Q2 2021 McEwen Mining Inc Earnings Call
Income.
[music].
Hello, Ladies and gentlemen, welcome to Mcewen, Mining's, Q2, 2021, operating and financial results Conference call.
And somebody today are Rob Mcewen, chairman and chief owner.
And <unk> Kruger Chief Financial Officer Peter.
Peter MA Chief operating Officer, Steve <unk> Executive Vice President of exploration.
After the speaker's presentation, there will be a question and answer session.
He would like to ask a question. During this time simply press Star then the number 1 on your telephone keypad.
If you would like to withdraw your question press the pound key.
I'll now turn the call over to Mr. Rob Mcewen Chief owner. Please go ahead, sir thank.
Thank you operator.
Good afternoon fellow shareholders and interested investors I'm very pleased to welcome you to our Q2.2021 conference call.
For the past 15 months.
We have rebuilt our senior management team at head office and at our mines.
And it is these talented individuals who are responsible for the turnaround we're currently experiencing.
A day Peter N C.
And I are going to share with you.
Significant improvements in performance of our operations.
And financial strength.
Along with the review of the highlights of our exploration program.
And our plans for surfacing value of our giant copper project losses either.
But first.
I'm truly delighted to say that our mines are operating.
Much more efficiently.
Such that we are back to delivering on our production guidance.
We are building our treasury and your share price is regaining some of the ground lost last year.
These are very encouraging indications.
We're getting back on track and that the trend is definitely up.
However, there's still a lot of ground to recapture and I wanted to assure you.
Net we are fully committed and driving hard to do so to regain that ground.
Yeah.
I will ask Anna to share with you the positive transformation of our financial condition.
As seen in our results from Q2 and first half of this year.
And to you.
Thank you, Rob and good afternoon, everyone.
Q2 was the quarter demonstrating operational progress in our turnaround strategy, where were cough and a strengthening treasury all resulting in improved finance.
Strong production for our operations translated into solid revenue on our gold and silver sales for the quarter.
Our revenue from our 100% loans operations during the quarter was $40.7 million, which is an increase of 123% compared to Q2 of last year.
Average realized sales prices in the quarter or 1830 per gold equivalent ounces.
Compared to prices from 1733 realized in Q2 of line here.
Our cash growth profit, which is a non-GAAP measure that excludes depreciation was $9.6 million for the quarter, an increase of $13.6 million from Q2 of last years cash gross loss of negative $4.1 million.
The change in Q2 is attributed to increased production and sales higher average realized gold prices and decrease cash cost per ounce at both our gold bar and Fox complex operations.
Which Peter MA will discuss in a bit more detail shortly.
We reported a net loss.
<unk> or negative <unk> <unk> per share for Q2.
This does include a total of $7.7 million invested in our exports and advanced project.
This compares to a net loss of $19.8 million or negative <unk> <unk> per share in Q2.2020.
Again, an improvement primarily driven by the increase in improved operations.
Our exploration activity ramped up in 2021, and we've spent approximately.
9 million to date, but any high potential targets in both Ontario, and Nevada. We're also incurring eligible Canadian exploration expenditures independent regions of Ontario.
In a given will give further update on our various exploration program shortly.
We also spent just under $1 billion on advanced projects. During the quarter. This includes continued spending on our Fox complex.
Pega, our preliminary economic assessment and the Fenix project in Mexico.
Our total liquid assets as of June 30 was $48.9 million compared to $20.8 million for the same period last year. This is reflecting higher cash and cash equivalents restricted cash investments and our.
Inventory.
We also received $2.6 million of dividends in Q2 from our interest from our San Jose mine.
A total of $7.6 million in each 1 this compares to $1.3 million received during the first half of last year.
Net cash used in investing activities of $12.3 million in the first half of this year is largely attributed to the capital development costs at our full line at our Fox complex, we remain on track to reach commercial production in Q4.
We ended Q2 with $74.9 million current assets and a positive working capital of $39.
Thank you I will now turn the call to Peter MA, Our Chief operating officer.
Thank you Anna and good day to all.
We're pleased to report on another good quarter Mcewen mining with production trending up on track with our 2021 guidance.
Costs are trending down with teams focused on continuous improvement from there.
Expansion projected effects Fox complex is progressing well.
Consolidated gold production in Q3, 2021, with 40700 gold equivalent ounces.
