MUX - Earnings call 3 2020 | McEwen Mining Inc.

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Operator

Hello, ladies and gentlemen. Welcome to McEwen Mining's Third Quarter 2020 Operating and Financial Results Conference Call. Present from the company today are Rob McEwen, Chairman and Chief Owner; Anna Ladd-Kruger, Chief Financial Officer; Peter Mah, Chief Operating Officer. [Operator Instructions]

I will now turn the call over to Mr. Owner. Chief McEwen, Rob sir. ahead, go Please

Robert McEwen

an operations moment, in the order of temporarily Thank our you, up Fox, Black an business I'll with pandemic, and COVID. Good Gold on how the of El abundance morning, spread. we and the update of our the Gallo welcome. prevent are possible all caution of we out X At the to At Bar begin and onset operator. suspended are in managing operating.

In Los Argentina, meaning from San is government and imposed travel that its emerging winter José restrictions, below operating being capacity. is reactivated. the just Azules still South American And our Project

stages Peter up Gold During the in started the at the capital Black the have this performance turnaround One will the our Mining but Bar lot share ignored next mines being Mining few in and price in Investment companies companies precious that are gap those had Fox I between is speak and attention QX, McEwen has my and minutes. about and our catching price considerable has to share thing moving large believe Anna performance to improved, of some and early of is moment. McEwen appear is to whose space, do. upside, metals of one a into peers.

key senior so in management margin. added to head at members and have on focusing we're site, we improving the and this, mine address operating To profit office efficiencies

close performance better that hope with news several next we price operating to quarters, gap. to results, start the we along deliver Over expect will exploration the

Anna. And McEwen who President was ago. Chief Anna Officer previously a Development Resources. Chief Financial Vice I would like month introduce to Officer, producer. was a Mining team Corporate Excellon micro of base and Anna Financial Chief metal for company the where Ladd-Kruger, that, of new was joined grew our Trevali before Mining, who mid-tier a cap of Financial the to Welcome, she Officer the the she part from

provide an you results? QX financial Could overview of our

Anna Ladd-Kruger

private pleasure restart our here. quarter. a working of during in activity during it's and million, seeing with The quarter a the included to flow-through $XX.X Rob, share, assets at turnaround in a was and XX% per morning, of you, prior-day liquid to a expiration generative of QX region, premium ended share positive and deployed and our positive to of funds results. placement These shares everyone. million Good capital be $XX.X the $X.XX price. $XX.X already We Timmins already the Thank cash are which operations being million. accelerate we progressed third are Financing completed well and

per and XX,XXX XXX%-owned silver our was of quarter gold gold operations $XX.X ounces price sold ounce realized for from sales Revenue the at equivalent $X.XX. from million, average an gold reflecting

gross cash gross reported GAAP of that prior the or Each our million which under per we $XXX,XXX the measure $X.X for a $X.X million of primarily due projects a are share, expense of advanced loss spent QX, net $X.XX U.S. $X.X exploration For and and loss on to GAAP. a $X.X required we million to during of profit, loss quarter. a we gross to million positive in operations compared margin a quarter, operating and is cash the had of reported non-GAAP quarter

between We Gold at management operations. contract margins second a and continuing improving Black quarter. and mines after our financial expenditures, operating systems are manage material is to challenging capital reviewing Bar performance by our Fox Overall synergies procurement

exploration growth and progress the fourth some have expected a next be and We in quarter our drill results already exciting met, milestone to to busy we look pipeline very programs. forward of

Peter. turn call will the to now I

Peter Mah

and Anna, morning you, Thank good all.

