McEwen Q3 Earnings Call Highlights

Key Points

• McEwen called its third-quarter operating performance unacceptable, citing problems at Gold Bar, Fox and San José. It reported early signs of recovery, including Gold Bar’s highest monthly production in 15 months in October, and expects San José to rebound in the fourth quarter.
• The company is targeting 250,000–300,000 ounces of gold production by 2030. It ended the quarter with $49 million in cash and $10 million in marketable securities, then raised another $55 million through October sales of non-core properties.
• Los Azules’ investment decision and full project financing are targeted for mid-2027, with first copper still targeted for 2030. Construction financing is not committed, and heavy snowfall could delay site access and affect the construction schedule.

McEwen NYSE: MUX executives said they are working to address operational problems after a difficult third quarter, while maintaining a goal of roughly doubling gold production by 2030 and advancing financing for the Los Azules copper project.

Executive Vice Chairman Ian Ball called the quarter “very unacceptable,” citing problems at Gold Bar, the Fox Complex and San José. He said changes at the operations are beginning to take effect and that the company remains on track to reach its longer-term production target.

Chairman and Chief Owner Rob McEwen said the company is targeting gold production of 250,000 to 300,000 ounces by 2030. He said McEwen had $49 million in cash and $10 million in marketable securities at the end of the quarter, with a subsequent sale of non-core properties adding $55 million in October.

Gold Operations Show Signs of Recovery

At Gold Bar, Ball attributed the recent problems to a lack of oversight and detail, as well as delayed decision-making. The company made personnel changes, but improvements took time to show up because the operation uses heap leaching rather than a mill, he said.

October was Gold Bar’s highest-production month in 15 months, and the mine generated positive cash flow for the month, Ball said. Asked about October production of more than 3,000 gold-equivalent ounces, he said the company expects a similar amount in November and December and, on average, each month in 2027 based on early budgeting.

At the Fox Complex, third-quarter costs rose as the company incurred development expenses to access additional ore at the Froome mine and processed a low-grade stockpile to use excess mill capacity. Ball described both pressures as temporary and said October costs had returned within guidance.

Ball said the new Stock mine was entering its ore zone in November and should be more profitable than Froome. He cited better gold recoveries, no royalty or haul to the mill, and the ability to process material at a higher rate because the rock is softer. Benefits should begin to appear in December and early 2027, he said.

At San José, in which McEwen holds a 49% interest, heavy snowfall increased moisture at the mill. The operation switched to lower-grade stockpiles, reducing production and recoveries while raising costs, Ball said. He said the team expects a strong fourth quarter and to meet full-year production guidance as it returns to higher-grade material.

Chief Financial Officer Perry Ing said McEwen does not expect further San José dividends in 2026 but anticipates additional dividends in 2027, with the amount dependent in part on silver prices and capital needs.

Los Azules Financing and Weather Risks

Michael Meding, managing director of McEwen Copper, said the technical and economic work underpinning a final investment decision for Los Azules remains on track for completion around year-end. The decision itself, along with full project financing, is targeted for mid-2027.

McEwen Copper is updating the project’s feasibility study to reflect improved geotechnical results, a higher long-term copper price and current bid costs. Meding said the project is not being redesigned and that the updated report is targeted for publication in February 2027.

Heavy snowfall in the Andes has delayed the reopening of the access road, with crews expecting to reach the site in early 2027, potentially later depending on snowmelt and weather. Meding said the delay could affect the construction schedule, although off-site engineering and cost work for the investment decision are unaffected.

The company continues to target first copper in 2030, but Meding said meeting that date depends on site access, recovery measures, financing and approvals. One possible mitigation is expanding planned camp capacity to 3,000 beds from 2,500, allowing more workers on site during construction.

For construction financing, McEwen Copper is pursuing senior project debt, strategic equity investment and a potential initial public offering. None of the construction financing is committed, Meding said. Société Générale, the project’s debt-financing adviser, sent an indicative senior debt term sheet to export credit agencies and development finance institutions in late October.

Meding said McEwen’s 46.3% stake in McEwen Copper would decrease to the extent it does not participate in new equity financing. The size of any dilution will depend on the debt raised and the equity valuation, neither of which has been set.

Costs and Development Spending

Vice President of Operations Channa Kumarage said higher diesel prices added about $200 per ounce to Gold Bar’s cash costs in the third quarter. Ing said the impact at other operations would be $50 per ounce or less and was not material.

At the El Gallo project in Mexico, Ing said mill construction earthworks had begun. He expects modest spending in the fourth quarter, with more consistent spending in the first half of 2027 after engineering, procurement and construction management contracts are finalized. Construction spending will be capitalized as the project progresses, he said.

About McEwen (NYSE:MUX)

McEwen Inc., formerly known as McEwen Mining, is a metals exploration and mining company focused on gold, silver and copper. Its activities include operating mines, advancing development projects and exploring for additional mineral resources. The company's assets and projects span the United States, Canada, Mexico and Argentina. Its portfolio includes gold and silver properties as well as the Los Azules copper project in Argentina, which is being advanced through its McEwen Copper subsidiary. McEwen was founded by Rob McEwen, who serves as the company's chairman and chief executive officer.

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