Hello, ladies and gentlemen. Welcome to the 2024 Annual Meeting of Shareholders of McEwen Mining. Please note that today's meeting is being recorded. During the meeting, we'll have opportunities for questions. You can submit questions or comments at any time by clicking on the Q&A icon. To enter a question or comment, compose your question or comment in the lower field provided on the right of the screen, and then click Send to submit. During the presentation, you will be able to follow the slides on the left-hand side of the screen. To extend the slides to the full browser view, click the Broadcast icon at the top right of the screen. To return to reduced view, click any icon at the top right corner of the screen. 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 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 two 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 of 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 of 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 your 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 email 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 one-third 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 meetings screen.
No questions or objections have been raised.
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 nine 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 nominations.
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 the Q&A icon on your screen.
No questions or points of discussion have been 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, non-qualified 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 it 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 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 accountant 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 four 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, 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 the 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 owners' 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. I'd like slide seven. 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 seven. Gold, silver, copper are critical metals for living in the modern world, and there are very few substitutes for ways to protect your wealth and powering the energy transition. We are fortunate enough to have all three 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 its 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 two 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 eight, please. This slide illustrates how far we have run ahead of the herd in the past 22 months. Since September 2022...
September 2022, when we closed the first financing of McEwen Copper, and up until last night, our share price has increased 8 times greater than the Dow Jones, 7 times greater than the price of copper, 4 times greater than the gold ETFs of GDX, GDXJ, 4 times that of Nasdaq, and 3 times 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's 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 lbs of copper, that would equate to a 70 million-oz gold deposit. To put that in perspective, that's the same amount of gold as 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 lbs of copper that equals the value of one oz of gold. Using last night's closing prices, 537 lbs were required to equal an oz of gold.
Using the cost and production numbers from the 2023 Los Azules Preliminary Economic Assessment, and from the recent increased recovery rates and resultant lower cost per lb, Los Azules would have a gold equivalent average annual production of 735,000 oz, producing at a low cash cost of $550 per oz and an all-in sustaining cost equivalent of $850 an oz with a mine life of 27 years. And that's 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 three to five years, if not sooner.
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. Let's take a look at the value proposition for McEwen Mining. Slide 10. McEwen Mining's value is the sum of three parts, and we're showing three 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 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 a share.
The largest contributor to this value is McEwen Copper, and its mid-range of $7.73 a share is based on the most recent financing of McEwen Copper that was completed last October, giving it a 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 values for two 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 Josemaria deposit in April 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 six non-producing 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 out over the 27 years of life of the mine, more than $500 million.
The third part of the value is derived by comparing our economic value, enterprise value per gold equivalent ounce of four 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 gonna use are in U.S. dollars, unless otherwise noted. So just as, as an opening comment, you know, overall, I think, we've made tremendous progress over the past 18 months, both from a financial and a production standpoint, as, 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 prices, 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 in the company has allowed us to do two things.
So looking at our, 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 this facility. Second, the flow-through raises have allowed us to expand our mineral 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 Stock, of the Fox Complex. Bill Shaver and Sean Farrell will go into more details on the operations and exploration at 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 oz, 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, 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 costs down on a per ounce basis, closer to our cost guidance range for Fox. At Gold Bar and San José, 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. 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 José, they are undertaking a mill capacity expansion up to 2,000 tons 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 oz through 2026, and gives us a potential pathway of increasing production to 200,000 gold equivalent oz and beyond. Looking at opportunities at Grey Fox, at the Fox Complex, Timberline in Nevada and Fénix 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 timelines 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 had an exciting year and already two very exciting quarters. McEwen Copper's flagship project, Los Azules, is located in Argentina, an emerging Tier One 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, where San Juan, the province where our project is located, year after year, ranks very highly. 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 located on the spine of the Andes, at the border with Chile, where Chile and Peru produce 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 size, there are 2 top 10 projects in San Juan. Los Azules is one of them located in this province. Next slide, please. Next slide, please. The mine has a 27-year life per PEA. It's in the lowest cost quartile and with CO₂ emissions in the lowest 10%, and aims to be carbon neutral by 2038. There's upside potential for the resource coming from exploration and from Rio Tinto's new technology. Ongoing studies are confirming resource size.
