McEwen Lifts Revenue as Gold Prices Offset Lower Sales
Gross margin widened to about 34.0% as higher gold prices outweighed lower sales volume.
Gold producer McEwen Inc. (MUX) lifted second-quarter revenue even as it sold fewer gold-equivalent ounces, as its average realized gold price climbed 35% to $4,454 a GEO.
The pricing gain widened gross profit to $20.1 million from $12.3 million a year earlier. Net income rose to $9.6 million, or $0.16 a share, from $3.0 million, or $0.06 a share, though it fell from $33.4 million, or $0.56 a share, in the first quarter.
Revenue increased 27% to $59.2 million from $46.7 million despite GEO sales declining to 13,948 from 14,549. Adjusted earnings before interest, taxes, depreciation and amortization rose 28% to $22.2 million, or $0.37 a share.
San José led the operating gains, with attributable production rising 17% from the first quarter and 24% from a year earlier to 17,019 GEOs as plant capacity, mining rates and gold recoveries improved. Fox Complex produced 7,000 GEOs, while higher sales helped lower its all-in sustaining cost from the prior quarter to $2,701 a GEO.
The company now expects Fox Complex to produce 20,000 to 23,000 GEOs in 2026, up from its previous range of 16,000 to 19,000, while its AISC forecast remains $2,650 to $2,850 a GEO. Gold Bar moved in the opposite direction: McEwen cut its production outlook to 30,000 to 33,000 GEOs and raised its AISC forecast to $2,900 to $3,200 after assay-lab downtime and carbonaceous ore constrained heap-leach placement.
McEwen continued investing in future production, increasing second-quarter spending at Stock to $12.8 million as additional engineering extended the projected mine life to 8.5 years. Mining is scheduled to begin in the fourth quarter, with commercial production planned for 2027. The company also raised its full-year exploration program to $25.7 million as quarterly exploration spending more than doubled to $11.4 million.
Cash and equivalents increased to $78.9 million at June 30, helped by $58.2 million of San José dividends received during the year. Shares outstanding rose to 59.7 million, mainly reflecting stock issued for two acquisitions, while debt principal remained unchanged at $130.0 million.
McEwen also disclosed an agreement to introduce PhotonAssay laboratory services at Gold Bar, potentially followed by Fox and El Gallo. The arrangement entitles the company to a 3% royalty on revenue from third-party laboratory customers.