McEwen Inc. (MUX) Q3 2026 Earnings Call Transcript

DATE

Nov. 10, 2026

CALL PARTICIPANTS

• Chairman and Chief Owner - Robert McEwen
• Executive Vice Chairman - Ian Ball
• Chief Financial Officer - Perry Ing
• Vice President, Finance and Tax - Amy Wang
• Vice President of Operations - Channa Kumarage
• Vice President, Development Projects - Kevin Bromfield
• Vice President, Permitting, Government Relations and Sustainability - Zahir Jina
• Vice President, Corporate Development - Stefan Spears
• Managing Director of McEwen Copper - Michael Meding
• General Counsel and Secretary - Carmen Diges

TAKEAWAYS

• Gold Bar Oct Production -- Over 3,000 gold equivalent ounces, representing the highest monthly output in 15 months and returning the mine to positive cash flow.
• Production Target -- 250,000 to 300,000 ounces of gold by 2030, reflecting management's goal to double output levels.
• Gold Resources -- 5.8 million ounces, providing the foundation for extending mine lives across the company's portfolio.
• Cash and Marketable Securities -- $49 million in cash and $10 million in marketable securities at quarter end, facilitating organic growth initiatives.
• Noncore Asset Sale -- $55 million in proceeds from a transaction closed in early October, further strengthening the company's liquidity position.
• McEwen Copper Cash -- $157.8 million at the end of the third quarter, used to fund engineering and early works at Los Azules.
• McEwen Copper Working Capital -- $138.9 million as of the quarter end.
• McEwen Copper Term Loan -- $240 million in total commitments, which serves as bridge funding for project development.
• Gold Bar Diesel Cost Impact -- $200 per ounce increase in cash costs during the third quarter, driven by higher fuel prices in Nevada.
• Stock Mine Life -- 8.5 to 9 years, transitioning the Fox Complex away from the two-year life of the Froome Mine.
• Grey Fox Mine Life -- 15 years, contributing to the extension of operational timelines at the Fox Complex.
• Stock Mine Capacity -- 30% increase in milling capacity compared to the Froome Mine, reflecting the softer nature of the rock in the Stock ore zone.
• San Jose JV Cash -- approximately $135 million at quarter end, held by the venture in which McEwen Inc. maintains a 49% interest.
• Los Azules Camp Capacity -- 3,000 beds, increased from 2,500 beds to allow for more aggressive staffing to recover time lost to weather delays.
• Los Azules Local Sourcing -- $27.7 million in goods and services purchased from suppliers in Calingasta and Barreal from 2023 to mid-2026.
• Chairman Personal Investment -- $290 million total capital invested by Robert McEwen across McEwen Inc. and McEwen Copper.
• Mexico Mill Life -- 10 to 20 years, depending on the status of future permits for the project.
• Los Azules Acceptance -- 97% of 2,529 residents surveyed in 10 neighboring communities indicated acceptance of the project.
• San Jose Production Recovery -- Management expects a strong fourth quarter as the plant moves back to higher-grade clay material.

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RISKS

• Ian Ball stated, "there was a lack of oversight... lack of detail, there was delayed decision-making," which negatively impacted performance at the Gold Bar mine during the third quarter.
• Michael Meding stated, "The Andes had the heaviest snowfall in more than two decades, and it has delayed the reopening of our access road," warning that site works starting later than planned may affect the construction schedule at Los Azules.

SUMMARY

McEwen Inc. (NYSE:MUX) reported a difficult third quarter as operational challenges at Gold Bar and significant weather-related disruptions at the San Jose mine impacted financial results. Management stated that the company remains on track to double its annual gold production to a range of 250,000 to 300,000 ounces by 2030 despite these temporary setbacks. The company is currently transitioning several assets from short-term operations to longer-life mines, including the move to the Stock Mine at the Fox Complex and the expansion of mine lives in Nevada and Mexico. For the copper segment, McEwen Copper continues to progress toward a final investment decision for the Los Azules project, which is targeted for mid-2027.

• Ian Ball stated, "this was a very difficult quarter. I would call it a very unacceptable quarter," and noted that the company is taking steps to ensure profitability across all sites.
• Management confirmed that the Gold Bar mine returned to generating positive cash flow in October after addressing oversight and personnel issues.
• Michael Meding stated, "Our target to first copper remains 2030," despite the heaviest snowfall in more than two decades delaying access to the Los Azules site.
• The company received environmental approval in September to connect the Los Azules project to Argentina's national power grid.
• Ian Ball noted that the new Stock Mine is expected to be more profitable than the Froome Mine due to higher gold recoveries, the absence of royalties, and lower haulage costs.
• Management reported that McEwen Copper is evaluating three sources for project construction financing: senior project debt, strategic equity investments, and a potential initial public offering.

