McEwen Q3 2024 Earnings Report

McEwen EPS Results

• Actual EPS: -$0.04
• Consensus EPS: $0.04
• Beat/Miss: Missed by -$0.08
• One Year Ago EPS: -$0.39

McEwen Revenue Results

• Actual Revenue: $52.25 million
• Expected Revenue: $48.60 million
• Beat/Miss: Beat by +$3.65 million
• YoY Revenue Growth: N/A

McEwen Announcement Details

• Quarter: Q3 2024
• Date: 11/5/2024
• Time: After Market Closes
• Conference Call Date: Wednesday, November 6, 2024
• Conference Call Time: 11:00AM ET

McEwen (NYSE:MUX) is a mining company focused on the exploration, development, and production of gold, silver, and copper. The company’s portfolio includes operating mines, advanced development projects, and exploration properties in the United States, Canada, and Argentina.

Its principal gold assets include the Fox Complex in Ontario, Canada, and the Gold Bar mine in Nevada. McEwen also has an interest in the San José mine in Argentina, which has historically produced gold and silver, and is advancing the Los Azules copper project in San Juan Province, Argentina, through its McEwen Copper subsidiary.

McEwen was founded by mining entrepreneur Rob McEwen, who serves as chairman. The company is headquartered in Toronto, Ontario, and its shares trade on the New York Stock Exchange under the symbol MUX and on the Toronto Stock Exchange under the same symbol.

McEwen Q3 2024 Earnings Call Transcript

Key Takeaways

• During Q3 2024, McEwen Mining reported 36% revenue growth, a 268% increase in gross profit, and $23 million in operating cash flow compared to a $2.3 million outflow in Q3 2023.
• The company recorded a $2.1 million net loss (US$0.04/share) as $11.4 million of exploration spending at Fox, Gold Bar and Los Azules was expensed, extending mine lives but depressing current earnings.
• McEwen Copper secured US$56 million in private financing (US$470 million total to date) to complete the Los Azules bankable feasibility study by H1 2025 and obtain environmental permits, with an IPO planned thereafter.
• Acquisition of Timberline Resources near Gold Bar added 500,000 ounces of outlined gold on patented lands, with drilling underway to fast-track permitting and mine-life extension.
• All-in sustaining costs at Gold Bar and Fox exceeded Slide 28 guidance in Q3 due to low production at Fox and aggressive strip mining at Gold Bar, pressuring unit costs ahead of expected annual alignment.

Presentation

[Operator]

Hello, ladies and gentlemen. Welcome to McEwen Mining Q3 2024 Operating and Financial Results Conference Call. Present from the company today are Rob McEwen, Chairman and Chief Owner, William Shaver, Chief Operating Officer, Perry Ing, Chief Financial Officer, Jeff Chan, Vice President, Finance, Stefan Spears, Vice President, Corporate Development, Michael Meding, Vice President and General Manager at McEwen Copper, Carmen Diges, General Counsel and Secretary. After the speaker's presentation, there will be a question-and-answer session. If you would like to ask a question during this time, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number one again. I will now turn today's call over to Rob McEwen, Chief Owner. Please go ahead, sir.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you, Operator. Good morning, fellow shareholders and interested investors. You heard who is with me today on the call, and they're available to answer your questions when we move into that period. During the third quarter and the first nine months of this year, we have made significant progress, reporting double and triple-digit improvement in key performance metrics. As you can read in our press release, the third quarter of 2024 was stellar compared to the third quarter of 2023. Revenue up 36%, gross profit up 268%, adjusted EBITDA up 586%, operating cash flow up at $23 million from a negative $2.3 million back in 2023. Our safety record is also stellar.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

We're pleased to post our records at Gold Bar, 54 months without a lost time accident, at the Fox Complex, 33 months without a lost time, and McEwen Copper Los Azules, an amazing 1.3 million man-hours without a lost time accident. During the quarter, we continued to push our exploration, spending $5.3 million at the Fox and Gold Bar mines, $6.1 million at Los Azules at the McEwen Copper Project, and these expenditures we view as strategic investment and that have successfully extended the lives of our mines, and they're currently treated as expenses and largely contributed to the net loss we recorded of $2.1 million or four cents a share. We will be providing updated resource estimates to be released early next year.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

