McEwen Inc. (NYSE: MUX) (TSX: MUX) has announced positive results from the Pre-Feasibility Study (PFS) for its wholly owned Grey Fox Project near Timmins, Ontario, highlighting the project's potential to significantly increase production at the Fox Complex and extend mine life through 2041. The study positions Grey Fox as a key growth driver for the company's near-term production targets.
With Grey Fox contributing to production, the Fox Complex is projected to reach approximately 100,000 ounces of gold production in 2029 and average 87,000 ounces annually from 2028 through 2041. This increase supports McEwen's goal of increasing total annual production to 250,000-300,000 gold equivalent ounces by 2030, a strategic objective that could significantly impact the company's revenue and market position.
The study estimates initial capital expenditures of $181 million and outlines strong project economics. At a gold price of $3,000 per ounce, the project shows a post-tax net present value (NPV) of $282 million and a 25% internal rate of return (IRR). At a gold price of $4,500 per ounce, post-tax NPV increases to $841 million with a 55% IRR and a 2.3-year payback period. These robust returns underscore the project's viability even in volatile gold markets.
Management said current precious metals prices are expected to generate sufficient cash flow to largely fund development internally while leveraging existing Fox Complex infrastructure, including the Stock Mill, tailings facilities and workforce. This approach minimizes dilution and reduces financing risk, which is particularly important for shareholders seeking exposure to a growing gold and silver production base.
The implications for the mining industry and the Timmins region are significant. Grey Fox's development could sustain hundreds of jobs and support local economic activity for nearly two decades. For McEwen, the project is a cornerstone of its 2030 production target, which also includes contributions from its other assets in Nevada, Manitoba, Argentina and Mexico. Additionally, the company holds a 46.3% interest in McEwen Copper, which owns the advanced-stage Los Azules copper project in Argentina, designed to be one of the world's first regenerative copper mines and carbon neutral by 2038.
For investors, the PFS provides a clear roadmap for value creation. The strong economics at current gold prices suggest that Grey Fox could generate substantial free cash flow, potentially supporting McEwen's objective of building profitability and ultimately implementing a dividend policy. Chairman and Chief Owner Rob McEwen, who has invested over US$250 million personally and takes a salary of $1 per year, aligns his interests with shareholders, adding a layer of confidence in the company's direction.
The full press release is available at https://ibn.fm/u0vpq. For the latest news and updates relating to MUX, visit the company's newsroom at https://ibn.fm/MUX.