Recent metallurgical testing delivers higher than expected recoveries, positively influencing the business case. There's a very experienced board and management team in place. Our bios you find in the appendix, and Argentina is changing to be more attractive to business, positioning itself for international investment. As Rob already mentioned, McEwen Copper is a significant value driver for McEwen Mining shareholders. On the right-hand side of the slide, you see a photo of one of our one-hour meeting with Argentine President Milei, where we had the chance to show the benefits our project brings to our stakeholders. And where President Milei took his time to explain us 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, under legislative consideration by Congress is the basic law and starting point for the freedom of the Argentines, and a fiscal package seeking state deregulation, labor modernization, and structural changes. This includes a regime for incentive of large investment, RIGI, offering significant tax and foreign exchange incentives to encourage investments in key sectors of the economy, particularly in mining. On April 30th, the bill was approved by the Chamber of Deputies. June 13th, it was approved by the Senate with some amendments. June 25th, the commission sent the bill with recommendations for approval to the Lower House. It is likely that the bill, 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 today. Next slide, please. In this slide, you see the many benefits that the RIGI will provide for mining projects in order to attract foreign capital. Main items are 30-year tax stability, a significant lowering of the overall tax burden, faster recovery of VAT for construction, explicit freedom for importation, freedom for exportation, lowering of export duty to 0% after three years, and free disposition of export proceeds after three 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. Next slide, please. Thank you.
Let me now quickly recap an overview of the PEA that we published in June last year for our preliminary economic assessment of Los Azules, showing a very robust project that has already shown us the potential based on updated metallurgical results. A mine life of 27 years, a low strip ratio of 1:6, an initial low capital cost of $2.5 billion, a sustaining capital cost over the life 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 a low all-in sustaining cost of $1.64 per lb of copper, resulting in an internal rate of return of 21.2% and an NPV of almost $2.7 billion, and a short payback of 3.2 years with an initial production of 192,000 tons of copper during the first two years, and a nominal production rate of 175,000 tons.
Based on our metallurgical testing, this is seeing a potential upside with an increase in recovery of 3.2 percentage points and needs an increase of copper production of 172,000 tons over the life of the mine, and an improvement of the net present value of the project of $262 million, combined with the lower estimated acid consumption rates. Next slide, please. Our feasibility study is on track to be delivered by the end of the first quarter 2025. Our field investigation is on track. With over 70,000 m drilled, having been 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 ore columns for the leaching tests of phase II and phase III are under leach and on track. On the engineering and design side, we have the preliminary design for the leach pad complete, and the final design is on the way. The flow sheet has been selected, design for interiors are complete, and finally, the facility laid out, layouts 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 investigation as well as metallurgical testing by December, engineering and design by September, operating and capital costs by January, and the project execution plan and schedules 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 through the middle portion of the deficit. The highlighted hole in blue is a new hole from this field season that contains an intercept of 0.77% copper over 349 m, and is validating the grades shown in nearby holes from last year's drilling campaign. Next slide, please. As I stated earlier, Los Azules has completed very aggressive drill programs in the last two field seasons. Over 101,000 m of drilling has been drilled since the PEA, which represents over 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 deficit, to enable us to convert resources into the measured and indicated categories.
Measured and indicated resources offer a higher level of confidence, thus they indicate an inferred resource that were in the preliminary economic assessment from last year. This cross-section is to the northern portions of the deficit, and all holes in blue are new drilling performed after the PEA. You see that also on the right side, with the pit layout and all the blue dots, they're all new drilling holes. Next slide, please. Exploration drilling to the north and south of the deficit continues to encounter mineralization. This slide is a north-south view of the deficit, with north on the left, and shows exploration drilling performed this field season to the north and south of the deficit.
Hole AZ-23-241, shown on the left edge of the figure, intercepted 0.2% copper over more than 200 m, and the last 12 m of the hole grade 0.44% copper. This hole is located more than 400 m to the north of last year's middle exploration hole, which was already outside of the pit shell, and demonstrates that copper mineralization continues well to the north of the deposit. Exploration drilling, on the other hand, to the south of the deposit, encountered the earlier mineral porphyry, a significant distance to the south of the limits of the pit. This porphyry is responsible for bringing the majority of the copper into the deposit. This season's drilling was able to extend this porphyry 700 meters farther to the south. Next slide, please. Now, something that we are very excited about that Rob already mentioned.
Regional mapping and sampling performed throughout our large property has discovered a new porphyry copper system called Tango, 3 km to the east of Los Azules, and opens the possibility that the Los Azules area may contain a cluster of porphyry copper deposits. When exploring for new porphyry copper deposits, there are five key elements that an area should contain to be prospective. An area should have several pulses of intrusives, and Tango contains at least four distinct types of intrusives. An area should contain porphyry-style alteration, and Tango has three large areas of sericitic alteration, shown in black dashed lines. At least two types of porphyry quartz veining have been recognized at Tango. A new area should contain geochemical anomalies typical of porphyry copper systems, and Tango has three large molybdenum anomalies, shown by the white dashed line, that coincide with the alteration areas.
