Q4 2021 McEwen Mining Inc Earnings Call
Hello, Ladies and gentlemen, and welcome to Mcewen mining Q4 end of year, and 2021 operating and financial results Conference call present from the company today are Rob Mcewen, Chairman and chief owner.
O'donohue VP corporate controller, and interim CFO , Peter MA Chief operating Officer, Michael Matting, Vice President Andy's confirmation Minera S. H.
Steve Mcgibbon Executive Vice President of exploration after the speaker's presentation. There will be a question did answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question press the pound key I will now turn the call over to Mr. Rob Mcewen.
Chief owner. Please go ahead Sir.
Thank you operator.
And Hello, and welcome to them.
Hello shareholders and investors.
As you know we've been working.
To turn their fortunes around today, we're going to discuss the progress that we made in 2021 and provide our outlook for this year.
In 2021.
We had a number of notable.
Steps of improvement, we increased our production lowered the cost.
Cost per ounce center operations delivered positive exploration results.
Along with our preliminary economic assessment for our Fox complex.
Showing that there is a 10 year life out in front of US there and we created Mcewen copper to fund the advancement of our losses and less copper project.
Today on the call a number of our officers will be talking about.
2021 results and looking forward into this year.
And we're going to start with sugar N.
And.
It's not on your.
You're at Michigan.
Thank you Rob Good day, everyone.
I'll finish up our full launch.
Our future improve our gold bar on Fox complex mine in training trained to kind of change one I'll start you're training turnkey March by the beginning of the COVID-19 pandemic.
Although most significantly impacted by COVID-19 I'll.
Allocation of all <unk> got to make sure I'm pretty sure I saw on the state money to generate $10 million in dividend payments to them our point in Miami.
So anything you want.
I'll leave it up it would be kind of yes, which includes cash and cash declared all 50 ballpark forgive me I'm, often fox, including its pretax cost of $6 3 million in restaurant.
Investment in short time your regimen.
And sometimes that should be a cash equivalent of one park in New York.
Frictionless event, three or four months, we have 60.
You see $3 91 door locks.
Thank you Frank do you want.
Thank you Tracy warm, we computed refinancing transactions, which included a $14 million.
Well, what can be done probably because it's me.
The advancement of amongst others.
Yes.
I'll be false complex here.
In Canada before my eye Pinnacle, much calmer sharp reduction on Darlington change one.
Head of schedule.
We are especially that'd be mined we can change towards the new rack, all Splunk Warrington Gemini chip.
Also true intrinsic drink to.
Primarily we'd be we continue to monitor all drinking by gene by gene copies are expanding shelf by terrorists contract.
Moving to our marketing messages first I'm also.
So like just throw on procurement.
Oh occurring between operational.
Yeah, I'll stop here and as we all.
No what is happening in D C.
In the global Arena right.
We started the year, we do very heightened zoom calls.
Already in parking or law.
Our cash cost of our house.
How about Petrofac pause $1.
We aspire to see I'll say.
With the increasing gold price yeah life at current gold prices, averaging 19 object.
This is something that we are expecting that we would be a cluster in parts of the world you won't go to the digital prices excuse me.
We expect to see offset we'd be good price.
It would be risky and goes awesome storytelling to advanced the project took isn't really start.
Because you can make a speech.
This spending will be our content and our economy acquaint us on this space. So we are starting to see our all in.
Income statement into any gains will be buffeted by expanded that clean up.
Those houses.
Subsequent to the year Hey, Matt.
Much.
We are interesting quite $1 billion.
Through a flow through financing that would be used as quickly mutual, especially with me for our qualified colleague that installation expenditure.
Building on the U S K E P.
Fox Congress.
And these are all the teams plus we think that we'll be working towards in 'twenty to 'twenty. Two we're not trying to be cultural Peter cooperations Fuji.
I'm not sure if Peter's on the call right now he is in transit.
From the airport.
Alright, I would suggest you orin.
Rob and everybody.
Yes.
Okay welcome.
Thank you Rob Thank you should get.
The three highlights for 2021 were improved production lowering costs and advancing our pipeline of growth projects I'll just take a moment to go through some of those highlights.
For Q4, 2021 consolidated production was 31300 gold ounces and six.
<unk> hundred 83000, silver ounces for 40150, G O or 33% higher than Q4 2020.
Our consolidated production for.
2021 was 154000 and 410 do you own.
The midpoint of our guidance for the year and about 34% higher than 2020.
Production costs.
Hum.
Our cash cost per ounce for 'twenty, one decrease compared to 2020.
2020, and additional reduction remains a focus for this year.
Cash cost yield sold for power one federal mined in 2021 were $14 53, representing an 18% decrease over last year and all in sustaining costs were.
We're 16 35 or 21% below 2020.
2020, we are forecasting production between 153200 72000 geos.
I'll just shipped into each region quickly here Fox complex.
Production from Peru in Q4, 2021 was $94 60 deal was 18% higher as compared to mining out of Black box in Q4 2020.
Fox complex production in 2021 was 30060 deals or 23% higher than production in 2020.
Production guidance in 2020 at the complex.
Based on our full year production for room, where we're fully in production and commercial past commercial loan in full production there.
We'll be wrapping up screw around 44 to 49000 to yield.
2021 cash costs and all one system.
We're in that one.
$14 61.
Or 1% down from the same period last year.
For 2022, we'll just keep continuing a downward trend efforts and working for gum and improved efficiency as we advance our Peru project.
We also came out with the Fox P. A.
It adds another nine that are 80800 ounces of gold so again growing our scale, helping spread out our fixed costs.
That will add.
Add on after the firm is completed.
We have about another two and a half years of room left we added a year of resources in 2021.
IRR on that project is 21% and it's got some nice low cost ounces cash cost be it.
