McEwen Q2 Earnings Call Highlights

Second-quarter operations fell short as lower production and elevated costs at Gold Bar, driven partly by unexpected carbonaceous ore and preg-robbing, pressured recoveries and all-in sustaining costs. Management is revising geological models, mining sequences, blending strategies and processing methods, with improvement expected over time. McEwen plans to advance the Los Azules copper project toward a final investment decision in the fourth quarter . The company is evaluating approximately $4 billion in financing—potentially 60% debt and 40% equity—and is targeting an IPO later this year to help fund an estimated $1.6 billion equity requirement. Gold Bar expansion permitting is expected to take about two more years , while exploration and engineering updates could improve its long-term production potential. Separately, the San José joint venture is not expected to pay another dividend this year, with distributions currently anticipated to resume in 2027. McEwen NYSE: MUX said its second-quarter operational performance fell short of expectations, citing lower production and elevated costs, while management outlined steps to improve recoveries at its Gold Bar mine and advance the Los Azules copper project toward a final investment decision. Chairman and Chief Owner Rob McEwen said the company’s results were disappointing but argued that the company’s longer-term value depends on resolving operational issues, expanding its resource base and advancing its copper-development portfolio. Operationally, we fell short of our own expectations,” McEwen said. “Production was lower than we had planned. Costs remained higher than we consider acceptable.” The principal operational issue during the quarter occurred at Gold Bar, where the company encountered more carbonaceous material than expected in portions of the ore body. Carbonaceous ore can absorb dissolved gold during leaching, reducing recoveries in a process known as preg-robbing. McEwen said the company is expanding metallurgical testing, improving geological modeling to identify carbonaceous zones before mining, modifying mine sequencing and blending strategies, and evaluating processing improvements. He cautioned that the measures are not immediate fixes but described them as practical actions intended to improve recoveries over time. Chief Operating Officer William Shaver said Gold Bar’s geological model is being continually updated using blast-hole drilling and routine sampling. He said blast holes are spaced roughly 12 to 14 feet apart and are used to distinguish ore, waste and carbonaceous material in operating benches. Shaver said the company did not change the overall conservatism of its model but encountered a significant amount of waste during the period. McEwen is increasing overall production activity to move more waste while seeking to maintain ore volumes, he said. “We just didn’t mine the right amount of ore during the period,” Shaver said. Chief Financial Officer Perry Ing said the production shortfall at Gold Bar was the main driver behind higher all-in sustaining costs, as the operation has a relatively fixed cost base. He said the company expects AISC to decline in the second half as recovered ounces increase, even as Gold Bar moves more material. Ing also said Gold Bar is McEwen’s primary consumer of fossil fuels and therefore its main exposure to U.S. diesel prices. He estimated that the rise in U.S. diesel prices from about $3.75 per gallon in 2025 to about $4.75 per gallon so far in 2026 had an approximately $100-per-ounce effect on overall AISC. A further $1-per-gallon increase could add close to another $100 per ounce, he .