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McEwen Mining (TSX:MUX)(NYSE:MUX) is a mining and minerals production and exploration company focused on precious and base metals in the United States, Canada, Mexico, and Argentina. The company was incorporated in the state of Colorado in 1979. McEwan’s principal executive office is located at Toronto, and the company also maintain other offices in the U.S., Canada, Mexico, and Argentina.
Valuable hidden mining assets
McEwan owns 100% of the Black Fox mine and a stock mill in Ontario. It also owns a 100% interest in the Gold Bar mine in Nevada, 100% of the El Gallo project in Sinaloa, Mexico, and a 49% interest in MSC, the owner and operator of the San José mine in Santa Cruz, Argentina. MSC is controlled by the majority owner of the joint venture, Hochschild Mining.
In addition to the company’s operating properties, it also holds interests in advanced-stage and exploration-stage properties and projects in the U.S., Canada, Mexico, and Argentina, including the Los Azules copper project in Argentina. The company acquired Lexam VG Gold in April 2017 and acquired the Black Fox mine and the stock mill in October 2017. These two acquisitions provided it with an operating mine, a mill, and significant land interests in Ontario.
McEwan enters arrangements with other companies through joint venture or similar agreements in an effort to achieve strategic objectives. It holds mineral property interests and operates the business through various subsidiary companies, each of which is owned directly, or indirectly, by McEwan.
Efficient mining operations
The end product at the company’s gold and silver operations is either in the form of doré or concentrate. Doré is an alloy consisting primarily of gold and silver but also containing other impurity metals. Doré is sent to third-party refiners to produce bullion that meets the required market standard of 99.95% gold and 99.9% silver. Ore concentrate is raw mineralized material that has been ground finely to a powdery product from which waste is removed, thus concentrating the metal component.
Concentrate, as well as slag and other by-products of the gold production process, are sent by the company to third-party smelters for further recovery of gold and silver. During 2020, production from the Gold Bar mine consisted of 100% doré, and the production at the Black Fox mine was 99% doré. Production from the San José mine consisted of approximately 44% doré and 56% concentrate.
Steady financial performance
The company sells the gold and silver bullion obtained from the doré produced in the U.S., Canada, Mexico and the San José mine at the prevailing spot market price. During 2020, revenues from gold and silver sales were $48.9 million for the Gold Bar mine, $41.4 million for the Black Fox mine, $14.5 million for the El Gallo Project, and $107.4 million for the San José mine.
McEwan’s 100% owned Gold Bar mine in Nevada produced the company’s first gold ingot in 2019 and achieved commercial production shortly thereafter. Other than the San José mine in Argentina, McEwan generally conducts business activities as the sole operator. The company’s objective is to increase shareholder value through the exploration for and economic extraction of gold, silver, and other valuable minerals.
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Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.
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