Business Context and Reporting Period
Company: McEwen Inc. (formerly McEwen Mining Inc., renamed July 2025)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended March 31, 2026 (Q1 2026)
Operations: Production and sale of gold and silver; development and exploration of copper, gold, and silver properties in North and South America. Key assets include the Gold Bar Mine (USA), Fox Complex (Canada), El Gallo (Mexico), and equity interests in Minera Santa Cruz S.A. (MSC) and McEwen Copper Inc.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue (Gold/Silver Sales) | $74.0 million | $35.7 million |
| Gross Profit | $31.5 million | $10.1 million |
| Operating Income | $41.2 million | ($7.6 million) Loss |
| Net Income | $33.4 million | ($6.3 million) Loss |
| Diluted EPS | $0.47 | ($0.12) |
| Cash from Operating Activities | $12.1 million | ($1.9 million) Used |
| Cash and Equivalents (End of Period) | $56.5 million | $17.5 million (Q1 2025 end) |
| Total Debt (Long-term + Current) | $126.4 million | $126.2 million (Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Surge: Revenue increased 107% to $74.0 million, driven by a 71% increase in average realized price per gold equivalent ounce (GEO) to $4,792 and a 21% increase in GEOs sold.
- Profitability Turnaround: The company reported a net income of $33.4 million compared to a net loss of $6.3 million in Q1 2025. This was primarily due to a $21.4 million increase in gross profit and a $38.4 million swing in income from equity method investments.
- Equity Method Investments: Income from equity method investments (MSC, McEwen Copper, Paragon) jumped from a loss of $8.1 million to income of $30.3 million. The MSC investment contributed $32.8 million in income, driven by higher metal prices and production volumes at the San José mine.
- Acquisition Activity: Completed the acquisition of Canadian Gold Corp. on January 5, 2026, adding the Tartan Lake Gold Mine Project. Consideration included $87.7 million in shares and subscription receipts.
- Cost Increases: Production costs applicable to sales rose 82% to $35.6 million, largely due to higher operating costs at Gold Bar (stripping activities) and Fox Complex (higher waste tonnes and externally sourced material).
Guidance, Outlook, and Risks
- Production Guidance: Management remains on track for 2026 consolidated production guidance of 114,000 to 126,000 GEOs.
- Gold Bar: 39,000 to 43,000 GEOs.
- Fox Complex: 16,000 to 19,000 GEOs.
- San José (MSC): 59,000 to 64,000 GEOs (100% basis).
- Cost Outlook: All-in sustaining costs (AISC) are expected to decrease through the remainder of 2026 as mine development costs wind down at Froome and production increases at San José and Gold Bar.
- Capital Projects:
- Stock Project (Fox Complex): Pre-commercial production expected in Q4 2026; commercial production in Q2 2027.
- El Gallo (Mexico): Construction expected to begin mid-2026 with production commencing mid-2027.
- Risks and Contingencies:
- Canadian Gold Acquisition: $30.0 million of consideration is in subscription receipts for the CEO. If shareholder approval is not obtained, this must be settled in cash.
- Foreign Currency: Significant exposure to the Argentine peso (MSC and McEwen Copper) and Canadian dollar. Inflation in Argentina has increased local currency costs.
- Commodity Prices: No hedging strategy; results are highly sensitive to gold and silver price fluctuations.
Investor Verification Checklist
- Equity Method Valuation: Verify the sustainability of the $30.3 million income from equity method investments, particularly the impact of Argentine inflation on MSC's reported costs versus revenue.
- Canadian Gold Settlement: Monitor the status of shareholder approval for the CEO's subscription receipts ($30M potential cash liability) from the Canadian Gold acquisition.
- Cost Trajectory: Track Q2 and Q3 AISC metrics to confirm the projected decrease in unit costs at Gold Bar and San José mines.
- Debt Covenants: Review the terms of the $110M Convertible Notes (due 2030) and the $20M term loan, specifically regarding conversion triggers and interest rate exposure.
- Project Timelines: Confirm the start dates for the Stock Project (Q4 2026) and El Gallo construction (mid-2026) against capital expenditure burn rates.