McEwen Inc.

Hello, ladies and gentlemen. Welcome to McEwen Mining's Q2 2020 Operating and Financial Results Conference Call. Present from the company today are Rob McEwen, Chairman and Chief Owner, Peter Ma, Chief Operating Officer, and Sylvain Girard, Senior Vice President of Exploration. After the speaker's presentation, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, press the pound key. I would now like to turn the call over to Mr. Rob McEwen, Chief Owner.

Thank you, operator. Good morning, fellow shareholders, ladies and gentlemen. It's a great day we have. The price of gold and silver has been climbing over the last couple of months. And I was reminded the other day someone called up and said, you know, you said gold was going to $2,000 an ounce. That was a couple of years back. And they said they thought it was impossible. Now we're just over $2,000 an ounce. Silver's on a real tear. And it looks like given all of the quantitative easing that's been going on in the world and the amount of debt, we're going to see much higher prices. If you take a look at the Indian rupee right now, the price of gold's just taken off over there. And I think that's a good example of what's about to happen to a lot of other currencies and the price of gold. in those currencies. Q2 was not a quarter we're proud of from a standpoint of performance, but we are proud of something about Q2 in that we put the health of our employees before profits. We started with the PDAC and when COVID came along, we said, you know, there's a risk to our employees being at that conference And we didn't want to contribute to the spread, so we said, well, we have a booth, but we're not going to attend. No one in the firm is going to that conference. And early on after that, we decided to suspend operations at our mines. And that had a very serious impact on our production. The expenses were there, but the ounces weren't produced. And so in this quarter, in the just past quarter, Q2, we've seen numbers that make me sick when I look at them. But I'm comforted in knowing that we've protected our employees. And it's really important that they be protected because they're the life and the longevity of these operations. Going forward, and you'll hear from Peter today, that production is picking up at all of our operations and we expect our cost per ounce numbers to go back to where they're reasonable in the ensuing quarters. We also have got some interesting exploration news that Sylvain will speak to you about. At this point, I'd like to turn the presentation over to Peter to talk about our operations.

