McEwen Mining Inc. (NYSE:MUX) Q3 2025 Earnings Call Transcript

McEwen Mining Inc. (NYSE:MUX) Q3 2025 Earnings Call Transcript November 6, 2025

Operator: Hello, ladies and gentlemen. Welcome to McEwen’s Third Quarter 2025 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 of McEwen Copper; Carmen Diges, General Counsel and Secretary; Michael Swistun, President and CEO of Canadian Gold Corp [Operator Instructions] I will now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.

Robert McEwen: Thank you, operator. Good morning, fellow shareholders, interested investors. We have been preparing McEwen Mining to benefit from the stronger metal prices we are seeing today. Over the past year, gold at just below $4,000 an ounce is up 45%, silver up 47% and copper is close to $5, up 13%. And I believe the intermediate and long-term prices will be considerably higher. This is an excellent environment for our portfolio mix of assets. I go to — as far to say that perhaps you could think of us as a mini Freeport with growing gold production pipeline and large exposure to a robust world-class long-life copper story. The improved gold and silver prices have buffeted us from the inconvenient unexpected events that can temporarily throw us off course and off guidance.

Fortunately, these moments are temporary and can be resolved in a relatively short period of time and have not seriously delayed our ambitious growth plans of delivering by 2030, 250,000 to 300,000 gold equivalent ounces of annual production, plus watching Los Azules become a copper mine. And in the first 5 years, we’re looking at producing at an annual rate of over 450 million pounds of copper a year, which today, copper prices would be about $2.2 billion, and it has a — at least based on the feasibility study we just put out and the current copper price would have a gross margin of 64%. So we’ve done a number of things in the quarter, and we’ve made some investments, and I’ll start with those. And then I’ll move to asking Michael Meding to talk about the excitement at Los Azules, and then we’ll get into our finances and our operations on our gold operations.

So I’ll start with Ian Ball to talk about our investment in Canadian Gold Corp and also [Technical Difficulty].

Operator: Ladies and gentlemen, we’re experiencing technical difficulties, please stay on the line. We’ll resume momentarily.

Ian Ball: Thank you very much, operator. So on the Canadian Gold front, we’re set to close that acquisition in January. Upon closing, we expect to issue an updated resource estimate for the end of February that will come out with our year-end financials, and that’s going to be part of a preliminary economic assessment. Our shareholders will note, we have not included Tartan in any of our guidance going forward over the next 5 years, but we fully anticipate including that as we set to embark on our studies of that project. Exploration is ongoing and Canadian Gold is scheduled putting out an exploration update over the next 3 weeks. The key there is we’ve been drilling on the main zone, continuing to build out that resource. We’ve been doing a lot of work on the recently acquired ground to the west, which is option from Hudbay, where historically, there was a lot of historical high-grade drill intercepts and surface.

We think there’s a lot of synergies between Tartan and that ground. It really fits well with the McEwen mining portfolio in terms of the underground style, the processing plant, and we feel there’s a lot of ways that we can optimize this and we can accelerate the permitting on this project to get it back into production upon some of the completion of the test work that we’re currently undertaking. So we’re quite optimistic both on the time frame for permitting, the exploration as well as the production profile that it can deliver for McEwen going forward.

Robert McEwen: Mike, would you hop on the call?

Michael Meding: Okay. Thank you, Rob. Thank you, operator. Q3 was an excellent and transformative quarter for McEwen Copper. We successfully advanced Los Azules from a world-class deposit into a derisked politically endorsed and bankable Taiwan asset. At McEwen Copper, we are committed to excellence in 3 key areas: operations, ESG and exploration. The most significant strategic event of the quarter was the acceptance of Los Azules into Argentina’s [indiscernible] or the large-scale investment incentive program in Argentina on September 26. This is a fundamental game changer for the project. Through VG, Los Azules now benefits from 30 years of legal, fiscal and custom stability, access to foreign exchange and a significantly lower and internationally competitive tax rate.

