8-K: McEwen Inc. Q3 2025: Production Misses, Strategic Gains

McEwen Inc. reported lower-than-expected Q3 2025 production and increased costs, while advancing key projects aimed at doubling production by 2030 and securing major benefits for its Los Azules copper project.

Summary

• McEwen Inc. announced its third quarter (Q3) and year-to-date (9M) financial and operating results for the period ended September 30, 2025.
• The company is pursuing a plan to double consolidated annual production to 250,000 to 300,000 Gold Equivalent Ounces (GEOs) by 2030.
• Operational challenges at Nevada and Timmins operations led to production below guidance and higher-than-expected costs in Q3 2025.
• Full-year 2025 production guidance was lowered to 112,000-123,000 GEOs from an initial range of 120,000-140,000 GEOs.
• Full-year 2025 cost guidance for 100%-owned operations increased to $2,028-$2,128 per ounce cash costs and $2,356-$2,456 per ounce All-In Sustaining Costs (AISC).
• Q3 2025 revenue decreased by 3% to $50.5 million from the sale of 14,968 GEOs, compared to $52.3 million from 21,350 GEOs in Q3 2024.
• Net loss improved to $0.5 million ($0.01 per share) in Q3 2025, from a net loss of $2.1 million ($0.04 per share) in Q3 2024.
• Adjusted EBITDA increased 12% to $11.8 million ($0.22 per share) in Q3 2025, up from $10.5 million ($0.20 per share) in Q3 2024.
• Cash and equivalents increased significantly to $51.2 million at September 30, 2025, from $13.7 million at December 31, 2024.
• Working capital improved to $62.6 million at September 30, 2025, from a negative $6.5 million at December 31, 2024.
• Debt principal outstanding increased to $130.0 million at September 30, 2025, from $40.0 million at December 31, 2024.
• The Los Azules copper project received RIGI (Large Investment Incentive Regime) approval in Argentina, securing significant tax and regulatory benefits.
• The company signed a definitive agreement to acquire Canadian Gold Corp. (Tartan Mine) and acquired a 31% interest in Paragon Geochemical Laboratories Inc.

Sentiment

Score: 6

Explanation: While Q3 production and cost guidance were negatively revised due to operational challenges, the company made significant strategic progress on its long-term growth projects, particularly the Los Azules copper project with RIGI approval and a robust Feasibility Study, and the advancement of other gold projects. The increase in cash and working capital also provides a stronger financial base despite increased debt.

Positives

• Net loss improved to $0.5 million in Q3 2025 from $2.1 million in Q3 2024.
• Adjusted EBITDA increased 12% to $11.8 million in Q3 2025 from $10.5 million in Q3 2024.
• Cash and equivalents significantly increased to $51.2 million at September 30, 2025, from $13.7 million at December 31, 2024.
• Working capital improved to $62.6 million at September 30, 2025, from negative $6.5 million at December 31, 2024.
• The average realized gold sale price was $3,477 per GEO in Q3 2025, 39% higher than $2,499 per GEO in Q3 2024, offsetting a decline in GEOs sold.
• The Los Azules copper project received RIGI approval, granting 30 years of legal, fiscal, and customs stability, a reduced corporate income tax rate of 25% (from 35%), a 50% reduction in dividend withholding tax, accelerated depreciation, release of VAT payments during construction, and exemption from export duties.
• The Los Azules Feasibility Study indicates robust project economics with a $2.9 billion NPV(8%), 19.8% IRR, 3.9 years payback, $3.2 billion initial capex, $1.71/lb C1 cash cost, and $2.11/lb AISC (at a $4.35/lb copper price assumption).
• The acquisition of Canadian Gold Corp. (Tartan Mine) is expected to close in January 2026, increasing the resource base and future production potential.
• The company acquired a 31% interest in Paragon Geochemical Laboratories Inc., a strategic investment in PhotonAssay technology.
• Zero lost-time incidents were reported across 100%-owned operations.
• Stock Mine (Fox Complex) ramp development is on schedule and within budget, expected to begin production by mid-2026 with lower costs due to reduced royalty burden, shorter ore haulage, and softer material processing.
• El Gallo Phase 1 production plan was optimized to maximize cash flow and metal recoveries, with lower initial capital costs, targeting 20,000 GEOs annually for 10 years.
• Encouraging drilling results were reported from the Windfall and Lookout Mountain areas, expected to increase overall resource size.
• The Froome West discovery is advancing to production, with promising expansion potential highlighted by recent deep assays.
• An updated resource estimate for Grey Fox is expected in Q4 2025, and a Pre-feasibility Study (PFS) in H1 2026, with Grey Fox anticipated to be McEwen's largest producing mine at full production.

