Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Darren Blasutti, Chief Executive Officer. Please go ahead.
Welcome to our conference call, and want to thank everybody for joining. Today, we will be discussing our Q2 2026 financial and operating results, which we released earlier this morning. After a brief presentation from management, we will have some time for some questions and answers. On the line for management, we have Darren Blasutti, myself, the company's Chief Executive Officer, the President and Chief Operating Officer, Darren Koningen, and our Chief Financial Officer, Alfredo Cires, as well as other members of our leadership team.
During the presentation, we will be making forward-looking statements throughout, and as such, we encourage listeners to review the relevant disclaimers on slide two of the presentation. We released our Q2 2026 results earlier this morning. This was our third full quarter with the Pan Mine under our ownership. Since that transformational acquisition just over nine months ago, we have made substantial progress both at the operational and the corporate levels.
In Q2, we settled the remainder of our gold loan and call option obligations with Auramet. As such, our gold production now has complete exposure to higher trending gold prices. This, combined with the progressive ramp-up in mining rates successfully achieved at Pan during Q2 2026, we look to higher production rates and corresponding lower cash costs and AISC in the second half of the year. With total available liquidity of $73 million and no debt payments until 2029, Mining Americas is in a strong financial position to advance our pipeline of high-quality, low-capital growth projects. Now, here is Alfredo Cires, our Chief Financial Officer, to walk you through some of the highlights from our financial quarterly results.
Thank you, Darren. All amounts I am going to discuss are presented in US dollar. In the second quarter, gold production was 8,217 ounces. Gold sales were 8,329 ounces at an average realized gold price of $3,920 per ounce. This is compared with the average spot price of gold in Q2 of approximately $4,500 an ounce. The average realized gold price was impacted by settling 1,500 ounces of the company's outstanding call options with Auramet at an average selling price of $2,096 an ounce. In addition, production and sales were more heavily weighted to the end of the quarter as spot gold prices declined throughout the period. Quarterly revenue was $32.6 million, and earnings from mine operations was $13.2 million. The company realized a net loss of $15.7 million or $0.14 per share, and EBITDA of $4.8 million.
However, when excluding certain non-operating items such as the Cerro de Oro royalty repurchase of $4.5 million and the expenses related to the settlement of the Auramet gold loan and call options of approximately $17.5 million, adjusted net income was $6.5 million or $0.06 a share, and adjusted EBITDA was $9.3 million. Our balance sheet is the healthiest it's ever been. We ended Q2 with cash and cash equivalent to $43.5 million and record working capital of $106 million, up from $82 million at year-end. Total available liquidity is now $73.5 million, including $30 million undrawn on the company's $75 million revolving credit facility with Scotiabank and National Bank. In Q2, cash costs were $1,831 per ounce of gold sold, and all-in sustaining costs were at $2,054 per gold ounce sold.
While these increased quarter-over-quarter, our year-to-date cash costs of $1,740 an ounce are below the bottom end of our annual guidance range, and all-in sustaining costs of $1,930 an ounce are at the midpoint of the guidance range. Halfway through the year, the company is well on track to achieve 2026 guidance at the Pan Mine with gold production of 32,000 ounces- 38,000 ounces, cash costs of $1,750- $1,900 an ounce, and AISC of $1,850- $2,000 an ounce. In terms of changes in our cash position over the second quarter, our Pan operation contributed $3 million net of changes in working capital. CapEx at the operations used about $7 million.
The initial draw against our revolving credit facility added $45 million, and we repaid a gold loan and several gold call options with a combined impact of $43 million, with a net result of nominally reducing our cash position by about $2 million in the second quarter. Now I'll pass it back to Chief Executive Officer Darren Blasutti.
Thanks, Alfredo Cires. The company made tremendous progress in the second quarter at the corporate level. We appointed Darren Pylot as Chairman of the Board and are now able to leverage his company-building experience as both the founder and longtime leader of Capstone Copper. We closed the $75 million revolving credit facility with Scotiabank and National Bank, drastically reducing our cost of capital, pushing out debt repayments to 2029, and positioning our balance sheet to fund our sector-leading gold production growth profile. We graduated from the TSX Venture Exchange to the Toronto Stock Exchange, which we anticipate will broaden our shareholder base, enhance our trading liquidity, and increase index inclusion eligibility. We also changed our name to Mining Americas Inc., with a corresponding new brand and website, which is much more reflective of our current asset base and our stated goal to become a leading U.S.-focused intermediate gold producer.
I now welcome President and Chief Operating Officer Darren Koningen to discuss the Pan Mine operating results and give us an update on the Copperstone project.