Sub 770, and all in sustaining being around 12 40 66.
Hum.
Sure.
At fault block.
Yeah.
Well, they're extraordinary story of it.
Exploration continues through 2022, Steve will so we'll touch on that more in a bit later.
Gold bar in Nevada.
Our production for Q4, 2021, with 90, 950 deals or 66% higher compared to Q4 2020 operations in Nevada are produced 43850 deals for 'twenty, one as a whole.
Representing 57% increase over 2020.
This was the improved production with mainly due to improved heap leach operating a fish.
Ts and lesser material impact or sorry, no material impacts on COVID-19.
Suspension of operations.
2021 cash costs and all in sustaining per deal for gold bar were $6 87 and 717.
D O D O downy in 'twenty than <unk>.
2020.
<unk> guidance for gold bar in 2022 is 38000 to 44000 Geos.
We will continue addressing reduced courses in Clos in 2022.
We anticipate placing more ROM on the leach pad, which will reduce our melting and agglomeration costs and increasing that Ron placement to about 80% from our historical 50%.
Other highlights.
Change mining contractors to a new fixed unit rate contract and.
So proving out to help lower cost compared to last year.
San Jose moving South Argentina.
Our 49% interest in San Jose attributable production for Q4 2021 was <unk>.
20200, geos, 38% higher than Q4 2020.
As well for the full year production predominantly in <unk> 'twenty.
Thanks, David.
Higher compared to 2020.
Gold and silver production increased.
The lessening COVID-19 restrictions that impacted operations in 2020.
Lots itch and I'll now turn over the presentation to Steve who will talk about our exploration plans in rubles.
Thank you Peter and good afternoon, everyone. During 2021, we invested.
$29 million in exploration at Fox complex in Nevada, and delivered solid results in three important projects.
<unk> been increasing the mine life at room.
Completing our initial resource estimate at stock West and completed initial assessments of Tonkin Rooster and Atlas in Nevada.
<unk> focused on our principal goal in 2022 of one cost effectively discovering and extending gould deposits adjacent to our existing operations to drill testing very attractive exploration targets at stock and three seeking to expand through skill further to depth.
And in other areas.
During 2021, we completed.
<unk> 250000 features 77000 meters of drilling focused on stock and Grey Fox properties two.
2021, delineation drilling at <unk> has expanded the deposit further to the west.
<unk> 2021 results from drilling was a 20 meter true width intercepted 743 grams per ton gold in hole 200.
085 points.
2022, Diamond drilling will focus on extending streams mine life through resource expansion at depth in 2021.
24300, <unk> were produced from <unk> and as at year end 2021 indicated resource additions at <unk> and Grey Fox and some 317000 ounces at a discovery cost of less than $55 per ounce and in addition, we released.
An initial resource estimate at stock West that includes 144000 ounces indicated and.
111000 ounces of inferred material.
The stock exploration area is adjacent to our stock mill, which currently processes or from.
Drilling planned for 2022 will follow up on the 2021 drilling yourself in pool F. 'twenty, one 202, which in calendar 'twenty one meters true width of $4 two nine gram per tonne material at stock West and mean Gibson.
This intercept connects the mineralization at stock West It will materially enlarge the boundaries of the stock West mineralization system.
Visible GUL has been noted in several drill holes from our exploration.
On stock main in the historic stock mine.
Sallow.
Drill intercepts include.
Nine one meters up 743 grams per tonne gold.
Including two six meters of more than 23 grams per tonne gold within 25 meters of surface from Paul S. M 21, who too for the exploration budget for 2022 at Fox is about $10 million.
Now at gold bar in 2021, we completed 17500 or 5300 meters of drilling which included some 80 620 feet 2630 meters of metallurgical geotechnical and drilling programs had ridge and Tonkin Rooster Julia.
Any nation programs were conducted at Atlas pitch southwest pick extension and cabin more.
The gold bar exploration budget for 2022 is two and a half million dollars and we'll be targeting replacement of mining depletion and growth of mineral resources and reserves.
<unk> of delineation drilling at cabin Moore and southwest pick extension is ongoing.
We'll focus on near mine exploration that can offset mining depletion and grow mineral resources over time.
San Jose our 49% interest in Argentina, the San Jose Mine Mcewen mining is funding a pro rata portion of a $3 $5 million exploration program for 2022, San Jose property surrounds Newmont's, Cerro <expletive> mine and its host to high grade at the thermal Gould.
And silver deposits.
Important to the areas of exploration in 2021 were San Jose and Savedra located in the center of the property.
Exploration drilling in the mine area at San Jose returned several encouraging results, including six three meters of 44 point.
<unk> four grams per ton gold in the battalion vein, one nine meters of 14, five grams per ton and 342 grams per ton silver in the Manto vein and four three meters of $14 nine grams per tonne gold and nearly 1400 grams per ton silver in the Emilia vein.
<unk> is a new newly acquired property 70 kilometers south of San Jose It represents a bulk mineralization target six initial holds an 8500 meters of planned drilling for 2022 is to demonstrate continuity of high grades.
Silver.
Once that has been recognized on surface.
This concludes the exploration portion of the presentation and I will pass it back to Mark.
Thank you Steve.
I'd like to now introduce our newest member.
The routine Michael netting he is.
He is looking after our.
Mcewan copper.
He has spent.
Seven years working for Barrick in San Juan Province, Argentina.
Both had valid Darrow mine and Pascua Lama.
Yeah.
I can say he has extensive experience in San Juan He lived there for seven years and.
To his three daughters were born there. So he is strong.
<unk>, there politically and <unk>.
Commercially.
So.
We just returned from a trip down.
To.
Since it was property and I'll ask Michael to speak about that.
Michael Thank you so much fuller.
This is.
As Rob said this senior management, just came back from San Juan Argentina.