Thank you, Rob, and good morning, everybody. At Gold Bar, Gold produced was 6,100 ounces in Q2, and for the first half of this year, 15,200. Production was impacted by shutdown in April for COVID, and we operated on a single shift during May and June. Getting back on track, we started 24-hour operations towards the end of July and are ramping up towards feasibility levels in Q3. An optimization and improvement plan has been developed. We are targeting improved costs and throughput. The implementation of that project started in late July and is progressing quite well. Also, work has progressed quite positively on the optimization of mining and processing cost scenarios, and we expect a resource and reserve update in Q4 this year. Moving on to Black Fox, gold produced was 2,200 ounces per the quarter and 10,500 for the first half of this year. Again, production was primarily impacted by the COVID-19 shutdown. We had slower than expected ramp up as the mine resumed normal operations Lower grades from longer stope exposure times that were blasted before the shutdown and delays in development timing that limited our stope access. Going forward in half to production costs are expected to come in line with pre-COVID-19 performance. What's new? Pleased to report the West Plains 280 we got in on the ore development, which is five months ahead of schedule. and we encountered high grade that we anticipate will lead to stoping this year. Broom is on track for first ore in Q2 2020 and we expect commercial production to be reached in Q4 of next year. And the Black Box Complex Expansion Study, it's out for tender and will be awarded next week and we expect to complete the first step of that study, the preliminary economic analysis in Q4. A little bit about our gold resources in Canada. We thought we'd just summarize them. You know, a total of nearly 3 million ounces in Canada split kind of equally between our Lexham properties in Timmins and our Black Fox complex. Next slide, our organic growth expansion strategy. The main objectives of this strategy is to convert resources to near-term for a total gold equivalent production of greater than 300,000 ounces per year that is sustainable, low cost, and leverages our three operating regions in the Americas. The strategy currently consists of seven projects, the Black Box Mine, its extensions, Broome, Gray Fox, Stock, Phoenix, Gold Bar, and Gold Bar South. Several of our projects are under review, such as the Lexham properties I mentioned in Timmins, and the Tonkin Oxides and we'll be reporting on those in the following quarters. The Phoenix project is advancing towards feasibility expected in Q4 2020 based on the preliminary economic analysis financial model and using updated metal prices of 1,500 gold and 19 silver at 22.4 peso exchange rate. The IRR is 44% and the NPV at 5% discount rate is 112 million U.S. At spot prices, it improves using 20, 50 gold and 28 silver. The IRR rises to 97% and the NPV just north of 252 million U.S. On the next slide, I'll touch on some highlights for improvements at the Black Fox Mine and give an update on some of our near-term production projects such as Broome and Grey Fox. This next slide shows black box and the 2020 mine plan areas that we developed towards. It's created some new mining opportunities and we accessed those in the first half of this year. Grey represents mined out areas, blue is the 2019 year end resource, and red is our plans doping and development respectively. The dark red shows the actual development. Two examples of what's different in the upper part of the mine are the 240 East. It's a new stoping area, which so far has added about 26,000 tons to the 2020 plan. Recently, we got in on the 280 level and developed some very nice high-grade areas of that west flank. and in the West Blank, that 300 to 280 area. Both of these examples will increase working phases, result in shorter hauls and more flexibility. All the areas shown on this slide are active development, stoping and definition drill programs this year. Beyond these opportunities, an assessment will be completed toward the end of 2020 to determine if a bulk low-grade opportunity exists in the future. This next slide shows some of the new west flank drill targets shown in red which are in close proximity to the Froome declines and could add to production at Black Fox this year. The following slide is the Gray Fox project. It's one of the most exciting opportunities we have in our project pipeline. The company expects it will become a long life core asset representing a strong foundation to build our future upon. The inset in this slide shows the conceptual high-grade grey fox pits shown in grey. They target the contact 147 NE, 147 and S zones. Also shown is the new whiskey jack discovery above and to the right of the contact zone in the existing Gibson portal and underground workings towards the left-hand side of the inset. A scoping study and trade-off analysis to assess open pit and or underground mining while maximizing the stock mill capacity will be completed in Q4 2020 this year. On the next slide, this is just an update of where our Froome Twin ramp access is. The overall average is about 30% complete. You see on the right-hand side the Froome decline was collared at the bottom of the Black Fox pit. The red dot shows the location. We expect to reach the ore body by Q2 2021 and to begin transverse and longitudinal stope development, shown here in light green on the left-hand side of the slide. This forecast includes a conservative estimate of advance through the fault zone, shown in the middle of the slide, ahead of the red dot. Commercial production is expected in Q4 2021. On the next slide, this slide shows some important advantages of the FRUM project compared to Black Box. It's a shallower deposit suited for low-cost productive bulk mining, and it's not beneath the pit. It has more consistent grades and continuity in a wide disseminated style mineralization. A wider expected mining width ranging from 15 to 40 meters for the most of the deposit. Larger stoves equals more efficient underground development and mine sequencing. A lower gradient and a straighter ramp also will help haulage and reduce underground congestion. We're in fair to good ground conditions and so we expect positive results with dilution and grade control. That concludes the operational and projects updates. I'll hand over to Sylvain to provide the Q2 exploration results. Thank you, Peter.

At Gold Bar, our exploration drilling activities were focused primarily at the PIC West pit and the Gold Bar South satellite deposit. In-pit drilling confirmed significant gold minization, grade and width over the West PIC area. and provided additional key information to assist reinforcing our model. At the Gold Bar South Satellite Deposit, which is located at lower elevation about 3.5 miles southeast of Gold Bar, we are completing a 10,000-meter drill program. Drill assay results have been positive. and the program is successfully confirming shallow zones of plus 2 gram gold mineralization. In addition, drill results are extending mineralization toward the south with new drill intersections of 2.4 gram per ton over 104 feet, 2.2 over 95 feet and 1.2 gram per ton over 125 feet. as well as to the northwest of the deposit area where shallow intersections of 0.7 gram per ton go over 60 feet and 0.6 over 60 feet were obtained. The 2020 drill program is also significantly reinforcing the geological understanding and control of gold mineralization. which occurs mostly along the stratigraphic contact and at the intersection with northeast southwest trending falls. The Gold Bar Salt resource will be updated in Q4 permitting for the development and production from Gold Bar Salt is progressing and we expect to start mining this satellite deposit in the second half of 2021. In Timmins now, Drilling was mostly devoted to closely spaced definition drilling of gold mineralization within or adjacent of upcoming mining blocks. The black shock deposits remain open to the west and at depth, along two structural controls driving the geometry of the main mineralized zone or chute, as shown with the yellow arrows on the slide. The level of structural complexity is very important at Black Fox, and we are putting more efforts on understanding the control and geometry of the mining areas, as well as we keep advancing our drilling. Several high-grade intercepts were generated from these ore definition holes, including, as highlighted in yellow on the slide, 19.9 gram per tonne gold over 3.5 meter. This is in-field hole testing, randomization, adjacent to, as you recall, drifting over the 340 level. 162 gram per tonne over 3.2 meter. This includes 1,000 gram per tonne intersection over 0.5 meter. And this is coming from the west flank extension of the mine. Finally, a very recent definition drilling in the deep central zone around the 860-meter level returned an impressive high-grade intersection of 44.8 gpm gold over 5.8 meters, which includes 149 meters over 1.5 meters. On this, I will return the call back to Rob. Thank you.