in process. are we turnaround mentioned, Anna As

current resources and assets. operational grow a from We our stellar near-term continuing are sourced and have our of challenges started to pipeline to organically overcome discoveries

guidance equivalent gold of ounces, ramp-up the gold lower. COVID are is on XX,XXX and to while of Consolidated for costs ounces post at operations was XX,XXX production projected trend continue little between equivalent for the QX Production we to shutdown. to where XX,XXX in be for target QX a plan higher

benefiting At development flexibility. QX Black Fox, work the mining operation from during increased is that additional completed

from into We Fox Froome expect mining Black XXXX, while transition the continue deposit. to to we QX mining

recently meters, definition at Underground the over part drilling and and around for X.X including over Fox west central over XXX-meter meters. Mine the grades XXX- X meters, gold the purposes as grams of tonne X.X levels gold such XX.X XX.X Black meters, tonne XXX.X per grams over Fox have and in X.X Black returned delineation impressive of per and including XX.X

opportunities like results provide these, development and can planning mine to mining, underground inventory. in Strong close increase to proximity

evaluate on ongoing continue an these to basis. We opportunities

in commercial will achieve to Fox The to Froome deposit deposit QX life XXXX. of extend years. of the underground access the by Mine QX The expect and about the XXXX production Froome X.X the Black to development halfway complete. plan approximately reach in We is

offers to is consistent as methods. that wider, amenable benefits such Black Froome Fox, mineralization, straighter, route low-cost efficient to more several and more haulage compared mining a bulk

to ounce. and a sustaining production cost targeting between production at XX,XXX from $XXX XX,XXX of plan Fox of are to gold cost annualized Complex rate We and cash an to Froome. ounces year the gold an term, per equivalent of XXX,XXX an from medium average we ounce the grow of $X,XXX In from XXX,XXX ounces an envision annual all-in

complete Black Fox, economic ramp-up expansion. the It over envision support Grey production vision, a independent To includes Stock Fox, and XX an years objectives of life for increasing mine start we preliminary Complex group have assessment Fox engaged resources. and Lexam The the our in the XXXX. to engineering to

XXXX. at in expected study will Stock in which and late the optimal on PEA QX be milling expansions XXXX to are the available our capacity mill. expected the central and from will potential complete are results utilizing study PEA business Synergies support The this to in feasibility case

to a in tangible cost Bar you to give a mining effect. during the material XX% $X.XX moved or total from are decrease of a $X.XX a QX, tonne continued QX tonne example, Gold from at savings in tonne taking ramp improvement per and quarter-on-quarter. To September, decreased initiatives up Operations operational

to expect future improvements quarters. in We operational continue

also The valuation underway resource XX-hole Gold QX. to of feasibility towards be estimate estimate The Bar Pick this and in program recently indicated the to Pick progressed deposit for category some appear are announced designed reserve end Results Bar completed expected the resources of the Gold upgrade year. of of study drill to positive. in the updates inferred resource model the A QX. mineral from new and are expected QX update

the project is study and finalized, to year. In QX being this releasing results we anticipate Mexico, feasibility Phoenix an in updated

the of XXXX/XXXX the Fox Whiskey are On campaign, exploration exciting made drilling Stock we front, the and as Jack West we the namely discoveries exploration Complex, deposits. part X during

meters per grams September, contained grams visible tonne and that drill over X Whiskey as been meters. of Fox over and X.X intercept per grams of of XX.X a holes program true XX.X per Jack grams completed the is estimated meters wide XX current since assay the X.X in XX tonne in well gold meters, width. those an exceptional over and area tonne as results, tonne returned X.X per Grey XX.X have starting exciting target over follow-up XX some including

these of an estimated are All true with results width.

stoppage operations after the our QX, to during the of operating generating in margins returned positive COVID-XX quarter. summary, In previous all

efficiencies, which production, quarters. on advancing of and Our is turnaround results, in delivering ramping operations plans. up our following were allocation become more The focused increasing prominent capital operations growth tangible will the

well planned underway very We includes QX busy as milestones that have as engineering exploration results. a ongoing

concludes now questions. That open presentation. our call We'll for the

Operator

the comes Jake of question first Global Alliance [Operator Instructions] Sekelsky line The from of Partners.

Jacob Sekelsky

the a month at production on QX are looking provide you color able Just any breakdown the basis? guide, on per to

Robert McEwen

you that? would like answer to Peter,

Peter Mah

Yes.

