Hello, ladies and gentlemen. Welcome to McEwen Mining's Q3 2022 operating and financial results conference call. Present from the company today are Rob McEwen, Chairman and Chief Owner, Perry Ing, Chief Financial Officer, William Shaver, Chief Operating Officer, Stephen McGibbon, Executive Vice President of Exploration, and Michael Meding, Vice President and General Manager of McEwen Copper. 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, please press star one again. I'll now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.
Thank you, operator. Hello, ladies and gentlemen. Thank you for joining us today. During Q3, we addressed a number of the overhanging concerns about McEwen Mining. First, the financing of McEwen Copper. We completed an $82 million financing in a really tough market. Not only did we complete it, but we have the second largest mining company in the world becoming a shareholder through its subsidiaries. We had high costs at our operations at Fox, and in the third quarter, we turned in operating costs, cash costs per ounce below industry averages at $774 per ounce. At Gold Bar, we saw our production fall in the first half of the year as a result of carbonaceous ore, and it resulted in unusually high costs, unacceptably high costs.
We are opening up the Gold Bar South deposit, and it has no carbonaceous ore, it has higher grade ore, and it's a lower strip, so we should be seeing lower cost production coming from there. We also had. In Mexico, it looked like we were coming to the end of the life of the mine. We did have a feasibility study there for a project called Fenix, and we've improved the economics of it considerably with the purchase of a process plant on very advantageous terms. These issues all obscured the value of McEwen Mining, in my mind. With these resolved and a steady improvement going forward, I believe that the value of McEwen Mining will become more apparent. After the presentations of my associates, I will talk about the value I see behind McEwen Mining.
I would now like to turn it over to Perry Ing.
Thanks, Rob. I'll provide a brief overview of our third quarter financial results. I'll start by stating that our 100% owned mines generated a cash gross profit of $5.8 million and a gross profit of $1.5 million. You can compare that to our reported GAAP loss of $10.5 million or $0.21 a share, which generally reflects the fact that the $7.6 billion we invested in Los Azules, along with $5.1 million on exploration on other projects, is expensed rather than capitalized. As Rob mentioned, our results reflect a ten-for-one share consolidation that was completed in July during the quarter. Having completed that share consolidation, McEwen Mining has now regained full compliance with NYSE share price listing requirements.
Looking at gold equivalent production just on a consolidated basis, production for the third quarter was 35,700 gold equivalent ounces, which was roughly equivalent to the same production in the second quarter of the year and down approximately 16% from approximately 43,000 gold equivalent ounces produced in the third quarter of 2021. I'll have William Shaver talk about our production details, but overall, I'll characterize our quarter as generally being strong at Fox and San José, but continuing to experience challenges at Gold Bar, as Rob alluded to.
In terms of cash costs, as Rob stated earlier, we reported $774 as cash cost per ounce and all-in sustaining costs of $1,308 per ounce, driven by our strong performance from our underground operations, which continues to produce ore well ahead of current mill throughput. We were also assisted by a weaker Canadian dollar. The U.S. Canadian dollar exchange rate of approximately 1.31 was about five cents weaker than the same period in 2021. Just as a detail on our production at Fox. If you look at our inventory balances, they're about $6 million. There's about a $6 million build in ore inventory stockpiles just in the third quarter alone.
That ore that is now sitting in surface stockpiles at our mill. Going forward, you know, this should allow for some greater flexibility in our mine sequencing and some cost-saving opportunities. In Nevada, looking at Gold Bar, our cash costs were $1,712 an ounce and all-in sustaining at $2,049 an ounce. Although these figures are down slightly from the first half of the year, they remain elevated compared to the prior year due to low production levels resulting from carbonaceous ore issues and are well above spot gold prices. We noted our mining contractor demobilized towards the end of the quarter.
