McEwen Mining Inc.

production of 135,884 gold equivalent ounces was 12% lower than what we produced in 2023. The selling price of our production was 24% higher. As a result, our adjusted EBITDA was 3.8 times higher this year at 29.2 million or 57 cents a share. versus 7.7 million or 16 cents a share in 2023. We did post a net loss of 43.7 million, and that was due to the equity accounting redo of the expenditures at Los Azules of 47 million. a difference of 3.3 million. We spend another 16 and a half million on exploration, bringing it to 19.8, and there was 10 million in depreciation. So our minds are making money at this point, and it is the large investment we've been making in Los Azules to bring that project forward that is creating this net loss. And speaking of that, when we started financing Los Azules separately in McEwen Copper, we did a financing of $10 a share, which effectively put a value on that property of $175 million. This was a property that was largely obscured in our portfolio by the performance of our gold assets. Today, based on the last financing that we've done in McEwen Mining at $30 a share, puts the value and applied value on Los Azules of $984 million. We have a 46% interest in that now, and that equates to $457 million value, and on a per share basis, $8.47 a share behind every McEwen mining share. So that's the big number, and we're pushing that project forward to a feasibility study, and after which, once we have Hopefully approved in the Regie. Which is a large investment incentive scheme enacted by the Argentinian government. We get that approval. And complete feasibility at the end of June of this year will be ready to do an IPO. And that will be dependent on the market sentiment towards copper. But right now there's a positive view on the price of copper. Coming back later in this call, I will ask Michael Medding, our vice president general manager of McEwen Copper, to speak in greater detail about Los Azules. Looking at McEwen Mining's gold assets, we've spent quite a bit of money on exploration. As I said, $16.5 million in the past year at our Fox complex up in Timmins, Ontario. That exploration has increased our indicated and inferred resources to a total of over 2 million ounces, and that's allowing us to now plan for a doubling of production from what we produced this year to 60,000 ounces in 2027. And we can see There's a possibility to increase that production further four to five fold increase over what we've done this year in 2024 to 130 to 150,000 ounces, bringing on the Gray Fox deposit where the exploration had increased the resources. That subject permitting would increase our consolidated production to 225 to 250,000 ounces per annum. So exploration is working at Fox. It's also been extending our reserve life at Gold Bar. And that's being augmented by the purchase of Timberline Resources, which is a property near to Gold Bar where we're getting some initial good exploration results. Our investment in 49% interest in the San Jose mine, a mine operated by Hosshield Mining, is also expecting to pay a dividend shortly. That'd be a welcome change from a number of years without a dividend. Higher metal prices, gold and silver, are helping that. During the year, we increased our debt from $40 million to $130 million by way of a capital convertible to venture. We chose that route to raise capital because we could get 100% premium over our share price at the time we announced this debt deal. So we were trading at around $8.60 a share, and we were able to get a conversion price by use of this structure. of 100% premium over market. So our cash now is approximately $62 million. A large part of that money is going into increasing the production at our Fox complex and at Gold Bar. And at this point, I'd like to ask Michael Medding to speak about Los

Thank you so much, Rob. Los Azules had a great year. In terms of environmental safety and regulatory compliance, we have safety excellence, 1.5 million hours without the lost time incident. We have received our environmental impact statement, which is the environmental permit for the construction and operation of the future Los Azules mine, 3rd of December last year, zero fines on more infractions, And we completed all the hydrogeological tests to support sustainable water use in the future. In terms of operational achievements, we have drilled over 51,000 meters in 2024. We have now a project progress of about 90% by the end of 2024. And as Rob said before, we plan to publish, we plan to complete the feasibility study by June this year. We have now the majority of our engineering complete for the feasibility study. We have a new structural geological model. We had great work done by the community and sustainability team. We have more than 3,500 participants in 61 meetings, covering 50% of Calingasta's economically active population in 2024. We have done lots of training initiatives to support Calingasta that's the department where our project is located, to prepare themselves for the future work at our project with more than 890 participants, including 521 women. And we have also joined the UN Global Compact. I think that is a summary of what was going on for Los Azules. We're looking forward to the completion of the feasibility.

Thank you, Michael. Back to you, Rob. And more recently, we received a claim, a statement of claim from an Indigenous group that have interests in the property we have in Timmins. We believe it is without merit and we're working to engage constructively with the leadership of that tribe. At this point, I'd like to open the session to questions.