For McEwen Copper, we have raised privately over our funds, and in the last quarter, we closed on $56 million, and that'll be used to complete the bankable feasibility study for Los Azules. We expect the feasibility study to be completed in the first half of next year, and we're also expecting to receive our environmental permit to construct the mine during that same period. Once we have both the feasibility study and the environmental permit in hand, we're planning to IPO McEwen Copper. I think it's worth noting that we have raised privately over $470 million to go towards the development of Los Azules, and based on the last financing that we completed at $30 a share, it gives an implied market value to McEwen Mining of $984 million. I expect this value will soon reach the unicorn status that I predicted several years ago.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

During the quarter, we made some investments. In Nevada, we completed the acquisition of Timberline Resources. It has properties, three properties, but one close to our Gold Bar Mine has patented land claims with over 500,000 ounces outlined on there that we will be using to extend the life of our Gold Bar Mine. We are starting to drill on some of the exploration targets we've identified, and that's starting this week and will continue through the year. At Fox, work is underway expanding our tailings facility to accommodate increased production from our Fox Complex, and we will be driving a ramp to connect the underground at Stock, going to connect Stock East, Stock Main, and Stock West. In Ontario, we bought a position in a company called Inventus Mining. It has a very interesting paleoplacer gold deposit.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

These deposits are quite common in South Africa and contribute to South Africa's large gold production. It's a shallow deposit. We think it could be easily mined and find it a very interesting property. We also invested $14 million in McEwen Copper, part of the $56 million we raised early this year, believing that after BHP and Lundin, their deal of in excess of $4 billion, we looked at our property and said it's lower altitude, a larger resource, it's closer to infrastructure. We can see a higher value for our Los Azules property. At this point, I'd like to open the session for questions. I can say we have two questions that came in online. Well, two people came in online each asking two questions.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

One was how much capital the company is planning to raise for Los Azules, and a related question, the anticipated IPO in 2025, can we provide preliminary details on the expected offering price and size of the offering? I'm sorry to say we can't provide comments on either of those. It could be considered pre-marketing, and we haven't completed the feasibility, so we don't have a hard number to say how much we're going to raise. But once we have the feasibility study out, we can answer those questions. The second questions came in, and it was outlining what studies have been completed at Los Azules for the feasibility and what are outstanding. Also, exploration news, what are we going to be doing on the newly discovered porphyry system that's 3 km away?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

I'll ask Mike Meding, our VP and General Manager of Los Azules, to answer those questions, those two questions. Mike.

[Michael Meding, VP and General Manager at McEwen Copper]

Thank you so much, Rob. So our record-breaking drilling campaign last season with 23 rigs at site provided most of the technical data needed for the feasibility study. We plan to drill an additional approximately 7,700 meters this season to complement existing data using rigs operated mainly by local contractors we've developed in San Juan. We're planning nearly 4,000 meters of condemnation drilling using diamond drills in the area designated for future project infrastructure, along with about 1,400 meters of geotechnical sonic drilling, 1,500 meters of geotechnical diamond drilling, and 800 meters of hydrogeological wells to support our study conclusion. In Q3, we updated the mineral resource model, optimized pit resources, and conducted initial reserve calculations, with results being likely close to the preliminary economic assessment, the PEA. We also completed hydrological models, process instrumentation diagrams, the P&IDs, and initiated third-party reviews for resource modeling, geotechnics, hydrology, and metallurgy.

[Michael Meding, VP and General Manager at McEwen Copper]

Metallurgical recoveries are trending at expected levels with recoveries of around 76%, in line with the prior press release we put out. We've signed a second memorandum of understanding with YPF to ensure feasibility study level of engineering aligns with our feasibility goals. YPF committed to options to provide renewable energy for the project to wind, solar, and hydro sources. Our team conducted benchmark visits in Chile and the U.S. and engaged with major equipment suppliers on electric and autonomous fleet options. Now, what are the remaining steps? The remaining steps before the feasibility study include completing the site investigation, as I mentioned before, the final mine design, complete metallurgical variability testing, engineering, logistics planning, equipment specification, capital and operating cost confirmation, and finally, the write-up of the feasibility study itself, which we already started. We aim to include the Nuton upside as potential in the NI 43-101 report.