Hi Sylvain, thank you. Sorry, technical glitch. Peter and Sylvain have outlined to you what's going to happen in operations and we're continuing to see excitement in our exploration. Looking forward, and when I look into the near term, the next couple of quarters, we're going to see more ounces and better operating costs. That'll be followed by economics studies on grey fox, stock, phoenix. Froome will be advancing, getting closer to the ore body. We've been constrained with our capital given the lack of production in the second quarter, but that will be partially addressed by the More Ounces. I have to say I'm really excited about the growth prospects. Over the years we've been adding properties and now it's starting to consolidate and it will become easier for you to see what we have. There's a very significant organic growth pipeline that is concentrated in several regions I think when you look out and you can see the potential for 300,000 ounces a year coming from a few tightly contained areas, it gets quite exciting. My confidence remains high, although I've been discouraged by some of the setbacks we've experienced, but recently I bought another 2 million shares, bringing my holdings up to 82 million shares. I believe that we're going to see improving fortunes in the company and that's going to be doing as a result of the work we're doing but also the gold and silver price is just beginning to move and the world is starting to think about what is going to happen to our currencies and we have seen a period most unique In the past, you would see one country or a region where a number of countries have abused their monetary base, abused their currency by pushing out a lot of money and incurring large amounts of debt. This time with COVID, we have seen a universal And I just say to you, add to your positions wherever you are, whatever you're holding, In the precious metal space. And you're going to have a great ride. Thank you very much. I'd like to open it up for questions.

As a reminder, to ask a question, you will need to press star followed by the number one on your telephone. To withdraw your question, press the pound key. Our first question comes from the line of Heiko Eili with HC Wainwright. Your line is open.

Hey, guys. Thanks for taking my questions. Hope everybody's staying safe.

We are, Heiko. Thank you. I hope you are too.

Good to hear. I am indeed. Hey, Rob, walk me through the ongoing COVID expenses. I don't know if there is an intelligent way to quantify it mind by mind, but can you just sort of walk us through what additional expenditures you have, you know, like this quarter, next quarter, et cetera?

Sure. I'm going to ask VP Finance, Andrew Iavone, to... Address your question, Heiko.

Thanks, Rob. Yeah, so to address the question, we looked at the COVID expenditures in kind of twofold. Well, I guess there's three ways of really looking at it. One is the direct incremental costs required to improve our safety and security standards as people enter and leave the sites. So those costs related to things like Temperature gauges and other thermometers, some increased security at the site and checkpoints, minor changes to workstations, and those costs were really not that significant and not expected to be significant on a go-forward basis. The more significant costs that we incurred were directly related to the shutdown, and those items were disclosed in our financial statements and specifically relate to labor That we continue to retain during that shutdown period. Yeah, so keeping our labor force available for that ramp up was the first big bucket of costs that were incurred. And then the second category of costs that were incurred were really around the idle capacity costs where we're operating below our capacity. And so we're still paying for wages, utilities, overhead. and those costs were all categorized as production costs applicable to sales and those costs would continue to the extent that we're not back at capacity in the coming months.

Fair enough, but there's no way to quantify it. Are we talking about $100,000 or are we talking about a million bucks? A couple million bucks?

Well, we quantified the shutdown costs. Those ones were disclosed in I think it was 600,000 of shutdown costs. Yeah, Black Fox. And then we incurred just around 1.4 million of costs for Gold Bar during that shutdown period.

Fair enough. And if we trend line that, we're probably doing okay.

What do you mean in terms of trendlining, like applying that forward? Because those costs were specific to the period of when we were not operating.

But you don't have a number for us of what you expect to incur in Q3 and Q4?