As a reminder, to ask a question, you will need to press star followed by the number one on your telephone keypad. To withdraw your question, again, press star one. The first question comes from the line of Jake Sikelski from Alliance Global Partners. Your line is open.

Hey, Robin. Thanks for taking my questions. So because some opportunities for mine life extension at Gold Bar, I'm just curious if you're able to provide any additional color on sort of the critical path forward there. You know, on the permitting side and bringing the timberline properties into the mine.

Sure, I'll ask Bill Shaver, our chief operating officer to comment.

Yeah, thanks very much Jake. Yeah, So we're doing exploration work at the present time on the Timberline property. You know, as Rob mentioned earlier, we did about $1.2 million worth of work last year and we're in the midst of doing, you know, approximately $4 million worth of exploration work on Timberline properties, the ones right adjacent to Eureka and also at Seven Troughs project, which is another project that we got in that transaction. So I guess generally the permitting time frame for Timberline is there's two parts to it. Uh, that's because there's part of the the claims that are there are patented claims and they have a shorter period for permitting. And then there's a part of the property that's on BLM land and the permitting time for that property is something in the order of could could be done in three years, but it's generally seen as three to five years, so. That permitting work will start immediately this year because we have some of the from the drilling that we did last year. We have some understanding in the patented ground what we might be able to do in the short term. So those permits will will make application for those in the next quarter. And hopefully have those permits sometime early next year or early to mid next year. And so that kind of fits in with. You know the. What's happening at at Gold Bar at the pick and at Gold Bar South and you know, but at the present time we have assets to mine at Gold Bar itself that extend. into 2030. So I guess what we see happening with timberline is, you know, we'll go through that permitting process and then tuck those in as they come on stream.

OK, thanks so that's helpful. And then I noticed you broke out the royalty portfolio in the release. I mean, how should we think about these going forward? Is it an area you might look to expand upon or more of something that you might be looking to monetize in some way, shape, or form when the time's right? Yes to both those questions. Fair enough. And then just lastly here, we're sitting with gold over 3,000 an ounce pushing all time highs. Just curious, have these price levels caused you to go back and re-examine some of the near term mine planning?

I would say absolutely. We're getting focused now, especially at Gold Bar, to try and increase production. you know, because to take advantage of these high prices and also to, we're looking at whether we can do the same in Timmins, because at these prices, if we could increase even by 10% production in Timmins and 10%, you know, in Nevada, that would, you know, basically create about $10 million of cash. So I think, yeah, there's... We're working diligently now to, you know, get ramped up to try and take advantage of the price that we're seeing at the present time, which, you know, all indications seem to tell us that that price is going to go higher.

Makes sense. Okay. Thanks again. Call for me. Thank you, Jake.

Your next question comes from a line of Mike Kozak from Cantor Fitzgerald. Your line is open.

Yeah, good afternoon, Rob and team. Hi, guys. So just one question from me and then maybe a follow-up. What's your best estimate as to when you'll know whether or not Los Azules is approved or not approved, but then it potentially admitted into RIGI?

Two things. three, four months from now. There's only been two groups approved so far, and there was about 11 in mind to be reviewed.

Okay, and then that's helpful. That was actually my follow-up. So I saw this morning that YPF's Vaca Muerta South oil pipeline was approved under RIGI, which is the second one. So my follow-up was, do you have any sense as to where Los Azules is in the queue? of projects that have applied for and are awaiting that RIGI approval?

Mike, perhaps you could answer that.

Sure. I mean, we are the second metal mining project that filed for the RIGI. Where we sit is a little bit difficult to say. I mean, we have applied 11th of February, and we have given an in-person presentation a week after that filing. The regulator has about 45 days, but every time there is an information request towards the company, the clock stops on the 45 days. That means that we have now received, for example, information requests from the regulator on the 5th of March that we're going to respond tomorrow. And we are hopeful that over the next couple of months, as Rob said, we're going to get approved. But it's a little bit difficult to say. It's new regulation. And how long each step exactly takes and where one sits in the queue is difficult to say.

Got it. But that color is very helpful. Thank you, and good luck. Thank you. Thanks, Mike.

Our next question comes from the line of Chris White from Gray Aspen. Your line is open.