[Michael Meding, VP and General Manager at McEwen Copper]

So that's what we have on the schedule going forward. With regards to Tango, depending on funds availability, we have a comprehensive program in place to test the mineralization in Tango. You remember that we discovered a porphyry about 3 kilometers east of Los Azules. This will not be included in the feasibility studies on top of what we think is that we have a porphyry system. We have seen moly on surface. We have seen quartz veining. We have seen copper veining. We have seen geophysical anomalies, and we have drilled at the end of the last season to relatively shallow depth, but we saw 106 meters with about 0.11% of copper. While this is borderline, it shows that the system is mineralized. So we're going to drill more to the center of where we see the anomaly to confirm the presence of higher grade.

[Michael Meding, VP and General Manager at McEwen Copper]

That's what we have on top of mind for Tango going forward.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you, Mike. Operator, are there other questions?

[Operator]

As a reminder to ask a question, you will need to press star followed by the number one on your telephone keypad. To withdraw your question, press star followed by the number one again. Your first question is from Jake Sekelsky of Alliance Global Partners.

[Jake Sekelsky, Managing Director and Senior Research Analyst at Alliance Global Partners]

Hey, Rob. Thanks for coming back. Hey, Rob. So just looking at Gold Bar, it turned in another strong quarter from a production perspective. I'm just curious, are the higher production levels we saw over the last two quarters something we should expect to continue heading into 2025?

[William Shaver, COO at McEwen Mining]

I may be right to answer that question for you. We have increased the amount of material we're moving at Gold Bar, but a lot of that material is actually waste that we're moving off of a part of the pit that's called Pit 3, so it's basically a stripping operation. So although we are moving significantly more material, the expectation is that production of gold in 2025 will be in line with what we've done this year, so we'll have an equal amount of gold produced in 2025 with more tons being mined because of the amount of stripping, and we're aggressively pursuing the stripping now because of the high gold price.

[Jake Sekelsky, Managing Director and Senior Research Analyst at Alliance Global Partners]

Okay. That's helpful. Switching to the Timberline acquisition, Rob, you touched on this a bit. Can you just give us some color on what the permitting process and timeline might look like at Eureka? I'm just curious how quickly some of this material could potentially be brought into the Gold Bar Mine plan.

[Jeff Chan, VP Finance at McEwen Mining]

Sure. I'll ask Stefan Spears to address that question.

[Stefan Spears, VP of Corporate Development at McEwen Mining]

No problem, Rob. Hi, Jake. So we're looking, I mean, we're working already on the permitting process. We've got our permit to conduct exploration. And as Rob said in his remarks, exploration has started on part of the property. There's kind of two segments to the property: one area where we have patented mining claims that are not BLM ground. So we're dealing with the state only on permitting there, and that has kind of a quicker timeline of around two years for permitting. BLM permitting is a slight unknown, but it's expected to be longer, and that would affect the Lookout Mountain resource. And so the way the team is looking at it is it'll be permitted in several phases, with the earliest possible production projected for around 2027, and then layering on from there.

[Jake Sekelsky, Managing Director and Senior Research Analyst at Alliance Global Partners]

Got it. Okay. That's helpful. And then just lastly at Fox, any color on the development work that's being done and still needs to be done there over the next quarter or so in order to improve slope access?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Bill, would you care to address that?

[William Shaver, COO at McEwen Mining]

Yes. Well, we are in the final throes of getting our permit to start the ramp excavation to get down into the main ore body at Stock and also into Stock East. At the same time, we are doing some shaft rehabilitation, and this work is being done principally to make sure we have proper egress from the mine and also to help in the eventual ventilation system for the operation. So I guess we're hoping to have some parts of the Stock operation in operation in kind of Q3, Q4 of next year. And that will overlap nicely with ore coming out of Froome so that we don't end up with a gap in between the two operations. And this year, we've had, I would say, a very successful drilling program where we've extended the ore to Stock East and extended ore down as deep as 600 meters.

[William Shaver, COO at McEwen Mining]

I think the future looks pretty good there. Of course, with today's prices, it even looks a little bit better. Yeah, we're pretty optimistic about what we'll be able to do with our assets in Timmins. We're now working diligently on a plan that gets us kind of around 100,000 ounces per year by 2028. Some of that planning will be fleshed out in our 2025 budget process, which we're working on diligently right now, and we'll have before our board sometime in December.

[Jake Sekelsky, Managing Director and Senior Research Analyst at Alliance Global Partners]

Got it. Okay. That's all for me. Thanks again, and congrats on the quarter.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you, Jay.