We believe that this will have a limited impact on our cash flows, as we expect to continue to recover residual ounces from the leach pad, and we expect to begin gold ore sales production within the next quarter. Finally, looking at our 49%-owned San José Mine in Argentina, they generally had a good quarter with cash costs of $1,223 per ounce and all-in sustaining costs of $1,562 an ounce, which represents a significant improvement from the first half of the year, where they experienced COVID-related production issues as well as a fire at the San José Mine during the quarter, but we are optimistic for the future depending on silver and gold prices.
Finally, looking at our treasury, our cash and equivalent balance stood at $55 million at the end of the quarter, which is roughly unchanged from the $54 million at the beginning of the year. As Rob noted, this included the completion of $82 million in private placements, of which approximately $42 million was completed during 2022 and $27 million during the quarter, primarily from a subsidiary of Rio Tinto. Following that private placement, McEwen Mining's ownership of McEwen Copper was approximately 68%. With that, I'll turn it over to William Shaver, our COO.
Thank you very much, Perry. Good morning, everyone. The third quarter was a reasonable quarter, though not as good as we hoped it would be. We are making progress, though, at all operations to make our future brighter. On the safety front, we had a good quarter. We had one minor medical aid where a worker felt a neck pain while lifting an oxygen cylinder. On the environmental front, we had no environmental events to report in the third quarter. Also, at the Fox Complex, the tailings management facility construction to raise all of the dams by approximately 2 m was completed on time and on budget. Also, at the Fox Complex, we had an excellent month in the mine, producing ore containing 13,146 ounces versus a budget of 12,441 ounces.
This raised the amount of stockpiled ore at the mine and at the milling process to 112,000 tons. This represents a value of approximately $10 million after milling cost and applied recoveries from the mill. Unfortunately, we have continued to have some mechanical issues in the Fox processing plant that have constricted the availability in the plant to approximately 77% for the quarter. This has allowed this stockpiled ore to increase substantially over the quarter. In October, the plant availability was significantly better at 90% based on a nominal rate of 50 tons per hour or 1,200 tons a day. Thus, the plant operated at approximately 1,100 tons a day. We produced 9,000 gold equivalent ounces in the quarter.
What we need to do is increase the rate in the processing plant so that we can decrease the amount of stockpiled ore. The mine itself is in a very sweet spot of the mining life, where many mines find themselves from time to time, and where we can produce more ore than we can in fact process at this time. In order to address this situation, we are debottlenecking the process plant in a very systematic way, while at the same time reducing costs at the mine to stay within our cost per ton budget. We are being successful both in the mine and in the plant of keeping the cost as per our budgets. We will also install a crushing plant at the mine to relieve the stress on the front end of the plant.
We hope that this will allow the ore to go reasonably quickly through the front end of the mill directly into the grinding and leaching circuits. We hope this will relieve the stress on the overall plant availability and improve throughput. At the Gold Bar mine in Nevada, we have come to a position where we have a better understanding of the carbonaceous minerals that occur in the ore and have a capacity to rob ore from the pregnant solution. This has complicated the mining process of separating ore and waste in the pit. However, we are getting this also under control. Gold Bar produced 7,200 ounces for the quarter. The Gold Bar South project, which we are in the midst of starting, was impacted by permitting delays of approximately two months. We will now see production from Gold Bar South in December.
On a positive note, we have engaged a competent contractor who has completed the road to Gold Bar South over the last six weeks, so we will not lose any time on this front. We have also engaged a new contractor to operate the mine. This contractor is mobilizing equipment to the site this month to take over the work. This contractor has started the preliminary mining at Gold Bar South with the first drill arriving at the site last week. At the same time, we have moved approximately 100,000 tons of ore that we had next to our crushing plant through the plant and onto the leach pad. We completed this in October, and now have that material under leach. We poured 2,500 ounces of gold in October and anticipate we will have 4,500 ounces over November and December.
