McEwen Mining(MUX) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights McEwen Inc. reported strong Q2 2025 financial improvements, including positive net income and doubled Adjusted EBITDA, despite lower production, while advancing strategic development projects towards 2030 production goals Introduction and CEO Commentary McEwen Inc. reported its Q2 and H1 2025 results, highlighting continued progress towards doubling gold and silver production by 2030. CEO Rob McEwen emphasized strategic investments in development projects, including the proposed acquisition of Canadian Gold Corp., and noted the positive impact of higher gold prices on the company's financial performance - McEwen Inc. is continuing momentum to double gold and silver production by 2030[1] - H1 2025 investments in development projects, including the proposed acquisition of Canadian Gold Corp., are aimed at positioning the company for operational growth[3] - Net income is expected to improve with the publishing of the Los Azules Feasibility Study, allowing capitalization of the majority of development costs (year-to-date expense was $15.6 million)[3] - Higher gold prices had a welcome positive impact on cash flow and net income[3] Financial Highlights McEwen Inc. demonstrated significant financial improvements in Q2 2025, with gross profit increasing to $12.3 million and a positive net income of $3.0 million, a substantial turnaround from a net loss in Q2 2024. Adjusted EBITDA more than doubled, and liquidity strengthened considerably with a rise in cash and equivalents and positive working capital, despite a slight decrease in revenue due to lower GEOs sold | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | $12.3M | $10.8M | +$1.5M | | Gross Margin | 26% | N/A | N/A | | Net Income (Loss) | $3.0M | ($13.0M) | +$16.0M | | EPS | $0.06 | ($0.26) | +$0.32 | | Adjusted EBITDA | $17.3M | $7.2M | +$10.1M | | Adjusted EBITDA per share | $0.32 | $0.15 | +$0.17 | | Revenue | $46.7M | $47.5M | -$0.8M | | GEOs Sold | 14,549 | 20,630 | -6,081 | | Average Realized Gold Price per GEO | $3,298 | $2,355 | +$943 | | Cash and Equivalents (June 30) | $53.6M | $13.7M | +$39.9M | | Marketable Securities (June 30) | $16.0M | N/A | N/A | | Working Capital (June 30) | $61.8M | ($6.5M) (Dec 31, 2024) | +$68.3M | | Debt Principal Outstanding | $130M | $40.0M | +$90.0M | | McEwen Copper Implied Market Value | $984.0M | N/A | N/A | | McEwen Ownership in McEwen Copper | 46.4% | N/A | N/A | | McEwen Shares Outstanding | 54,106,415 | N/A | N/A | Operational Highlights Q2 2025 saw a decrease in consolidated production to 27,554 GEOs, accompanied by higher cash costs and AISC for 100%-owned operations. The company actively invested in exploration programs ($5.4 million) and the Los Azules copper project ($7.0 million, McEwen Copper's share), while maintaining excellent safety standards with zero lost-time incidents | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Consolidated Production (GEOs) | 27,554 | 35,265 | -7,711 | | Cash Costs per GEO (100%-owned) | $1,906 | $1,554 | +$352 | | AISC per GEO (100%-owned) | $2,120 | $1,728 | +$392 | | Exploration Investment | $5.4M | N/A | N/A | | McEwen Copper Investment (Los Azules) | $7.0M | N/A | N/A | - Fox Complex is advancing the Froome West discovery to production and the Stock mine ramp[7] - Zero lost-time incidents were recorded across 100%-owned sites[7] Outlook and Strategic Catalysts The company reaffirmed 2025 production guidance, anticipating lower costs in H2, and outlined ambitious 2030 production goals supported by key near-term catalysts 2025 Full-Year Guidance McEwen Inc. reaffirmed its full-year production guidance for 2025, expecting 120,000–140,000 GEOs. The company anticipates that projected production increases in the second half of 2025 will lead to lower costs per GEO - Full-year production guidance reaffirmed at 120,000–140,000 GEOs[7] - Projected production increases in H2 2025 are expected to drive costs per GEO lower[7] Long-Term Production Goals and Key Catalysts The company has set an ambitious long-term production goal of 250,000 to 300,000 consolidated GEOs by 2030. This target is supported by seven key near-term catalysts, including resource updates, strategic acquisitions, feasibility studies, and the commencement of new mine production - Production goal