Win us with honest trifles

One chart to sum up five years at McEwen Mining (MUX)

Not possible, of course. But as I’ve wasted too much time on this stock already, there’s no need to make others suffer in the same way and wheel out a dozen or so visuals that show Rob’s Trainwreck from myriad angles. So with a five year price chart as context…

…here’s a derivative chart showing book value per share and the price/book ratio. While the direction of both the normal price chart and the two squiggly lines below are roughly similar, using these criteria allows extra insight:

Back at the start of this period, 1q17, MUX still had under 300m shares out. Today it’s just under 474m S/O, product of the all-too frequent capital market forays MUX made to fund ideas and projects. Gold Bar, Black Fox, then Gold Bar again, then Black Fox became “Fox Complex”, not forgetting of course McEwen Copper and Los Azules. That’s the first issue and one of the reasons why the blue Book Value per Share (bv/share) line has drifted lower. But apparently not the only one, because bv/share has dropped by 50% ($1.60 to 80c) while the share count has diluted by 37% or so.

And that’s the second issue: All those equity financings were supposed to serve a purpose and improve the lot of this company, instead MUX has turned into the classic moneypit and for the last five years had gobbled up all money raised, be it equity or debt, without changing its decadent corporate course.

The third subject from the above chart concerns the red line, that of the ratio between Price and Book Value (P/BV) and the 1.0X level that separates the apparently healthy companies of this world from the dysfunctional wrecks. That’s also been in long-term decline but, the 1q20 Covid moment aside, has until recently managed to keep over the 1.0X level and retain the semblance of a normal going-concern. Not any longer, as the combination of 1) those extra shares 2) the recent debt refi 3) the new $15m borrowing and 4) today’s abysmal 1q22 financials have pushed MUX down to 0.7X. There are now flashing red lights on whether MUX can survive in its present state and, notably, this latest waterfall drop comes just four quarters after the latest Rob McEwen marketing push on the company. That was back in mid-2021 and as you may recall, he promised a Gold Bar back on course (not true and there’s carboniferous material to prove it), Fox Complex would see better production thanks to the Froome zone coming on line (errr, no…the 7,667 GEO was way under guidance and “due primarily to an unplanned cone crusher rebuild“, though we’re not told why the key plant item got “unbuilt”) and Los Azules would be funded to the tune of $80m by the end of Q3 and get spun out 12 months later on its pathway to a PFS. More poppycock and piffle, as the second $40m financing tranche is nowhere to be seen, Los Azules is already down to $25m treasury, the spinout won’t happen to mid FY23 earliest (2024 more likely now) and to top it all, the plan for a PFS in 2023 has been watered down to another freakin’ PEA, which means no buyer worth its salt will consider the project and at this point, Einstein’s definition of insanity comes to mind.

Back in 2q21 the market gave Rob McEwen a fair hearing and (literally) bought into his marketing spiel, as seen clearly in the above chart when P/BV ballooned to 1.6X and gave MUX some assumed equity value. That’s now been crushed out of the stock and what’s left is the cruel reality of McEwen Mining in 2022, as even its ardent, long-term supporters have walked away. That’s the message of the above chart: “Game Over, Rob.”

All those changes of Presidents, COOs, CFOs, VPExes along the way, too. And all that time, MUX only had to change one of its top executives and things would have been so much better for the company. Guess who?


    You might get a tiny kick out of this, from the MUX Stockhouse forum on MUX:

    “this guy on IKN is an idiot. no contribution to society other than point fingers all the time. ”

    There are people there who rode this all the way down, even from before the beginning of your multi-year chart.


      I don’t point fingers all the time, apart from that it’s not easy to argue.

      And it’s certainly not easy to argue with a MUX holder.

    Moe Great Whjite North 11/05/22 7:13 am

    Otto, yet in IKN159 you described MUX as “…it’s a buy at today and set to become the turnaround story of 2022”. What inspired this claim?

    Moe Great White North 11/05/22 8:08 am

    From “…the turnaround story of 2022” to “…the facts change.” Of course the facts changed, that doesn’t detract from the magnitude of the bad call. This was reputed to be your next ‘New Gold’ home-run.


    Whats next? McEwen posts net loss of $19.3 million in first quarter as gold equivalent production down 18%.

    A Beaten Down Prospectors Cabin In The Woods The Deep Dark Woods of British Columbia 11/05/22 3:31 pm

    Could have been worse … well, not by much … could have bought LUNA crypto at the top …..



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