compared to $148 million, or $0.50 per share in 2013. The net loss for 2014 includes impairment charges of $228 million for Los Azules, $98 million for our Nevada properties, $27 million for our exploration properties in Santa Cruz, and $21 million on our investment in the San Jose mine.
The $228 million impairment charge on Los Azules ($120 million in Q2 2014 and $108 million in Q4 2014) is the result of a decline in the observed market value of comparable copper transactions. The impairments to the Nevada and Argentina exploration properties both occurred in Q4 2014 and are due to declines in observed market transactions and a decision by the Company to rationalize our non-core property holdings. The impairment to our investment in the San José mine is due to decreases in long term silver price assumptions and the value of the exploration properties surrounding the mine.
The adjusted net loss for 2014 was $33 million, or $0.11 per share. This compares to a net loss of $31 million, or $0.10 per share, for 2013. Adjusted net loss removes the impact of impairment charges, foreign currency gains or losses, and non-recurring items.
About McEwen Mining Inc
McEwen Mining (NYSE:MUX) (TSE:MUX) has the goal to qualify for inclusion in the S&P 500 Index by creating a profitable gold and silver producer focused in the Americas. McEwen's principal assets consist of: the San José mine in Santa Cruz, Argentina (49% interest); the Black Fox mine in Timmins, Canada; the Fenix Project in Mexico; the Gold Bar mine in Nevada, currently under construction; and the large Los Azules copper project in Argentina, advancing towards development.
McEwen has approximately 345 million shares outstanding. Rob McEwen, Chairman and Chief Owner, owns roughly 23% of the shares.
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