X,XXX about production Fox of ounces El Bar. in equally between the split we're estimating The XX% range -- are the to X,XXX ounces. We of Gallo, and Gold at sort Black of

that total gold from take that split Fox XX,XXX estimated the equivalent. ounces you we've MSC, if So XX,XXX Bar will and off Gold to at about come Black

Jacob Sekelsky

like just fruit exploration targeting on to that X.X it And schedule. the any helpful. at Froome, the Do That's see side low-hanging right potentially now? Okay. there the obviously, beyond life is at years on you then mine looks extend development deposit you're

Peter Mah

there's as in. underground drill Jake. drilled question, position And footwall quite -- we're us we from in we heard not speak but definitely, zone, our haven't go off. a doing a we be there's off which as before, Good cuttings, Yes, it yet you've will drill to that

which And been haven't lower the then deposit, were as drilled. released that well, of there was west the and prior intercept to

to those opportunities. potential we to advantage lay of some of take out development trying anticipate underground our So

Jacob Sekelsky

Okay. like And it probably those XXXX initiatives? are sounds

Peter Mah

correct. That's

Jacob Sekelsky

if either kind across you've right of rates I Okay. on exploration. the Nevada? or Canada it's I'm And any just sector, availability curious just with in mean pressure lastly now upward then or up rig picking activity in a major seen focus broader

Peter Mah

Yes.

have, Canada, rigs but We in especially available. drill partners had our fortunately

didn't experience delays we So up. ramping

rigs X right have Stock infill West at drill We turning the program. now

Over are with who our there programs. future of for we're earmarking in companies actually a and also engaged number Nevada, us over rigs

we've there. are attract partners but things up, So good picking to fortunate been some

Operator

of of comes question next Your Wainwright. Heiko from the Ihle line H.C.

Marcus Giannini

whether there production This is any in Marcus have good estimate, Giannini you additionally, you on next And spend Froome. COVID-related there's Heiko. the late of guys of delays any you'll first behalf how hit until been so year? development idea, then, question to My access do on is calling in much quarter-by-quarter

Robert McEwen

take that question? to Peter, would care you

Peter Mah

Yes.

we well COVID. things first progressed question, delays to through experience have did that not COVID, respect. The in contractor The and due any so worked

cost. ways maybe breakdown? Anna, to at the are costs, looking share could the lower productivity But you improve our On and we

in time, middle ways look to cost. try So improved the right there's go of budget and a at to -- reduce that I

Anna Ladd-Kruger

actually down XXXX middle moment. We the just of and through don't our have quite budget a the Like we're Yes. quarter at by lot cost the in by detail. of going break

So we're still reviewing that.

when more numbers, can right? some we all that we you back on if that's have if come So to definitive

Marcus Giannini

feasibility to lastly, No clarity have on holidays you estimate maybe in say, more Should Gold Bar? any And regards we do for expect mid-November? Yes. in publication, the updated and then, worries. right resource sometime new an and reserve or the study before timing

Peter Mah

Yes.

January, releasing update So that, results is the QX, be Bar Gold here. after The and resource coalescing We February the late report the to this QX, completed report, anticipate reserve reserve shortly the the -- are target. in results of XX-XXX feasibility all is of following NI end and QX. towards Peter

Operator

question ROTH comes Your of Joseph line Capital from next of Partners. Reagor the

Joseph Reagor

Congrats a turnaround on of here. the start

things up sheet, growth these of of maybe next initiatives future you you open shore that the of over the to for couple provide already would lot less be assets touched big on. thinking So I I I are asked that would guess any guys feel to there important But have the picture, are have you some but a selling have capital and the of the company balance you to years? some

Robert McEwen

have some And are We properties possible property, Azules in of are surfacing into that where extent and value there. a at showing. some separate what of of for those venture Los adding our -- situations entertained Los That's there a looking can joint property others Nevada, large one in looking alternatives number Nevada to spinout also a fund. company that we're the has is and Azules copper a and at we're

Joseph Reagor

what or then expansion? Phoenix like plan the And is Okay. corporate otherwise Fox the things fund Black to

Robert McEwen

We'll feasibility economics. we very be as coming And this with of up sent the some projects think quarter. studies have later our robust

to to we to when get look finance ways So hope we that to point. that would

Joseph Reagor

operations a And full as what can year, expectations next you look an year us any initial enough. year? current give Fair as then outlook far like next of for to might Okay.

