McEwen Mining(MUX) - 2025 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements This section presents McEwen Inc.'s unaudited consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, including statements of operations, balance sheets, changes in shareholders' equity, and cash flows, along with detailed notes explaining the company's operations, accounting policies, and specific financial line items Consolidated Statements of Operations and Comprehensive Income (Loss) This section details the company's unaudited consolidated statements of operations and comprehensive income (loss), presenting key financial performance metrics for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (in thousands of U.S. dollars, except per share) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue from gold and silver sales | $46,700 | $47,476 | $82,396 | $88,704 | | Production costs applicable to sales | $(27,733) | $(32,066) | $(47,338) | $(57,176) | | Gross profit | $12,281 | $10,758 | $22,351 | $16,769 | | Operating loss | $(3,375) | $(13,947) | $(11,015) | $(35,929) | | Net income (loss) | $3,040 | $(12,995) | $(3,230) | $(33,378) | | Net income (loss) per share (Basic and diluted) | $0.06 | $(0.26) | $(0.06) | $(0.67) | | Weighted average common shares outstanding (Basic) | 53,968 | 49,718 | 53,623 | 49,580 | - Net income significantly improved in Q2/25 to $3.0 million ($0.06 per share) from a net loss of $13.0 million ($0.26 per share) in Q2/24, primarily due to lower expenditures at McEwen Copper Inc. and an unrealized gain on marketable securities[9][114] - Gross profit increased by 14% in Q2/25 to $12.3 million, driven by a 14% decrease in production costs applicable to sales[9][114] Consolidated Balance Sheets This section presents McEwen Inc.'s unaudited consolidated balance sheets, detailing assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheets (Unaudited) (in thousands of U.S. dollars) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $53,554 | $13,692 | | Marketable securities | $15,967 | $1,617 | | Total current assets | $107,668 | $41,192 | | Total assets | $735,622 | $664,623 | | Total current liabilities | $45,851 | $47,693 | | Long-term debt, net of issuance costs | $125,772 | $40,000 | | Total liabilities | $251,143 | $169,648 | | Total shareholders' equity | $484,479 | $494,975 | - Cash and cash equivalents significantly increased to $53.6 million at June 30, 2025, from $13.7 million at December 31, 2024, primarily due to proceeds from Senior Convertible Notes[11][142] - Long-term debt increased to $125.8 million at June 30, 2025, from $40.0 million at December 31, 2024, following the issuance of $110.0 million in Convertible Senior Unsecured Notes[11][49][54] Consolidated Statements of Changes in Shareholders' Equity This section outlines the unaudited consolidated statements of changes in shareholders' equity, reflecting movements in common stock, additional paid-in capital, and accumulated deficit for the six months ended June 30, 2025 Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (in thousands of U.S. dollars and shares) | Metric | Balance, December 31, 2024 | Stock-based compensation | Investment in Goliath Resources Limited | Purchase of capped call options | Shares issued for debt refinancing | Net loss | Balance, June 30, 2025 | | :---------------------------------- | :------------------------- | :----------------------- | :-------------------------------- | :------------------------------ | :------------------------------- | :------- | :--------------------- | | Common Stock and Additional Paid-in Capital (Amount) | $1,804,702 | $1,380 | $6,068 | $(15,114) | $400 | — | $1,797,436 | | Accumulated Deficit | $(1,309,727) | — | — | — | — | $(3,230) | $(1,312,957) | | Total Shareholders' Equity | $494,975 | $1,380 | $6,068 | $(15,114) | $400 | $(3,230) | $484,479 | | Common Stock (Shares) | 53,054 | 123 | 868 | — | 53 | — | 54,098 | - Total shareholders' equity decreased from $494.9 million at December 31, 2024, to $484.5 million at June 30, 2025, primarily due to the purchase of capped call options ($15.1 million) and a net loss of $3.2 million, partially offset by stock-based compensation and investment in Goliath Resources[13] Consolidated Statements of Cash Flows This section provides the unaudited consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows (Unaudited) (in thousands of U.S. dollars) | Cash Flow Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(3,230) | $(33,378) | | Cash provided by (used in) operating activities | $(1,454) | $7,487 | | Cash used in investing activities | $(28,822) | $(11,124) | | Cash provided by financing activities | $70,250 | $20,038 | | Increase in cash, cash equivalents and restricted cash | $40,086 | $15,699 | | Cash, cash equivalents and restricted cash, end of period | $57,550 | $43,209 | - Cash provided by financing activities significantly increased to $70.3 million in H1/25 (from $20.0 million in H1/24), primarily driven by $110.0 million in proceeds from Senior Convertible Notes, partially offset by financing costs and principal repayments[15][141] - Cash used in investing activities increased to $28.8 million in H1/25 (from $11.1 million in H1/24), mainly due to higher additions to mineral property interests and plant and equipment ($24.2 million) and advances to McEwen Copper ($5.1 million)[15][140] NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION This note describes McEwen Inc.'s primary business activities, including gold and silver production, mineral property development, and its ownership structure in key projects and investees - McEwen Inc. (formerly McEwen Mining Inc.) is engaged in the production and sale of gold and silver, and the development/exploration of copper, gold, and silver mineral properties across North and South America[16] - The Company owns 100% interests in the Gold Bar mine (Nevada, US), Fox Complex (Ontario, Canada), Fenix Project (Sinaloa, Mexico), and various exploration properties. It also holds 46.4% in McEwen Copper Inc. (Los Azules copper project, Argentina) and 49.0% in Minera Santa Cruz S.A. (San José silver-gold mine, Argentina), both accounted for using the equity method[17] NOTE 2 OPERATING SEGMENT REPORTING This note provides a breakdown of the company's financial performance by operating segment, including geographic revenue and segment profit (loss), as reviewed by the chief operating decision maker - The Company's operating segments are reviewed by the executive leadership team (CODM) at the geographic region level, by major mine/project, or by investee, with performance assessed based on segment income/loss or attributable equity income/loss[21][23] Segment Profit (Loss) (in thousands of U.S. dollars) | Segment | Three months ended June 30, 2025 | Six months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | USA | $9,419 | $19,699 | $7,276 | $11,736 | | Canada | $(4,354) | $(9,010) | $(1,648) | $(5,466) | | Mexico | $(2,575) | $(5,190) | $(2,974) | $(5,005) | | MSC | $3,596 | $4,106 | $4,701 | $5,979 | | McEwen Copper | $(6,978) | $(15,556) | $(16,816) | $(34,828) | | Total Segment Profit (Loss) | $(892) | $(5,951) | $(9,461) | $(27,584) | Geographic Revenue (in thousands of U.S. dollars) | Region | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | USA | $27,523 | $29,686 | $49,913 | $54,964 | | Canada | $19,177 | $17,790 | $32,483 | $32,540 | | Mexico | — | — | — | $1,200 | | Total Consolidated | $46,700 | $47,476 | $82,396 | $88,704 | NOTE 3 OTHER INCOME This note details the components of other income, including unrealized and realized gains on investments and foreign currency fluctuations, for the periods presented Summary of Other Income (in thousands of U.S. dollars) | Category | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Unrealized and realized gain on investments | $4,715 | $461 | $6,450 | $259 | | Foreign currency gain (loss) | $2,221 | $(485) | $1,926 | $(394) | | Other income | $114 | $334 | $251 | $357 | | Total other income | $7,050 | $310 | $8,627 | $222 | - Total other income significantly increased to $7.1 million in Q2/25 (from $0.3 million in Q2/24) and $8.6 million in H1/25 (from $0.2 million in H1/24), primarily driven by substantial unrealized and realized gains on investments and foreign currency gains[30][128][136] NOTE 4 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH This note presents the breakdown of cash, cash equivalents, and restricted cash by currency, highlighting changes in liquidity over the reporting period Cash and Cash Equivalents and Restricted Cash (in thousands of U.S. dollars) | Currency | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Held in USD | $55,279 | $15,578 | | Held in CAD | $1,628 | $1,501 | | Held in other currencies | $643 | $385 | | Total cash and cash equivalents and restricted cash | $57,550 | $17,464 | - Total cash, cash equivalents, and restricted cash increased by $40.1 million to $57.6 million at June 30, 2025, from $17.5 million at December 31, 2024[31][138] NOTE 5 MARKETABLE SECURITIES This note outlines the company's marketable securities, detailing changes in equity securities and warrants, including additions, disposals, and unrealized gains Marketable Securities Activity (in thousands of U.S. dollars) | Category | As at December 31, 2024 | Additions/transfers during period | Disposals/transfers during period | Unrealized gain on securities held | As at June 30, 2025 | | :---------------------------------- | :---------------------- | :-------------------------------- | :-------------------------------- | :--------------------------------- | :---------------- | | Equity securities | $1,206 | $7,463 | $(168) | $5,386 | $13,887 | | Warrants | $411 | $982 | $(380) | $1,067 | $2,080 | | Total marketable securities | $1,617 | $8,445 | $(548) | $6,453 | $15,967 | - The Company's marketable securities increased significantly to $15.9 million at June 30, 2025, from $1.6 million at December 31, 2024, driven by additions and a substantial unrealized gain of $6.5 million[32] - Key investments include acquiring a 4% interest in Goliath Resources Limited and a 6% interest in Canadian Gold Corp through share exchanges and private placements, and exercising warrants in Inventus Mining Corp[32][33][35] NOTE 6 RECEIVABLES, PREPAIDS AND OTHER CURRENT ASSETS This note provides a breakdown of receivables, prepaids, and other current assets, including government sales tax and other prepaid expenses Receivables, Prepaids and Other Current Assets (in thousands of U.S. dollars) | Category | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Government sales tax receivable | $2,677 | $3,918 | | Prepaids and other assets | $4,094 | $3,568 | | Total receivables, prepaids and other current assets | $6,771 | $7,486 | NOTE 7 INVENTORIES This note details the composition