We visited our Lasalle properties and had the opportunity to meet key stakeholders, including South one governor check you in Yack Minister of mines close us to deal and the culling just EMEA you were all positive.
Jake and once it's too advanced as quickly as possible.
We visited the site and also had the opportunity to drive a new access roads that we are currently developing that is significantly lower than our coolant explanation.
Which will almost a low for year round access to the sites and should help us to develop the properties quicker.
I'll chat the opportunity just to see how well our drill program advancing.
And.
This is an exciting opportunity as we have heard by all stakeholders that you met during that visit.
We get.
Thank you Michael.
Yes.
Before starting question and answers I want to make a couple of comments for those of you unfamiliar with the term G O.
Which you heard it's not that we're employing a lot more geologists, but the geos.
Our gold equivalent ounces and in that is converting the silver ounces that come out of our operations.
In Argentina, and southern Nevada are converted to a gold equivalent.
The split is referred to as Ceos.
Michael just mentioned.
The.
New access road, we're looking at is lower.
That's lower elevation.
And it lacks the high <unk>.
Current route in there.
It's too high mountain passes that we have to pass that are prone to giddings.
Closed because of snow load them.
And this new route is a quite an important development.
For that project.
Yeah.
We're willing to say that looking forward our production for 2022.
We expected the trend of lowering cost per ounce to continue and there will be a slight increase in production, but I wanted to alert everybody to the fact that in the first quarter, we're going to experience higher cost.
Covid and was a large contributor to that but it's contributed to a lot of companies, having higher cost, but we have it.
It was higher costs, both in humans and in Nevada, So Q1 will there'll be a hiccup than us.
Projected to be lower going forward for the balance of the year.
Yeah.
There are a number of questions that have been asked.
I wanted to speak to them.
Before opening up for further questions.
Cost guidance was given.
Right here now and she's done.
For the year.
<unk>.
There is.
The commodity prices there is some sensitivity given by should goon, an oil and and the offset of a higher gold price.
It was a big issue of.
We're trading below a dollar and the New York stock exchange as many of you know has given us notice that they don't like stocks below a dollar and if within a six month period. It isn't trading above a dollar then you face two decisions one to accept the listing or you go.
And think about it consolidation.
We've had some experience with this before and each time.
We've entered into this danger zone, we've been able to escape it.
I think that we will be able to do that again.
There are number of reasons for that one the exploration.
Steve spoke about.
We believe it will allow us to reduce the payback period in the preliminary economic assessment for the Fox complex.
Which it would be quite positive.
Cuz that is projected to be a nine year mine life as we know it.
The annual production of about 80000 ounces a year.
Almost 660% higher than what we're currently doing and then a significant lower cost, but it's important to get the payback then too.
Two we.
We will be coming out later this year with.
Our progress at losses Xu lists.
Where.
We'll be updating the preliminary economic assessment, we've been looking at the project going through a number of simulations.
Optimization simulations and believe there is a larger deposits there in a more deposits.
Profitable Plaza.
Using a $3 copper price in koppers now about four and a half dollars so 50% higher.
We decided to.
The best way to develop this project are to fund the development of Los Angeles.
Just to put it into a separate company.
And some people have questioned that decision.
It was largely driven by a desire.
Not to issue a lot of shares.
In Mcewen mining to fund it.
And it was also something we wanted to reduce the potential for significant dilution.
You know that would be required to fund the project within Mcewen mining.
Also there is a very.
Distinct preference by most investors for specific place like a pure copper play or a pure precious metal play.
And that's why we put it out.
A question relating to the QM pop areas when do we expect to close the $60 million to $80 million financing, we announced last year and we hope to conclude that.
We expect to conclude that in the first quarter of this year.
Okay.
It's still.
Relevant to them.
The queue in mining.
And the Q on copper.
With this financing that we expect to close by the end of the first quarter. The human would have 69% interest in the QM copper.
It's been some people asking well what would the percentage ownership D. D. D. Following the IPO the IPO is still <unk>.
Some time away.
But I do believe that.
Losses, <unk> represent a very valuable asset for us.
We will enhance its value.
In its form as a separate company.
And it would be.
Appear very attractive to copper investors as you heard earlier on.
Or may have a Canadian mining journal.
Ranked it as the 10th or the ninth largest undeveloped copper deposits in the world.
We also in the Q1 level.
Q and mining level, we had.
$50 million of debt that we were to start the retirement of it in August of this year.
No.
We will be moving that we expect to have that.
Pushed out by a year taking that.
Our immediate need offer.
Balance sheet.
And there's also.
Some people were saying why hasn't management in the buying mode.
They're long blackout periods.
That.
We have to observe when we're releasing financials or any significant news of the companies such as the preliminary economic assessment.
So that's largely been why people haven't.
Then adding to their positions.
In terms of profitability.
You should know that since it is.
The queue of copper will be a subsidiary.
Of Mcewen mining.
And mcewen mining being a large shareholder.
The money, we spend at losses zealous.
A large portion of it will be reflected on our income statement as an expense.
So the question of profitability will be up in the air for quite a while as we're spending money there.
Operationally, our mines are generating positive cash flow.
And with that I.
I'd like to open it up for.
Questions and answers.
Thank you operator.
No problem as a reminder to ask a question you will need to press star followed by the number one on your telephone keypad to withdraw your question press the pound key.
Your first question comes from the line of Jacob Schakowsky with Alliance Global partners.
Hey, Rob Hey, Thanks for taking my questions, Hey, Rob sure.
I think you mentioned that cost guidance was given on the call I might've missed it my apologies for that would you mind, just walking us through that again.
Sure.
Yes.
First quarter, just going to be quite expensive I'll do it on a consolidated basis first.
Cash of 1900.
All in sustaining of $24 50.
