McEwen's Q3 Loss Badly Misses Estimates As Its Mines Stumble; October Fixes Must Offset A Slipping Los Azules Timeline

McEwen Inc. delivered a quarter that management itself called unacceptable. The company posted a loss of $0.60 per share against a consensus estimate for a $0.09 profit, a 766.7% miss. Revenue of $43.64 million fell 25.3% short of the $58.4 million consensus and declined 13.6% year over year. Earnings fell 5900.0% from a year ago, as a near-breakeven $0.5 million net loss in Q3 2025 became a $36.7 million loss. This was also a sharp reversal from the $33.4 million profit in Q1. The central tension is that every operating asset underperformed at once, and the long-dated copper story that underpins much of the valuation case slipped at the same time. Management's October data is the main counterweight.

The quality of the quarter was weak beyond the headline. A 19% higher realized price of $4,151 per GEO could not offset a 29% drop in GEOs sold to 10,689. Gross profit fell to $4.0 million from $7.8 million. Adjusted EBITDA swung to a negative $10.9 million from a positive $11.8 million, so the damage was not purely a non-cash or tax story. GAAP results were further burdened by:

• roughly $13.0 million of income and mining tax expense;
• $8.1 million of higher project and exploration spending;
• $7.3 million of lower unrealized gains on securities.

Costs deteriorated across the portfolio. Gold Bar AISC rose to $3,520 per GEO, Fox to $3,725, and the attributable San José stake to $3,414, compared with $2,852, $2,352 and $2,771 a year earlier.

Management's explanations differ by mine, and the most candid one is Gold Bar. There, management blamed internal oversight failures and delayed decision-making, replaced leadership in late August, and cited diesel inflation adding about $200 per ounce. At Fox, costs were inflated by roughly $780 per GEO from completing all remaining Froome development and about $150 per GEO from processing a low-grade stockpile. At San José, record snowfall forced a shift toward lower-grade sulphide ore with poorer recoveries. The early repair evidence is real but brief:

• Gold Bar averaged an estimated 108 ounces per day in October, versus 68 in Q3, with estimated AISC near $2,873. Management said October grades were average rather than a one-off.
• Fox's October AISC is expected around $2,618.

That is one month of data following two consecutive operational misses.

Guidance deserves scrutiny. The release reaffirmed consolidated 2026 production of 109,000-120,000 GEOs and cost ranges set in Q2. The call, however, framed the outlook as weaker. Gold Bar's guidance was already cut in Q2. San José dividends will not resume until 2027, after the Q1 call had anticipated $30-40 million more this year, although the $58.3 million received year to date exceeded the original $40-50 million estimate. The cost targets are a particular problem:

• San José's nine-month AISC of $2,946 sits well above its unchanged $2,300-$2,500 full-year range.
• Fox's nine-month AISC of $3,107 sits above its $2,650-$2,850 range.

Hitting the production range requires roughly 25,000-36,000 GEOs in Q4, compared with 22,852 in Q3. That is achievable if October holds, but the cost guidance looks stretched.

The bigger strategic shift is at Los Azules. Final investment decision has moved from year-end 2026, as stated on earlier calls, to mid-2027. Record Andes snowfall has pushed site access to early 2027 or later, which leaves the 2030 first-copper target conditional. Construction financing of roughly $4 billion remains uncommitted, and the McEwen Copper IPO timing was not reaffirmed. Equity raised at the McEwen Copper level could dilute McEwen's 46.3% stake. Several de-risking steps are genuine:

• grid-connection and camp approvals;
• four EPCM bids received;
• an indicative debt term sheet sent to export credit agencies;
• term loan commitments raised to $240 million;
• an updated feasibility study targeted for February 2027.

Closer to home, the Stock mine is set to start mining in December and El Gallo construction has begun. Neither contributes meaningfully before 2027.

The balance sheet is adequate but not loose. Cash stood at $49.1 million plus $10.4 million of securities, against $130 million of debt principal. The October asset sale added $55 million, but $50 million of that came in Discovery Mining shares rather than cash. The share count has climbed to 61.6 million from 55.5 million since year-end because of acquisitions.

The market was already skeptical heading into the report. Investor sentiment, negative before the report, weakened modestly from -0.44 to -0.50. Shares have fallen 13.9% since the open following the Q2 report, to $16.23. That leaves the stock about 21% below its 200-day moving average of $20.55. Earnings Whispers trend readings are mostly negative, with price, momentum and AVWAP all pointing lower.

The bottom line is that McEwen missed badly on earnings, revenue and costs, and the quarter exposed management execution problems rather than just bad luck. October offers a credible early sign that Gold Bar and Fox are recovering. Even so, a mid-2027 Los Azules decision, unfunded construction, and cost guidance that looks hard to reach give bears legitimate ammunition until several clean quarters replace one good month.

Read our earnings preview for McEwen Inc.: https://www.earningswhispers.com/article/MUX/22796

This earnings review was originally published on Earnings Whispers.

This article is for informational purposes only and is not investment advice. Earnings Whispers and its staff may hold positions in the securities mentioned. It is AI-assisted, based on proprietary Earnings Whispers data and company reports, and edited by Earnings Whispers staff.