Over 2 times higher than production during the same period last year.
Total production for the first half.
2021.71300 <unk>.
In line with the lower end of our guidance range of 141000.
160400 deals.
Q2 production from our 100% from Barnes was 22400, <unk>, which increased by 12300 as compared to Q2 last year.
Q2 consolidated cost per deal flow.
Our 100% on loans and operations was.
<unk> 86 per cash costs were 41% lower than last year from $14.47 for all in sustaining cost.
<unk>, which was 47% lower than last year.
Moving on to each region.
Of the gold Bar mine in Nevada, Q2 production was 14100 gold equivalent ounces, reflecting a 132% increase over last year.
Production increased from the first half of 2021 to 21500 gold equivalent ounces from 15300 for the same period last year.
Cash cost per geo for the quarter reduced 18%.
<unk> 63, while all in sustaining cost reduced 35% to $16.19 compared to the same period last year.
Improved production and costs were driven by the increased gold production operational improvements from efficiencies that no COVID-19 interruption to production.
Moving onto Canada Q2 production of the Fox complex was 7100 <unk>.
Reflecting more than a 3 fold increase from the 2200 deals produced in Q2 of last year.
Increased beat our expectations. According to the mine plan as mining wound down at Blackhawk and true.
In addition to the ramp up at Fox mine modestly better than expected.
Cash cost per ounce in Q2 decreased to $917 compared to $31.21, and 2020, while all in sustaining cost per ounce from Q2 decreased to 10.88 compared to $33.32 in 2020.
The decrease in costs reflects improved gold production.
Our mining efficiencies more consistent mill throughput and more reliable grid control programs.
In addition for Q2.2021 cost per ounce benefitted from an optimized mine design, reducing underground development costs.
And schedule at the prelim deposits.
And no production interruptions due to COVID-19.
<unk> remains on track to reach commercial production in Q4 of this year.
Grade reconciliation is on plan metallurgical recoveries has slightly outperformed our expectations and further optimization of recovery versus grind size is ongoing.
Underground resource and reserve definition drilling is underway with the aim to extend the life of mine it from them.
And help bridge will production, while the grey Fox and stock projects are advanced.
The Fox complex expansion drove results and model updates are expected to be delivered in Q3.
A preliminary economic assessment subsequently from Q4 of this year.
Plans are underway to select the mining contractor to start dewatering the stock mine shaft in Q4 this year.
This will provide access to the existing underground development from which the company plans to conduct underground drilling Cup stock.
At <unk> in Mexico, Q2 production was 1300 gold equivalent ounces from residual leaching of the existing heap Leach pad visit.
Residual leach activities are projected to wind down towards early 2022.
We're currently evaluating multiple strategic alternatives, including the potential divestiture of our Mexican business unit.
Shifting to Argentina at the San Jose mine.
Q2 production attributed to our 49% interest was 18200 Geos nearly 2 times the production for the same period last year due to higher ore tonnes processed and reduced impact from COVID-19.
Increases were slightly offset by lower processed grades due to delayed timing of stoping and lower grade mill feed substituted from development.
Cash costs were 1105, <unk> slightly lower than Q2.2020 for reasons mentioned.
All in sustaining were on par for the same period last year ex <unk>.
<unk> hundred gold.
<unk> hundred dollars per gold equivalent ounce.
Thank you I will now turn the call over to Steve Mcgibbon, Our executive Vice President of exploration.
Thank you Peter exploration activities ramped up significantly in Q2 across all projects in Canada, the United States and Argentina with a total investment of some $6.9 million.
In all nearly 35000 meters of core and RC drilling equivalent to more than 114000 feet once completed.
The focus of exploration remained on cost effective discoveries and extending deposits adjacent to our existing operations in order to sustain near to medium term growth production.
Firstly I will update work at our 49% zone, San Jose property, which is operated by our joint venture partner Hochschild mining.
On a 100% basis to 22021 exploration budget for San Jose was $9.3 million with $2.9 million spent in Q2.2021, raising exploration expenditures for the first half from year to $5.2 million.
Similar to current San Jose operations resource drilling was completed in the Escondida and the timing of the veins.
From the 30.410 meters of drilling several encouraging drill intercepts.
1.5 years to 2.5 meters grading typically between 2.5 and 3.5 grams per tonne gold and 2 to 300 grams per ton silver were realized.