This will allow us to have positive cash flow, cash flow in the fourth quarter of approximately $4.5 million. Going over to Mexico, we have been able to develop an approach to get the El Gallo project back in production. We will reprocess the heap leach pad, which has a grade of 0.6 g per ton. To accomplish this, as Robin mentioned, we have acquired a 7,000 ton per day gold processing plant, which operated recently at another mining operation in Mexico. This plant is approximately 150 km away from our site and was purchased recently on quite favorable terms. At El Gallo, we will assemble only the grinding, cyclones and leaching portions of the plant and use the present El Gallo gold recovery circuit to operate the mining of this leach pad.
Some minor changes in our permit are required, and we are also making some final updates to the project evaluation analysis, and some engineering and scheduling studies are being undertaken. The results of all of these will result in a favorable return on the project and a reasonably small capital cost of between $12 million and $15 million. We hope to have this plant running late next year or early in 2024. Thank you very much. I will now turn over to Stephen for an update on our latest exploration results.
Thank you, William, and good morning, everyone. I'm not going to quote grades and intercepts today, but rather talk more about plans and opportunities coming in 2023 based on work completed in Q3 and Q4. I am happy to say we will release an exploration press release shortly for the Fox Complex. That release will update key results, including a near surface discovery east of the mill at Stock and solid infill results that highlight the quality of our Stock West deposit. We have very good early results at Gray Fox that are a follow-up to 2021 successes as well. Surface exploration in Nevada is near completion for the season and is just ramping up again at San José, where spring in the southern hemisphere has begun. At the Fox Complex, we are drilling at both Stock and Gray Fox during Q4.
Q1 2023 will be critical for us to explore along the Nighthawk fault during our winter program. Nighthawk is a controlling structure to all previous discoveries at Stock. All discoveries have a near surface expression that will respond well to fire assay and other analyses. In fact, historically, it may surprise you to hear that only about 5% of past production occurs on the prolific Destor-Porcupine fault zone. Much of the remaining 95% occurs along secondary fault splays such as Nighthawk. Nighthawk has not been explored along the 3 km west of Stock West for decades, yet has exciting but limited near surface exploration results. Like a string of pearls, our winter program will be designed to signal the likely additional discoveries to be made along Nighthawk, west of past discoveries.
Systematic near surface drilling passing through the Nighthawk to the Destor-Porcupine fault zone is the best way to determine where subsequent and more focused phases of drilling need to be placed. At Gold Bar in Nevada, the phrase boots on the ground best describes our Q3 work this summer. We utilized part of our geological teams from Argentina and Mexico to accelerate surface mapping on areas of the Gold Bar property that haven't had boots on the ground in decades. That work will be completed in 2023. Along with what we think will be a very strong overall exploration program. Drilling will begin in April. Mapping doesn't have the sex appeal of drill results, but this work is prioritizing targets having near-term oxide potential to support mining a stone's throw from the leach pad south of current mining operations.
Longer term, similar host rocks and the key contact of the Gold Bar South deposit have been mapped and sampled elsewhere on the property and display strong alteration and rock chip sample grades. We see the geologic framework that hosts world-class gold deposits at Cortez in place at Gold Bar. Our Bartine host rock, the analog to Cortez's Wenban 5, is virtually untested away from the Gold Bar mine as a deeper refractory target, particularly along the Wall Fault corridor. The Wall Fault is a prominent structure associated with extensive alteration, which we now believe is a southern extension of the Cortez fault. Will 2023 be a watershed discovery year for exploration in Nevada and Ontario? That remains to be seen, but we have important programs proposed and are very excited by the near-term and medium-term potential. Thank you. Michael Meding now has our McEwen Copper update.
