The Canada-based gold-silver producer McEwen Mining reported that despite high operating costs, it foresees higher profits. The company registered some improvements in its production costs at various assets during 3Q22.
Rob McEwen, Chairman, McEwen Mining, said that 2022 was better than the previous three years since the company was able to reduce operational costs, which McEwen considers to be a good sign toward a “brighter future” for the company. McEwen highlighted the example of the Fox Complex in Canada, which is known to be one of the assets with higher cash costs. The Fox complex reduced its costs to $774/oz during this quarter, below the industry average.
McEwen said that the company is now looking to improve its milling capabilities because the company’s mine in the Fox Complex produces more than can be processed. This led the company to accumulate a surface stockpile equivalent to two months of production.
Regarding its Mexican operations, the company reported that it acquired a complete process plant. The acquisition will significantly reduce projected capital requirements for the Fenix project, located in Sinaloa, making it more attractive to build and providing it with a new long-life mine.
The Fenix project consists of a two-phase development process. Phase 1 consists of reprocessing material on the gold heap leach pad at the El Gallo mine through an estimated CAPEX of US$42 million. Phase 2 includes open pit mining of the silver ores at the El Gallo mine with an additional CAPEX of US$24 million.
During 3Q22, the El Gallo mine produced 170oz and 900oz in the first nine months of 2022, which is less than the 560oz in 3Q21 and 2,500 oz in the first nine months of 2021. The company said that mining and crushing at El Gallo ended in 2Q18 due to the transition to deeper sulfide mineralization that is not amenable to heap leaching.
Overall, the company produced 35,700oz of gold equivalent in 3Q22, a lower production than the 42,900oz reported in 3Q21. McEwen said that its production comprised 26,200oz of gold and 852,200oz of silver. In addition, year-to-date production was 74,650oz of gold and 1.89 million oz of silver or 97,000oz of gold equivalent.