INDUSTRY GLOSSARY

• AISC: All-In Sustaining Costs, a mining industry metric that includes production costs plus capital and corporate expenditures.
• EPCM: Engineering, Procurement, and Construction Management, a contract model where a third party manages the design and execution of a large-scale project.
• FID: Final Investment Decision, the point at which a company's board formally approves the full funding and execution of a project.
• Fox Complex: A gold mining operation in Ontario, Canada, that includes the Froome and Stock mines.
• Gold Bar: A heap leach gold mine located in Eureka County, Nevada.
• Los Azules: A large-scale copper deposit located in San Juan, Argentina, currently in the development stage.
• San Jose Mine: A silver-gold mine in Santa Cruz, Argentina, in which McEwen Inc. holds a 49% interest.

Full Conference Call Transcript

Operator: Good morning, ladies and gentlemen, and welcome to McEwen's Third Quarter 2026 Operating and Financial Results Conference Call. Present from the company today are Rob McEwen, Chairman and Chief Owner; Ian Ball, Executive Vice Chairman; Perry Ing, Chief Financial Officer; Amy Wang, Vice President, Finance and Tax; Channa Kumarage, Vice President of Operations; Kevin Bromfield, Vice President, Development Projects; Zahir Jina, Vice President, Permitting, Government Relations and Sustainability; Stefan Spears, Vice President, Corporate Development; Michael Meding, Managing Director of McEwen Copper; Carmen Diges, General Counsel and Secretary. Other management of the company will also be available to answer questions during the call. Please note, this event is being recorded. [Operator Instructions] I will now turn the conference over to Mr.

Rob McEwen, Chief Owner. Please go ahead, sir.

Robert McEwen: Thank you, operator. Good morning, ladies and gentlemen. Today, we're going to start right in, trying to find some sunshine and look at how we're repairing some of our operations. And I'm going to ask Ian Ball, our Vice Chairman, to jump right into that discussion.

Ian Ball: Thank you, Rob. First, obviously, it was a very difficult quarter. I would call it a very unacceptable quarter. As a mining company, as a gold company, you have to make money, and we do not do that. And there's some very specific reasons, which I believe we're on the route to fixing, but that does not hold the disappointment that we felt with putting out our results yesterday. Despite the difficult quarter, we still are on track to double our gold production by 2030, so nothing in that sense has changed.

But I do want to take some time to talk about some of the issues that we had at each of the sites, what we're doing to correct them, where we're at now and a little bit about the transition we're seeing from our old mines to our new mines. So I do want to spend some time first on Gold Bar because the issues that we started to see there began in Q2, they fed into Q3, and that was happening for a number of reasons. One, I would say there was a lack of oversight that we mentioned in our press release.

From there, a lack of detail, there was delayed decision-making, and from there, we made a number of personnel changes, promoted various people who are on this call to a higher-up. And that is to correct this as soon as possible because it is a heap leach mine and not a mill, it does take time for those changes to take effect. And we didn't start seeing higher output until the end of September into October, and that's why we released the October production numbers. And for Gold Bar, October was the highest production month in the last 15 months for that mine. Can we do better? Absolutely.

There's still a lot of improvement we could do at Gold Bar but it is now back generating positive cash flow for the month of October, and we've seen a positive trend continue into November. At Fox, it was a situation where that mine -- the Froome Mine at the Fox Complex was scheduled to come to an end. We did find some incremental ore, and it was decided earlier on in the year to do development into that ore area, but most of that development cost was occurred in Q3 despite us mining there for another 6 to 9 months, we could not spread it out over our AISC.

So with that and the fact that the mill had excess capacity, we decided to draw down on a low-grade stockpile to feed the mill, both of those items elevated the AISC. Both are temporary, and we showed in October that the cost for the month are now back within guidance, and we suspect that they will be there and move lower as we transition into the new Stock Mine, which I'll touch upon in a second. And lastly, at San Jose, where we have a 49% interest as probably many of you know, Latin America, particularly in Argentina into Chile experienced significant snowfalls this year, record amount.

And this caused increased moisture at the mill typically, the better grades at San Jose are associated with a clay-like content but with the moisture, this was causing issues at the plant. So they moved over to more sulfide rich stockpiles, which were lower grade, because the grade was lower, typically, the gold and silver recoveries are also lower. So it was a bit of a compounding effect of why you saw the elevated costs and the lower production at San Jose. So what could be some good news if I'm an investor looking at this scenario and saying, well, why would I want to continue on with this company? And that's a very good question.

