McEwen Inc (MUX) 2021 Q3 法說會逐字稿

Hello, ladies and gentlemen. Welcome to McEwen Mining's Q3 2021 Operating and Financial Results Conference Call. Present from the company today are Rob McEwen, Chairman and Chief Owner; Anna Ladd-Kruger, Chief Financial Officer; Peter Mah, Chief Operating Officer; Steve McGibbon, Executive Vice President of Exploration. (Operator Instructions) I will now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.

Thank you, operator. Good afternoon, and welcome fellow shareholders and curious investors. Our fortunes are definitely improving. This is the second consecutive quarter where our production has increased, and our production costs have decreased relative to last year. I am delighted to say that our Q3 was a good quarter. And year-to-date, we are looking far better than we did last year at this time. We are making good progress on our turnaround. Gold and silver production is up at our mines in Canada, America and Argentina, and our operating costs are falling.

These results are due to the extra efforts of many individuals, and in particular, to our senior management team at head office and at our mines. But this is just the start. We know there's much more to achieve, and we are intently focused and motivated to build an exceptional company. That becomes a model for mining in the 21st century. We have made a large investment in exploration over the years, and we will soon be showcasing the results of this effort. It is expected to extend the life of our mines and provide the foundation for future gold and silver production growth. I imagine that many of you feel the same way as I do when looking at our share price.

I'm not happy with it. And I bet neither are you. But as you will hear today, we have good reason to be optimistic. Our operations are starting to hump. Exploration is starting to reveal the promise of our large land holdings in prolific gold and silver districts and our very big copper project is coming alive. Another indication that the market is beginning to appreciate our progress is our share performance year-to-date. It's up 15.7% relative to the industry's performance as measured by the ETFs, the GDX and GDXJ that have declined 11.6% and 19.7%, respectively, during the same period.

So here's today's agenda. Anna will cover our financials. Peter, our operations and Steve our exploration. I will follow with news on the McEwen Copper and provide closing remarks, then open the Q&A segment of the meeting. Anna, the podium is yours.

Thank you, Rob, and good afternoon, everyone. Q3 was another solid quarter that demonstrated operational progress in our turnaround strategy, translating into lower costs and a continued strengthening balance sheet. Our average realized gold sales price in the quarter was $1,793 per gold equivalent ounces, down from $1,925 in Q3 of last year. Reflecting the lower spot prices. Nevertheless, stronger production from our operations translated has increased there. Revenue from our 100% owned operations during the quarter was $37.1 million, a 36% increase compared to the revenue in Q3 of last year.

Cash gross profit, which is a non-GAAP measure that includes the depreciation was $6.4 million for the quarter compared to $3.9 million for Q3 2020. The 9 months ended September 30 was $16.1 million versus $2.8 million, a material increase of 575% compared to the same period last year. Much of this change is due to the increased production sales despite lower realized gold prices and decreased per ounce cash cost for both Gold Bar and the 3-month transition sweep from site commercial production at the Fox Complex, one full quarter ahead of vision. Peter Mah will detail more of our operational achievements shortly.

During Q3, we also continued to aggressively invest in our fleet with $10.3 million spent on our exploration and advanced projects. This is reflected in reporting a loss of $17.4 million or minus $0.04 per share for the quarter compared to a net loss of $9.8 million or minus $0.02 per share in Q3 2020. In addition, we (technical difficulty) the San Jose mine, with a $5.2 million reduction compared to 2020. This decrease is primarily due to continued COVID-19 related expenditures of the operations in Argentina.

We also spent $4 million on the gas project during the quarter, which included continued spending for the Fox Complex expansion PEA. Our total liquid assets as of September 30 is $72.7 million compared to $18.8 million for the same period last year. This is reflecting higher cash and cash equivalents, investments and precious metal inventory as well as the $40 million range for our mature and copper investment.