Second quarter 1400, cash $18 50, all in sustaining.
Third quarter.
<unk> thousand $230.
And.
$1550.
And in the fourth quarter $1200 cash.
And 13 50.
All in sustaining.
Yeah.
It was COVID-19 and.
Weather.
It affected both black Fox and.
Yeah.
Gold bar during the first quarter and that caused that bump up.
N N <unk>.
Problem in the mill with a piece of equipment and also at Black Fox.
But you can see the trend.
Aside from that ugly bump in the first quarter as.
Is progressively lower.
Yeah, No. That's that's helpful and it's good to see the trend in the second half.
Okay, and then just quickly at gold bar.
You mentioned in the release.
Potentially bringing on the gold bar South satellite deposit in the second half of the year.
Any color on development costs that you expect to incur there.
During the first quarter to kind of bring that tonnage into the mine plan.
I'll ask Peter to shed some light on that.
Yeah, Thanks, Rob Hi, Jake Yeah Goldberg, the Capex for the year is around $10 million.
We're expecting to be able to bring that project on in the second half of this year. So we moved it forward from the feasibility.
Spend if you will.
Most of that spend is to expand the heap leach pad.
Build the gold bar South.
<unk> broad and construction and paid some stage growth stage growth credits.
Got it okay. That's all on my end thanks, Greg.
Thanks Jake.
Your next question comes from the line of Joseph Reagor with Roth Capital Partners.
Yes.
Hey, Robert Jones.
How are you guys doing.
So.
You mentioned, a weather impact in Q1, and I called bar, but looking back to Q4.
Rate was quite a bit below the first three quarters was that planned or was that something.
Where you know the Resourcing and match X rate expectations.
Peter.
Yes.
Yeah.
In Q4, we changed out the mining contractor.
And.
And to lead Florida unit rates, So we didn't quite get the script, what we had hoped for.
And the ore.
So things have gone well not all of the contractors are fully trained.
And we expect her to get back on track this.
Yeah.
Okay.
And then looking at the guide for this year.
Particularly at gold bar.
I think when we've talked about this maybe even over a year ago. There was kind of an expectation of some time around 2022 'twenty 'twenty three to be an uptick in grade.
As you guys completed some pre.
Pre stripping activities and got to a higher grade part of the resource.
Has that been pushed out is it.
Not as high as maybe we had anticipated you know any additional color you can give there as far as you know like going forward expectations on grade.
Yeah.
Not sure, which timeframe, you're referring to but the so we're still in pick west.
And obviously that mining has extended longer than the feasibility by adding in some other.
Card.
Opportunity or as we call it that we've been mining from waste them or in this year. We continued to do that the higher grades will actually come with gold bar South.
The mine plan.
And we're advancing that are ahead of the feasibility quicker into the first half of the year.
Right.
Progressing well, we're expecting approvals in the next month.
Caveat, though that although the gold grades are expected to be higher the recoveries are slightly lower.
Okay.
And then.
Looking at MSA and I realized guidance there is provided by your partner.
But.
There was a pretty decent jump in in both cash costs and all in sustaining costs in Q4.
You know what do you guys attribute that to and you know do we expect that to continue into 2020 two.
Large part of that cost came from Covid.
Yeah.
Mine was largely evacuated for a period of several weeks.
There were.
The number of people that were infected with COVID-19 in it.
They came in and shut down the mine.
It didn't have the production.
At the expenses.
Okay.
I could add a word tallied up could be I believe $11 4 million in 2020.
Pandemics Boston delays as Rob mentioned.
And no issues in Q1, so far.
They started opening their board you heard we've gone downhill, it's improving.
Hum.
We didn't.
The army for ongoing but seem to be getting back to normal when we were there.
Okay.
Yeah.
Alright, I'll turn it over thanks guys.
Thank you Joe.
Your next question comes from the line of Heiko with H C. Wainwright.
Hello, Michael.
Yeah.
Your line is open.
Maybe we should move to the next question.
Yeah.
No.
Okay, we'll move on to the next question. Your next question is from John Tumazos with John Tumazos very independent research.
Thank you.
Hi, John how are things.
Well I've got back down to a lower altitude, it's a and.
And I don't I'm, not looking as far now when.
It's.
Argentinian C for long distances.
Down in the city is here.
Your vision isn't quite as far.
So with all these great metals prices.
Maybe there's a shot of selling out guy or 49% of Minera, San Jose, where eventually mcewen copper.
Do you have enough confidence.
Oh to borrow $25 million.
Maybe by 25 million shares.
You are to sell Minera, San Jose the proceeds would be a lot more than that.
For example, even though guy might be that much or more.
I might also address your NYSE issues too.
Yes, yes.
And we have been gathering to.
Move some of our assets.
Yeah.
We just haven't been able to conclude a transaction on that but definitely that would be.
Hi list would be.
Reducing the debt.
Or eliminating it.
And.
With the extra funds using it and some of the.
Areas you suggested there.
If I can ask a second question.
Looking at the M D N a.
Beginning around page five it mentions reserves at San Jose.
Yeah.
I'm looking at the resources for Ontario.
We're about the same as the end of.
2020, but more at grey Fox and stock West.
Unless it fuller.
Others are other than the first time zones.
Uh huh.
Could you explain the progress where the Ontario reserves resources excuse me stayed the same.
And the documentation that Peter.
Steve and the team need to do.
To classify reserves.
<unk> percent projects.
And I'm, assuming that the absence of much gross profit or net profit.
In current periods, it's not relevant.
Because if you traveled Ontario production costs would fall in the results would improve as more tonnes and grade.
But correct me if that impression is wrong in the current results having impact I'm, just trying to understand the reserve and resource accounts better.
Sure, Alaska, Kidder and seems to weigh in on that question.