This provides a predictable framework and strong protection against future regulatory changes. The approval of the VG is a powerful public endorsement, which was personally announced by Argentine’s Minister of Economy, Luis Caputo, and reinforced by President Javier Milei on their official X accounts. We also finalized a collaboration agreement with the IFC, a member of the World Bank Group. This partnership will align the project with the IFC’s rigorous ESG performance standards and establishes a framework for collaboration on future financing. Our most recent milestone was the publication of the NI 43-101 feasibility study results on October 7. The study confirms robust project economics driven by a production process designed for low environmental impact.

The leach and SX-EW process will produce 99.99% LME Grade A copper cathodes and as Rob already mentioned in the first 5 years, 204,000 tonnes of pure copper per year. The highlights include $2.9 billion after-tax NPV at 8%, 19.8% after-tax IRR, a payback of 3.9 years, $3.2 billion initial CapEx, C1 cash cost of $1.71 per pound of copper produced, all-in sustaining cost of $2.11 per pound of copper. The financial model used a copper price assumption of $4.35 per pound. The full National Instrument 43-101 technical report is scheduled for publication later this month. Looking forward, detailed engineering for Los Azules is set to commence, and we are targeting construction for late 2026, beginning of 2027, subject to project financing. Finally, let’s talk about the upside.

Our total mining rights cover approximately 32,000 hectares. To date, we have explored less than 10% of our holdings, about 3,000 hectares. We have already identified 8 significant targets, 4 of which we will focus on in the upcoming season. We have strong reason to believe we can significantly increase the resource size of Los Azules and ultimately convert this project into major mining districts. Thank you so much. I hand back over to you, Robert.

Robert McEwen: Thank you, Mike. Perry?

Perry Ing: Thank you, Rob. Good morning, everyone. I’ll just provide some brief highlights from our third quarter report. So in terms of headline numbers, we reported a net loss of $0.5 million or $0.01 a share compared to a loss of $2.1 million or $0.04 a share in the corresponding period. I will note that this net loss included $4.3 million in terms of the loss from McEwen Copper. As we’ve noted previously, now that the feasibility study for Los Azules has been published, going forward from the effective date of the feasibility study at the beginning of September, we will be able to report those associated costs on a capitalized basis. So any loss attributable to Los Azules from prior periods will no longer — will now be capitalized on a go-forward basis.

In terms of adjusted EBITDA, we reported $11.8 million of positive EBITDA during the quarter or $0.22 a share compared to $10.5 million or $0.20 a share in the corresponding period. In terms of our treasury, we ended the quarter with $51 million in cash as well as $24 million in marketable securities. Our cash balance was relatively unchanged from the prior quarter at June 30. So just looking ahead, in terms of our release, we’ve outlined a number of significant projects ahead of us. So just looking into 2026 and our capital needs, obviously, we expect to finish the stock ramp by the end of next year. complete a heap leach pad expansion at Gold Bar. And as noted, we will undertake El Gallo Phase 1 with a capital cost of approximately $25 million.

Overall, we expect to accomplish these using our existing treasury and cash flows from operations. And specifically for the El Gallo project in Mexico, we also expect to utilize some form of gold prepay for approximately half of the anticipated CapEx. So with that, we’ll turn it over to Bill for some comments on operations.

Robert McEwen: And what we’re going forward.

William Shaver: Good morning, shareholders. So from the operation perspective, as we all know, we started off the year poorly. However, we have a very good start to Q4. Q3 wasn’t exactly as we anticipated due to some issues with the final few months of the Froome mine. And this is, I guess, to some extent, I guess, one of the outcomes of the end of a mine life. However, the Froome West deposit has kicked in nicely in — towards the end of Q3, and we see it producing gold at the rate in our guidance through Q4 and well into 2026. We now see Froome mining until Q3 of 2026, by which time the stock deposit should be coming into production, which we’re now indicating as occurring later in the first half of next year. In terms of the development work that we are doing at Stock, the ramp development is going along on schedule.