In October, we also decreased an additional $2.3 million in dividends from our San Hose mine, bringing the year-to-date dividend up $10 million compared to a total of $0.3 million received in 2020. Cash used in investing activities of $20.4 million for a 9-month period, increased relative to the $7.8 million in the same period last year. The change is primarily due to capital development costs included the Fox Complex for the 3-month deposit, partially offset by the dividend to receive from our San Jose mine. Lastly, we ended the quarter with $92.1 million in current assets and a positive working capital at $45.8 million. Thank you. I will now turn the call to Peter Mah, our Chief Operating Officer.

Thank you, Anna, and good day all. We had another good quarter at McEwen mining with production trending up, costs going down and operations on track to meet our 2021 guidance of 141,000 to 160,400 gold equivalent ounces. Production in Q3 2021, with 42,900 gold equivalent ounces or 41% higher than the same quarter last year. The increased production was attributed to operational improvements at the Gold Bar, Fox, and San Jose operations, which were in line with our expectations.

Total production was 114,300 gold equivalent ounces for the 9-month period ending Q3 2021 or 35% higher than the same period last year. From our 100% owned operations, Q3 consolidated cash and all-in sustaining cost per GEO for $13.9 and $15.39, respectively, or 12% and 10% over compared to last year. For the 9 months ended September 30, 2021, our consolidated cash and all-in sustaining costs lowered by 14% and 21%, respectively, compared to last year. Gold Bar production for Q3 and year-to-date ending September 30 was 12,400 GEOs and 33,900 GEOs, representing 82% and 54% increases over last year.

Cash and all-in sustaining cost per GEO for the quarter were lower by 2% to $15.53 and 9% to $16.18, respectively, compared to last year. The increased production and lower costs were attributed to improved mining efficiencies, processing optimization, tighter work control and reduced COVID impact.

Moving on to Canada, Fox Complex. Production in Q3 2021 for the 9 months ended September 30, 2021, in the Black Fox mine with 8,300 GEOs and 20,600 GEO's representing a 42% and 26% increase, respectively. Relative to the GEOs produced in the comparable period in 2020. Cash and all-in sustaining cost per GEO were $11.54 and $14.23 in Q3 2021, 27% and 13% lower than 2020, respectively. Cash costs and all-in sustaining per GEO were $11.02 and 1,339 for the 9 months ended September 30, 2021, both 23% lower in the comparable period in 2020. Higher production and lower costs were the result of more efficient mining, increased utilization of mowing capacity, better grade control, decreased COVID impacts, and reaching commercial production at term ahead of schedules.

The optimization of the mine design and underground development and improved capital spend effectiveness, further contributed to the improvement. The company is looking forward to releasing the Fox Complex expansion growth results, model updates, and preliminary economic analysis in Q4 2021. The work is targeting higher gold production, a longer mine life, and lower cost than historically achieved at the Fox Complex. In Q3, El Gallo produced 600 GEOs in residual leaching and activities are winding down towards 2022. Multiple strategic initiatives are being evaluated. Moving now to Argentina at the San Jose mine Q3 2021 attributable production was 10,800 balances gold ounces and 790,000 silver ounces for a total of 21,600 gold equivalent ounces or 36% higher than last year. The GEO production year-to-date ended September 30 increased by 43% compared to last year. Q3 cash and all-in sustaining costs per GEO sold were $11,00 and $1466, respectively. This decreased from last year's cost of $1,269 and $1,538 respectively.

The increased production and reduced costs were attributed to higher ore tonne process, higher grade process in Q3 and improved workforce availability of the COVID's restriction lifted in 2020. I will now turn the call over to Steve McGibbon, Executive Vice President of Explorations.

Thank you, Peter. Exploration activity continued during Q3 across all projects in Canada, the United States and Argentina with total spending of $6.2 million. Our principal exploration goal remains to cost-effectively make discoveries and to extend deposits adjacent to our existing operations in order to contribute to near to medium-term gold production growth. To that end, we had solid results from the recent quarter on which to build. Firstly, I will update on the work at our 49% owned San Jose property operated by our joint venture partner, Hochschild Mining. 100% basis, San Jose exploration was $2.7 million in Q3 and on track to meet the 2021 exploration budget of $9.3 million.