1 additional intercept Corp. S. JD $22.67 ran 18, 4 grams per ton growth and 879 grams per ton silver along a 1.4 meters cortland.
I will remind the listeners that gold and silver deposits that San Jose or at the thermal and will often produce highly variable drove results true normal through the normal course average.
Drill program.
At the China.
From 283 meters were completed.
And include a $3.1 meter intercept grading 5.5 grams per tonne gold and 6 grams per ton silver and hole S. J D 23.2008.
During the third quarter 3000 meters of drilling will be carried out on the timing or structure. In addition to testing a geophysical target to the south of San Jose.
At Gold Bar mine in Q2 exploration incurred $1.3 million in expenditure.
In the gold bar mine area, which included 4700 meters or 15400 feet.
Core and RC drilling.
<unk> makes up part of our planned program for 2021 of about $5 million exploration spending.
Drilling activities during the quarter were focused primarily on the range deposits located west of the active fixed line and of the nearby.
Atlas line.
Exploration efforts sort of we get her day risk loans mineralization.
To test potential deposit expansion of Cherry Hill.
The range core drill program.
Confirmed mineralization locally and returned intercepts that we reported.
In our may 10th exploration and definition.
Uptake.
Exploration activities at the Atlas included volume.
500 meters and Ken RC holes after by mapping and modeling identified several drill targets for evaluation.
Some assays remain pending but our best results to date is a deeper intercepts that comprises our.
That composition at about 27 meters or 90 feet of 310 grams per ton gold in whole Oh G. D 010.
This includes a higher rate income goal of about $10.7 meters from 35 feet.
Of 623 grams per tonne gold.
Further 3 oriented core holes are planned for the third quarter channel will round out the initial phase of drilling.
Yes.
Activities at the Tonkin property, including starting a property wide reevaluation regional geology.
Mineralization controls and their context in relation to other large carnival type systems industry.
Early indications of this work suggest Houghton has greater similarities to other properties hosting large carlin type systems to the more than previously thought including the geological setting of lower plate rocks.
Our 19 Hall, RFC and for whole core drilling program totaling some 500 meters has been underway during the third quarter, primarily testing oxide mineralization of the known new suite deposits.
This work is being integrated into an updated geologic model that will dovetail.
<unk> drilling with our improved property wide understanding.
Ongoing exploration activities at Thompson, each pick cabin pop.
Pop Canyon.
All right.
<unk> planned to continue throughout the second half of 2021.
Exploration at Gold Bar, South has successfully advanced the project and is expected to contribute to gold bars from future production.
At the Fox complex in County line.
Exploration will continue throughout 2021.
As production from timber.
Area shifts to.
The <unk> mine underground exploration drilling on <unk> and West plant has been underway with the objective of extending the free deposits near existing and planned structure.
The firm deposits and also remains open at depth potentially.
Potential exists for nearby sub parallel mineralization from the hanging wall and footwall that will also be drill tested.
Underground drilling at the Black Fox mine continued to return encouraging high grade results at the 160 <unk> spend 130 east targets.
Proximal to the main ramp.
Underground Diamond drilling is being completed to identify additional mineralization adjacent to black Fox ore body that could be inserted into Q2 and mine plan.
In the second quarter.
We invested $3.5 million in exploration activity, including some 26500 meters of core drilling focused around the stock west stock.
Stock main targets at the stock property.
And the whiskey, Jack and Gibson targets at Grey Fox.
The stock exploration area sits adjacent to our stock now with.
Which currently processes or from our Blackhawks and cruise lines' renewal process or from the historical underground stock line.
Which operated intermittently.
From the pension <unk> until 2004 and produced a 137000 accounts of the goals.
The southwest Mineralized zone was discovered in mid 2019.
And in 2020 exploration activities were focused on follow up drilling.
Initial results suggest the potential to define a significant new zone of mineralization.
Mile or about 800 meters from our stock processing facility.
In Q2, 2021, 4 drill rigs were secured F stock to infill and expand the known dimensions of growth mineralization.
A total of 20008 meters of surface exploration drilling was completed during the quarter at stock West and stock name.
With the primary focus at the stock West Zone.
<unk> also completed.
<unk> hundred 61 meters to test the extension of ships below the underground workings on stock line.