Steve do you want to go first on read the resource or I can leave it out.
Yes go ahead Peter.
Okay.
Yeah, Thanks, John Lewis lots of moving pieces there in Ontario.
As I mentioned room, we mined a year and we kept drilling with mine acts in and added a years.
Our resorts, which really is in our mine plan. So it added to our mine planning inventory. So we stayed flat there on our resource reserve basis by mining the euro and by adding another year or so.
Very positive we're looking to try to do the same this year, maybe slightly less maybe 30 40000 ounces.
To add a room.
Oh, Great Fox went up with some drilling around there more focus was on stock West and we came out with the maiden resource.
Of about 250000 ounces and about 185000, if my Memory's correct within the mine plan.
Which made the P. A.
So although it might seem that some of the P. A rear door to decrease or they're there they just need.
More drilling and what we've added in with what we believed were the more shore mine plan constrained.
Ounces at the end of the P. E. So that's why there's a bit of difference between P. A mine planning.
Then the financial models, you're seeing there and the resource numbers and why we decided to raise some more flow through funds.
But both unlock grey Fox in Peru.
Fuller.
A full a full look hadn't been done that no pun intended in the past and so.
When we started putting mining shapes on that again for the same reason, we thought some of the drilling.
Area would require more drilling so.
That might be part of the reason for some of the reduction.
You saw at Fuller.
That's really all it now there over to you.
<unk>.
Maybe maybe Peter what I'll add to that.
Sure.
2022 plan as I had mentioned we believe there is still an opportunity to increase further the resorts in that room.
Most notably from our drilling at the bottom of the deposit also our newer surface drilling at stock West.
Yeah, We believe there is an opportunity to.
Ultimately improve.
The payback period that was in the PGA and <unk> and that would come by a data by adding some additional ounces near surface.
Proximal to the stock mine.
There's further delineation to be undertaken have stock west overtime and.
From an exploration standpoint, while it may not show up in resources. This year any any success we have.
Following up.
The $4 three gram per ton of intercept over 21 meters is going to certainly signal.
Probably a meaningful increase in the resource over time, a little further in depth. So.
<unk>.
And at our San Jose what I can at least best speak to now is because of.
The new <unk>.
Property <unk> yesterday.
So some of San Jose proper that has veins on surface that.
Is a very attractive bulk mineralization opportunity and that's really the focus of a good portion of the exploration program. There this year.
Thank you, Steve and Peter if I could ask a little more.
There's 235000.
Measured indicated and inferred ounces called others.
Yeah.
Black Fox or stock central.
Or Buffalo anchor right or Davis Tuesday.
Did any of those four projects.
<unk>.
And could you tell us kind of which one is the biggest one and others.
Steve Peter Yeah, I would say that.
The biggest one in the other.
Category would likely be stock east.
Which was around 95000.
<unk> broken out Stephen I'll answer matching stocks central.
I'd have to go back and kind of do a calculation on that John and certainly I can report that back to you.
Times before Stephen before Peter.
Sam Vg gold stood alone or was brought into the mcewen mining.
My recollection is that there are three deposits for Davis to sale.
And Buffalo anchor right.
Larger resources.
I'm, assuming the drilling was it.
It was too widely spaced in the current <unk> management, just interpret the resources smaller pending more infield drilling is that fair.
That'd be a fair statement.
Thank you very much thank you for putting up with all my questions.
Glad to China. Thank you.
Your next question is from the line of Heiko.
H C Wainwright.
One of the two.
Can you guys hear me okay.
Now we can yes.
Not sure what happened earlier.
Millwork and all that.
Thanks for taking my question well the second try.
Right and thanks for taking my first time to Hey, Rob geopolitical most of my questions have been answered, but geopolitical risks are all over the news right now I mean for obvious reasons in your conversations with investors or potential business partners do you feel you're getting enough credit for the geopolitically safe jurisdiction.
They have I mean.
I'm thinking of Russian oil versus non Russian oil I'm thinking about north American sourced uranium versus.
Every other source of uranium.
Doing that's supposed to be <unk>.
Thanks for that and you know what can the analysts community and your company do to maybe you know lead up to that.
Don't think political risk has come into the consideration for <unk>.
In North America for Canadian and American assets.
There was questions and it remains about Mexico, but Mexico is a small small part of our portfolio today.
And Argentina has.
Dominated the.
Area of concern.
I'd say about our asset.
With the recent developments in Chile, and Peru in terms of the political leaning at the parties elected.
And the amount of copper produced by those nations.
There has been a decided shift too.
To Argentina.
And it's looking better, but I think they have to do a better job of convincing investors. Its a good place, but we have glencore talking about it.
And developing their output Jon mind, that's close to losses illness.
You have fortescue, making a very large statement about.
Working to develop the hydrogen.
Green energy.
Argentina, they're also exploring near us.
He of lundeen working to develop a copper mine in the same problem. So.
I think you need to see more of that and you're seeing some good copper drill holes that.
I'd say, Argentina is better than the Congo.
Or.
Sure Paul.
Go ahead sorry.
I thought I would concur unsold, probably just about everybody else.
Hum.
Oh.
Right now the political conflicts or just illustrating.
Illustrating the short supply of metals.
In face of the demand profiles that are being constructed.
Uh huh.
Right.
I guess I guess I agree with everything award you said, but probably just a little bit more I mean do you think that investors give you full I mean, most of your assets are in places, where you know you could walk alone and at night and be just fine.
And do you think you'd get enough credit for them.
<unk> already in the marketplace and if no how do you think we might be able to achieve that.
Hum.
As I said I don't think there is any concern about.
The location of our Canadian and American assets.
There's more concern about the operation.
The results coming out of them.
And then Argentina I think people.
Argentina should do a better job on and we should be doing a better job of just highlighting the types of capital investments moving into the country, but argentina needs to be chain.