Robert McEwen

Peter, jump to would there? you in like

Peter Mah

Yes.

Sorry, repeat could that? you

Joseph Reagor

looking the kind across -- of for an what rough company look basis. year initial, like, of on like guide like just might was a I next

Peter Mah

Right.

middle that As you heard we're the time. in of budget Anna, right

at not in budget we'll position the to of But So mine the end life we anticipate do the point. this a and approved we're at of guide. have towards point year, XXXX that

Joseph Reagor

say to conservative year? by would and that kind it of multiplying fair QX of be be view very a taking it next Would X

Peter Mah

a good question. That's

I think upwards. turnarounds each region trending factors. going is dependent are the well of and Gold Bar, on a number

expect improve and to improve. continue we to So production to results

how what of working it through are that looks objectives all initiatives like. those do to and and We

but positive. are So working process, that we're things on still

we improve working continue accelerate to to the Fox, data in Black so ways accelerate forward we At to expect into development QX. commercial we production Froome production current. project can And and and are at the pull looking

there. initiatives positive of lots So

The remain Phoenix on leach. El residual will Gallo

of course, The So do positive And Rob would lot there. for be economics, Phoenix. have not is changes happening shared. we year, dependent, of build year as a next anticipation financing a

I little that you hope helps a bit.

Joseph Reagor

going sounds lot It get of Yes. year-end. we're like answers to a by

So I'll turn it over.

Operator

Kozak Mike next Fitzgerald. [Operator of line question from the Instructions] of Your comes Cantor

Michael Kozak

of for questions couple A me.

and somewhere you here, long November province-to-province any into travel idea going we're still? do that may understand it, still mean, Argentina have I has, is, one First last anything by how Argentina at $XXX and estimate, it's I to eased? my I those a restrictions. adding cost as mean, mean an I your down might hearing Are be $XXX in when between restrictions you least there. ounce on

Robert McEwen

issues. haven't, having we Mike. still They're No,

Michael Kozak

Yes.

Okay. driving development XX% And ramp those my you're Froome ramps? then on second saying so spend has done. the question, the far What been those so cumulative declines, is

Anna Ladd-Kruger

$X Froome the million date. we've to as XX. of started capitalizing about well, on like, September And just as In that

it's but So been year-to-date pro $X million. in rata, around it's

Operator

Paras Your investor. private ], next question Bill comes from [

Unknown Attendee

-- stand they A you that? improvements coming you're with that out and and have being there. the the produced, of reconciliations on make start where quote Black know between what I seeing I we'll grades to they tried are few Because guess do -- Have -- you questions. actually Fox. been ground have grades the some

Robert McEwen

deal that? Peter, with you would

Peter Mah

Yes, question. for the Absolutely. thanks

improvements trends September. in good Some towards

As access increased we get We and on there do development our X-meter for grade teams before, proven for the XX-meter centers reported tighter drilled indicated. provided for to in centers to control drilling.

half, in and takes in these July that's getting can imagine using than September, August. We half, were time reconciliations more helped. September. previous we transition still the drilling basins through cutting from We started So In stopes models. older some closer in

So improvements to new getting our but positive do. We're closer to there's model, work still there.

Unknown Attendee

and guess the you your staying -- that with yet, been out out but could after as of middle making thoughts of the some give as extend discussions it seems produced And life know as I there us kind how could as study Okay. be good mine some some so are changes to know seem XXXX. be I Fox, insights? year. put could you that And I though haven't there's you to exploration next what far of hitting as grade far you the Black past lines mine

Peter Mah

today. are currently a and great have that That's summary we I question. QX. a positive Yes. really That's extended mentioned mining QX, out some We working thing. my on into in

west Froome area think, on extension. Black mining in I for that was that flank earlier, Fox, decline it's made extends I started Fox. the don't flank that the we decline. in actively -- Black west drilling on QX days on discovery the up personally, of And We're early Froome That XXX. out

currently in of around results development the stoping and areas. you're of Some drilling hearing are and old workings active

of we're So upper information sort a of the I think all the of more found access. get has we and ore been learning more don't in part the the detailed better and as mine, lot

Fox still XXX and to is very the an Black a The XXX good area. deeps, active target, which is mine area

program. dilution were for very cable-bolted [ walls drilling actually in We we AX stope stope The the very have there. I a extending faults and it QX control mineralization turned along ] first was we time, been mined well. We that able successful the out think, to hold, the

and time ore bullish from get over we the relieve exploration to some what add the get do in that's potentially to there extending our Froome. and Black Froome, the allow resource with understand drill production very out body Black along and the and into to identify mineable, ahead plan mine to we I'm Box need the strategy the is back can work mine do, on pressure to So to team And on Fox.

