Q1 2024 McEwen Mining Inc Earnings Call
Okay.
Operator: Hello, ladies and gentlemen. Welcome to McEwen Mining's Q1 2024 Operating and Financial Results Conference Call. Present from the company today are Rob McEwen, Chairman and Chief Owner, Perry Ing, Chief Financial Officer, Jeff Chan, Vice President of Finance, William Shaver, Chief Operating Officer, Stefan Spears, Vice President of Corporate Development, Michael Meding, Vice President and General Manager of McEwen Copper, and Carmen Diges, General Counsel and Secretary. After each speaker's presentation, there will be a question and answer session. If you would like to ask a question during this time, press star followed by the number one on your telephone keypad.
Hello, Ladies and gentlemen, welcome to Mcewen Mining's Q1, 'twenty 'twenty four operating and financial results Conference call present from the company today are Rob Mcewen, Chairman and Chief owner, Harry Yang Chief Financial Officer, Jeff Chen Vice President Finance.
Operator: William Schaefer, Chief operating Officer Stephen.
Operator: Stephan years, Vice President corporate development, Michael netting Vice President and general manager of Mcewen, copper and Carmen, Yes, General Counsel and Secretary after the speaker's presentation. There will be a question and answer session. If you would like to ask a question. During this time.
Operator: Press Star followed by the number one on your telephone keypad. If you would like to withdraw your question press the pound key.
Operator: If you would like to withdraw your question, press the pound. I will now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.
Robert Ross McEwen: I'll now turn the call over to Mr. Rob Mcewen Chief owner. Please go ahead Sir.
Robert Ross McEwen: Thank you, operator. Good morning, ladies and gentlemen, and welcome to our first quarter 2024 conference call. A few moments ago, I looked at our share price and thought, well, what happened? We're down about $2. And I think a lot of it is, I think it's overdone, but it's probably due a bit to our accounting policies, the difference between accounting treatment in Canada and the United States of America. And I'd like to ask Perry Ing, our CFO, to talk about that difference. Good morning, Rob.
Robert Ross McEwen: Thank you operator.
Speaker Change: Good morning, ladies and gentlemen, welcome to our.
Perry Y. Ing: First quarter 2024 conference call.
Robert Ross McEwen: A few months ago, I looked at our share price and thought well what happened.
Perry Y. Ing: We're down about $2 and I think a lot of it is I think it's overdone, but it's probably do a bit to our accounting policies. The difference between the accounting treatment in Canada and in the United States of America.
Robert Ross McEwen: And I'd like to ask Perry Ing, our CFO to talk about that difference.
Perry Y. Ing: So we would like to reiterate the fact that, as a U.S. gas reporting company, we expense all of our equitable expenses related to the Los Azules Copper Project in Argentina. So given that we own 48% of the company, all of the work going into drilling for that project is being expensed through our income statements. Unlike a lot of our peers, Canadian and Australian listed companies that report under international financial reporting standards, where they may capitalize those costs, and you would not see them reflected in net earnings or loss.
Perry Y. Ing: Good morning, Rob.
Perry Y. Ing: So we would like to reiterate the fact that as a U S GAAP reporting company.
Perry Y. Ing: Oh, we expense all of our activity level.
Perry Y. Ing: Expenses related to the losses are less copper project in Argentina.
Perry Y. Ing: Given that we own 48% of the company all of that work going.
Perry Y. Ing: And to drilling for that project.
Perry Y. Ing: <unk> expense through our income statements are unlike a lot of our peers are Canadian.
Perry Y. Ing: Alien listed companies that report under international financial reporting standards, where they may capitalize those costs and you would not see them reflected in net earnings or loss.
Perry Y. Ing: So if you look in more detail at our earnings, we reported a consolidated net loss of approximately $20 million, of which $18 million was directly attributable to our investment in McEwen Copper, as well as an additional $4 million in general exploration expenses. So again, had we reported under RFRS, we would not be showing a loss of that. Thank you, Perry.
Perry Y. Ing: If you look at more detail into our our earnings.
Perry Y. Ing: We reported a consolidated net loss of approximately $20 million of which $18 million was directly attributable to.
Perry Y. Ing: Our investment and they came on copper as well as the additional $4 million in general exploration expenses. So again, you know halfway through had we reported under our F. R. S.
Perry: Would not be showing a loss of that nature.
Speaker Change: Thank you Perry.
Perry Y. Ing: Sure.
Robert Ross McEwen: I started out just saying, you know, we had a good quarter, and we're active on many fronts. We've been hitting production guidance, generating positive cash flow from our gold and silver mines. Our exploration is producing encouraging results at our Fox complex, our San Jose mine, and our Las Azulas project. In addition, there has been a dramatic political shift that has occurred in Argentina.
Perry: I wish [laughter] started out saying you know we had a good quarter and we're active on many fronts.
Robert Ross McEwen: <unk> been hitting production guidance generating positive cash flow from our gold and silver mines.
Robert Ross McEwen: Our exploration is producing encouraging results at our Fox complex, our San Jose mine.
Robert Ross McEwen: And our losses this project.
Robert Ross McEwen: In addition, there has been a dramatic political shift that's occurred in Argentina. It's newly elected President is moving aggressively to make the country attractive to large direct foreign investment.
