Q1/25 OPERATING AND FINANCIAL HIGHLIGHTS
Highlights for Q1/25 are summarized below and discussed further under “Consolidated Performance”:
Corporate Developments
| ● | On January 31, 2025, the Company amended its Third Amended and Restated Credit Agreement, extending the maturity date from August 31, 2026 to August 31, 2028, and extended the commencement date for monthly repayments of principal from January 31, 2025 to January 31, 2027. As consideration for such amendment, the Company issued 53,160 common shares subsequent to March 31, 2025. Additionally, on February 21, 2025, the Company repaid $20.0 million of principal under this credit agreement. |
| ● | On February 11, 2025, the Company closed the offering of 5.25% Convertible Senior Notes due 2030 (the “Offering”), for an aggregate principal amount of $110.0 million. The net proceeds from the Offering were approximately $90.7 million after deducting offering related costs of $4.2 million and the purchase of a related capped call of $15.1 million. The capped call option was included to mitigate potential share dilution by effectively raising the conversion price from $11.25 to $17.30, representing a 100% premium over our closing share price on the day prior to the financing announcement. |
| ● | On February 11, 2025, McEwen Copper, through its wholly owned subsidiary, Andes Corporación Minera S.A., applied for the project's admission into Argentina’s Large Investment Incentive Regime (the “RIGI”) program. If successful, the RIGI is expected to provide significant fiscal and regulatory benefits, including tax reductions, export duty exemptions, and a 30-year tax stability guarantee. |
| ● | On March 10, 2025, the Company invested in Goliath Resources Limited through a non-brokered private placement, acquiring 5,181,347 shares in exchange for 868,056 shares of the Company’s common stock. Each unit consisted of one common share and one-half of one warrant. Each warrant entitles the Company to purchase one common share at a price of C$2.50 prior to expiry on March 10, 2026. |
| ● | On March 26, 2025, Minera Santa Cruz S.A. paid a dividend of ARS $4.9 billion (US$4.6 million) on a 100% basis, or ARS $2.4 billion (US$2.2 million) attributable and paid to McEwen Mining, representing the first significant dividend received since 2021. |
| ● | On March 27, 2025, the Company participated in two private placement offerings by Canadian Gold Corp acquiring 8,823,529 common shares and 2,941,176 units for a total investment of $1.4 million. Each unit consists of one common share and one non-transferable share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share at an exercise price of C$0.22 per share, exercisable for a period of twelve months from the closing date, expiring on March 27, 2026. |
Operational Highlights
| ● | Q1/25 consolidated production of 24,132 GEOs, including 10,924 attributable GEOs from the San José mine(1), compared to 33,037 GEOs produced in Q1/24 which included 12,934 attributable GEOs from the San José mine(1). Our annual plans include higher production across our operations through the remainder of the year, and we remain on track to deliver 2025 production guidance of 120,000 to 140,000 GEOs. |
| ● | Q1/25 consolidated sales of 23,804 GEOs, including 10,769 attributable GEOs from the San José mine(1). This compares to 34,407 GEOs sold in Q1/24, including 14,603 attributable GEOs from the San José mine(1). |
| ● | We are underway with Stock portal access development at the Fox Complex. During Q1/25, we invested $3.9 million to complete box cut drilling and bedrock blasting for the Stock portal entrance where we expect to begin mining by 2026. At Froome, we produced 5,520 GEOs during Q1/25, below expectations due to adverse winter conditions and labor challenges. In response, the Company accelerated hiring efforts and engaged contractors to support operations. With these mitigating actions in place, the Fox Complex expects to meet annual production guidance of 30,000 to 35,000 GEOs. |
| ● | At the Gold Bar Mine, we produced 7,688 GEOs during Q1/25. As ongoing pre-stripping activities at the Pick III deposit wind down and production begins in early Q2/25, our mine plan calls for production to increase steadily through the remainder of the year. The Gold Bar Mine remains on track to meet its annual production guidance of 40,000 to 45,000 GEOs. |