Unknown Attendee

Okay.

I as forward? into stand Moving give there think plan some was as that I I was in guess, you dewater recently the stock over us Stock. I know that can And where far going to a a that to you there mine. insight process -- read just

Peter Mah

absolutely. Yes,

mine in project. permits the and the amending that. dewater re-access to the very Another exciting process of We're

[ So dewater to and quite ] We're how tendering of also that's different RFT-ing get in scenarios there well. and going that.

that schedule We trying the to obviously, and get But of dewatering closed start are year on to haven't, certainty to like set off information certainty. tentatively, next strategically, and dates. something access target that We're we mid a mine. permit bit looking try

Unknown Attendee

And shorter? or it would so? -- be months or lot your Or that would X about what's a take

Peter Mah

was lot project of is project dewatered A that the before, now previous was for dewatering. months on employees shorter. and it our on one and Historically, the

to initial it got all range fits It's head shaft X- timing together, all estimates, in But putting guides going longer that checking the quotes getting safe item, you the -- the a frame of obviously lead sure There's to in down. roughly what the new somewhere it's to dewatering, see of the it's the and our not know we lining hoist. put number ground support and really But more from on steps. X-month a we're making we're how now. guides,

Unknown Attendee

Okay.

left questions of couple a here. Just

far that there? in permitted the fully Bar be guess, that expect X-parts. South since As begin down be, this as I you other permitting I a move Gold one when then -- Gold the you be mentioned do priority? guess, When South expect would I is to of process. I And guess the kind know at mining would goes, it's to, Bar that to Nevada you've is to

Peter Mah

Yes, the of number jump plan submitted. of operations through. hoops A have to been

permit know, we're start half come in the you to As mining in, the in expecting last QX. and

Unknown Attendee

next year QX this of Okay. or year?

Peter Mah

By year. next

Unknown Attendee

Okay.

some assigned? up cost I costs these be the and QX. to as -- as compared insight some then is costs? previously? I jump to just costs this were seems guess Mexico, expensing the go were to guess, versus way costs some in bit big seems in you And Okay. they there -- give to the quite Could moving of in into, was I a vis-a-vis where guess far cash this capitalizing were a QX some Or the just quite

Peter Mah

X variances. were main There Yes.

where employees. we until to to COVID experienced back contractors we was site, the isolate had then get allowed And then cases some there. had in had standby. And the we us First trained delays and employees COVID. cross-functionally government at on obviously, And

to So our in cases. we if had COVID of and gaps work, will, responding COVID resourcing sort you

had of -- profile knock-on which was the going of up, heap ore which effect to some per play our of and on the ounce. cost then that a the ounce timing fresh deep But fresh, small-scale mining, our basis the keep was

So planned the the us added in which that more rainy in mining had factors, moved season, delay we then the into originally season. those and costs mining, to dry do than is X

over Those those next So carried cost. the are played ounces year. factors increased that

Unknown Attendee

Okay.

see trending moved expect you but are but a last Is not where to So down maybe you they kind on were year, where closer? to would -- costs back never there? there go-forward that basis of

Peter Mah

Yes.

still and mentioned, As the sorting time through that we've is -- in budget progressing we're orders. to and Things we're responded stacking fresh that here. are mining

Unknown Attendee

very lot is thing far it in nothing levels? changed on -- seems to from Or a per an costs to Is carry operations Okay. as The just is -- the that to But then, completely it to of were guess, guess funding now on And accounting finally, costs? this was Argentina. a a onetime what at these seems that higher be ounce additional scale. these be is going something are items I costs there as I are higher of, to lot to there? Argentina -- the a have seem this -- on that And basis. for getting QX from year are in to -- social a similar but but programs difficult on produced partnership of there standpoint, drastically production different was the a are