Changing a few of the rules to make it look like an even more attractive.
Time, so I would say the argentinean asset is receiving the largest discount.
Bob.
And then just a quick clarification in your model.
Or do you guys seems to pick salary inflation for the remainder of the year.
And I assume all of that is baked into the guidance.
Alright.
Salary inflation across the board yes.
Yes.
Hmm.
I'll have to ask you then and Peter for that one.
To date.
Yeah.
Yeah.
Okay.
Great.
All of it.
It was it was just about what inflation factor did we factor to.
Compensation levels.
For the I'm just.
I think we were around.
In Nevada.
Sure Good D M D. The exact numbers yes.
That's why you guys are pretty sure we are talking Brooklyn, 5% inflation rate and that's how we're kind of done operationally we are talking.
Great 0.5% inflation rate.
Okay. Thank you chicken heiko.
But that was it on my end. Thank you all for months.
Sorry about being viewed as their only I'm not sure what happened.
Oh no need to apologize. Thank you appreciate your time bye bye.
Operator.
Your next question comes from the line of Ronny.
Sir.
Sure Hi, Ronnie.
Rob Rob Ive been a long term shareholder and.
I'll watch the Mcewen Mcewen share process five years ago in March it was trading at $4 a share.
And go straight goal was trading at between 12 and $1300 an ounce.
Fast forward today.
We're less than 90, Samsung 19th sensor share Angola, Australia and for $2000 an ounce.
Which is very very disappointed and I'd like for you to give me some color on that and my next question is if you cannot improve your cash flow and profitability in the near future would you be would you be willing to sell the whole company.
To a larger monitor.
Well.
Well turns if you had a bit you'd look at it right.
Right.
I'd have to say we encountered some.
It's a natural problems that were unanticipated and we experience them.
Serious operational issues.
<unk>.
Yeah and I.
I share your disappointment and a very large way.
I think we have some interesting assets in particular and it might sound different because you bought it as a precious metal company, but we happen to have.
Large copper resource.
That makes every other assets carry small right now.
Hum.
And I don't think that's getting value, but as we used in the past two years you've seen copper.
More than double.
And recently, you've seen a lot of other commodities he's trying to do the same thing.
And it has is a very big size. So we're trying to.
Bringing the costs down.
We are going along nicely and then.
Couple of operational.
Missteps pick this stems happens.
It shouldn't them.
But.
That's water under the bridge right now.
But I feel pretty confident we're going to rebuild that.
But it's a testing everyone's patient.
Okay.
Yeah.
To get copper going I put in 40 million My total investment in the company is now $200 million.
No.
And.
Trading at about half the value I pain.
Not happy about that at all.
Yeah.
We're working to resolve that and we spoke about it.
<unk>.
The cost there was a bump in the first quarter, but we're heading down and the margins will be increasing.
Hopefully.
Yeah, I guess the share price is what really I'm looking at a lot of the other miners.
Doubled tripled in the last four years and here we are.
75, we went less impressed.
We went the wrong way.
Yep.
Yeah.
No.
Hum.
I think better times are coming and I see them, but.
Yeah.
It's been hard on everyone.
Okay.
I don't have anything further to add to that.
Thank you.
You're welcome.
Your next question comes from the line of Bill powers, who is a private investor.
Yes, Hi, Ron Thanks, Hi, Brian Thanks for taking my question there today.
Just a quick question on.
I guess the cost scaling and forward what is.
Going to be is it the big drop into Q3.
Versus a slight uptick into Q4 or about a 20% uptick in 'twenty in Q4, what is the kind of yeah.
The surrounding factors for that.
Improved production it through in terms of number of ounces and getting through some of the.
Large waste removal at gold bar.
Okay.
And how quickly could we see a decision I know.
Cruise metals prices at.
Uh huh.
At stock West I know or it whereas you know going forward there I know you're actively.
Actively drilling.
What is the.
I guess do you need another six months another year.
Could you give us some idea on.
What the timeframe is looking like on that side.
We're exploring and very encouraged by what's going on stock mine.
We put out our initial.
For a preliminary economic assessment.
And it is projected a nine year life average production.
80000 ounces, a year, which would be about 60%.
Higher than what.
We're projecting for this year.
It however had a payback period that was not attractive.
Six years, I think where you're using $17 50 on it.
So at a higher gold price it would be a shorter period of time.
Where we expect that the exploration work, we're doing will expand the resource base and have a positive impact on the payback period.
So I mean I guess the question is you know you have near surface material at.
At stock and the stock West.
As far as looking for.
Ways to bring that forward.
Is that something.
Yes, how much more.
Before I know its been.
It's been up to two years before you would go.
Go forward with a decision on construction there.
You know I guess is there ways to do as a smaller initial investment to get.
You know that would those to me would seem to be pretty profitable ounces given the proximity to the to the mill as well as not having a royalty on it.
Yes, that's true.
Sure Peter would you like to give a little more flavor there.
Yeah, absolutely yeah, we're very encouraged and are a very astute question.
That's an exciting project.
You know we have enough resources you see in the P. A to go after it now.
What Robin and Steve have been talking about is.
Drilling up higher in and around the old workings.
And the whole internet at stock West as it did in the foot.
What wall.
Stock main historical working so we're busy drilling.
The old workings and around here and around the new stock West.
Ram.
Or try and find a you know around 100000 ounces.
In the upper part of the mine that we could easily access.
And start mining, while we develop the ramp all the way down to stock West So that that's the strategy.
Drilling there Ben been encouraging as Rob says, we're we're very excited about that we've started.
Sparing the baseline work and the and the work to submit a permit application. So it's no wonder if things work out in the drilling and on the back of that we see that.
Resulting in much less dilution to the shareholders.