of 250,000 to 300,000 GEOs consolidated by 2030[8] - Seven near-term catalysts include: resource update for Windfall and Lookout Mountain (Q4 2025), completing Canadian Gold Corp. acquisition (early 2026), Grey Fox Pre-feasibility Study (H1 2026), Stock Mine production commencement (mid-2026), potential future dividend from San José, continuing exploration updates, and Los Azules Feasibility Study (late Q3 2025)[9] Individual Asset Performance Individual mine performance in Q2 2025 showed varied production and cost trends, with Gold Bar and Fox Complex anticipating H2 improvements, while San José faced higher costs due to inflation Gold Bar Mine, Nevada (100% owned) The Gold Bar Mine produced 8,406 GEOs in Q2 2025, with cash costs and AISC within guidance. Production is anticipated to increase and costs to decrease in H2 2025 as accelerated stripping activities conclude. Significant investments were made to extend the mine life and advance other nearby projects | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | 2025 Guidance | | :--- | :--- | :--- | :--- | :--- | :--- | | GEOs Produced | 8,406 | 12,297 | 16,094 | 24,013 | 40,000–45,000 | | Cash Costs/GEO | $1,679 | $1,532 | $1,419 | $1,313 | $1,500–$1,700 | | AISC/GEO | $1,792 | $1,634 | $1,986 | $1,404 | $1,700–$1,900 | - Accelerated stripping activity is nearing completion, with expected production increases and decreased costs per GEO in H2[12] - $1.2 million was spent at Gold Bar Mine to extend the current mine life beyond 2029[12] - $1.3 million was spent at Lookout Mountain and Windfall projects to advance them towards production[12] Fox Complex Mine, Ontario (100% owned) The Fox Complex Mine produced 5,429 GEOs in Q2 2025 from lower-grade zones, resulting in higher cash costs and AISC, which are projected to decrease with increased output in H2. Exploration efforts led to a new high-grade gold discovery at Froome West, extending mine life, and significant investments were made in drilling at Grey Fox and developing the Stock ramp for mid-2026 commercial production | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | 2025 Guidance | | :--- | :--- | :--- | :--- | :--- | :--- | | GEOs Produced | 5,429 | 8,297 | 10,948 | 15,782 | 30,000–35,000 | | Cash Costs/GEO | $2,212 | $1,588 | $2,142 | $1,572 | $1,600–$1,800 | | AISC/GEO | $2,563 | $1,874 | $2,534 | $1,886 | $1,700–$1,900 | - Delineation drilling around Froome Mine led to the discovery of new high-grade gold mineralization at Froome West, expected to extend mine life through mid-2026[12] - $2.9 million invested at Grey Fox's Gibson Zone, completing 20,000 m of drilling[12] - $5.6 million invested on Stock ramp, targeting commercial production by the middle of 2026[12] San José Mine, Argentina (49% owned) Attributable production from the San José Mine decreased to 13,719 GEOs in Q2 2025 due to lower grades and recovery rates. Cash costs and AISC significantly increased, primarily driven by high inflation and increased contractor use, though H2 production growth is expected to mitigate these costs. The mine received a $2.2 million dividend in H1 2025 and built cash balances to $55.6 million | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | 2025 Guidance | | :--- | :--- | :--- | :--- | :--- | :--- | | Attributable GEOs Produced | 13,719 | 14,672 | 24,643 | 27,605 | 50,000–60,000 | | Cash Costs/GEO | $2,310 | $1,624 | $2,428 | $1,615 | $1,600–$1,800 | | AISC/GEO | $2,842 | $2,032 | $2,933 | $1,978 | $1,900–$2,100 | - Costs per GEO sold were influenced by high inflation outpacing the devaluation of the Argentine peso and increased use of contractors[15] - A $2.2 million dividend distribution was received during H1 2025[15] - Cash balances at San José mine reached $55.6 million (100% basis) as of June 30, 2025[15] Project Updates and Corporate Developments The company advanced the Los Azules copper project towards a Feasibility Study and expanded corporate capabilities through a milling agreement and the strategic acquisition of Canadian Gold Corp McEwen Copper – Los Azules Project, Argentina (46.4% ownership) McEwen Copper invested $15.6 million in Q2 2025 to advance the Los Azules copper project, with the Feasibility Study on track for late Q3 2025. The study is focused on optimizing cost estimates, hydrogeological modeling, and engineering to reduce upfront