Create FREE account or log in

to receive MINING.COM digests

McEwen Mining chairman injects $15 million into company

Black Fox complex. (Image courtesy of McEwen Mining.)

Canadian businessman Rob McEwen, the chairman and main owner of McEwen Mining (TSX, NYSE: MUX), has invested $15 million into its company as reduced cash flow from operations in the first three months of the year left it in a “challenging” position.

In a release posted after Tuesday’s trading closed, the miner said the deviation from its financial forecast for the first quarter of 2022 was caused by lower production at the Black Fox Complex in Ontario, Canada, and at San José mine in Argentina.

Loss of manpower due to covid-19 also affected operations at both mines, the company noted.

Results from operations will improve starting with the current quarter, the chairman said, as the Gold Bar mine in Nevada, US, achieved production targets in Q1 and the company has “made some important advances” at its Los Azules copper exploration project in Argentina, near the border with Chile.

The founder and former chairman of Goldcorp also said McEwen was extending the maturity of its $50 million senior secured term loan facility to be able to invest those funds in production growth and mine life extensions.

Shares in the company were down 1.9% to 79 cents in New York on Wednesday morning. Year to date, the stock has lost more than 13% of its value, leaving McEwen with a market capitalization of $373.6 million.

McEwen had, in early March, closed a private placement offering that injected another $15 million into the company’s coffers.

Days later, the miner said it expected to produce between 153,000 and 172,000 of gold equivalent ounces this year. Cash costs and all-in sustaining costs (AISC) per ounce sold this year from McEwen’s 100%-owned mines (Gold Bar and Fox) are expected to be in the range $1,310-$1,410 and $1,570-$1,690, respectively.

At the San José gold mine, which operates in a 49%-51% partnership with Hochschild Mining (LON: HOC), output for the year is estimated to be 69,500 to 77,500 of gold equivalent ounces at an AISC per ounce sold of between $1,330 and $1,370.