of inventories, including material on leach pads, in-process inventory, stockpiles, precious metals, and materials and supplies Inventories (in thousands of U.S. dollars) | Category | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Material on leach pads | $24,224 | $13,453 | | In-process inventory | $7,419 | $2,551 | | Stockpiles | $948 | $1,112 | | Precious metals | $1,207 | $2,312 | | Materials and supplies | $6,668 | $6,517 | | Total inventories | $40,466 | $25,945 | | Less: long-term portion | $16,332 | $7,834 | | Current portion | $24,134 | $18,111 | - Total inventories increased to $40.5 million at June 30, 2025, from $25.9 million at December 31, 2024, primarily driven by a significant increase in material on leach pads and in-process inventory[38] - The Company did not have any inventory write-downs during the six months ended June 30, 2025, compared to $0.8 million in write-downs in H1/24[38] NOTE 8 MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT This note describes the company's accounting policies for mineral property interests and plant and equipment, including impairment reviews and depreciation methods - The Company reviews long-lived assets for impairment quarterly; no indicators of impairment were noted for mineral property interests during the six months ended June 30, 2025[40][41] - Depreciation and depletion for Gold Bar and San José properties are based on proven and probable reserves (Regulation S-K 1300), while the Fox Complex uses the units-of-production method over the estimated remaining life of the mine due to lack of S-K 1300 compliant reserves[39] NOTE 9 EQUITY METHOD INVESTMENTS This note provides detailed operating results for McEwen Copper Inc. and Minera Santa Cruz S.A., in which the company holds significant equity method investments McEwen Copper Inc. Operating Results (100% basis, in thousands of U.S. dollars) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Advanced projects | $(12,236) | $(37,547) | $(33,507) | $(85,730) | | Net loss | $(15,026) | $(35,231) | $(33,497) | $(72,968) | | Portion attributable to McEwen Inc. (Loss) | $(6,978) | $(16,816) | $(15,556) | $(34,828) | Minera Santa Cruz S.A. (MSC) Operating Results (100% basis, in thousands of U.S. dollars) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue from gold and silver sales | $94,886 | $74,348 | $166,789 | $140,274 | | Gross profit | $20,671 | $11,405 | $25,376 | $20,520 | | Net income | $8,385 | $10,450 | $10,575 | $14,115 | | Portion attributable to McEwen Inc. (Income) | $3,596 | $4,701 | $4,106 | $5,979 | - McEwen Copper's net loss attributable to McEwen Inc. decreased significantly to $7.0 million in Q2/25 (from $16.8 million in Q2/24) and $15.6 million in H1/25 (from $34.8 million in H1/24), primarily due to reduced advanced project expenditures[43][126][133] - MSC's revenue from gold and silver sales increased to $94.9 million in Q2/25 (from $74.3 million in Q2/24), driven by higher realized metal prices, despite a decrease in attributable net income to $3.6 million in Q2/25 (from $4.7 million in Q2/24)[46][127][134] NOTE 10 DEBT This note details the company's debt structure, including convertible senior unsecured notes and term loan facilities, and related financing activities Debt Structure (in thousands of U.S. dollars) | Debt Type | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Convertible senior unsecured notes due 2030 | $110,000 | — | | Term loan facility | $20,000 | $40,000 | | Debt issuance cost | $(4,228) | — | | Long-term debt | $125,772 | $40,000 | - The Company issued $110.0 million in 5.25% convertible senior unsecured notes due 2030 in February 2025, with net proceeds of approximately $90.7 million after deducting offering costs and capped call transaction costs[54] - The $40.0 million term loan facility was refinanced in January 2025, extending principal repayments by 24 months, and $20.0 million was voluntarily repaid in February 2025, reducing the outstanding balance to $20.0 million[50][52] - In connection with the Convertible Notes, the Company purchased Capped Call Transactions for $15.1 million to reduce potential dilution, classified as a reduction to additional paid-in capital[63][64] NOTE 11 RECLAMATION AND REMEDIATION LIABILITIES This note outlines the company's reclamation and remediation liabilities across its properties, including changes in estimates and associated surety facilities Reclamation and Remediation Liabilities (in thousands of U.S. dollars) | Property | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Gold Bar, Tonkin and Lookout Mountain (Nevada) | $23,200 | $22,400 | | Fox Complex (Canada) | $18,200 | $16,700 | | El Gallo mine (Mexico) | $6,500 | $7,000 | | Total reclamation and remediation liabilities | $47,929 | $46,063 | | Less: current portion | $6,875 | $4,988 | | Long-term portion | $41,054 | $41,075 | - Total reclamation and remediation liabilities increased to $47.9 million at June 30, 2025, from $46.1 million at December 31, 2024, primarily due to accretion of liability and foreign exchange revaluation[66] - The Company has surety facilities totaling $46.5 million to cover bonding obligations in Nevada and Canada, with $4.0 million recorded as restricted cash[85][86][221] NOTE 12 SHAREHOLDERS' EQUITY This note details changes in shareholders' equity, including common stock issuances, stock-based compensation, and the impact of investment