Not specifically. I mean, we're back at operations, right? And then we're So as long as that ramp up continues, then there shouldn't be any significant COVID related costs.

Okay, and then Rob, I guess questions for you. You mentioned in the release, and I quote, I can see an exciting organic growth pipeline of projects ahead that could potentially push our production to 300,000 ounces per year. Just to clarify, we're talking about acquisitions here. and I don't know how much color you're willing to provide, but is there a timeline that you want to assign to that?

It'd be in the next three to five years, Heiko, and it wouldn't be acquisition. It'd be all organic. We're looking in the Timmins area, we have the stock property, Gray Fox, and Froome is coming on stream first. And then we do believe that the Black Fox mine, as you heard Silvan mention some of the drill results we're getting there. It's a shallow mine. We think it goes deeper. And also on the west we're exploring and getting very good results. So that mine needs more time, more exploration. But we could see it coming back on stream and adding. Also the Timmins properties, One of the attractions of the Black Fox complex when we bought it was the proximity of the Lexham properties to the mill. And so we were looking at everything sort of as single assets and this is right now we're looking to integrate all of those. So that's in the Timmins area. There are about four or five areas that we feel can bring that production up and give us a long life asset, running it better than 100,000 ounces a year. And then you go Gold Bar, it had a setback when its ounces were cut back earlier this year, but Gold Bar South is expanding and some of the results there are quite attractive, long intercepts of good grade for an open pit. And then we go down to Mexico and the Phoenix project is looking like it would provide a very robust feasibility study.

But that's all.

Those are all properties we own 100% of. So we don't have to go outside. We don't have to acquire any companies to get that growth.

Very good. I appreciate the color there. Thank you guys very much. You're welcome, Michael.

Our next question is from Bhakti Bhavani with Alliance Global Partners. Your line is open.

Good morning, guys. Thank you for taking my questions. Hi, Bhakti. I would like to, you know, dive right into BlackFox. You know, you kind of provided the long-term opportunity at BlackFox. Just kind of curious, you know, Specifically talking about the second half of 2020, how do you see the grade profile improving? Because, you know, grades have certainly come up from second quarter in comparison to first quarter, and with good drilling results near the west flank area. Just kind of wondering, how do you, you know, think about the grades there?

Peter, would you like to answer that question?

Thank you, Bhakti. A very good question. Before answering that, I just want to draw a note to a typo correction on slide six. It says First 4 in Broome and Q2 2020. It's 2021, so just draw a note to that.

Yeah, going to Black Box.

Yeah, I think we're excited. We're seeing some very good high-grade intersections on the west flank and also historically on the central zone. These are some of the areas that I reported on here earlier on slide 9. And we do expect to see some nice grade areas. It's early days. We've just gotten access. We're drilling. We are pretty excited about the 280 area. We went and filled out on that recently and saw some nice grades. and significantly higher than our head grade. But it's too early to guide on that, but I can report very encouraging. It's why we're excited about the extensions of those zones up to the Froome decline area, which I showed you those targets, which we do have some drilling on them to give us some confidence. So I think it bodes well. It's early days, and as Rob said, We need to invest some time and more drilling into these areas in the future and the story of Black Fox isn't over yet on the west flank and certainly down at 840 and the depths we're filling out there and have hit some high grade and we expect to see some extensions of that center zone going down as well.

Got it. Thank you so much for the color. And just from the tonnage standpoint, could you maybe, you know, since we are one month into production for the third quarter, could you maybe, you know, provide some more color into, you know, how's the tons coming along at Black Fox, you know, post the second quarter decline due to COVID?

Yeah, the tonnage is trending on plan. and these development accesses of course have helped us increase our number of stopes that we have access to. So our mining flexibility has improved tremendously. So we don't see any issue in terms of having available stopes going forward in the second half.

Perfect. You know, moving on to Froome, you know, Froome is expected to come online in Q4 2021. I know it's kind of preliminary, but could you maybe talk a little bit more about the cost profile there? The grades are slightly lower than the head grades in comparison to BlackFox, but just kind of curious, how does it fare in comparison to cost in comparison with BlackFox?

Yeah, it's significantly better. We're in the final stages and edits of our feasibility, and we'll be coming out with that soon here in Q3. That's about all I can say about it now. We have a great bulk transverse open stoping kind of deposit that's really suited for low-cost mining. It's a 5% decline short haul. It's got all the hallmarks of some very good operating costs.

