McEwen Mining [MUX] Conference call transcript for 2022 q3
2022-11-07 15:18:03
Fiscal: 2022 q3
Operator: Hello, ladies and gentlemen. Welcome to McEwen Miningâs 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, Exploration; and Michael Meding, Vice President and General Manager of McEwen Copper. After the speakersâ presentation, there will be a question-and-answer session. I will now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.
Rob McEwen: 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. And not only did we complete it, but we had 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 cost, unacceptably high cost. 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 plans on very advantageous terms. These issues all obscured the value of McEwen Mining in my mind. And with these resolved and a steady improvement going forward, I believe that the value of McEwen Mining will become more apparent. And after the presentations of my associates, I will talk about the value I see behind McEwen Mining. So I would now like to turn it over to Perry Ing.
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 million we invested in Los Azules along with $5.1 million on exploration and 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 NYSEâs 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 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 Bill Shaver talk about our production details, but overall, I'll characterize our quarter as generally being strong at Fox and San Jose. But continuing to experience challenges at Gold Bar as Rob alluded to. In terms of cash cost, as Rob stated earlier, we reported $774 as cash costs 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 or well ahead of current mills throughput. We were also assisted by a weaker Canadian dollar. The U.S. Canadian dollar exchange rate of approximately C$131, was about $0.05 weaker than the same period in 2021. Just as a detail on our production at Fox, if you look at our inventory balances are about $6 million. There's about a $6 million build in ore inventory stockpiles just in the third quarter alone. And that ore is that now sitting in surface stockpiles at our mill. So going forward, this should allow for some greater flexibility in our mind sequencing and some cost saving opportunities. In Nevada, looking at Gold Bar, our cash costs were $1,712 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 for the end of the quarter. We believe that this will have a limited impact on our cash flows, as we expect digital ounces and the leash pad and we expect to begin south production within the next quarter. Finally, looking at our 49% cone San Jose 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 a significant improvement from the first half of the year where they experienced COVID related production issues as well as the San Jose mind during the quarter. But we are optimistic for the future depending on silver and gold prices. Finally, looking at our treasury, our cash 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 subsidiary of Rio Tinto. Following that private placement, McEwen Mining â ownership McEwen Mining coffer was approximately 68%. So with that, I'll turn it over to Bill Shaver, our COO.
William Shaver: 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 tailing management facility construction to raise all of the dams by approximately two meters 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. So this has allowed this stockpiled ore to increase substantially over the quarter. In October, the plant availability was significantly better at 90% based on the 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, but what we need to do is increase the rate in the processing plant so that we can decrease the amount of stockpiled or the mine itself is in a very sweet spot of the mining life where any mines find themselves from time to time and where we can produce more or then we can in fact process at this time. In order to address the 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 tonne budget. And 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 or 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 row arriving at the site last week. At the same time, we have moved approximately 100,000 tonnes of ore that we had next to our crushing plant through the plant and onto the leach pad. We completed this in October and we now have that material under leach. We pour 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 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 heat leach pad, which has a grade of 0.6 grams per tonne to accomplish this as Rob had mentioned, we have acquired a 7,000 tonne per day gold processing plant, which operated recently at another mining operation in Mexico. This plant is approximately 150 kilometers away from our site and was pre-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 Steve for an update on our latest exploration results.
Stephen McGibbon: Thank you, Bill, and good morning, everyone. Iâm 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 info results that highlight the quality of our Stock West deposit. We have very good early results at Grey 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 Grey 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 displays such as Nighthawk. Nighthawk has not been explored along the three kilometers 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 havenât 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 doesnât have the appeal of drill results, but this work is prioritizing targets having near-term oxide potential to support mining a stones drill 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 rock, the analog to Cortezâs 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 an 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.
