TORONTO, Aug. 07, 2024 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) today reported its second quarter (Q2) and half year (H1) results for the period ended June 30th, 2024. "I'm delighted that this quarter was the most profitable since 2016 as measured by Adjusted EBITDA(1) for our mining operations and Q3 is off to a good start. Production costs increased 8% quarter-over-quarter, but revenue grew by 38%. Fox and Gold Bar are capitalizing on the higher gold prices to increase operating cash flow, Gold Bar in particular with its AISC at only $1,400 per GEO in H1. It's important to note that our net loss continues to be influenced by McEwen Copper and its expenses at Los Azules, which are non-cash as it relates to MUX," commented Rob McEwen, Chairman and Chief Owner. "McEwen Copper continues to grow in value - based on the most recent injection of capital at $30 per share the implied market value is now $947 million, with MUX owning 48.3% or $457 million. That is 106% of MUX's current fully diluted market capitalization. In addition, MUX shareowners also get exposure to a 1.25% NSR royalty on Los Azules, our cashflow generating gold-silver mines, and development projects." Stronger Financial Results Our gross profit in Q2 was $10.8 million and our Adjusted EBITDA(1) was $7.2 million, compared to a gross loss of $3.5 million and Adjusted EBITDA of negative $5.8 million in Q2 2023. Higher revenues, driven by a 21% increase in realized gold prices and a 13% increase in GEOs sold drove improvements in gross profit. After equity accounting for $35.2 million in net expenses incurred by McEwen Copper's Los Azules project ($16.8 million impact on MUX) we reported a net loss in Q2 of $13.0 million, or $0.26 per share, compared to a net loss of $21.6 million, or $0.46 per share in Q2 2023. In Q2, we invested $5.0 million in exploration activities at the Grey Fox property and Gold Bar mine. We invested $6.7 million in capital expenditures largely on the Stock Project where earthwork at the portal entrance is expected to be completed in the second half of 2024. An underground ramp will be developed to access the Main, East and West zones of the Stock deposit. Improved Liquidity and Capital Resources We reported consolidated cash and cash equivalents of $40.7 million, debt of $40.0 million, and consolidated working capital of $29.1 million as at June 30, 2024. (December 31, 2023 – $23.0 million, $40.0 million and $22.7 million, respectively). Steady Gold & Silver Production Production from our three operating mines was 35,265 gold equivalent ounces (GEOs)(2) in Q2, compared to 35,658 GEOs in Q2 2023. Production guidance remains 130,000-145,000 GEOs for 2024. Through the efforts of our operating teams, we have been steadily improving our production and cash flow while improving our prospects for the future with aggressive exploration drilling. Attracting and retaining our employees is a constant priority for us as it is for many of our peers, contractors and suppliers. Individual Mine Performance (See Table 1): 1.   Gold Bar produced 12,297 GEOs during Q2, an increase of 56% compared to Q2 2023. Increased mine production from our higher-grade Pick pit facilitated higher production. During H1 2024, we produced 24,013 GEOs at Gold Bar and we are on track to potentially exceed annual production guidance of 40,000 to 43,000 GEOs. Cash costs and AISC per GEO sold in Q2 were $1,532 and $1,634, respectively, compared to $2,113 and $2,585 in Q2 2023, respectively. The reduction in cash costs and AISC per GEO sold was driven by higher GEOs sold, as noted above. Gold Bar Mine($ millions) Q2 2024 Q2 2023 H1 2024 H1 2023 Revenue from gold sales 29.7 16.0 55.0 27.6 Cash costs 19.2 17.1 32.4 26.5 Gross margin 10.5 (1.1) 22.6 1.1 Gross margin % 35.4% - 41.1% 4.0%           2.   Fox has had a challenging first half of the year. At Froome we had a stope fail on the boundary between the ore and the waste, which required us to move out of this area. We are presently formulating a more conservative mining plan to ensure we can optimize future ore extraction. This event decreased stope availability and gold grade processed during the quarter. Froome is entering its final 18 months of production, focusing on mining areas that are generally smaller in size because they are on the periphery of the ore body, and grades that are generally lower than the main zones extracted over the last two years. We are preparing to meet these challenges as we transition from Froome to Stock, where we anticipate beginning limited production by mid-2025. We have increased throughput at our processing plant by approximately 40% over the last 18 months, growing from 900 tonnes per day (tpd) to over 1,300 tpd. In Q2, Fox produced 8,297 GEOs, a 20% decrease compared to Q2 2023. During H1 2024, we produced 15,800 GEOs at Fox. While we engaged a mining contractor at the end of Q2 2024 to address development, we expect to be approximately 15-20% below our annual production guidance of 40,000-42,000 GEOs. Cash costs and AISC per GEO sold were $1,588 and $1,874 in Q2, respectively, compared to $1,237 and $1,371 in Q2 2023, respectively. The increase in unit costs was driven by lower GEOs sold as described above. Fox Complex($ millions) Q2 2024 Q2 2023 H1 2024 H1 2023 Revenue from gold sales 17.8 18.4 32.5 41.6 Cash costs 12.9 12.5 24.7 26.5 Gross margin 4.9 5.9 7.8 15.1 Gross margin % 27.5% 32.1% 24.0% 36.3%           3.   