Activities at the Grey Fox project concluded drilling targets with a focus on the reinterpretation of local meeting trends at the whiskey, Jack and getting some targets, we expect the resource model to be updated.
In the second half of 2021.
During the second quarter, we reported <unk>.
Stock West assay results in our previously mentioned may 10th upbeat.
We have made good progress improving sample warehouses turnaround times that assay labs in both Ontario and Nevada.
And on increasing drilling capacity with additional rigs in both jurisdictions.
As a result, we anticipate updating exploration and delineation results before the end of Q3.
I'll now return the phone back to Rob.
Yeah.
Okay.
Thank you Peter I understood I was silent we found true silence who's moving on Im sorry.
Thanks, Steve.
I'd like to talk about how we're going to develop 1 of our assets in a way that I believe has the potential to create significant value.
Sure.
Q in mining.
As you know we have a large profit project losses, Louis it's a giant within our portfolio of properties.
And a giant on a global scale.
I do not believe the potential value of losses is reflected in our price.
In our share price and that's something.
But we're determined to change.
Furthermore, I believe there are several reasons why it has remained undervalued.
First Los Angeles has a number of risks associated with it.
It is remote with limited access.
With only road access 5 months of the year.
It is only at a preliminary economic assessment stage.
So uncertainty remains about its resources.
It's economic projections cap.
Capex and permitting.
And large investment is required to reduce these risks.
And unfortunately with funding requirements are significantly greater than.
Mcewen Mining's Treasury.
Without resorting to.
Our financing that would lead to considerable.
Share dilution.
Second.
Q and mining Hasnt head.
Management, GAAP and copper experience to development or at least perceived by the market.
And we've done quite a bit to correct that situation, putting together a large team.
Very experienced copper people.
And third the market prefers.
Appears to prefer to invest in a pure copper play.
Copper development company.
Over a small gold producers such as ourselves.
With a large cash hungry copper development story.
So to surface value of losses, as we considered a number of alternatives thats. The first 1 was to self fund it.
But because of the large potential dilution involved with funding it ourselves.
We dismiss that alternative is unattractive.
The second was to seek out a joint venture or an outright sale.
And we.
<unk> had discussions with a number of nature mining company led by Treasury and the experience to.
To build in.
But we wanted to maintain a continuing interest and none of the companies we spoke to London to joint venture. They all wanted to buy and it was a 100%.
And.
We'd be left with no continuing interest in.
In the property, we had suggest to all of them that we'd like to retain a royalty because this property is.
Net a 36 year life from the him well.
Robust economics at this point and it would be ashamed to give it away at an early stage.
When the copper price seems to be going higher through to the electrification of the world's transportation system and renewable energies.
All big users of copper and a pre.
Adjusted deficit coming in the future in terms of the supply of copper.
The third.
Option was distributing it to our shareholders. This idea has been around since the days of Minera, Andes, which preceded in Q in mining.
And never gained traction for a couple of reasons.
And they remain.
Complex tax structure.
That needs to be dismembered.
And upon distributions to our shareholders there'd be attached to them both for Mcewen mining and for the shareholders receiving the development or the distribution.
In addiction.
Distributing it the company would have to go out and do some fund raising.
And it's not at this stage right now because of the issues I mentioned earlier on.
To get a large value for the asset.
The fourth option, we looked at and have decided we want to go forward with is to privately funded subsidiary that holds losses illness.
And.
Advanced approach Act.
Moving it towards a pre feasibility study and then.
Laterally onto a feasibility stage.
But getting it towards a pre feasibility getting year round access constructed which is underway right now.
And then within 12 to 14 months, taking it public.
If you look at it.
We believe this is a good.
The best alternatives from maximizing the value for Mcewen the shareholders.
If you look at copper project that large copper projects that have been purchased.
Between 2010 and 2018.
You can see.
That the stage of development of the project.
He is clearly reflected in the value paid for.
For pound.
So.
At the earliest stage, where you have some drill results and you've come up with a resource.
That is.
The lowest amount and when you go all the range from that too.
Preliminary economic assessment onto a pre feasibility and then on to a feasibility study with.
The value incrementally increases.
And that's the strategy, we've taken that we can see a significant increase in.
In the value of the property by.
Solving the access problem by doing more drilling.
And completing the studies environmental metallurgical and other to produce.
Pre feasibility study.