Thanks, Rob. Hello, Chris. Hi, Robin. Thanks for taking my questions. Just four quick ones here. The first one, Rob, has to do with your opening comments. For Los Azules investments, if the company wasn't doing those investments, would MUX's quarterly earnings have been positive? Yes. I'll give you the other three here quick and then you can just go down.

Yes.

Do you know what that number was then?

It was 47 million was the charge we took from losses of it. So reported loss of 43. So it would be slightly positive there than if you backed out the exploration and depreciation.

So just rough math there around three to four million?

Yes, that's correct.

And then seeing how the market is valuing MUX disproportionately on those quarterly earnings that they're coming as negatives and looking to be positive. Have you guys done an analysis of what the spot price goal needs to be with your investments to print a positive quarterly earning?

Maybe I'll back up a little bit and note that, you know, with the work that Michael and his team are doing, we expect to be able to publish our feasibility study in the next quarter. And under U.S. accounting rules, that will allow us to, in fact, capitalize our expenditures on loss of Zulu's, like companies that report under international accounting standards. So I would say beginning at the end of the second quarter or start of the third quarter, we will, in fact, no longer need to report those losses. But otherwise, you know, in terms of addressing your other question, I mean, it's a little bit complex. It depends, you know, where in the cycle we are in terms of cost. But, you know, obviously at $3,000 spot gold, you know, we expect to be generating, you know, significant positive income from our gold operations.

That's helpful. Thank you. What is, what are you guys, what's management's current expected ASIC for 2025 GOs? I couldn't find that in the release. Is that there?

Yeah, so let me answer that for the team. So at both of our FOX and Gold Bar operations, we're projecting about 1700 to 1900 per GEO sold. We do expect to decrease those naturally over time. I think at Gold Bar, we do have a period of high strip in the first half of this year. So we don't expect the same in 2026. So we expect that to naturally lower. And then at Fox, once we ramp up our stock mine and enter into an area of significantly lower cost and higher grade, we would also expect to see that decline.

And that answer takes into consideration what Bill just answered about increasing the throughput with the price of gold being high, that you guys wouldn't do an ASIC as like $2,000 or something higher. Is that correct?

No, that's correct. That does take into account some of the considerations Bill mentioned as well.

That's great. Last thing, and I'll hush up. Thank you for the time. Is there any way when you guys do these releases, we can get the heads up on the call more than the day before? Or are you guys doing that on purpose? How does that process work?

No, we don't do that on purpose. There's some last minute changes that came in and unfortunately delayed it. Normally like to give you a day or two. This is, I agree with you. It's very short. On table one in the press release, you'll find the cash costs and ASIC costs outlined for each operation. You're welcome.

Really appreciate it, guys. Look forward to the next quarter.

Thank you.

Thank you. Your next question comes from a line of John Tomazos from John Tomazos Ferry Independent Research. Your line is open.

Hi, John. Thank you for taking my question. Hey, Rob. I'm concerned about Rio Tinto's participation in McEwen Copper. Last week there was an international arbitration won by Entrez Resources against the Mongolian government in Rio Tinto, where in 2012 the 2004 and 8 agreements were not honored. Rio Tinto made this little company pay lawyers for international arbitration for 12 years, trying to squeeze them to death and squeeze them out of the property. The little company won. God bless them. You may recall that Robert Friedland didn't end up with much of Mongolia because Rio Tinto left him exposed to the capital overrun. So I'm a little worried that having Rio Tinto money is a little bit like having COVID, AIDS, or cancer. What are your protections to keep them from squeezing you out? Excuse the directness of my question. I'm just very unhappy with what they did on the other company. Hi, John.

It's Stefan Spears. Maybe I can help you and get an answer to that question. Currently, the investment by Rio is through an intermediary, which is Newton. And I know you're aware of that organization. It's a technology arm of Rio Tinto. And they hold equity in McEwen Copper, which is a Canadian unlisted company, a private company. And then McEwen Copper, through subsidiaries, owns 100% of Los Azules. Currently, as it stands, they have just over 17% equity in McEwen Copper, and we do have a shareholder's rights agreement with them that provides for normal things, preemptive rights, tag-along rights, and so forth. As far as your direct question about squeezing us out, it is not possible for Rio to squeeze us out in any way, shape, or form at this stage.