Thank you, Steve. I will now speak about McEwen Copper's progress. McEwen Copper is a subsidiary of McEwen Mining, established in August 2021 as the holder of the Elder Creek and the Los Azules copper assets. The Elder Creek property in Nevada consists of 577 unpatented mining claims in the Battle Mountain-Cortez district. It is prospective for porphyry copper mineralization and well-placed in a district hosting several large copper and gold mines, including Nevada Gold Mines, Cortez, and Phoenix. On September 6, 2022, McEwen Copper signed an option term sheet with Rio Tinto subsidiary, Kennecott Exploration, to earn a 60% interest in the Elder Creek property in Nevada, U.S.A., by investing $18 million in the next seven years. The Los Azules project is one of the top 10 world's largest copper deposits measured by resource according to Mining Intelligence.
As Tony mentioned before, McEwen Copper completed the initial financing oversubscribed, which included a $25 million investment by Nuton, a Rio Tinto venture focused on innovative heap leaching solutions for copper projects. The proceeds from the private placements are used for the Los Azules project to update our prior PEA, addressing the risks and opportunities, and to advance the project towards a feasibility study to which we are looking to demonstrate our confidence in the accelerated development of the project. The use of funds includes exploration drilling, a new resource model, environmental permitting, community engagement, other technical work, and general corporate purposes. So far in Q3, we spent $7.6 million on activities related to groundwork, work for the drilling program, technical studies, and community engagement. We are targeting access to the site during much of the year in order to accelerate exploration studies.
During Q3, we improved further our exploration roads in preparation for the early mobilization of the equipment and personnel to sites. The current two roads to the site are aimed to provide near year-round access to adequately support the current phase of the project. With regard to the drilling program, by September 26th, all our three camps were operational. Several drilling contractors were secured for the upcoming drilling campaign, and mobilization was begun. We have drilled so far some 3.1 km, have completed already four holes, and have six drills turning on the next. The resource drilling program aims to further our understanding of the deposit and to upgrade the open pit to measured classification. We are also drilling several deeper exploration holes with the aim to further expand this already significant resource.
With regard to the technical studies, our team is well advancing on the PEA schedule to include all drilling, assay, and metallurgical testing from the 2017 and 2018 season together with the previous season results. Work continues during the quarter on trade-off studies related to power supply and inclusion of renewables, as well as to include further processing options, the design of future heap leach, tailings, and waste storage facilities. Hydrogeological assessment of historical information and the reestablishment of existing water monitoring locations was started. The preliminary Whittle Enterprise Optimization completed in Q1 using existing information was further refined during Q2 and Q3. This optimization study focused on the following objectives. Improve value by optimizing scale and capital requirements, reduce complexity, and to minimize risk.
This analysis continues to show that there's potential to include several changes to previous limitations, which could create a significant increase in the value of the project and are targeted to be included in the forthcoming PEA update. Metallurgical testing continues, and further preliminary metallurgical data has been received in Q3, both for flotation as well as for heap leach scenarios. Additional infills were planned for this drilling season, including environmental baseline work, a program designed to understand the hydrology surrounding the project, and a significant geotechnical program to assist in the design of the pit walls. We are planning to issue the updated PEA in the first quarter of next year to deliver a scalable mine project offering an attractive investment case for our shareholders.
The preparation of the exploitation environmental impact report, which is the filing for the environmental permit for future operation. Has been advanced to nine PSOIs, and the drafting is well underway to be presented to authorities here in Argentina in the first half of 2023. We believe that mining standards should support socio-economic development. As such, we have a dedicated community engagement team in Argentina for the Los Azules project. Our team maintains an accessible presence in the city of San Juan, as well as in the municipality of Calingasta, where the project is located. The community engagement team drives our sustainability efforts and is focused on local procurement and employment, environment, health, education, and security. In addition to the existing facilities in the town of Calingasta, a new community development office will be opened during the month of November.
At the moment, we directly employ 130 staff, out of which 98% are Argentinian, 17% are female, and thereof more than 75% are professionals, reflecting our commitment to workplace diversity and the offering of high-quality jobs in San Juan. Thank you for your attention. I will now turn the presentation back to Rob.