[Operator]

Your next question is from the line of Joe Reagor with Roth Capital Partners.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Hi, Joe.

[Joseph Reagor, Managing Director and Senior Research Analyst at Roth Capital Partners]

Hey, Rob and team. Thanks for taking the questions. I guess the first one is kind of a follow-up to Jake's question about Gold Bar, but more so about just this year. The current guide, you're almost there already. Should we read into that that Q4 is going to be a lower production quarter because there's less ore stacked in Q3, or is there just no incentive to raise the guide ahead of the quarter? Which way should we read that?

[William Shaver, COO at McEwen Mining]

Actually, the plan for Q4 was that it was going to be a low production period of time, and that's in part due to some of the stripping we are doing on the Pit 3. I can't remember exactly what that number is, but it seems to me it's around, for the quarter, it's around 8,000 ounces for the last quarter, is the number I kind of remember, but I think it's between 8 and 9. That was always part of the plan. We're basically on track to meet guidance with the better quarter that we just had. We're working hard to try and make the last quarter a little bit better. We're pushing our fellows to do that. A few of us are headed down there next week to spend some time trying to figure out how to do that.

[William Shaver, COO at McEwen Mining]

So yeah, I don't think we're going to see a significant change in the overall guidance for the year, but it's kind of steady as she goes.

[Joseph Reagor, Managing Director and Senior Research Analyst at Roth Capital Partners]

Okay. Fair enough. And then for Los Azules, post the equity issuance a couple of weeks ago, what's the cash balance roughly right now in the subsidiary?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Jeff, do you want?

[Jeff Chan, VP Finance at McEwen Mining]

Sure. Let me just pull that up. But it would just be north of $40 million at the moment.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

You get that, Joe?

[Joseph Reagor, Managing Director and Senior Research Analyst at Roth Capital Partners]

Yep. All right. And then one final thing. As you guys work towards adding in the Timberline acquisition to Gold Bar, will you guys be treating it as a separate mine, or will you guys be treating it as kind of like a separate pit but still all through Gold Bar from an accounting standpoint?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

From an accounting standpoint, it'd be unitized under Gold Bar.

[Jeff Chan, VP Finance at McEwen Mining]

Most likely, yeah.

[William Shaver, COO at McEwen Mining]

Yeah. And that's in part because operationally, eventually, we may have a leach pad at Timberline, but the final finished product, the Gold Bar, will be still produced at Gold Bar. So we'll transport carbon back to Gold Bar and then remove the gold.

[Joseph Reagor, Managing Director and Senior Research Analyst at Roth Capital Partners]

Okay. That's helpful. All right. I'll turn it over. Thanks, guys.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you.

[Operator]

Your next question is from the line of Heiko Ihle with H.C. Wainwright.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Hello, Heiko.

[Heiko Ihle, Managing Director at H.C. Wainwright]

Hey.

[Heiko Ihle, Managing Director at H.C. Wainwright]

Hey, Rob. How are you?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Excellent. Thank you.

[Heiko Ihle, Managing Director at H.C. Wainwright]

Hey, you had somewhat lower than expected grades at San Jose. Can you just provide a bit of color on what happened? I assume the mine plan's still intact. And also, most importantly, probably what you've seen in Q4 thus far. And then building on all of that, how should we think of our longer-term estimates for the site? I assume that this is more of a one-time thing, right?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Yes. Perry will answer that question.

[Perry Ing, CFO at McEwen Mining]

Morning, Heiko. Thanks for your question. So yeah, we have regular dialogue with the team from Hochschild and management at San Jose. They've advised that the lower grades were temporary, again, mostly reconciliation versus resource model. But that seems to have been rectified in October or by October. So Q4 is trending well so far, and we believe the operation is on track to meet guidance. Overall, I think they're quite bullish on San Jose as an operation. Obviously, silver prices having ticked up over the past quarter has helped significantly. And there has been some modest exploration success, which continues to extend mine life.

[Heiko Ihle, Managing Director at H.C. Wainwright]

Fair enough. And then something completely different, and frankly, I'm actually shocked that this hasn't come up yet. It's a bit more philosophical. I mean, you're based in Canada. You operate Gold Bar in Nevada. Obviously, big news out of the States today.