activities - In June 2024, the Company issued 1,533,000 flow-through common shares for gross proceeds of $21.8 million, with $14.4 million allocated to common shares and $6.0 million to tax benefits[67] - As of June 30, 2025, the Company incurred $14.4 million in eligible CEE and CDE expenditures, with remaining commitments expected to be fulfilled by the end of 2025[68] - In March 2025, the Company issued 868,056 common shares to acquire units of Goliath Resources Limited as part of a non-brokered private placement[69] NOTE 13 NET INCOME (LOSS) PER SHARE This note explains the calculation of basic and diluted net income (loss) per share, including the treatment of potentially dilutive instruments - Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average common shares outstanding, while diluted EPS uses the treasury stock method for options/warrants and the if-converted method for convertible notes[70] - For periods with a net loss, diluted EPS is computed the same as basic EPS because potentially dilutive instruments are anti-dilutive[71] - For Q2/25, diluted shares increased by 54,522 incremental shares, while for H1/25 and H1/24, all outstanding stock options and warrants were anti-dilutive and excluded from diluted EPS calculations[72][73][74] NOTE 14 RELATED PARTY TRANSACTIONS This note discloses transactions with related parties, including expenses, receivables, and investments involving affiliates of company executives Related Party Expenses (in thousands of U.S. dollars) | Related Party | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | REVlaw | $101 | $52 | $162 | $88 | Related Party Receivables (in thousands of U.S. dollars) | Related Party | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Receivables from McEwen Copper Inc. | $7,242 | $286 | - The Company paid $0.5 million in Q2/25 and $1.1 million in H1/25 in interest to an affiliate of Robert R. McEwen (Chairman and CEO) for the term loan facility[76] - The Company participated in private placements of Canadian Gold Corp and exercised warrants in Inventus Mining Corp., both affiliates of company executives[78][79] NOTE 15 FAIR VALUE ACCOUNTING This note describes the company's fair value measurements for financial instruments, categorizing them into Level 1, Level 2, and Level 3 inputs - Fair value measurements are categorized into Level 1 (quoted prices in active markets for identical assets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs)[80][81][82][83] Fair Value of Marketable Securities (in thousands of U.S. dollars) | Category | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | Total (June 30, 2025) | | :---------------------------------- | :---------------------- | :---------------------- | :---------------------- | :-------------------- | | Marketable securities | $13,887 | $2,080 | — | $15,967 | | Category | Level 1 (December 31, 2024) | Level 2 (December 31, 2024) | Level 3 (December 31, 2024) | Total (December 31, 2024) | | :---------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :------------------------ | | Marketable securities | $1,206 | $411 | — | $1,617 | NOTE 16 COMMITMENTS AND CONTINGENCIES This note details the company's commitments and contingencies, including surety bonds for environmental obligations, streaming agreements, and flow-through share expenditures - The Company has $46.5 million in surety bonds for environmental reclamation obligations in Nevada and Canada, with an average annual financing fee of 2.4% and a 7.3% deposit[85][86][221] - Under a streaming agreement, the Company is obligated to sell 8% of gold production from Black Fox mine and 6.3% from Pike River property at the lesser of market price or $561 per ounce (with inflation adjustments)[87] - The Company incurred $14.4 million in flow-through eligible expenditures by June 30, 2025, and expects to fulfill remaining obligations by year-end 2025[89] - The Company extended its precious metals purchase agreement with Auramet International LLC, receiving $13.5 million in Q2/25 and $38.2 million in H1/25 from sales on a Supplier Advance Basis[90] NOTE 17 INCOME AND MINING TAXES This note presents the company's income and mining tax recovery, detailing current and deferred tax components for the reporting periods Income and Mining Tax Recovery (in thousands of U.S. dollars) | Category | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Current income and mining tax expense | $1,793 | $459 | $3,631 | $992 | | Deferred income and mining tax recovery | $(2,904) | $(2,835) | $(5,821) | $(5,925) | | Total income and mining tax recovery | $(1,111) | $(2,376) | $(2,190) | $(4,933) | - The income and mining tax recovery for Q2/25 was $1.1 million (compared to $2.4 million in Q2/24) and $2.2 million for H1/25 (compared to $4.9 million in H1/24), primarily reflecting the amortization of the flow-through shares premium[94][129][137] NOTE 18 SUBSEQUENT EVENT This note discloses a significant subsequent event regarding the company's binding letter of intent to acquire Canadian Gold Corp - On July 27, 2025, the Company entered into a binding letter of intent to acquire all outstanding securities of Canadian Gold Corp, with shareholders receiving 0.0225 shares of McEwen Inc. common stock for each Canadian Gold share[96][111] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on McEwen Inc.'s financial condition and operational performance for the three and six months ended June 