What: McEwen Mining Inc.'s (NYSE:MUX) shares rose a massive 72% last month. That comes after a roughly 13% drop in May. The precious metals miner is now up more than 200% for the year.
So what: There was a lot going on at McEwen in June. For starters, the precious metals miner benefited from higher gold prices, which rose around 9% last month. But that was only one piece of the story.
McEwen also held a shareholder meeting. Although the basics were taken care of, like electing board members, there was also a special vote. In this case, the company asked owners of a special class of stock used to facilitate an acquisition to approve what amounts to an early exchange of those shares for McEwen common shares. Exchanging the shares will simplify the company's corporate structure, reduce costs, and change the characterization of the distributions the special share class receives from dividends to return of capital, which is generally taxed at more favorable rates.
The exchange was approved in the first few days of June, just about the time McEwen shares started their big run. This news, mixed with the gold rally, acted like rocket fuel, sending the shares sharply higher.
Now what: McEwen Mining is a small precious metals miner with all-in sustaining costs of around $900 an ounce for gold. That's not industry-leading, but it leaves plenty of room between the current price of gold and what it costs McEwen to pull it out of the ground. And McEwen has no long-term debt, giving it notable staying power, and heavy insider ownership, two more reasons to like the company's story. Add in a simplifying corporate structure, and more aggressive investors might want to take a look at this small-fry gold miner with growth aspirations. Just don't forget that gold can be volatile, a trait McEwen stock will likely share.