Okay. Would you be reluctant to take any more money from them?

Not really. I mean, if it's in the same form, so say, you know, if they're, for example, anti-diluting, you know, they want to maintain their interest at 17 or even increase their interest, doesn't change their position from a, you know, strategic standpoint. You know, I think where you obviously want to be sure that you've got the right partner, is when you consider doing an asset level transaction where you're selling an interest in the asset to a party that is going to be a long-term supporter and proponent for the project. I think that's a very, one has to take that decision very carefully, but we're not at that decision point yet.

Thank you. I'm just a little guy rooting for little guys.

Appreciate that. Thank you, John. It's a good heads up.

Your next question comes from a line of Bill Powers, a private investor. Your line is open.

Hi, Rob. Thanks for taking my call. A couple of questions. I guess we'll start in Canada. Could you just give a little more color on the progress at stock? I know it seems to have been delayed quite a bit, and I thought we'd be producing from that. by mid this year rather than late this year. If you could maybe expand on that a little bit.

Yeah, so I'll take that. Thanks very much Bill. Yeah, I mean we were slowed down a little bit by the permitting, but at this point we've got all of the portal drilled and blasted and we should have start driving the ramp, I guess, in the next 10 days or so. So that should put us down to the fourth level sometime late in the third quarter. And at the same time, we'll be driving out towards the eastern part of stock to uh get some mining there and there's also some mining that we're contemplating doing up near the portal but the main thing is to get down to uh the fourth level with uh the main ramp at this point we're also dewatered all the way down to below the loading pocket which is at the at the fourth level uh so we're the next step uh under underground uh is to is you know where we're accessing down the shaft is to get all of the surveying done of all the headings try and understand uh where uh there might be or and if possible get underground to do some drilling uh with uh small underground drills so that we can understand where the early mining might be in the old part of the stock mine and so that uh part of the process is going to start you know next month so and we're you know we don't have a the access that we have uh to the fourth level is limited in terms of we're accessing that by an alamac and we're in the midst of uh trying to figure out if we should put a temporary oyster and head frame there uh to make that work a little bit uh easier to do But yeah, so I think we're in pretty good shape there.

OK, thank you. I mean, I guess along the same lines, I know you've done a lot of drilling at Gray Fox. Could you give us some estimates on the timeline on kind of the rehab of the portal, or is that going to be a this year project or a next year project, since that seems to have a material impact on future production?

Yeah, so we're in the midst of putting a team together that's going to be responsible for Gray Fox, and you know that's going to happen in the first week of April. And from there we'll, you know, go into figuring out what we need to do in terms of permitting and so on to get us back into, you know, what's called the Gibson ramp, which will hopefully allow us in the short term to do some underground drilling to start to put together resources and reserves and mining plans and so on. And of course, then there's the permitting phase of that whole undertaking. And we're hoping that we can move that along uh quickly but you know i would i would say you know the normal timelines on doing that kind of stuff is two to three years so we're hoping it'll be better and we're you know we're going to initiate all of that stuff uh here in the next uh six months okay one last question for you bill while i have you um

Is any movement on Mexico, since that seems to be a, you know, something that could be impactful, should you be able to get that permit moved forward?

Yeah, so we're, we are, you know, I guess waiting, you know, for getting a permit there. I guess with all of the goings on with tariffs and, you know, things with cartels and so on were were moving ahead cautiously uh in mexico uh and you know i guess uh once we see a permit then we'll make a decision whether we should move ahead with that or or or not and at this point you're right it's a a little bit of an untapped resource there which at these prices would look pretty good. And so I think it's a bit of wait and see in terms of moving ahead there. But basically, we're ready to move ahead. We have equipment in Mexico. We have a gas fire power plant. We have all of the more or less all of the assets to make that get started fairly quickly. So, you know, I guess we're just hoping that, you know, kind of the whole climate in Mexico might change a little bit here in the near future.

Well, they seem to have handed out permits elsewhere for existing operations. And I, you know, hopefully you guys, I mean, since I'm guessing this is a permit that just needs to be amended, it would not be something new, I would think. that you guys would be able to be put near the front of the queue for that.

Well, that's correct. And we I guess I guess it's for four weeks ago where we had meetings with the economic ministry to see if we could move that process along. And, you know, like we're hopeful. But, you know, permitting everywhere in the world today is the timelines are at best unpredictable, including here in Canada.