San Jose has been in operation since 2007. Exploration activities at San Jose located in Santa Cruz province, we're focused on the telco Norte and Savadia near-mine targets, exploration drilling in these areas returned encouraging results, including 6.3 meters of 44.4 grams per tonne gold in the Pitania vein, 1.9 years from 14.5 grams per tonne gold and 342 grams per tonne silver in the MENA vein and 12.3 meters of 14.9 grams per tonne gold and 1,381 grams per tonne silver in the Emilia vein. Drilling is expected to continue through Q4 2021. The Q3 brownfield program at San Jose carried out 6,900 meters of drilling.

Adding further high-grade inferred resources during the quarter and bringing the inferred resources added year-to-date to approximately 121,000 GEOs, which is 9.1 million silver equivalent ounces. Longer term, we recognize the tremendous exploration potential of this property and province. Iman's Cerro Negro mine is only 20 kilometers away and largely surrounded by our nearly 700,000 acre property that remains under stored. As the GI bottom line and properties in Nevada, and in Q3 2021 for the 9 months ended September 30, 2021, we incurred 1 and $2.7 million in exploration, respectively, at both the Wold Banine and Tonkin mine areas. At the Gold Bar mine area, we are committed to targeting potential unmined zones and extending known mineral structures.

Our exploration efforts are focused on derisking the geological and levallois models and expanding resources to replace mining depletion. Our Tonkin property sits immediately south of world-class Carlisle deposits being developed by Barrick Gold. Tonkin has not seen exploration activity, while gold Bar was being built and production stabilized, but we recognize the long-term value creation that could be realized by committing exploration balance here. During the 3 months ended September 30, drilling was aggregated at the Talken Luster deposit, located some 25 miles north of Gold Bar, which generated positive initial results starting from surface, including oxide dominant drilling desce of 1 gram per tonne gold over 57.9 meters. 10.65 grams per tonne gold over 71.6 years, with both likely amenable to heap leaching.

The Rooster deposit is structurally complex and includes mineralization in both lower plate limestones and other plate shirts and siltstones. The oxide material has the same host rocks as we see at Gold Bar, whereas the more refractory style mineralization, which can be very high-grade is hosted in the Comus Formation, also host to multimillion ounce ore deposits at Turquoise Ridge. We are very encouraged by [Intecept's] Comus that include Cold Ts 208 at 3.23 grams per tonne gold over 38.1 meters and locally grading over 14 grams per ton.

An ongoing program of remapping, relogging historic drill holes and producing an up feeded geological model by year-end will establish a basis for a stronger commitment to talking, including further defining oxide resources that could potentially be processed at GEO. At the Fox Complex in Canada, we incurred $4.2 million in Q3 exploration expenditures in 2021. The majority of which was deployed at the stock property with lesser focus at Gray Fox. The stock property includes a historic stock mine, current mineral resources at stock needs and an important 2019 gold discovery at Stock West. Our fast processing plant also resides at stock.

Our overall strategy in 2021 as stock includes delineation and expansion of non-mineralization of stock less and the stock mine in support of a production vision that will be detailed in our upcoming Fox complex PA.

Also, we are ranking and drill testing targets likely to host the next important discovery on the property. In Q3 2021, a total of 19,400 meters of surface exploration drilling was completed with potentially important ramifications. Of particular interest was hole S21-202, which returned 4.3 grams per tonne gold over 21 meters have estimated it. This hole is a 200 meters from the stock West discovery area and also resides some 250 meters above our S-1995, 27.2 grams per tonne gold over 7 years in 2019.

These holes are located at the projected intersection of the Stock West East and the Stock mine West one, and they will command further drilling in 2022. These inner sets which have far more similarities to the geometries and grades being successfully mined at from versus black box are very exciting to us. Additional discovery potential is being assessed in the footwall of the stock mine, where we believe the host unit for the stock West deposit called the Green Carbonate or CGR Youth exists. That has been very poorly tested in the past.

