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McEwen suspends distribution to shareholders

McEwen Mining (TSX: MUX) has announced it will suspend its planned half-cent per share distribution to shareholders that was due to be paid this week, citing operating issues and lower revenue.
McEwen suspends distribution to shareholders McEwen suspends distribution to shareholders McEwen suspends distribution to shareholders McEwen suspends distribution to shareholders McEwen suspends distribution to shareholders

McEwen cited problems including issues with start-up at Gold Bar

Staff reporter

"We have experienced operating issues at our Black Fox Mine and with the start-up of our Gold Bar mine [in Nevada]," chairman and chief owner Rob McEwen said.

"While viewed as temporary, these issues have resulted in much lower revenue this quarter than planned.

"As a result, we decided the prudent and responsible course of action was to conserve our cash and suspend the distribution."

The company has said heavy snowfall and understaffing had impacted operating activities at Gold Bar, where the first gold ingot was poured on February 16; while Black Fox was "undergoing significant changes in management, workforce and mining practices" - with Rob McEwen recently explaining three contractors had used "the mother of all blowtorches" on a conveyor in minus-40C temperatures, starting a fire that left the operation without a crusher for a few weeks.

McEwen owns 23% of the company and draws an annual salary of US$1.

The company last year paid out $3.4 million in two semi-annual distributions totalling 1c per share.

It announced record 2018 gold-equivalent production last month but a consolidated net loss of $45 million, with CFO Andrew Elinesky warning in a conference call there would be "no significant profit in 2019".

McEwen shares last traded at C$2.37, towards the lower end of its 52-week range of $2.16-$3.28, capitalising it at $817.5 million.