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.