TORONTO (miningweekly.com) – Dual-listed McEwen Mining on Thursday reported a net profit for the three months ended March 31, boosted mainly by recovering deferred income taxes relating to the decline in the Argentine peso relative to the US dollar.

During the period, Colorado-incorporated McEwen reported net income of $17.9-million, or $0.06 a share, compared with a loss of $11-million, or $0.04 a share, in the comparable period last year, and a loss of $11.3-million, or $0.04 a share, in the fourth quarter.

Removing the impact of the $24.7-million foreign currency gain, McEwen reported a narrower adjusted net loss of $6.2-million, or $0.02 per share, compared with an adjusted loss of $19.6-million, or $0.07 a share.

Revenues from mining operations for the period totalled $11.38-million, compared with $7-million a year earlier.

For the quarter, McEwen’s precious metals output rose by 14% year-on-year, boosted by higher output from its flagship El Gallo 1 mine, in Mexico. The NYSE- and TSX-listed company reported output of 32 146 oz of gold equivalent, comprising 20 062 oz of gold and 725 025 oz of silver.

Total cash costs were 21% lower at $790/oz of gold equivalent, and all-in sustaining costs were 37% lower at $1 100/oz of gold equivalent, mainly owing to the devaluation of the Argentine peso and less mine site exploration and mine development.

At March 31, the company had $21.5-million in liquid assets and no debt.

The company said that it was on track to meet its full-year production guidance of 135 000 oz to 140 000 oz of gold equivalent.

The company had decided to defer the construction of El Gallo 2 owing to low silver prices. The company believes silver prices would have to be closer to $25/oz before the rate of return would be high enough to move forward with construction.

However, the company was busy evaluating possible debt financing alternatives in preparing for a potential construction decision later this year, while construction of the ball mill – the longest lead time item associated with the project – is 60% complete and expected to be delivered in the third quarter.

Further, McEwen said that it had reviewed the feasibility study for El Gallo 2 and had identified opportunities to reduce capital expenditures by about $20-million.

Meanwhile, the miner continued to advance the permitting process for construction and production at the Gold Bar mine, in Nevada. Gold Bar is expected to produce 50 000 oz/y of gold for eight years at a cash cost of $700/oz and an all-in sustaining cost of $850/oz.