McEwen - Q4 2025
March 12, 2026
Transcript
Operator (participant)
Hello, ladies and gentlemen. Welcome to McEwen's fourth quarter and year-end 2025 operating and financial results conference call. Present from the company today are Rob McEwen, Chairman and Chief Owner, Ian Ball, Executive Vice Chairman, William Shaver, Chief Operating Officer, Perry Ng, Chief Financial Officer, Jeff Chan, Vice President, Finance, Stefan Spears, Vice President, Corporate Development, Michael Meding, Managing Director of McEwen Copper, and Carmen Diges, General Counsel and Secretary. After the speakers' presentation, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd 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.
Rob McEwen (Chairman and Chief Owner)
Thank you, operator. Good afternoon and welcome, fellow shareowners and interested investors. 2025 was a very momentous year for us, for MUX. One that I believe will be the first of many to follow. The higher gold, silver, and copper prices certainly contributed to giving us a big reason to smile, but there are many more reasons for us to continue to smile. Beyond the excitement of the higher prices, our vision of the future is accelerating towards becoming a reality. Our focus on exploration has been adding resources that will extend the lives of our mines. Our focus on expanding our existing operations, plus several acquisitions, has created the opportunity for us to significantly increase, more than double, our precious metal production by 2030. Our focus on driving McEwen Copper's large Los Azules copper project towards production has been extremely successful.
So far, our efforts have attracted global corporations as shareholders and completed extensive work to produce a feasibility study, which we published last October, that outlined an economically robust, large, long life, low production cost per pound, environmentally sensitive model for mines of the future. Compared to a conventional copper mine of comparable size, Los Azules is planned to have much lower water consumption, energy needs, carbon emissions, and it will have no tailings and be utilizing 100% renewable energy. It is designed to not only be profitable, but to improve the general public's impression and acceptance of mining. We are planning to take McEwen public later this year.
Should the copper price remain around current price levels at the time of going public, we expect this world-class deposit with strong economics that it will attract a much higher price than our last private placement at $30 a share, and that will be reflected in a higher value of McEwen Mining's shareholdings. I'd now like to ask Ian Ball to speak about the big questions that come out about our growth.
Ian Ball (EVP)
Thank you, Rob. When you look at the press release that we put out this morning, the thing that becomes apparent is, as a shareholder, I guess what I would be asking is, how are you going to finance this growth? Because there's no point of growing if all you're going to be doing is diluting your shareholders in the process. When I rejoined the company back in September and my ownership from Canadian Gold was moved into McEwen Mining, you want to see the share price grow, and that was my only reason for coming back to the company. I want to walk you through our plans and how we're going to double production and do so in a way that maintains your ownership.
First, the one thing you have to look for is at today's gold and silver prices, we are generating significantly more cash flow. We received our first dividend from the San José Mine in quite some time. That's, one, due to metal prices, but also them having covered off a number of closure obligations, which is now freeing up a lot of operating cash flow to be paid out as a dividend. Second is we're finishing up our development at Stock, and we're going to be getting cash flow coming out of Mexico as well. When you combine that with our current operations, our internal cash flow will be ever increasing, which will go a long way to developing our next two projects, which are Gray Fox, which we're looking at as an underground operation that would feed our existing Stock mill.
Then looking at our Gold Bar operation, where we're essentially continuing on what we're doing there today, which is a little more pre-stripping and expanding the leach pad. We do believe that these projects are scaled in such a way that we can finance them. We're hoping mostly internally, but if gold and silver prices were not to maintain these levels, it would not represent excess dilution to our shareholders. We're very mindful of the cost of capital and how does this translate into a per share value over the next five years. The other question is, you know, how realistic are these goals? One thing to point out is everything that we're looking at is either at an existing mine site or rehabbing a mine site here within our precious metal bases.
We do think these are projects which are quite achievable with the time frames that we have set out today in the press release.
Rob McEwen (Chairman and Chief Owner)
Thank you, Ian. I will now ask Perry to discuss our financial performance.
Perry Ing (CFO)
Thanks, Rob. Good afternoon, everyone. Yes, as discussed earlier, you know, the fourth quarter was very good. Our business delivered a strong finish to the year. Gross profits on an accounting basis more than doubled quarter-over-quarter, rising to $17.4 million from $7.8 million just the quarter prior. For the full year, gross profit increased to $47.6 million, up from $30.9 million in 2024. The strength flowed through to our bottom line in terms of reported net income. In the fourth quarter, we generated net income of $38.1 million or $0.70 a share, compared to a net loss of $8.2 million or $0.16 a share in the fourth quarter of 2024.
For the full year, we delivered net income of $34.4 million which is a sharp turnaround from a net loss of $43.7 million in 2024. What are the main drivers for that? I think, both Rob and Ian touched on, the higher gold price environment. The higher gross margins come from both increased production that we saw in the fourth quarter relative to the rest of the year, as well as higher realized gold prices at our 100% owned operations, where we realized over $4,400 an ounce gold in the fourth quarter. As Ian touched on, we also had solid operating performance for our San José Mine, where we reported $33.5 million in the fourth quarter just for our 49% interest in, the San José Mine.
As noted, subsequent to the fourth quarter, we received a dividend of $8.8 million in February. Also tied to our accounting net income is a $27.5 million deferred tax recovery tied to the expected use of U.S. tax losses, which shows our expectations for continued profitability at our Gold Bar Mine complex in the United States. I believe these results underscore the progress we're making in terms of our operations, cost discipline, and positioning our assets for growth in 2026 and onwards. I also note that in terms of our balance sheet, we ended the year with a strong cash position of $51 million compared to $14 million at the year-end 2024.
Rob McEwen (Chairman and Chief Owner)
Thank you, Perry. Now I ask William to speak about our operations and looking forward.
William Shaver (COO)
Yes. Thanks very much, Rob. With regard to our operating entities at Gold Bar and Fox, I'm happy to tell you that it looks like the first quarter is going to be on target, and that will put us in a good position to have the whole year. If you remember last year, we kind of had a bit of a slow start to the year and that kind of plagued us through most of the year. This year we put a concerted effort into getting off on the right foot, and I think we're doing well on that front. As you know, Mexico is also producing a small amount of gold and that's not a significant amount of our production.
However, it is carrying all of the operating costs out of Mexico. As we move forward in this year, we will complete the development of the stock ramp, and the access over into what we call Stock East. That portion of the mine should be in production in the second half of this year. We're also working hard on our Gray Fox pre-feasibility study, which will be out in the month of June. We're doing the detailed planning of bringing the Tartan asset into production, and we have permitting work going on all of these projects, including building the Phoenix project.
As Rob mentioned earlier, you know, our exploration over the last four years is now coming closer to production and, you know, we can see all of these projects moving towards production this year. Of course, in the third quarter of this year, we will complete mining at the Froome Mine, although, you know, we're still drilling some lower parts of the Froome West and we're seeming to be finding ore on some of these holes. Froome may in fact, you know, find a way to go for another couple of quarters.
All in all, we're pretty happy with where we are in the projects and the project development and, you know, I think it's nice when you're in the third month of the year that you're able to say that the first quarter is gonna be on target. That's a rough summary of where we are.
Rob McEwen (Chairman and Chief Owner)
Thank you, Bill. Now I'd like to ask Mike to talk about our McEwen Copper's Los Azules project.
Michael Meding (VP and General Manager of McEwen Copper)
Thank you, Rob, and good afternoon, everyone. It is a pleasure to be here today with an update on McEwen Copper and the Los Azules project. I want to be direct with you. 2025 was a transformational year for this project, and we enter 2026 with more momentum than at any point in our history.
When we look back at what we accomplished over the last 12 months, three things stand out. First, we secured RIGI approval, locking in 30 years of regulatory and fiscal stability in Argentina. Second, we completed a robust feasibility study that confirms Los Azules as a globally significant low-cost copper project. Third, we did all of this while the macro environment for copper has only gotten stronger. Let me start with RIGI, because this was arguably the single most important de-risking event in the project's history. In September 2025, Argentina approved our application under a large investment incentive regime. What does this mean in practical terms? It means Los Azules now benefits from 30 years of legal, fiscal, and customs stability. Our corporate income tax rate drops from 35%-25%. We receive a 50% reduction in dividend withholding tax.
We are exempt from export duties at the start of the exports, and critically, we have guaranteed access to foreign currency and international arbitration. RIGI was designed to attract exactly the kind of large-scale investment that Los Azules represents. It has fundamentally changed the investment framework for mining in Argentina, and we were among the first to secure these benefits. In October 2025, we released the results of our feasibility study, and I want to walk you through the headline numbers because they tell a compelling story. The base case at $4.35 per pound of copper gives us an after-tax NPV at an 8% discount of $2.9 billion, a 19.8% IRR, and a payback of 3.9 years.
The project is designed for a 22-year life of project with an average copper cathode production of 205,000 tons per annum in the first five years and 148,000 tons per annum of the full life. Our C1 cash cost comes in at $1.71 per pound and all-in sustaining costs at $2.11 per pound, placing Los Azules firmly in the lower half of the global cost curve. Here is what really excites me. At today's copper price of around $5.80 per pound, the economics are dramatically stronger. The NPV more than doubles to $6.3 billion. The IRR jumps to 30%, and the payback shortens to just 2.7 years. The NPV to CapEx ratio moves from just under 1-2.
Every dollar increase in the copper price adds roughly $2.3 billion to the project NPV. For MAG shareholders, that translates to approximately $18 per share of additional value for every dollar move in copper. Importantly, the feasibility study also identified significant upside beyond the base case. There is potential for an additional 33 years life of mine, adding another 141,000 tons per annum of copper production to either Rio Tinto's Nuton technology or a commercial concentrator. When you consider that full potential, you are looking at one of the largest and longest-lived copper assets globally. I want to emphasize something that makes Los Azules stand apart. This project has been designed from the ground up as low impact operation.
Compared to a conventional mine of similar scale, Los Azules is expected to use one quarter of the water, produce one-tenth of the carbon emissions, and has the potential to operate on 100% renewable power. There are no conventional tailing dams. We produce a finished copper cathode on-site which can be delivered directly to industry. This matters enormously in the current environment. Off-takers, financiers, and governments are all increasingly focused on the sustainability credentials of their copper supply. Los Azules is positioned to be a supplier of choice in a world that demands responsibly produced copper. We've also been building the institutional framework around the project. The International Finance Corporation, a member of the World Bank, has signed a collaboration agreement with McEwen Copper to align Los Azules with IFC's environmental standards, social and governance standards.
This agreement also provides IFC with customary rights to act as a lender or arranger for prospective project financing going forward. Having the IFC at the table is a strong signal of the caliber of project we are building. Looking ahead, our team is continuing detailed engineering work, and we are targeting a final investment decision by the end of 2026, with construction targeted to begin in early 2027, obviously subject to project financing. We are well on track. On the financing front, we are seeing strong interest from multiple categories of capital providers. Export credit agencies and development finance organizations in particular have shown meaningful appetite to support a project of this profile, large scale, long life, responsibly designed, and located in a RIGI-qualifying jurisdiction.
We are advancing conversations with the IFC and other institutions, and we are actively preparing optionality for full financing packages that gives us flexibility in how we fund construction. At the same time, we are currently evaluating the ideal timeframe for an IPO of McEwen Copper in connection with these ongoing financing discussions. The combination of a completed feasibility study, secured regulatory framework, strong copper fundamentals, and interest from institutional capital providers give us the right conditions to consider a public listing that would unlock value for shareholders and provide additional avenue to fund the project's development. Let me step back for a moment and talk about why the timing for Los Azules could not be better. We are building this project into what I believe is the strongest structural backdrop for copper that we have seen in a generation.
Copper is trading above $5.80 per pound today, near record highs. LME prices surged past 14,500 per metric ton earlier this year. Major banks are forecasting prices to remain elevated. JP Morgan expects an average of around 12,000 dollars per ton for 2026. Goldman Sachs has raised its forecast to approximately $11,400 per ton. There is structural deficit forecasted going forward on significant growth and overall worldwide declining grades. What is driving this? Three converging mega trends. First, the explosive build out of AI data centers. JP Morgan estimates data centers copper demand alone will reach approximately 175,000 tons in 2026, growing rapidly year-over-year. A single large AI data center can require up to 50,000 tons of copper. Second, the electrification of transport.
Electric vehicles use nearly 3x the copper of a conventional car, and EV adoption continues to accelerate. Third, the massive investment needed in grid infrastructure and renewable energy to power all of that. Power grids worldwide need to be expanded and modernized to support all this demand. On the supply side, we have real constraints. Mine disruptions have tightened. Declining ore grades, permitting timelines averaging 15-17 years from discovery to production, and a weakening discovery pipeline all point to sustained structural deficits. S&P Global projects that copper supply could fall 10 million tons short of demand by 2040. This is precisely the environment in which large-scale shovel-ready copper projects like Los Azules become extraordinarily valuable. The world needs new copper supply, and there are very few projects of our scale and quality anywhere in the development pipeline.
Investor sentiment towards copper equities has shifted meaningfully over the past year, and rightly so. The market is recognizing that we are at the beginning of a multi-year super cycle driven by electrification and AI infrastructure. Copper is no longer just industrial metal. It is a critical enabler of the energy transition and the AI revolution. Now, consider this. Of the 20 largest undeveloped copper deposits in the world, nearly all are either controlled by major mining houses or effectively stranded by permitting and political roadblocks, some for decades. Los Azules, to our knowledge, is the only that is independently held, fully permitted, has a completed feasibility study with costs in the lower half of the global cost curve, has its regulatory framework locked in, and is advancing toward a final investment decision this year.
For investors looking for direct exposure to a world-class copper asset before construction begins, there's simply nothing else like it in the public markets. For those of you evaluating McEwen Copper's value within MUX, I would point you to the most recent private financing is October 2024, which valued McEwen Copper at $30 per share, implying an overall market value of $987. Since then, we have secured the environmental permit for construction and operation. We have secured the RIGI, and we have secured the feasibility study with strong economics, significantly de-risking and increasing the value for the project. Let me close by bringing this all together. Los Azules is one of the world's largest undeveloped copper deposits. In 2025, we de-risked it through RIGI approval and a strong feasibility. We have a clear path to the final investment decision.
The project's environmental design positions it as a next-generation mine, and we are building it into the strongest copper market in decades. Los Azules has the potential to become a generational copper asset, one that will deliver value for shareholders for decades to come. Thank you. I hand it over back to Rob.
Rob McEwen (Chairman and Chief Owner)
Thank you, Mike. Excellent. I'd just like to say, one, we have some questions I'd like to answer, and we've, through these presentations, covered off some of the questions. One, Perry was asking to provide more information on the IPO for McEwen Copper, which we're looking at later this year when we, as Mike said, complete several other tasks. Steve was asking also about Los Azules and about the milestones, and I think that was well covered off by Mike. He also had a question about Goliath Resources, which we purchased an interest in. The rationale, it's a rich gold deposit in British Columbia. It's had a high success level in its drilling. It looks like a resource that would grow. Buying into juniors was a strategy I used when building Goldcorp. I used that as a
It served as a listening post, and also, one day could be a farm team member. But it also provided us with capital growth that allowed us to fund our expansion of production. We have John from Minnesota, and he's asking about our silver production. I'll ask Ian Ball to talk about that.
Ian Ball (EVP)
Yes. Regarding John's question, he was asking what is our current attributable silver production. Right now, we have silver just coming from our San José mine with Hochschild. Our portion of that is approximately 3.6 million ounces of silver. That's the total production. Ours is half. We then convert that to gold equivalent when we report our production. We're doing that right now based on a silver to gold ratio of 77-1. That's a good question because it's not quite clear when you look at our news release. If you take half of the 3.6, that's currently what we're producing in terms of silver. You know, how does that evolve over the years where our next source of silver production comes from our, what we're calling El Gallo phase II.
That is obviously after El Gallo phase I, and we're looking at approximately 3-4 million ounces of silver production there, which is 100% owned. In terms of how we look at rationalizing these, obviously we do it based on, you know, gross profit margins, but also in terms of where things are practically in terms of CapEx and permitting. The one thing we are currently looking at is if the silver price environment were to remain as strong as what it was and the margins as robust, we are looking at ways that somehow you could accelerate the phase II silver production closer to today and deferring some of the gold production coming from El Gallo. We are working on that to try to maximize the profitability of the operations.
But a lot of that obviously is driven by the silver price. Just looking at the last question here. The last question that came from John was whether the company has considered a silver dividend. Right now, just based on the optics of that, no, it probably would logistically be very difficult for us to issue a dividend in silver. I think, you know, first and foremost, if we were to implement a dividend policy, it would start with cash, and then proceed from there. I know when Rob was running Goldcorp, when I was running Abitibi, I'm not saying I copied his strategy, but we did copy his. That was to pay a monthly dividend. I think that's something that, you know, here we're looking to eventually strive towards, while balancing our growth needs.
Rob McEwen (Chairman and Chief Owner)
Thank you, Ian. Operator, do you have any other questions?
Operator (participant)
We do. As a reminder to ask a question, you will need to press star followed by the number one on your telephone keypad. Your first question we have comes from the line of Jake Sekelsky from Alliance Global Partners. Your line is open.
Rob McEwen (Chairman and Chief Owner)
Hello, Jake.
Jake Sekelsky (Managing Director and Head of Metals and Mining Research)
Hey, Rob and team. Thanks for taking my questions.
Rob McEwen (Chairman and Chief Owner)
Please do.
Jake Sekelsky (Managing Director and Head of Metals and Mining Research)
Just looking at the 2026 guide, you mentioned in the release that no contributions from Stock were included there. I guess I'm just wondering, is that something that you expect to revisit, you know, in the second half of this year from a guidance standpoint? I'm just wondering how we should be thinking about the ramp up there, as it relates to consolidated production.
William Shaver (COO)
Yep. Thanks very much for the question, Jake. Yeah, basically, you know, the project development at Fox is going very well. We're more or less on schedule. We broke through into the second level a couple of weeks ago. We're breaking into the fourth level, you know, before the end of this month. The headings over towards where the mining is gonna start are advancing at the right pace, you know, about in the two headings, about 14 meters a day. We, you know, will see production from there in the second half of this year. What we're hoping is that the
What we're planning, I guess, is that the Froome Mine is gonna kind of fade out and then at the same time as we're ramping up at Stock. We're in the midst of acquiring the equipment for the operation and, you know, so that once we get out to the ore, we'll be ready to start the mining operation.
Jake Sekelsky (Managing Director and Head of Metals and Mining Research)
Okay. That's helpful. Just on the M&A front, I mean, Rob, you just mentioned you've been fairly active investing in juniors and picking up land packages surrounding some of your mines. Do you feel, you know, you have your plate full with the internal growth that you've laid out? Or are you seeing any attractive larger producing bolt-on type acquisition opportunities out there in this type of environment?
Rob McEwen (Chairman and Chief Owner)
That's a good question, Jake. When you look at the performance of juniors relative to the producers and relative to gold, they're still lagging far behind in terms of performance. We've been concentrating on companies that have properties either adjacent or in close proximity to our existing operations that would allow us to extend the life that we believe have potential to grow and aren't expensive to acquire. We're open to other opportunities. You never want to issue a lot of stock and dilute your position, but we're building our production. Right now we can see more than a doubling by 2030, assuming all the projects go ahead as planned. I don't think I want to stop there.
The metal markets are. I see the gold price, the silver price, the copper price are those commodities getting in short supply, and demand is increasing. I see higher prices as we go forward. Want a position on McEwen benefit from that.
Jake Sekelsky (Managing Director and Head of Metals and Mining Research)
Got it. Okay. That's all for me. Thanks again, guys.
Rob McEwen (Chairman and Chief Owner)
Thanks, Jake.
Operator (participant)
Your next question comes from the line of Joseph Reagor from Roth Capital Partners. Your line is open.
Rob McEwen (Chairman and Chief Owner)
Hi, Joe. How's it going?
Joseph Reagor (Managing Director and Senior Research Analyst)
Hey, Rob. I'm looking forward to seeing you in a week or so. I guess it's just kind of following up on Jake's question about Fox. Will you guys still report the production from there? It just won't be considered part of your ounces.
That are commercial, so therefore it's not in the guide. Is that the rationale there?
Jeff Chan (VP of Finance)
Yeah. This is Jeff, Vice President, Finance here. Yeah, I think that would be the expectation that we would start to report pre-commercial production analysis from stock partway through the year when we start expecting to see that come through. At this time, because it is pre-commercial production, we're not giving production or cost guidance on those notes.
Joseph Reagor (Managing Director and Senior Research Analyst)
Okay. Yeah, it's helpful. Then, over at Gold Bar, saw the new Lookout resource. Can you remind us, like, where Gold Bar is at as far as the remaining mine life at this point?
William Shaver (COO)
Yes. Yeah, the mine life at Gold Bar, as we know, it goes into the 2030 or 2030s. I would say, you know, we're doing an extensive amount of diamond drilling and exploration drilling on, you know, ground, you know, all around the Gold Bar site. At the same time, we're doing an extensive amount of drilling on the Timberline assets. You know, that is basically in progress right now on an exploration basis. We're also doing some mine planning, and we're also doing some permitting work on those sites. As soon as that, you know, we get all of the permits, there are areas there that are amenable to open pit mining.
You know, what our intention is at this point is we would build a small or small to medium-sized leach pad on those sites and leach the material at the site. Meanwhile, the plant will be very, very small because all we'll do is circulate a cyanide solution, and then we'll take the carbon back out to Gold Bar. We won't have to build a plant there. All we'll have is a leach pad and a circulation system. There'll also be some sumps and so on for storm events and that kind of thing. Basically, it'll be an operating mine without much infrastructure.
Joseph Reagor (Managing Director and Senior Research Analyst)
Okay. That makes sense.
William Shaver (COO)
Kind of one final thing.
Joseph Reagor (Managing Director and Senior Research Analyst)
Go ahead.
Ian Ball (EVP)
I was just going to ask Ian to comment on the resources.
Joseph Reagor (Managing Director and Senior Research Analyst)
Yeah.
Ian Ball (EVP)
The one thing I would take into account is what we refer to as Trinity Ridge. It's actually below the existing pits at Gold Bar. When Bill talks about, you know, the current mine life 2000 into the 2030s, we then see it expanding much beyond that as Trinity Ridge is taking into account mineralization that we know it exists, does not have a resource, but it's directly below where we're mining today.
Joseph Reagor (Managing Director and Senior Research Analyst)
Okay.
William Shaver (COO)
We'll have resources.
Ian Ball (EVP)
Yeah. We're currently doing a drill program right now. There are 150 drill holes approximately. We're about, you know, a third of the way through. Once we finish that program and have the assays, we're gonna be calculating the Trinity Ridge resource while we're doing metallurgical test work on that as well. We see that Gold Bar just dovetailing into a much larger pit.
Joseph Reagor (Managing Director and Senior Research Analyst)
Cool. That makes sense. Last thing, just on MSC, now there's actually dividends coming out of it. Is there an opportunity to reopen discussions with Hochschild for one of you to buy the other one out there and consolidate that asset?
Rob McEwen (Chairman and Chief Owner)
Well, there's been rumors they wanted to sell it from time to time, but I think as the price has gone up, that desire to sell has sort of faded away. They were gathering lots of cash to cover off the closure costs, and they've now exceeded what they thought they needed. They still have an active exploration program keep going. It's a prolific area and right next to Cerro Negro.
The price is.
Joseph Reagor (Managing Director and Senior Research Analyst)
On your end, Rob, would you consider monetizing that and redeploying the capital elsewhere?
Ian Ball (EVP)
At the right price, Joe.
Joseph Reagor (Managing Director and Senior Research Analyst)
Oh, okay. Fair enough. I'll turn it over. Thank you.
Rob McEwen (Chairman and Chief Owner)
Thank you.
Operator (participant)
Your next question comes from a line of Jeremy Hoy from Canaccord Genuity. Your line is open.
Rob McEwen (Chairman and Chief Owner)
Hello, Jeremy.
Jeremy Hoy (VP of Equity Research)
Hi, Rob and team. Thanks very much for taking my questions. I guess I'll start with, you know, there's a lot of growth projects on the go. It's rapidly evolving, and it strikes me there's a lot of catalysts coming up this year. Could you walk us through the capital expenditures in 2026 and how those are divided across the assets? If you can comment on 2027 or 2028, that'd be helpful as well for the model in front.
Rob McEwen (Chairman and Chief Owner)
Certainly. I'll ask Jeff to address that.
Jeff Chan (VP of Finance)
Sure. We expect the bulk of our capital expenditures this year to really be focused on the Fox Complex, so really looking at the Stock Mine. I think in terms of remaining CapEx through 2026 to complete, I think we're looking at sort of mid-$50-$60 million to finish, possibly less. We are also looking at
Heap leach expansion at Gold Bar, which will take about $12 million this year. We're also looking at Mexico in terms of the plant refurbishment and bringing that back online, about $25 million there.
Jeremy Hoy (VP of Equity Research)
Okay, great. That's very helpful.
William Shaver (COO)
That gets you to about $100 million. I think what you'll see is as we move forward with Tartan and Grey Fox, you know, the next few years will be around $100, you know, that same $100 million a year.
Jeremy Hoy (VP of Equity Research)
To be clear, that $100 million, you know, we can calculate what sustaining is expected to be based on the AISC numbers provided. What's the approximate split between sustaining and non-sustaining?
Ian Ball (EVP)
In terms of those capital expenditures, I think the only amounts that we expect to report as sustaining are the Gold Bar figures. Given Stock is a growth project, and we don't expect to bring that into commercial production until 2027, that capital has not been included in our AISC estimates at this time.
Jeremy Hoy (VP of Equity Research)
Okay, great. That's really helpful. I guess just staying on the same vein of discussion here, again, a lot going on, you know, pretty exciting for the precious metals portfolio. Does this require augmentations to the team? Are you guys building up, on the technical side, the exploration side? Just thinking about, management's capacity to deliver on all these goals.
William Shaver (COO)
Perhaps I can answer that. Yeah. Yeah, I mean, we're building up our capabilities in terms of our technical capabilities and our bench strength, you know, as we speak. That has been going on for, you know, not more than six months, and you might even say it started a year ago. Yeah, we have, you know, we have a study group that's centered in Sudbury. The reason we put that there was because, you know, we had some, I guess some people that worked with us in the past and, you know, so we set it up so that they'd be home, and we have really had no more room for them here in Toronto, and they didn't wanna drive down here anyway.
You know, we're also adding key people at all the projects. You know, it's for sure a work in progress. Recently we appointed a person in charge of permitting, environmental and social responsibility. We're building a substantial HR team. You know, we're working with a couple of consultants to help us put more rigor around our internal reporting requirements and so on. Yeah, I mean, we recognize the hurdles that we have if we're gonna build these projects.
Jeremy Hoy (VP of Equity Research)
Understood. Okay. Well, thank you very much for the color, and I'll step back in the queue.
Rob McEwen (Chairman and Chief Owner)
Thank you, Jeremy.
Jeremy Hoy (VP of Equity Research)
Thanks.
Operator (participant)
Your next question comes from a line of Don DeMarco from National Bank. Your line is open.
Rob McEwen (Chairman and Chief Owner)
Hi, Don.
Don DeMarco (Analyst)
Thank you, operator, and good afternoon, Rob and team. Maybe a question on the Tartan mine. You've got the resource update that's pending. With this update, maybe just in terms of managing expectations, do you plan to start by de-risking this, the existing resource, or could we also see maybe some resource accretion at this early stage?
Ian Ball (EVP)
Yeah. We're taking into account all the drilling that's been done post the 2017 resource. We do expect it to be larger as the vertical extent of Tartan was expanded by about 90%. It's not gonna be an apples-to-apples comparison for a few reasons. The 2017 resource did not use a stope optimization as it was really not a requirement or it was seen as a requirement back in 2017. We are gonna be putting some preliminary stopes around the resource. The second factor that makes it hard to compare is the resource cutoff grade. 2017 used a three gram per ton cutoff. At today's gold price, we're using $3,000 for this resource.
You know, you could theoretically use a much lower cutoff grade, which will increase your ounces as well. Again, the comparison's hard, but we do expect an accretion number over the previous resource, you know, by-
Don DeMarco (Analyst)
Okay.
Ian Ball (EVP)
You know, I'd say by a reasonable amount.
Don DeMarco (Analyst)
Okay. Okay, we'll look forward to that. Maybe just some comments on your strategy for M&A. I mean, obviously you've been somewhat active. I mean, Tartan's an example. That was the Paragon looking at these, you know, tactical high ROI opportunities. Should we maybe expect more of these to come, or what is your kind of, you know, your vision on M&A or in the gold sector over the next, you know, year or two to come?
Rob McEwen (Chairman and Chief Owner)
Having greater exposure to precious metals, I think is very positive development if you can find it on an accretive basis. We, I mean, we spend, we have a large expenditure on exploration.
Don DeMarco (Analyst)
Yep.
Rob McEwen (Chairman and Chief Owner)
We've been meeting success there on our own properties, but we'd like to augment that growth.
If we see...
Don DeMarco (Analyst)
Okay. Jurisdiction-wise, do you continue to focus on the Americas, I would presume then or Ontario or what, is there any, you know, considerations on where you might be focused?
Rob McEwen (Chairman and Chief Owner)
We've largely focused. Well, we have focused almost exclusively on areas in close proximity to our existing operations. We have the talent in place and don't have to spread ourselves too thinly. If what comes up in our neighborhood, that's a natural fit where you have an opportunity to extend the life, increase your production. But there are other situations that might catch your eye and where you can see considerable growth. We call it opportunistic.
Don DeMarco (Analyst)
Okay. Well, thanks so much. That's all for me and good luck with the rest of the quarter.
Rob McEwen (Chairman and Chief Owner)
Thank you, Don.
Operator (participant)
Your next question comes from the line of Jay Goldsmith, a shareholder. Your line is open.
Jay Goldsmith (Shareholder)
Hi, Rob. Good afternoon. Joined a little late, so I hope this question wasn't asked. Congrats to you and the team on the solid quarter and nice to see the profitability turnaround and stronger balance sheet and progress on Los Azules. Can you update McEwen's stake in Paragon? I think it's like 31% in Paragon Geochemical Laboratories and the photon assay technology. Love to hear how the adoption's going.
Rob McEwen (Chairman and Chief Owner)
I'll ask Ian to speak on Paragon.
Ian Ball (EVP)
Yeah. Just for your background, I did join the board of Paragon when McEwen made its investment. The ownership is slightly below 30%. It's about 28%. You know, McEwen was using Paragon for its assay needs, you know, before we made the investment, so we did see how it was working there. As an industry, you know, it is gaining widespread acceptance. Right now, another supplier of the photon machines is supplying Barrick, and I believe the number is about 18 machines that Barrick is now using worldwide. You know, you are seeing turnaround times for assaying for gold and silver, you know, down as low as six days, high as 10 days versus traditional fire assay you're seeing right now in the industry is running, you know, 3-4 weeks.
The cost between the two is approximately the same. A couple of the key advantages with the photon technology is that the sample that you're able to analyze is much larger. By that, it should be more representative of the actual assay. It's also non-destructive. You're able to use that material for metallurgical test purposes later if you so choose versus having to drill a second hole or another hole. The turnaround time is much faster than, obviously, fire assays. There are many advantages, but you're still seeing throughout the industry, you know, it's still being adopted, but, you know, it's gonna take probably a couple of more years. The more people are turning towards it.
You said Barrick is using it now for the majority of their needs, and we're using it for all of our current needs.
Jay Goldsmith (Shareholder)
Okay. Exciting to hear. Financial impact for McEwen still a couple of years down the road, you suspect?
Ian Ball (EVP)
Well, there's no real financial impact for us. We do include Paragon as an equity investment into our financial statements, very similar to what we do with McEwen Copper. You know, we're not adding any more capital out of our treasury to it, nor are we receiving any current dividends. The impact right now is purely as a capital gain or loss. Right now, we made the investment at CAD 1.75. You know, we've been trying to help them, you know, realize what a customer wants to see. Because I think you are in a commodities business when you're doing things such as assaying.
What we're trying to stress and work with Paragon is how do you make yours a very customer-oriented business, so you go above and beyond to give the level of service that your competitors are not to win over that business.
Jay Goldsmith (Shareholder)
Okay. I appreciate that. Thank you so much.
Rob McEwen (Chairman and Chief Owner)
Thank you, Jay.
Operator (participant)
There are no further questions at this time. Mr. Rob McEwen, I turn the call back over to you.
Rob McEwen (Chairman and Chief Owner)
Thank you, operator. Thank you for everyone on the line. We're looking to build a company that provides our shareowners with growing exposure to hard money, gold and silver, and to a critical mineral, copper, a metal critical to modern society. We're moving ahead on that front, and I think once we take McEwen Copper public, there'll be a very positive impact on our balance sheet. Thank you for joining us today.
Operator (participant)
This concludes today's call. You may now disconnect.