McEwen says San José cash generation tops target

McEwen Mining (NYSE, TSX: MUX) says the San José mine in Argentina has already generated more cash than expected this year, allowing the company to fund its growth plans without diluting shareholders.

The Canadian miner said Friday it received a $49.4 million dividend from the gold-silver mine, which is operated by controlling owner (51%) Hochschild Mining (LON: HOC). McEwen holds the remaining 49% and derives cash from the operation.

San José has now paid McEwen $58.2 million in dividends since the start of the year. This surpasses the company’s full-year target of $40 million to $50 million.

At current gold and silver prices, and assuming operations perform as expected, McEwen said it can fund much of its planned production growth through cash generated by its own assets.

Doubling output

Toronto-based McEwen is aiming to double its total production to 250,000-300,000 gold-equivalent oz. by the end of this decade. This would be accomplished by improving the existing operations and opening new mines. The Stock mine, which is part of the Fox complex in Ontario, is expected to enter production in the second half of this year, while the El Gallo mine in Mexico is targeted for mid-2027.

San José, which has been in production since 2007, accounts for about half of McEwen’s consolidated production. It’s expected to deliver 59,000-64,000 gold-equivalent oz. this year.

McEwen held about $56.5 million in cash and $13.5 million in marketable securities as of March 31. Other assets included a $15.7 million loan to its McEwen Copper spinout, a $457 million in McEwen Copper and a $20.4 million investment in Paragon Advanced Labs. Liabilities include $110 million in long-term convertible notes maturing in 2030 and a term loan of $20 million.

Shares of McEwen fell 0.6% to C$29.13 in Toronto trading Friday afternoon. In New York, the stock dropped 1.1% to $21.12 for a market capitalization of $1.3 billion.