30, 2025, compared to the prior year. It covers consolidated results, liquidity, and detailed reviews of each operating segment, including production, costs, and exploration activities, while also defining and reconciling non-GAAP financial measures OVERVIEW This section provides an overview of McEwen Inc.'s business, including its core activities in gold and silver production, mineral property development, and its use of non-GAAP financial measures for performance evaluation - McEwen Inc. (formerly McEwen Mining Inc.) is engaged in gold and silver production and sales, alongside copper, gold, and silver mineral property development and exploration across North and South America[105] - The Company owns 100% of the Gold Bar mine, Fox Complex, Fenix Project, and exploration properties, and holds 46.4% in McEwen Copper Inc. and 49.0% in Minera Santa Cruz S.A., both accounted for using the equity method[106] - The discussion includes non-GAAP measures such as cash costs, AISC, Adjusted EBITDA, and average realized price per ounce, which are used by management to evaluate performance and generate cash flows[100] Q2/25 OPERATING AND FINANCIAL HIGHLIGHTS This section summarizes McEwen Inc.'s key operating and financial achievements for the second quarter of 2025, including production, revenue, net income, and exploration successes - Consolidated production for Q2/25 was 27,554 GEOs, a decrease from 35,265 GEOs in Q2/24, but the Company remains on track for its 2025 production guidance of 120,000 to 140,000 GEOs[111] - Q2/25 revenues from 100%-owned operations were $46.7 million, a slight decrease from $47.5 million in Q2/24, primarily due to a 29% decrease in GEOs sold, offset by a 40% increase in realized gold prices[117][123] - Net income for Q2/25 was $3.0 million ($0.06 per share), a significant improvement from a net loss of $13.0 million ($0.26 per share) in Q2/24, driven by lower McEwen Copper losses and an unrealized gain on marketable securities[117] - Exploration activities led to the discovery of new high-grade mineralization at Froome West (Fox Complex) and infill drilling at Gold Bar Mine and Timberline properties[117] Selected Consolidated Financial and Operating Results This section presents a summary of McEwen Inc.'s key consolidated financial and operating metrics for the three and six months ended June 30, 2025 and 2024 Selected Consolidated Financial Results (in thousands, except per share) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue from gold and silver sales | $46,700 | $47,476 | $82,396 | $88,704 | | Gross profit | $12,281 | $10,758 | $22,351 | $16,769 | | Adjusted EBITDA | $17,309 | $7,227 | $26,018 | $13,550 | | Net income (loss) | $3,040 | $(12,995) | $(3,230) | $(33,378) | | Net income (loss) per share | $0.06 | $(0.26) | $(0.06) | $(0.67) | | Cash from (used in) operating activities | $478 | $2,507 | $(1,454) | $7,487 | | Additions to mineral property interests and plant and equipment | $9,649 | $6,684 | $24,183 | $11,206 | Selected Consolidated Operating Results | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | GEOs produced (Total) | 27,554 | 35,265 | 51,685 | 68,320 | | GEOs sold (Total) | 28,039 | 35,182 | 51,854 | 69,589 | | Average realized price ($/GEO) | $3,298 | $2,355 | $3,062 | $2,246 | | Cash costs per ounce ($/GEO sold) (100% owned) | $1,906 | $1,554 | $1,715 | $1,414 | | AISC per ounce ($/GEO sold) (100% owned) | $2,120 | $1,728 | $2,210 | $1,592 | | Gold : Silver ratio | 99 : 1 | 81 : 1 | 94 : 1 | 85 : 1 | Consolidated Operations Review This section provides a detailed review of McEwen Inc.'s consolidated operational performance, analyzing revenue, production costs, and net income drivers for the reporting periods - Q2/25 revenue from 100%-owned operations decreased by 2% to $46.7 million, driven by a 29% decrease in GEOs sold, partially offset by a 40% increase in realized gold prices[123] - Production costs applicable to sales decreased by 14% in Q2/25 to $27.7 million, primarily due to lower GEOs produced and sold, despite higher per-unit costs[124] - The Company recorded a net income of $3.0 million in Q2/25, a significant improvement from a $13.0 million net loss in Q2/24, mainly due to reduced losses from McEwen Copper and a $4.7 million gain on marketable securities[9][126][128] LIQUIDITY AND CAPITAL RESOURCES This section discusses McEwen Inc.'s liquidity position and capital resources, including changes in cash, operating and financing activities, and working capital - Cash, cash equivalents, and restricted cash increased by $40.1 million to $57.6 million during H1/25[138] - Cash used in operating activities was $1.5 million in H1/25, reflecting a net loss of $3.2 million adjusted for non-cash items[139] - Cash provided by financing activities was $70.3 million in H1/25, primarily from $110.0 million in Senior Convertible Notes proceeds, partially offset by debt repayments and capped call option purchases[141] - Working capital increased by $68.3 million to $61.8 million at June 30, 2025, from a negative $6.5 million at December 31, 2024, driven by increased cash, marketable securities, and reduced liabilities[142] Operations Review This section provides a detailed review of the operational and financial performance of McEwen Inc.'s individual mining segments and equity investments United States Segment This section details the operating and financial results of the Gold Bar Mine