Robert Ross McEwen: Its newly elected president is moving aggressively to make the country attractive to large, direct foreign investment, of which we have one of those situations. Overall, our consolidated gold equivalent production was up 7% over the previous year. First quarter 2023, and costs were in line with guidance at two of our three mines. We're making good progress at Gold Bar and San Jose, and they exceeded guidance by delivering higher production and lower costs.
Robert Ross McEwen: Some of which we have one of those situations.
Robert Ross McEwen: Overall, our consolidated gold equivalent production was up 7% over the.
Robert Ross McEwen: First quarter 2023 and costs were in line with guidance.
Robert Ross McEwen: Two of our three mines.
Robert Ross McEwen: We're making good progress at gold bar in San Jose and they exceeded guidance by delivering higher production and lower cost at gold bar production was up 80% and at San Jose It was up 15%.
Robert Ross McEwen: At Gold Bar, production was up 80%, and at San Jose, it was up 15%. And while the results of the Fox Complex were disappointing, and tonnage during the quarter was down, we're expecting over the balance of the year that production will increase and the cost per ounce will fall to be in line with our year-end guidance. From a financial perspective, the news was also positive. During the quarter, our gross profit was $6 million, some 36% higher than the $4.4 million in the first quarter of 2023.
Robert Ross McEwen:
Robert Ross McEwen: And while the results Fox complex for disappointing due to mining lower grade.
Robert Ross McEwen: And tonnage during the quarter.
Robert Ross McEwen: Yeah.
Robert Ross McEwen: We're expecting over the balance of the year the production will increase in the cost per ounce will fall.
Robert Ross McEwen: To be in line with our year end guidance.
Robert Ross McEwen: From a financial perspective. The news was also positive during the quarter, our gross profit was $6 million some 36% higher.
Robert Ross McEwen: Then the $4 4 million in the first quarter of 2023.
Robert Ross McEwen: And in this quarter, we also reported our results on an adjusted EBITDA basis because we believe it provides a better representation of the performance of our gold and silver mining operations. Why? Because it removes the impact of our ongoing investment in McEwen Copper. During the quarter, our adjusted EBITDA was 6.3 million, and for $0.13 a share, and versus an adjusted EBITDA loss of 2.9 million, or six cents a share. So when we include the $18 million loss attributable to our investment in McEwen Copper, we reported a consolidated loss of $20.4 million or $0.41 a share.
Robert Ross McEwen: And in this quarter.
Robert Ross McEwen: We reported our results also on an adjusted EBITDA basis.
Robert Ross McEwen: We believe it provides a better representation.
Robert Ross McEwen: The performance of our gold and silver mining operations.
Robert Ross McEwen: Why because it removes the impact of our ongoing investment in Mcewen copper.
Robert Ross McEwen: During the quarter, our adjusted EBITDA was.
Robert Ross McEwen: 6.3 million.
Robert Ross McEwen: And or 13 cents a share.
Robert Ross McEwen: And versus an adjusted EBIT loss of $2 9 million or six cents a share.
Robert Ross McEwen: So when we include the $18 million.
Robert Ross McEwen: Loss attributable to our investment in Mcewen copper.
Robert Ross McEwen: Hmm.
Robert Ross McEwen: We reported a consolidated.
Robert Ross McEwen: Loss of $20 4 million or 41 cents a share.
Robert Ross McEwen: Yes.
Robert Ross McEwen: Okay.
Robert Ross McEwen: In Argentina, the company's new president, Javier Mele, who Mike, Carmen, Stefan, and I had the great honor of having a one hour meeting with recently, has unleashed an infectious mood of great optimism, something that has not existed in that country for many decades. I said to him that Argentina is very much like the story of Sleeping Beauty, who was poisoned by years of populist government policies and fell into a deep sleep, and now he is the prince whose kiss has awoken her.
Robert Ross McEwen: In Argentina, the Companys, new president, having a min Li.
Robert Ross McEwen: Who might Carmen Stefan and I had the great honor it too.
Robert Ross McEwen: We have a one hour meeting with recently.
Robert Ross McEwen: His unleashed an infectious mood of great optimism something that has not existed.
Robert Ross McEwen: In that country for many decades.
Robert Ross McEwen: I said to him that Argentina is very much like the story of sleeping beauty.
Robert Ross McEwen: It was poisoned by years of populist governments policies and fell into a deep sleep and now he.
Robert Ross McEwen: Is the Prince whose kiss has woken there.
Robert Ross McEwen: Global investors and innovators are starting to take notice. Just two weeks ago, Elon Musk tweeted that it's time to invest in Argentina. And President Malay's election, coupled with the progress we're making on Las Azules, has made this quarter an incredibly exciting time for McEwen Copper and for McEwen Mining. Our other asset in Argentina is our 49%-owned San Jose silver and gold mine. Performance in Q1 of this year was much better than the comparable period last year, and as a result, management is considering resuming its dividend later this year.
Robert Ross McEwen: Global investors and innovators are starting to take notice.
Robert Ross McEwen: Just two weeks ago, Elon Musk tweeted, it's time to invest in Argentina.
Robert Ross McEwen: And president malaise election, coupled with the progress, we're making advancing losses. Louis has made this quarter in an incredibly exciting time for mcewen copper and for Mcewen mining.
Robert Ross McEwen: Our other asset in Argentina, as our 49% owned San Jose Silver and Gold mine performance in Q1 of this year was much better than the comparable period last year and as a result management is considering resuming its dividend.