capital. An RIGI application was submitted to secure tax and regulatory benefits, and new copper targets have been identified for drilling - $15.6 million invested in Q2, advancing towards publishing a Feasibility Study in late Q3 2025[15] - Feasibility Study is progressing with a focus on cost estimates, hydrogeological modeling, and engineering optimization to reduce upfront capital[15] - A RIGI application was submitted (revised July 11, 2025) to secure significant tax and regulatory benefits[15] - Exploration has generated three other nearby copper targets which will be drilled in late fall of 2025[15] Further Corporate Developments McEwen Inc. strategically expanded its operational capabilities by entering a milling agreement with Inventus Mining Corp. to optimize costs and signed a binding Letter of Intent to acquire Canadian Gold Corp. This acquisition aims to significantly increase the company's resource base and future production in Manitoba, with immediate plans for resource updates, economic assessment, and permit amendments to restart the Tartan Mine - On July 2, 2025, the Company entered into a milling agreement with Inventus Mining Corp. to utilize excess milling capacity and reduce cost per ounce[15] - On July 27, 2025, the Company signed a binding LOI to acquire Canadian Gold Corp., a strategic move to increase its resource base and future production in Manitoba[15] - Upon completion of the acquisition, next steps include updating the resource estimate, preparing a preliminary economic assessment, and amending mining permits for a quick restart of the Tartan Mine, alongside continued exploration[15] Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures, including Cash Costs, AISC, and Adjusted EBITDA, used to evaluate operational performance and cash flow, emphasizing their non-standardized nature Cautionary Note and Definitions This section provides a cautionary note on non-GAAP financial measures like Cash Costs, AISC, and Adjusted EBITDA, clarifying that they are common in the gold mining industry but lack standardized definitions under U.S. GAAP. The company uses these measures to evaluate operational performance and cash flow, but stresses they should not be considered in isolation. Detailed definitions for Cash Costs and All-in Sustaining Costs (AISC) are provided, outlining their components - Non-GAAP performance measures (Cash Costs, AISC, Adjusted EBITDA) are common in the gold mining industry but do not have standardized definitions under U.S. GAAP and should not be considered in isolation[22] - Cash costs include mining, processing, on-site G&A, community and permitting costs, royalty costs, refining and treatment charges, sales costs, export taxes, and operational stripping costs, excluding depreciation and amortization[25] - All-in sustaining costs (AISC) consist of cash costs plus accretion of retirement obligations, amortization of asset retirement costs, environmental rehabilitation, sustaining exploration and development, sustaining capital expenditures, and sustaining lease payments, excluding corporate G&A[26] Reconciliation of Cash Costs and All-In Sustaining Costs (AISC) The report presents detailed reconciliations of Cash Costs and All-In Sustaining Costs (AISC) to production costs applicable to sales for both 100%-owned operations (Gold Bar, Fox Complex) and the 49%-owned San José Mine. These reconciliations cover Q2 and H1 periods for 2025 and 2024, providing transparency on the calculation of these non-GAAP operational metrics | Metric | Q2 2025 (Total) | Q2 2024 (Total) | H1 2025 (Total) | H1 2024 (Total) | | :--- | :--- | :--- | :--- | :--- | | Production costs applicable to sales (100% owned) | $27,733 | $32,066 | $47,338 | $57,176 | | All-in sustaining costs | $30,851 | $35,657 | $60,994 | $64,352 | | Ounces sold, including stream (GEO) | 14,549 | 20,630 | 27,596 | 40,434 | | Cash cost per ounce sold ($/GEO) | $1,906 | $1,554 | $1,715 | $1,414 | | AISC per ounce sold ($/GEO) | $2,120 | $1,728 | $2,210 | $1,592 | | Metric | Q2 2025 (100% basis) | Q2 2024 (100% basis) | H1 2025 (100% basis) | H1 2024 (100% basis) | | :--- | :--- | :--- | :--- | :--- | | Production costs applicable to sales | $63,603 | $48,220 | $120,191 | $96,105 | | All-in sustaining costs | $78,246 | $60,342 | $145,218 | $117,694 | | Ounces sold (GEO) | 27,530 | 