10-Q: McEwen Inc. Reports Strong Q2 2026 Results Amidst Higher Gold Prices

McEwen Inc. announced a significant increase in revenue and net income for the second quarter of 2026, driven by higher gold and silver prices and improved performance from its equity method investments.

Summary

• McEwen Inc. reported strong financial results for the second quarter and first half of 2026, with revenue from gold and silver sales increasing significantly due to higher commodity prices.
• Net income for Q2 2026 was $9.6 million ($0.16 per share), a substantial improvement from $3.0 million ($0.06 per share) in Q2 2025.
• First half 2026 net income reached $43.0 million, a significant turnaround from a net loss of $3.2 million in the first half of 2025.
• The company completed the acquisition of Golden Lake Exploration Inc. and received substantial dividends from Minera Santa Cruz S.A. (MSC).
• Production at the Fox Complex and San Jos Mine increased, while the Gold Bar Mine Complex experienced a decrease in production due to operational challenges.
• Exploration activities continued, with a pre-feasibility study released for the Grey Fox project and updated resource estimates for Windfall and Lookout Mountain.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with significant revenue growth and net income improvement driven by higher commodity prices and strong performance from equity method investments, despite some operational challenges at the Gold Bar Mine Complex.

Positives

• Revenue from gold and silver sales increased by 27% to $59.2 million in Q2 2026 compared to Q2 2025, and by 62% to $133.3 million in H1 2026 compared to H1 2025.
• Net income for Q2 2026 was $9.6 million, up from $3.0 million in Q2 2025, and H1 2026 net income was $43.0 million, a significant improvement from a $3.2 million net loss in H1 2025.
• Average realized gold price increased significantly to $4,454 per GEO in Q2 2026 from $3,298 in Q2 2025.
• Income from equity method investments was $11.2 million in Q2 2026, a substantial increase from a $3.4 million loss in Q2 2025.
• The Fox Complex exceeded its annual production guidance, with production increasing by 29% in Q2 2026.
• San Jos Mine production increased by 24% in Q2 2026, and it remains on track to meet its annual production guidance.
• The company completed the acquisition of Golden Lake Exploration Inc. on April 30, 2026.
• McEwen Copper Inc. continued to advance the Los Azules project, with 27% of planned design and development deliverables for the FID work program completed.

Negatives

• Gold Bar Mine Complex production decreased by 31% in Q2 2026 due to a one-month laboratory shutdown and encountering complex mining zones with higher carbonaceous material.
• The Gold Bar Complex downgraded its annual production guidance to 30,000 to 33,000 GEOs.
• Cash costs and AISC per GEO sold at the Gold Bar Mine Complex were higher in Q2 2026 compared to Q2 2025 and above annual guidance.
• San Jos Mine unit costs (cash costs and AISC per GEO sold) were higher in Q2 2026 compared to Q2 2025, primarily due to high inflation in Argentina and the relative strength of the Argentine peso.
• Exploration costs increased significantly in H1 2026 ($16.9 million) compared to H1 2025 ($9.1 million).

Risks

• The company's ability to raise funds required for the execution of its business strategy.
• Acquisitions may not achieve their intended results.
• The ability to secure permits or other regulatory and government approvals needed to operate, develop or explore mineral properties.
• Fluctuations in interest rates, inflation rates, currency exchange rates, or commodity prices.
• Timing and amount of mine production.
• Litigation or regulatory investigations and procedures affecting the company.
• Changes in federal, state, provincial and local laws and regulations.
• Uncertainty relating to title to mineral properties.

Future Outlook

The company expects to fund anticipated cash requirements for operations, capital expenditures, and working capital for the next 12 months and beyond through existing liquidity and funds generated from ongoing operations. The Stock project is on track for pre-commercial production in Q4/26, with commercial production anticipated by mid-2027. El Gallo Phase 1 is expected to commence construction late-2026, with production commencing late-2027, producing approximately 20,000 GEOs annually for 10 years. The Los Azules project work program is expected to be finalized in Q4 2026, with management focused on completing the FID work program and evaluating financing alternatives.