Michael Meding: Thank you, Steve. I would love speak about McEwen Copper programs. McEwen Copper is a subsidiary of McEwen Mining, established in August 2021 an on older of the Elder Creek and the Los Azules copper. The Elder Creek property in Nevada consists of 577 unpatented mining plants Itâs perspective for porphyry copper mineralization and workplace in the district hosting several large copper and gold mines, including Nevada Gold Mine, Copper and Fenix. On September 6, 2022, McEwen Copper signing option to earn sheet with Rio Tintoâs subsidiary, Kennecott Exploration to earn a 60% interest in the other three properties in the Nevada , by investing $80 million in the next seven years. The Los Azules project is one of the top 10 worldâs largest copper deficits measured by resource according to Mining Intelligence. As Perry mentioned before, McEwen Copper completed initial financing oversubscribed, which included $25 million investment by Nuton, Rio Tinto venture focused on innovative intelligent solution for copper projects. The proceed from the private placements are used for the Los Azules project to update our prior PEA addressing 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 acceleration drilling, any resource model, environmental permitting, community engagement, other technical work and general corporate purposes. So far in Q3, we spend $7.6 million on activities related to work growth, work of the drilling program, technical studies and convenient engagement. We are targeting access to decisively much of the year in order to accelerate exploration studies. And during Q3, we improved further our excavation mode in preparation for the early mobilization of the equipment and personnel to sites. The two roles of the site are aimed to provide median round access to adequately support the common phase of the project. With regard to the drilling program by September 26, all our free cash flow operational, several of drilling contractors were secured for the upcoming drilling campaign and mobilization was begun. We have built so far some 3.1 kilometers have completed already four holes and up six drills joining on the next. The resource drilling program aims to further our understanding of the deficits and to upgrade the payback period to measure classification. We are also drilling several deeper excavation modes with the aim to further expand this already significant resource. With regard to technical drillings, our team is well responding on the PEA schedule to all drilling end-to-end metallurgical testing from the 2017 and 2018 season together with the previous seasonal results. Work continues during the quarter on trade-off studies related to power supply inclusion of renewables, as well as to include further processing options, the design of future in-pit tailings and waste storage facilities. Hydro-geological assessments of historical information and the reestablishment of existing water monitoring locations for started. The preliminary written enterprise optimization completed in Q1 using existing information was further refined during Q2 and Q3. And this optimization study focused on the following objective, improve value by optimized scale and capital requirements, reduce complexity and to minimize risk. These analyzes continues to show that there potential to include several changes to previous limitations, which could create a significant increase in the value of the project and according to the included in the forthcoming PEA updates. Metallurgical testing continues and from preliminary metallurgical data has been received in Q3, both for flotation as well as the in-pit scenarios. Additional huge volumes planned for the drilling season, including environmental baseline work, a program designed to understand the hydrology to running the project and significant to your technical program to assist in the design of the pit resource. 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 basis for the environmental permit for future operations, has been evolved tonight and the drafting is well underway to be presented to authorities here in Argentina in the first half of 2023. We believe that mine should support social 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 South Juan, as well as in municipality of Calingasta where the project is. The community engagement team drives our sustainability efforts and is focused on local procurement and employment, environments, health, education and security. In addition to the existing facilities in the town of Calingasta, a new community development office will be open during the month of November. At the moment, we directly employ 130 staff, out of which 98% are continuing, 17% are female, and there of more than 75% are professionals reflecting our commitment to workplace diversity and the offering of high quality jobs in South Juan. Thank you for your attention. I will turn the presentation back to Rob.
Rob McEwen: Thank you, Michael. I believe the value of McEwen is considerably higher than our current share price. In fact, I think itâs worth somewhere between $8 to $30 a share. And this is arrived at by adding up this â itâs the value of its parts. And this value is the reason why Iâve made a personal financial commitment in McEwen Mining and McEwen Copper of over $220 million. I arrived at the $8 to $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 & Silver Assets, and our portfolio of royalties. The math is set out at the end of todayâs 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 weâre then going to push aggressively to produce a feasibility study in the following year and a half and the turnaround thatâs occurring in our Gold & Silver Assets. Today, you can buy shares of 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. Iâd now like to open the session for questions.
Operator: Thank you. The first question comes from Jake Sekelsky with Alliance Global Partners. Your line is open.
Rob McEwen: Hi, Jake.
Jake Sekelsky: 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 in the level of CapEx savings. Do you expect to realize that Fenix project?
Rob McEwen: Sure. Iâll ask Bill to address that.
William Shaver: So this process plant as I said earlier is a 7,000 ton a day plant that was used to operate a gold core Los Azules mine, that mine ran for approximately seven years. And that plant has been in Mexico moved from the gold core site for approximately five or six years. And the acquisition price was $2.8 million. I would suggest that the value of â if that plant was somewhere where you were going to 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, and so the plant is basically brand new.
Jake Sekelsky: Okay. Thatâs helpful. And switching over to Fox. I mean, you mentioned that production was a bit lower due to some bottlenecking at the mill. And 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 catching the mill up to mining rates might take a bit longer?