And then you go on to the feasibility study.
To get the ball rolling and we didn't have the money in when we are at a disadvantage in terms of flow.
Going public.
And I decided personally.
Get the ball rolling.
By committing $40 million.
The up to $80 million were looking to raise.
And that will allow us to move the project had quite aggressively.
<unk>.
The road into the property the new route is now into its 15th day construction.
It'll take us the better part of the year to complete that.
But it'll make.
Make a huge difference on this project.
What might it do.
<unk>.
My investment is a related party transaction.
We ask the disinterested directors on the board.
Which is to everyone except myself.
2.
Engage an independent.
Value were to look at what.
Q and mining was getting relative to the market.
And.
So there we were looking at $175 million on that property plus a royalty of 1.25%.
And.
We think right now the projects valued at about just under copper from 29.5 billion pounds of copper in the indicated and inferred categories.
It's valued at about <unk> 6 of a cent.
Moving to.
The pre feasibility and feasibility into.
You can move to <unk> <unk> per pound 6 cents, a pound at even higher than that if you're in a strong market.
And if you do the math you can understand why we see this creating the biggest value from.
Q and mining rather than selling out to a company today.
Early stage at what appears to be a strong bull market developing copper.
This point I'd like to thank you for attending an invite to.
Through our question and answer period.
Operator could you.
Open up the phones for question and answers.
Certainly and as a reminder to ask a question press Star then the number 1 on your telephone keypad.
So let's draw your question press the pound key.
And your first question comes from Jake.
<unk> of Alliance Global partners.
Hey, Ryan.
Thanks for taking my questions.
I can share.
So it's good to see that cockpit Goldberg are trending down I'm. Just curious if we should expect to see from further improvements here over the next few quarters and if so could you maybe touch on some of the operational improvements that are driving us.
Certainly I'll pass that question over to Peter.
Yes, Hi, Jay Thanks for your question.
We released the feasibility of Youre aware.
We're driving towards that.
That guidance, we're not providing updated cost guidance at this time.
But <unk>.
You can certainly see from our production profile and coffered trending quite well relative to the feasibility study.
The best information, we can share at this time.
I think.
Regarding where to improve with the same errors and we spoke on the last quarters regarding the mining.
The process plant and just general administration, our areas of focus.
We continue to look for.
<unk>.
In our mind anymore for your mining contractors.
Regarding processing, we've been completing a of that reach.
Program, which I think we talked about last call.
And that was targeting a run of mine leaching. So those tests are just coming true.
Ben.
Fairly positive, but we're in the analysis day jokes and what that means to the split.
How much we could.
<unk> placed on the pad of ROM vs Crusher agglomerate.
And lots of business improvements through with Mad men and areas.
Working through synergies some of our synergies with our Mexican operations, we've been utilizing some of the team there to support our Nevada team and things are going quite well.
Okay.
That's helpful and then speaking of Mexico, It looks like residual leaching in Ohio.
It's probably going to conclude in the first half of next year.
And I think you guys touched on this a bit earlier, but do you have any more color on sort of plans for the Mexican assets going forward, whether it be on the M&A front or looking at development out of Phoenix, just any color you have on that score would be helpful.
Thank you Peter.
Yeah.
We knew summer.
Any money there.
You won't hear me you can hear me okay.
Yeah.
We're looking at Phoenix were just.
Pushing on a couple of leaders there to try to improve.
Yeah.
The economics of the project and also looking at.
Source of funding.
Yes.
Started to lean 1 way or the other whether it's you know M&A there or are developing it yourself.
Mhm Mhm that's right.
Got it okay. That's all on my end, Thanks again Robyn.
On a good quarter.
Okay. Thank you.
Thank you. Your next question is from Heiko Ihle.
Thanks for taking my questions can you hear me all right.
Yes Heiko.
Wonderful.
At Fox complex would you be able to give a little more color when you expect to see more.
<unk>, what do you think a cohorts mature amazing outcomes from area or for the site would look like.
Yeah.
Or would you care to answer Heiko.
Sorry, I micro pivotal fingers I hit the wrong button there.
Yes.
Back in I Didnt catch that question Heiko.
No worries I'll repeat it with the Pea at the Fox complex would you be willing to price a little bit more color on 81 would think it's gonna be share with the marketplace and but more importantly also would you think a good 2 amazing outcome scenario from our site would look like in other words, what we should.