Peter, could you contrast that for back to you against what's going on in Black Fox in terms of the mining there as opposed to And why do you feel it's easier and better?

Yeah, at Black Fox, thanks Rob, at Black Fox we have very small, you know, we're trying to, we call them the chicklets, taking out these high-grade areas that are maybe 1,000 or 2,000 tons each on average. And so you have to do a lot of setup work, a lot of drilling, a lot of prep work, and we mine them out very quickly. to minimize the stand-up time and fill them quickly. Conversely, go over to Froom. We have very wide intersections, 15 to 40 meters foot wall to hanging wall that we can set up transverse stoping, primary, secondary, really much more contained, bigger stopes, 10 to 20,000 ton range we can get up to depending on how our stability works out. So just a whole different, Thank you so much for the callers.

Approximately 30% of development has been completed to date. Just kind of curious, from modeling the expense going forward, how much of additional development expense do you expect to incur in the second half of this year?

Andrew, do you want to take that one?

Sorry, can you repeat the question?

I said, how much of the development expense are still remaining to be incurred in regards to Froome's development for the second half?

I think for the second half of the year, we're projecting another $10 million of development expenditures for Froome.

Got it.

Thank you so much. Moving on to Phoenix, in the press release, you did talk about renewing your focus and given higher metal prices, the project now makes more sense. Just kind of curious, I believe you have everything from the permitting front, at least for advancing the deposit, post the feasibility study. Just kind of wondering, what additional things you need to accomplish before you take a production decision there? And could you maybe remind us about the initial capital requirements for the project?

Sorry, was that Scrum, Bhakti?

Phoenix. Project Phoenix.

Oh, Phoenix. So Phoenix, Phase 1 is permitted. That's the gold project. So Phase 1 is the gold. Phase 2 is silver. Phase 1 permitted. That's approximately a $44 million project. and then phase two the silver project is about a 23 million dollar project. We are in the final stages of that feasibility as well as mentioned and those numbers might change and we look for improvements on our business case there but for now that's those are the numbers we're using.

Got it and when it comes to you know construction or development timeline what's kind of the And lastly, you know, What's kind of the dividend expectation from San Jose? I know COVID has disrupted operations, but just kind of curious.

San Jose, in fact, is having to deal with travel restrictions between provinces in Argentina. And most of the workforce comes from northern provinces. And so it's only operating at about 60% capacity right now. So it's not generating, it's not realizing the economics as much as it should be. Mind you, half of its production is high-grade silver. So with the move in silver from $12.00 C.F.A. C.F.A. So I can't really quantify. We haven't been able to quantify what we might get out of our interest in the San Jose. But the economics, at least on a silver front, is big.

Fair enough. Thank you very much for all the color. That's it from my side.

You're welcome.

Our next question is from Mike Kozak with Kantor Fitzgerald. Your line is open.

Yeah, good afternoon, everybody. Thanks for hosting the call. A couple questions from me. First, at Gold Bar, you're saying you're going to be back mining at full capacity in September. And my question is, you know, what does full capacity mean for gold output at that mine? Like, are you still mining in only Pick West? Have you solved the grade reconciliation challenges there? And just to follow on there, I mean, Guidance was withdrawn earlier this year, but now that you're ramping back up, you clearly have a plan there at Gold Bar. So do you have a production target at Gold Bar in Q3 and Q4?

Peter, would you care to handle that?

Absolutely. There were a number of questions there. Hopefully I captured them all. So full capacity. What we're meaning there is ramping up to 24 hours operations and targeting our feasibility level. We've currently, in end of July, increased our crews and ramped up to 24 hours. We are achieving somewhere in the range of 5,000, 6,000 tons a day. We are targeting 7,000 tons a day. And in our optimization plan, a cost savings of a couple hundred dollars an ounce cash cost. Pick West, exactly that's where we'll be mining throughout 2020 and hence where most of the drilling that Sylvain has spoken about in the past where we're focused on mining. Resource estimate is coming out in Q3 and then we'll be updating a reserve based on the optimizations that I spoke about earlier in terms of mining and process costs. It's early days for reconciliation versus the model. We're just getting into it now and just starting on that so we don't have guidance on that. As you can tell, we're still updating our resource and reserve. At this stage, no guidance there. Things are trending very well and we expect to You know, have our teams fully crewed up and operating in September as normal, as are normally operating pre-COVID.