Robert Ross McEwen: Later this year.
Robert Ross McEwen: So hopefully, from that investment, we'll be receiving money for the first time in a couple of years. We've also encountered encouraging exploration results there from two different targets. The best assay results reported were 12 meters of 12.7 grams gold plus 101 grams silver, and the other was 6.2 meters of 23.3 grams gold plus 314 grams silver.
Robert Ross McEwen: So we'll be receiving money hopefully from that investment.
Robert Ross McEwen: For the first time in a couple of years.
Robert Ross McEwen:
Robert Ross McEwen: We've also encountered encouraging exploration results there from two different targets. The best assay results reported were 12 meters of $12 seven grams gold plus a 101 Gram silver and the other was 6.2 meters of 23.3.
Robert Ross McEwen: Graham schooled plus 314 grams silver.
Robert Ross McEwen: Pretty nice holes. It's worth noting that the San Jose land package surrounds Newmont-Cerro Negro, a property on three sides. So let's go back to Los Azules. As winter begins in the southern hemisphere, the 22 drills that were operating there are now being removed, having drilled some 69,000 meters this season, which is quite a large program.
Robert Ross McEwen: Pretty nice holes.
Robert Ross McEwen: It's worth noting that the San Jose land package surrounds newmont's, Cerro <expletive> property on three sites.
Robert Ross McEwen: Yes.
Robert Ross McEwen: So let's go back to losses Atlas as the winter begins in the southern Hemisphere.
Robert Ross McEwen: 22 drills that were operating there.
Robert Ross McEwen: There are now being removed having drilled some 69000 meters. This season, which is quite a large program. This drilling has been confirming and upgrading the categories of our estimated resources.
Robert Ross McEwen: That were contained in the June 2023 preliminary economic assessment.
Robert Ross McEwen: They were also.
Robert Ross McEwen: Drilling to precisely define the location of our payback pit.
Robert Ross McEwen: Which is calculated to be.
Robert Ross McEwen: Payback in three years.
Robert Ross McEwen: Through the winter work.
Robert Ross McEwen: We will be progressing on delivering a bankable feasibility study for losses are less than the first half of next year.
Robert Ross McEwen: This drilling has been confirming and upgrading the categories of our estimated resources that were contained in the June 2023 Preliminary Economic Assessment. They were also drilling to precisely define the location of our payback pit, which is calculated to be payback in three years through the winter work. We'll be progressing on delivering a bankable feasibility study for Los Azules in the first half of next year. So, we're looking ahead. We are now in a position to think about growing, and I feel the market conditions are ideal to search out opportunities in anticipation of much stronger markets for gold, silver, and copper.
Robert Ross McEwen: So looking ahead.
Robert Ross McEwen: We are now in a position to think about growing and I feel the market conditions are ideal to search out opportunities in anticipation of much stronger markets for gold silver and copper.
Robert Ross McEwen: And here's what we've been doing. First, we've been taking a closer look at the potential opportunities on our existing properties, and we will lease. Very shortly, I will provide you with exploration results from our Fox Complex, Los Azules, and San Jose. Second, we're looking at opportunities that are close to these existing operations. And to that end, we've recently made a friendly takeover bid for a company called Timberline Resources, which has property located close to our gold bar mine, and it also has property adjoining McEwen Copper's Elder Creek property, both of which are in Nevada.
Speaker Change: Here's what we've been doing.
Robert Ross McEwen: First we've been taking a closer look at the potential opportunities on our existing properties.
Robert Ross McEwen: And we will leash.
Robert Ross McEwen: Very shortly providing you with exploration results from our Fox complex losses, Lewis and San Jose.
Robert Ross McEwen: Second we're looking at opportunities that are close to these existing operations.
Robert Ross McEwen: And to that end, we've recently made a friendly takeover bid for a company called Timberline resources, which has property located close to our Goldmark Gold bar mine.
Robert Ross McEwen: And it also has a property adjoining the QM Koppers Elder Creek property, both of which are in.
Robert Ross McEwen: Nevada.
Robert Ross McEwen: And three, I believe there are some interesting situations out there where we could consider bolstering our management strength, increasing our resource base and annual production, and providing us with greater leverage on the prices of gold, silver, and copper. In Los Azules, we have funds to continue for a while. We are looking at completing the feasibility study and doing the associated engineering, and all the financing for Los Azules has been done by McEwen Copper.
Robert Ross McEwen: And three I believe theres some interesting situations out there.
Robert Ross McEwen: That where we could consider bolstering our management strength.
Robert Ross McEwen: Increase our resource base and annual production and provide us with greater leverage too.
Robert Ross McEwen: The prices of gold silver and copper.
Robert Ross McEwen: In losses, Louis we have.
Robert Ross McEwen: Funds.
Robert Ross McEwen: To continue for a while.
Speaker Change: We are.
Robert Ross McEwen: Looking at.
Robert Ross McEwen: Do it completing the feasibility study and doing the associated engineering.
Robert Ross McEwen: And.
Robert Ross McEwen: So all the financing for losses, Louis has been done in Mcewen copper.
Robert Ross McEwen: We continue to look for opportunities with our principal investors and others to fill that funding. At this point, I'd like to ask Michael Meding, our Vice President and General Manager of McEwen Copper, to provide an overview of the political situation in Argentina and some of the changes to regulations that are being promoted, and the impact they could have on the value of that asset of ours. Thank you so much, Rob. Hello, everybody.