in the United States segment, including production, costs, and exploration activities Gold Bar Mine Operating and Financial Results (in thousands of U.S. dollars, except per ounce) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | GEOs Produced | 8,406 | 12,297 | 16,094 | 24,013 | | GEOs Sold | 8,350 | 12,510 | 16,285 | 24,700 | | Revenue from gold and silver sales | $27,523 | $29,686 | $49,913 | $54,964 | | Cash costs per ounce ($/GEO sold) | $1,679 | $1,532 | $1,419 | $1,313 | | AISC per ounce ($/GEO sold) | $1,792 | $1,634 | $1,986 | $1,404 | - Gold Bar Mine production decreased by 32% to 8,406 GEOs in Q2/25 due to lower mined and stacked tonnes, as operations focused on the higher strip ratio Pick III deposit[146] - Cash costs and AISC per GEO sold increased in Q2/25 to $1,679 and $1,792, respectively, primarily due to the ongoing high-stripping phase at Pick III, with unit costs expected to decrease in H2/25[149] - Exploration activities at Gold Bar Mine focused on the Jug Handle target and at Timberline properties on infill drilling at Windfall and Lookout Mountain deposits[150][151] Canada Segment This section details the operating and financial results of the Fox Complex in the Canada segment, including production, costs, project advancements, and exploration activities Fox Complex Operating and Financial Results (in thousands of U.S. dollars, except per ounce) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | GEOs Produced | 5,429 | 8,297 | 10,948 | 15,782 | | GEOs Sold (including stream) | 6,199 | 8,071 | 11,311 | 15,671 | | Revenue from gold and silver sales | $19,177 | $17,790 | $32,483 | $32,540 | | Cash costs per ounce ($/GEO sold) | $2,212 | $1,588 | $2,142 | $1,572 | | AISC per ounce ($/GEO sold) | $2,563 | $1,874 | $2,534 | $1,886 | - Fox Complex production decreased by 35% to 5,429 GEOs in Q2/25 due to mining in lower-grade zones at Froome, with higher production expected in H2/25[157] - Cash costs and AISC per GEO sold increased to $2,212 and $2,563, respectively, in Q2/25, driven by a 23% decrease in GEOs sold and higher fixed costs spread over fewer ounces[160] - The Company invested $5.6 million in Q2/25 to advance the Stock project, completing the mine portal and initiating ramp access, targeting commercial production in 2026[155] - Exploration at Froome West discovered new high-grade gold mineralization (36.0 g/t gold over 10 meters), expected to extend Froome's mine life, and diamond drilling continued at the Grey Fox property[161][162] Mexico Segment This section provides an update on the Fenix Project in the Mexico segment, an advanced-stage gold heap leach reprocessing project awaiting key permits - The Fenix Project, an advanced-stage gold heap leach reprocessing project, is awaiting key permits for a construction decision and remains under review[164] Minera Santa Cruz Segment, Argentina This section details the operating and financial results of the San José Mine in Argentina, including production, revenue, costs, and McEwen Inc.'s attributable share of income San José Mine Operating and Financial Results (100% basis, in thousands of U.S. dollars, except per ounce) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | GEOs Produced | 27,997 | 29,942 | 50,291 | 56,337 | | GEOs Sold | 27,530 | 29,699 | 49,507 | 59,501 | | Revenue from gold and silver sales | $94,885 | $74,348 | $166,788 | $140,275 | | Cash costs per ounce sold ($/GEO) | $2,310 | $1,624 | $2,428 | $1,615 | | AISC per ounce sold ($/GEO) | $2,842 | $2,032 | $2,933 | $1,978 | - San José Mine production decreased by 6% to 27,997 GEOs in Q2/25 (100% basis) due to lower mill grades and reduced recovery rates, despite a 27% increase in tonnes processed[168] - Revenue from gold and silver sales increased to $94.9 million in Q2/25, driven by 38% higher realized gold prices and 13% higher silver prices, offsetting the decrease in GEOs sold[169] - Cash costs and AISC per GEO sold increased to $2,310 and $2,842, respectively, in Q2/25, reflecting increased operating costs due to inflation and higher contractor reliance, combined with lower ounces sold[170][171] - McEwen Inc.'s 49% attributable share of MSC operations resulted in an income of $3.6 million in Q2/25, and the Company received $2.2 million in dividends from MSC during H1/25[172][173] McEwen Copper Inc. This section provides an update on McEwen Copper Inc. and its Los Azules copper project in Argentina, including feasibility study progress and investment initiatives - McEwen Copper, 46.4% owned by the Company, is advancing the Los Azules copper project in Argentina, with a definitive feasibility study expected in Q3/25[174][176] - During H1/25, McEwen Copper invested $33.5 million to complete final drilling activities for the Los Azules feasibility study, refining geotechnical characterization and the mine plan[111][117] - McEwen Copper submitted an optimized application for Argentina's Regime of Incentive for Investments (RIGI) for the Los Azules Project, proposing a $2.7 billion investment to potentially gain tax and regulatory benefits[182] Non-GAAP Financial Performance Measures This section defines and reconciles non-GAAP financial measures used by management, such as cash costs, AISC, and Adjusted EBITDA, to evaluate operational performance - Non-GAAP measures like cash costs, AISC, Adjusted EBITDA, and average realized price per ounce are used to evaluate operational efficiencies