Thanks, Darren. Once we acquired the Pan operating complex late last year, one of our initial priorities was to update the previous mining contract. Earlier this year, Turner Mining Group was selected, given their new equipment fleet and better equipment availability and a broad pool of skilled operators to help the company grow. There was a slight dip early in the year as we transitioned into the new mining agreement and the new contractor who mobilized all the equipment.
The mining rates have now ramped up progressively, and during the second quarter and subsequent to the quarter, we exceeded the budgeted mining rates. During the quarter, the Pan Mine ramped up total mines ton from approximately 52,000 tons per day at the start of the year to a June average of over 70,000 tons and on track to achieve nearly 100,000 tons per day in the second half of the year.
Therefore, we anticipate higher gold production rates as we move into the second half. Despite higher-than-budgeted diesel prices compared to the start of the year, the impact to our unit mine operating costs has largely been offset by the economies of scale from the increased mining rates. In general, just as a reference, fuel costs for the project represent approximately 15% of our total mining costs, and we've been able to manage it appropriately. In the second quarter, we also released the results of a PFS on the Copperstone underground gold project. The study highlighted attractive economics, which at the end of the day, will more than double the company's current gold production over an initial six-year to seven-year mine life. We also anticipate much more upside to further evaluate in the future.
The PFS was really just an initial snapshot of a high return underground gold project, and we believe there's substantial potential to extend the mine life, expand the production rates, and also delineate a future open pit deposit on the property.
During the second quarter of the year, as far as Copperstone itself was concerned, there was a lot of work going on. Just some of the highlights, we've been working to finalize the detailed engineering for construction and new equipment purchases. We've been coordinating with the underground mine contractor that will be joining the project to plan workforce and equipment mobilization and also get going with early mine rehabilitation and development. We've created a laydown area near the west portal of the existing mine that can be used for equipment and consumable staging. We've been renovating all the existing office buildings on-site and looking at putting together workforce accommodations for the future.
We also transported some of the large existing mill equipment that we have available for the project down to Arizona, and it's been sent to nearby facilities for cleaning, inspection, and rehabilitation. Also started to demolish just one end of the plant. Not demolish the plant, but just take out enough space that we can prepare to put the new grinding mill and equipment in. We've purchased a number of new surface and process plant equipment items that are at site, and we're in the process of testing and commissioning an existing lab that is already there as well.
The second quarter also saw us initiate a surface drilling program at Copperstone, and we're really looking here to try and delineate some surface open pit potential material on the property that wasn't included in the underground mine plans outlined in the PFS for the project. At Gold Rock, which is a deposit relatively close adjacent to the Pan Mine, we're now working to advance the detailed engineering in anticipation of a potential construction decision for mine development. Last but not least, in Mexico, with our Cerro de Oro project, we've certainly noted that the current administration of Mexico is starting to issue more mining permits, including obviously the recent announcement for the San Nicolas project in Zacatecas state, which is owned by Agnico Eagle and Teck in the same state that Cerro de Oro is located.
The company obviously is continuing to engage with the appropriate government agencies to advance the permitting process. I'll hand it back now to Darren to proceed.
Thanks, Darren. Thanks, Alfredo. We had a very exciting quarter. I think the most relevant to note is that we basically have the balance sheet ready so that Darren and Kevin and their teams can start building these projects. The calling card of the company has been that we're going to 5x our gold production over the next 27 months. We feel that that is a very realistic and doable scenario. We have the financing in place. We have a very experienced construction and management team in place. We look forward to continuing to update the market over the next 1.5 years As we bring in a couple of new mines in the U.S. As I said, it's a very exciting time. We've been not only getting the balance sheet ready, we've been getting the team ready.
Had lots of additions to the board, to management. Again, at site, lots of great people. We're being able to hire at Copperstone. We're looking at expansions at Pan Mine that I think is going to be exciting for the Pan Mine team as we move forward. Again, it's been a very important quarter. A little bit messy from the accounting side with all of the gold hedges and prepayments taken off, and the new debt package with Scotiabank. But what it means is every ounce we produce from Pan Mine, and in a year from Copperstone and hopefully Gold Rock, every one of those ounces will be at spot, and none of them will be at prices, as we saw affecting our average realized price in Q2, and lowering that price. We expect to be getting the spot price going forward.
That production and that cash flow is going to drive our ability to build these projects, as quickly and as efficiently as we can. So with that concludes the presentation portion of the conference call. We now have some time for a question-and-answer, and I'll pass it back to the call operator for instructions on how to do that. We look forward to answering your questions.