What I would say is, one, these are temporary issues. And you probably have thinking to yourself, I've heard this before from this company, you promise me you're going to make changes and you put out another unacceptable quarter. And I would share that frustration. And what I'm saying today is we do think with all the changes that we have made, we are in a position to make money and to build out the portfolio as we see it. At Stock, we're just coming into the ore zone this month. Stock should be a more profitable mine than Froome. It has much better gold recoveries, there's no royalty, there is no haul to the mill.

We can mill at about 30% increased capacity over Froome because the rock is softer. So we should start to see the benefits of that take hold in December and the beginning of the new year. We're also seeing a lot of our operations going from short mine life to much longer mine lives. Froome and Froome West were a couple of years, Stock is 8.5 to 9 years, Grey Fox, which is part of the Fox Complex is another 15 years. We're transitioning Gold Bar from being a 3- to 4-year mine life with Trinity, Windfall and Lookout to be a decade plus.

We are now starting construction of our mill in Mexico, and that's expected to go for 10 to 20 years, depending upon the future permits we would receive there. So this quarter is a bit of a transition. We do think we can finance the growth with minimal share dilution going forward. So much as there was a lot of negative, there's still a lot of positive to be seen here, and we'll be happy to take any operating questions you have at the end of the call.

I am going to hand it over to Michael Meding, our Managing Director of Los Azules because -- it's despite this being a financial and operating call, the development at Los Azules, obviously, have a big impact on our overall valuation. Michael?

Michael Meding: Thank you, Ian. Good morning, everyone. Four topics on Los Azules: the work towards a final investment decision; permits; the winter; and financing. The FID work, the engineering cost estimate and execution plan that form the basis for the decision on track for completion around the end. Metso has started work on the main process plant packages under limited notices to proceed. Four international engineering firms bid for the EPCM contract. We expect to finish evaluating the bids before year-end and will award once final terms are negotiated. Metallurgical test work, including 10-meter column leach test continues to favorably support the heap leach design, to date, so nobody confuses them, around year-end, we completed technical and economical basis.

The decision itself with full project financing is targeted for mid-2027. We are also updating the feasibility study. Three things drive it: better geotechnical results than we expected; a higher long-term copper price in line with analyst consensus; and current costs from our recent bids. It's not a redesign. The project stays broadly the same. The base case does not use Nuton as was the case in the feasibility. It is conventional bio-heap leaching as used in many mines in Chile and Peru. Some at higher altitude than ours, Quebrada Blanca and El Abra among them. We see potential for more copper over a longer mine life.

Lenders and investors in our financing process will work from this updated technical report. We target publishing it in February 2027. Permits. In September, we received the environmental approval to connect Los Azules to Argentina's national grid. Within 3 weeks of the public hearing in Calingasta, Calingasta is a community where we're operating in. It covers the high altitude section of the line which was common to the supply alternatives we are considering, so we can build it whichever we choose. Basic engineering for the line and substation is complete and advanced enough to tender.

We also obtained land use approvals for the 3,000-bed construction camp and the Candadito camp and environmental approval to explore the neighboring Marisa I property that we acquired some months back. One permit is outstanding the water concession. Our application is complete. The authority has no open information requests, and we await the provincial water council's decision and we are cautiously optimistic. The winter. The Andes had the heaviest snowfall in more than 2 decades, and it has delayed the reopening of our access road. Road crews expect to reach site in early 2027. Snowmelt and spring weather could push that later. Site works will start later than planned, and that may affect the construction schedule.

However, it does not affect the engineering cost work for FID, which is done off-site and with information we already have. We are assessing options to recover the lost time, including more camp capacity, so more people can work at site sooner. They cost money, and we are weighing that against the time recovered. Our target to first copper remains 2030. Holding it depends on site access and the recovery measures we choose and on completing the FID work, securing project financing and customary approvals. I will add additional precisions once we have out the technical report. Safety through all of this, Los Azules closed the third quarter without a reportable incident or a lost time injury. Financing.

In August, commitments under McEwen's Copper term loan facility increased to $240 million, funding continued engineering and early works. At quarter end, McEwen Copper had $157.8 million in cash and cash equivalents and $138.9 million in working capital. The term loan is bridge funding. It does not build the mine, obviously. For construction, we are working on 3 sources. The first is senior project debt. Société Générale is sole financial adviser for the project's debt financing. In late October, it sent an indicative senior debt term sheet to a group of export credit agencies and development finance institutions. Their feedback will shape the final structure. The second is equity at the McEwen Copper level from strategic investors.