And I would have to say both the mining contractor and our own mining crews continue to have their safety record in very good shape with no lost time accidents by either our contractors or our own forces. In terms of Gold Bar, Q3 has been quite challenging because of the fact that there was one part of our ore that we intended to mine in Q3, which basically did turned out not to be ore when we got to the mining. But we pivoted there quite nicely to move into Q4. Q4 is already looking very good, and we’re back into the normal routine of our mining and our stripping and are moving north of 1.5 million tonnes per month. So that’s a very good outcome for operations. From the perspective of exploration, we’ve had very, very good success in both operations at Gold Bar and at Stock.

And at our Board meeting yesterday, we approved going ahead with the re-leaching of the — of the assets in Mexico. So that will start early in the new year with construction and then move on into leaching of the El Gallo leach pad and then putting those tailings back into the pit. So we see a challenging fourth quarter, but we’re in very good shape, I would say, in the month of October. And so looking forward to the next 2 months, and we’re really looking forward to getting back to producing gold in Mexico. Thank you.

Robert McEwen: During the year, we’ve enjoyed exploration success at we discovered the Froome West deposit that allowed us to bridge our production. During a time when we found permitting delays, we’re backing up our production pipeline and our development plans. Both at Gold Bar over at the acquired timberline properties, we’re getting excellent grades and continuity. There’s one area that I don’t know if everyone in the company shares my same optimism, but it’s a property called even Seven Troughs. And historically, it excites me because of its historic record is one of the highest grade mines in Nevada at averaging more than 1.2 ounces per tonne. And there was a recent grab sample in an area that historically had shown a lot of plus 1 gram material, and that was better than 270 grams over a very short intercept, but still exciting given the history of that location.

Gold at in Timmins, our Grey Fox area is growing. We’ll have a preliminary economic assessment out in the first quarter of next year. We’ve got plans to expand in Mexico, as you heard from Perry and Bill. And we’re bringing in some other properties and have some investments in areas and in companies that I think have a lot of growth potential. So with that, I do have to say that our miss year-to-date on our production is inexcusable, but we’re taking steps to remedy that and get us back on track. So with that, I’ll open it up for questions.

Q&A Session

Operator: [Operator Instructions] Your first question today comes from the line of Heiko Ihle from H.C. Wainwright.

Heiko Ihle: Rob, can you hear me okay?

Robert McEwen: Loud and clear. Can you hear us?

Heiko Ihle: Perfect. Just making sure. First of all, congratulations to Ian Ball on his appointment there. Rob, you actually early on this call preempted a bit of what I was going to ask you. But I mean, your deal for Britannia or Paragon Geochemical Labs, an interesting move there. A few follow-ups to that. Do you think that you will engage in more vertical integration like this? And building on that last part, do you think we’ll see a bit of an arms race for lack of a better word, or other guys want to get involved with suppliers, distributors in order to guarantee supply and fast processing? I mean like one example would be an assay lab. Obviously, you can’t do it for independent assays, but would that be like a potential target? Just maybe elaborate a bit on what you were describing earlier on the call and what…

Robert McEwen: Heiko, Paragon holds a technology called photo assay, and it’s an X-ray process that is faster, cheaper, more comprehensive in terms of the data being provided. I first saw this technology 5 years ago, comes out of Australia. Paragon stepped in and got in line to secure 12 units, and that’s about the annual production. Some of the majors have bought units for their sole use. I think as more money comes into the mining space, and that’s surely going to happen with everybody, all the sovereign nations and corporations around the world looking for new sources of mineral — being able to compress time and get more information for your dollar out of your assays is going to grow increasingly more important. And the old suppliers of assays, I mean, you could see backups go 3, 4 weeks or more.

And here, you can get it in 2 weeks or less and sometimes almost daily. So I think that’s important. I mean the whole industry is under a lot of strain right now. There are labor problems, so there’s going to be competition there. There’s equipment supplies. When someone comes along, we’re going to have all these projects coming on. Who’s going to — will they be able to deliver the trucks, the shovels, the drills and that. You’re already — in Argentina, we looked at that problem with drills. We ended up buying 8 drills because there weren’t drills down there readily available. And so mean you look at the world and say mining investments in a mix of global portfolios is very small today. It might be 1% or 2%. 10 years ago, it was up around 12%.

