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What: Shares of base metals supplier McEwen Mining Inc dropped as much as 11% today after the company reported fourth-quarter earnings after the market closed yesterday.
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So what: Quarterly revenue increased 33% to $13.7 million but net loss ballooned from $11.3 million to $212.8 million, or $0.71 per share. The loss was largely due to a writedown of $233.3 million in the quarter.
Now what: The bottom line is that McEwen Mining is losing money, primarily because metals prices haven't remained high enough for it to operate profitably. I don't see that dynamic changing in the near future, and the company's $12.4 million in cash should be a cause for concern. I don't see this as a buying opportunity and would stay away from this metals play until they can prove long-term profitable operations.
The article Why McEwen Mining Inc's Shares Plunged 11% Today originally appeared on Fool.com.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.