and cash flow generation, but do not have standardized definitions and should not be used in isolation[184][186] Reconciliation of Cash Costs and All-In Sustaining Costs (100% owned operations, in thousands, except per ounce) | Metric | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Production costs applicable to sales - cash costs | $27,733 | $47,338 | | All-in sustaining costs | $30,851 | $60,994 | | Ounces sold, including stream (GEO) | 14,549 | 27,596 | | Cash cost per ounce sold ($/GEO) | $1,906 | $1,715 | | AISC per ounce sold ($/GEO) | $2,120 | $2,210 | Reconciliation of Adjusted EBITDA (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Income (loss) before income and mining taxes | $1,929 | $(15,371) | $(5,420) | $(38,311) | | Adjusted EBITDA | $17,309 | $7,227 | $26,018 | $13,550 | | Adjusted EBITDA per share | $0.32 | $0.15 | $0.49 | $0.27 | Critical Accounting Policies This section confirms that there were no significant changes to the company's critical accounting policies or estimates since the last fiscal year-end - There were no significant changes in the Company's critical accounting policies or estimates since December 31, 2024[199] Forward-looking Statements This section highlights the forward-looking nature of certain statements in the report, outlining the inherent uncertainties and assumptions underlying future projections - The report contains forward-looking statements regarding anticipated exploration results, production estimates, permits, strategic alternatives, and financial outcomes, which are subject to significant business, economic, and competitive uncertainties[200][202] - Production guidance is based on various factors and assumptions, including gold/silver price forecasts, average grades, tonnes moved, recovery rates, and labor availability, which are frequently evaluated and reconciled[203][205] Risk Factors Impacting Forward-looking Statements This section identifies key risk factors that could materially impact the company's forward-looking statements, including financial, operational, and geopolitical risks - Key risk factors include the ability to raise funds, success of acquisitions, securing permits, maintaining NYSE listing, geopolitical events, fluctuations in commodity prices and exchange rates, and operational challenges[206][207] Item 3. Quantitative and Qualitative Disclosure about Market Risk This section outlines McEwen Inc.'s exposure to various market risks, including foreign currency, equity price, commodity price, credit, and interest rate risks, and explains how these factors could impact the company's financial condition and results of operations Foreign Currency Risk This section details the company's exposure to foreign currency fluctuations, particularly with the Mexican peso, Canadian dollar, and Argentine peso, and their impact on financial results - The Company is exposed to foreign currency risks from the Mexican peso and Canadian dollar directly, and indirectly from the Argentine peso through its investments in MSC and McEwen Copper[210] - In Q2/25, the Canadian dollar and Mexican peso appreciated by 5.1% and 8.5%, respectively, while the Argentine peso depreciated by 10.1% against the U.S. dollar[211] Equity Price Risk This section describes the company's exposure to equity price risk from its investments in other mining entities and the measures taken to mitigate potential dilution - The Company is exposed to equity price risk from its investments in other mining sector entities, which can be volatile and lack liquidity[214] - Based on $15.9 million in marketable securities at June 30, 2025, a 1% change in fair value would result in an approximate $0.2 million gain or loss[214] - The issuance of Convertible Senior Notes and associated Capped Call Transactions in February 2025 are intended to offset potential dilution from equity price movements[216] Commodity Price Risk This section explains the company's exposure to fluctuations in gold and silver market prices and their significant impact on revenues and cash flows - Changes in gold and silver market prices significantly affect the Company's operations and cash flows; a 10% change in prices would impact Q2/25 revenues by approximately $4.7 million[217] - The Company does not hedge its sales, making it fully exposed to commodity price fluctuations[219] Credit Risk This section addresses the company's credit risk exposure from precious metals sales agreements and surety bonds for reclamation obligations - The Company is exposed to credit loss from precious metals sales agreements with financial institutions and refineries, though no significant credit exposure is anticipated[220] - Surety bonds totaling $46.5 million are in place for reclamation costs, exposing the Company to the risk of surety default or non-acceptance by governmental agencies[221] Interest Rate Risk This section assesses the company's interest rate risk, noting its insignificance due to fixed coupons on convertible notes and term loan facilities - The Company's interest rate risk exposure is considered insignificant due to fixed coupons on its $110.0 million convertible notes and $20.0 million term loan facility[222] Item 4. Controls and Procedures This section addresses McEwen Inc.'s internal controls over financial reporting and disclosure controls. It details ongoing remediation efforts for a previously identified material weakness in income