Robert Ross McEwen: We continue to look for opportunities with our principal investors and others to.
Michael Meding: Phil that funding.
Robert Ross McEwen: Finding.
Robert Ross McEwen: Okay.
Michael Meding: At this point.
Michael Meding: I'd like to ask Michael netting our vice President General manager.
Michael Meding: Of Mcewen mining and the human copper.
Robert Ross McEwen: Two.
Michael Meding: Provide an overview of the political situation in Argentina.
Michael Meding: And some of the changes to regulations that are being promoted.
Michael Meding: And the impact it could have on the value of that asset of ours.
Robert Ross McEwen: Yeah.
Michael Meding: Thank you so much Rob Hello, everybody.
Michael Meding: Exciting times in Argentina, as Rob has already said. We had an exciting quarter with lots of progress at Los Azules, and what we're looking at at the moment, well, Los Azules has a very strong PEA without further incentives. What we see in Argentina is that there are a lot of projects that could benefit from a better investment incentive scheme, and that has been presented to Congress, to the lower house, a couple of days ago, and has received approval by the lower house, and is now in the Senate for discussion. It's going through the commissions, and the administration is trying to get approval of this new exciting project. It's called Native Assets in Spanish.
Michael Meding: Exciting times in Argentina.
Michael Meding: I've said already.
Michael Meding: An exciting quarter with lots of August Atlas a seamless.
Michael Meding: And what are you looking at at the moment well, let's assume that has a very strong.
Michael Meding: Without further incentives will be seen Argentina is today, a lot of projects that could benefit from a better investment incentive scheme and that has been presented to the Congress and the White house.
Michael Meding: A couple of days that Ken has received approval by.
Michael Meding: By the level of housing is now under Senate.
Michael Meding: For a discussion thats going through the <unk>.
Michael Meding: So the commissions.
Michael Meding: The administration is trying to get approval of.
Michael Meding: This new exciting project is called native athletes in Spanish.
Michael Meding: It contains something called RIGI. Just to give you some ideas what this means if it goes through, and we are cautiously optimistic that it will go through rather shortly, income tax would be reduced from 35% to 25%, export duty would be reduced from 4.5% to 0%, VAT recovery would basically be instance, and operating bank tax, debit and credit tax is 1.2%, we would be able to use 100% as an advance for income tax.
Michael Meding: Contains something called <unk> Thats, a large infrastructure investment incentives this year just.
Michael Meding: Just to give you some ideas.
Michael Meding: This means it could go through them.
Michael Meding: Cautiously optimistic that it will go through this.
Michael Meding: So for the year.
Michael Meding: Income tax would be reduced from 35% to 25% export duty would be that useful Portland licensed centers zero percent VIP recovery.
Michael Meding: It would be basically in fleece and operating banks extended credit, Texas, 1.2% would be.
Michael Meding: To use one.
Michael Meding: This is an advance for income tax. So this means that this combined with with what is included and as having the opportunity to it.
Michael Meding: So this means that this, combined with what is included as having the opportunity to ensure access to the capital markets, can change the face of mining projects and other large infrastructure projects in Argentina. We think that this project is a major driver for the Argentine economy going forward. Back to you, Rob. Thank you, Mike. And, As many of you know, there's a high rate of inflation in Argentina, and we've been able to offset that.
Michael Meding: Sure access to the capital markets can change the face of mining coal Jake and other largely perpetual cold Jake in Argentina.
Rob: We think that this project is a major driver for the Argentine economy going forward.
Michael Meding: Okay.
Rob: Thanks to Europe.
Rob: Thank you Mike.
Michael Meding: And.
Rob: As many of you know there was a high rate of inflation in Argentina.
Rob: And we've been able to offset that.
Perry Y. Ing: Yeah, that's right, Rob. Overall, after our last financing transaction in McEwen Copper, we were able to invest in a variety of products that essentially fully hedged our exposure to Argentine inflation and devaluation. So I believe at the end of the first quarter, McEwen Copper had a treasury of just over $60 million. Since we deconsolidated McEwen Copper in the fourth quarter of last year, we no longer show its cash balance on our balance sheet.
Michael Meding: Yeah, that's right Rob overall after our last financing transaction and Mcewen Hopper, we were able to invest in a variety of our.
Speaker Change: Product stops.
Perry Y. Ing: Essentially fully hedged our exposure to Argentine inflation and devaluation. So I believe at the end of the first quarter Mcewen copper hotdog treasury of just over $16 million.
Perry Y. Ing: So sweet <unk> consolidated Q1 copper in the fourth quarter of last year, we no longer show my kilos hoppers cash pile up on our balance sheet.
Operator: It's set apart. We only report, you know, there 48% of their earnings have lost in our income statement. Thank you, Perry. I'd now like to open the call for questions. Thank you. As a reminder, to ask a question, you will need to press the star followed by the number one on your telephone.
Perry Y. Ing: Soft are partly only reports.
Operator: There are 48%.
Operator: Of the earnings loss in our income statement.
Operator: Perry.
Speaker Change: I'd now like to open the <unk>.
Speaker Change: Call to questions.
Operator: Okay.
Operator: Thank you as a reminder to ask a question you will need to press star followed by the number one on your telephone.