Thank you, Michael. I believe the value of McEwen Mining is considerably higher than our current share price. In fact, I think it's worth somewhere between $8-$30 a share. This is arrived at by adding up the value of its parts. This value is the reason why I've made a personal financial commitment in McEwen Mining and McEwen Copper of over $220 million. I arrived at the $8-$30 share value, as I said, by adding up the estimated values of our assets. McEwen Copper with its Los Azules and Elder Creek property, our gold and silver assets, and our portfolio of royalties. The math is set out at the end of today's press release.
The biggest leverage, I believe, will come from the recognition of the size and scale of Los Azules, and that will be seen in our updated PEA, which we're then going to push aggressively to produce a feasibility study in the following year and a half. The turnaround that's occurring in our gold and silver assets. Today, you can buy shares in McEwen Mining and essentially get the value at the low end of the value of Los Azules, and all the other assets are for free. I'd now like to open the session for questions.
Thank you. As a reminder, to ask a question, you'll need to press star followed by the number one on your telephone. To withdraw your question, please press star one again. The first question comes from Jake Sekelsky with Alliance Global Partners. Your line is open.
Hi, Jake.
Hi, Rob and team. Thanks for taking my question. Are you able to provide any more color on the processing plant that you acquired in Mexico? I guess maybe what you paid for it and the level of CapEx savings you expect to realize that being a?
Sure. I'll ask Bill to address that.
This process plant, as I said earlier, is a 7,000 ton a day plant that was used to operate a Goldcorp
El Sauzal
El Sauzal mine. That mine ran for approximately seven years, and that plant has been, in Mexico, moved from the Goldcorp site for approximately five or six years. The acquisition price was $2.8 million. If that plant was, you know, somewhere where you were gonna build a 7,000 ton a day plant, then it would probably save you in the order of $40 million because the mine only operated for six or seven years. The plant is basically brand new.
Okay. That's helpful. Switching over to Fox, I mean, you mentioned that production was a bit lower due to some bottlenecking at the mill. You touched on some of the steps you guys expect to take to rectify that. I mean, is that something we should expect to be flushed out in the fourth quarter? Or do you think, you know, catching the mill up to mining rates might take a bit longer?
No. I mean, we're doing and have been working on a number of things to improve the production and improve the availability of the mine. We've installed a new screening process. We're in the midst of fixing some conveyor components. I guess what one has to understand is that plant has been there since some time in the mid-eighties, and it was originally built with used equipment. Some of the equipment, especially on the front end of the plant, the cone crushers and so on are pretty old, have done a lot of hard work over the years and so just have poor availability. We're trying to do all of the things we can in order to help that situation.
Ultimately, the best fix that we're contemplating at this point is to continue operating that plant as best we can, you know, and make it as productive as possible. The long-term solution is to improve the front end of that plant by, in fact, using some of this equipment that we bought in Mexico to try and upgrade the production from 1,100 or 1,200 tons a day up to, you know, something that's reasonably higher. We haven't come to decide what that number is, but it's probably somewhere in the range of 1,600 tons-2,000 tons a day.
You know, then we would have the capability of, you know, running close to the same rate that the mine is running at, which at this point is, you know, something around 2,000 tons a day that we can produce out of the mine at the present time. What we've done to kind of help that situation is, we've reduced the development crews. You know, because the mine is kind of in that sweet spot of with lots of headings and so on, although we've reduced the crew size by 50%, we've only managed to reduce the production by about 25%, because when you have more headings, you just make more footage, and it's effectively cheaper.
Anyway, that, you know, it's nice to have a big stockpile, but it's not so nice to have a big stockpile, you know, when you'd rather have the cash. We're working through the process of trying to make it a better situation.
Got it. Okay. That's all for me. Thanks again.
Thanks, Jake.
The next question is from Heiko Ihle with H.C. Wainwright. Your line is open.
Hello, Heiko.
Hey, Rob. Thanks for taking my questions.
Happy to.