Okay. Thanks for all your time. I just have one last question. I think this may be more directed at Rob or Terry, but I, in your Q4 release, you mentioned, it was mentioned that the joint venture with Hochschild has $200 million in cash. And, you know, to me, It seems as though that's an extremely large number, especially given that there was an expansion last year that was completed. And now at today's run rate, it would be generating substantial cash. I guess as far as it seems as though the payout or the dividends should be substantial this year. Could you guys give some color on what you're expecting from them and why there's $200 million in cash there?

Where did you see the $200 million?

Maybe I misread that.

Maybe I misread that. What is the exact number? I mean, we'd be banging down their doors if they had that much money.

That's right, Rob.

Yeah.

Bill, they typically keep, well, right now their cash balances are kind of in the $25 to $40 million range. But as Rob mentioned in his opening remarks, we've had positive conversations across fields. They're declaring a dividend later this month of just under $5 million, so we should be receiving our share of just over $2 million by the end of the first quarter. You'll also notice in the reserve reports, they have done a good job extending mine life. It's still not long. I mean, it's still kind of 18 months on reserves and two to three years on resources. So it's going to be a combination of dividends and putting money into exploration and looking at how we can make that operation more efficient. But you're right. At these prices, it should generate... fair bit of free cash. And, you know, we'll keep investors updated on dividends on a regular basis.

Okay. Thank you so much. Thank you both.

Again, if you would like to ask a question, press star one in your telephone keypad. Your next question comes from the line of, please stand by, of Terry DeVries, a private investor. Your line is open.

Hello, Carrie McEwen. Good morning. How are you? Excellent, thank you yourself. Oh, very well, thanks. I've got a whole bunch of questions over the series, so I won't get into all at once, but all these questions are with the goal of determining what your investment in McEwen Mining is going to be worth a hell of a lot more than it currently is. I'll start with my first question on loss of Zulies. Initially, I think I was wrong in assuming that when we IPO, when you IPO, hopefully Q3, the shares will be returned, will be given to the shareholders. That's not the case, is it?

That's not the case, no.

Okay. Given that Los Azules means about $2.5 billion for production, What's the timeline to go to build the mine after you IPO until we're producing?

Right now we have a plan to assuming all the finances is in place to do the engineering and then put a shovel in the ground in late 2026 with production starting in late 2029 and running for 27 years.

In that case, I'm looking, I'm trying to figure out how to value mature and mining shares. We currently have 46%, give or take, losses. If I was to do a worst-case scenario post-IPO and assume that you had to raise all the equity at $30 a share and given costs always increase, We could be issuing 100 million shares, which would bring McEwen mining interest down on a worst case scenario to 10%. What's your worst case scenario?

That's mine. Well, one, we started financing McEwen Copper at $10 a share. Our last financing is at $30. If you look at what it might go at, go out at on an IPO, I'm thinking it's going to be quite a bit higher than that. You could just look at a relatively recent transaction where BHP, the largest mining company in the world, came in and did a deal with Lundin Mining on two copper projects in the same province as Los Azules. And that was valued at $4.5 billion. And when you compare Los Azules to the two projects, Jose Maria and Filo del Sol. We have some definite advantages over that and I think could be more value there and I'll start. We're at a lower altitude than either of them, so operations and the health of the workers is better because there's more oxygen. We're a larger resource than either of them and both of them combined. And a higher copper value than either of them. Although they have some gold, we would be a lower capital intensity as we're going with a heat bleach process as opposed to a conventional mill producing a concentrate will will be producing a cathode which can be used by industry immediately rather than having to go to a smelter. In the case of concentrate, we're closer to infrastructure, major roads and. Hydro corridors. So we'll have our feasibility out there. They're a little more advanced than we are. Pre fees and feasibility studies will have our feasibility out by the end of the second quarter, so they have a value of four and a half billion and our value is based on the last financing just under a billion dollars. I would expect in an IPO, assuming copper market states where it is or goes higher. that we could shrink that difference between the four and a half and the one billion that I spoke of. So I would expect we'd be selling at higher than $30 a share on the current share structure. And it wouldn't all be... If I may add, Rob. Yes, go ahead, Mike.