[Heiko Ihle, Managing Director at H.C. Wainwright]

We're going to get a new president in January. I wanted to see if you have internally thought of the impacts of all of that, positive or negative, from the election results from last night. Even just minor things, whatever, cash moving across borders, staff travel, that kind of stuff.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

McEwen Mining is a Colorado incorporated company. Gold Bar is in Nevada. President-elect Trump has said that he wants to encourage the development of resources in the country. I think it can only be positive. He wants to streamline the regulations and create more employment in the country, so.

[Heiko Ihle, Managing Director at H.C. Wainwright]

He's pro-mining, obviously.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Yes. So I think that's good for Gold Bar and our other properties there.

[Heiko Ihle, Managing Director at H.C. Wainwright]

Fair enough. I figured you'd say something along those lines, but you don't have any little internal checklist of things that you're focusing on?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

It's too early at this point.

[Heiko Ihle, Managing Director at H.C. Wainwright]

Fair enough.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

The outcome of the election was up in the air, and we just thought we'd let the dust settle before trying to look at that.

[Heiko Ihle, Managing Director at H.C. Wainwright]

Fair enough. I appreciate it. Thank you very much.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you, Heiko.

[Operator]

As a reminder, to ask a question, press star one on your telephone keypad. Your next question is from the line of Chris White with Pax Ventures.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Hello, Chris.

[Christopher White, Managing Director at Pax Ventures]

Good morning, Rob and team. Congratulations on the sales price of $2,499 an ounce. That's great. I got two quick questions. I think they might be for Bill, but you let me know. Reviewing the release, I'm struggling with on slide 28 of the corporate deck. It said that our all-in sustaining costs were going to be going down to like $1,650-$1,750 at Gold Bar. But the press release said Gold Bar's actuals was $1,822. And then same thing at Fox. The slide 28 says $1,450-$1,550 for Fox, but the actual was $1,953 or $400-$500 more than slide 28 suggested. Could you maybe provide more details here for all of us on the line? And maybe answer also, what would it take to get under $1,500 in Q4? Is that even possible?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Do you want to answer part of that, Jeff, or?

[Jeff Chan, VP Finance at McEwen Mining]

Yeah. I would say the chances of us getting under $1,500 is probably very low. In the case of Gold Bar, it's in part because we're on a very aggressive stripping program right now to take advantage of the high gold price to do stripping at Pit 3. Pit 3 is a little bit lower grade than the average at Gold Bar. And at these prices, it is very valuable ore. But if the price of ore, say, fell back to $1,500, that material might not even be ore. So in part, we may be seeing some higher, I guess, cost per ounce numbers, but those are based on doing proper work in order to put us in a better position for next year.

[Christopher White, Managing Director at Pax Ventures]

Sure. So just in clarifying, the slide 28 in your corporate deck, you guys are going after different parts of the mine than what the all-in sustaining cost of $1,650 and $1,750 was reflecting. Is that right? Because the price of gold is higher?

[Jeff Chan, VP Finance at McEwen Mining]

That's right, and also, I mean, this stripping that we're doing now is going to expose ore for next year.

[Christopher White, Managing Director at Pax Ventures]

Got it. Any comment on Fox, why Fox came in so high?

[Jeff Chan, VP Finance at McEwen Mining]

Fox is primarily high because of the low production in Q3. That's basically it. It has to do with the divisor. And it also, I guess, some of it is attributed to all of the money we're spending at this point on getting Stock going as well.

[Christopher White, Managing Director at Pax Ventures]

That just wasn't factored in on the Slide 28 piece? What's the delta between what you guys have in the corporate deck and what actually happened in Q3?

[Jeff Chan, VP Finance at McEwen Mining]

So this is Jeff Chan here. Just to speak to slide 28 on this deck, I think we need to keep in mind that the guidance figures here are provided on an annual basis. And so just speaking to Gold Bar specifically, we still do expect to meet or exceed, by exceed I mean come in below our cost guidance on an annual basis. I think, as Bill mentioned in his earlier remarks, given the planned declining production of Gold Bar quarter over quarter, it would be natural to see increasing quarterly unit costs go up. But on an annual basis, I would expect to still come in, again, within or below cost guidance. At Fox, it's exactly as Bill mentioned. Due to the lower-than-planned production and the production miss that we've advised the markets, we are expecting higher-than-expected unit costs in our guidance.