It seems like that's a recurring theme in the Q&A today. For the process plant at Fox, you state in the release that we plan to start crushing at the Stock Mine prior to transportation to the mill. Is it fair to say that the crushing circuit is the only bottleneck, or is this an issue with more like the entire plant? If maybe you could provide a bit of color on what components are holding you back in excess of what was just said in response to the last question.
Yeah. The back end of the plant, which is the leaching and the gold recovery is fine. The middle of the plant, which is the grinding circuit, is probably okay, but it has three mills accomplishing the grinding task. Effectively, that over time, as that plant was increased in capacity, which I understand started at something like 500 tons a day, the original ball mill was in place. They added another ball mill, then they added a third ball mill. What you have is a plant that has lots of operating entities. Of course, every time you look at the availability of a plant, you know, as you probably know, it's the availability of each component in a series of components.
If everything works at what one would anticipate, you would see in a mill, which is somewhere between 95%-97% availability. When you multiply all those things together, you get down to, you know, into the 80% range. The ball mills are still okay because they're, you know, they do work. There's not a lot of duplication there. The front end of the plant is where most of the struggle is because the cone crusher is very old. When the plant was, I guess, changed or when there were components added to the plant, they really didn't spend a lot of time thinking about how they were going to maintain them and how they were gonna have access, you know, both with cranes or with overhead cranes or.
In order to get at these pieces of equipment. Every time when you go to fix something, it's a relatively big ordeal. Some of the plant over the past, you know, number of years, you know, I guess the plant maintenance was something that they've struggled with for some time. We're just systematically going through each part of the plant. We've changed the screen, we've changed some of the feeding arrangement. You know, as you probably know, one of the primary crushers is associated with the old hoisting plant. All of those things are just, you know, don't help when it comes to maintenance because of the number of components and the availability of each.
It'll be a process, but you know, it's everything that we've done so far seems to be helping. This next step is get some material crushed down to a significantly smaller size so that it's easier to feed through the front end of the plant.
That makes perfect sense, and I appreciate the comprehensive answer there. Just for clarification, something completely different. The surface stockpiles, do you have an idea as to their average grade? Is this just run-of-the-mill or just-
The average grade is 2.44.
Got it. Once again, a very specific answer. Thank you. How much tonnage are you adding there right now per week or day or month or whatever?
I'm gonna say we're adding somewhere between 7,000 and 12,000 tons a month, depending on what's going on. I may just go back to my previous answer. There are two components to that stockpile. One is about 1.5 grams per ton, and the other is a little bit over 3 grams per ton. It's split kind of 50/50 at this point with the ore that we're adding, as we move forward will be a little bit higher grade.
Got it.
You know, what we're doing, I guess, is trying because this grade is a little wee bit higher that's coming out of the mine now, we're directing that directly from the mine end to the process plant without it stopping in a stockpile.
Got it.
Yeah.
Go. Sorry?
Go ahead.
I know it's rude to ask three questions, so I'm just gonna make this very brief. Earlier in this call you mentioned that Stock exploration Q1 2023 is, and I'm using your word here, critical. How much do you expect to spend on exploration there in 2023 and maybe even in the first quarter? I mean, you were at $2.7 million for Stock in Black Fox in Q3. Can we just trendline that figure?
Sure, Heiko. We've got about, I would say, a global exploration budget of about $20 million for next year. I would say nearly 80% of that is gonna be directed at the Fox Complex. I would say, you know, Steve talked about, you know, the winter drilling and work that he wants to do over the winter. I would say generally it's gonna be phased, you know, fairly evenly throughout the year. Steve can probably give a more nuanced answer.
Yeah. Maybe what I'll add to that, thanks, Perry, is that we have a flow through commitment to complete in 2023. The upcoming first quarter is really our only winter program where we can attack targets that require winter conditions. I would say overall, we could expect our first quarter spending to likely be higher than average quarterly spending for the rest of the year. Those numbers haven't been finalized, but that's kind of the bias I see developing.
Got it. Awesome. Thank you all so much. Stay well, and I'll talk to you soon.