William Shaver: No. I mean, weâre doing and have been working on a number of things to improve the production and improve the availability of the mine. Weâve installed a new screening process. Weâre in the midst of fixing some conveyor components. But I guess, what one has to understand is that plant has been there since some time in the mid-80s, and it was originally built with used equipment. So 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. So weâre trying to do all of the things we can in order to help that situation. And ultimately, the best fix that weâre contemplating at this point is to continue operating that plant as best we can and make it as productive as possible. But 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 something thatâs reasonably higher. We havenât come to decide what that number is, but itâs probably somewhere in the range of 1,600 to 2,000 tons a day. And then we would have the capability of running close to the same rate that the mine is running at, which at this point is something around 2,000 tons a day that we can produce out of the mine at the present time. So what weâve done to kind of help that situation is to â weâve reduced the development crews. And because the mine is kind of in that sweet spot of â with lots of headings and so on, although weâve reduced the crew size by 50%, weâve only managed to reduce the production by about 25%, because when you have more headings, you just make more footage and itâs effectively cheaper. So anyway itâs nice to have a big stockpile, but itâs not so nice to have a big stockpile when youâd rather have the cash. So weâre working through the process of trying to make it a better situation.
Jake Sekelsky: Got it. Okay. Thatâs all for me. Thanks again.
Rob McEwen: Thanks, Jake.
Operator: The next question is from Heiko Ihle with H.C. Wainright. Your line is open.
Rob McEwen: Hello, Heiko.
Heiko Ihle: Hey, Rob. Thanks for taking my questions. So itâs seems like itâs 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 front line 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 probably give a bit of color on what components are holding you back in excess of what was just set in response to the last question?
William Shaver: Yes. So 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. So effectively that over time as that plant was increased in capacity, which I understand started at something like 500 tons a day, they added â the original ball mill was in placed, they added another ball mill, then they added a third ball mill. So what you have is a plant that has lots of operating entities. And of course, every time you look at the availability of a plant as you probably know, itâs the availability of each component in a series of components. And so if everything works at what one would anticipate, you would see in a mill, which is somewhere between 95% and 97% availability, when you multiply all those things together, you get down to into the 80% range. But the ball mills are still okay, because theyâre â they do work. Thereâs not a lot of duplication there. But 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 didnât spend a lot of time thinking about how they were going to maintain them and how they were going to have access, both with cranes or with overhead cranes in order to get at these pieces of equipment. So every time when you go to fix something, itâs a relatively big ordeal. And some of the plant over the past number of years, I guess, the plant and maintenance was something that theyâve struggled with for some time. So weâre just systematically going through each part of the plant. Weâve changed the screen, weâve changed some of the feeding arrangement. As you probably know, one of the primary crushers is associated with the old hoisting plant. And so all of those things are just donât help when it comes to maintenance because of the number of components and the availability of each. So itâll be a process, but everything that weâve done so far seems to be helping. So this next step is get some material, crush down to a significantly smaller size so that itâs easier to feed through the front end of the plant.
Heiko Ihle: 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 a mill orâ¦
William Shaver: The average grade is 2.44.
Heiko Ihle: We get a very specific answer. Thank you. And how much tonnage are you adding there right now per week or day or month or whatever?
William Shaver: So Iâm going to say, weâre adding somewhere between 7,000 and 12,000 tons a month, depending on whatâs going on. And I may just go back to my previous answer, thereâs two components to that stockpile. One is about 1.5 grams per ton, and the other is a little a bit over three grams per ton. And itâs split kind of 50:50 at this point with or that weâre adding as we move forward, weâll be a little bit higher grade. Soâ¦
Heiko Ihle: Got it.
William Shaver: And what weâre doing, I guess is trying, because this grade is a little bit higher, thatâs coming out of the mine now. Weâre directing that directly from the mined to the process plant without it stopping in a stockpile.
Heiko Ihle: Got it.
William Shaver: So, yes.
Heiko Ihle: And then I know itâs go sorryâ¦
William Shaver: Go ahead.
Heiko Ihle: I know itâs rude to ask three questions. So Iâm just going to make this very brief. Earlier on this call, you mentioned that stock exploration Q1 2023 is, and Iâm using your word here, critical. How much do you expect to spend on exploration here 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?
Perry Ing: Sure, Heiko. Weâve got about a â I would say a global exploration budget of about 20 million for next year. So I would say nearly 80% of that is going to be directed at the Fox Complex. And I would say, Steve talked about, the winter drilling and work that he wants to do over the winter. So I would say generally itâs going to be phased fairly evenly throughout the year. But Steve can probably give a more nuanced answer.