| ● | At the San José Mine, Q1/25 production of 10,924 GEOs decreased by 16% compared to 12,934 GEOs during Q1/24. Production during the period was slightly impacted by lower processed grades and recovery rates, primarily due to elevated clay content in the ore. In response, San José plans to increase plant throughput beginning April 2025, supported by recent mill improvements completed in late 2025. Additionally, the first quarter of each year is impacted by production seasonality due to annual maintenance shutdowns. We reiterate full year guidance of 50,000 to 60,000 attributable GEOs(1). |
| ● | We continued to advance our Los Azules copper project to feasibility. During Q1/25, McEwen Copper completed the final drilling activities required to support the Los Azules feasibility study. The data collected will be used to refine the geotechnical characterization of the deposit and finalize both the mine plan and production schedule. |
| ● | We continued to meet safety expectations at our 100% owned operating mines. During Q1/25, we did not have any lost-time incidents at our Fox Complex and Gold Bar mine. In February 2025, the Gold Bar mine achieved a significant safety milestone, marking five years without a lost-time incident. |
Financial Highlights
| ● | Q1/25 revenues of $35.7 million were recognized from the sale of 13,036 GEOs from our 100% owned operations at an average realized price(2) of $2,803 per GEO. This compares to Q1/24 revenues of $41.2 million from the sale of 19,804 GEOs at a realized price of $2,131 per GEO. |
| ● | We reported gross profit of $10.1 million in Q1/25 compared to $6.0 million in Q1/24. This increase was primarily driven by a 31% higher average realized gold prices. |
| ● | Net loss for Q1/25 was $6.3 million, or $0.12 per share, compared to a net loss of $20.4 million for Q1/24, or $0.41 per share. This improvement was primarily driven by lower expenditures at McEwen Copper Inc., reducing our portion of its recognized loss from $18.0 million in Q1/24 to $8.6 million in Q1/25, as well as higher gross profit as previously discussed. |
| ● | Adjusted EBITDA(2) for Q1/25 was $8.7 million, or $0.16 per share, compared to Q1/24 adjusted EBITDA of $6.3 million, or $0.13 per share. Adjusted EBITDA excludes the impact of McEwen Copper’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 Q1/25 were $2,061 and $2,504, respectively. as compared to annual guidance ranges of $1,600 to $1,800 and $1,700 to $1,900, respectively. The increase in unit costs was driven primarily by 33% lower GEOs sold. Unit costs are expected to decrease through the year as production improves. |
| ● | Gold Bar unit costs: Cash costs(2) and AISC(2) per GEO sold in Q1/25 were $1,146 and $2,197, respectively, as compared to annual guidance of $1,500 to $1,700 and $1,700 to $1,900, respectively. The increase in unit costs was largely attributable to $7.5 million of pre-stripping costs, and will decrease through 2025 as production begins at Pick III. |
| ● | San José unit costs: Cash costs(2) and AISC(2) per GEO sold in Q1/25 were $2,575 and $3,047, respectively, as compared to full year guidance of $1,600 to $1,800 and $1,900 to $2,100, respectively. Higher unit costs were primarily the result of 18% higher production costs driven by relative strength in the Argentine peso, as well as 26% lower GEOs sold during the period. As higher planned production is achieved through the remainder of 2025, we expect San José to decrease its unit costs over the remainder of the year. |
Exploration and Mineral Resources and Reserves
| ● | McEwen Copper invested $21.3 million in Q1/25 to advance its feasibility study on Los Azules. Including amounts spent by Minera Andes Inc. prior to 2012, and McEwen Mining prior to 2021, we have invested over $400 million to develop Los Azules as a world-class copper deposit. |
| ● | We incurred $2.3 million in exploration expenses at Fox Complex during Q1/25 to advance our Grey Fox project, where we completed 50,000 feet (15,200 meters) of diamond drilling, focused mainly on the Gibson zone. |
| ● | We incurred $1.4 million in exploration expenses at the Gold Bar Mine and our Timberline properties, primarily on planning drilling programs and site preparation in advance of the drilling season. |
(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 36.