Expect to see.
Sure good to remainder of them I'll touch on that second.
Sure.
We're doing you know obviously from extra work in the drilling there Steve.
Do you have shared with you we're targeting Q4 of releasing the P. A.
I'm likely to the earlier side of that our current schedule shows.
So I expect to see that before the year end.
You know good 2 amazing.
How big do we want to dream here.
In the P. A.
First step of our expansion, we're targeting a 10 year mine life from something North of 100000 ounces a year would be a good project charter, where we're still analyzing their resources and waiting on some results from <unk>.
Optimizing our mine plan there so.
It's trending well.
We don't have everything controller, David yet to give you a view on that and that will come out Q4. This year.
Okay.
Moving on to copper and do the interest and the loss of Lula's. That's been tomorrow will have been a month since the initial announcement how is the deal coming along and is there any other future timelines that you can maybe disclose sales I know you said 12 months from the original press release that came out in July but is there any.
Other you know, maybe a hard or soft timeline that youre willing to talk about or what do you think we should.
Spec to see maybe quarter by quarter.
Yes, well.
Low probably close in 2 stages HEICO 1 during this month.
Around the middle of the month.
There is a legacy of a lot of our subsidiaries.
That came with losses you list.
Previous owners losses, Louis Minera Andes setup on.
Elaborate.
<unk> came in Canada.
Argentina.
Those all had to be cleaned up and taking a little longer than we thought they would.
So we're looking to close.
That.
Simplify that structure.
August.
And then again.
And by the end of September.
In terms of a.
The public we'd be looking at.
Up to 12 months after the end of September.
Got it very helpful. Thank you very much.
Youre welcome welcome.
Thank you. Your next question is from John Tumazos.
Well, thank you very much.
Congratulations growth.
Progress.
Yes.
The members of the Mcewen.
Okay.
Factoring of February 1 announcement or another company vehicles they were.
Creating a new management team.
Stronger management team in the heart of former CEO of <unk>.
Tahoe resources, former CEO of Nevada copper.
For that 1 jurisdiction, Nevada company.
And I'm just thinking how.
The Fox complex is at least 3 deposits and the stock complex is always true deposits.
The chairman's downtown.
From Vinci projects for at least 3 projects.
Gold bar is over 3 deposits.
And then there's an old guy.
And then $80 million program on demand is in Argentina.
So.
Is there a whole new management structure to be rolled out.
For Argentina.
Or are Peter and Steve and Stefan and the team margin 72 hours a day.
Or should we just assume that.
Guy.
What I call the downtown Chairman so ex Vijay.
Properties are on a back burner interest there's only so much you can do with Fox and stock.
Old bar versus <unk> Sr.
Marketable treasurer of opportunities.
Excellent question, John and yes, they're working with $76.
Good day.
Yeah.
But Peter do you want to talk about the team that's been assembled for losses. Louis it's quite extensive very deep in hopper experience.
Absolutely and thanks John.
2 questions in.
There's been more than 76 hours in a day coffee is good.
We are we have assembled quite a support team.
Around the project, which includes from internal sort of consultant.
Some additional people on the ground in San Jose.
Sorry, I missed that 1.
And.
And also external consultants, so internally, we've beefed up with the construction manager Gary Cochran.
Hum.
A former Anglo employee very very.
Decorated career of mine building, we brought on Bill Thomas 1 of his last projects with Constancia.
Dave Tyler who has been doing.
Works for us on all our technical projects is starting to get more involved.
And then Jim Sorenson from Samuel.
You may have heard of it's quite a large project career. In addition to Samuel on the external side and their team.
<unk> brought on back to them and their copper excellence group they've meadows.
Who would be Ah study manager for the Allbritton project.
They've recently come into the into the fold.
And then after our case he has assembled.
Very top team Dr. Sullivan.
And Sylvia for the resource.
Development.
So they are actively engaged with our team on developing drill plans.
The mine engineering side, we've involved the Gerald widow and his group.
And the enterprise optimizer and that actually that were kicked off today, where you're looking at sort of optimizations around phasing them all of that so we have quite an extensive group.
Restructure I could go on and on and on but it's true.
Well I don't know I lost track it over 200 years of experience in large corporate projects.
For capital projects.
<unk>.
<unk> team advancing that John.