Lastly, a new area should display an interesting geophysical anomaly, and the southern portion of Tango area has a very similar magnetic low, shown by the dark blue and purple colors, as at Los Azules to the west. One drill hole, shown by the blue square, was built into the southern portion of Tango, and the last 160 m of the hole contained 0.11% copper and validates that we are within a mineralized porphyry copper system. Additional work will be performed at the exciting Tango target once we restart the exploration season 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 use by 75%-80% versus production of concentrates. Solution will be recirculated in the leach plant.
Leaching uses 35% less electricity versus milling, only requires crushing. No tailings dam is required, saves water and lower seismic risk. Production of 99.999% pure green copper for direct use in the industry and a reduction of byproducts, 70%-75% reduction of mass as a 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 MWh and an annual estimated consumption of 45 MWh, and thus an annual injection into the grid of about 4.2 MWh. Next slide, please.
A very important aspect of effective community relation management is the citizen participation program, especially in the community of Calingasta, where our project is located. More than 300 people actually participated in the initial EIA presentations of our environmental permit filing in 2023. More than 1,600 people have attended presentations in communities in 2024. This represents about almost 20% of the total population of Calingasta and half of the economically active population of the municipality. A great achievement in short amount of time of our community affairs team. Next slide, please. Next slide, please. In summary, we are positioning McEwen Copper as the new vehicle for copper growth, with a world-class resource not in the hands of a major. In Argentina, in emerging tier one lithium and copper mining jurisdiction, we have a very robust project through our price cycles.
We are designing a mine for the modern world with regenerative principles and low carbon and water intensity. We have significant upside potential, both from exploration and from technologies such as Nuton, and are backed by two key strategic partners, Stellantis, the world's third biggest car manufacturer, and Rio Tinto, the second biggest mining company in the world. All this leverage with a very experienced board and management team, with on-the-ground experience in exploration, construction, and operation of mines in San Juan in Argentina, a tier one and tier two operation. We are going to show you now a short video that represents our vision that we're developing together with Jason McLennan, the founder of the Living Building Alliance, on how we can make mining different.
In order to see the video, make sure you are in the broadcast tab in the webcast, where you will see the slide presentation. Click on the video button, button at the top right corner of your screen, just below the Q&A icon. When the video ends, toggle back to the slides button to continue with the presentation.
McEwen Copper is planning the world's first regenerative copper mine in Argentina. It goes without saying that we need to transform industry to provide us with the materials we need for a renewable society, but without the historic legacy of environmental damage. Copper is one resource that will only grow in importance as we replace fossil fuels with a decarbonized world…. Electric cars, wind turbines, batteries, solar panels, and the computers that power everything all require copper. And that copper needs to be green copper, carbon neutral, and ecologically responsible. When we started the project, we began by drafting a set of principles for the project that would guide the team in its decision-making and approach. We did this work informed by the place itself.
The Andes are an incredibly beautiful and sensitive ecosystem, so we knew it was our duty to be stewards of this place, protecting habitat, glaciers, water, and life itself, while at the same time getting the copper resources that we need. So we've been thinking carefully about the future first and our eventual legacy. We then focused on the people, the miners, and the community itself, and we've been working to create a new kind of experience for people that live in San Juan and the surroundings. Over the life of mine, over 1,000 high-quality local jobs will be created, and these will be jobs unlike any others in the industry. We think people will covet working for McEwen Copper because not only do we focus on safety, but also on dignity and livability, creating a mining facility that is an oasis in the sky.
Here is our vision for the mine camp of the future. Beautiful, inspiring, and bold. A biosphere of health and life. After a long day of work, our people will return to a place completely powered by the sun and creating ideal conditions for rest, sleep, recuperation, and the daily needs of miners. Imagine a place that grows its own food, collects and treats its own water, and generates energy without emissions on a giant solar super roof. We are placing specific emphasis on indoor air quality, acoustics, and stress reduction, with a focus on social justice, equity, and even beauty within a mine setting. This will be a place to live and thrive while earning a living. We're designing an ecological water treatment valley that not only completely protects downstream water quality, but allows for the creation of new habitat and the enhancement of vegas.