It's about a year to get down to the top of stock West.
And about a 10 $10 million.
Estimate on the on the Capex to do that so it's something we could do quickly.
We're working on and hoping to bring something in the second half of this year for a decision for maybe next steps in further advancement.
Yeah, Okay, no that's that sounds M&A, that's I mean with prices I think your base case was $16 50 at today plus or minus 2000.
And you know.
A way to move that forward would be I think very welcomed by pretty much all shareholders. Just given it's the impact it could have been and are moving things forward.
The other thing I'm laughing is Mexico I saw that you put out.
Some a little news on that is that something that.
Is in the cards as far as.
Selling or potentially developing I know there is.
Fairly there are some options that involve relatively low initial capital is that something that you guys are looking actively looking at right now.
Okay.
Peter.
Yep.
Thanks, Rob.
Absolutely we're looking at each of those strategic options. There are still are from folks in the data room.
Looking at purchasing the asset.
We haven't remained idle ourselves on the other options, we've identified a low capital option for about $29 million for phase one.
Should good then.
<unk> and team have been coordinating with the soggy on our potential.
Gold loan option to finance and build phase one.
The permitting has been at bats in May.
They all know the in pit.
Tailings disposal per minute, but both have been advancing the power permits.
<unk> natural gas so.
We have the team there.
We have two potential mills, but.
We could achieve that low capex cost for and we're working on getting quotations for.
Those mills and the final.
Detailed engineering designs in all of the steps that go with that.
That would be something like a.
12 to 18 month construction.
Period from the time, we take the decision to hit the go button, so with the price of gold.
At these levels. If you look at the robust upside case, if you will.
In the feasibility it's quite attractive.
I think payback.
At around the 1900 gold are reduced to just around a year on the $29 million.
It's looking to be a really good project and.
And averaging 30000 ounces of gold for the first six or seven years.
At a cost of.
600 Bucks so it could be a really nice cash generator for.
Essentially mcewen mining or an acquirer.
No and I mean, especially if it can be done partially through debt financing I mean, that's a.
That sounds like.
Got some more work on that I mean, certainly that they.
No.
I would imagine very attractive with a payback of a year. So anyway I hope you can keep us updated on all of that in any way. Thank you for all your time today.
Thank you Bill.
Peter.
Your next question comes from the line of Mark <unk> with Atlanta U S C.
Hello, everyone hear me.
I was there.
Great. Thank you Hi, Rob we spoke a few months ago, I believe or not about the copper I P O but quick question.
Since I work for International Data Corporation, you know our job is to really put names out there and I think with your company do you have any.
D as our plants or get more analyst coverage on wall Street, because I think that would help with your visibility quite a bit.
Yes, well, we wanted to move to copper project.
Forward them.
To a degree and then communicate with the street Covid was restricting that at first but.
No that's a.
In the plans you have ways to do that effectively.
Yes, we do but that's a whole another conversation I just wanted to see if you had plans because I don't think a lot of them.
Big banks, our wall Street, or there's not enough coverage and I know that the future is bright with your company. So that that was my purpose of the question.
Well there is some work we were.
We're working to update the preliminary economic assessment that was done in 2017.
And included in that would be.
On that.
Some of the results coming from the optimization work, that's being done by Australia and company called Whittle consulting.
And they're envisioning.
Through all of the simulation safeguard.
Yes.
What appears would be larger and more profitable.
P a suggested.
We will have to fine tune that and granted it's it.
It's a preliminary economic assessment that is.
It shows that working at at $3 copper price you can improve the economics.
A considerable degree and when you if.
If you were to plug in todays price of copper.
Uh huh.
A very attractive okay.
Definitely that's all I have thank you so much.
Youre welcome Mark.
Kent.
Your next question comes from the line of Jeffrey Hall, who is a shareholder.
Hi, Roger.
Hey.
I'd like your thoughts you know since the announcement of the Mcewen copper we've talked about this.
That was.
I believe July six 2021.
Price of Mcewen mining was $1 35.
Since that announcement, it's gone down a black diamond slow.
Two the price we see today.
I'd like your thoughts on why the market.
And investors have given that a thumbs down.
And.
Secondly.
You've you've created an acute on copper and you said it stayed in the past.
Too low.
Show the value of Mcewen mining.
Why not.
Why not sell all your gold and silver properties.
They're just not it seems like there are hemorrhaging money.
And just go with false.
Forced into the Mcewen cockpit.
Also.
Did you give an update on the CFO condition.
And finally, what would be the list.
Listing date.
The New York Stock Exchange I know those are like three questions asked you bet.
Anyway.
Sure Gibson Yeah.
Yeah.
Well, let's start with the CFO she had.
Had a stroke.
December mid December .
That led to a brain aneurysm and some brain surgery.
She has been recovering well and expects to report back to work next week.
Okay.
On a part time basis.
And we're all very happy about that.
Yeah.
We learned that when they went into the operating when she went into the operating theatre. The doctors gave her a 30% chance of living.
So it was.
Very.
Sudden very sad and.
We're delighted to see recovering shoes.
Athletic individual and that contributed to that right.
Yes.
As a retired anesthesiologist that's great to hear you know my question might just because you know any time you know that.
When the market or when a company reports CFO , leaving it or whatever temporary leave that always you know Gibson.
It gives investors.
Our sense of alarm, but anyway, that's good news.
With respect to selling gold.
Our other assets and just concentrating on the copper.
If you were to look at the potential of the assets that we hold.
Certainly.
Today, it would appear that the largest.
Tension return.
And the longest life asset would be losses illness.
That's never escapes me, it's always been one of my favorite.
Assets in our portfolio because of its size.
And its economic power.
Once developed.
What was important there.
We get a P. A some time ago.
And.
A number of majors looked at it and there were some they said well there are a couple of things that.