Stephen McGibbon: Yes, maybe, what Iâll add to that, thanks, Perry, is that we have a flow through commitment to complete in 2023. And so the upcoming first quarter is really our only winter program where we can attack targets that require winter conditions. And so I would say overall we can expect our first quarter spending to likely be higher than average quarterly spending for the rest of the year. Those numbers havenât been finalized, but thatâs kind of the bias I see developing.
Heiko Ihle: Got it. Awesome. Thank you all so much. Stay well and Iâll talk to you soon.
Rob McEwen: Thanks, Heiko.
Operator: The next question is from Joseph Reagor with Roth Capital Partners. Your line is open.
Rob McEwen: Hi, Joe.
Joseph Reagor: 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. But your guide for next year, what was the assumed gold to silver ratio for that?
Rob McEwen: 85 to one.
Joseph Reagor: Okay. And then, with the ongoing carbonation material problem, is there an expectation with the existing resource at Gold Bar that you guys will be providing an update there and also with the focus on Gold Bar South next year? The previous â I think mine plan called for something like 2.5 million to 2.9 million tons per year. Are we thinking a smaller number on an annual basis going forward?
Rob McEwen: Well, yes, the â I donât think weâre planning on a smaller number than we said before. The hope ourselves should â we should produce ore outer there at the rate that we have contemplated. And there is still some or that we will recover out of the pit and out of cabin. But for sure next year we will be concentrating on Gold Bar South.
Joseph Reagor: Okay. And then on MSC and this probably good one for Rob. Net income year-to-date 9.4 million on a 100% basis. You guys have gotten less than 300,000 in dividends. At what point do you think, your partner will start, giving more cash out of that entity? I know the first half of the year was tough, but itâs been profitable despite that.
Rob McEwen: So far they havenât 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. But at the moment, Joe, we havenât seen any indication theyâre going to pay this year anything further.
Joseph Reagor: And do you think that might change next year?
Rob McEwen: Well, the year end is not the normal year end. Itâs not December 31. Itâs â I think itâs March, so you could see something in the first quarter.
Joseph Reagor: Okay. All right. Iâll turn it over. Thanks guys.
Rob McEwen: Thank you.
Operator: The next question is from Mike Kozak with Cantor Fitzgerald. Your line is open.
Rob McEwen: Hi, Mike.
Mike Kozak: Yes. Good morning or good afternoon, Rob and team. Just one question from me. Of the 55 million in cash that youâre reporting as of exit 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 and I think it was March?
Rob McEwen: Hey, Mike. The vast majority is in McEwen Copper currently. So Iâd say just north of 50 million. So the remainder, yes, I mean, the remainder would be McEwen Miningâs cash balance, which is below the net flow through raise.
Mike Kozak: Got it. Okay. Yes, all my other technical questions have already been answered, so thanks. Iâll leave it there.
Rob McEwen: Thank you.
Operator: The next question is from John Tumazos with John Tumazos Very Independent Research. Your line is open.
Rob McEwen: Hi, John.
John Tumazos: Thank you for taking my question. So Rob, we know youâre passionate and a believer in all the assets you wouldnât be managing the company, the way you are and investing the way you are, and you might be happily retired skiing somewhere if the projects werenât so good. Is it a reasonable way to approach the risk profile of McEwen Mining that youâre going to invest in the projects. Maybe the exploration budget at 20 million could get bigger, but itâs probably not going to get smaller. And if thereâs a bump in the road or the gold price falls or the copper price falls, probably Rob isnât worried if the companyâs $10 million or $20 million short, youâd just cut a check probably. Youâre not worried. And if the people on the outside are worried, well, thatâs just a buying opportunity.
Rob McEwen: Yes.
John Tumazos: Is it fair way to approach things?
Rob McEwen: No, thatâs a good way of looking at it John. The way I look at it.
John Tumazos: Iâm not trying to commit you, but I think people outside the company probably worry a lot more than you do. We get to gray hairs and you donât.
Rob McEwen: I donât know about that. But no, I see a discernible turn in our precious metal operations, and I see very large leverage for a share price with the Los Azules asset that is continues to gain some recognition out there. I felt it was very obscured by the operating problems we experienced over the last several years. And now with copper taking the front stage on the electrification of transportation I have a lot of optimism there.
John Tumazos: Thank you.
Rob McEwen: Thanks, John.
Operator: There are no further questions at this time. Mr. Robert McEwen, Iâll turn the call back over to you.
Rob McEwen: Thanks very much, operator. Thank you everyone for joining the call.