[Jeff Chan, VP Finance at McEwen Mining]

Looking at our financial base, it's not a result of overspend. I think on a total basis, we're expecting to be within exactly our planned spend, but it is a production issue.

[William Shaver, COO at McEwen Mining]

And at Fox, there was an unexpected failure of one of the stoves that affected a larger area underground, and that reduced our production. As Bill said, when you reduce the production, the cost per ounce goes up.

[Christopher White, Managing Director at Pax Ventures]

That's very helpful.

[William Shaver, COO at McEwen Mining]

Also, remember that the Froome mine is kind of in its last year of mine life. And so there is. That's always a bit more challenging, I would say, but we're handling that well.

[Christopher White, Managing Director at Pax Ventures]

That's helpful. So it sounds like then if we were to put a bow on this answer, you guys are sticking with the estimates on slide 28 and that Q3 was just an outlier. Is that a fair articulation? Maybe Jeff?

[Jeff Chan, VP Finance at McEwen Mining]

I guess just to maybe add some caution there, I would expect that what we're going to see is a slightly higher cost per ounce at Fox. And it'll depend on exactly what the production is in the last quarter.

[Christopher White, Managing Director at Pax Ventures]

Got it. So then my last question here, just kind of springboards, Rob, off what you said. In the release, it says 15%-20% fewer ounces compared to the annual guidance on Fox for the reason that you highlighted. If that hadn't happened, wouldn't we be looking at potentially a break-even quarter? And I guess if that's correct, how do we make sure that this type of thing doesn't happen again? Because, boy, this stock would be ripping if you guys could just be breaking even. I don't know. Am I interpreting that correctly? That's what's stopping us from being break-even? And then this question of how do we make sure this doesn't happen again? Any comment there?

[Perry Ing, CFO at McEwen Mining]

Yeah. That's totally correct, Chris. And this is Perry, the CFO. So definitely, had we produced a bit more ounces, we would have had a positive quarter. And as well as Rob mentioned, going back to Los Azules, once we finish the feasibility study and have our permits in hand, we can actually capitalize our exploration costs that McEwen Copper is incurring. So if you look at our year-to-date spend, our year-to-date proportional loss, it's $36-$37 million. That would have been nullified as a loss, and we would have been quite profitable for the year and for the quarter, so.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

It would have been $34 million.

[Jeff Chan, VP Finance at McEwen Mining]

Yeah.

[Christopher White, Managing Director at Pax Ventures]

So what quarter do you think that that comes together? I mean, and I ask this since I've been on the ride with you, Rob, since 2016, and I've been an investor, not a speculator, and it's been rough. And so I'm ready for it to come. It'd be interesting to hear.

[Jeff Chan, VP Finance at McEwen Mining]

It's going to be hard.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Yeah. I can imagine for you. When do you think that quarter, Perry?

[Perry Ing, CFO at McEwen Mining]

The feasibility will be in the first half of next year, and I guess the feasibility, as Michael talked about, is well underway. The timelines for that are fairly definite. The permits, obviously, we're subject to the timelines from the appropriate ministries in Argentina.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

And then.

[Jeff Chan, VP Finance at McEwen Mining]

Great.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

So first half of 2025, we should be printing positive quarters. Fair? Well, we'll have the feasibility. We expect to have the permit, and we have to get the IPO out. We don't need to have the IPO? All right. So the end of the first half, we should be moving into positive ground, assuming we don't buy something else.

[Jeff Chan, VP Finance at McEwen Mining]

Which prices could be good?

[Christopher White, Managing Director at Pax Ventures]

All right. Thank you, guys.

[Jeff Chan, VP Finance at McEwen Mining]

Thank you, Chris.

[Christopher White, Managing Director at Pax Ventures]

Thank you for your loyalty.

[Operator]

Your next question is from the line of John Morin.

[Operator]

Hi. I have two questions. The first, I've been an individual investor for over 12 years, now having over 40,000 shares. When people ask me why I invested in the company, I told them, I said, "The company is really unique. You founded and were chairman of the Goldcorp. And then you started this company. You have a large stake in it. And plus, originally, you had no debt." So I said, "It's one of a kind." The thing that puzzles me, though, is that back in the day, like about 12 years ago, the stock was substantially or at least peaked substantially higher. Now, from what I can see, the company is in much, much better shape now. You finished that road for the copper.