Speaker Change: Withdraw your question press the pound key.
Operator: To withdraw your question, press the pound. And your first question comes from the line of Jake Sekelsky, Alliance Global Partners. Jake, your line is open. Hi Robin team, thanks for taking my questions. Hi Jake.
Operator: And your first question comes from the line of Jake Zukowski Alliance Global partners.
Robert Ross McEwen: So it was good to see costs come down quite a bit at Goldbar, and I know this is a function of mining lower strip areas. I'm just curious if that's something you expect to continue a bit into Q2 here before moving back to more and more normalized levels of strip, as you mentioned in the second half. I'll ask Bill to comment on that. Yeah, Jake.
Jacob G. Sekelsky: Jay Your line is open.
Jacob G. Sekelsky: Hi, Robyn thanks for taking my questions.
Bill: Hi, Jake.
Bill: So it was good to see costs come down quite a bit of Goldberg and I know you mentioned this is a function of mining lower strip areas. I'm. Just curious if that's something you expect to continue a bit into Q2 here before moving back toward more normalized levels of strip as he had mentioned in the second half.
Robert Ross McEwen: I'll ask bill to come.
Bill: Rent on that.
Bill: Yeah Jake.
Robert Ross McEwen: Sure.
William Shaver: I guess production in the first quarter was pretty much on schedule. It's a little over budget, but it's, you know, pretty much on schedule. In the second quarter, we'll be expanding the work that we're doing in PICC and also expanding the work that we do in Globe ourselves to try and get more material or more ore onto the pad in order to improve our leaching. As you probably know, the first quarter is always a bit of a challenge because of rain and snow and cold weather.
Bill: I guess.
Bill: Production in the first quarter was pretty much on.
William Shaver: It's a little over budget, but its pretty much on schedule.
William Shaver: In the second quarter.
William Shaver: We will be expanding the work that we're doing in Pic and also <unk>.
William Shaver: Expanding the work that we do in <unk>.
William Shaver: And globe ourselves to try and.
William Shaver: Or to get more material or more ore onto the pad.
William Shaver: In order to improve our leaching.
William Shaver: As you probably know the first quarter is always a bit of a challenge because of rain and snow and cold weather.
William Shaver: This year was a little bit better than last year, although this year we did release about four points, just under five million gallons, where last year we released about 9 million gallons. So, you know, all in all, I think the first quarter responded well to all the production challenges. And, you know, we see the second quarter as improving on that. Yeah, and the stripping, you know, the stripping is just related, I guess, to where we're taking the ore at the time and, and we're working with our contractor to, to, I guess, upgrade the number of trucks we have at the site to look after the stripping that's associated with the ore. So, you know, we see those two things as kind of being tied together.
William Shaver: This year was a little bit better than last year, although this.
William Shaver: This year, we did.
William Shaver: Our release about four point, just under 5 million gallons, where last year we.
William Shaver: Released about 9 million gallons.
William Shaver: So all in all I think the first quarter responded well to all all of the production challenges.
William Shaver: We see the second quarter is improving over that.
Speaker Change: What about the stripping.
William Shaver: Yes, no stripping the stripping is just related I guess to where we're taking the aura.
William Shaver: Time, and we're working with our contractor too.
William Shaver: To I guess upgrade the number of trucks, we have to.
William Shaver: Site to look after the stripping that's associated with your soul.
William Shaver: We see those two things is.
William Shaver: Kind of being tied together.
Speaker Change: Okay. That's helpful.
Robert Ross McEwen: Okay, that's helpful. And then, Rob, you touched on opportunities for growth and things that you're looking at from an M&A standpoint. I'm just curious, should we be thinking more along the lines of complementary type transactions such as Timberline, or would you be willing to look at more of a transformational type acquisition? So just your thoughts there would be helpful.
William Shaver: And then Rob you touched on opportunities for growth and things that we're looking at from an M&A standpoint.
Robert Ross McEwen: I'm just curious should we be thinking more along the lines of complementary.
Robert Ross McEwen: Transactions, such as timber line or would you be willing to look at.
Rob: More of a transformational type acquisitions. So just your thoughts there would be helpful.
Robert Ross McEwen: We're just going on several fronts, Jake. I just think this market is delivering some that bear a lot of consideration. And there was a transformational opportunity that was attractive.
Rob: Oh, we're just going on several fronts Jake.
Robert Ross McEwen:
Robert Ross McEwen: I just think this market is delivering some <unk>.
Robert Ross McEwen: Situations that.
Robert Ross McEwen: There are lot of consideration and <unk>.
Robert Ross McEwen: There was a transformational opportunity that.
Robert Ross McEwen: It was attractive.
Robert Ross McEwen: <unk>.
Robert Ross McEwen: Take a close look at it, because I think we're in one of these rare opportunities where this is the time to grow because we're going to see higher prices going forward. I'm quite confident of that. Okay, that's all for me. Thanks again.
Speaker Change: We'll take a close look at it.
Robert Ross McEwen: Because I think.
Robert Ross McEwen: We're in one of these rare opportunities where this is the time to grow.
Robert Ross McEwen: Because we're going to see higher prices going forward.
Robert Ross McEwen: Quite confident of that.
Speaker Change: I agree with you there okay. That's all from me Thanks again.
Speaker Change: Thanks Jake.
