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McEwen (MUX) Soars 8.8%: Is Further Upside Left in the Stock?

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McEwen (MUX - Free Report) shares ended the last trading session 8.8% higher at $6.80. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 7.5% loss over the past four weeks.

Shares of McEwen Mining Inc. have gained following the announcement that Nuton LLC, a Rio Tinto (RIO - Free Report) Venture will make an additional $30 million investment in MUX’s subsidiary  McEwen Copper Inc..

Per the agreement, Nuton will acquire shares of McEwen Copper in a two-part transaction which consists a private placement of 350,000 McEwen Copper common shares and purchase of 1,250,000 common shares owned by McEwen Mining in a secondary sale. Proceeds of the subscription and purchase are expected to be around $6.5 million to McEwen Copper and $23.5 million McEwen Mining, respectively.

The proceeds of the private placement will be used to advance development of the Los Azules copper project in San Juan, Argentina, and for general corporate purposes. After closing of deal, which is expected by Mar 10, 2023, Nuton will own 14.2% of McEwen Copper on a fully diluted basis, and McEwen Mining will own 51.9%.

This gold and silver mining company is expected to post quarterly loss of $0.23 per share in its upcoming report, which represents a year-over-year change of +54%. Revenues are expected to be $29.4 million, down 16% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with 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 belongs to the Zacks Mining - Miscellaneous industry. Another stock from the same industry, American Resources Corporation (AREC - Free Report) , closed the last trading session 0.3% higher at $1.63. Over the past month, AREC has returned 5.5%.

For American Resources Corporation, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.03. This represents a change of +83.3% from what the company reported a year ago. American Resources Corporation currently has a Zacks Rank of #3 (Hold).

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