10-Q: McEwen Inc. Q3/25: Production Dip, Stronger Cash, Copper Project Advances

McEwen Inc. reports a 30% decrease in Q3/25 gold equivalent ounces sold from 100%-owned operations, offset by a 39% increase in realized gold prices, while advancing its Los Azules copper project and tightening annual production guidance.

Summary

• Net loss for Q3/25 was $0.5 million ($0.01 per share), an improvement from a net loss of $2.1 million ($0.04 per share) in Q3/24.
• Net loss for 9M/25 was $3.7 million ($0.07 per share), a significant improvement from a net loss of $35.5 million ($0.70 per share) in 9M/24.
• Consolidated production for Q3/25 was 29,662 Gold Equivalent Ounces (GEOs), a decrease from 35,180 GEOs in Q3/24.
• Consolidated production for 9M/25 was 81,346 GEOs, a decrease from 103,445 GEOs in 9M/24.
• Annual 2025 GEO production guidance has been revised and tightened to 112,000 to 123,000 GEOs, down from prior guidance of 120,000 to 140,000 GEOs.
• Revenues from 100%-owned operations for Q3/25 decreased by 3% to $50.5 million, from $52.3 million in Q3/24, primarily due to a 30% decrease in GEOs sold, partially offset by a 39% increase in realized gold prices.
• Gross profit for Q3/25 was $7.8 million, compared to $13.8 million in Q3/24, driven by increased production costs and decreased revenues.
• Adjusted EBITDA for Q3/25 was $11.8 million ($0.22 per share), an increase from $10.5 million ($0.20 per share) in Q3/24.
• Cash and cash equivalents increased by $37.6 million to $51.2 million as of September 30, 2025, from $13.7 million at December 31, 2024.
• Working capital increased by $69.1 million to $62.6 million as of September 30, 2025, from negative $6.5 million at December 31, 2024.
• McEwen Copper's Feasibility Study for the Los Azules copper project in Argentina was completed, indicating an after-tax NPV8% of $2.9 billion and an internal rate of return of 19.8% based on a copper price assumption of $4.25 per pound.
• The Los Azules project received RIGI (Large Investment Incentive Regime) approval in Argentina, entitling it to tax and regulatory benefits.
• The company signed agreements to acquire a 31% equity interest in Paragon Geochemical Laboratories Inc. for $10.9 million.

Sentiment

Score: 6

Explanation: While production was down and costs were up at operating mines, the significant improvement in net loss, strong liquidity position, and positive developments for the Los Azules copper project (Feasibility Study, RIGI approval) provide a moderately positive outlook, especially for long-term growth. The downward revision of production guidance and ongoing internal control weakness temper enthusiasm.

Positives

• Net loss significantly improved for both Q3/25 ($0.5 million) and 9M/25 ($3.7 million) compared to prior year periods ($2.1 million and $35.5 million, respectively).
• Adjusted EBITDA increased to $11.8 million in Q3/25 (from $10.5 million in Q3/24) and to $38.0 million in 9M/25 (from $24.0 million in 9M/24), indicating improved operational cash flow.
• Cash and cash equivalents increased substantially by $37.6 million to $51.2 million as of September 30, 2025.
• Working capital improved significantly to $62.6 million as of September 30, 2025, from a negative position at year-end 2024.
• The Feasibility Study for the Los Azules copper project confirmed robust economics with an after-tax NPV8% of $2.9 billion and an IRR of 19.8%, establishing 10.2 billion pounds of proven and probable copper reserves.
• Los Azules project received RIGI approval in Argentina, providing significant tax and regulatory benefits, including a reduced corporate income tax rate (35% to 25%) and exemption from export duties.
• Discovery of higher-grade mineralization at the Froome West deposit extends production into 2026, de-risking the transition from Froome to Stock at the Fox Complex.
• No lost-time incidents were reported at the 100% owned operations (Fox Complex, Gold Bar Mine Complex, or El Gallo) during Q3/25.
• Unrealized gains on marketable securities contributed $8.1 million to other income in Q3/25 and $14.5 million in 9M/25.
• Income from investment in Minera Santa Cruz S.A. (MSC) improved to $3.5 million in Q3/25 (from a loss of $1.2 million in Q3/24) and $7.6 million in 9M/25 (from $4.8 million in 9M/24).
• Received $2.2 million in dividends from MSC during 9M/25, up from $0.4 million in 9M/24.
• Refinanced the $40.0 million term loan, extending principal repayments by 24 months to begin January 31, 2027.
• Successfully issued $110.0 million in 5.25% convertible senior unsecured notes due 2030, enhancing liquidity.