[Operator]

You mentioned that the copper, if I understood you correctly, is worth more than the stock price, not even counting the gold and silver. What puzzles me is nothing to do with you, but why the market isn't reflecting this to a much larger degree, where you would estimate the stock should be in the 20s or 30s. My second comment: I heard what you said about Trump, but just today, the gold is down about $80 a share almost, and the silver $1.50. I was wondering if it's a positive reflection, at least with the Colorado-Nevada or the Nevada mine. Why do you think it dropped so substantially? Thank you.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you, John. Okay. Let's deal with the first question about why are we not higher, and I agree. We are in better shape than we were back then. We have production coming from a number of areas. Unfortunately, there was a period of three to four years, 2018 to 2022, where our operations were not delivering on guidance. They missed it by a wide margin, and as a result, our revenue was low, and I think people looked at our copper project and said, "How are you going to finance that? This is a big project, and it's going to be very cash-hungry, so we separated the copper and said, "Let's raise the money privately there rather than diluting McEwen Mining to raise the funds," and we've had the benefit of our operations, our precious metal operations, coming back on stream and performing much better.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

There's still, I think, an issue of consistency in the production across all of the operations. One's up, the other one's down, and that's being addressed. And we see room to expand our production considerably over the next three to four years through organic growth, so we're looking at a bigger picture. When we do our own internal estimates of value, it's sort of the sum of the parts. We have the copper holdings. We have a portfolio of five royalties, none of them producing at the moment, but the largest one is on Los Azules, 1.25%. And based on the preliminary economic assessment, production forecast, that would generate over a 27-year life better than $400 million, and then we get down into the gold shares. And when you compare it to a peer group, we're trading at a large discount at the moment.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

These results and what we can see going forward should start addressing concerns about the life of these assets and the costs of them. So I think it's a timing issue that will resolve itself as we move forward. But it's been a painful process. With respect to Trump and the gold price, I was looking at it and saw Bitcoin was up and gold was down, and I was saying, "That's odd." I suppose the market's saying they don't expect the Trump government to be spending, being as profligate a spender as would the Harris government. And that's resulting in a stronger dollar or a perception of a stronger dollar. And you saw it wasn't only gold. It was silver. It was a number of the base metals. The only one that wasn't down at one point this morning was lead.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

That's probably because of the wars going on.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Can I just ask one other thing?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Yes.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

The institutional investors, that has grown over the years, right?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

It has been. We have good volume. We trade average daily volume about 500,000 shares on New York. So good liquidity. And with an improving balance sheet and operational performance, I think we'll win the attention of more institutions and retail investors.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

I'm 68. I know you're 74. How much longer do you think I'm retired? How much longer do you think you're going to go with this?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Let me share a story. A number of years ago, I was meeting with an executive coach, and his first question was, "How long?" He asked me how long I was going to live. I said, "Well, ever since I've been about 20, I figured I'd live to 100." He said, "Well, tell me what you think you're going to be like when you're 99." I said, "Well, I'd like to have a clear head and be mobile." He said, "Well, all right. If you're like that at 99, do you think you're going to die at 100?" I said, "No." My wife and I have put a lot of money into regenerative medicine and research. What I've seen there is life expectancies are going to extend and make.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

So I said, he said, "Well, how long are you going to live?" And I said, "120." And he said, "Okay." At the time I was 60, he said, "If you're going to live to 120, you have your whole life in front of you again. What are you going to do with it?" And I said, "Well, what could I do with it?" And he said, "Well, you could do 10 times what you've already done." I said, "10 times like 10 times more love, 10 times more travel, 10 times more philanthropy, 10 times more wealth." And he said, "All of the above." And I said, "Well, that sounds pretty good. You have" and I said, "You have 240 quarters in front of you. So you can lay out a plan." So I'm in no rush.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

I think we have in McEwen Copper, the Los Azules property, I believe, has the potential to be much bigger than Goldcorp ever was. If you look at it and put it on a gold equivalent, it's bigger than a 60 million-ounce gold deposit. And on the projected cost, it'd be coming in at just over $600 cash, all in under $1,000, 27-year life, and producing gold equivalent of better than 600,000 ounces a year. In my book, that's an extremely big gold deposit. It's almost equal to all the gold that's produced in the last 100 years out of the Timmins District, the most prolific mining area, one of the most prolific gold areas in Canada. So I think there's a lot of room. We've got copper is in large demand.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

