Q3/26 OPERATING AND FINANCIAL HIGHLIGHTS
Highlights for Q3/26 are summarized below and discussed further under “Consolidated Performance”:
Corporate Developments
| ● | On August 26, 2026, the Company sold and assigned its entire interest in the McEwen Copper Inc. loan receivable, together with the associated warrants, to unrelated third parties for cash proceeds of $13.6 million. Following the transaction, the Company retained no rights, interests, or continuing involvement in the transferred loan or warrants. |
| ● | McEwen Copper Inc. ("MCI"), in which the Company holds a 46.3% ownership interest, closed a $240.0 million senior secured term loan facility on August 27, 2026. The financing, provided by a syndicate of lenders, will support the continued advancement of the Los Azules copper project in San Juan, Argentina, as well as general corporate purposes. The facility enhances MCI's liquidity as it advances engineering and early works activities toward a final investment decision anticipated in mid-2027 and continues preparations for a potential initial public offering. |
Subsequent Events
| ● | On October 8, 2026, the Company entered into an agreement to sell its interests in the Fuller and Paymaster properties and certain related surface rights for total consideration of $55.0 million, consisting of $5.0 million in cash and $50.0 million in common shares of Discovery Mining Ltd. The transaction is expected to provide additional capital to support the Company’s operations and development projects and remains subject to customary closing conditions. The sale was subsequently completed on October 21, 2026. |
Financial Highlights
| ● | Q3/26 revenues of $43.6 million were recognized from the sale of 10,689 GEOs from our 100% owned operations at an average realized price(2) of $4,151 per GEO. This compares to Q3/25 revenues of $50.5 million from the sale of 14,968 GEOs at an average realized price of $3,477 per GEO. |
| ● | We reported gross profit of $4.0 million in Q3/26 compared to $7.8 million in Q3/25. The change was primarily driven by a 14% decrease in revenues as a result of a 29% decrease in GEOs sold, offset by a 19% increase in average realized price during the quarter. |
| ● | Net loss for Q3/26 was $36.7 million, or $0.60 per share, compared to a net loss of $0.5 million, or $0.01 per share, in Q3/25. The higher net loss primarily reflected a 49% decrease in gross profit and a $12.9 million increase in other operating expenses, driven by increased exploration and advanced project expenditures, including drilling at Grey Fox and exploration and resource conversion and expansion activities at Windfall and Lookout Mountain within the Eureka Project. The increase in net loss also reflects a $9.0 million increase in other expense, primarily due to higher unrealized losses on marketable securities of $7.3 million and a $13.0 million income tax expense for Q3/26. |
| ● | Adjusted EBITDA (loss) (2) for Q3/26 was a loss of $10.9 million, compared to Q3/25 adjusted EBITDA of $11.8 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 Q3/26 were $2,911 and $3,725 respectively as compared to annual guidance ranges of $2,200 to $2,400 and $2,650 to $2,850, respectively. Q3/26 unit costs were above annual guidance primarily due to lower production and GEOs sold as operations transitioned from Froome to Stock. The Company expects to remain on track to end the year within its annual 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 Q3/26 were $3,248 and $3,520, respectively, as compared to annual guidance of $2,650 to $2,950 and $2,900 to $3,200 respectively. Q3/26 unit costs were higher than annual guidance primarily due to lower quarterly GEO production. |
| ● | San José unit costs: Cash costs(2) and AISC(2) per GEO sold in Q3/26 were $2,916 and $3,414, 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 23% higher production costs due to 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
| ● | We completed 25,886 feet (7,884 meters) of drilling at our Grey Fox deposit, incurring $2.7 million of exploration expenditures during Q3/26. During July 2026, an updated reserve and resource estimate was released supporting the results of the prefeasibility study announced in June 2026. The study outlines a 15-year mine life extending production at the Fox Complex through 2041, supported by probable mineral reserves of 980,300 ounces of gold, and demonstrates robust project economics, including a post-tax NPV (5%) of $282 million and an IRR of 24.8% at a gold price of $3,000 per ounce. |
| ● | We incurred $5.5 million in exploration expenses at the Gold Bar Mine Complex during Q3/26, primarily to advance exploration and resource development activities across the Eureka Project, including the Windfall and Lookout Mountain deposits. The July 2026 reserve and resource estimate reported combined Indicated Mineral Resources of 629,800 ounces of gold and Inferred Mineral Resources of 262,000 ounces of gold, with most of the mineralization considered potentially amenable to heap-leach processing. Exploration drilling continued during the quarter to support resource conversion, expansion and potential resource growth. |
| ● | We incurred $3.1 million in exploration expenses at the Tartan Mine Project during Q3/26. The exploration expense was primarily incurred on drilling aiming to upgrade and expand both the high-grade portion of the Main Zone and the current mineral resources that were published in a supporting Technical Report Summary in May. The mineral resource estimate incorporates drill hole data compiled from both historical and recent exploration programs, supporting an estimated 308,900 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.
Operational Highlights
| ● | Q3/26 consolidated production was 22,852 GEOs (9M/26 – 84,195 GEOs), compared to 29,662 GEOs in Q3/25 (9M/25 – 81,346 GEOs). Production includes 11,786 GEOs in Q3/26 for our attributable interest in the San José mine(1) (Q3/25 – 14,986) and 43,388 attributable GEOs in 9M/26 (9M/25 – 39,628 GEOs). Due to forecasted changes in our operations, we have revised our 2026 consolidated guidance to 109,000 to 120,000 GEOs. |
| ● | Q3/26 consolidated sales of 20,268 GEOs (9M/26 – 81,467 GEOs), compared to 26,134 GEOs sold in Q3/25 (9M/25 – 77,988 GEOs). Total sales include 9,579 attributable GEOs from the San José mine(1) in Q3/26 (Q3/25 – 11,166 GEOs) and 41,078 attributable GEOs during 9M/26 (9M/25 – 35,425 GEOs). |
| ● | At the Fox Complex, we invested approximately $12.2 million in the Stock project during Q3/26, advancing underground development and completing key ventilation, heating, electrical and other infrastructure as the project progresses toward commercial production. Development activities continued at Stock East and West, while personnel and equipment began transitioning from Froome to Stock to support ongoing mine development. At Froome, we produced 4,427 GEOs during Q3/26 (9M/26 – 17,212 GEOs), representing a 31% decrease from 6,386 GEOs in Q3/25 (9M/25 – 17,334 GEOs), primarily reflecting lower processed grades and tonnage as operations continued the transition from Froome to Stock. Production at Froome is expected to continue until Q1/27. |
| ● | At the Gold Bar Mine Complex, we produced 6,215 GEOs during Q3/26 (9M/26 – 19,941 GEOs), representing a 24% decrease from the 8,191 GEOs produced in Q3/25 (9M/25 – 24,285 GEOs). Lower Q3/26 production primarily reflected fewer ounces recovered during the quarter despite higher tonnes stacked and average mined grades, as ounces reflected higher carbonaceous materials encountered in certain mining zones. The year-to-date decrease also reflected operational challenges experienced during Q2/26, including the temporary shutdown of the mine assay laboratory and complex mining zones containing higher carbonaceous material that did not reconcile with the mine model. |
| ● | San José’s Q3/26 production decreased by 21%, with 24,054 GEOs produced in Q3/26 (9M/26 – 88,546 GEOs), compared to 30,583 GEOs in Q3/25 (9M/25 – 80,874 GEOs). The decrease primarily reflected an 8% reduction in processed mineralized material and lower recoveries due to operational challenges experienced during the winter season. 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 Q3/26, 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. |