Okay, thank you. If I could jump in there just first. Peter, could you give Mike a reference point for that cost reduction? What are you reducing it from or hope to reduce it from?

Right.

It's not from Q2 numbers.

No, so we completed an operational review with implementation engineers and we looked at our baseline production and costs in the previous nine months to where we are and then projected forward in our 18-month plan and normalized our grades. And if we did that and achieved our oracles, Production costs at our go-forward ounces. I know it's a bit busy and complicated, but that would have been $1,009 per ounce going forward. And so the Improvement Program Optimization Plan, I talked about targets taking $200 off, an ounce off that projection. It equates to something like $13 to $17 million savings Annually for the Life of Mine. It's a pretty exciting and compelling project. There's no one magic area. There's a whole bunch of areas where there's opportunity and efficiency improvements with our existing plant. So this is no capex. This is just looking at our efficiencies and how we operate and how we can get better. And we identify sort of seven work streams where we're actively I'm working to improve at the moment.

Okay, so it sounds like you have a much better handle on what the costs will be, but the ounce profile is still a bit of a question mark until you get the reserve model and the reconciliation issues figured out, correct?

Exactly.

Okay, okay. And then just one more, and it's another one for you, Peter. So you've been at McEwen Mining for four months now. Despite all the travel restrictions and stuff, I'm assuming you've been able to spend a bit of time, or quite a bit of time, hopefully, at Black Fox and Gold Bar. My question is, is there anything at either of those operations, either on the mining side or on the processing side, over the last four months that kind of immediately jumped out to you that needs to be fixed or can be improved over the short term?

Yeah, I mean, I think there's always room for improvement. I've spoken a lot about Gold Bar. I think, you know, we have similar journeys at both mines. I think any operations, you can find opportunities. We've spoken a lot about the resources and improvements to that and sort of similar approaches at both mines where we get more access, more drilling ahead of ourselves, more information on the GeoMet. Thank you, Mike. You too.

Our next question is from John Charles Tumazos with John Tumazos Ferry Independent Research. Your line is open.

Thank you, and congratulations on all the progress, even if it's not in the income statement.

Thank you, John.

I was doodling one day, and your 10Q reports tons in grade and output, but not recovery. So I solved the equation for recovery. And I noticed that at five of the 11 quarters you've owned Black Fox, the recovery rate derived was 106 to 131%. And the other six quarters, it was 77 to 99. And the unweighted average was 100.5. But had I weighted it The 2018, when there was more gold, it would have been higher. And the question is, if you could explain the top cut procedure at Black Fox. I'm not critical of it. I think it's always better to produce a little more than a little less. But clearly, the recovery suggests the grade's hard to estimate.

Right. So, Ben, would you like to comment on that?

More specifically, what's the question?

Tell us about your top cut at Black Fox because some of the quarters it produces over 100% recovery rate, suggesting the grade sometimes is a little hard to estimate.

Yes, no, that's a good point, John. Top cost is, you know, it's always something that's not necessarily easy to define, especially in a nuggety mind like we see at Black Fox. As you know, there is spectacular itch. Continuity is often an issue. We have a resource geologist in-house at site working full-time on Black Fox for Now over a year, and as we move forward, as we learn about the reconciliation, as we learn about the geological control, and I mentioned that we put more effort having geologists in the scope, understanding and benchmarking back to grades and model. We are actually looking at this top capping as we speak and refining the way we are modeling the deposit itself. So it's an ongoing process.

Was the past top cut closer to 30 or closer to 100 or even higher?

It was over, closer to 100, I would say.

Continuing the line of reasoning, to Gold Bar. As the tons process went down, the recoveries went up to 95% derived in the first quarter and 228% in the second quarter, which implies that the leach cycle might be closer to 12 months than three months. What do you think the leach cycle is at Gold Bar, and is it possible That you might have declared defeat prematurely and that the gold is just coming out later.

Peter, do you have some thoughts on that?

Yeah, a very technical question, as you know. During the shutdown, without mining residual leads, you can see we were covering ounces. and we were about 50% of production with not a lot of tons stacked up there. Leach is directly obviously related to the time and life of mine. So at the end of the life of mine, if you shorten your life of mine, you're shortening your leach time as well. So there are a number of factors there. We are looking at how to improve Leach time, that's actually part of the optimization plan. And in the past, if the feasibility was designed at, I think, 20-foot stack heights, the operations team had moved to 30-foot, which delays our leach curves. And so we're actually looking at moving back towards 20 or possibly even 15 to improve our leach curves. We've done a lot of improvements on the side leaching. You saw that actually come through here in Q2. So there are lots of opportunities to improve leaching and recovery, and that's exactly one of the optimization areas we're looking at.