Robert Ross McEwen: Okay.
Operator: Thanks, Jake. Thank you, and your next question comes from the line of Joseph Reagor from Roth Capital Partners. Joseph, your line is open. Hey, Rob and team.
Robert Ross McEwen: Thank you and your next question comes from the line of Joseph Joseph Gregor.
Joseph Reagor: Roth capital partners.
Operator: Joseph.
Operator: Thanks for taking my questions. I guess. Following on Jake's comment, the last comment there on acquisitions, the Timberline acquisition, what's your guys' best guess on timing for closing that? I can answer that. We're looking at an outside date in early July for that closing. There are a couple of factors that could accelerate that, but that's a good date to use.
Joseph Reagor: Hey, Rob and team thanks for taking my questions.
Speaker Change: I guess.
Operator: Following on the Jay comment that last comment there on acquisitions, the timberland acquisition, what's the.
Operator: Best guess on timing on closing that.
Operator: Yeah.
Speaker Change: I can answer that.
Stephane: It's stephane.
Operator: We're looking at a outside date in early July for that closing there are a couple of factors that could accelerate that but thats. Good good.
Speaker Change: Date to use at this point.
Operator: Okay, thanks. That's helpful. And then going back to the opening comment about the accounting treatment of McEwen Copper, can you guys give us any guidance for the rest of this year on what you think your income level expense is going to look like, you know, so that there's not such a big, you know, delta between what we have and what actually occurs? Hey, Joe.
Speaker Change: Okay. Thanks.
Speaker Change: Thanks, that's helpful and then.
Operator: Going back to the opening comment.
Operator: About the accounting treatment on the QM copper can you guys give us any guidance for the rest of this year on what you think your REIT income level expenses kind of look like.
Joe: There is not such a big.
Operator: Delta.
Joe: Between what we have and what actually occurs.
Operator: Okay.
Perry Y. Ing: I think as far as McEwen Copper is concerned, Q2 is going to be pretty similar to Q1. I mean, we had over 20 rigs going until May, so we'll continue to have those costs flowing through. Q3 will be quieter, as there will be no drilling activity, although we will still be working on the feasibility. And then Q4 activity will be dependent on when Copper raises money and what the program is. You know, I will note, obviously, once we do have a feasibility study for McEwen Copper and, you know, permits in hand, then, under US GAAP, then we can start capitalizing costs at Los Azules, if it makes sense, kind of in line with our Canadian peers. Okay, and what is the timing on having that feasibility study in hand? Certainly, the first half of next year. That's helpful from a modeling standpoint.
Operator: Hey, Joe I think as far as the QM copper.
Perry Y. Ing: Q2 is going to be pretty similar to Q1, I mean, we had.
Perry Y. Ing: Over 20 regs going until May So we'll continue to have those costs flowing through Q3 will be quieter.
Perry Y. Ing: There's no drilling activity, although we will still be working on the feasibility and then.
Perry Y. Ing: Q4 activity will be dependent on when when copper raises money and what the what the program will be in terms of.
Perry Y. Ing: In terms of drilling in the hall.
Perry Y. Ing: I will note obviously.
Perry Y. Ing: Once we do have a feasibility study for Magellan copper and.
Perry Y. Ing: Permits in hand, then under U S. GAAP that we can start capitalizing costs at losses, Elisa if it makes sense kind of in line with our Canadian peers.
Speaker Change: Okay, and what is the timing on having that feasibility study in hand.
Speaker Change: Certainly first half of next year.
Perry Y. Ing: Yes.
Perry Y. Ing: Okay.
Perry Y. Ing: Thats helpful from a modeling standpoint.
Robert Ross McEwen: And then on Fox, Rob, you commented that, you know, the first quarter grades were light, but you expect things to pick up and then costs to drop. Have you already seen a pickup in grade in Q2? The grade has picked up this month. It's running now around 3 grams.
Perry Y. Ing: And then on Fox.
Robert Ross McEwen: Rob you commented that the first quarter grades for a while but you expect things to pick up and then cost drop have you already seen a pickup in grade in Q2.
Robert Ross McEwen: The grid this is bill.
Robert Ross McEwen: <unk> has picked up from.
Robert Ross McEwen: This month.
Robert Ross McEwen: Running now around three grams.
Robert Ross McEwen: And, you know, we hope to see that pick up a little bit more. But we're saying at this point that the grade in Q2 will be around three grams. So right now, it's a case of making sure we put through, you know, all the tons we can through the mill. Okay, so we should expect tonnage to stay relatively similar to what Q1 was in the grade and start working its way higher over the rest of the year. That's correct.
Speaker Change: We hope to see that pick up a little bit more but we're we're seeing at this point that the grade in Q2, we will be around three grams. So.
Robert Ross McEwen: Right now.
Robert Ross McEwen: It's a case of making sure we put through.
Robert Ross McEwen: All the tons, we can through the mill.
Robert Ross McEwen: Okay. So we should expect tonnage to stay relatively similar to what Q1 was in the grade the start working its way higher over the rest of the year.
Robert Ross McEwen: That's correct.
Robert Ross McEwen: Okay. All right. Well, those are the questions I had.
Robert Ross McEwen: Okay.
Robert Ross McEwen: Alright.
Speaker Change: That was all the questions I had thanks guys.