We would have liked to see done before convinced this this this is a great deposit.
And so they were looking at us and saying our finances were weak.
We had this big deposit, let's put some lowball bids in there and see if we can get it.
Since then copper price has gone from $2 to now better than four and a half.
Yeah.
And we looked at well could we finance it by just financing the queue in mining.
I'm really not happy with the number of shares we have outstanding in Mcewen mining and John Tumazos, saying, well, let's let's buy some back.
But we didn't have the financial strength to advance our.
Gold and silver assets at.
At the same time is advancing the copper.
So I know some people wonder well why didn't I, just put the $40 million into mcewen.
Right well yeah.
And and you look at it and say, we're gonna have to issue a ton of shares.
So I.
I thought if we could advance and I didn't want to issue a ton of shares in the Q&A.
Alright, if investors prefer a pure play over an amalgam.
Our school costs.
Phil.
Let's create a separate company and that if we can get.
It should create value once we get it fully financed.
For Mcewen mining in it retains a large interest retains a royalty.
The P. A suggests a 36 year life.
Yeah.
Copper is 50% higher.
What it was but the protocol that was all remote.
Hey, Rob can I interrupt with with most of the delays.
From the day from day, one I guess, how are you going to develop that originally your plan before you you went into this mcewen copper.
Oh you did.
With me on that I mean, what.
Yes, yes, yes no.
Question I looked at it at first I thought Okay. We were supposed to have gold bar and he was going to be up and running and we have positive cash flow surplus cash flow that it would allow us to develop okay hold bar flew into a wall Ryan.
Brian we had to scramble for the last two years.
To try to repair the damage.
Am I wrong.
Geological model that sucked enormous amounts of cash out of our system.
So and.
I took on yet believing in the projections on gold bar.
Well I'd, rather have definitely can repay it but.
In hindsight, it would've been better to do equity.
And not have that.
Amount of debt on it and it's not a lot of that but it's it's certainly weighing heavily on.
The company right now.
Rob so on those projections, who made those projections.
With gold bar.
Payoff it apparently.
And I might have missed.
We used to sort of a firm.
Recognized geological consultant.
Okay.
So RK and they.
Look at our resources came up with that geological interpretation okay.
Our geologist compared with.
And the year. After we went into production and we weren't getting the grade or the tonnage that had been projected they came back in and said Oh the interpretation of the deposit is different.
[laughter], rather rather than being laterally distributed it's more concentrated vertically.
And that wiped out a large part of the tonnage we had and the resources.
Is that a true up on their part.
I won't put it exclusively on it.
Okay I see.
We were part of the party.
I see okay, because you have.
Wow Yeah.
Okay, well that that that just slammed us in the head.
And.
Then all of 'twenty, 2020 , a large part of 'twenty one triangle.
The Gogo is there more of it and.
All of a sudden it was like we looked at it and it rather continuous the ore body and what the reinterpretation said it wasn't didn't extend the full distance in fact, theres a big chunk right in the middle.
Okay.
I'm still learning as I go to I mean, I've been investing with your company. Since 2016. When you know you had no debt you've paid a dividend I mean, it was only a penny but anyway.
Well do you still use that company then.
So.
For projections are.
Yeah, that's an excellent question.
Believe in some cases, we do they're different.
Areas they are international.
Oh I see okay.
And then yeah.
I know I threw something about you know the delisting date Guy I mean, I hope you don't have to do that and I Hope you don't do a reverse split because as I've told you on my email I know they've been kind of harsh [laughter].
But well have to leave it.
That'll be the last nail in the coughing I hope anyway, so what what date do we look at where I mean you.
You have to get this price above $1.
Yeah, you'll have to be above a dollar for 30 days trading days.
Right.
Alright that happening.
Okay. So it just depends on.
But what's what.
The day to day to day announcement, what's the cutoff date, and they say well.
Is it six months period yet.
Right, Okay. So that protects months from the date of notice.
Okay. So I'll figure that okay, I'll figure that it's into June .
Okay.
But you kind of feel confident you can.
Address that.
Sure the Hell of it a try.
[laughter] yeah okay.
And I think I think that's it for me.
Yeah, Yeah yeah.
We did get a nice little of course, Gold's down 50 about.
About Sidney.
Dollars today, I think it's under yeah.
And the 2000, but.
But I guess it boils down.
Iran is going to release, some oil in anyway, but hey, Rob I think that's it thanks for bearing with me.
And get this puppy Garland.
That's right.
[laughter], alright, well that rod.
Jeff We just came back from as Michael said came back from Argentina.
There's a lot of excitement down there right now and.
We'll be putting out a P. A.
An updated Pea a on the.
Lots of illness protection when you start doing some of the math it starts looking very interesting.
Okay.
You know, let's just say you know we've been hearing this for a long time for me I know.
No. It's it's.
Alright.
Alright be safe and thanks, a lot for taking my call you're welcome. Thank you bye bye.
Operator next question.
And there are no further questions at this time I'll turn the call back over to you.
Thank you very much operator, thank you everyone for attending.
<unk> is a friend of mine Ted Rogers used to say the best is yet to come I know, it's a it's been a long wait but yeah.
Metal prices are moving in the direction that they are a function of the huge amounts of liquidity that's been pumped into the system by governments around the world.
The large levels of debt.
And low interest rates and that's an environment.
Lynch.
Hard assets appreciate in value.
And gold being one of them.
Most valuable lift those but copper is also.
Moving as we electrify the world and.
I think we have the right assets and the trends.
Pumps and hurdles we've had.
The trend is.
Lower our production costs and.
And opening of the margins.
Profit margin.
Thank you very much for joining us today.
Goodbye.
Thank you operator conference call. Thank you you may now disconnect at this time.
Yeah.
[music].
Yeah.
[music].