At this time, I would like to remind everyone, in order to ask a question, please press star one on your telephone keypad. Your first question comes from the line of Allison Carson with Desjardins. Please go ahead.
Thanks, operator. Good morning, Darren and team, and thanks for taking my questions this morning. My first question is just on CapEx. Can you break out your CapEx spend this quarter? What was spent on sustaining, and then what growth CapEx was spent on Pan Mine and Copperstone?
Sure. I will let Alfredo Cires answer that. He has got all the details for you, Allison Carson. Thanks for the call or the question.
We did, in our waterfall chart for the cash changes in Q2, we indicated that there was $7.4 million of investing outflows, and about 56% of that was growth CapEx, mainly at our Pan Mine complex and Copperstone. The balance is other CapEx, so that is a split basically. We bought a second crusher, Allison Carson, that was around $700,000 or $800,000. Then obviously, we also had some increasing, like, the Gold Rock bond was put in place, that got into capital. Most of the growth capital was kind of at the Pan Mine area. We also had a little bit on Copperstone, just about $800,000 or so at Copperstone in the month of June, because right now we were doing detailed engineering. We were effectively mobbing demolition teams. There is not that much capital yet from Copperstone. You will start to see a lot more as we get into Q3 and to Q4.
Perfect. That is very helpful. My second question is just I was wondering if you could give a bit more of a detailed update on Copperstone. How are things tracking to budget and schedule, and maybe what are just the critical path items for this year?
I will start and I will hand it over to Darren Koningen. Allison Carson, the management and board visited Copperstone last week on Wednesday, prior to our board meetings. It is very unusual in the sense that the management team was able to get underground, before the project has barely kicked off. To answer your question, long lead time item is we have got an old mill that is being refurbished and putting into the plant. That mill, as Darren Koningen said in his comments, has been shipped between Tucson and Phoenix, and it is being basically refurbished. That is the long lead time item, the plant itself, the processing part. Once that processing part gets in, then we will bring in small mine developers to start working on the underground, because both portals are open, we are able to get right down into the underground mine.
That is the back end of the capital. When we talked about $58 million and talked about being up in the Q2, Q3 next year, the long lead time item is really pushing getting the mill and the processing plant up and into place. I would say on a tracking basis, there's not very much capital in Q2 and Q3. We are on budget there. On timing, the budget again is still, we had said basically it is going to be slightly more than a year when we put it out at the end of May. I think we are still tracking on that timeline. As I said, budget, we are probably a little bit light on budget, but not material. Just as I said, as things are moving in and out of site. We removed the old ball mill out.
We are reconfiguring the process plant to put the new bigger ball mill in sideways instead of vertical. Again, that will be put in. I mean, we walked through the assay lab, which is almost ready to go. We walked through the warehouse. All that stuff is on site. I think the long lead time is the plant. As soon as that plant, we feel comfortable with the refurbishment of that ball mill going in. The plan is to put three months of stockpiled ore on the pad prior to starting up the mill. Again, I think that will be kind of late fourth quarter when that starts. Darren, anything I missed? Darren Koningen?
No, I think you covered it pretty well. We are trying to go through right now some of the bigger new equipment items too. Given current world events, some of the suppliers or the fabricators have pretty short quotation periods right now. We are back talking to some of the guys we had spoke with a few months ago when we were doing the capital estimates just to confirm who actually has shop availability and all the materials and everything right now. We are just trying to identify if there is anything that is in that schedule that may have the potential to drag up from when we talked to them a few months ago, and if we need to make some changes to those suppliers, we could do that now up front before it becomes an issue.
Great. That is very helpful. I appreciate the additional color. That is it for me, and congratulations on Q2.
Thanks, Allison.
Your next question comes from the line of Raveel Afzaal with National Bank of Canada. Please go ahead.
Hey, good morning, team. Thanks for taking my questions. Firstly on Pan, your June mining rates are exceeding 70,000 tons per day, and you are targeting nearly 100,000 tons per day in the second half. Do you expect to sustain that level of mining rates? How should we think about that in terms of translating the higher mining rate into a production outlook for H2 and 2027? The grade profile, stacking grades, any color you can give on that?
Yeah, I will put that over to Mr. Koningen. I think he is
No, that's fine. We do expect to be able to maintain those mining rates. All the new equipment is now at site, and, if we need to make any further adjustments, we can. The big thing that's going on right now is that, as I'm sure you can appreciate, everybody's trying to rework mining plans based on where gold prices are. And certainly that was the case at the start of the year at Pan as well. A lot of what's going on right now is starting to remove additional waste and things that wouldn't have been in that plan back when people were planning at $1,600, $1,700. A big part of that increase in tonnage is that. We will eventually work our way through that at some point next year.
