McEwen Inc.

Hello, ladies and gentlemen. Welcome to McEwen Mining's Q2 2023 Operating and Financial Results Conference Call. Present from the company today are Rob McEwen, Chairman and Chief Owner, Perry Ng, Chief Financial Officer, William Shaver, Chief Operating Officer, Michael Medding, Vice President and General Manager of McEwen Copper, Carmen Diaz, General Counsel and Secretary Jeff Chan, Vice President of Finance. After the speaker's presentation, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. I will now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.

Thank you, Operator. Good morning and welcome, ladies and gentlemen. Today I'll be discussing the highlights of our operating and financial results in Q2 and the first half of this year, as well as our expectations for the balance of the year. Our press release of this morning discusses these matters in greater detail, and members of senior management are on the line to answer your questions. As many of you are aware, our gold and silver assets had a weak start for the year, while activities at McEwen Copper's Los Azules project were running at a rapid pace. I'm pleased to say that our mines delivered better results in Q2 than Q1, and the outlook for the second half of the year is significantly better. But I'd like to share with you the highlights of the first quarter. this quarter that's passed, second quarter. One, the Fox Complex generated gross profits of $6 million and is expected to deliver on our guidance. The San Jose performance was much stronger in Q2 than in Q1, and it too is expected to deliver on its production guidance, but costs will be 10% to 20% higher on a cost per ounce basis. At Gold Bar, The outlook, again, is looking significantly better as a result. We are increasing the mining rate. We'll be mining with a lower strip ratio and processing a higher grade of ore. McEwen Copper released in June its updated preliminary economic assessment. It displays a project with robust economics, a long life, low production costs, and based on an environmentally sensitive approach to mining. Safety at all of our sites was the way we like it. No lost times at Fox and Gold Bar. We improved our balance sheet by reducing our debt by 39% to $40 million. And financially, we consolidate the financials of our 52% owned subsidiary, McEwen Copper, And as I said, we've invested heavily in exploration and other work in order to complete the updated PEA. So at quarter end, our consolidated liquid assets were $85 million, with an additional $29 million in investments. Our working capital was $92 million. And our consolidated net loss in the quarter was $22 million, and in the first half, $65 million, again reflecting the very heavy investment in moving the Los Azules project forward. And we've increased the value of Los Azules significantly during this period. It now has a value of about $555 million implied. based on the last financing we did. Our investment in exploration at Fox has given us a resource base and confidence to see a mine life being extended by nine years. And in Mexico, construction of the Phoenix project is expected to start later this year and provide a nine-year mine life. In terms of our share performance, since the beginning of the year, to present day. We're up just under 18% in US dollars. And that compares against the GDX, which is down 1.8%. The GDXJ down 5.2%. Gold's up 4%. The Dow's up 6%. And the NASDAQ is the only one of those. that is outperformed. It's up 32%. Largely driven, it appears, by generative AI development. And I have to say that the mining world will be embracing generative AI as we go forward, like many other industries. I'd now like to open the conference calls for questions.

If you would like to ask a question, You will need to press star followed by the number one on your telephone. To withdraw your question, press the star one. Your first question comes from the line of Jake Zaleski with Alliance Global. Your line is open.