Q2/26 OPERATING AND FINANCIAL HIGHLIGHTS
Highlights for Q2/26 are summarized below and discussed further under “Consolidated Performance”:
Corporate Developments
| ● | On April 30, 2026, the Company completed the acquisition of 100% of Golden Lake Exploration Inc.’s (“Golden Lake”) outstanding equity interests. Golden Lake is a mineral exploration company with a focus on gold properties located within the south end of the Eureka belt, adjacent to the Company’s Windfall and Lookout Mountain properties. Under the terms of the arrangement, the Company issued a total of 532,499 common shares and 18,490 options, for a total fair value of $11.7 million as part of the consideration. |
| ● | On May 20, 2026, MSC paid a dividend of ARS $141.1 billion ($101.2 million) on a 100% basis, of which ARS $69.1 billion ($49.4 million) was attributable and paid to the Company. The Company received total dividends of $58.2 million in H1/26, compared to $2.2 million in H1/25. |
Operational Highlights
| ● | Q2/26 consolidated production was 30,872 GEOs (H1/26 - 61,342 GEOs), compared to 27,554 GEOs in Q2/25 (H1/25 - 51,685 GEOs). Production includes 17,019 GEOs in Q2/26 for our attributable interest in the San José mine(1) (Q2/25 - 13,835) and 31,601 attributable GEOs in H1/26 (H1/25 - 24,643 GEOs). Due to forecasted changes in our operations, we have revised our 2026 consolidated guidance to 109,000 to 120,000 GEOs. |
| ● | Q2/26 consolidated sales of 29,310 GEOs (H1/26 – 60,521 GEOs), compared to 28,039 GEOs sold in Q2/25 (H1/25 – 51,854 GEOs). Total sales include 15,362 attributable GEOs from the San José mine(1) in Q2/26 (Q2/25 – 15,362 GEOs) and 31,499 attributable GEOs during H1/26 (H1/25 – 24,258 GEOs). |
| ● | At the Fox Complex, we invested approximately $12.8 million in the Stock project during Q2/26, completing key infrastructure work, and expanded its plans at Froome West. The Stock project continues to be on track to reaching pre-commercial production in Q4/26, with Q2/26 development efforts focused on prioritizing Stock East ventilation and haulage ramps. At Froome, we produced 7,000 GEOs during Q2/26 (H1/26 – 12,785 GEOs), representing a 29% increase compared to 5,429 GEOs in Q2/25 (H1/26 – 10,948 GEOs). Based on updated mine planning work completed during Q2/26, production from Froome West is now expected to extend until the end of Q4/26. As a result, the Fox Complex expects to exceed its annual production guidance, moving up to 20,000 to 23,000 GEOs from 16,000 to 19,000 GEOs. |
| ● | At the Gold Bar Mine Complex, we produced 5,842 GEOs during Q2 2026 (H1/26 – 13,726 GEOs), representing a 31% decrease from the 8,406 GEOs produced in Q2 2025 (H1/25 – 16,094 GEOs). This decline was attributable to timing and mine model factors. During Q2, a one-month shutdown in our mine assay laboratory operations limited our ore mining rate; mining operations focused on waste stripping activities instead. Additionally, complex mining zones with higher carbonaceous material than expected were encountered, which did not reconcile with our mine models. Additional studies are being completed in Q3/26 to better understand these reconciliation differences. As a result of these issues, the Gold Bar Complex has downgraded its annual production guidance to 30,000 to 33,000 GEOs. |
| ● | At the San José Mine, Q2/26 production of 17,019 GEOs(1) (H1/26 – 31,601 GEOs) increased by 24% compared to 13,719 GEOs(1) during Q2/25 (H1/25 – 24,543 GEOs). San José’s Q2/26 production increased due to a 4% increase in gold recovery rates, a 1% increase in silver recovery rates along with a 3% increase in processed mineralized material and a 4% increase in average gold grade processed. San José remains on track to meet its annual production guidance of 59,000 to 64,000 GEOs. |
| ● | We continued to meet safety expectations at our 100% owned operations. During Q2/26, we did not have any lost-time incidents at the Fox Complex, the Gold Bar Mine Complex, or El Gallo. The Nevada Mining Association recently recognized the Gold Bar Mine Complex as the recipient of its 2026 Mine Operator and Safety Award that recognizes companies that demonstrate exceptional safety performance. |
Financial Highlights
