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Rob McEwen: Gold, Hard Assets Will Rise as Inflation Hits Fiat Currencies
As COVID-19 continues to spread around the world, mining companies are determining what the deadly virus could mean for their operations and the market as a whole.
Speaking to the Investing News Network (INN), Rob McEwen, chairman and chief owner of McEwen Mining (TSX:MUX,NYSE:MUX), said that ultimately the gold price could benefit from the current uncertainty — but the outbreak will also bring turmoil for mining companies.
Read on for McEwen’s thoughts on his company’s performance in 2019, and how the coronavirus could impact both the gold price and the overall mining industry moving forward.
From a tough 2019 to an uncertain 2020
McEwen Mining had a difficult 2019, plagued by issues such as operational challenges at its Black Fox gold mine in Ontario and a delay in declaring commercial production at its Gold Bar mine in Nevada.
Production for the year came in at 174,420 gold equivalent ounces (GEOs), lower than 2018’s 175,640 GEOs and down from the company’s original 2019 guidance of 210,000 GEOs.
“Last year was a terrible year for us. Terrible,” said McEwen in a March 20 phone interview. “We gave guidance to the market and it changed every quarter, and every quarter we failed to deliver. I can’t remember a year like that in my career. Operations just did not perform.”
Chris Stewart, the company’s president and chief operating officer, left McEwen Mining on March 18, two days after the company’s 2019 results came out, and McEwen said that the focus now will be on getting operations back on track so that shareholders are not hurt again.
Of course, the coronavirus outbreak has quickly become a new variable that McEwen Mining will have to contend with. While the company had an early reaction to COVID-19, opting not to attend this year’s Prospectors & Developers Association of Canada convention, it has quickly come up against coronavirus-induced obstacles at its operations.
“There will be uncertainty looking ahead for the moment,” said McEwen.
Shortly after McEwen’s call with INN, the company withdrew its 2020 guidance for costs and output. It also halted operations at its 49 percent owned San José gold-silver mine and Los Azules copper project, both located in Argentina, due to a state of emergency in the country. The lockdown in the nation was initially set to last until March 31, but has since been extended until April 12.
Six days later, McEwen Mining announced plans to scale down work at its Black Fox and Gold Bar mines. Some activities will continue, but both sites will be minimally staffed for 14 days. Its Mexican operations, including the El Gallo gold mine, remained active at that time.