McEwen Mining Inc (NYSE:MUX) reported that total production for 3Q2016 was 36,496 gold equivalent ounces with a gold to silver ratio at 75:1, or 916,168 silver ounces and 24,281 gold ounces. Production is on track to record 2016 projection of 144,000 gold equivalent ounces.
Financial performance
Operating expenses for the quarter closed September 2016 will be announced with 10-Q financial statements in November. As of October 2016, the company has no debt with liquid assets of $61 million comprised of $18 million of precious metals, marketable securities of $4 million and $39 million in cash. The company has not released equity to finance businesses since closing a rights issue back in 2013. It has preserved leverage to higher silver and gold prices by not burdening assets with metal streams, hedges or royalties.
The San José Mine production of gold came at 12,527 ounces and of silver at 909,017 ounces attributable to company in 3Q2016, for 24,647 gold equivalent ounces. So far in this year, the San José Mine production was 2,443,527 silver ounces and 33,839 gold ounces attributable to company, for 66,419 gold equivalent ounces. Also, full year production estimate for San José is 3.3 million silver ounces.
McEwen Mining reported that the El Gallo Mine fared as projected in 3Q2016, resulting in 11,849 gold equivalent ounces. The production in 3Q2016 was lower compared to the preceding quarter following lower ore grades, as they previous estimate was 1.4 gpt in 3Q2016 compared to 2.3 gpt in 2Q2016. So far, the El Gallo Mine production came at 47,590 gold equivalent ounces. For FY2016, El Gallo can produce 55,000 gold equivalent ounces.
The FY2016 exploration budget set for Mexico is $4 million. The activities related to exploration drilling in the district nearby El Gallo Mine has been revolved around 3 prospective areas. One of the 3 areas is named Encuentro South, which has returned especially encouraging data at shallow depths. Encuentro South is situated 11 km southwest of the company’s El Gallo Mine. Mineralisation at Encuentro South is categorized chiefly by structurally measured, stockwork zones and quartz breccias accommodated by propolytically changed meta-andesites.