| ● | Q2/26 revenues of $59.2 million were recognized from the sale of 13,948 GEOs from our 100% owned operations at an average realized price(2) of $4,454 per GEO. This compares to Q2/25 revenues of $46.7 million from the sale of 14,549 GEOs at an average realized price of $3,298 per GEO. |
| ● | We reported gross profit of $20.1 million in Q2/26 compared to $12.3 million in Q2/25. The change was primarily driven by a 35% increase in average realized price during the quarter. |
| ● | Net income for Q2/26 was $9.6 million, or $0.16 per share, compared to a net income of $3.0 million for Q2/25, or $0.06 per share. The improvement was primarily driven by a $7.8 million increase in gross profit and a $15.0 million increase in income from equity method investments, partially offset by $8.5 million increase in other operating expenses. |
| ● | Adjusted EBITDA(2) for Q2/26 was $22.2 million, compared to Q2/25 adjusted EBITDA of $17.3 million. Adjusted EBITDA excludes the impact of McEwen Copper and Paragon’s results and reflects the earnings of our operating properties, including the San José mine(1). |
| ● | Fox Complex unit costs: Cash costs(2) and AISC(2) per GEO sold in Q2/26 were $1,972 and $2,701 respectively. as compared to annual guidance ranges of $2,200 to $2,400 and $2,650 to $2,850, respectively. The Company expects to remain on track to end the year within its guidance ranges, including costs associated with the additional production expected from Froome West in Q4/26. |
| ● | Gold Bar Mine Complex unit costs: Cash costs(2) and AISC(2) per GEO sold in Q2/26 were $2,705 and $3,197, respectively, as compared to annual guidance of $2,250 to $2,450 and $2,350 to $2,550, respectively. Q2/26 unit costs were higher than annual guidance primarily due to lower quarterly GEO production. Due to the decrease in production guidance ranges, annual cost guidance is now projected to be $2,650 to $2,950 cash costs per GEO sold and $2,900 to $3,200 AISC per GEO sold. |
| ● | San José unit costs: Cash costs(2) and AISC(2) per GEO sold in Q2/26 were $2,466 and $2,913, respectively, as compared to full year guidance of $2,000 to $2,200 and $2,300 to $2,500, respectively. Higher unit costs were primarily the result of 22% higher production costs driven by relative strength in the Argentine peso compared to the US Dollar, as well as Argentine inflation. These trends are expected to continue through the remainder of 2026. |
Exploration Highlights
| ● | At Grey Fox, we published the results of a pre-feasibility study (“PFS”) in June 2026, indicating that Grey Fox is a robust and economically resilient asset with an anticipated mine life capable of supporting the continued growth of the Fox Complex, and established an initial mineral reserve of over 980,000 gold ounces. The Company’s next planned activities at Grey Fox include detailed engineering and permitting towards a final investment decision and construction. |
| ● | We completed 65,335 feet (19,914 meters) of drilling at our Grey Fox deposit, incurring $2.6 million during Q2/26. Objectives of our exploration program during Q2/26 were to grow and upgrade the Grey Fox resource base after the release of our pre-feasibility study (“PFS”). |
| ● | We incurred $6.5 million in exploration expenses at the Gold Bar Mine Complex during Q2/26, primarily to continue definition and de-risk drilling of the Windfall and Lookout Mountain deposits, and to advance ongoing drilling activities at Trinity Ridge. Subsequent to the second quarter, we also published an updated mineral resource estimate for Windfall and Lookout Mountain, together containing 629,800 gold ounces in indicated mineral resources and 262,000 gold ounces in inferred mineral resources. |
| ● | We incurred $2.3 million in exploration expenses at the Tartan Mine Project during Q2/26. The exploration expense was primarily incurred on drilling aiming to expand the high-grade portion of the Main Zone along the western flank and for the preparation of a technical report summary supporting the mineral resource estimate that was published in May. The mineral resource estimate incorporates drill hole data compiled from both historical and recent exploration programs, supporting an estimated 398,900 ounces of indicated gold resources and 302,700 ounces of inferred gold resources. |
(1) At our 49% attributable interest.
(2) T**his is a Non-GAAP financial performance measure. See “Non-GAAP Financial Performance Measures” beginning on page 47.