San José produced 14,672 attributable GEOs during Q2, a 15% decrease compared to Q2 2023. Production was impacted adversely by lower gold grades processed, slightly offset by higher gold recoveries. With 27,605 attributable GEOs produced in H1 2024, San José remains on track to meet annual production guidance of 50,000 to 60,000 attributable GEOs(2). Cash costs and AISC per GEO sold were $1,624 and $2,032 in Q2, respectively, compared to $1,362 and $1,811 in Q2 2023, respectively. The increase in cash costs and AISC per GEO sold resulted from lower GEOs produced and sold as described above, and foreign exchange impacts of a stronger than expected Argentine Peso. San José Mine—100% basis($ millions) Q2 2024 Q2 2023 H1 2024 H1 2023 Revenue from gold and silver sales 74.3 67.7 140.3 113.5 Cash costs 48.2 46.9 96.1 88.1 Gross margin 26.1 20.8 44.2 25.4 Gross margin % 35.1% 30.7% 31.5% 22.4%           Exploration Exploration results from flow-through funded drilling at the Fox Complex were published in separate press releases on May 27th and June 20th. Infill and exploration results from Los Azules were published on May 16th. Drilling to support the upcoming Feasibility Study by the end of Q1 2025 is complete and work on the study is progressing as planned. Timberline Acquisition On April 16th, 2024, we announced the friendly acquisition of Timberline Resources Corporation for all-share consideration. Timberline's special meeting to approve the merger will be held on August 16th, 2024. Benefits to Timberline shareholders include: 1) significant premium, 2) ownership in a growing gold-silver-copper producer focused in the Americas, and 3) participation in the potential acceleration of the development of the Eureka project. Benefits to MUX shareholders include: 1) acquisition of a gold deposit that is near-term development opportunity complimentary to Gold Bar, 2) addition of a large prospective package of exploration properties, and 3) consolidation of additional land around the Elder Creek property (owned by McEwen Copper). Any Timberline shareholders who have not yet voted their proxy are encouraged to vote FOR the merger. Advancing McEwen Copper We own a 48.3% interest in McEwen Copper Inc., which holds a 100% interest in the Los Azules copper project in San Juan, Argentina, and the Elder Creek exploration project in Nevada, USA. The recent financing by McEwen Copper gave the company a market value of $947.1 million, which means the value of McEwen Mining shareholding has increased to $457.5 million or $8.45 per fully diluted share. McEwen Mining has three classes of assets, its gold and silver mines, its portfolio of six gold, silver and copper royalties and its 48.3% interest in McEwen Copper. Based on the recent financing of McEwen Copper, the implied value of MUX's ownership in McEwen Copper is approximately 106% of MUX's current fully diluted market capitalization as at August 7th, 2024. On July 12, 2024, McEwen Mining and Rob McEwen invested $14 million and $5 million, respectively, as part of the previously announced $70 million McEwen Copper financing at $30 per share (see the June 24, 2024 news release). The balance of the financing is expected to close in Q3 or early Q4 2024. Milei's Magic Turbocharging Argentina The Argentina National Government led by President Milei has recently passed important new legislation designed to support and encourage direct foreign investments in large infrastructure projects including projects like Los Azules. The aim is to create conditions of predictability and legal certainty for large investments, and to create special tax incentives for qualifying strategic sectors. On July 29th, 2024, it was announced that BHP and Lundin Mining would jointly acquire Filo Corp for approximately $3.1 billion; and form a 50/50 joint venture to develop both the Filo del Sol and Josemaria projects located in the north of San Juan, Argentina. This significant development is an endorsement by the world's largest mining company of investing in major copper projects in Argentina. Management Conference Call Management will discuss our Q2 financial results and project developments and follow with a question-and-answer session. Questions can be asked directly by participants over the phone during the webcast. ThursdayAug 8th, 2024 at 11:00 AM EDT Toll Free Dial-In (US & Canada): (888) 210-3454 Toll Free Dial-In (Other Countries): https://events.q4irportal.com/custom/access/2324/ Toll Dial-In: (646) 960-0130 Conference ID Number: 3232920 Event Registration Link: https://events.q4inc.com/attendee/655979798/guest An archived replay of the webcast will be available approximately 2 hours following the conclusion of the live event. Access the replay on the Company's media page at https://www.mcewenmining.com/media. Table 1 below provides production and cost results for Q2 and H1, with comparative results from Q2 and H1 2023 and our guidance range for 2024.   Q2 H1 Full Year 2024Guidance Range 2023 2024 2023 2024 Consolidated Production           GEOs(2) 35,658 35,265 66,022 68,320 130,000-145,000 Gold Bar Mine, Nevada           GEOs 7,916 12,297 14,372 24,013 40,000-43,000 Cash Costs/GEO 2,113 1,532 1,842 1,313 $1,450-1,550 AISC/GEO 2,585 1,634 2,190