So you and Steve and stuff and arent managing the Argentina theater of operations, where in Nevada in Ontario plenty.
Where the touch it out below.
Our management team, so myself and Steve.
Steve Rubin volume on permitting environmental health safety or providing the oversight to that team so they sort of governance and controls.
We monitor and.
Drive load objectives through that team there is an extensive team under each 1 of those areas.
That is actually executing the work.
Okay.
Sure.
Is it too much.
True.
Let's just assume for a second.
Okay.
Management team is delegating and supervising Argentina, but you still have from.
And the stock restart and all of these different good sounds at gold bar.
Yes.
Thanks, guys.
Theaters of operation on North America.
Absolutely I think our results we've been doing it for this year and results from kind of speaking for themselves from that from where we're on track.
Tension, we have beat on commercial production.
We have a very solid team, we'd be sculpt, our operating team as well.
And managers.
And he's the director of operations in Canada.
We have a director of operations for net.
So there's been a lot of expansion of those organizational charts ahead of all of this.
Now of course, you'll guide doesn't take a lot of our time and we're looking at strategic options.
Right now I think we're fairly right fit for this year.
Not knowing any dire need of our growth. So theres always recruitment process going on and we want to hire the right people to advance all of our regions.
Once the PPA is done more no more clearly.
What the next steps are for the Fox expansion.
And.
As I mentioned earlier, we're well positioned to select the contractor and go down the stock shop for dewatering and get the underground drilling they're going to advance the project.
But once we get more clarity on the strategic.
Options and move forward, we'll be able to right fit.
What's remaining at Mcewen mining in terms of our organizational structure.
And I can certainly speak to the finance admin side and all the other areas, where there's been significant recruitment.
Success and building up of her team.
Yeah, John I mean that is from very very good question, you know how many people from ramping.
Kicked on the admin are missing.
We are.
Obviously, putting in the system really helped.
On the line to streamline and automation from record accident year Pizza hut, if I cant forecasting system a number of other operational.
<unk> system on the go to here he can only buy engineered line Atlas.
We are recruiting as Peter said.
Al.
Hum.
Cash back to levels not on I'm thinking about succession planning.
Often comment that non Mcewen Congress specifically path.
Got it.
We go from here.
On the intention at that time.
I'm going to keep growing public company.
So from our dedicated management team.
And reported.
An example.
So from now we grew Monica Homburg are quite.
Quite comfortably.
Mmm assumptions.
Some of that.
Okay.
Uh huh.
I could ask a different follow up thank you very much Anna.
Youre out your results improved to lose only a penny.
With all this activity of new hiring going on.
Can you talk to what the Capex was in the June quarter.
And how many of these.
New pay for capitalized versus Expensed.
Most of the capital for the quarter really related to the from a mine.
Mine project in that 1.
Sure.
Your line I think from cloud from long time.
The individual family income.
We're capitalized interest you've got it.
Ongoing matching true a lot of them were the conditions were sort of already there and we're growing our cash from them.
From a replacement and most of them are.
Combining position on finding the right people.
Okay.
And in terms of EBIT partnering.
Catenary that kind of level I don't think the volume.
From a position at that level income.
The price or the origin chain consultants from team members capitalized for vs.
Expense.
At the moment.
According to U S GAAP.
Thanks.
When we go forward into Mcewen copper.
The momentum, we're thinking maybe investing will be able to follow <unk> and will be capitalized.
So it's really amazing that you only lost a panel with all this activity going on congratulations.
Thank you.
Yes.
Thank you. Your next question question is from David Denison.
Good afternoon, Rob and team David Denison individual investor.
Follow up with his company.
Yes.
For I think quest from Minera Andes. So a couple of questions again, just as an individual investor.
First question is what can I expect as a current mcewen mining investor in the next 12.18 20 months.
The mcewen copper progresses and things.
Different question as you hope or expect.
And then the second.
The question is the 100% owned.
Maybe I misheard this or correct me, if I'm wrong, but the 100% owned <unk>.
Property or assets that you have down next to the San Jose mine that Youre drilling what does that mean that if you find something does that mean it becomes.
Good job sooner under the current structure, where you've got 49% or you don't know that yet over.
Okay.
San Jose tourists.
Property debt.
Minera Andes held.
There are 2 sets of properties around the mine Minera Andes headlines Haas shelf had another from a number of years ago.