Sorry to jump in, but I mean, uh we're not looking to finance um making a couple of the soulless projects entirely through equity what we're looking forward to is is a certain relation we could think about for example 40 to 60 40 equity 60 debt that could be a reasonable assumption and with regards to the debt what we're looking into is export credit agency supported debt and development finance organization or developing finance institutions That's our main focus at the moment, while we're also in the equipment selection process.

Okay. No, thanks very much, Mike. That's exactly what I was thinking, too. I was just doing, well, what if, worst case scenario, we have to do all equity? How much are we going to be left in the queuing mine? Which then transitions me, and thank you very much, Rob. You answered a whole ton of my questions right there regarding loss of zoo, it's much appreciated. And you are to be congratulated for bringing that mine to fruition. That's a tier one asset. So my hat's off to you, sir. Thank you, Terry. Back in human mining, I've been there for 12 years along with you. So your share price and my share price are pretty much the same. You put $140 million, which translates to about $17 a share Adjusted for inflation, I think you need $25 a share just to get your money back. In 2016, we're sitting at $50 a share, and we just hit $8 a share today, which is a really nice move. We're up 50 cents. I'm really happy. It's not anyone's fault that the gold-buying sector has been out of favor like it has for so many years, and I think it's reasonable to to assume that the retail investor and the institutional investor is going to start looking at this sector with gold over 3,000 and silver, it looks like it wants to break out and run to 40, but that's left to be seen. Maybe it'll happen this week. Maybe it won't. My last question to you, Mr. Chairman. You need $25 just to get share price, just to get your money back. And I don't think you went into this just to get your money back and put in all this work. When do you think you will at least see $25? And I know I'm asking for speculation. When do you think you can get your money back? Because I'm there with you. And I don't know if I have five more years to wait in this uncertain environment, given what's happening with fiat currencies, world war potentials, et cetera, and overvaluations in the stock market. If I want to be at stock, I'd rather hold bull bullion. which has performed fantastically.

Right. Well, you're absolutely correct. I didn't go in there to lose money, and all investors are the same way. You make an investment, you're expecting it to go up, not go down unless you're shorting it. In terms of Los Azules, that little piece I gave, the comparison with the BHP-Lundin deal, if we just went up halfway up the value so doubling right now there's eight dollars and 47 cents per share behind uh value due to los azules behind every share of McEwen mining so a doubling of that would get it up to 17 a little over that and the gold sector as you observed has been unloved for quite a while. And most portfolios are under, gold's underrepresented in them. You're going to see, I believe, a lot more M&A occurring in the space, driven by the natures whose treasuries are filling up very quickly. And they're going to be looking at the intermediates and the juniors. And that is going and that's one of the reasons we've been looking at a number of juniors while i was running goldcorp we maintained a portfolio of juniors i viewed it as a listening post for what was going on in the industry and treated some of them as a farm team where in the case of goldcorp most of them went up beyond where i wanted to accept the goodwill by doing m a So we just sold them and financed a large portion of our capital development through capital gains. And we've been doing that in a small way. I would have liked to have been doing much more of that because we're in a moment when I think there's a lot of value to be created in the junior space. If you look at the past gold manias, if you want to call it, where people really get excited about gold, the seniors you can see a triple digit increase in the number of the junior explorers and developing companies you can see you know a four digit increase in value so it's a spot to be watching and i think more investors will be looking and you're going to see the discoveries that people are making gaining greater prominence and attention in the market so When will that return to my cost base and exceed it? I think we're in a market right now. If you look at commodities relative to financial assets, we're at a 40-year low. It's a cyclical nature, and I'd say that commodities, precious metals, are going to be appreciating in value as we watch the world bifurcate into various areas. with tariffs and geopolitical conflicts, causing not only sovereign states, but large manufacturers looking very quickly to secure safe sources of supply, whereas their regular supply areas have been disrupted by these factors. So I just say, anyone who's looking at the junior sector and hasn't invested, it's a place they should pay more attention to.

Mr. McEwen, thanks very much for your great response. I really appreciate that you always take time to answer my questions. All the best, sir. Thank you, Kerrick.

Successful investing.

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

Thank you, operator. Thank you, ladies and gentlemen. Looking forward to better days ahead, increased production, more cash flow, and a better share price. Thank you.

This concludes today's call. You may now disconnect.