A discovery here would be very beneficial, owing to the proximity of underground infrastructure. Fox complex expansion, a PEA summary, an independent engineering group has been engaged to complete the PEA on the Fox, Grey Fox, Black Box, pro, stock and filler resources using our existing centralized milling capacity of stock. The objective is to outline a potential low cost, near-term business case to increase production and mine life for the Fox complex. The PEA activities for the 9 months ended September 30th have concluded ongoing drilling, modeling and remuneration, baseline work to support permitting, environmental, mine planning and trade-off studies, metallurgical assessment reviews and process flow sheet assessments and preliminary cash flow analysis.

The PEA will include the resource estimates and an underground design, which are expected to be completed in late -- expected to be completed in late Q4 this year. Thank you. And I will turn the presentation back to Rob.

Thank you, Steve. Okay. Let's talk about the curing copper and how we see it benefiting into in mining. As some of you know, its -- assets is losses, which is a big project. How big, it's one of the world's largest undeveloped copper repository deposits not owned by a major mining company. Its total indicated and inferred resources are estimated to be 32.89 billion pounds of copper equivalent.

For comparative purposes, let's use today's gold, silver and copper prices to see how large this resource would be if-converted to a gold equivalent. The answer will likely surprise you. It is 82 million gold equivalent ounces. I see the McEwen copper becoming a powerful value driver for the McEwen mining for us. However, to make that happen, we needed money that McEwen mining didn't have. And we needed to move fast to test the limited weather window to access the project this season.

We felt that the fastest way to fund the advancement of Los Azules from its current preliminary economic assessment stage and advanced it to a preliminary -- a pre-feasibility stage was to do with private financing. We estimated that $60 million to $80 million, including contingencies, would be sufficient to deliver a pre-feasibility study. To kick start the financing, I personally provided a lead order of $40 million, and some others have subsequently followed.

With these initial funds, we are proceeding to de-risk and advance the project. So far, we have assembled a very talented and experienced copper team. We have begun construction of a new road to make the site accessible 12 months of the year rather than the current 5 months. The pre-feasibility study will include a 53,000 meter drill program to convert the insured resources to indicate it to complete environmental, technical and metallurgical studies and to find local infrastructure and training.

We are moving forward quickly. Our financing remains open on terms previously disclosed. The minimal order is $250,000. Let me share with you some of the math and reference, 12 of the large copper projects purchased between 2010 and 2008. In this group, there were 4 projects at the PEA stage or preliminary economic assessment stage of development. And the price paid per copper equivalent pound ranged from $0.02 to $0.034 per copper equivalent pound.

Due to the current remote nature of losses, the liquidity of our private placement, some geopolitical concerns. And being at its preliminary economic assessment stage, Los Azules for the purpose of our financing is valued at $175 million, which is equal to $0.065 per copper equivalent pound.

As I said earlier, we are using the funds to advance Los Azules to a pre-feasibility study stage. Only 2 of the 12 largest projects purchased were at the pre-feasibility level. The purchase price for these 2 projects was $0.134 and $0.155 per copper equivalent pound. Clearly, a significant increase in value over a preliminary economic assessment stage projects. Let's imagine for a moment. And when the launch of Los Azules pre-feasibility study is completed that, one, losses on risk still have total resources of 32.89 billion copper equivalent tons. 2, the private financing of $80 million has been fully subscribed, and thereby, reducing the McEwen Mining with an ownership to 69% of receiving the copper. And 3, Los Azules is valued at a much lower price per pound than the 2 pre-feasibility stage projects that I just mentioned.

What currently McEwen Mining ownership in the field at $0.03 or $0.05 per copper equivalent pound. The answer is quite attractive. It is $681 million to over $1.1 billion, respectively. This match, this leverage to the price of copper is why we have created McEwen copper and why we believe it could be a significant value driver for McEwen Mining.

When combined with the improving performance of our mines producing gold and silver. We believe, we have a very compelling future. And our current share price presents an attractive entry point.

I would now like to open the session for questions. Operator?

(Operator Instructions) Your first question comes from the line of Heiko Ihle of HCW.

