McEwen - Earnings Call - Q4 2024

Executive Summary

• Q4 2024 capped a year of higher gold prices and improved profitability metrics, but quarterly production was planned lower at Gold Bar (65% reduction) and Fox continued to work through stope availability issues; full-year revenue rose to $174.5M and Adjusted EBITDA to $29.2M, while consolidated net loss reflected $47M Los Azules expenses.
• Liquidity was strengthened post-quarter via $110M 5.25% convertible notes with a capped call raising effective conversion to $17.30; cash climbed to $62.2M as of Mar 13, 2025, and $20M of 9.75% debt was repaid.
• 2025 production/cost guidance was maintained: consolidated 120–140k GEOs; Gold Bar 40–45k GEOs (cash cost $1,500–$1,700; AISC $1,700–$1,900), Fox 30–35k (cash $1,600–$1,800; AISC $1,700–$1,900), and San José (49%) 50–60k (cash $1,600–$1,800; AISC $1,900–$2,100).
• Catalysts: Los Azules feasibility by June 2025 and potential RIGI approval “in a couple of months” could unlock capitalization of copper spend (reducing reported losses) and an IPO window; management is also evaluating higher throughput to capture >$3,000/oz gold.

What Went Well and What Went Wrong

• What Went Well

  • Full-year revenue grew to $174.5M (vs. $166.2M in 2023) on stronger realized prices ($2,390/oz) and higher gross profit ($30.9M).
  • Adjusted EBITDA rose to $29.2M ($0.57/share) from $7.7M, reflecting higher realized prices and lower production costs; Q4 adjusted EBITDA was $5.2M.
  • Safety and ESG execution: zero LTIs at Fox and Gold Bar in 2024; >90% water recycling at wholly owned sites in 2023–2024.
  • Quote: “Our mines are making money at this point… it is the large investment we’ve been making in Los Azules… creating this net loss.” – Rob McEwen.
  • Los Azules EIA approval in Dec-2024, feasibility targeted for H1’25; RIGI application submitted (45-day review clock stops with info requests).

• What Went Wrong

  • Fox underperformed guidance: 2024 production 30,151 GEOs (25% below guidance) with higher-than-guided cash cost and AISC (by 24% and 28%) due to a stope failure and development constraints.
  • Planned Q4 Gold Bar production decline (65%) from mine sequencing (transition from Gold Bar South to Pick pre-stripping), driving higher unit costs in the quarter.
  • San José unit costs above guidance in 2024 (cash cost $1,742/GEO; AISC $2,139) due to lower grades and macro factors; 100% basis Q4 AISC $2,038/GEO.
  • Consolidated net loss of $43.7M for 2024 was driven by $47M of equity-accounted Los Azules expenses and $16.5M exploration at wholly owned mines.

Transcript

Speaker 5

Hello, ladies and gentlemen. Welcome to McEwen Mining's fourth quarter and year-end 2024 operating and financial results conference call. Present from the company today are Rob McEwen, Chairman and Chief Owner; William Shaver, Chief Operating Officer; Perry Ing, Chief Financial Officer; Jeff Chan, Vice President, Finance; Stephan Spears, Vice President, Corporate Development; Michael Meding, Vice President and General Manager of McEwen Copper; Carmen Diaz, 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, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. I will now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.

Speaker 3

Thank you, Operator. Good morning, ladies and gentlemen. Welcome to the call. 2024 was a good year for McEwen Mining, while our consolidated production of 135,884 gold-equivalent ounces was 12% lower than what we produced in 2023. The selling price of our production was 24% higher. As a result, our adjusted EBITDA was 3.8 times higher this year at $29.2 million or $0.57 a share versus $7.7 million or $0.16 a share in 2023. We did post a net loss of $43.7 million, and that was due to the equity accounting we do of the expenditures at Los Azules of $47 million. There's a difference of $3.3 million. We spent another $16.5 million on exploration, bringing it to $19.8 million, and there was $10 million in depreciation.

Our mines are making money at this point, and it is the large investment we've been making in Los Azules to bring that project forward that is creating this net loss. Speaking of that, when we started financing Los Azules separately in McEwen Copper, we did a financing at $10 a share, which effectively put a value on that property of $175 million. This was a property that was largely obscured in our portfolio by the performance of our gold assets. Today, based on the last financing that we've done in McEwen Mining at $30 a share, it puts a value, an implied value, on Los Azules of $984 million. We have a 46% interest in that now, and that equates to $457 million value, and on a per-share basis, $8.47 a share behind every McEwen Mining share.