The third is a potential initial public offering of McEwen Copper, preparations continue in parallel. None of the construction financing is committed today, that is normal before the FID basis is complete, and you should hear it from me. We continue to target FID and full project financing in mid-2027. On McEwen's 46.3%. New equity will be raised at the McEwen Copper level. To the extent McEwen does not subscribe, its percentage goes down. By how much depends on the amount of debt and the equity price and neither is set yet. We aim to raise that equity at higher price than past round so that future capital increase are accretive to McEwen as early rounds were. Community.

In recent door-to-door survey of 2,529 residents, the 10 communities near the project, 97% said they accept Los Azules and 90% said they trust it. From 2023 to mid-2026, the project sourced $27.7 million in goods and services from suppliers in Calingasta and Barreal. That's an 11,000 people community, the nearest towns. In September, Los Azules was named outstanding mining company in corporate social responsibility at Argentina Mining Norte. So what to watch? The FID basis around year-end, the EPCM award, the updated feasibility study targeted for February 2027, site access in early 2027 and the updated schedule, the lender's feedback and FID with full project financing in mid-2027. Thank you so much, and back to you, Rob.

Robert McEwen: Thank you, Mike. So despite our reduced cash flow during the quarter, we do have an adequate treasury as Ian said, to cover our organic growth and we're looking to double our production by 2030 to 250,000 to 300,000 ounces. In terms of our liquidity, at the end of the quarter, we had $49 million in cash and a further $10 million in marketable securities. And then early in October, we closed on a sale of noncore profits and raise -- that added a further $55 million. We have the asset base. Our gold assets in all categories, resources, 5.8 million ounces.

That is a solid foundation to allow us to build longer life mines, and as Ian said, at lower cost. We also have a world-class copper project that Michael just spoke about, which is equal to -- if you put it on a gold equivalent basis, is equivalent to a 56 million-ounce gold deposit with very attractive costs. We do think there's some room to improve on that asset and the technical work is being done, and we'll see the results of that early in the new year. And for those reasons, I'm optimistic about our growth. I've invested over $290 million between McEwen Inc. and McEwen Copper, my own money because I believe in the assets that we have.

Mining, I've found over the years comes with its challenges every once in a while, and we're going to overcome those and move forward. So at this point, operator, I'd like to welcome questions from the audience.

Operator: [Operator Instructions] Your first question comes from Jake Sekelsky with Alliance Global Partners.

Jacob Sekelsky: So just looking at the Los Azules time line, I'm curious if the adverse weather has affected anything here? And have any delays on that front been built into the current time line for the FID? Any color there would be helpful.

Robert McEwen: Sure, I'll ask Mike to answer your question, Jake.

Michael Meding: Jake, we had, I would say, 3 to 4 months delay on getting normally to site, and we want to start build out the camp early. And that obviously has impact, so that means that now we need to be more aggressive in terms of scaling up camp capacity. And as you have seen and heard, we are now targeting a 3,000-bed camp instead of a 2,500-bed camp as before. So that will be part of the mitigation. So we are going to have more people working over the construction time lines than before in order to claw that back.

Now how the rest of the of the summer is going, and what does it mean in terms of snowmelt and potential access, I think that we will be in a much better position once we have our feasibility out. But that's a one in a 25-year event. And you had seen a lot of impact on the Chilean side and also in other mine operations in Argentina. We are cautiously optimistic that we can claw back the time we have lost due to inclement weather conditions.

Jacob Sekelsky: Okay. That's helpful. And then just looking at the quarter at San Jose, I mean, we saw much higher dividends in 2026 than originally expected. Should we expect the JV to sort of revert back to retaining cash flow as the project gets back to steady state here over the next quarter? Or how should we be thinking about dividends heading into '27 here?

Perry Ing: Sure. This is Perry. I can take that, Jake. So I would say as far as San Jose, we're not expecting any further dividends for the balance of 2026, but I could say their closure obligations, I think, are substantially or fully met at this point. So I think barring need for significant capital development because of a discovery, I would say we expect further additional dividends in 2027. The quantum will be relative to silver prices. Obviously, we saw very high silver prices late last year going into 2026, first half. But overall, we think they will recover the production -- a large part of the production in Q4 this year.

And their cash balance was very healthy at the end of the third quarter, I think, about $135 million in cash approximately. So I would say look for a similar profile next year compared to this year.