You look at the deficits that are being projected for a number of reasons: the electrification of energy, the extremely high use of electricity by big data farms and servers, and then the growth of the world's population and the use of copper in the infrastructure. So there's that. And gold, I think we've got the right mix of assets. Gold is, to me, that's always been that's money. And our governments are good at debasing fiat currency. And so gold is, in my mind, heading higher despite this little drop today. When you have 36 trillion in national debt, the service costs on that are high. And America is not alone. I look to Canada. I look to Europe. I look to China. Everybody has printed a lot of money, and they've taken on a lot of debt. And at one point, you have to pay back the debt.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Gold is one of those hard assets you want to have in your pocket because it doesn't appreciate like fiat currency.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

I agree with you on the potential life expectancy. Yeah.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Oh, good.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you very much for sharing all that. I really appreciate it. Someday, I'm in Hershey, near Hershey, Pennsylvania. Someday, I'll come up to Toronto and meet all of you. Thank you.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Maybe we'll get down to see you down in Hershey.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Okay. That'd be great. Thank you.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Bye.

[Joseph Reagor, Managing Director and Senior Research Analyst at Roth Capital Partners]

Bye.

[Michael Meding, VP and General Manager at McEwen Copper]

Your next question is from the line of Mike Kozak with Cantor Fitzgerald.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Hello, Mike.

[Mike Kozak, Metals & Mining Analyst at Cantor Fitzgerald]

Yeah. Good morning. Good morning, Rob and team. Congrats on the solid quarter. I joined the call a little bit late. So if any of this was already mentioned, I apologize. But one question I've had in the back of my mind the last couple of months, just with what silver prices have done over the last few months, kind of catching up with gold strength, notwithstanding the one-day move down today, but in the current silver price environment and both McEwen Mining and McEwen Copper looking increasingly more focused on Los Azules, would McEwen Mining potentially look at monetizing either the Project Fenix or your interest in the San Jose mine?

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

At the right price. Sure. Yeah.

[Mike Kozak, Metals & Mining Analyst at Cantor Fitzgerald]

Okay.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

At the right price. I mean, there has been rumor that Hochschild is thinking of possibly selling San José. And we've been approached by one potential buyer that asked if we'd be amenable to thinking about selling.

[Mike Kozak, Metals & Mining Analyst at Cantor Fitzgerald]

Okay.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Nothing coming up.

[Mike Kozak, Metals & Mining Analyst at Cantor Fitzgerald]

Okay. I did hear something, a rumor to that effect. That's why I was just asking this question. But okay. That's all I had. Thanks.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

All right. Thank you, Mike.

[Operator]

At this time, there are no further questions. I will now hand the call back over to Rob McEwen for any closing remarks.

[Perry Ing, CFO at McEwen Mining]

I just want to say about.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Yeah. Sure.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Okay. Before we close off, Perry just wanted to make comments on.

[Perry Ing, CFO at McEwen Mining]

Yeah. We did receive an email from Howie Center just regarding page four of our news release. So we can confirm that there is a typo on one of the columns on the gross margin percentage. So we'll update that on our website version. But the correct percentage should be 17.6% rather than 35.1% for gross margin at the San Jose Mine in the third quarter. Thank you, Rob.

[Rob McEwen, Chairman and Chief Owner at McEwen Mining]

Thank you. Well, thank you, everyone, for joining the call today. I hope you share the same thoughts that this was a great quarter. And what we want to do, our goal is to keep repeating these. So thank you and successful investing.

[Operator]

This concludes today's call. Thank you for joining. You may now disconnect.

Participants

Executives

• William Shaver, COO
• Stefan Spears, VP of Corporate Development
• Perry Ing, CFO
• Jeff Chan, VP Finance
• Michael Meding, VP and General Manager
• Rob McEwen, Chairman and Chief Owner

Analysts

• Jake Sekelsky, Managing Director and Senior Research Analyst at Alliance Global Partners
• Mike Kozak, Metals & Mining Analyst at Cantor Fitzgerald
• Christopher White, Managing Director at Pax Ventures
• Heiko Ihle, Managing Director at H.C. Wainwright
• Joseph Reagor, Managing Director and Senior Research Analyst at Roth Capital Partners
• Analyst