Negatives

• Q3 2025 production was below guidance and costs were higher than expected due to operational challenges at Nevada and Timmins operations.
• Full-year 2025 production guidance was lowered to 112,000-123,000 GEOs from 120,000-140,000 GEOs.
• Full-year 2025 cost guidance for 100%-owned operations increased to $2,028-$2,128 per ounce cash costs (from $1,543-$1,743) and $2,356-$2,456 per ounce AISC (from $1,700-$1,900).
• Gold Bar Mine Complex Q3 2025 production was 8,191 GEOs, lower than expected, leading to a reduction in its annual production guidance to 32,000-35,000 GEOs (from 40,000-45,000 GEOs).
• Gold Bar Mine Complex costs per GEO sold were $2,540 cash costs and $2,852 AISC in Q3 2025, due to lower GEO production and increased waste tonnes.
• Fox Complex annual production guidance was lowered to 25,000-28,000 GEOs (from 30,000-35,000 GEOs) due to a production shortfall experienced in Q1 2025.
• Fox Complex costs per GEO sold were $2,132 cash costs and $2,352 AISC in Q3 2025, due to higher contractor labor costs and development at Froome West, with costs expected to remain elevated through 2025.
• Revenue decreased by 3% to $50.5 million from the sale of 14,968 GEOs in Q3 2025, compared to $52.3 million from 21,350 GEOs in Q3 2024.
• Gross profit decreased to $7.8 million in Q3 2025 from $13.8 million in Q3 2024, primarily due to higher waste stripping costs at the Gold Bar operation.
• San José Mine costs per GEO sold were $2,196 cash costs and $2,771 AISC, impacted by high inflation outpacing the devaluation of the Argentine peso and increased use of contractors.
• El Gallo Phase 1 production commencement is pending final permit approval (extension of its Environmental Impact Assessment) from the Mexican government.
• Debt principal outstanding increased to $130.0 million at September 30, 2025, from $40.0 million at December 31, 2024.

Risks

• Fluctuations in the market price of precious metals (gold, silver) and copper.
• General mining industry risks, including operational challenges and unexpected geological conditions.
• Political, economic, social, and security risks associated with foreign operations, particularly in Argentina and Mexico.
• The ability to receive or receive in a timely manner permits or other approvals required for operations, such as the Environmental Impact Assessment extension for El Gallo and permitting for Windfall and Lookout Mountain.
• Risks associated with the construction of mining operations and commencement of production, including potential cost overruns and delays.
• Risks related to litigation.
• The state of the capital markets, which could impact the ability to secure project financing for Los Azules and other development projects.
• Environmental risks and hazards associated with mining activities.
• Uncertainty as to the calculation of mineral resources and reserves.
• Foreign exchange volatility, foreign exchange controls, and foreign currency risk, particularly concerning the Argentine peso.
• Factors that could cause actual results to differ materially from projections or estimates, including future drilling results, metal prices, economic and market conditions, operating costs, and receipt of working capital.