Operator: Thanks, guys. Okay. Thank you, Joe. Your next question comes from the line of Mike Kozak, Cantor Fitzgerald. Mike, your line is open. Yeah, good morning, Robin team.
Speaker Change: Okay. Thank you Joe.
Operator: Your next question comes from the line of Mike Kozak Cantor Fitzgerald, Mike Your line is open.
Operator: Thanks for hosting the call. The last caller asked one of my questions, but I just wanted to follow up here and make sure I heard Perry's comment correctly that he made right at the end of the prepared remarks. Did you say cash and investments of approximately $60,000,000 in the Copper subsidiary at Exit Q1?
Unknown Executive: Yes, good morning, Robin team, thanks for hosting the call.
Operator: The last the last caller asked one of my questions, but I just wanted to follow up here.
Operator: Make sure I heard Perry's, calling it correctly that you made right at the end of the prepared remarks did you say cash and investments of approximately $60 million six zero in.
Operator: Copper subsidiary at exit Q1.
Perry Y. Ing: At the end of Q1, that's correct, yeah. Okay, and then maybe as a follow-up to that, you know, in prior quarters and prior years, you guys would give some so-called soft guidance on when you would look at potentially IPOing McEwen Copper. Is IPO kind of off the table now? Is the priority to keep funding this with Stellantis and Newton?
Operator: Okay.
Perry: At the end of Q1, that's correct yes.
Speaker Change: And then maybe as a follow up to that.
Perry Y. Ing: In prior quarters and prior years.
Perry Y. Ing: You guys would give some call it soft guidance on when you would look at potentially IPO ing Mcewen copper as IPO kind of off the table now.
Perry Y. Ing: This is the priority to keep funding this with still at this in Newton or how are you thinking about potentially IPO ing that unit.
Robert Ross McEwen: Or how are you thinking about potentially IPOing that unit? Well, we feel we're in a in-between spot in that we got the PEA last year that was published, and we're looking at a feasibility study. There's probably 100,000 meters of drilling that haven't been included in the resource, the results of which... And we filed for an environmental application approval, and we're hopeful to get that before we publish the feasibility study. After the feasibility study is out and we have a permit in hand, that would be a time to be looking at an IPO, when we believe we'd maximize the value.
Perry Y. Ing: Well, we feel we're in a in between spot and that's where we've got the <unk> last year that was published and we're looking at a feasibility study.
Robert Ross McEwen: There's probably 100000 meters of drilling that hasn't been included in the resource the results of which.
Robert Ross McEwen: And we're we filed for an environmental application approval and we're hopeful to get that before we publish the feasibility study.
Robert Ross McEwen: So.
Robert Ross McEwen: After the feasibility.
Robert Ross McEwen: He is out and the we have a permit in hand that would be a time to be looking at an IPO.
Robert Ross McEwen: We believe we can maximize the value.
Operator: Got it. Okay. Thank you for that. I'll turn it back.
Speaker Change: Got it okay. Thank you for that I'll turn it back.
Operator: Yes.
Operator: Great, thank you. And your next question comes from the line of Bill Powers, private investor. Thank you. Thanks, Rob, for hosting this call. Just a couple quick questions. I guess we could start with the decline at Fox. Could you just give us an update on that? I know it was supposed to start sometime this year.
Speaker Change: Great. Thank you and your next question comes from the line of Bill powers private Investor.
Speaker Change: Bill Your line is.
Bill Powers: Thank you thanks, Rob for hosting this call.
Bill Powers: Just a couple of quick questions.
Bill Powers: I guess, we could start with the <unk>.
Bill Powers: Decline at Fox could you just give us an update on that I know.
Operator: Post to start some time.
Bill Powers: This year, if you could give us.
Operator: An update on that as well as <unk>.
Bill Powers: The progress towards construction starting in Mexico.
Operator: If you could give us an update on that as well as the progress towards construction starting in Mexico. Okay, I'll ask Bill to address that question. Bill
Speaker Change: Okay, I'll ask bill to address that question.
William Shaver: Thank you very much, Bill. Yeah, in terms of the ramp at Stock, we expect to start the surface excavation work this month. We're in the midst of negotiating with contractors on that matter, and, you know, we hope to get started as soon as they can get equipment into the field, so, and, you know, the people we're talking to have equipment in their yards, so that, you know, should start as scheduled. In terms of Phoenix,
Bill: Thank you for a heartfelt.
Bill: Yeah in terms of the ramp that stock we expect to start the <unk>.
William Shaver: Surface excavation work this month.
William Shaver: We're in the midst of negotiating with the contractors on that matter.
William Shaver: And we.
William Shaver: We hope to get started is like as soon as they can get our equipment into the field. So.
William Shaver: The people, we're talking to have equipment in the yard so that.
William Shaver: Should should start as scheduled.
William Shaver: In terms of Phoenix.
William Shaver: We are waiting for permits, and those have all been the required submissions have all been made. We optimistically hope to see that in the, You know, kind of the third, second, well, second to third quarter. I guess I'm going to say the third quarter now because we're hoping to have it like in the next few months. There's an election coming up in Mexico.
William Shaver: There we are waiting for permits.
William Shaver: And we those have all been.
William Shaver: <unk> required submissions have all been made.
William Shaver: We optimistically, we hope to see that.
William Shaver: Kind of the third second well second to third quarter.
William Shaver: Yes, I'm going to say the third quarter now because we're hoping to have it.