Thanks, Heiko.
The next question is from Joseph Reagor with Roth Capital Partners. Your line is open.
Hi, Joe.
Hey, Rob, and team. Couple of things, just kind of my more fine-tuning questions. Previous two callers asked some detailed stuff, that was good. Your guide for next year, what was the assumed gold to silver ratio for that?
85 to 1.
Okay. And then, you know, with the ongoing, you know, carbonaceous material problem, is there an expectation with the existing resource at Gold Bar that you guys will be providing an update there? Also with the focus on Gold Bar South next year, you know, the previous, I think, mine plan called for something like 2.5-2.9 million tons per year. You know, are we thinking a smaller number on an annual basis going forward?
Well, yeah, I don't think we're planning on a smaller number than we said before. The Gold Bar South should, you know, we should produce ore out of there at the rate that we have contemplated. There is still some ore that we will recover out of the Pick pit and out of Cabin. For sure, next year we will be concentrating on Gold Bar South.
Okay. On MSC, and this is probably sort of one for Rob, net income year to date's $9.4 million, on a 100% basis. You guys have gotten less than $300,000 in dividends. You know, at what point do you think?
You know, your partner will start, you know, giving more cash out of that entity. I know the first half of the year was tough, but, you know, it's been profitable despite that.
So far, they haven't said they want to pay a dividend this year. That might change because they have some problems in Peru with two of their properties right now. At the moment, Joe, we haven't seen any indication they're gonna pay this year anything further.
Do you think that might change next year?
Well, their year-end is not the normal year-end. It's not December thirty-first. It's, I think it's March. You could see something in the first quarter.
Okay. All right, I'll turn it over. Thanks, guys.
Thank you.
The next question is from Mike Kozak with Cantor Fitzgerald. Your line is open.
Hi, Mike.
Hey. Yeah, good morning or good afternoon, Rob, and team. Just one question from me. Of the $55 million in cash that you're reporting as of the end of the third quarter, how much of that is within the McEwen Copper subsidiary? And how much of that is any flow-through dollars that might be left over from what you raised back in, I think it was March?
Hey, Mike. The vast majority is in McEwen Copper currently.
Yeah.
I'd say just north of $50 million. The remainder, I mean, would be McEwen Mining's cash balance, which is below the net flow-through raise.
Got it. Okay. Yeah, all my other technical questions have already been answered, so thanks. I'll leave it there.
Thank you.
The next question is from John Tumazos with John Tumazos Very Independent Research. Your line is open.
Hi, John.
Thank you for taking my question. Rob, we know you're passionate and a believer in all the assets or you wouldn't be managing the company the way you are and investing the way you are. You might be happily retired skiing somewhere if the projects weren't sick. Is it a reasonable way to approach the risk profile of McEwen Mining that you're going to invest in the projects? Maybe the exploration budget of $20 million could get bigger, but it's probably not gonna get smaller. If there's a bump in the road or the gold price falls or the copper price falls, probably Rob isn't worried if the company's $10 or $20 million short, you'd just cut a check probably. You're not worried. If the people on the outside are worried, well, that's just a buying opportunity.
Yes.
Is that a fair way to approach things?
No, that's a good way of looking at it, John. The way I look at it.
I'm not trying to commit you, but I think people outside the company probably worry a lot more than you do. We get the gray hairs and you don't.
I don't know about that. No, I see a discernible turn in our precious metal operations, and I see very large leverage for our share price with the Los Azules asset that continues to gain some recognition out there. I felt it was very obscured by the operating problems we experienced over the last several years. Now with copper taking the front stage on the electrification of transportation, I have a lot of optimism there.
Thank you.
Thanks, John.
There are no further questions at this time. Mr. Rob McEwen, I'll turn the call back over to you.
Thanks very much, operator. Thank you everyone for joining the call.
Ladies and gentlemen, this conference call. Thank you for participating. You may now disconnect.