That's the big number, and we're pushing that project forward to a feasibility study, after which, once we have hopefully approved in the REGI, which is a large investment incentive scheme enacted by the Argentinian government, we get that approval and complete the feasibility at the end of June of this year, we'll be ready to do an IPO. That'll be dependent on the market sentiment towards copper, but right now there's a positive view on the price of copper. Coming back later in this call, I will ask Michael Meding, our Vice President, General Manager of McEwen Copper, to speak in greater detail about Los Azules. Looking at McEwen Mining's gold assets, we've spent quite a bit of money on exploration. As I said, $16.5 million in the past year at our Fox Complex up in Timmins, Ontario.

That exploration has increased our indicated and inferred resources to a total of over 2 million ounces, and that's allowing us to now plan for a doubling of production from what we produced this year to 60,000 ounces in 2027. We can see there's a possibility to increase that production further, a four to five-fold increase over what we've done this year in 2024 to 130,000-150,000 ounces, bringing on the Grey Fox deposit where the exploration had increased the resources. That, subject to permitting, would increase our consolidated production to 225,000-250,000 ounces per annum. Exploration's working at Fox. It's also been extending our reserve life at Gold Bar, and that's being augmented by the purchase of Timberline Resources, which is a property near to Gold Bar where we're getting some initial good exploration results.

Our investment in 49% interest in the San Jose Mine, a mine operated by Hochschild Mining, is also expecting to pay a dividend shortly. That'd be a welcome change from a number of years without a dividend, but the higher metal prices, gold and silver, are helping that. During the year, we increased our debt from $40 million to $130 million by way of a Capital Convertible Debenture. We chose that route to raise capital because we could get a 100% premium over our share price at the time we announced this debt deal. We were trading at around $8.60 a share, and we were able to get a conversion price by use of this structure of 100% premium over market. Our cash now is approximately $62 million. A large part of that money is going into increasing the production at our Fox Complex and at Gold Bar.

At this point, I'd like to ask Michael Meding to speak about Los Azules.

Speaker 2

Thank you so much, Rob. Los Azules had a great year. In terms of environmental safety and regulatory compliance, we have safety excellence, 1.5 million hours without a lost-time incident. We have received our environmental impact statement, which is the environmental permit for the construction and operation of the future Los Azules mine as of December 3, last year, zero fines or no infractions, and we completed all the hydrogeological testing to support sustainable water use in the future. In terms of operational achievements, we have drilled over 51,000 meters in 2024. We have now a project progress of about 90% by the end of 2024, and as Rob said before, we plan to publish, we plan to complete the feasibility study by June this year. We have now the majority of our engineering complete for the feasibility study. We have a new structural geological model.

We had great work done by the community and sustainability team. We have more than 3,500 participants in 61 meetings covering 50% of Calingasta's economically active population in 2024. We have done lots of training initiatives to support Calingasta. That's the department where our project is located, to prepare themselves for the future work at our project with more than 890 participants, including 521 women, and we have also joined the UN Global Compact. I think that is a summary of what was going on for Los Azules. We're looking forward to the completion of the feasibility.

Speaker 3

Thank you, Michael.

Speaker 2

Back to you, Rob.

Speaker 3

More recently, we received a claim, a statement of claim from an indigenous group that has interest in the property we have in Timmins. We believe it is without merit, and we're working to engage constructively with the leadership of that tribe. At this point, I'd like to open the session to questions.

Speaker 5

As a reminder, to ask a question, you will need to press star followed by the number one on your telephone keypad. To withdraw your question, again, press star one. The first question comes from a line of Jake Sikelski from Alliance Global Partners. Your line is open.

Hey, Rob and Steven, thanks for taking my questions. We touched on opportunities for MineLife Extension at Gold Bar. I'm just curious if you're able to provide any additional color on sort of the critical path forward there on the permitting side in bringing the Timberline properties into the mine plan.

Speaker 3

Sure. I'll ask William Shaver, our Chief Operating Officer, to comment.