We get back to that. As you said, there’s going to be a real battle for a lot of the inputs that are required to define an ore body. And at the same time, we have to compress time in this industry. It’s taking far too long to reach certain decision points. And so you’re going to see a lot more technology. I view what Paragon’s technology, the crisis rather, is a disruptive technology that will advance the industry. And we — we’ll be looking for other opportunities to accelerate and improve the knowledge of the industry, first for us, but then for the industry.

William Shaver: Yes.

Heiko Ihle: Yes, good answer. Obviously, interesting move. I’ve seen this machine in operation. I was trying to dig up where it was, but I’ve seen it on a site visit before somewhere. It was one of your assets, it was somewhere else. It might have been — I go to so many sites. At Gold Bar, you did obviously 8,200 ounces, quite a bit lower, frankly, a bit lower than what we had in our model as well. You were talking about the reinterpretations of geological data and changes to your mine plans. What should we be looking at for next year? I mean this sure sounds like a temporary issue, but is it?

William Shaver: I would say absolutely that the particular zone of the mining operation that we were in, in the last quarter, we ended up with a part of the — where we were mining that we anticipated would be ore. It turned out to be — to, in fact, be unmineralized material. And as a result, that part of the pit basically turned into stripping material. So — and for some reason, the historical drilling that was done many years ago didn’t identify that horse of unmineralized material. So we’ve mined through that with our stripping part, and we’re now back into what we would call our normal ore. And what we’re seeing in the rest of the mining that we’re doing is that the reconciliation to the block model is standing up. And it was just, I guess, something that we missed in our confirmation drilling or something that we missed in the mine planning at the time.

And again, this is a part of the ore body that we decided more than a year ago to start stripping because of the increase in the gold price, and that’s what brought that whole zone into ore. At the gold price that we had 1.5 years ago, that stripping wouldn’t — and that mining would not have been done. So in answer to your question with regard to next year, we see the mine plan being pretty consistent through the year, and we’ll be announcing the production guidance for next year shortly.

Operator: [Operator Instructions] Your next question comes from the line of Joseph Reagor from ROTH Capital Partners.

Joseph Reagor: I think Heiko asked the 2 big ones there. But just kind of following up on Gold Bar. In the comments, you guys said that you’re going to be doing some more work to review this. What degree of risk do you see to an overall resource change, if any? Or is this just a matter of sequencing?

Robert McEwen: It appears to be a matter of sequencing and not a large risk.

Joseph Reagor: Okay. That’s good to hear. And then you mentioned with Phoenix mid next year, how comfortable are you guys with that time line to have all your permits? And where do you see like the kind of the potential for to get started earlier on that front? And then do you expect to publish an updated financial study once you have permits in hand?

Robert McEwen: Yes, the last question, and the permitting is somewhat unknown. We have a permit to do some of the work and it needs to be amended. And we’re hoping that the timing will coincide with what we gave you.

William Shaver: And we’ve had a number of meetings with the government authorities on permitting, and we’re fairly optimistic that we’ll have those permits in time and the construction of the plant will start in Q1.

Joseph Reagor: Okay. And then part of your comments on the Canadian gold thing, I think got cut in the beginning. What is the time line to complete that merger? And then how — what’s kind of the time line after that by quarter as far as expectations for analysts?

Robert McEwen: The process, there’s a shareholder vote in December, and then it has to be ratified by the courts, and that’s set for the 6th of January, I believe. Mid-January? 6 — early January. And in terms — then we’ll go in there and do a resource estimate and a preliminary economic assessment on that.

Joseph Reagor: Okay. Okay. And when do you think the — what’s the rough estimate, assuming a Q1 close, what’s the rough estimate on PEA being released, like how many months or quarters?

Robert McEwen: You’d probably be looking into the fourth quarter next year.

Operator: Your next question comes from the line of [ Gord Weber ] from RBC Capital Markets.

Unknown Analyst: With respect to resource estimates, how would McEwen Mining now calibrate or estimate their proven resources?

Robert McEwen: The same way everyone else does.

Unknown Analyst: And how many ounces or equivalent ounces would McEwen claim to have today?

