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McEwen (MUX) Surges 9.7%: Is This an Indication of Further Gains?

McEwen (MUX) shares rallied 9.7% in the last trading session to close at $7.91. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 19.8% gain over the past four weeks.

The company recently reported its fourth quarter and full year 2022 results. In 2022, the company produced 133,300 gold equivalent ounces (GEOs). The Fox operation in Timmins delivered a solid improvement with a 22% increase to 36,650 GEOs in 2022. It reported 8% lower cash costs per ounce and steady all-in sustaining costs per ounce.  In addition, Froome’s production exceeded mill capacity and 120,000 tons of mineralized material was stockpiled at the end of 2022, ready for processing in 2023. The company’s production guidance is 150,000 to 170,000 GEOs for 2023.

Also, recently a subsidiary of Stellantis N.V. invested ARS$ 30 billion, and Nuton LLC, a Rio Tinto RIO Venture, agreed to increase its investment by $30 million, to acquire shares of McEwen Copper. Subsequent to these transactions, each of Stellantis and Nuton own 14.2% of McEwen Copper, and McEwen Mining owns 52%. The implied valuation of McEwen Copper is now approximately $550 million on a 100% basis.

This gold and silver mining company is expected to post quarterly loss of $0.27 per share in its upcoming report, which represents a year-over-year change of +32.5%. Revenues are expected to be $33.6 million, up 31.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For McEwen, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MUX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

McEwen is part of the Zacks Mining - Miscellaneous industry. Wheaton Precious Metals Corp. (WPM), another stock in the same industry, closed the last trading session 4.4% higher at $45.30. WPM has returned 2.4% in the past month.

Wheaton Precious Metals Corp.'s consensus EPS estimate for the upcoming report has changed -2.3% over the past month to $0.29. Compared to the company's year-ago EPS, this represents a change of -17.1%. Wheaton Precious Metals Corp. currently boasts a Zacks Rank of #3 (Hold).

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McEwen Mining Inc. (MUX) : Free Stock Analysis Report

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