McEwen Mining Inc.

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 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, fellow shareholders, analysts, and interested investors. Year-to-date, 2025 has been an eventful year for us. with the higher prices of gold, silver, and copper brightening the outlook for our operation. We've increased our liquidity by using a financial instrument called a capped call convertible note. This instrument allowed us to reduce potential share dilution by setting an effective conversion price at 100% premium to our share price at the time of the transaction. The majority of these funds will be used to advance the development of our fox complex, and we expect that once this work's completed and the stock and gray fox mines are in production, our consolidated annual production in 2030 could reach as high as 225,000 to 255,000 ounces. This represents an increase of over 80% above our current production. So let's start with some other good news. It's taken some time, but our 49% interest in the San Jose mine has once again paid a dividend, and we're expecting more during the balance of the year. During the quarter, we were delighted to see Goldbar produce 10% more gold than budgeted at a cash cost 24% below the low end of our annual guidance at eleven hundred and forty six dollars as opposed to the low end of our guidance of fifteen hundred dollars However, I expect you will be alarmed when you see gold bars All in sustaining cost per ounce of approximately twenty two hundred dollars an ounce. I want to explain this high number of It was a result of our decision during the quarter to access a gold zone that had been uneconomic at lower gold prices, but was quite economic at today's gold prices. So we decided to accelerate the stripping rate in the first half of this year. And so far, that's cost us about $7.5 million. in order to increase our production and lower our almond sustaining costs in the second half of the year. Financially, Q125 compares well to Q124. I'll give you some examples. Our gross profit was up 68% to $10.1 million. Our adjusted EBITDA was up 38% to $8.7 million. Our cash and cash equivalents increased to $68.5 million from $17.5 million. Our consolidated working capital increased to $61 million, as opposed to a negative $6.5 million. Our total debt went up to $130 million from $40 million. Our debt cost of service went from 9.75 to 6%. And our net debt is currently standing at just over $42 million. So, speaking of our FOX complex, it was a disappointing quarter from an operational perspective because production was lower than budget and cost per ounce were unacceptably higher than budget. However, many of the reasons for the underperformance are expected to be behind us, with production and cost per ounce for the balance of the year looking much improved. Speaking of FOX, on a positive note, we just received our permit to construct a ramp to the underground at the stock mine. This is a key element in our plans for the stock complex expansion. So we have exploration going on, active programs at both the Fox Complex and at Gold Bar, and we will be releasing updates on that throughout the year. We just put out a release earlier today on our exploration showing, particularly at the Gray Fox, how that resource has been growing quite rapidly some good grades over nice intercepts, quite optimistic that this still has quite a bit more room to grow. And with that, I'd like to open the session for 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, press star one again. We will pause for just a moment. And your first question comes from a line of Mike Kozak from Cantor Fitzgerald. Your line is open.

Yeah, good morning. Hi, good morning, Rob. Good morning, Rob and team. Thanks for hosting the call. I just really had one question. How much cash or cash plus investments is held within the copper subsidiary?

Barry? Hi, Mike. So currently, the Treasury for McEwen Copper is below $10 million currently. Obviously, we expect to announce another financing at some point as we move towards the publication of the feasibility study. But currently, cash balances held at the McEwen Copper level are relatively minimal.

Okay, and then my follow-up to that is that $10 million, do you think that's enough to get you to get that feasibility study complete? And then is it still, I think the schedule is still there for July, ideally?

We will likely need some additional runway to get to July, Mike. I mean, we just finished a geotechnical program At sites, the costs have come down significantly, but ideally we'd like to complete another round prior to the feasibility study.

Okay, that's it for me. I'll turn it over. Thank you.

Thanks, Mike. Again, if you'd like to ask a question, press star 1 on your telephone keypad. Your next question comes from a line of Bill Powers. Private investor, your line is open.

hi rob thanks for um thanks for hosting the call um a few quick questions i guess we'll start with um san jose as far as getting a 2.2 million dollar um dividend during the quarter um it still seems as though as i talked about last time it still seems to be over 80 million dollars of working capital um have hop shield given any education on what they may be paying out. I would imagine, have you talked about regularly quarterly dividends with them, or do you know the status?

Sure. I can answer that as well, Bill. No, we're in regular dialogue with Hochschilds. You know, there is, you know, a focus to extend mine life at San Jose, so it's going to be a balance between reinvesting in the mine, especially with, you know, silver prices, you know, above $30 and gold where it is. So, you know, between continued exploration, return to shareholders, and, you know, setting aside some funds for, you know, rainy day enclosure investments, It's going to be, you know, a balancing act. And, you know, right now, in terms of the Argentine peso, it's right now very strong right now. So that has a negative impact on, you know, reported U.S. dollar cash costs. But we are optimistic. We think the mill expansion to 2,000 tons per day with the installation of the VertiMill has been performing very well. And we'd you know, that allows us to increase throughput and lower unit costs, which, you know, effectively lowers our cutoff grade at the mine. So all those things are important to us. But, you know, we do expect to receive further dividends this year at these commodity price levels.