Your 2021 guidance for Gold Bar is currently at 37,000 to 45,000 ounces. That's 8,000 ounce gap between the high and the low end of the guidance, and there's about 55 days less than a year. For contrast trend lining in Q3 production to Q4, you'd be at 33,900 plus 12.4 you did report 6,300. So I guess, can you just walk us through your thoughts of what factors could cause you to come in at either end of these that band in your guidance range, please?

Sure. I'll ask Peter to answer that question.

Sure. Thanks, Rob. Heiko, yes, the 37 was the feasibility number, and we're obviously on the trend to beat that. There were some opportunity ounces that we couldn't quite get a handle in terms of guiding at the feasibility stage. So we are trending. We were targeting kind of midpoint, and we're trending on that quite well as we indicated and a potential for a beat. So there's still another strip to sort through when we transition from Pick West into the Pick Central and Pick East, and that's what we're sorting to as we work through the rest of this year and next year. So that's the reason for that range. And I think we also wanted to build back our credibility and to meet and beat our guidance and go back a reputation on delivery. So I think those factors led us to establish those ranges last year.

It could be one other Heiko as well, and that is -- we're changing contractors. And so, there might be an interruption, a brief interruption now. So we want to have a contingency for that.

Got it. Okay. Also, you mentioned in the release that -- and this is a quote. The COVID -19 is not materially affecting our operations or our future strategic plans and objectives. While I assume this holds true for quite a few firms, I don't think it's really seen it in writing in many releases thus far. At least to a logical follow-up, are you still feeling any sort of impact with regards to cost warranting expenditures, workforce costs, et cetera or is that essentially just gone or I guess what I'm saying is that, are you talking about future impacts or about current impact? And now, I'm not saying total, I don't know if this is a number that you have on and do you know what percentage of your workforce is vaccinated?

It varies depending on site. Some of the understanding Gold Bar is the least vaccinated. You might want to come in there, Peter, knowing that more.

Yes. Gold Bar, we're around 50% vaccination rate. At Fox, I believe we're around 75% to 80%. It might be just above 80%, actually. A lot of it is cultural in Nevada, and there's a strong sort of culture of not vaccinating there. I think we're not, the only one who are not in that arena experiencing that, Canada and our corporate, of course, were I think primarily all double vaccinated. So that's the status of the operations. We still have our protocols in place from prior. I think we are experiencing the same challenge as the industry is experiencing in supply chain, and we're looking at the supply chain very carefully as we speak. We've recruited a global procurement lead to join our executive team. We just joined early this year, and part of his brief is looking at some of the potential risks to production and making sure we respond appropriately.

As far as active cases, we don't have any at current at our sites. I think protocols were quite effective last year. I think the comment we're referring to in our Q3 results is that we didn't take a temporary suspension of operations, and that has contributed to higher, obviously, production, and that's what we mean by that.

Your next question comes from the line of Jacob Sekelsky of Alliance Global Partners.

So just looking at Gold bar costs, should we expect them to drop back down to 1,200, 1,300 an ounce range over the longer-term as capital investments moderate or do you think all-in sustaining costs of around 1,500 is sort of the new norm there going forward?

Over to you, Peter.

Thanks. Jacob, well, I mean, I think you've got a pretty good view with the updated feasibility study. At this stage, I wouldn't be guiding anything different than that cost profile. Next year, we need to raise or sure expand the footprint for our lease pad. Other aspects are the Gold Bar South project, which is actually trending ahead of schedule on permitting. It's with on final review of the meta process, and we expect in Q4 to have approval to go forward in the feasibility, it showed Gold Bar in the second half of next year, we're looking to accelerate that and bring production forward.

I think that's the case for Gold Bar is bringing production forward and offsetting some of those capital costs next year. And then, once 2022 is completed, you can see in the feasibility, we start cash and all-in sustaining drop quite significantly. And we're in quite a cash flow generation phase there for the 6-year mine life. And that's part of what Steve looking at in the expiration of some of these near-term potential ounces of a fair amount of drilling also have been happening on Gold Bar this year at the Atlas, which is the old Gold Bar site Ridge. We're going to be going back into cab, and we've identified more mineralization and extension of the cabin or. And that's why, we're turning back into Pick to see as we get towards the pit East or get more opportunity assets to bring it. So that's the strategy there. But at the moment, the best guidance we have feasibility.

