McEwen (MUX) Q2 2024 earnings summary

Executive summary

• Q2 2024 was the most profitable quarter since 2016, with gross profit of $10.8 million and adjusted EBITDA of $7.2 million, reversing prior year losses and driven by higher gold prices and improved margins.

• Net loss for Q2 2024 narrowed to $13.0 million ($0.26/share) from $21.6 million in Q2 2023, mainly due to non-cash expenses from McEwen Copper.

• Cash and cash equivalents rose 77% to $40.7 million, with working capital at $29.1 million and debt stable at $40 million.

• Increased investment in McEwen Copper, with implied value of $947 million and a 48.3% interest valued at $457 million, now exceeding market capitalization.

• Major developments included a $21.9 million flow-through share issuance, Timberline Resources acquisition agreement, and favorable Argentine reforms supporting mining investment.

Financial highlights

• Q2 2024 revenue was $47.5 million, up 38% year-over-year, driven by higher gold prices and increased sales at Gold Bar.

• Gross profit reached $10.8 million and adjusted EBITDA was $7.2 million, compared to losses in Q2 2023.

• Cash from operating activities was $2.5 million in Q2 2024, compared to cash used of $25.2 million in Q2 2023.

• Working capital increased 25% to $29.1 million as of June 30, 2024.

• Received a small dividend from San Jose mine; larger dividend possible in Q4 2024.

Outlook and guidance

• Full-year 2024 consolidated production guidance remains at 130,000–145,000 GEOs, with Gold Bar on track to meet or exceed 40,000–43,000 GEOs and San José expected to meet 50,000–60,000 attributable GEOs.

• Fox Complex annual production expected to be 15–20% below the low end of 40,000 GEOs guidance due to development delays.

• Los Azules feasibility study expected in H1 2025, with $60 million technical work budgeted ahead.

• Exploration and incremental production increases expected at Gold Bar and Stock Mine, subject to permitting.