Future Outlook

McEwen Inc. is targeting 250,000 to 300,000 GEOs Consolidated Annual Production by 2030, with the Fox Complex, Gold Bar Mine Complex, and El Gallo expected to be key contributors. The Stock Mine (Fox Complex) is expected to begin production by mid-2026, leading to lower-cost gold production. El Gallo Phase 1 production is targeting mid-2027, pending permit approval, with Phase 2 (El Gallo Silver) potentially extending mine life. An Updated Resource Estimate for Grey Fox is expected in Q4 2025, followed by a PFS in H1 2026, positioning it to become the largest producing mine. Resource updates for Windfall and Lookout Mountain are expected in H1 2026. The acquisition of Canadian Gold Corp. is set to close in January 2026, with subsequent resource estimation and engineering for the Tartan Mine. Detailed engineering for Los Azules is set to commence, with construction targeted for early 2027, subject to project financing, and a commitment to achieving carbon neutrality by 2038. Management expects corrective measures at Nevada and Timmins operations to deliver positive results in Q4 2025, leading to lower costs per ounce at Gold Bar and decreasing costs at Fox Complex as higher-grade material is processed. The CEO's objective is to build profitability, share value, and eventually implement a dividend policy.

Management Comments

• Rob McEwen, CEO and Chief Owner: "We encountered operational challenges that led to production below guidance and higher-than-expected costs. We have identified the root causes at our Nevada and Timmins operations and are implementing decisive corrective measures. We expect these actions to begin delivering positive results in the fourth quarter."
• Rob McEwen, CEO and Chief Owner: "At the same time, we achieved significant strategic progress. We advanced all sites toward our 2030 goal of 250,000-300,000 ounces of annual gold production, published the Feasibility Study for Los Azules, and secured approval for RIGI benefits—providing 30 years of tax and foreign exchange stability, a substantially lower tax burden, and immediate VAT recovery. These major de-risking milestones bring this world-class copper asset closer to construction and production."
• Rob McEwen's objective is to build MUX's profitability, share value, and eventually implement a dividend policy, as he did while building Goldcorp Inc.

Industry Context

McEwen Inc. operates within a dynamic global mining industry, currently benefiting from strong gold prices which partially offset its production shortfalls. The company's strategic focus on developing the Los Azules copper project aligns with increasing global demand for critical minerals, particularly copper, driven by electrification and green energy transitions. The project's commitment to low environmental impact and carbon neutrality by 2038 positions it favorably within the growing ESG investment landscape. The acquisition of Canadian Gold Corp. and investment in PhotonAssay technology reflect broader industry trends towards consolidation, resource base expansion, and the adoption of innovative, efficient processing and analytical methods to enhance operational performance and reduce costs.

Comparison to Industry Standards

• Los Azules' Feasibility Study results, including a 19.8% IRR, $1.71/lb C1 cash cost, and $2.11/lb AISC (at $4.35/lb copper), position it as a potentially competitive large-scale copper project. These metrics are generally favorable compared to other major copper development projects globally, which often target IRRs in the 15-25% range, and C1 cash costs that vary widely but are competitive for a long-life asset.
• The RIGI approval for Los Azules, providing 30 years of legal, fiscal, and customs stability, significantly de-risks the project and offers a more predictable operating environment compared to many jurisdictions, enhancing its attractiveness for international investment.
• The commitment of Los Azules to achieving carbon neutrality by 2038 and its affiliation with the UN Global Compact align with leading industry standards for sustainable and responsible mining, potentially attracting ESG-focused investors and financing partners like the International Finance Corporation (IFC).
• The operational challenges leading to increased costs and reduced production guidance at the Gold Bar and Fox Complex in Q3 2025 suggest performance below industry best practices for operational consistency and cost control, particularly when compared to more established, stable producers in similar North American jurisdictions.
• The investment in PhotonAssay technology through Paragon Geochemical Laboratories Inc. demonstrates an adoption of advanced analytical methods, which is a growing trend in the mining industry to improve efficiency, accuracy, and speed in exploration and production assays.

Corporate Governance

Related Party Transactions

• McEwen Inc. holds a 46.4% interest in McEwen Copper, and its Q3 results include a $4.3 million investment by McEwen Copper in the Los Azules project, representing McEwen Inc.'s share of costs.
• McEwen Inc. accounts for its 49% interest in Minera Santa Cruz S.A., the owner of the San José Mine, using the equity method.
• Chairman and Chief Owner Rob McEwen has personally invested over US$200 million in the company and takes a salary of $1 per year, aligning his interests with shareholders.