Speaker 1

Yeah, thanks very much, Jake. Yeah, so we're doing exploration work at the present time on the Timberline property. As Rob mentioned earlier, we did about $1.2 million worth of work last year, and we're in the midst of doing approximately $4 million worth of exploration work on Timberline properties, which include the ones right adjacent to Eureka and also at the Seven Troughs project, which is another project that we got in that transaction. I guess generally the permitting timeframe for Timberline is there's two parts to it.

That's because there's part of the claims that are there are patented claims, and they have a shorter period for permitting, and then there's a part of the property that's on BLM land, and the permitting time for that property is something in the order of could be done in three years, but it's generally seen as three to five years. That permitting work will start immediately this year because we have some of the from the drilling that we did last year, we have some understanding in the patented ground what we might be able to do in the short term. Those permits will we'll make application for those in the next quarter and hopefully have those permits sometime early next year or early to mid next year.

That kind of fits in with what's happening at Gold Bar at the PIC and at Gold Bar South. At the present time, we have assets to mine at Gold Bar itself that extend into 2030. I guess what we see happening with Timberline is we'll go through that permitting process and then tuck those in as they come on stream.

Speaker 2

Okay. Thanks, Bill. That's helpful. I noticed you broke out the royalty portfolio in the release. I mean, how should we think about these going forward? Is it an area you might look to expand upon or more of something that you might be looking to monetize in some way, shape, or form when the time's right?

Speaker 3

Yes to both those questions.

Speaker 2

Fair enough. Lastly, here, we're sitting with gold over $3,000 an ounce pushing all-time highs. I'm just curious, have these price levels caused you to go back and re-examine some of the near-term mine planning?

Speaker 1

I would say absolutely. We're getting focused now, especially at Gold Bar, to try and increase production because to take advantage of these high prices. Also we're looking at whether we can do the same in Timmins because at these prices, if we could increase even by 10% the production in Timmins and 10% in Nevada, that would basically create about $10 million of cash. I think, yeah, we're working diligently now to get ramped up to try and take advantage of the price that we're seeing at the present time, which all indications seem to tell us that that price is going to go higher.

Speaker 2

Makes sense. Okay. Thanks again, Paul, from me.

Speaker 3

Thank you, Jake.

Speaker 5

Your next question comes from a line of Mike Kozak from Cantor Fitzgerald. Your line is open.

Yeah. Good afternoon, Rob and Team. Hi, hi guys. Just one question from me and then maybe a follow-up. What's your best estimate as to when you'll know whether or not Los Azules is approved or not approved, but then it potentially admitted into REGI?

Speaker 3

Two, three, four months from now. There's only been two groups approved so far, and there was about 11 in line to be reviewed.

Speaker 2

Okay. That was actually my follow-up. I saw this morning that YPF's Vacuum Huerta South oil pipeline was approved under REGI, which is the second one. My follow-up was, do you have any sense as to where Los Azules is in the queue of projects that have applied for and are awaiting that REGI approval?

Speaker 3

Mike, perhaps you could answer that.

Speaker 2

Sure.

Speaker 3

I don't think we have.

Speaker 2

I mean, we have a second metal mining project that filed for the REGI. Where we sit is a little bit difficult to say. I mean, we have applied 11th of February, and we have given an in-person presentation a week after that filing. The regulator has about 45 days, but every time there is an information request towards the company, the clock stops on the 45 days. That means that we have now received, for example, information requests from the regulator on the 5th of March that we're going to respond tomorrow. We are hopeful that over the next couple of months, as Rob said, we're going to get approved. It is a little bit difficult to say. It is new regulation, and how long each step exactly takes and where one sits in the queue is difficult to say.

Got it. That color is very helpful. Thank you and good luck.

Thank you.

Speaker 3

Thanks, Mike.

Speaker 5

Your next question comes from a line of Chris White from Gray Aspen. Your line is open.

Speaker 2

Thank you, Rob.

Hello, Chris.

Speaker 3

Hi, Rob and Team. Thanks for taking my questions. Just four quick ones here. The first one, Rob, has to do with your opening comments. For Los Azules investments, if the company wasn't doing those investments, would MUX's quarterly earnings have been positive? I'll give you the other three here quick, and then you can just go down.

Speaker 2

Yes. Yes, it would have.

Speaker 3

Do you know what that number was then?

Speaker 2

There was $47 million that the charge we took from Los Azules. We reported a loss of $43 million. It would be slightly positive there than if you backed out the exploration and depreciation.

Speaker 3

Just rough math there, Rob, that's $3 million-$4 million?

Speaker 2

Yes.

Speaker 3

That's correct. And then seeing how the market is valuing MUX disproportionately on those quarterly earnings that they're coming as negatives and looking to be positive, have you guys done an analysis of what the spot price gold needs to be with your investments to print a positive quarterly earning?

Speaker 6

Chris, maybe I'll back up a little bit and note that with the work that Michael and his team are doing, we expect to be able to publish our feasibility study in the next quarter. Under U.S. accounting rules, that will allow us to, in fact, capitalize our expenditures on Los Azules, like companies that report under international accounting standards. I would say beginning at the end of the second quarter or start of the third quarter, we will, in fact, no longer need to report those losses. Otherwise, in terms of addressing your other question, I mean, it's a little bit complex. It depends where in the cycle we are in terms of cost. Obviously, at $3,000 spot gold, we expect to be generating significant positive income from our gold operations.

Speaker 3

That's helpful. Thank you. What are you guys, what's management's current expected AISC for 2025 GEOs? I couldn't find that in the release. Is that there?

Speaker 6

Yeah. Let me answer that for the team. At both of our spots and Gold Bar operations, we're projecting about $1,700-$1,900 per GEO sold. We do expect to decrease those naturally over time. I think at Gold Bar, we do have a period of high strip in the first half of this year. We do not expect the same in 2026. We expect that to naturally lower. At Fox, once we ramp up our stock mine and enter into an area of significantly lower cost and higher grade, we would also expect to see that decline.

Speaker 3

That answer takes into consideration what Bill just answered about increasing the throughput with the price of gold being high, that you guys would not do an AISC as like $2,000 or something higher. Is that correct?

Speaker 6

No. That's correct. That does take into account some of the considerations Bill mentioned as well.

Speaker 3

That's great. Last thing, and I'll hush up. Thank you for the time. Is there any way when you guys do these releases, we can get the heads up on the call more than the day before, or are you guys doing that on purpose? How does that process work?

Speaker 2

No. We don't do that on purpose. There were some last-minute changes that came in and unfortunately delayed it. Normally, I like to give you a day or two. I agree with you. It's very short. On table one in the press release, you'll find the cash costs and AISC cost outlined for each operation. You're welcome.

Speaker 3

Really appreciate it, guys. Look forward to next quarter.

Speaker 2

Thank you. Thank you.

Speaker 5

Your next question comes from a line of John Tomazos from John Tomazos Berry Independent Research. Your line is open.

Speaker 2

Hi, John.

Thank you for taking my question. Hey, Rob. I'm concerned about Rio Tinto's participation in the Qin copper. Last week, there was an international arbitration won by Entre Resources against the Mongolian government and Rio Tinto, where in 2012, the 2004 and 2008 agreements were not honored. Rio Tinto made this little company pay lawyers for international arbitration for 12 years, trying to squeeze them to death and squeeze them out of the property. The little company won. God bless them. You may recall that Robert Friedland did not end up with much of Mongolia because Rio Tinto left them exposed to the capital overrun. I'm a little worried that having Rio Tinto money is a little bit like having COVID, AIDS, or cancer. What are your protections to keep them from squeezing you out? Excuse the directness of my question.

I'm just very unhappy at what they did to the other company.

Speaker 4

Hi, John. It's Stefan Spears. Maybe I can help you and get an answer to that question. Currently, the investment by Rio is through an intermediary, which is Nuton. I know you're aware of that organization. It's a technology arm of Rio Tinto. They hold equity in McEwen Copper, which is a Canadian unlisted company, a private company. McEwen Copper, through subsidiaries, owns 100% of Los Azules. Currently, as it stands, they have just over 17% equity in McEwen Copper. We do have a shareholders' rights agreement with them that provides, for normal things, preemptive rights, tag-along rights, and so forth. As far as your direct question about squeezing us out, it is not possible for Rio to squeeze us out in any way, shape, or form at this stage.

Okay. Would you be reluctant to take any more money from them?

Not really. I mean, if it's in the same form, so say if they're, for example, anti-diluting, they want to maintain their interest at 17% or even increase their interest, it doesn't change their position from a strategic standpoint. I think where you obviously want to be sure that you've got the right partner is when you consider doing an asset-level transaction where you're selling an interest in the asset to a party that is going to be a long-term supporter and proponent for the project. I think that's a very one has to take that decision very carefully. We are not at that decision point yet.

Thank you. I'm just a little guy rooting for little guys.

Appreciate that.

Speaker 3

Thank you, John. It's a good heads up.

Speaker 5

Your next question comes from a line of Bill Powers, private investor. Your line is open.

Speaker 3

Hi, Rob. Thanks for taking my call.

Speaker 2

Bill.

Speaker 3

A couple of questions. I guess we'll start in Canada. Could you just give a little more color on the progress at Stock? I know it seems to have been delayed quite a bit, and I thought we'd be producing from that by mid this year rather than late this year. If you could maybe expand on that a little bit.

Yeah. I'll take that. Thanks very much, Bill. I mean, we were slowed down a little bit by the permitting, but at this point, we've got all of the portal drilled and blasted, and we should start driving the ramp, I guess, in the next 10 days or so. That should put us down to the fourth level sometime late in the third quarter. At the same time, we'll be driving out towards the eastern part of stock to get some mining there. There's also some mining that we're contemplating doing up near the portal. The main thing is to get down to the fourth level with the main ramp. At this point, we've also dewatered all the way down to below the loading pocket, which is at the fourth level.

The next step underground is to where we're accessing down the shaft is to get all of the surveying done of all the headings, try and understand where there might be ore, and if possible, get underground to do some drilling with small underground drills so that we can understand where the early mining might be in the old part of the stock mine. That part of the process is going to start next month. We don't have the access that we have to the fourth level is limited in terms of we're accessing that via an Alamak, and we're in the midst of trying to figure out if we should put a temporary hoist and head frame there to make that work a little bit easier to do. I think we're in pretty good shape there.

Okay. Thank you. I mean, I guess along the same lines, I know you've done a lot of drilling at Gray Fox. Could you give us some estimates on the timeline on kind of the rehab of the portal, or is that going to be a this-year project or a next-year project since that seems to have a material impact on future production?

Yeah. We're in the midst of putting a team together that's going to be responsible for Gray Fox, and that's going to happen in the first week of April. From there, we'll go into figuring out what we need to do in terms of permitting and so on to get us back into what's called the Gibson ramp, which will hopefully allow us in the short term to do some underground drilling to start to put together resources and reserves and mining plans and so on. Of course, then there's the permitting phase of that whole undertaking. We're hoping that we can move that along quickly. I would say the normal timelines on doing that kind of stuff is two to three years. We're hoping it'll be better, and we're going to initiate all of that stuff here in the next six months.

Okay. One last question for you, Bill, while I have you, is any movement on Mexico since that seems to be something that could be impactful should you be able to get the permit moved forward?

Yeah. We are, I guess, waiting for getting a permit there. I guess with all of the goings-on with tariffs and things with cartels and so on, we're moving ahead cautiously in Mexico. I guess once we see a permit, then we'll make a decision whether we should move ahead with that or not. At this point, you're right. It's a little bit of an untapped resource there, which at these prices would look pretty good. I think it's a bit of wait and see in terms of moving ahead there. Basically, we're ready to move ahead. We have equipment in Mexico. We have a gas-fired power plant. We have more or less all of the assets to make that get started fairly quickly.

I guess we're just hoping that kind of the whole climate in Mexico might change a little bit here in the near future.

They seem to have handed out permits elsewhere for existing operations. I mean, since I'm guessing this is a permit that just needs to be amended, it would not be something new, I would think, that you guys would be able to be pretty near the front of the queue for that.

That is correct. I guess it is four weeks ago where we had meetings with the Economic Ministry to see if we could move that process along. We are hopeful, but permitting everywhere in the world today, the timelines are at best unpredictable, including here in Canada.

Okay. Thanks for all your time. I just have one last question. I think this may be more directed at Rob or Terry. In your Q4 release, it was mentioned that the joint venture with Hochschild has $200 million in cash. To me, it seems as though that's an extremely large number, especially given that there was an expansion last year that was completed. Now, at today's run rate, it would be generating substantial cash. I guess as far as it seems as though the payout or the dividends should be substantial this year. Could you guys give some color on what you're expecting from them and why there's $200 million in cash there? Where did you see the $200 million? Maybe I misread that. Maybe I misread that. What is the exact number? We'd be banging down their doors if they had that much money.

Speaker 4

That's right, Rob. Bill, they typically keep, right now, their cash balances are kind of in the $25 million-$40 million range. As Rob mentioned in his opening remarks, we've had positive conversations with Hochschild. They're declaring a dividend later this month of just under $5 million. We should be receiving our share of just over $2 million by the end of the first quarter. You'll also notice in the reserve reports, they have done a good job extending mine life. It's still not long. I mean, it's still kind of 18 months on reserves and two to three years on resources. It's going to be a combination of dividends and putting money into exploration and looking at how we can make that operation more efficient. You're right. At these prices, it should generate a fair bit of free cash.

We'll keep investors updated on dividends on a regular basis.

Speaker 3

Okay. Thank you so much. Thank you, Bill.

Speaker 5

Again, if you'd like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of, please stand by, of Terry Deveres, a private investor. Your line is open.

Speaker 3

Hello, Terry.

This is McEwen. Good morning. How are you?

Excellent. Thank you. Yourself?

Very well. Thanks. I've got a whole bunch of questions, a whole bunch, but it's serious, so I won't get into all at once. All these questions are with the goal of determining when your investment in McEwen Mining is going to be worth a hell of a lot more than it currently is. I'll start with my first question on losses and Zulis. Initially, I think I was wrong in assuming that when we IPO, when you IPO, hopefully Q3, the shares will be returned, will be given to the shareholders. That's not the case, is it?

That's not the case. No.

Okay. Given that Los Azules means about $2.5 billion for production, what's the timeline to build the mine after you IPO until we're producing?

Right now, we have a plan to, assuming all the financing is in place, to do the engineering and then put a shovel in the ground in late 2026, with production starting in late 2029 and running for 27 years.

In that case, I'm trying to figure out how to value McEwen Mining's shares. We currently have 46%, give or take, of Los Azules. If I was to do a worst-case scenario post-IPO and assume that you had to raise all the equity at $30 a share, and given costs always increase, we could be issuing 100 million shares, which would bring McEwen Mining's interest down on a worst-case scenario to 10%. What's your worst-case scenario? That's mine.

One, we started financing McEwen Copper at 10 cents, $10 a share. Our last financing is at 30. If you look at what it might go out at on an IPO, I'm thinking it's going to be quite a bit higher than that. You could just look at a relatively recent transaction where BHP, the largest mining company in the world, came in and did a deal with Lundin Mining on two copper projects in the same province as Los Azules. That was valued at $4.5 billion. When you compare Los Azules to the two projects, Jose Maria and Filo del Sol, we have some definite advantages over that, and I think could be more value. I'll start. We're at a lower altitude than either of them. Operations and the health of the workers is better because there's more oxygen.

We're a larger resource than either of them, and both of them combined, and a higher copper value than either of them, although they have some gold. We would be a lower capital intensity as we're going with a heap leach process as opposed to a conventional mill producing a concentrate. We'll be producing a cathode, which can be used by industry immediately rather than having to go to a smelter in the case of concentrate. We're closer to infrastructure, major roads, and hydro corridors. We'll have our feasibility out there. They're a little more advanced than we are pre-feas and feasibility studies. We'll have our feasibility out by the end of the second quarter. They have a value of $4.5 billion, and our value is, based on the last financing, just under $1 billion.

I would expect in an IPO, assuming copper market stays where it is or goes higher, that we could shrink that difference between the $4.5 billion and the $1 billion that I spoke of. I would expect we'd be selling at higher than $30 a share on the current share structure. It would all be.

Speaker 5

If I may add, Rob.

Speaker 3

Yes. Go ahead, Mike.

Speaker 5

Sorry to jump in, but I mean, we're not looking to finance McEwen Copper or the Los Azules project entirely through equity. What we're looking forward to is a certain relation. We could think about, for example, 40%-60%, 40% equity, 60% debt. That could be a reasonable assumption. With regards to the debt, what we're looking into is export credit agency-supported debt and development finance organization or development finance institutions-supported debt. That's our main focus at the moment, while we're also in the equipment selection process.

Okay. No, thanks very much, Mike. That's exactly what I was thinking too. I was just doing, well, what if worst-case scenario, we had to do all equity? How much are we going to be left in McEwen Mining? Which then transitions me, and thank you very much, Rob. You answered a whole ton of my questions right there regarding losses and Zulis. Much appreciated. You are to be congratulated for bringing that mine to fruition. That's a tier-one asset. My hat's off to you, sir. Back to McEwen Mining. I've been there for 12 years along with you. Your share price and my share price are pretty much the same. You put $140 million, which translates to about $17 a share. Adjusted for inflation, I think you need $25 a share just to get your money back.

In 2016, we were sitting at $50 a share. We just hit $8 a share today, which is a really nice move. We're up 50 cents. I'm really happy. It's not anyone's fault that the gold mining sector has been out of favor like it has for so many years. I think it's reasonable to assume that the retail investor and the institutional investor is going to start looking at this sector with gold over $3,000. Silver looks like it wants to break out and run to $40. That's left to be seen. Maybe it'll happen this week. Maybe it won't. My last question to you, Mr. McEwen. You need $25 just to get share price, just to get your money back. I don't think you went into this just to get your money back and put in all this work.

When do you think you will at least see $25? I know I'm asking for speculation. When do you think you can get your money back? Because I'm there with you. I don't know if I have five more years to wait in this uncertain environment, given what's happening with fiat currencies, World War potentials, etc., and overvaluations in the stock market. If I want to be in stock, I'd rather hold gold bullion, which has performed fantastically.

Speaker 3

Right. You're absolutely correct. I didn't go in there to lose money. All investors are the same way. You make an investment, you're expecting it to go up, not go down unless you're shorting it. In terms of losses and Los Azules, that little piece I gave, the comparison with the BHP Lundin deal, if we just went up halfway up the value, so doubling. Right now, there's $8.47 per share due to losses and Los Azules behind every share of McEwen Mining. A doubling of that would get it up to $17, a little over that. The gold sector, as you observed, has been unloved for quite a while. Most portfolios are under gold's underrepresented in them. You're going to see, I believe, a lot more M&A occurring in the space, driven by the majors whose treasuries are filling up very quickly.

They're going to be looking at the intermediates and the juniors. That is one of the reasons we've been looking at a number of juniors. While I was running Goldcorp, we maintained a portfolio of juniors. I viewed it as a listening post for what was going on in the industry and treated some of them as a farm team. In the case of Goldcorp, most of them went up beyond where I wanted to accept the goodwill by doing M&A. We just sold them and financed a large portion of our capital development through capital gains. We've been doing that in a small way. I would have liked to have been doing much more of that because we're in a moment when I think there's a lot of value to be created in the junior space.

If you look at the past gold manias, if you want to call it, where people really get excited about gold, the seniors, you can see a triple-digit increase in the number of the junior explorers and developing companies. You can see a four-digit increase in value. It is a spot to be watching. I think more investors will be looking. You are going to see the discoveries that people are making gaining greater prominence and attention in the market. When will that return to my cost base and exceed it? I think we are in a market right now. If you look at commodities relative to financial assets, we are at a 40-year low. It is a cyclical nature.

I would say that commodities, precious metals, are going to be appreciating in value as we watch the world bifurcate into various areas with tariffs and geopolitical conflicts causing not only sovereign states but large manufacturers looking very quickly to secure safe sources of supply. Whereas regular supply areas have been disrupted by these factors. I would just say anyone who is looking at the junior sector and has not invested, it is a place they should pay more attention to.

Mr. McEwen, thanks very much for your great response. I really appreciate that you always take time to answer my questions. All the best, sir.

Thank you, Kirk. Successful investing.

Speaker 5

There are no further questions at this time, Mr. Rob McEwen. I turn the call back over to you.

Speaker 3

Thank you, Operator. Thank you, ladies and gentlemen. Looking forward to better days ahead, increased production, more cash flow, and a better share price. Thank you.

Speaker 5

This concludes today's call. You may now disconnect.