TORONTO – McEwen Mining Inc.’s chairman and chief owner, Rob McEwen, said in the company’s fourth-quarter and year’s end report that he is “deeply pained by our awful financial performance in 2019 and 2020,” but he said the future will be better.
The company stated that the consolidated net loss for all of 2020 was $152.3 million, or 38 cents per share, mainly due to an impairment charge for the Gold Bar Mine in Nevada of $83.8 million, investment on advanced projects, and loss from operations.
For the fourth quarter, McEwen Mining posted a $23.5 million consolidated net, or 6 cents per share, compared with a loss of $25.1 million, or 7 cents per share, in the 2019 quarter.
McEwen Mining completed an updated feasibility on Gold Bar in Eureka County in February that estimated probable gold reserves of 300,000 ounces for a six-year mine life and stated that exploration programs were under way to extend the mine life.
Rod McEwen said in the earnings report that the feasibility study outlines a six-year mine life for “our Gold Bar Mine, which recovered from what was tantamount to a near-death experience for the operation in early 2020.”
Gold Bar produced 28,000 gold equivalent ounces in 2020, as total cash costs of $2,106 per ounce and all-in sustainable costs of $2,549 per ounce, with the impact from COVID-19 felt as the mine shut down in the second quarter of last year and isolation quarantine protocols reduced operating shifts in the fourth quarter after site personnel tested positive for the coronavirus.
The slower ramp-up to full mining rates following the shutdown at Gold Bar was primarily due to delays related to mining contractor rehiring of operators, according to the earnings report.
On the brighter side, McEwen Mining stated that if permits are received as planned, the mining of Gold Bar South could begin as early as the first quarter of 2022.
McEwen also said the future of the Black Fox operations in Canada is “becoming more visible” with access to the Froome deposit nearly complete and commercial production planned for in the fourth quarter of this year.
“This will extend the life of the Black Fox Mine by 2.5 years, providing a bridge to our second phase of growth at Fox, which we will unveil in Q2. Given our large resource base in the Timmins area, we expect it to support a potential 10-year mine life with annual production of 100,000 to 150,000 ounces of gold,” he said.
The company also has a 49% interest in the San Jose Mine in Argentina and the 100% interest in the El Gallo Project in Mexico.
For the full year, McEwen Mining produced 114,800 ounces of gold equivalent ounces, which the company compared with production of 174,000 ounces in 2018. The forecast is for between 141,000 gold equivalent ounces and 160,400 ounces this year.
For the fourth quarter of 2020, the company produced 30,100 gold equivalent ounces, compared with 46,300 ounces in the 2019 quarter.