Looking over to the Fox complex. Assuming the PEA is positive later in Q4, how quickly should we expect you guys to move forward with the positive development position or execution, I guess, of the new mine plan?

Yes, very good question, and I was expecting that it being a PEA, the general follow, we'd have to follow up pretty fast and feasibility. Of course, this is a unique situation in that we have an operating mine at Froomemine where continue to explore black box that we could hopefully bring on back online again in the future and a stock mill and tailings facility that's got capacity. And so the PEA objective was exactly about what could we bring on quickly towards production? And so I would say we chose the PEA because it was quite a complex set of deposits to understand and bring together.

We're obviously an operating mine and beyond feasibility and some of our knowledge of costs and things like that. So our whole idea there was once we understood that pathway to value, we would be looking at where could you access quickly and bring on near-term production at low cash and all-in sustaining costs and increased scale. As you recall, those were the trend because I think we trended very well there. The 2 areas that we see advancing quickest are the Stock West deposit and the Gray Box. And so if we look to the end of Q4 here where we released those results, they're fairly exciting and look forward to growing on that strategy even further.

Okay. Fair enough. And then just more of a housekeeping item. On exploration, I mean, you guys were pretty aggressive this year, which was good to see, you've had some strong results. Should we be modeling a similar level of exploration in 2022?

I'll let Steve handle that. We're right in budget time but he can give you more of a flavor of that.

Yes. I would say, in general terms, specifically for Nevada and Ontario, well, specific to Ontario, the flow-through funding that was raised in fourth quarter last year, we anticipate that, that exploration funding will be depleted by the end of 2022. And we have a planned exploration program that is anticipated to work within that framework. At Nevada, our $5 million budget, we've had exploration spending that's been a little slower than anticipated, and we'll probably have a slight shortfall in spending in 2021 and anticipating rolling that difference into 2022. So expenditures in Nevada in 2022 will likely be higher than they were in 2021, but not necessarily a change in the 3-year exploration plan for the area.

Your next question comes from the line of Joseph Reagor of ROTH Capital Partners.

Rob, so first, obviously, congrats on having a second consecutive strong quarter of production. It's good to see things going in the right direction here. With that said, a couple of minor questions. Maybe following on something just sitting on with the exploration spend. So far you spent about $18 million at the income statement level on exploration. Should we expect a similar company-wide exploration budget next year? Should we expect it to decline somewhat now that you're finalizing this PEA over at Black Fox? Or maybe get some of the gives and takes there?

I would expect to be a little lighter next year as we move out of the PEA, move forward from the PEA at the Fox Complex. And the results -- at Gold Bar, probably there are some areas we want to get on to that will probably increase our expenditure there. And Hochschild, our partner in Argentina is still moving along there. Quite excited about some of the results they're getting. But I'd say it's probably less by maybe 20%.

Okay. That's helpful. And then forgive me if I missed it, but did you give any outlook in the release or in the MD&A on your thoughts on the El Gallo and the Phoenix expansion? Any update there? Maybe it's not immediate, but are you guys still planning on potentially doing that expansion in the near term?

Peter, do you want to jump in?

Sure. Thanks, Joe. Yes, it's a good question. I am wondering where they put that in, so I'm glad you actually asked. We've been working on a number of strategic alternatives, one of those is a low CapEx alternative for Phase 1. So if you recall, the initial CapEx for Phase 1 was around $42 million in the feasibility, and that gave us sort of 6, 7 years of gold production. What we've actually identified is to the lower CapEx opportunities which were right in the proposal phase, targeting somewhere around $25 million CapEx for Phase 1. So we're trying to find ways to advance that project, whether it's internally or a partner or with other strategic alternatives such as a sale. So I think all told that, that option is looking quite promising. It's early yet though, so we need to validate technical parameters and costing and construction, commissioning, and all those things. But either way, we believe that will add value, whatever strategic way we met those.