Okay. Good to hear. I guess one of the things I saw on your updated website information sheet regarding the fox complex is that it looks like there's about 71 million dollars of spend for development this year um i was wondering you know how far along i guess percentage wise are you complete with before you begin production and is there any production expected to come from stock this year or you know i or what could be uh the status of that

Bill Shaver here. I'll answer that for you. Yeah, we anticipate that we will have the first production from the underground portion of the stock mine in the last quarter of this year. The permit that we got a few days ago allows us to start the drilling and blasting of the ramp. And. You know, we now have obviously the final design of that ramp and we anticipate that we will have the ramp down sometime late in the third quarter or early in the fourth quarter. And at the same time we have the shaft now dewatered down below the 400 level. And we're in the midst now of doing the surveying. making sure that all the headings are safe and properly bolted and so on to the standard that's required today. And the plan is to do some exploration type work, sampling and so on, underground in the old workings, because we know that mine was shut down when the gold price was relatively low. And, you know, we're confident that there's some you know, a certain amount of ore down there that we can extract fairly quickly. So as soon as we get the ramp broken through so that we can load trucks from the underground, you know, that'll allow us to go ahead with that work. And, you know, then as we go into next year, you know, we'll ramp stock up to its full production capability.

Okay. Good to hear. I guess there's one last question regarding Gray Fox. You guys have done a lot of drilling, seems to be going well. I guess what is the time frame and what might you envision the cost to put the Gibson ramp back into production?

So that's a very good question. So we're just in the midst of starting a study on that what the capital costs are going to be, what the operating costs are going to be, and what the exact strategy is for, number one, getting the permit in as timely a manner as possible, and then, number two, what's that going to look like in terms of a mine plan and capital. And I guess the opening of the The mine of the Gray Fox mine. I mean, we're right now we're studying which is the best best access method. Should we be talking about an underground operation or should we be talking about a small open pit? And both of those options are viable. So now it's a question of deciding which one is the. the cheapest and the fastest. The plan initially for that part of the property, Gray Fox and the associated other ore bodies around there, would be to bring that ore back to the stock mill and you know it's relatively high grade and and therefore we would establish some cash flow and then the next step would be you know what is the long-term potential of Gray Fox which you know we see as pretty robust so then we would want to increase the tonnage through a process plant that would be significantly larger than than the stock mill. So that's another part of this study that we're working on. And I guess I see a mine that's running at 3,000 to 5,000 tons a day. And then we need a tailings facility and so on. And I guess the major thing we have to think about in terms of the ultimate goal Time frame for putting that together is how long is the permitting going to take? And so that's something that we're actively working on and you know as we've all heard from our governments at both federal and provincial Levels that they're going to speed up the permitting process at the present time based on historical time frames that would take about three years and We're hoping that that might get down to, you know, 18 months to two years would be, I think, an optimistic view of that. And, you know, that's kind of what we're hoping for.

Okay. No, that's very helpful. And so, basically, the timeframe of getting it would depend on a mine. I'm guessing it would require a fair bit of work since it has not been I'm guessing hasn't been active for quite some time.

Well, that area, in fact, has a ramp there, an exploration ramp that was driven many years ago. To tell you the truth, I don't know exactly when it was, but it's approximately 10 years ago. And so there's a significant amount of development to bringing a new mine into operation there. The positive thing about that area is the depth of the overburden is insignificant. We have ore right at surface that we understand that we could be mining within months of getting a permit. So I think there's lots of really good things about the ore body that's out at Great Fox. And the drilling that we're doing right now continues to expand Uh, you know the the resources that we have there and. You know, we've just spent a couple of days up there reviewing the the drilling and the exploration program. And you know, we're very, very positive about what's going to happen up there. You know, based on our success up to now. OK, that's great.

Thank you so much for all your time today. Thank you, Bill.

And as a final reminder, if you'd like to ask a question, press star one on your telephone keypad. We'll pause for just a moment.

While we're pausing, operator, one thing I'd like to bring up that I didn't mention in my introductory comment was something that's going to happen to our financials. Our income statement's going to look better once the feasibility study for Los Azules has been published, which will be this summer. It's going to improve because we won't be needing to include the expenses of McEwen, Copper, and Los Azules in our income statement any longer once the feasibility is published. That expense will be capitalized under accounting standards And so it will improve our bottom line. And over a period of the last few years, I think Jeff is going to tell us how much we've had to incorporate in our income statement for the expenses of Los Azules. But that will be removed, which I think is a good thing. We've invested heavily to increase the value of Los Azules. And we've paid the price of showing a negative bottom line for quite a while as a result of those investments.

Yeah. So just to expand on what Rob just mentioned, at the end of the first quarter, we reported negative $6.3 million in net income. And capitalizing the expenditures of McEwen Copper would have resulted in a positive net income of $2.3 million rather than a negative. If we take a look at the last few years of expenditures since 2021, we've spent over $250 million in McEwen copper that we could have capitalized onto our books should we have hit feasibility four years ago. Thank you, Jeff.

And there are no My apologies, there are no questions at this time. I will now turn the call back over to you, Rob McEwen, for some final closing remarks.

Thank you, operator. When I look at it, it's been an interesting year so far. I think it's going to get more exciting. From an operational standpoint, we're still not quite there in terms of where we want to be. with respect to performance, but that's on the right track to be repaired. As I said, from a financial standpoint, we've improved our liquidity. We have the money to advance the project at Fox, and that's going to have a big impact on our future, although a couple of years away, but that's moving ahead. Exploration is delivering encouraging results. And so there will be active news coming out on exploration each quarter. And I believe the price of gold is going higher. So for a company such as ourselves, higher gold is a good price for us. Thank you.

And this concludes today's call. You may now disconnect.