In the short term, through that period, you're not going to see a corresponding production increase that matches those kind of tonnages. But then certainly as we're through that waste, there'll be a big uptick as we get through it. So we're still doing planning on it, and trying to see what we can do to optimize it. But certainly that's the biggest part of the difference. Obviously, there's lower grade material coming in now as well. So it's been a big transition, not just in tons, but also in the sequence in the mine as well as we start to look at what kind of pushbacks. I say pushbacks in air quotes. It's not big pushbacks, but there's definitely more material to be moved out of there, so that you can access some deeper material that wasn't in the plans when we first got involved.
Right. And just to add to that, Ravi, again, I think the 100,000 tons, we're going to see the upside of that in the near term, more in the fourth quarter than the third quarter. And the other thing I would say is, Darren, DK, now that we're looking at some 0.2 gram per ton ore that would've been waste that's now going on the leach pad. Again, all of these things
For sure. Look, a set of grades have all come into play there too. As Darren said, part of the issue is heap leaching or characteristics of it, maybe not issue, is just that you see a pretty slow response to changes in mine production rates just because of the fact that it's a leach pad. Even once the new material starts to come under leach, the gold recovery from that new material comes out slowly over many months. In the case of Pan Mine, it's actually many years before it's all done. So, at the end of the day, it means that there's quite a big lag between changes in mining rates and changes in gold production rates. We're definitely in that transition period right now.
Should we think of these changes and the increase in mining rates more in terms of exposing additional grade and resource for you to eventually stack on the pads?
Yeah.
Fair to think that we should think of a steady stacking rate going forward?
Yeah, I think that's true. Until the waste is cleared out, you're absolutely right. We're accessing additional material that wasn't available at the lower gold prices, and the stacking rate will be fairly consistent until we're through that. That's exactly right.
Yeah. Makes sense. Of course, you mentioned the gold price increase. Everybody's looking at new mine plans. Your reserve grade is in the 0.3s, but you are mining and stacking in the 0.2s. Any thoughts about putting out a new resource update at the end of the year based on a revised gold price and how that might change things?
Yeah, look, we are talking about that but in the context also of Gold Rock. We are doing some more planning for the resource at Gold Rock, and so we will put an update out on that, and probably at that time it'll be part of an overall update for the Pan complex. Yeah, it's in the works.
Ravi, for sure. As you probably have seen, we've started talking about Pan and Gold Rock as the Pan operating complex. Again, updating some of that MRE on Gold Rock and Pan together and then making that decision to go forward on Gold Rock are all going to be coming in the same report.
Okay, thanks for taking my questions. I am looking forward to the rest of the year, and you are tracking well to guidance, so nice to see all of that .
Yeah. Thank you.
Again, if you would like to ask a question, please press star one. There are no further questions at this time. I would like to turn it back to Darren Blasutti for closing remarks.
Great. Thank you, Lacey. Listen, one, we appreciate all our shareholders', analysts' support with the company. We are in a dynamic period of transition. We have got three quarters of Pan under our belts at just around 27,000 ounces of production. As you can hear from Darren Koningen, we are making big changes to that asset. We are in the early stages of construction at Copperstone, and we are getting ready to make a decision on Gold Rock. All of these things are on budget in the way we expected to be doing them. As said, I think the second quarter was really around fixing the balance sheet and getting us ready for this growth. Again, I think as we talked about, Q3 will be similar to Q2. Q4 will be the best quarter of the year.
Again, nothing's linear here in the subsection of you take 35,000 ounces or 36,000 ounces and divide by four. But you can see that our costs are tracking. We're below our budgeted guideline for cash costs and lower than the midpoint of our range for AISC despite higher oil prices. We're making good progress. I think the noise going through the accounting statements will be much less during Q3. And we look forward to selling our gold at much higher gold prices without having to have it impacted by 1,500 ounces sold at $2,000, or prepayments at no ounces. All of that will benefit the company as we go forward. Q2 was always expected to be a little bit messy. I think the people inside the company have done an excellent job. I just want to point one thing out.
Once again, Pan has over-delivered on the safety, continuing to be one of the safest mines in Nevada, and we're very proud of that team there. With that, we look forward to talking to you again coming forward, and we appreciate your support as we build these assets. Thank you very much.
This concludes today's call. You may disconnect.