Bear with me one more. The black fox complex, the gray fox has 800,000 or 900,000 ounces at just over 7 grams. which looks like money in the bank. I appreciate that Froome was a little more ready to develop and get into production. How much longer would it take to get to Gray Fox and pull out that beautiful seven gram stuff?

Yeah, I'm with you. I think you asked that question last quarter too. Look, we're moving forward. There are some really nice underground targets there. It's early days. It's all about great continuity and infill drilling improving up, particularly in underground where you can hang together a good stokes. Preliminary look, I like Gibson. I like the south zone for underground. I like Whiskey Jack, although it's very early days, that could be a pit as well. We've drilled mainly to about 400 meters depth, so we haven't even looked beneath that. Permitting wise, you know, we're looking at approximately two years once we lock down our project description, so hence why we're working, you know, feverishly to get the scoping study done and the plan is to front-end load that with The quality of information such that we could move right into FS given that we're an operating region and we have a pretty good understanding of our cost base and what that capital might be once we define it.

With the top cuts at Gray Fox, is there a chance the grade is a half a gram or a gram better?

Sylvain, would you like to answer that question?

The Gray Fox situation, as Peter said, there's an upside that resides in some of the zones. We drill with Kijak at the end of the program where we've got new intersections of really high-grade that is still early stage. We also have a better understanding of the Gibson area where We need to go back with an orientation of the drilling that will optimize cutting better the key structure that we see there at Gray Fox. It's a large complex, as you know. There's still a lot of room for infill drilling. There's a lot of room for growing a portion of the resources over some of the area. And we are, as Peter said, Looking at economic scenarios regarding open pit and underground, so there's a benchmarking regarding what will be realistic cost considering what we have there as a deposit, the geometry of it and everything, what makes more sense as an open pit versus on the ground. So all of those studies are ongoing as we speak.

Thank you and congratulations and I apologize for asking the technical questions. I admire you taking these difficult challenges.

Thank you, John. I liked your questions. They're the ones that need to be asked that underlie what might be the potential for grade being higher than we've shown it or longer to get the gold out at Gold Bar. Good observations.

Our next question is from Terry DeVries, investor. Your line is open.

Good morning, Rob. Good morning, gentlemen. How are you today?

Good morning, Terry.

Good. Hi, Rob. As you know, I've been with you for quite a long time. And one thing I really have difficulty in understanding You don't really have to go into it, though, is the massive underperformance I see if I put you up against your benchmark, which when I look at it, and I call your benchmark GDXJ, if that's fair.

Sure.

And, you know, we started really at the beginning of January 2019. It broke down below GDXJ, and it's continued down, and I realize you had some problems this year that you didn't expect, no doubt. Great fault of your own. I understand that these do happen. But when I look at you compared to your benchmark, the underperformance is just staggering. If I would have said in 2016 where the price of McEwen Mining would be when we had $2,000 gold and $28 silver, certainly would have projected multiples beyond this. My question now comes to my concern when you said you're moving towards 300,000 ounces of possible production, but your timeline of three to five years. We're five years into a bull market, a bull market that I think all of us knew was coming because of central bank policies. We perhaps have five years left to run before the central banks destroy all of our currency, and my concern is I've been waiting for all these years Are we going to miss this bull market? How long is it going to take to return to even your benchmark or outperforming your benchmark? Thanks very much. Thank you, Terry.

Like you, I've been bothered by the underperformance and I think every one of our shareholders shares the same view. Historically, we were trading above The GDXJ and GDX. So we've gone south and everybody's gone north. And when I look at it, we're in a transition period right now, and I believe the future is looking brighter, although it's taking its time to show up. The type of performance, if we were just to get back to where the industry was, is a huge bump up. And I think we have to deliver a couple of quarters, good quarters, to demonstrate that the turnaround is in progress. We all believe internally that the turnaround is occurring. We can see improvements. But it has to manifest itself in ounces produced and costs. So that with the rising gold price, we're participating with it rather than just trading dollars.

The size of... Go ahead. No, I'm sorry to cut you off. So what I'm understanding is if I could be patient for two to four quarters and you're able to produce in line with your expectations or exceed them, could I expect, you know, At least to close the gap significantly on GDXJ.