Negatives

• Consolidated production of GEOs decreased by 19% in Q3/25 and 21% in 9M/25 compared to prior year periods.
• Annual 2025 GEO production guidance was revised downwards to 112,000-123,000 GEOs from 120,000-140,000 GEOs.
• Gold Bar Mine Complex production decreased by 40% in Q3/25 due to mining and processing lower grade material and mine-to-model variances, leading to a downward revision of its annual guidance.
• Fox Complex production decreased by 19% in Q3/25 and 27% in 9M/25 due to mining in lower-grade zones, leading to a downward revision of its annual guidance.
• Production costs applicable to sales increased by 19% to $35.2 million in Q3/25, primarily due to higher operational stripping costs at Gold Bar and increased contractor labor and development costs at Fox Complex.
• Cash costs and AISC per GEO sold increased significantly at Gold Bar Mine Complex and Fox Complex in Q3/25 and 9M/25.
• San José unit costs are expected to continue to be impacted by the strong Argentine peso and increased reliance on contractors.
• Loss from investment in McEwen Copper increased to $4.3 million in Q3/25 from $1.9 million in Q3/24.
• A material weakness in internal control over financial reporting related to income tax reporting continues to exist as of September 30, 2025.

Risks

• Ability to raise funds required for the execution of the business strategy.
• Acquisitions may not achieve their intended results.
• Ability to secure permits or other regulatory and government approvals needed to operate, develop or explore mineral properties and projects.
• Ability to maintain an ongoing listing of common stock on the New York Stock Exchange or another national securities exchange in the United States.
• Decisions of foreign countries, banks, and courts within those countries.
• National and international geopolitical events and conflicts, and unexpected changes in business, economic, and political conditions.
• Operating results of Minera Santa Cruz S.A. (MSC) and McEwen Copper Inc.
• Fluctuations in interest rates, inflation rates, currency exchange rates, or commodity prices.
• Timing and amount of mine production.
• Ability to retain and attract key personnel.
• Technological changes in the mining industry.
• Changes in operating, exploration or overhead costs.
• Access and availability of materials, equipment, supplies, labor and supervision, power and water.
• Results of current and future exploration activities.
• Results of pending and future feasibility studies or the expansion or commencement of mining operations without feasibility studies having been completed.
• Changes in business strategy.
• Interpretation of drill hole results and the geology, grade and continuity of mineralization.
• Uncertainty of reserve estimates and timing of development expenditures.
• Litigation or regulatory investigations and procedures affecting the company.
• Changes in federal, state, provincial and local laws and regulations.
• Local, indigenous and community impacts and issues including criminal activity and violent crimes.
• Accidents, public health issues, and labor disputes.
• Uncertainty relating to title to mineral properties.
• Changes in relationships with the local communities in the areas in which the company operates.
• Decisions by third parties over which the company has no control.
• Exposure to foreign currency risks directly through the Mexican peso and Canadian dollar, and indirectly through the Argentine peso.
• Equity price risk from investments in shares of common stock of other entities in the mining sector.
• Commodity price risk from changes in the market price of gold and silver.
• Credit risk through precious metals and doré sales agreements with financial institutions and refineries.
• Risk that surety providers may default in returning deposits or that surety bonds may no longer be accepted by governmental agencies for reclamation coverage.

Future Outlook

The company has revised its annual 2025 GEO production guidance downwards to 112,000 to 123,000 GEOs. The Fox Complex and Gold Bar Mine Complex also saw individual production guidance reductions. The Stock project at the Fox Complex is on track for commercial production in 2026, with a pre-feasibility report for the Grey Fox deposit scheduled for H1/26. The Fenix Phase 1 gold reprocessing project is awaiting permit extension, with construction anticipated mid-2026 and production commencing mid-2027, aiming for 20,000 GEOs annually for 10 years. Work has also begun on Fenix Phase 2 for in-situ silver deposits to extend mine life. Preliminary drilling at newly identified targets near Los Azules is expected to commence in early 2026. The company expects to fulfill its remaining Canadian Exploration Expenses (CEE) commitments by the end of 2025. The acquisition of Canadian Gold Corp. is expected to close in early January 2026.

Management Comments

• "The Company believes that the information and disclosures included in the interim consolidated financial statements are adequate and not misleading."
• "In managements opinion, the unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)... reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Companys financial position, results of operations and cash flows on a basis consistent with that of the Companys prior audited consolidated financial statements."
• "However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year."
• "The Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements, through existing or alternative means, as they arise."
• "The Company conducts its operations so as to protect public health and the environment, and believes its operations are materially in compliance with all applicable laws and regulations."
• "The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations."
• "The Company believes that it has sufficient liquidity along with funds generated from ongoing operations to fund anticipated cash requirements for operations, capital expenditures and working capital purposes for the next 12 months and beyond."
• "We continued to meet safety expectations at our 100% owned operations. During Q3/25, we did not have any lost-time incidents at the Fox Complex, the Gold Bar Mine Complex, or El Gallo."
• "Management, including the Chief Executive Officer and Chief Financial Officer, believes that the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S. GAAP."

