McEwen Mining shares rise as 1Q production gets back on track after difficult start to 2019

McEwen Mining Inc (TSE:MUX) (NYSE:MUX) is hoping that a strong close to 1Q production is enough to convince investors that it has recovered from a tough start to 2019.

The Toronto-based company released production numbers for the first quarter of 2019 on Tuesday showing a decrease in ounces since the year-ago quarter. In Q1 2019 McEwen produced a total of nearly 27,000 ounces of gold and around 703,000 ounces of silver, or 36,000 gold equivalent ounces (GEOs) using a 75:1 gold-to-silver ratio.

Comparable figures during Q1 2018 were 35,000 ounces gold, 695,000 ounces silver and 44,000 GEOs.

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Shares of McEwen Mining were up around 2% by midday Tuesday in Toronto and just over 1% in New York.

The precious metals miner was hit with a couple of unforeseen disruptions at the beginning of the year at its Gold Bar and Black Fox mines. At Gold Bar in Nevada, production guidance has been reduced by 10% as a result of a slower-than-expected start up due to challenges with the crushing plant.

The Black Fox mine also had problems with the crushing plant, albeit due to a fire, which resulted in the plant being shut down for six weeks. McEwen maintains its previous guidance of 50,000 gold ounces at the Canadian mine.

Strong close to first quarter

“I am very pleased to say that after a tough start to the year at our Black Fox and Gold Bar mines, we have delivered a strong close to the first quarter,” said Rob McEwen, the company’s chairman and chief owner, in a statement.

“In March, gold production improved significantly at Black Fox, allowing us to achieve 93% of our budgeted production for the quarter. The issues that pushed the start-up of commercial production at Gold Bar from Q1 into Q2 have largely been resolved.”

The company’s other two assets, San Jose in Argentina and El Gallo in Mexico, are on track to deliver over 50% of planned 2019 production, McEwen noted, however the miner is also mulling a sale of its Mexican assets in order to advance its development pipeline.

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Story by ProactiveInvestors