I would hope that that would be the case. I mean, last year was a huge disappointment for everybody and a lot of trust was lost and confidence and we have to rebuild that. And as you know, building trust takes a long time and it's going to be built by demonstrating that we're delivering And that's what we're working hard to get to, to regain that confidence and clearly outline the dynamic of the growth that we have in front of us.

Just a final quick question then. Your long-term goal of qualifying for the S&P 500, can you discuss that?

Yeah, sure.

It's become very distant. No, no, no need to apologize. When that goal was first articulated, the threshold to get into the S&P was $3.5 billion. It was subsequently increased several times and it's now $8 billion. Given our market cap of less than $800 million, 300,000 ounces won't get us there. unless they're extraordinarily inexpensive to produce, which I'm not going to say we're going to be able to do. So there would have to be M&A to get to there. I think the goal is still a very good goal to have because there's only one gold stock in the S&P 500. And that would drive a lot of investment dollars towards Newmont, which is the only one in there. I do think we're coming into a market where there will be a lot more investors looking for exposure to gold and gold and silver. So I think you'll have a strong movement in the sector there and maybe that index is something that you'll get the performance without the index in the near term.

Thanks, Rob. I wish you a great year. Thanks for answering the questions. You're welcome.

Our next question is from Bill Powers, private investor. Your line is open.

Yes, good morning and thank you for... Hi, Rob. Good morning and thank you for taking my call here today. Just had a few questions covering, you know, a broad range of subjects, but I guess if we first start with the slide nine, which is your... Thank you very much. Thank you very much. Thank you.

For the moment, because of the early stage, that's what we're comfortable saying.

Okay. Fair enough. As far as the down in Nevada, there seems to be a, you said that you were moving towards production rate at your feasibility study, I guess. Could you give some more color on what you're expecting on a per month basis for Production Rate at Gold Bar, at least for the rest of this year.

I think Peter may have mentioned that, but sure. Peter, would you like to just say that? Yeah, sure.

We're targeting in that, so once we get up to full, you know, could be that 6,000 to 7,000 ton per day range, so You know, kind of north of 150,000 tons per month is where we're targeting. Again, we're hesitant again to guide on that until we complete our resource update, reserve, and mine plans. But, you know, I think the capability and capacity is there in the plant. We've worked on the blending. We can get the tons. It then becomes can we deliver them out of the pit and all that scheduling sequencing stuff.

So Bill, we didn't produce in May. There was no production at Gold Bar and it was only one shift per day during May and June. We'll be Up at full capacity we'll be operating 24 hours a day and as Peter said we just started 24 hours a day so that'll have a material impact on the amount of material we're moving and or that we're loading on the pad.

Okay and I guess are you outside of your I know you've acquired a number of properties surrounding your gold bar Are there any plans to drill off some of those this year, or is that going to be down the road type of activity?

That'll be down the road. We're concentrating on our near mine right now. Our major focus is to expand the resource base near mine. We haven't forgotten about outside. We have a property nearby, our Tonkin property, which has A good-sized resource on it. It's oxides and sulfides. And at some point, we'll see if we can incorporate some of that into our gold bar production. In the past, it's been treated as a separate property and not really thought about incorporating what it has already outlined there. So we may see some years on that as we go forward.

Okay, great. And I guess really the last The next question I would have is as far as stock. I know there are plans. Is this going to be incorporated into the plans for, I guess, the comprehensive Timmons plan that you're working on for later this year? That's right. Okay, and then actually just one more quick question. As far as Argentina goes, it seemed as though from at least reading the financial statements that it seemed to be operating at almost a, at a significant loss during the second quarter due to, you know, paying, it looks like you guys were paying the salaries of the workers who were, you know, staying home. And I guess has the attitude or has at least the environment changed where rather than operating as more of a charity that the government is now going to be allowing, it seems as though there's been a significant increase in Argentina's overall foreign reserves to C.F.A. C.F.A. C.F.A.

and they have travel bans still and it's still an issue there. But with much higher prices, I think there's a possibility, a good possibility we'll see something out of there later this year.

That sounds great. Well, thank you so much for all your time today. I appreciate it. Thank you, Bill. Thank you for your questions.

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

Thank you everyone for joining the call. I wish you much success in the investing and stay tuned. I think we have more news coming. Good news. Thank you very much. Be well. Stay strong and healthy.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.