We merge those 2 interest together.
So they are all contained within the San Jose mine property and under net.
<unk>, Santa Cruz, which is a subset controls to mine.
We own 49%.
Of that company, which is the mine in the property and each of harsher than yourselves retained in 2% MSR on the properties we've ended in.
So we don't have any 100% owned properties in the vicinity of San Jose any longer.
Okay, Okay, I, Miss I guess I misheard that there was no drilling in on it you're 100% owned or something like that so okay. Thank you for that clarification.
Dan.
On the copper project.
The because it's Argentina and because it's.
No.
Sort of limited access we will gain.
Access to the property in.
November.
We have a plan to do 50 feet 53000 meters of drilling.
There are ongoing studies.
The environmental permitting.
Metallurgical economic community relations.
We hope to advance the project significantly next year through the drilling and increase the confidence.
In the resources there.
<unk> done.
First net will be updating the.
In the area of economic assessment. It was done in 2017, and we're just looking at selective huh.
From a cost of changed looking.
Looking at how we.
Has proposed to mine and if there are ways of reducing costs from lowering capital.
Yeah.
Yeah.
And then moving onto a pre feasibility study.
That would probably be.
Completed no earlier than the end of next year.
When do you want to go public.
Before that let you.
Have a drill season right now.
That really run this from.
Denver.
To the end of March early April.
We're putting in camps that will allow us to operate through that period.
Road construction.
Started on what we call the northern route.
Which we believe will give us 12 months access to the property.
Lower altitude.
Hmm.
In <unk>.
Less problems with the snow apparent weighted.
You have to go over to <unk>.
Passengers, 1.4000 meters.
There are 4200 meters and theirs.
With suggesting snow and that even at 20 feet of snow up there.
So in the near future and with all the way up.
And down from those passes zone.
We really struggled from a long time trying to.
Economically true project because you have this tiny little window, where you can get in setup materials start drilling and then you have to take them out and.
Sure.
It could.
It would be a huge boost from my mind from gross profit.
I'd like to take a public within 12 months.
12 to 14 months, where we are today.
Hope that answers your question.
Mostly I guess looking at your Crystal ball Rob.
And 12, 18, or let's say 25 months from now.
If things progress as you want to know big obstacles.
Mcewen copper.
Gone public.
Interest from the from the markets.
As our current Mcewen mining shareholder derive get anything from that or do I have simply have to buy into that as it develops over.
Yeah.
Under our current plan.
We look at distributions to shareholders of an interest.
And that has tax consequences for both mcewen mining and for the shareholders receiving net distributions.
It has a taxable event.
Many people will probably want to sell to cover off the taxes.
So we looked at it in central is the best way to get the value.
We will need to advance the project.
If you look at the.
Financing we're looking.
The range 40.
$80 million.
At the clearance.
Rice of the issue.
If we just raise 40.
It would be mcewen mining would continue to 482% interest.
And the company.
Meyer to going public.
And has a 1% interest on that property.
If you look at the past.
So large.
Copper transactions.
Between 2010 and 2018.
You can see a progression in value and as you move from a resource and then pega than F. <unk>.
Tcs is already setting and a feasibility study.
Hum progression in value.
So.
If we said our drilling confirms and upgrades of resource when you hit 29, continuing to have 29.5 billion pounds processing.
And she got 3.
<unk> for them.
We've been looking at a value of $885 million.
If you've got 5 pounds.
Looking at 1.4.75 billion.
And Q1.
He has a large interest.
Profit.
In that country.
So there.
I think Lawson Lewis.
In this new vehicle.
Would be a very attractive asset.
And quite comparable.
To a number of things.
<unk>.
<unk> single asset about profit developers I say right now.
Which carry significantly higher market caps.
But we have to do the work first to justify the market share.
Yeah.
Thank you Robin sorry, if it was a question very little remedial I'm not a mining expert by any stretch just from an individual investor.
Thanks.
You're welcome anytime.
Anytime.
Operator any other questions.
Sorry, no. There are no further questions at this time I will turn the call back over to you Mr. Mcewen.
Thank you operator, I'd like to thank everyone for joining us today.
Hey, Chen.
Yeah.
Best is yet to come thank you.
Yeah.
Thank you. This does conclude today's conference call you may now disconnect.
Yeah.