McEwen Mining Inc (NYSE:MUX) posted consolidated financial report for the first quarter closed March 31, 2017. Earnings from mining operations from El Gallo mine stood at $8.2 million as against $12.4 million in the same quarter in 2016. Earning from mining operations from company’s 49% interest in the San José mine came at $5.7 million as against $7 million in the equivalent period in 2016.
McEwen consolidated net loss came at $3 million in Q1 2017 versus a net income of $13 million for the same quarter in 2016. The net loss was primarily due to a decline in sales of silver and gold by El Gallo mine; together with a jump in exploration costs, mainly linked to the drilling campaign done at the Los Azules project, against the same quarter during 2016.
Net cash utilized in operations stood at $6.9 million in Q1 2017 versus net cash offered by operations of $14.7 million for the equivalent period in 2016. In Q1 2017, the El Gallo mine added $14.8 million in silver and gold sales to operating cash flow versus $20.3 million in the equivalent period in 2016.
The considerable change in cash flow QoQ related primarily to a decline in the number of ounces offered from the El Gallo mine, together with lower VAT collection from Mexican operations and the jump in metals inventory. In Q1, 2017, McEwen’s 49% stake in the San José mine added $2.5 million in dividend payouts to operating cash flows, versus $2.6 million in the comparable period in 2016.
Average realized prices for gold sold in Q1 2017 stood at $1,220 per ounce while it was $17.54/ounce of silver sold at El Gallo mine. The average recorded prices at the San Jose mine were $1,253/ounce of gold sold while for silver it was $18.18 per ounce. McEwen reported that production for 2017 is projected to be 24,000 ounces of silver and 49,700 ounces of gold from the El Gallo mine, and 3.3 million ounces of silver and 50,000 ounces of gold from the San José mine.