Stakeholder Impact

• Shareholders are impacted by lower production guidance and higher costs in the short term, but also by significant strategic advancements in long-term growth projects (Los Azules, Stock Mine, Grey Fox) and improved liquidity. The implied market value of McEwen Copper ownership ($456 million or $8.43 per MUX share) represents a substantial asset.
• Employees may experience internal restructuring or efficiency drives due to operational challenges at Nevada and Timmins. The advancement of new projects (Stock Mine, El Gallo, Los Azules) could create future employment opportunities. Zero lost-time incidents indicate a positive safety culture.
• Customers can expect continued supply of gold, silver, and copper, with future production increases anticipated from new and expanding projects.
• Suppliers and contractors will see ongoing engagement, particularly with increased use at the San José Mine and higher labor costs at the Fox Complex. Significant demand for services and materials is expected during the construction phases for Los Azules, Stock Mine, and El Gallo.
• Creditors face higher leverage due to the increased debt principal outstanding ($130.0 million), but improved cash and working capital provide liquidity. The RIGI benefits for Los Azules de-risk a major asset, potentially improving creditworthiness for future project financing.
• Local communities, particularly around Los Azules, are impacted by the project's commitment to the UN Global Compact and low environmental impact, along with RIGI benefits, suggesting a focus on responsible development and potentially stable regulatory frameworks.

Next Steps

• Implement decisive corrective measures at Nevada and Timmins operations to improve Q4 results.
• Continue increasing production at Froome and Froome West in Q4 2025.
• Resolve and optimize short-term mine planning at Gold Bar in Q4 2025 to lower costs.
• Release an Updated Resource Estimate for Grey Fox in Q4 2025.
• Evaluate additional upside in the historically mined Stock Main zone in late 2025.
• Commence underground exploration drilling at Stock Mine in 2026.
• Begin construction of the El Gallo mill in H1 2026, pending final permit approval.
• Release a Pre-feasibility Study (PFS) for Grey Fox during H1 2026.
• Reflect Windfall and Lookout Mountain drilling results in a resource update expected in H1 2026.
• Continue permitting activities for Windfall and Lookout Mountain areas.
• Complete metallurgical testing for Windfall and Lookout Mountain deposits.
• Expected closing of Canadian Gold Corp. acquisition in early January 2026.
• Following Canadian Gold Corp. acquisition, complete a resource estimate for Tartan Mine, advance engineering designs, and apply for potential permit modifications.
• Commence Los Azules' detailed engineering.
• Target Los Azules construction for early 2027, subject to project financing.
• Publish the National Instrument 43-101 technical report for Los Azules in November 2025.
• Complete drill programs and data review for Stroud's mineralization to include in future Grey Fox resource updates.
• Obtain extension of Environmental Impact Assessment from Mexican government for El Gallo.
• Advance Fenix Phase 2 (El Gallo Silver) for production from in-situ silver deposits.

Key Dates

Recommendation

The filing presents a mixed bag of results. While Q3 2025 saw production shortfalls and increased costs, leading to a downward revision of full-year guidance, the company made substantial strategic progress on its long-term growth initiatives. The de-risking of the Los Azules copper project with RIGI approval and a robust Feasibility Study, along with advancements at the Fox Complex and other gold projects, provides a strong future growth pipeline. The improved liquidity position (cash and working capital) is positive, but the significant increase in debt warrants caution. The operational challenges need to be closely monitored for Q4 improvements. Given the short-term headwinds balanced by significant long-term potential, a 'hold' recommendation is appropriate, awaiting clearer signs of operational turnaround and further progress on project financing.

Keywords

Gold, Copper, Silver, Mining, Exploration, Financial Results, Q3 2025, McEwen Inc., MUX, Los Azules, Fox Complex, Gold Bar Mine, El Gallo, San Jose Mine, Production Guidance, Costs, EBITDA, Capital Raise, Argentina, Canada, Mexico, Nevada, Ontario, RIGI, Feasibility Study