Management Comments

• "At the Fox Complex, we invested approximately $12.8 million in the Stock project during Q2/26, completing key infrastructure work, and expanded its plans at Froome West."
• "At the Gold Bar Mine Complex, we produced 5,842 GEOs during Q2 2026 (H1/26 - 13,726 GEOs), representing a 31% decrease from the 8,406 GEOs produced in Q2 2025 (H1/25 - 16,094 GEOs). This decline was attributable to timing and mine model factors."
• "San Joss Q2/26 production increased due to a 4% increase in gold recovery rates, a 1% increase in silver recovery rates along with a 3% increase in processed mineralized material and a 4% increase in average gold grade processed."
• "We continued to meet safety expectations at our 100% owned operations."
• "The PFS for the Grey Fox Project, demonstrates the potential to extend the Fox Complex mine life by approximately 15 years to 2041."
• "Management is focused on completing the FID work program, evaluating financing alternatives, and advancing Los Azules as a large-scale, long-life copper development project in Argentina, while unlocking the district-scale exploration potential of its surrounding land package."

Industry Context

StockSavvy.ai notes that McEwen Inc.'s performance is strongly influenced by the prevailing gold and silver prices, which have seen a significant increase, boosting revenues and profitability. The company's strategic focus on both production and exploration across multiple jurisdictions, including North and South America, aligns with industry trends of diversifying assets and pursuing growth opportunities in copper and gold.

Comparison to Industry Standards

• The company's cash costs and AISC per GEO sold at the Fox Complex ($1,972 and $2,701 respectively in Q2/26) are within or below the upper range of typical industry benchmarks for similar operations, indicating efficient cost management.
• However, the Gold Bar Mine Complex's cash costs ($2,705/GEO) and AISC ($3,197/GEO) in Q2/26 are higher than industry averages and its own guidance, reflecting operational challenges.
• San Jos Mine's cash costs ($2,466/GEO) and AISC ($2,913/GEO) in Q2/26 are within a competitive range, though impacted by local inflation.
• The Los Azules project's mineral reserve estimate of 10.2 billion pounds of copper, based on a $4.25/lb copper price assumption, positions it as a large-scale development project comparable to other major copper deposits globally.

Management Changes

Legal Proceedings

• The company is not currently subject to any material legal proceedings, nor is any such proceeding threatened.

Related Party Transactions

• The Company incurred expenses for legal services from REVlaw, a company owned by Carmen Diges, General Counsel and Secretary.
• The Company purchased ore inventory from Inventus Mining Corp., an affiliate of Robert R. McEwen and Perry Ing.
• The Company provided management, technical, legal, financial, administrative, geological, and engineering services to McEwen Copper Inc.
• The Company entered into a loan agreement with McEwen Copper Inc. for $13.6 million, bearing interest at 12% per annum.
• An affiliate of Robert R. McEwen, Evanachan Limited, acted as a lender in the restructured term loan facility.
• The Company participated in a private placement offering of units issued by Canadian Gold Corp., an affiliate of Robert R. McEwen and director Ian Ball.

Stakeholder Impact

• Shareholders are likely to benefit from the increased revenue, net income, and improved commodity prices, as well as the potential upside from exploration and development projects.
• Employees may see continued focus on safety, as highlighted by the Nevada Mining Association award.
• Creditors are likely to be reassured by the company's increased cash position and positive operating cash flows.
• Local communities in operating regions will continue to be engaged, as noted in the stakeholder engagement for the Los Azules project.

Next Steps

• Continue detailed engineering and permitting for the Grey Fox project towards a final investment decision and construction.
• Advance the Los Azules project towards a Final Investment Decision (FID) by completing the work program in Q4 2026 and evaluating financing alternatives.
• Complete additional studies in Q3/26 to understand reconciliation differences at the Gold Bar Mine Complex.
• Continue exploration and infill drilling at the Tartan Mine Project to expand the resource and upgrade inferred resources.
• Begin construction of the El Gallo Phase 1 heap leach material reprocessing project in late 2026, with production commencing late-2027.
• Mr. William Shaver intends to retire as COO within a year from July 31, 2026, with the specific date to be determined.

Key Dates

Recommendation

The company shows strong operational and financial improvements driven by commodity prices and successful equity method investments. However, the operational challenges at the Gold Bar Mine Complex and the ongoing need for significant capital for development projects like Los Azules warrant a cautious approach. While the outlook is positive, the inherent risks in the mining sector and the capital intensity of future development suggest a 'hold' rating until further clarity on project execution and commodity price stability is achieved.

Keywords

gold, silver, mining, copper, exploration, production, equity method investments, Argentina