William Shaver: Like in the next few months.
William Shaver: There's an election coming up and in Mexico.
William Shaver: So we're actually planning to make a trip to Mexico in the next few weeks, where we will go and have a chat with the Minister of Economic Development, who visited the site last year and basically said he would try and help us in any way he could and if we needed help, to come and see him. So we're going to maybe take advantage of that.
William Shaver: So we are we're actually planning to.
William Shaver: Make a trip to Mexico.
William Shaver: <unk>.
William Shaver: In the next few weeks.
William Shaver: Where we will go.
William Shaver: And have a chat with <unk>.
William Shaver: The minister of economic development.
William Shaver: We had to the site last year and basically.
William Shaver: <unk> said, he would try and help us any.
William Shaver: The way it could and if we needed help to come and see them. So we're going to maybe take advantage of that.
William Shaver: But yeah, we're in. We're doing the final engineering of the plant now, and so as soon as we have a permit in hand, we'll start working on that. We've already ordered gas generators for that project, and most of the equipment that's going to be installed is now refurbished at the site.
William Shaver: But yes, we are.
William Shaver: And we're doing now the final engineering of the plant.
William Shaver: And so as soon as we have a permit in hand, we will.
William Shaver: I'll start working on that we've already ordered gas generators.
William Shaver: For that project.
William Shaver: And most of the equipment, that's going to be installed is now refurbished at the site.
William Shaver: Okay, so you'd expect construction to begin by the fourth quarter, with potentially first production coming out in Q1 of next year. Is that a reasonable time frame? That would be our hope, yeah.
William Shaver: Okay. So you would expect.
William Shaver: Construction.
William Shaver: To begin that fourth quarter with.
William Shaver: Potentially first.
William Shaver: Production.
William Shaver: Coming out of Q1 of next year is that a.
William Shaver: A reasonable timeframe.
William Shaver: That would be our hope.
William Shaver: Okay, and I guess as far as the stock. Given the results that came out in the stock earlier in February of this year, are there any plans to include the stock east into the initial ramp going down, or is that something for future development? No, absolutely, that is going to be the first order of the day, you know, once we get underground and We are, you know, we've completed a drilling program in the first quarter of the year at Stock East, and the results of that, I would say, are very good.
William Shaver: Okay, and I guess as far as the.
William Shaver: Uh huh.
William Shaver: Given the results that came out in stock earlier.
William Shaver: In February of this year.
William Shaver: Are there any plans to include the stock east into the initial ramp slowing down or is that something for it yeah.
William Shaver: For future development.
William Shaver: No absolutely that is going to be the first order of the day.
William Shaver: Once we get underground and.
Speaker Change: We are.
William Shaver: Yes.
William Shaver: We've completed our drilling program in the first quarter.
William Shaver: Of the year stock East and the results of that I would say are are very good and we.
William Shaver: And we are going to have an announcement about those results sometime in the next 30 days. And yeah, we'll basically, once we get the ramp collared and get underground, we will be heading in two directions, one towards Stock East and the other towards Stock West. So, yeah, that's... Because that particular ore zone is very close to the surface, we will head there right away, as soon as we get underground.
William Shaver: Are going to have an announcement about those results.
William Shaver: Sometime in the next 30 days.
William Shaver: And yes, we will basically once we get the ramp color doesn't get underground.
William Shaver: We will be heading in two directions, one towards stock east on the other.
William Shaver: Towards stock West.
William Shaver: Yes.
William Shaver: Because of its.
William Shaver: That particular ore zone is very close to surface, we will head there.
William Shaver: Right away as soon as we get underground.
Operator: Sounds great; that was all the questions I had. Thanks so much. Thank you, Bill. And just as a reminder, if you would like to ask a question, press star followed by the number one on your telephone keypad. And we'll pause for just a moment to see if there are any additional questions. Alright, it looks like there are no additional questions at this time. Mr. Rob McEwen, I will turn the call back over to you.
Speaker Change: It sounds great that was all the questions I had thanks, so much. Thank you bill.
Robert Ross McEwen: Thank you.
Operator: And just as a reminder, if you would like to ask a question press star followed by the number one on your telephone keypad and we'll pause for just a moment to see if there are any additional questions.
Operator: Okay.
Operator: Mhm volumes.
Robert Ross McEwen: All right. It looks like there are no further questions at this time, Mr. Rob Mcewen I will turn the call back over to you.
Operator: Thank you very much, operator. Thank you, ladies and gentlemen, for joining us. I believe there's a question that came in by email that I've already answered. It was relating to the market performance this morning. I think it's overdone and we've got a lot of positive momentum at the moment.
Robert Ross McEwen: Thank you very much operator, thank you, ladies and gentlemen for joining us.
Operator: I believe there is a question.
Operator: It came in by E Mail.
Operator: And I think I've already answered it it was relating to.
Operator: The.
Operator: Market performance this morning.
Operator: I think it's overdone.
Operator: And.
Operator: We've got a lot of positive momentum at the moment.
Operator: Yes.
Robert Ross McEwen: Thank you, operator. Great. Well, thank you so much. This does conclude today's conference. You may now disconnect. Thank you. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? Thanks for watching!
Speaker Change: Thank you operator.
Robert Ross McEwen: Great well. Thank you. So much. This does conclude today's conference you may now disconnect. Thank you.
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