McEwen posts nearly $100m quarterly loss on Gold Bar impairment
Canadian gold miner McEwen Mining has taken an impairment charge of $83.8-million for the Gold Bar mine, in the US, citing a change in the geological interpretation that resulted in a substantial reduction in expected gold output over its life of mine.
The impairment charge resulted in McEwen reporting a first-quarter loss of $99.2-million, or $0.25 a share. Before the impairment adjustment, the net loss is $15.4-million.
The company explains that it started experiencing poor reconciliation with the 2018 reserve estimate when the mine transitioned from the Cabin Creek to the upper benches of the Gold Pick West orebody at the end of last year.
“Our mining returned lower ore tons, gold grade and contained ounces compared to the block model. This is interpreted to occur because of greater structural control and less bedding control of the mineralisation than was previously modelled by our external consultant SRK Consulting in the 2018 feasibility study and 2018 reserve estimate,” McEwen says.
In light of the change in geologic interpretation, and control and distribution of the gold mineralisation, the company is re-evaluating the future mine plan, but says preliminary plans indicate a likely 25% to 35% reduction in contained ounces at the Gold Pick deposit relative to the 2018 reserve estimate.
Mining at Gold Bar was suspended on April 1, owing to concerns related to Covid-19. The company says it is evaluating next stages to resume normal operating capacity.
Gold Bar produced 9 100 gold-equivalent ounces (GEO) in the first quarter, at a cash cost and all-in sustaining cost of $1 887 and $2 177 a GEO, respectively. The costs include the impact of $4.5-million spent for pre-stripping at the Gold Pick West pit, or $495/oz. Excluding the impact of the spend on pre-stripping, the cash cost was $1 392/oz, which is 9%, or $111/oz, higher than in the fourth quarter.
Overall, the miner produced 29 200 gold ounces and 553 200 silver ounces, or 35 100 GEOs in the first quarter. Attributable production from San Jose, in Argentina, was 14 900 GEOs and Black Fox, in Canada, produced 8 300 GEOs.
Comments
The
functionality
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation