McEwen Inc. (MUX) Earnings Call Transcript & Summary

Hello, ladies and gentlemen. Welcome to the 2024 Annual Meeting of Shareholders of McEwen Mining. Please note that today's meeting is being recorded. [Operator Instructions] We will begin with the formal part of the meeting, which will be followed by a company presentation. It is now my pleasure to turn the meeting over to Rob McEwen, Chairman and owner of the McEwen Mining. Mr. McEwen, the floor is yours.

Thank you, operator. As Chairman and Chief Owner of McEwen Mining, it's my pleasure to welcome you today to our 2024 Annual General Meeting of Shareholders. I believe that our large exposure to copper, gold and silver will position us well to prosper in the years ahead. Inflation and the energy transition will drive the prices of these metals significantly higher. Here's our agenda. The meeting will have 2 parts as the operator said, Carmen Diges, our General Counsel will be handling the first part, which deals with the formal requirements of an annual meeting, after which members of our senior management team and I are going to talk about how we have worked to prepare the company for a future of strong growth. So, let's get the party started, they say. Carmen, you have the Chair. Please start by sharing the formal part of the meeting.

Thank you, Rob. Good afternoon. My name is Carmen Diges, and I'm the General Counsel and Corporate Secretary at McEwen Mining. At Rob's request and in accordance with our bylaws, I will act as Chairman of this meeting; and Stefan Spears, Vice President, Corporate Development of the Corporation will act as Secretary. A representative from Computershare will be acting as a scrutineer for the meeting and is also in attendance. Today's virtual-only meeting is a live webcast. As we believe in engaging with our shareholders, we hope this virtual meeting will maximize participation of shareholders regardless of their location. Thank you very much to everyone for participating in our virtual meeting today. Today, we'll consider the election of directors for the ensuing year. We'll also consider the proposed approval of the McEwen Mining 2024 Equity and Incentive Plan and the ratification of appointment of our independent accountants. For convenience, certain persons have been asked to propose and second resolutions. You don't need to vote if you've already voted by proxy, unless, of course, you wish to change the vote. All owners of record as of the close of business on May 13, 2024, are entitled to vote at this meeting. Those wishing to vote, would have received a ballot when they registered with the scrutineers and will need to sign-in using the link provided online and their 15-digit control number provided on the proxy card or notice of availability of proxy materials previously received. Should participants wish to post a question or comment, they will need to click on the Q&A icon above. Our Vice President of Corporate Development, Stefan Spears, will be managing questions for this meeting. Any questions pertaining to the business of the meeting will be addressed today. A complete list of the owners of McEwen Mining, as of the record date for the meeting, May 13, 2024, has been on file at the McEwen Mining office and was open to inspection by any owner at the corporation's principal office and upon request by e-mail, since May 17, 2024, as required by Colorado law. The list is also available online for inspection by any owner during this meeting. I have an affidavit of mailing from Computershare Trust Company, our stock transfer agent, attesting that the notice of this meeting, proxy statement, annual report on Form 10-K and proxy were mailed or made available to all shareholders of record as of May 13, 2024, in the manner prescribed by law on May 17. Copies of these documents are available today to any owner who would like them. If you would like a copy of the annual report or the proxy statement, the links are provided online. There are a total of 49,488,775 shares outstanding and entitled to vote at this meeting. I've received the Interim Inspector's report on attendance. Our articles require 1/3 of the outstanding shares entitled to vote at this meeting for a quorum and on that basis, I declare a quorum is present. I also declare that this meeting is duly convened. The first item of business is the appointment of the Scrutineer. I have appointed Computershare Trust Company of Canada to act as Scrutineer for the purposes of tabulating votes at this meeting. The next item of business is the approval of the minutes of our last meeting held on June 28, 2023. Copies are available for inspection by any interested owner. With your consent, I propose we dispense with the reading of these minutes. Is there any objection? You may submit objections or questions online by clicking on the Q&A icon in the upper right of the meeting's screen.

No questions or objections have been received.

Thank you. The polls have been open for voting since May 17, 2024 and have remained open until 2:00 p.m. Eastern Time today, as declared in our proxy statement regarding this meeting. We will vote on those matters by online ballot and provide an interim result of voting on each item of business today. Management believes it has sufficient proxies to carry each of the proposals. And as such, the outcome is expected in favor of management's recommendations. If you did not vote by proxy and intend on voting at the meeting and you have not yet been informed of the procedures for online voting, please read the online voting instructions available to shareholders by clicking on the documents icon on your screen. We'll now move to the election of directors to serve until the next annual meeting of owners and until their successors are duly elected and qualified. Mr. McEwen, McEwen Mining's Chairman and CEO will now recognize the 9 persons nominated for election to the Board of Directors.

The Board has nominated the following persons to serve as directors of the corporation to hold office until the next annual meeting of McEwen Mining and until their successors are duly elected: Allen Ambrose, Richard Brissenden, Nicolas Darveau-Garneau, Robin Dunbar, Michelle Makori, Merri Sanchez, William Shaver, Ian Ball and myself.

Is there a second to the nominations?

I second the nomination.

Thank you, Mihaela. The corporation has received no other nominations for directors in the manner prescribed by the corporation's bylaws. I therefore declare that the nominations for directors are closed. Is there any discussion regarding this matter? If so, please communicate using Q&A icon on your screen.

No questions or points of discussion is raised.

Thank you. We'll now move on to the next item of business. Next item is the proposal to approve the McEwen Mining Inc. 2024 Equity and Incentive Plan. As stated in the proxy statement prepared for the purpose of this meeting, the adoption of the 2024 Equity and Incentive Plan will permit awards of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards up to a maximum number of shares reserved for issuance, which is set at 5 million new shares of common stock. Additionally, the total compensation paid to a director who is not also an employee, including equity awards and cash compensation in any calendar year may not exceed $400,000. The 2024 plan updates the plan we had in place since 2015. It modernizes our plan to more current standards for Equity Incentives. The 2024 plan does not increase the number of shares of our common stock that are available for awards under our old plan. If shareholders approve this new plan, no new awards will be granted under the old plan after the annual meeting. The old plan will, however, continue to govern outstanding Equity Awards made under, in the past. The 2024 Equity and Incentive Plan is outlined in the proxy statement prepared for the purpose of this meeting and attached as Annex-A to that statement. If you'd like a copy of the statement, the link is provided online. I'll now call for a motion on the proposal.

I move that the following resolution be adopted, resolved that the proposed McEwen Mining Inc. 2024 Equity Incentive Plan be substantially in the form attached as Appendix -- Annex-A to the proxy statement be ratified and approved.

Thank you, Rob. Is there a second to the motion?

I second the motion.

Thank you, Mihaela. You've now heard the motion. Is there any discussion.

No questions or points of discussion have been raised.

Thank you. We'll now move on to the remaining item of business, which is the ratification of the appointment of Ernst & Young LLP as auditors and independent registered public accountants of the corporation for the year ending December 31, 2024. The Audit Committee of the Board of Directors has approved the appointment of Ernst & Young LLP and recommends ratification of their appointment. Robert McEwen will make the necessary motion to approve the auditors.

Really? I move that the following resolution be adopted. Resolve that the appointment of Ernst & Young LLP as the corporation's independent registered public accountants for the year ending December 31, 2024, be ratified and approved.

Thank you, Rob. Is there a second to the motion?

I second the motion.

You've now heard the motion. Is there any discussion?

No questions or points of discussion have been raised.

Thank you. If you've not voted or wish to change your vote, you may now do so by clicking on the vote link provided online. Any shareholder who has already voted and does not want to change their vote, need not take any further action. The final tally of the vote and report on the ballot by the scrutineers will be published on the SEC website and on SEDAR+ within 4 business days of the meeting and in the minutes of the meeting. Based on the preliminary review of the votes cast, the Election Judge has informed me that all nominations for the Board of Directors have been elected. The amendments to the second amended and amended -- Sorry. The amendments to the Equity Incentive Plan and the appointment of Ernst & Young LLP as the corporation's auditors have all been ratified. We'll safeguard any ballots, proxies, affidavit of mailing, oath and certificate and report of inspector and save them with records of this meeting. On the basis of the scrutineers' report, I'm pleased to announce that Robert McEwen, Allen Ambrose, Richard Brissenden, Nicolas Darveau-Garneau; Robin Dunbar, Michelle Makori, Merri Sanchez, William Shaver and Ian Ball have all been elected as the corporation's directors. The new Equity Incentive Plan has been adopted and the proposal to ratify the appointment of Ernst & Young LLP as the corporation's independent registered public accountants for the year ending December 31, 2024, is approved. Thank you. Are there any other items to be considered at this owner's meeting? If not, I would entertain a motion to terminate the formal portion of the meeting.

I hereby move that the meeting be terminated.

I second that motion.

Unless anyone is opposed, the formal portion of this meeting is now terminated.

There's no opposition to this motion.

I declare the meeting terminated. Thank you for your attention. I'll now turn the meeting back to Rob McEwen, who will chair the remainder of the meeting today.

Thank you, Carmen. Mike, Slide 7. I'm skipping over the Safe Harbor statements, but you could read it at your leisure. It's designed by lawyers and accountants to confound investors and supposedly protect. Okay. Slide 7. Gold, silver, copper are critical metals for living in the modern world. And there are very few substitutes for ways to protect your wealth, empowering the energy transition. And we are fortunate enough to have all 3 of those metals and located in the Americas. Our exposure to copper is enormous. And earlier this week, we announced that McEwen Copper was going to be raising additional funds to complete feasibility study and that I and McEwen Mining would be increasing our investment in that project. Myself, an additional $5 million on my already $40 million and McEwen Mining an additional $14 million. You may be curious why we're investing at this point when we started selling shares back 2 years ago. There are a couple of reasons. One, the copper price, the outlook for it is very positive. Two, there's been a major positive change in Argentina, geopolitically. Three, we believe we may have discovered another Los Azules. If you look at our exposure to copper, it has already contributed significantly to lift our share price off the lows we experienced between 2019 and 2022. Slide 8, please. This slide illustrates how far we have run ahead of the herd in the past 22 months. Since September '22 -- September 2022, when we closed the first financing of McEwen Copper and up until last night. Our share price has increased 8x greater than the Dow Jones. 7x greater than the price of copper, 4x greater than the gold ETFs of GDX, GDXJ, 4x that of NASDAQ and 3x silver. I believe we will continue to recover the ground we lost in the earlier years for several reasons. One, we're undervalued. And I will show you in a moment by how much. Two, our gold and silver mines are operating much better and delivering on guidance. Three, our focus on exploration is increasing our resource base and giving us the foundation to increase production and lower cost per ounce. And four, McEwen Copper, Los Azules copper deposit is becoming a very powerful engine for value creation. It is projected to become a very large, low-cost per pound, long-life mine by 2030. So let me help you understand how big and profitable Los Azules could become. If we were to convert Los Azules to a gold equivalent and took its total resources of 37.6 billion pounds of copper. That would equate to a 70 million-ounce gold deposit. To put that in perspective, that's the same amount of gold, that has been produced over the past 100 years in the Timmins Mining District, one of the largest gold regions in Canada. To convert what we've done is divided the price of gold by the price of copper to determine the number of pounds of copper that equals the value of one ounce of gold. Using last night's closing prices, 537 pounds were required to equal an ounce of gold. So, using the cost and production numbers from the 2023 Los Azules' preliminary economic assessment, and from the recent increased recovery rates and results in lower cost per pound, Los Azules would have a gold equivalent average annual production of 735,000 ounces, producing at a low cash cost of $550 per ounce and an all-in sustaining cost equivalent of $850 an ounce with a mine life of 27 years. And that is only when having mined less than 40% of the estimated resource. I'm convinced that McEwen Mining has considerable value, which will become apparent over the next 3 to 5 years, if not sooner. And as I said earlier, I've committed to this recent fundraising, but I already have a personal investment of $220 million, spread between McEwen Mining and McEwen Copper. So let's take a look at the value proposition for McEwen Mining. Slide 10. McEwen Mining's value is the sum of 3 parts. And we're showing 3 possible values, a low, a mid and a high for each part. Management believes McEwen Mining, at its closing price on the New York Stock Exchange last night of $9.26, $9.26 a share is clearly undervalued when compared to our internal estimate of value. Which ranges from a low of $11.28 a share to a high of $43.17 per share. The largest contributor to this value is McEwen Copper. And it's mid-range of $7.73 a share is based on the most recent financing of McEwen Copper that was completed last October, giving in value -- an implied value of just over $800 million. Of which we own 47.7%. The low and the high values are based on using 50% of the public market value for 2 separate deposits, which is then divided by McEwen Mining shares outstanding. We view these reference points as relevant because both of these deposits are located in the same province of Argentina as Los Azules and the values are current. The low is based on the $485 million purchase price for the Jose Maria deposit in April of 2022. And the high is based on Filo mining's current capitalization of $2.4 billion. Another part of our value is our portfolio of 6 nonproducing royalties, which we have valued at $35 million or $0.71 a share across all the ranges, low, mid and high. We view this value as very conservative as the largest royalty is a 1.75% NSR on Los Azules. At the current copper price, and projected average annual production at Los Azules, this royalty would pay over the 27 years of life of the mine, more than $0.5 million -- $0.5 billion. The third part of the value is derived by comparing our economic value -- enterprise value per gold equivalent ounce of 4 peer companies. The low range is based on a 50% discount to that average, and the high is at a 50% premium where we once traded relative to this group. I'd now like to turn the session over to Perry to talk about our financial records.

Perfect. Thanks, Rob. Good afternoon, everyone. I'll provide a brief overview of our financial results and highlights for 2023 and the first half of this year. All the figures I'm going to use are in U.S. dollars unless otherwise noted. So just as an opening comment, overall, I think we've made tremendous progress over the past 18 months, both from a financial and a production standpoint, as Rob alluded to. Just looking on the left-hand side, starting with our cash balance. We expect to report a quarter end cash balance for the current quarter of approximately $36 million. As you can see, I mean, going back to the beginning of 2023, the company had very minimal liquidity. However, throughout the period between then and now, we've been able to significantly increase our cash balance through a combination of improved performance from our mining operations, stronger gold price and liquidity events, both from the sale of a small portion of our stake in McEwen Copper and flow-through funds raised at healthy premiums to our share price, including the raise completed just this month of $22 million at $14.36 a share. It is also important to remind our shareholders that we no longer consolidate our ownership of McEwen Copper in our financial statements, after we fell below 50% ownership in the fourth quarter of last year. So the reported cash balance you see is purely that of McEwen Mining. The increased liquidity that we have and the company have allowed us to do 2 things. So looking at the next column, we've been able to reduce our debt from $65 million at the beginning of last year to a current balance of $40 million. We expect to reduce this balance further beginning January of next year as we start to make regular principal repayments and expect to end 2025 with less than $30 million outstanding under the facility. Second, the flow-through raises have allowed us to expand our minimal resources at the Fox Complex and raise the majority of the funds required to build the new ramp at the stock mine, which is the future of the Fox Complex. Bill Shaver and Sean Farrell will go into more details on the operations and exploration of Fox, respectively. However, having a solid foundation will certainly allow the company to look at additional growth projects in the future and expand production further. So just looking at where we are currently from a production standpoint, we expect to report first half production of just over 67,000 gold equivalent ounces. Which will put us on track to meeting 2024 guidance. On the next slide, on Slide 13. You'll see a breakdown on the left-hand side of our production year-to-date in 2024. And on the right, you'll see our reported all-in sustaining costs per ounce as reported during the first quarter of this year. Overall, as high-level comments, I'll say that production at Fox has started slower this year due to stope sequencing and processing of lower grade stockpiles but we do expect production to increase in the second half of the year, which will bring cost down on a per ounce basis closer to our cost guidance range for Fox. At Gold Bar in San Jose, production has been very solid in the first half as both operations are operating at or above budget from a production standpoint. We will expect to see costs to normalize towards our guidance range indicated once seasonal and operational fluctuations are taken into account. And finally, turning to Slide 14. What could our future production profile look like? Looking at our existing assets, we believe we have a solid future at Fox as we transition from Froome to stock. In Nevada, we are getting encouraging results from exploration at Gold Bar, which Bob Kastelic will cover. And we believe the pending acquisition of Timberline Resources will give us a platform for further growth in Nevada. At San Jose, they are taking -- undertaking a mill capacity expansion up to 2,000 tonnes per day, and we are also seeing encouraging exploration results. Taking all this into account, this should allow the company to see consistent production in the near term, reaching 155,000 gold equivalent ounces through 2026 and gives us a potential pathway of increasing production to 200,000 gold equivalent ounces and beyond, looking at opportunities at Grey Fox at the Fox Complex, Timberline in Nevada and Fenix in Mexico. We've outlined these as potentially starting in 2027, although the ultimate timing and level of gold production we see from these projects will be subject to permitting time lines and engineering. But we firmly believe that in the current gold price environment, these projects can predominantly be financed with cash flows from our existing operations. So with that, I'd like to turn the presentation over to Michael Meding of McEwen Copper.

Thank you so much, Perry. Let's now talk about McEwen Copper, which has an exciting year and already too very exciting quarter. McEwen Copper's flagship [indiscernible] Los Azules is located in Argentina, an emerging player on mining jurisdiction with further significant changes on the horizon. On the upper left side of the slide, you'll see all the major mining companies already active in Argentina. On the lower left-hand side, you see the Fraser Institute mining investment attractiveness index with [indiscernible] located year after year brings very high. In the 2024 ranking, it ranks higher than Brazil, Chile, Peru, Ecuador, Colombia and Mexico for mining investments. On the right side of the slide, you see a depiction of where we are based on the [indiscernible] at the border with Chile, where Chile and Peru produces 40% of the worldwide copper supply. San Juan has 5 of the top 8 projects in Argentina and has the resources to rival Peru's production in the next decade. Based on overall resource side, there are 2 top 10 projects in San Juan. Los Azules is one of them, located in this province. Next slide, please. The mine has a 27-year life per PEA. It's in the lowest cost quarter and with CO2 emissions in the lowest 10% and aims to be carbon neutral by 2038. There is upside potential for the resource coming from exploration and from Rio Tinto's Nuton technology. Ongoing studies are confirming resource size. Recent metallurgical testing delivered higher-than-expected recoveries, positively influencing the business case. There's a very experienced board and management team in place, our [indiscernible] appendix. And Argentina is changing to be more attractive to business, positioning itself for international investments. As Rob already mentioned, McEwen Copper is a significant value driver for McEwen Mining shareholders. On the right-hand side of the slide, we see a photo of one of our meeting with Argentine President, Milei, where we had the chance to show the benefits of our project brings to our stakeholders. And President Milei took this time to explain that his economic reforms that are currently implemented. Next slide, please. President Milei's government has promoted changes in Argentina's financial and fiscal policies, which are focused on private investment and freedom as a fundamental principle. Currently, on the legislative consideration by Congress, is the basic rule and starting points for the freedom of Argentenians and a fiscal package seeking state recognition, labor modernization and structural changes. This includes a regime for incentive of large investments, RIGI. Offering significant tax and foreign exchange incentives to improve investments in key sectors of the economy, particularly in mining. On April 30, the bill was approved by the Chamber of Deputies. June 13, it was approved by the Senate with some amendments. June 25, the commission sent the bill with recommendations for approval to the lower house. It is likely that the base bill containing the RIGI including the amendments introduced by the Senate will be approved. The session in the lower house is ongoing as we speak. In this slide, you see the many benefits that RIGI will provide for mining projects in order to track foreign capital. Many items are [indiscernible] flexibility, a significant growing of the overall tax burden, faster recovery of VAT construction. Explicit freedom for importation, freedom for exportation. Lowering of export duty to 0% after 3 years and free disposition of export proceeds after 3 years. This package addresses the majority of all past stumbling blocks for sustained development of the mining sector in Argentina, and it's a huge step in the right direction. Next slide, please. Thank you. Let me now quickly recap an overview of the PEA that we published in June last year of our preliminary economic assessment of Los Azules showing a very robust project that has already shown us the potential based on updated analogical results. A mine life of 27 years, a low strip ratio of 1:1.6, an additional low capital cost of $2.5 billion, a sustaining capital cost over the loan of $2.2 billion, 4 million tons of pure copper cathode production during the life of the mine, a low C1 cash cost of $1.07 and low all in sustaining cost of $1.64 per pound of copper, resulting in an interim rate of return of 21.2% and an NPV of almost $2.7 billion in a short period of 3.2 years, with an initial production of 192,000 tonnes of copper during the first 2 years, and the nominal production rate of 135,000 tonnes.. Based on our metallurgical testing, this is seeing a potential [ upside ] with an increase in recovery 3.2 percentage points and need to increase the copper production of 132,000 tonnes of the life of the mine and an improvement of the net present value of the project of $262 million, combined with the lower [indiscernible] asset consumption rates. Next slide, please. Our feasibility study is on track to be delivered by the end of the first quarter 2025. Our field investigations on strike, without the 70,000 meters drilled having rigs at 23 drilling rigs on site. Our resource modeling and geology is on track and confirms the PEA resource. Our mining and mine planning is on track with the interim mine plans complete and key trade-off studies completed. All our columns for the leaching tests of Phase 2 and Phase 3 are under leach and on track. And on the engineering and design side, we have the preliminary design for the leach pad complete, and the final design is underway. The flow sheet has been selected, design for interiors are complete. And finally, the vicinity laid out, payouts are complete and the overall site plan is in process. Next slide, please. On the next slide, you see all the major individual milestones. Mine design will be finished by October field investigations as well as metallurgical testing by December, engineering and design by September, operating and capital costs by January, and the project execution plan and schedule by December. Next slide, please. The drilling that we performed this field season is validating and confirming the resource estimate that was released last year in our preliminary economic assessment. This figure represents a cross-section to the middle portion of the [indiscernible]. The highlighted hole in blue is a new hole from this [indiscernible] contained an intercept of new 77% copper, over 349 meters and is validating the great show and nearby holes from last year's drilling campaign. Next slide, please. As I stated earlier, Los Azule has completed very aggressive drill programs in the last 2 field season. Over 101,000 meters of drilling has been drilled since the PEA, which represents about 50% of all drilling drilled to date on the project. One of the objectives of this year's drilling program was to obtain a higher density of drilling within the deposit to enable us to convert resources into the measured and indicated categories. Measured and indicated resources offer a higher level of confidence that the indicated inferred resources that grown the preliminary economic assessment from that [ PEA ]. This cross-section to the northern portions of the deposit and all holes in blue are new drilling performed after the PEA. You see that also on the right side that pit layout in all the blue dots their own new drilling holes. Next slide, please. Exploration drilling to the north and south of the deposit continues to encounter mineralization. This slide is a north-south view of the deposit with north on the left and shows exploration drilled performed this field season to the north and south of the deposit. Hole AZ23241 shown on the left edge of the figure, intercepted 0.2% copper over more than 200 meters in the last 12 meters of the hole, grade 0.44% copper. This hole is located more than 400 meters to the north of last [indiscernible] explorational hole which was already outside of the pit shell and they will stress that copper mineralization continues well to the north of the deposit. Explanation drilling on the other hand, to the south of the deposit encountered the earlier minimal popery a significant distance to the south of the limits of the pit. This portal is responsible for bringing the majority of the copper in the deposit. This season's drilling was an to extend this quarterly 700 meters [indiscernible]. Next slide, please. Now something that we are very excited about, that Rob already mentioned. Regional mapping and assembly performed throughout our large property has discovered a new porphyry copper system called Tango. 3 kilometers to the East of Los Azules and opens the possibility that Los Azules area may contain across our prophyry copper deposit. When excluding for new porphyry copper deposits, there are 5 key elements that an area should contain to be prospective. And area should have several [ patterns ] of intrusives and Tango contains at least 4 distinct patterns of intrusives. An area should contain [ pottery style ] alteration and Tango has 3 large areas of [indiscernible] alteration Black. Shown in black dashed lines. At least 2 types of porphyry mainly [indiscernible] Tango. A new area should contain geochemical anomalies typical of prophyry copper systems and Tango has 3 large [indiscernible] anomalies. Shown with white dashed line that coincides with the alteration areas. Lastly, in new areas should display an interesting geophysical anomaly and the further portion of Tango area has a very [indiscernible] shown by the dark blue and purple colors as they found at Los Azules [indiscernible]. One drill hole shown by the blue square, was built into the southern portion of Tango and the last 106 meters of hole contain 0.11% copper and validate that we are within a mineralize porphyry copper system. Additional work will be performed at the exciting Tango target once we reset the exploration in Q4 2024 because we had to end early due to weather. Next slide, please. Now we talk about sustainability on the next slide. Los Azules will reduce effective water used by 75% to 80% versus production of concentrates. Solution will be circulated in the leach pad. Leaching uses 35% less electricity versus milling, only requires crushing. No tailing dam is required, saves water and lower seismic risks. Production of 99.999% of pure green copper for direct use in the industry and the reduction of freight on products, 70% to 75% of the reduction of mass of the shipment of concentrate. On the next slide, you will see a visible token of our commitment to sustainability. Our Los Azules offices in Argentina are completely powered by renewable energy, with an estimated annual production of 50 megawatt hours and an annual estimated consumption of 45 milliwatt hours, and that's an annual injection to degree of about 4.2 million megawatts -- 4.2 megawatt hours. Next slide, please. A very important aspect of effective community relation management is a citizen participation program, especially in the community of Calingasta where our project is located. 300 [indiscernible] the people actually participated in the initial EIA presentation for our environmental permit filing in 2023. More than 1,600 people have defended presentations in communities 2024. This represents almost 20% of the total population of Calingasta and half of the economically active population in municipality, a great achievement in a short amount of time of our community fast team. Next slide, please. In summary, we are positioning McEwen Copper as a new vehicle for copper growth. With a world-class resource, Not in the Hands of a Major. In Argentina, in emerging tier 1 lithium and copper mining jurisdiction. We have a very robust project to our product cycles. We are designing a mine for the modern world with regenerative principles and low-carbon network intensity. We have significant upside potential both from exploration and for technologies such as Nuton and affected by 2 key strategic partners, Stellantis, the world's third biggest car manufacturer and we intent to be the second biggest mining company in the world. And all of this leverage with very experienced Board and management team with on-the-ground experience in exploration, construction and operation of mines in San Juan in Argentina, and tier 1 and tier 2 operation. We are going to show you now a short video that represents our vision that we developed together with Jason McLennan, the founder of Living Building Alliance (sic) [ Living Building Challenge ] and how we can make mining different. In order to see the video, make sure you are at the broadcast tab in the webcast, where you will see the slide presentation, click on the video button at the top right corner of your screen, just below Q&A icon. When the video ends, toggle back to the slides button to continue with the presentation. [Presentation]

The video was narrated by Jason McLennan himself. I think we have an amazing vision for paradigm shift in mining. So thank you so much. I'm now handing over to our CEO, Bill Shaver.

Thank you very much, Michael. Welcome shareholders. With respect to the long-term value creation potential of McEwen Mining addressed by Rob at the beginning of our meeting, in the second half of 2022, we stabilized our mining operations and got our costs under better control. And at the same time, we were able to undertake a significant and focused exploration program, which continues today to the years later and will be -- one of the focuses of our future growth. In 2023, finding operations rectified a number of challenging situations, including installing a new mining contractor at Gold Bar and other less significant things at all of our operations. The mines performed on plan and delivered anticipated results, including increased production in Timmins. And I might say that, that was all helped by the increase in price of gold, which was not insignificant in the whole plan. The exploration is now revealing our path into the future. In Timmins and Nevada, we are spending $17.5 million in exploration drilling this year. Next slide. Our safety performance is one of our primary objectives and a source of pride for the organization. At Gold Bar, we have gone 4 years and 4 months without a lost time accident. And at Fox, we've gone 2 years and 10 months without a lost time accident. Both are significant relative to our industry. These results, we must note included all of our contractors and included all of our exploration drilling work. At the same time, our mine rescue crews and emergency response teams are fully operational at all sites. At Fox, we also have a competition mine rescue team that competed in local mine rescue competition this year where for the second year in a row, won the rookie of the -- Rookie of the Year award. On the environmental side, we have had no reportable spills or exceedances over the year last year and also this year. And relationships with our contractors, regulators and the local community are good. We are also particularly proud of our exploration teams as we have discovered resources, which represent more than 10 years of production in Timmins, and we're also having good success in Nevada with more news to come from both Sean and Bob later in our presentation. Next slide, please. At Gold Bar, the mining operations are on track to meet our gold production guidance for the year. We are finalizing plans to increase production in the second half of the year to ensure we exceed our guidance for the year and to, I guess, look at improving that as we move forward. The new leach pad, we built last summer is now fully operational as of the first of this year and will allow us to push up production to improve cost and increase gold production. In Nevada, we will spend $7.5 million on exploration this year, which will secure part of our future. We are also very excited about the acquisition of Timberline as this will be part of our go-forward plan and will secure production on an ongoing basis and allow us to expand our Nevada footprint. Excellent. Thank you. In Timmins, we are entering an exciting time as we are starting the work to build a new mine at the stock operation. Mining will continue at Froome for approximately the next 18 to 24 months, by which time we will have the stock operation in full production hopefully, starting in the second half of 2025 to allow a smooth transition between from and stock. This year, we have also increased our throughput in the mill to by about 10% to 15%, which will help us with the lower grade ore that we are seeing from the Prom operation. And of course, we also have some low-grade stockpile, which we will deal with as we move through the final part of this year and next year. Our ongoing exploration in Timmins has already extended our potential mine life by 10 years, and there is more to come at Gray box. In summary, we are starting at Fox and will be fully in terms of the ramp development, which we're starting now and we'll be in full development mode underground by Q4 of this year, which will lead us into the mining operation being in production by mid next year. Next slide, please. In Mexico the permitting of the Fenix project is our -- is the key to our future. And we are working through that process, albeit very slowly. And I guess, we hope that now that there's a new government in Mexico that this process might speed up a little bit. However, we are not counting on this. In July, we plan to visit government folks in Mexico to try and move this process along. But at the same time, we are working on a plan to get in production earlier with a more modest approach that will be easier to permit and have a lower capital cost, which we hope would get us up into an operation, which then with any luck, we could transition into the final plan as we move forward and get it into a production mode that we would like to see, which is something more like about 30,000 to 50,000 ounces per year. So in summary, on the mining operations side, we are looking to be in reasonably good shape moving forward. And I think our continuing success in the exploration work will -- bodes well for the operations part of the organization. And now I'll turn it over to Sean Farrell for exploration in Timmins.

Thank you, Bill. Good afternoon, everyone. 2024 has been another busy year for exploration at the Fox Complex. We have drilled about 115,000 meters of core from January of 2023 to the end of May of this year at our stock and Gray Fox properties. Since the last AGM, we have completed resource updates for our Western main zones at stock and just recently completed a resource update for our East Zone, which is also located at stock. The planned view below shows the relative positions of the stock project, Froome mine and the Grey Fox project. Next slide, please. We are currently looking at a planned view section of the overall stock project. The stock deposit is associated with the prolific Destor-Porcupine fault zone and a secondary display structure known as the Nighthawk Lake Fault. The current resource for the West and Main zones at stock contains 338,000 combined gold ounces, while a recent resource update for our East Zone contains 125,000 combined gold resource ounces. The total for the stock project is now approaching about 0.5 million ounces of contained gold resources with room to grow. Next slide, please. This is a project-wide longitudinal section looking North for the stock project. I draw your attention to the 3 main plunge directions, which are denoted by the black dashed lines that we have identified at stock and believe control the majority of mineralization. Next, it can be seen that the West zone is open to the Southwest with only limited drilling, as shown by drill hole S23-291, which created about 6.1 grams over 5.6 meters [ true width ]. The main zone is also opt the Southwest and even deeper elevation with limited drilling as defined by drill hole S21-202, which created in excess of 4 grams over about 20 meters true width. In addition, historical drilling below this deployment direction indicates mineralization down a depths greater than 900 meters low surface. Finally, the East zone also appears open at depth as seen by drill hole S19-31, which graded 2.7 grams per tonne over about 11 meters true width. I would also like to highlight the fact that the entrance of the stock ramp is strategically located next to the stock mill and headframe. This will eventually allow for simultaneous mining at both the East and main zones, while the rent is also being driven to the West zone. Next slide, please. This is a zoomed in longitudinal section for our East zone. The current East zone resource is just located about 700 meters away from the stock mill and early mining is being planned for the zone. The current average resource for the East zone is about 2.7 grams per tonne, but it can be seen that there are areas that the East on where the grade is much higher, like in drill hole SEZ19-35, which created in excess of 83 grams per tonne over 5.6 million true width and drill hole SEZ19-28, which graded 34.7 grams per tonne over 5.9 mini true width. Both of these drill holes are located in the steeper plunge direction, which remains open at depth. Next slide. The main focus of the 2024 drill campaign at Stock was to identify early revenue-generating ounces for the Stock project. As was mentioned earlier, the overall Stock resource is approaching 0.5 million ounces with a lot of room to grow. Next slide, please. Moving on to Grey Fox. This is a planned new section for the majority of the Grey Fox deposit, which is located only about 3 kilometers southeast of Black Fox mine. The current resource contains more than 1.1 million ounces of gold resources. I draw your attention to drill hole 24GF-1426, which is located at the south zone and graded over 500 grams per tonne over about 0.5 meter true width and lives on a previously defined mineralized lens. This demonstrates this high-grade potential for Grey Fox with some of the zones also tending to less than 10 meters below surface. Drill holes 22GF-1366 and 24GF-1397 were drilled in proximity to the historical Gibson ramp and both had constant values in excess of 8 grams per tonne, which demonstrates the potential viability of the Gibson area Grey Fox as an early mining horizon. Next slide, please. Aggressive drilling at Grey Fox is demonstrating good potential for early ounces for the project, especially at the aforementioned gift in area where there are multiple stack zones in close proximity to the historical Gibson ramp. These zones are not only showing good continuity but are also open for additional drilling in most directions. Next slide, please. This is a typical cross-section looking northeast in close proximity to the historical Gibson ramp. There are multiple holes [indiscernible] visible gold and good results are continuing to come in, such as drill hole 24GF-1397, which graded better than 13 grams per tonne over about 5.2 meters true width. In addition, the noted DG drill hole 24GF-1452 also returned 2 good intercepts, including about 20 grams per ton of were about 2 meters through width and 11.3 grams per tonne over 2.5 meters true width. Both correlated very well with the instances of noted visible goal. We plan on executing a full Grey Fox resource update by the end of this year. I'd like to now pass the presentation off to my colleague, Rob Kastelic, who will give an update for exploration at Gold Bar in Nevada. Thank you.

Thank you very much, Sean, and good afternoon, shareholders. So the Gold Bar complex is located in North Central Nevada, as seen on this map here. And within the Battle Mt. Eureka Trend, it's a very prolific trend that contains the Cortez complex, Gold Bar, Tonkin and numerous other deposits, including the Timberline's Eureka project down at the south end of the trend. And you can see the Carlin trend in the north here. These are the most prolific gold-producing trends in Nevada. The next slide will zoom into the Gold Bar complex itself. Focus for exploration in 2024 is within we call the mine plan of operations area. This area is more advanced and is permitting. So anything we find in this area has a shorter time line for getting into production. We have 3 main target areas within this mine plan of operations, the first one at Cabin Creek, where we have open pit mining going on there, Gold bar South, where we're actively mining an open pit there. And then as Hunter, a shallow and near surface resource that we are currently drilling. And we'll talk more about each of these 3 items as we go on. We've had successful drilling results in all of these areas as we expand our resources for near-term mining. We have a $7.2 million exploration budget for 2024, that's really helping us out here. Our next slide, we'll go -- look at each of these areas individually. The Cabin, we have 2 main target areas. The first one is an area between the Cabin South pit and North pit. These are the holes that we've drilled in 2024. We've had 28 holes drilled so far. We're still drilling. This area has mineralization near surface and all of these holes have intersected gold grades that are above the mines cut-off grade. We've just completed the block model in this first area and handed that over to engineering and they're working right now on mine planning to see if we can -- how much of this resource could be mined in the near term. Another target area to the Northeast is northeast of the North Cabin pit and we can see several drill holes in there. We are actively pursuing this area as mineralization is open in that direction. The next slide will show us at Gold Bar South, the blue outline there shows us the pit that we're mining right now. We have a target area to the north of the pit where we have shallow mineralization and starting essentially at the surface, we're drilling to expand that resource. And hopefully, we can find enough there to generate some near-term production. It's very close to the service with very little strip. The second area is to the East of the pit. There's a little indentation there where we have gold resources that are inside the footwall of the high wall there, that mineralization is still open we are drilling that right now to see if we can expand that and possibly find enough that we could lay the pit back in that area. And then the third area of Gold Bar South is to the -- we call it, to the Southeast extension. It's a deeper zone that we've currently expanded with a 300-foot step out into where there's been no drilling, we hit 65 feet of over 2 grams and another hole hit 30 feet of over 3 grams, all oxidized, certainly leachable material. So we're really excited about these targets. So that's Gold Bar. And then our next slide will take us down to at one more go by the Hunter target area. This map on the right-hand side, there is a planned view of the target area. Gold mineralization basically starts at the surface. There's some legacy drilling here, which led us into this area. We drilled 2 holes earlier this year and a hit definitely good grades, 90 feet of 0.75 of a gram, 240 feet at 1 gram, all oxidized, near surface. And the cross section to the -- on the left side there is a cross-section view of these 2 drill holes. And we see now that this mineralization is being controlled by Northwest dipping structure. And this mineralized zone as we currently see it, and it's open, is 45 and 200 feet fit and about 400 feet deep and open in certainly in 2 directions. And we're doing some more drilling in here. We still have assays pending, and this will be a focus for some near-term resources that we could mine within the mine plan of operations. In our next slide, then we'll turn -- the last slide here, we'll turn to the Timberline project and Eureka, it's about 30 miles from Gold Bar. There is an existing resource there, 508,000 ounces, creating about 0.69 grams per ton. And the first arrow will show you where that's located. And there's been past production there also a lookout and also at windfall, the next several point to that area where there's been past production. 154,000 ounces of gold have been produced between these 2 areas. And there's strong exploration, particularly along with north-south mineral trends. So the next arrow will show you what this trend here at the north end is the Ruby Hill mine that at i80 Gold has, but it extends on to the Timberline property, and it's marked with very prospective ground, lots of gold on the surface, lots of gold and legacy drill holes, lots of alteration. We are very excited about the exploration potential along this mineralized trend that goes through the heart of the Eureka property. And that summarizes everything from Gold Bar. And now I'll turn it over to Stefan Spears.