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

Joseph Reagor: One kind of like accounting question for me. You guys expensed some stuff from El Gallo and I think Fox Complex, advanced projects category. Can you give us any guidance on what that might look like in Q4 and for next year? Obviously, it's been a bit higher than in prior years.

Perry Ing: Joe, it's Perry. So in terms of El Gallo, we just started earthworks for construction of the mill. I think you'll see modest spend in Q4, but we won't get into the heavy spend until the EPCM contracts are finalized. So you'll see, I think, more consistent spend on that in the first half of 2027.

Joseph Reagor: Okay. And will all that be expensed in advanced projects?

Perry Ing: No. You'll see that capitalized as we work through that project.

Joseph Reagor: Okay. Okay. And then given the production of over 3,000 gold equivalent ounces at Gold Bar in October, are you expecting that kind of like 3,000 per month to continue through the rest of the quarter? Or was there some buildup on the pad that kind of came through well in October, but maybe it's more moderate for the rest of the quarter?

Ian Ball: Yes. I can address that, Joe, it's Ian Ball speaking. So there's nothing special about October. The grade was average. We just basically were more efficient with our mining. We removed more tons to the leach pad, and we do expect to see a similar amount in November and December as well as early budgeting is showing that we would expect to see that every month, or on average every month in 2027 as well.

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

Heiko Ihle: At San Jose, you hinted at this on the call and you also discussed in the release, you were talking about the snowfall, the weather, just the excess moisture and essentially, it sort of screwed up the plant a little bit. And I just want to see what have we seen so far in Q4? Because I mean you're only discussing Q3, all on what front? And is there maybe any changes you can make to the plant to avoid those blockages in the future? And just sort of help us out on what we should envision on like a cost production guidance type of thing for Q4, maybe beyond, if you'd be so kind.

Ian Ball: Yes. So it's Ian speaking again. So just on the plant, we have not had those conversations with Hochschild and any modifications. I would say this is the first time they've ever seen this type of moisture buildup over the 20 years that the plant has been operating, so will they need to recalibrate the plant for a one-off? I don't have the answer for you at this point. My gut tells me probably not that they won't do it.

But that said, going into Q4, the fourth quarter is typically very strong for San Jose, and speaking to the team at site there, they fully expect that they can have a very strong fourth quarter and meet their production guidance for the year. I think they did a very good job operating under a very difficult situation because there was more than just the moisture as well as the plants. Even getting to site, having the record high snowfall and getting people in and out because it is a fly-in, fly-out camp. So you see that -- Michael has been speaking about it regarding in the high Andes, it was sort of all over the country.

But that said, we are expecting a very strong Q4 in line with what they've traditionally produced.

Heiko Ihle: So essentially, in our models, we should -- I don't want to say ignore the whole thing, but very much put it on the back burner going forward. That's fair to say?

Ian Ball: No. Yes. I expect that everything is going to pick up in the fourth quarter. They're going to move back to the clay material, so that automatically increased the grade. The recovery should go back to normal. Obviously, with lower grade, typically, there's a fixed tail that comes with those recoveries, and we saw that in the quarter, that fixed tail will continue with a higher grade, so the recoveries should just jump back up to where they were in Q2 and Q1. And as you saw sort of prior to Q3, San Jose was actually running at record rates, highest throughput, highest production due to the mill expansion that we've seen in quite some time.

So I think this is really, unfortunately, just a one-off due to the weather.

Heiko Ihle: Yes. Completely different question. I'm in Zurich right now at the conference. In 2 different meetings, the topic of diesel prices came up in regards to costs for drilling. Can you maybe give us a dollar impact on -- I mean, I guess, how much you spend on diesel and what the delta is now versus, call it, Q1 and maybe how we could model it out going forward as well?

Channa Kumarage: Heiko, it's Channa, VP Operations. I don't have a full dollar value for that. But at Gold Bar, we did see an impact of diesel cost, the increase of diesel cost in Q3, and that accounted for about $200 per ounce increase that impacted the cash cost there. So we do see that impact at all our sites.

Heiko Ihle: Okay. But you want to maybe give us a rounded number or like at least like a quantifiable measurement?

Perry Ing: I would say for our other operations, the impact would be $50 per ounce or less. Gold Bar is our only operation, subject to significant diesel purchases. So I would not quantify the impact on our other sites as material.

Operator: 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. We're getting on top of the issues that caused the problem in the third quarter, and we look forward to sharing those with you in the next quarter. Thank you.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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