Partnerships with local universities and scientists will see new advances in natural phytoremediation, water treatment, and ecological testing to ensure that water is always pure and healthy. Our entire mine operation will be powered by on-site and off-site solar farms, generating all electricity without carbon emissions. Wherever possible, conveyors and fleet facilities will be electrified and plugged into this network of clean energy with batteries instead of diesel for backup generation. At Los Azules, we are not building a mill. Instead, we are advancing heap leaching techniques to extract metals chemically and in a completely closed-loop process, with radical reductions in energy and water requirements as a result.
And finally, a state-of-the-art, renewably powered electrowinning facility will produce pure copper, so that from the pit to the product, our investors and customers know that sustainability informed every single step, and they can count on that for their own ESG goal setting. Our planning process continues, and we look forward to sharing more innovations as we develop this amazing project further. At McEwen Copper, we are striving to deliver the world's greenest supply of copper in the world's first regenerative copper mine.
The video was narrated by Jason F. McLennan himself. I think we have an amazing vision for paradigm shift in mining. So thank you so much. I am now handing over to our COO, Bill Shaver.
Thank you very much, Michael, and 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, two years later, and will be one of the focuses of our future growth. In 2023, mining 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.
I might say that, you know, 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 four years and four months without a lost time accident, and at Fox, we've gone two 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 mining mine rescue team that competed in local mine rescue competitions this year, where we, for the second year in a row, won 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. 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 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 costs 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.
Next slide. 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 18-24 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 Froome and Stock. This year, we have also increased our throughput in the mill by about 10%-15%, which will help us with the lower grade ore that we are seeing from the Froome 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 Grey Fox. In summary, we are starting at Fox and will be fully... You know, 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, you know, into the mining operation being in production by mid-next year. Next slide, please. In Mexico, the permitting of the Fenix Project 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 and 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 30,000-50,000 oz per year. So in summary, on the mining operation 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.
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 m of core from January of 2023 to the end of May of this year at our Stock and Grey Fox properties. Since our last AGM, we have completed resource updates for our West and Main zones at Stock, and just recently completed a resource update for our East Zone, which is also located at Stock. The plan 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 plan view section of the overall Stock Project. The Stock deposit is associated with the prolific Destor-Porcupine Fault Zone and a secondary splay structure known as the Nighthawk Lake fault.
The current resource for the West and Main zones at Stock contains 338,000 combined gold oz, while a recent resource update for our East Zone contains 125,000 combined gold resource oz. The total for the Stock Project is now approaching about 500,000 oz 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 three main plunge directions, which are denoted by the black dashed lines, that we have identified at Stock and believe control the majority of the 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 graded about 6.1 g over 5.6 m true width.
The Main Zone is also open to the southwest at an even deeper elevation, with limited drilling, as defined by drill hole S21-202, which graded in excess of 4 g over about 20 m true width. In addition, historical drilling below this plunge direction indicates mineralization down to depths greater than 900 m below surface. Finally, the East Zone also appears open at depth, as seen by drill hole S19-31, which graded 2.7 g per tonne over about 11 m true width. I would also like to highlight the fact that the entrance to 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 ramp 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 m away from the Stock Mill, and early mining is being planned for this zone. The current average resource for the East Zone is about 2.7 g per tonne, but it can be seen that there are areas at the East Zone where the grade is much higher, like in drill hole SEZ19-35, which graded in excess of 83 g per tonne over 5.6 m true width, and drill hole SEZ19-28, which graded 34.7 g per tonne over 5.9 m true width. Both of these drill holes are located within 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 500,000 oz with a lot of room to grow. Next slide, please. Moving on to Grey Fox. This is a plan view section for the majority of the Grey Fox deposits, which is located only about 3 km southeast of the Black Fox mine. The current resource contains more than 1.1 million oz of gold resources. I draw your attention to drill hole 24GF-1426, which is located at the South Zone and graded over 500 g per tonne over about 0.5 m true width and lies on a previously defined mineralized lens....
This demonstrates the high-grade potential for Grey Fox, with some of the zones also extending to less than 10 m below surface. Drill holes 22GF1366 and 24GF1397 were drilled in proximity to the historical Gibson ramp, and both had composite values in excess of 8 g per ton, which demonstrates the potential viability of the Gibson area at 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 Gibson area, where there are multiple stacked 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 pending with visible gold, and good results are continuing to come in, such as drill hole 24 GF1397, which graded better than 13 g per ton over about 5.2 m true width. In addition, the noted VG and drill hole 24 GF1452 also returned two good intercepts, including about 20 g per ton over about 2 m true width, and 11.3 g per ton over 2.5 m true width. Both correlated very well with the instances of noted visible gold. 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, Robert 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 Mountain-Eureka trend. It's a very prolific trend that contains the Cortez complex, Gold Bar, Tonopah, 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 there. These are the most prolific gold-producing trends in Nevada. The next slide will zoom into the Gold Bar complex itself. The focus for exploration in 2024 is within what we call the mine plan of operations area. This area is more advanced in its permitting, so anything we find in this area has a shorter timeline for getting into production. We have three main target areas within this mine plan of operations.