Thanks, Bob. Good afternoon, everyone. I'll provide a brief update about our San Jose mine in Southern Argentina. We own 49% of San Jose, which is operated by our partner, Hochschild Mining. The 2024 objectives are as mining productivity by 10% and capital upgrades to the mill, increasing throughput by 15% by the end of year. This year, we forecast unhedged gold and silver production of 50,000 to 60,000 gold equivalent ounces, attributable bull to McEwen Mining at all-in sustaining costs of under $1,700 per gold equivalent ounce. In addition to operational improvements, exploration is a big focus, and it is delivering high grades in a couple of areas, including the Odin and Frea veins. At Frea, the mine geologists have outlined an area of consistent mineralization of approximately 250 meters along strike and 200 meters vertical, which is being infill drilled. One hole that we reported with our Q1 results returned 12 meters of 12.7 grams per tonne gold and 101 grams per tonne silver. More encouraging assays from Frea will be reported soon. Results from Odin are discussed on the next slide. As with our Los Azules project, the improving fiscal and regulatory environment in Argentina is expected to unlock some additional value at San Jose, a very welcome change under the Milei government. Next year, our partner Hochschild, is forecasting continued improvement with a 10% to 20% increase in gold equivalent production and a 15% drop in all-in sustaining cost. This plan map shows the outline of the existing Odin open pit and drilling designed to extend the pit to the Northwest. Some intersections were very encouraging, including 6.2 meters of 23.3 grams per tonne gold and 314 grams per tonne silver. In addition to the 2 promising targets I mentioned in the mine area, drilling and trenching is planned later this year on greenfield targets, north and south of Newmont's Cerro Negro mine on our joint venture property. I'll now hand the presentation back to Rob for closing remarks.

Thank you, Stefan. Ladies and gentlemen, we have a great mix of metals, precious metals and soon green energy. Our exploration efforts have increased our resource base that has extending -- has extended our mine lives and will allow us to plan for increasing production and lower cost. There's no question in my mind that the price of gold and silver have only one direction to go over time, and that is much higher. Slide 36 (sic) [ Slide 63 ] D3. You can see central banks are aggressively buying, and they haven't done so for well over 30 years. This is particularly true, seen on the next slide of the Brick Nations, who are selling their dollar reserves and their gold reserves are going up. Something at the end of the petro dollar in -- at the start of the end. And then on Slide 65, the near exponential growth of debt by governments around the world is rapidly eroding the purchasing power of fiat currencies. These events foretell much higher prices for these metals. And the outlook for copper looks equally favorable as it appears to be in short supply to ensure the energy transition progresses. At Los Azules, we're planning to build a very profitable copper mine designed to attract and retain the best talent to be light on the environment and to help improve the public's perception of mining, perception and acceptance of mining. We're very optimistic about the future for McEwen Mining. And I hope this presentation today showed you why we are. Thank you for joining us today. I will now invite your questions and comments.

Are there any online?

No, there are not.

I have one question that was called in the other day, and I was wondering why some of our officers were selling stock this week. They were curious if something bad it happens or someone was leaving the company. I'll ask Perry Ing, to answer that question.

Rob. So for those as a Canadian headquarter company, the federal government announced capital gains rate changes that were effective as of this week on Tuesday, June 25. So had a significant increase in capital gains inclusion from 50% to 66% and 2/3% subsequent to January 25. So I believe that for Canadian-based executives, they would need to have sold stock prior to June 25 in order to avoid the increased tax rate.

Any other questions online? Are there any other questions from those who've lasted this long on the phone? They can't ask questions on the phone? Can only ask questions by...

Writing them into the Q&A session.

Writing them in the Q&A session. [indiscernible] , do you have any questions that have been sent in earlier?

There was one prior question about when we view it's appropriate to raise capital issue, stock to raise capital. For example, the flow-through transaction, we -- why is reason because we were able to issue shares at a premium to market to raise capital that was necessary to develop the Fox mine.

So the recent financing in the McEwen Mining was done through the facilities of a flow-through financing. It's a tax-driven instrument that where exploration companies and mining companies will trade there basically pass their ex expenses spent on exploration or development through to investors who get a large write-off, an accelerated write-off of 130% and about 140%, depending on where the jurisdiction, and that allows the companies to raise capital at a lower cost of capital. In our case, we sold our shares at a blended price of $14.36 U.S. the currency, we quote all of our numbers in. And it was to further our exploration efforts in Timmins at the Fox Complex and to contribute to the construction of the ramp at the Stock property. If there are no further questions, once again, I say thank you for joining us.

Ladies and gentlemen, this concludes the 2024 Annual Meeting of Shareholders of McEwen Mining. Thank You for your attention. You may now disconnect.