Okay. That's helpful. And then, Rob, just kind of a big picture question. I mean, Black Fox is headed in the right direction, you guys got the firm deposit up early. Gold Bars had a good turnaround and now those 2 give you 2 steady state operations going forward from here, MSC is steady state with your partner there. Longer term, how do you take the company from, call it, 150,000 gold equivalent to 0.5 million and make it more of a mid-tier producer?

Well, one, we need a stronger share price before we go out looking for acquisitions or combinations. We're putting a lot of energy into McEwen Copper, where we see a significant value accretion possible by moving from a PEA to a pre-feasibility stage. I would say, in the near term, that would be the largest generator -- potential generator. And from there, McEwen Mining, well -- at this point, is the majority shareholder and what we've been doing with McEwen Copper is working to surface the value of that asset. It's somewhat unique in this world in terms of its size. And it's a medium altitude, not as high as some of the others in the country, so easier operating conditions. And that's where I think we could get some of the power to move to that next size.

(Operator Instructions) Your next question comes from the line of John Tumazos of John Tumazos Very Independent Research, LLC.

Rob, could you give us any drilling update of Hochschild at San Jose, the veins that might continue from Newmont onto your property sound exciting and vice versa. And second, you mentioned earlier that maybe if it were sold, it would be $150 million to your company. I'm hoping it's $200 million or $250 million or more. If that pot of gold rain money on you, would it be reasonable to say you pay off all the debt first, put a little bit of money more into McEwen Copper, pay some kind of special dividend and have a little cash in your treasury for the guy that wants you to be 500,000 ounces next week?

All of the above sound great. Yes, we'd be using funds to retire the debt. Could use it in McEwen Copper. Special dividend is always close to my heart. When I was building Goldcorp, we got to a point where we are paying a dividend every month. And when -- I look ahead, that would be a fabulous position to get into. In terms of the exploration, Steve, would you care to comment on John's question?

Yes. I guess I would just highlight specific to San Jose and the potential extensions at the -- from the sale and into the mine onto the property is -- we did get an update on the Brownfields program that just under 7,000 units of drilling, we added 121,000 GEOs. But I think we regard -- we really regard that as perhaps a tip of the iceberg. We know that there's tremendous potential on the property. We don't have an update currently on what the drill plan is for 2022, but the results that we've seen year-to-date tell us that we need to keep pushing there and moving forward. The results have been big, and the grades of the drilling stats are very good. And we believe that this mine still has a very bright future.

I was just going to say that there's been several parties that are interested in our interest in San Jose and in the whole property. But up until very recently, Argentina had a very restricted policy about letting foreign visitors come in. And so there was an inability to do an on-site due diligence. That's now been cleared away. So we may see some action there.

Steve, I apologize. I haven't listened to a Hochschild presentation in a few years. They may have made some public comments that I missed, you know how there's more gold and silver companies than people walking the streets in Toronto. You can't keep up with them all. What have they said publicly about San Jose drilling?

Steve, did you hear John's question.

Yes, I did. Sorry, I just had some trouble with my phone. I can't speak to you the specific comments by Hochschild on the program as a whole. That update certainly from them will come from the budgeting process and the plan on 2022.

I'm very optimistic, Rob. I think most of the world's major silver companies are in Santa Cruz province somewhere.

Yes.

And your land position is multiple here and Hochschild's land position is multiples of Newmont's and Goldcorp spent over USD 4.5 billion there. So I'm hoping you're just very modest and humble, Rob.

Well, it'd be very nice if Newmont decided to spend like old purchase when they bought that property and look towards ours.

There are no further questions at this time. Mr. Rob McEwen, I will turn the call over to you.

Thank you, operator. That's the end of our conference call, and I'd like to thank everybody for joining us. Best wishes for a successful investment. Thank you.

Thank you for participating in today's conference call. You may now disconnect.