The first one at Cabin Creek, where we have open pit mining going on or there, Gold Bar South, where we're actively mining an open pit there, and then at Hunter, a shallow, near surface resource that we are currently drilling. And we'll talk more about each of these three items as we go on. We've had successful drill 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 will go look at each of these areas individually. The Cabin, we have two 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 mine's cutoff 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 you 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 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 surface with very little strip. The second area is to the east of the pit. There's a little indentation there where we have gold in resources that are inside the 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 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 ft of over 2 g, and another hole hit 30 ft of over 3 g, all oxidized, all 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... No, so we have one more at Gold Bar, the Hunter target area. This map on the right-hand side there is a plan 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 two holes earlier this year, and it hit definitely good grades, 90 ft of three-quarters of a gram, 240 ft of 1 g, all oxidized near surface. And in the cross-section to the, on the left side there, is a cross-section view of these two drill holes.
We see now that this mineralization is being controlled by a north, northwest dipping structure.
... And this mineralized zone, as we currently see it, and it's open, is 450 wide, 200 ft thick, and about 400 ft deep, and open in certainly two directions. 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. Our next slide, then we'll turn... The last slide here, we'll turn to the Timberline project down in Eureka. It's about 30 mi from Gold Bar. There's an existing resource there, 508,000 oz, grading about 0.69 g per ton. The first arrow will show you where that's located. There's been past production there, also at Lookout and also at Windfall.
The next arrow will point to that area where there's been past production. 154,000 oz of gold have been produced between these two areas, and there's strong exploration potential along this north-south mineral trend. So the next arrow will show you where this trend here at the north end is the Ruby Hill Mine that i-80 Gold has. But it extends onto the Timberline property, and it's marked with very prospective ground. Lots of gold on the surface, lots of gold in 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 José mine in southern Argentina. We own 49% of San José, which is operated by our partner, Hochschild Mining. The 2024 objectives are to increase mining productivity by 10% and capital upgrades to the mill, increasing throughput by 15% by the end of the year. This year, we forecast unhedged gold and silver production of 50,000-60,000 gold equivalent oz, attributable to McEwen Mining, at all-in sustaining costs of under $1,700 per gold equivalent oz. 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 Fria veins.
At Fria, the mine geologists have outlined an area of consistent mineralization of approximately 250 m along strike and 200 m vertical, which is being infill drilled. One hole that we reported with our Q1 results returned 12 m of 12.7 g per ton gold and 101 g per ton silver. More encouraging assays from Fria 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 José, a very welcome change under the Milei government. Next year, our partner, Hochschild, is forecasting continued improvement with a 10%-20% increase in gold equivalent production and a 15% drop in all-in sustaining cost. Next slide.
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 m of 23.3 g per ton gold and 314 g per ton silver. In addition to the two 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 extended our mine lives and will allow us to plan for increasing production and lower costs. 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 36-3, you can see the 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 BRICS nations, who are selling their dollar reserves and their gold reserves are going up. Some think it's the end of the petrodollar, at the start of the end.
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 it was wondering why some of our officers were selling stock this week. They were curious if something bad had happened or someone was leaving the company. I'll ask Perry Ing to answer that question.
Hey, Rob. So, for those, as a Canadian headquartered company, the federal government announced capital gains rate changes that were effective as of this week, on Tuesday, June 25th. So, it resulted in a significant increase in capital gains inclusion from 50% to 66 2/3% subsequent to January 25th. So I believe that, for Canadian-based executives, they would need to have sold stock prior to June 25th in order to avoid the increased tax rate.
Thank you. Any other questions online? Are there any other questions from those who've lasted this long on the phone?
Can't ask questions on the phone.
They can't ask questions on the phone? They can only ask questions by-
Writing them into the Q&A section, yes.
Writing them in the Q&A section. Kamil, 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, you know, wise 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 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 their basically pass their 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. 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 , the currency we quote all of our numbers in. 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, I'll once again thank, 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.