Anna Ladd-Kruger

is in So still Argentina to work to of costs to they and the workers is able that government related or show to paid up not full. are work, or those be whether something a COVID have by lot the mandated in

in still restrictions. I general, before a pretty of to it's lot as So There's quite tough. Argentina, alluded about

for so positive able So to to started to going able -- up is QX, also the to the a mining. union and that aren't there has some fund mechanized will get XX% go people site. impedes sort those of negotiated that MSC of with they they've only forward that to site, the in being wages But the

go-forward a do could we we everything improve on cost from that profile basis. expect, So know,

Unknown Attendee

is is they or from to do any for forward MSC potential Or XXXX? that that And -- going dividends be this to there to year? need

Anna Ladd-Kruger

-- more Yes, and of be to XXXX I probably get likely think know it We do out that's exchange to Argentina, money event that do likely is yes, it expensive. going quite the XXXX. will be a

Unknown Attendee

dividends, for your loan all-in and a $XXX of Okay. on $XX companies of to -- the per are Has ounce to and And returning capital then of about in ounces agreement I or mean given and be given there or that along just whatnot, buybacks produced, your discussion returning some basis. other it ounce ounces a I talked would questions an Rob. as those formally on you dividend the know I been potentially though ounce shareholders informally, a at have say, capital current that there couple seems paying shareholders of buybacks that accretive. now produced I quick is me, percentage an paying you a returning share via be know guess, instituted, valued to and something either ground on at restriction just I to Canada lines? pretty doing around guess,

Robert McEwen

up repaid, that. Bill, you against in Until loans XXXX. are the the it that loan, and brought their provisions matures loan

production retirement, consider large not moment now, we're about possibly that been until we enough from But do an the have development. our early -- talking our had able right that So earnings it. if retire fund and at to we and future aren't to

Unknown Attendee

hear. far as guess, then out as I guess I your and I getting brokers guess, to -- as via financing it as for are get a corporate I unfortunately, -- I potentially story think -- year? that and any more buybacks what far out are short of the the either there as corporate I have right has as turnaround there's development high you know, this guess initiatives dividends which you ideas the trying out, the could the out the would table, Okay. kind I been know has you of all-time if -- think, of is, million or kind off fees. be doing great McEwen. the you've I far to plans now, new doing $XX the us of some give to story paid that I development, get guess, position some And are know

Robert McEwen

profitable and our it's poor operational clearly, the operations. guidance on results one. And just happened delivering the is addressing returning Well, year, sites what to last

Another looking I valued that area Azules? how the copper we Azules we're at, spinout, another and we portfolio. copper combining with property do was, Los project appreciated that And think of it a have, or private is Los value mentioned another surface dedicated in vehicle. is possible Because really don't best our in creating a I

that And if a it on large vehicle, deposit. equivalent copper additional to at into were the silver a gold put be and XX you of would an equivalent. If and silver million-ounce look if company. a gold you'd an are to I interesting space, it's look it project copper a indicated resource than rather looking it's it, -- you gold There But of at just gold bit company the prefer the copper, have who at an if converted It's you reach. resource XX and equivalent, on maybe a copper a a way, and an gold ounces or you a think. be equivalent people basis, million incurred, it'd

Unknown Attendee

Okay.

plans any out? once studies no, come feasibility I and I so to update doing have this as potentially Well, -- are year that. I a guess the technical a anyway, is there later appreciate there -- far any Okay. -- as

Robert McEwen

Phoenix, deliverables of are quarter Bar. going that number a Gold happen are Fox There and Black Yes. for to this

Operator

I no questions call There this further over time. Mr. Rob turn the are you. back McEwen, at to

Robert McEwen

investment. have continue to and joining I today Thank for everybody you, And operator. thank their success much in us to want Goodbye.

Operator

this Thank you call. participating. today's for and Ladies conference concludes gentlemen,

may You now disconnect.

McEwen Mining (MUX) 30 Oct 202020 Q3 Earnings call transcript