Robert McEwen: It’s all set out in our statements. We’re looking at about 3 million ounces at Fox. And it’s about 4.2 million, I think, between all of the operations. And then we have development going on at drilling at Grey Fox right now. We’re drilling down in Nevada at Gold Bar over at Eureka, starting at Seven troughs.

Unknown Analyst: The reason I ask is it seems to me a little inequitable that we’re being asked Canadian as Gold Corp stockholders to tender 50 shares for one of those shares when, in fact, we have a proven resource.

Robert McEwen: Who are you representing? Sorry, who are you a shareholder of?

Unknown Analyst: Yes, I’m a stockholder. I’ve been a long-term stockholder of Canadian Gold Corp. We know we have proven resources, and we also know that we have a lot of drilling that hasn’t been analyzed to date. So I assume we have greater resources than has been booked. And it just seems to me 50:1 isn’t — well, it just seems to me very opportunistic.

Robert McEwen: We put a bid on the table. It was accepted by management, and it’s going to shareholders in December. We thought it was fair at the time, and I believe management thought it was fair.

Unknown Analyst: Yes. And will there be a resource estimate for we, the stockholders before it goes to vote?

Robert McEwen: We don’t have any control over that.

Unknown Analyst: Okay. So I think that’s an…

Robert McEwen: I don’t have an answer to that question, but we’re not driving a resource estimate.

Unknown Analyst: But as the majority shareholder, don’t you want to know what that number is before you conclude the transaction? Or do you already have some inside information that leads you to believe it should be concluded?

Robert McEwen: No, the drilling is going. It’s exciting. It’s in an area that had past production, although the Tartan Lake mine wasn’t run very well, and that’s why it went into bankruptcy. But it’s — it’s in a favorite area of the country in terms of energy costs and that and mineral deposit.

Unknown Analyst: Yes. No, you don’t have to sell me on the merits of the Tartan mine. My concern is that the majority shareholders may have insight or information that the minority shareholders haven’t been provided with.

Robert McEwen: That isn’t the case.

Unknown Analyst: Well, that’s refreshing to hear that.

Robert McEwen: Any other comments, questions?

Unknown Analyst: Perhaps we can follow that up later.

Operator: Your next question comes from [ Terry A. DeVries ], a private investor.

Unknown Analyst: You know what, I’m good. I’m actually really good. I’ve had a great couple of months watching your stock double. Congratulations for Los Azules. Really exciting what’s happening there. And the gold market goes up, the gold market goes down, and we just got a fantastic buying opportunity. And so I stepped up to the plate again. The one question I have I didn’t really hear it from Michael Meding. The IPO for Los Azules, do you have any further information that you can give us when you think that might be happening? How much money you’d be willing to — or looking to raise in the first issue?

Robert McEwen: Well, we were hoping to do it earlier, but the feasibility, we got that out in October and didn’t feel the market would have enough time to do an IPO in the fourth quarter of this year. Now we’re looking at going to sometime next year, doing — taking the company public.

Unknown Analyst: First quarter…

Robert McEwen: In terms of raising money, our last financing was at $30 a share. And I would expect that we’re been accepted in the RGI. We’ve got the feasibility study. The project looks very attractive relative to a number of other development projects in copper that we’d see a higher price than that when we go public.

Unknown Analyst: Any other market-moving news that you can expect in the next quarter or 2?

Robert McEwen: I don’t know. I’m going to go meet with the President of Argentina tomorrow in New York. I don’t think that will move the market.

Unknown Analyst: Well, your drill bits success has been rather encouraging. So I wish you all the luck in pursuing that and look forward for some good news.

Operator: And there are no further questions at this time. Mr. Rob McEwen, I turn the call back over to you.

Robert McEwen: Thank you very much, operator. Thank you, everyone. We’ve set our course where we’re going. We think by planning by 2030 to have substantially more production coming out of our gold mines. There are a couple of other projects we’d like to see brought into production, and we hope to have the copper mine up and running by — in 2030. So all good news in the long term. Thank you.

Operator: And this concludes today’s call. You may now disconnect.