Industry Context

The filing highlights the impact of fluctuating commodity prices, with increased realized gold and silver prices partially offsetting lower production volumes. The company's focus on developing the Los Azules copper project, one of the world's largest undeveloped copper deposits, aligns with the growing global demand for critical minerals essential for electrification and green technologies. Inflationary pressures, particularly in Argentina, are noted as impacting unit costs at the San José mine, reflecting a broader economic trend affecting mining operations globally. Investments in exploration and advanced analytical services (Paragon) indicate a strategic focus on resource expansion and operational efficiency, common themes in the competitive mining sector.

Comparison to Industry Standards

• The Los Azules Feasibility Study results (NPV8% of $2.9 billion, IRR 19.8% at $4.25/lb copper) position it as a significant, large-scale copper project globally, comparable to other major undeveloped copper deposits in terms of scale and potential economic returns, though specific peer comparisons are not provided in the filing.
• The project design for Los Azules emphasizes environmental sustainability, incorporating renewable energy sources and milling methods that reduce water usage, aligning with evolving industry best practices and investor expectations for responsible mining.

Management Changes

Corporate Governance

Related Party Transactions

• Legal services from REVlaw (owned by Carmen Diges, General Counsel & Secretary) for $68 thousand in Q3/25 and $230 thousand in 9M/25.
• Outstanding accounts payable to REVlaw of $68 thousand and Inventus Mining Corp. of $297 thousand as of September 30, 2025.
• An affiliate of Robert R. McEwen (Chairman and Chief Executive Officer) acted as a lender in the restructured $40.0 million term loan and received 53,160 shares ($0.4 million) as consideration for loan extension.
• Paid $0.5 million in interest to this affiliate in Q3/25 and $1.8 million in 9M/25.
• Receivables from McEwen Copper Inc. (46.4% owned) of $8.1 million as of September 30, 2025, primarily for advances and management/technical services.
• Participated in a private placement offering of Canadian Gold Corp. (an affiliate of Robert R. McEwen and Ian Ball) on March 27, 2025.
• Exercised warrants in Inventus Mining Corp. (an affiliate of Robert R. McEwen, Perry Ing, and Stefan M. Spears) on April 28, 2025, and July 11, 2025.
• Purchased 4,817 tonnes of ore inventory from Inventus Mining Corp. on August 28, 2025, for $1.1 million upfront and $0.3 million payable upon final pour.

Stakeholder Impact

• Shareholders: Potential for long-term value creation from the Los Azules copper project and other development projects, but short-term production shortfalls and increased costs at operating mines may impact share price. The convertible notes and capped call transactions aim to manage dilution.
• Employees: Continued employment and development opportunities at operating mines and projects. The company emphasizes meeting safety expectations.
• Customers: Continued supply of gold and silver, though production volumes from 100%-owned operations have decreased.
• Suppliers/Creditors: Refinancing of debt and a strong cash position indicate improved ability to meet financial obligations.
• Local Communities: Ongoing exploration and development activities, particularly at Los Azules, involve social consultation and environmental considerations. Reclamation obligations are a key responsibility, with surety bonds in place.

Next Steps

• Fulfill remaining Canadian Exploration Expenses (CEE) commitments for flow-through shares by the end of 2025.
• Close the acquisition of Canadian Gold Corp. in early January 2026, pending required approvals.
• Commence commercial production at the Stock project in 2026.
• Publish a pre-feasibility report for the Grey Fox deposit in H1/26.
• Begin construction for the Fenix Phase 1 gold reprocessing project mid-2026, subject to permit approval.
• Commence production for the Fenix Phase 1 gold reprocessing project mid-2027.
• Continue work on Fenix Phase 2, which would primarily be production from the project's in-situ silver deposits.
• Commence preliminary drilling of newly identified targets at Los Azules in early 2026.
• Refine geological mapping and surface sampling across all target areas at Los Azules into the next field season.
• Continue remediation efforts related to internal controls over income tax reporting.

Key Dates

Recommendation

While the company faces operational challenges with decreased production and increased costs at its existing gold and silver mines, the significant improvement in net loss, robust liquidity from recent financing, and the highly positive Feasibility Study results for the world-class Los Azules copper project provide a strong long-term growth narrative. The RIGI approval for Los Azules further de-risks this major project. However, the downward revision of production guidance for 2025 and the ongoing material weakness in internal controls warrant a cautious approach. The stock is likely to be volatile, reflecting the balance between current operational headwinds and future growth potential in copper. Investors should hold, monitoring execution on project development and operational improvements.

Keywords

Gold mining, Silver mining, Copper project, Los Azules, McEwen Copper, Fox Complex, Gold Bar Mine, San Jose Mine, Exploration, Mineral properties, Argentina, Canada, Mexico, Nevada, SEC filing, 10-Q, Financial results, Production guidance, MUX, Precious metals