taxes and concludes that, due to this weakness, disclosure controls were not effective as of June 30, 2025, though management believes the financial statements are fairly presented Overview This section provides an overview of the company's efforts to remediate a material weakness in internal control over financial reporting related to income taxes - The Company is remediating a material weakness in internal control over financial reporting related to income taxes, which should enable certifying officers to confirm the effectiveness of disclosure controls[224] - Remediation efforts include redesigning internal controls around income taxes, adding human resources, and engaging third-party assistance[224] Evaluation of Disclosure Controls and Procedures This section concludes that, due to a material weakness in internal control over financial reporting, the company's disclosure controls and procedures were not effective as of June 30, 2025 - Due to the material weakness in internal control over financial reporting, the Company's disclosure controls and procedures were not effective as of June 30, 2025[225] - Despite the control weakness, management believes the unaudited consolidated financial statements fairly present the Company's financial position, results of operations, and cash flows in accordance with U.S. GAAP[226] Changes in Internal Control Over Financial Reporting This section confirms that, apart from remediation efforts for the material weakness, there were no other material changes in the company's internal control over financial reporting during the quarter - Other than the described remediation efforts for the material weakness, there were no material changes in the Company's internal control over financial reporting during Q2/25[227] Limitations on Controls and Procedures This section acknowledges the inherent limitations of all control systems, emphasizing that they provide only reasonable assurance and can be subject to deterioration - All control systems have inherent limitations, providing only reasonable assurance, and their effectiveness can deteriorate due to changing conditions or compliance levels[228] PART II OTHER INFORMATION Item 1. Legal Proceedings McEwen Inc. reported no legal proceedings during the quarter ended June 30, 2025 - There were no legal proceedings to report for the quarter ended June 30, 2025[230] Item 1A. Risk Factors The Company stated that there were no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes were reported from the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[231] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds All unregistered sales of equity securities by McEwen Inc. or its subsidiaries during the quarter ended June 30, 2025, were previously reported in filings with the SEC - All unregistered sales of equity securities during the quarter ended June 30, 2025, were previously reported to the SEC[232] Item 3. Defaults upon Senior Securities McEwen Inc. reported no defaults upon senior securities during the quarter ended June 30, 2025 - There were no defaults upon senior securities to report for the quarter ended June 30, 2025[233] Item 4. Mine Safety Disclosures McEwen Inc. emphasizes safety as a core value, operating under a comprehensive health and safety management system. The Gold Bar mine is subject to MSHA regulation, and the Company is required to report certain mine safety violations, with relevant information included in Exhibit 95 - Safety is a core value at McEwen Inc., with a health and safety management system in place to ensure a safe environment and comply with mining regulations[234] - The Gold Bar mine is regulated by the Federal Mine Safety and Health Administration (MSHA), which conducts regular inspections and may issue citations[235] - The Company is required to report certain mine safety violations under Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, with details in Exhibit 95[236] Item 5. Other Information During the quarter ended June 30, 2025, McEwen Inc. had no undisclosed Form 8-K information, no material changes to director nominee recommendation procedures, and no adoption, modification, or termination of Rule 10b5-1 trading arrangements by directors or executive officers - No information required to be disclosed in a Form 8-K was undisclosed during Q2/25[240] - There were no material changes to procedures for stockholders to recommend board nominees during Q2/25[240] - No directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during Q2/25[240] Item 6. Exhibits This section lists all exhibits filed or incorporated by reference with the Form 10-Q report, including agreements, articles of incorporation, bylaws, certifications, and mine safety disclosures - The exhibits include various agreements (e.g., Agreement and Plan of Merger, Loan Agreement), corporate governance documents (e.g., Articles of Incorporation, Bylaws), and certifications (e.g., Sarbanes-Oxley Act certifications)[241] - Mine safety disclosures and Inline XBRL Taxonomy Extension documents are also included as exhibits[241] SIGNATURES The report is duly signed on behalf of McEwen Inc. by Robert R. McEwen, Chairman and Chief Executive Officer, and Perry Ing, Interim Chief Financial Officer, as of August 6, 2025 - The report is signed by Robert R. McEwen, Chairman and Chief Executive Officer, and Perry Ing, Interim Chief Financial Officer, on August 6, 2025[245]