29,699 | 49,507 | 59,501 | | Cash cost per ounce sold ($/GEO) | $2,310 | $1,624 | $2,428 | $1,615 | | AISC per ounce sold ($/GEO) | $2,842 | $2,032 | $2,933 | $1,978 | Reconciliation of Adjusted EBITDA The reconciliation of Adjusted EBITDA, a non-GAAP measure, is provided to evaluate operating performance and cash flow from gold operations, excluding the impacts of McEwen Copper. Adjusted EBITDA significantly increased to $17.3 million in Q2 2025 from $7.2 million in Q2 2024, and to $26.0 million in H1 2025 from $13.5 million in H1 2024, reflecting improved operational profitability - Adjusted EBITDA is a non-GAAP measure used to evaluate operating performance and ability to generate cash flow from gold operations, excluding McEwen Copper's income or loss impacts[34] | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Income (loss) before income and mining taxes | $1,929 | ($15,371) | ($5,420) | ($38,311) | | Depreciation and depletion | $6,853 | $4,810 | $13,024 | $15,088 | | Loss from investment in McEwen Copper Inc. | $6,978 | $16,816 | $15,556 | $34,828 | | Interest expense | $1,549 | $972 | $2,858 | $1,945 | | Adjusted EBITDA | $17,309 | $7,227 | $26,018 | $13,550 | | Weighted average shares outstanding (thousands) | 53,968 | 49,718 | 53,623 | 49,580 | | Adjusted EBITDA per share | $0.32 | $0.15 | $0.49 | $0.27 | Company Information and Disclosures This section provides an overview of McEwen Inc.'s operations and strategic vision, details technical information approval, and includes important forward-looking statements and contact information About McEwen McEwen Inc. is a mining company focused on gold, copper, and silver in the Americas, operating three mines and developing the Los Azules copper project in Argentina, which aims for carbon neutrality by 2038. CEO Rob McEwen, a significant personal investor, is committed to building shareholder value and establishing a dividend, taking a symbolic $1 annual salary - McEwen provides exposure to gold, copper, and silver in the Americas through three operating mines (USA, Canada, Argentina) and a large, advanced-stage copper development project in Argentina[37] - The Los Azules copper project is designed to become one of the world's first regenerative copper mines, committed to achieving carbon neutrality by 2038[37] - Rob McEwen, Chairman and Chief Owner, has personally invested US$205 million, takes a salary of $1/year, and aims to build shareholder value and establish a dividend[38] Technical Information and Reliability of San José Data The technical content of the news release has been reviewed and approved by William Shaver, COO of McEwen Mining, a Qualified Person. The company relies on Minera Santa Cruz S.A. (MSC) for financial information regarding the San José Mine, which is accounted for using the equity method, noting that MSC's reported results are unaudited - The technical content of this news release related to financial results, mining and development projects has been reviewed and approved by William (Bill) Shaver, P.Eng., COO of McEwen Mining and a Qualified Person[36] - The Company relies on the management of Minera Santa Cruz S.A. (MSC) for accurate financial information prepared in accordance with GAAP for the San José Mine, and such results are unaudited[36] Forward-Looking Statements and Contact Information This section includes a cautionary statement regarding forward-looking statements, emphasizing that they are subject to significant business, economic, and competitive uncertainties and risks that could cause actual results to differ materially. It also provides comprehensive contact information for investor relations and links to the company's digital platforms - This news release contains forward-looking statements and information, which are necessarily based upon estimates and assumptions subject to significant business, economic, and competitive uncertainties, risks, and contingencies[40] - Risks and uncertainties include fluctuations in market price of precious metals, mining industry risks, political/economic/social/security risks, permitting, construction, litigation, capital markets, environmental risks, uncertainty in resource calculation, and foreign exchange volatility[40] - Contact information for investor relations and links to the company's website and social media channels are provided[42]