McEwen Mining Reports Record Production, but Net Loss of $312 Million

McEwen Mining Inc. (TSX:MUX,NYSE:MUX) announced its operating and financial results for Q4 2014, as well as the year as a whole, noting that it achieved record production for both periods.

Specifically, for 2014 the company put out 84,351 ounces of gold and 3,120,000 ounces of silver. Meanwhile, in Q4 it produced 27,401 ounces of gold and 973,457 ounces of silver.

In terms of financial performance, the company said:

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.

McEwen’s 2015 guidance is as follows:

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 $750per 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.

Click here to read the full McEwen Mining Inc. (TSX:MUX,NYSE:MUX) press release.
Click here to read about Chief Owner Rob McEwen’s PDAC presentation.