Mr. Rob McEwen reports

MCEWEN MINING: Q2 2023 RESULTS

McEwen Mining Inc. has released its second quarter (Q2) and half-year (H1) results for the period ended June 30, 2023.

"The year started with operational challenges at both Gold Bar and San Jose. San Jose appears to have turned the corner and we are confident that the plan in place for Gold Bar will do the same. Fox complex has delivered another solid quarter and we expect even better results in the second half of the year. We thank our operating teams for their hard work. The story at Los Azules keeps getting better and better! With a strong financing, an updated preliminary economic assessment (PEA) showing robust economics, unparalleled partners in Rio Tinto (through Nuton) and Stellantis, and potentially game-changing copper leaching technology, we could see Los Azules provide a model for how the mine of the future should look," said Rob McEwen, chairman and chief owner.

Second quarter highlights and building McEwen's future:

• Fox complex: Record daily mill throughput of 1,250 tonnes per day, generating $6-million in cash gross profit in Q2. Sustained higher throughput and improved grade expected to result in stronger production and margins in H2;
• San Jose: Production increased 54 per cent with cash costs/ounce declining 24 per cent compared with Q1, as the revised mine plan continues to be executed;
• Gold Bar: Higher mining rates and gold grades, together with faster recovery and lower strip ratio from the Pick deposit setting stage for improved production and margins in H2 2023 and beyond. Higher costs/oz during Q2 included the additional costs associated with the heap leach pad expansion, which is expected to be completed in Q3;
• Fenix project: McEwen continues to advance toward a formal construction decision. During the quarter, it initiated a sonic drilling campaign, advanced permitting applications and engaged a project manager;
• McEwen Copper: PEA for the Los Azules copper project issued in June, 2023, with net present value (8 per cent) of $2.7-billion and payback period of 3.2 years, assuming a copper price of $3.75/pound. Based on the financing closed in Q1 2023, the company's 52-per-cent ownership of McEwen Copper has now an implied value of $285-million, which is equal to 67 per cent of McEwen's current market capitalization;
• Early retirement of $25-million or 39 per cent of McEwen's outstanding debt in Q2; reduction of debt service of $2.2-million annually;
• McEwen continued its safety record of no lost-time incidents at its 100-per-cent-owned operating mines during Q2;
• Exploration update across the portfolio to be delivered later in Q3.

Mr. McEwen continued: "At McEwen Mining, quarterly production from our mines delivered a marked improvement in terms of ounces produced over Q1. At the Fox complex its AISC [all-in sustaining cost] was 8 per cent lower than the comparable period in 2022. Gold Bar continued with high costs per ounce; however, we expect to see much better performance in H2 as a result of a lower strip ratio and increased mined ore grades. At San Jose production got back on track in Q2. We anticipate all our mines will deliver stronger results in H2 and finish the year in line with our production guidance. We are advancing two important development projects, at the Fox complex in Canada and at the Fenix project in Mexico, both designed to extend the mine lives by nine years.

"Our biggest single asset with the greatest near-term potential to increase our share value is our 52-per-cent-owned subsidiary McEwen Copper. Given my long association with gold, I view non-gold deposits in terms of their gold equivalent value. McEwen Copper's most advanced property is its large Los Azules copper project. On June 20 we published an updated PEA for Los Azules. Using the numbers of this PEA and a copper gold ratio of 500 to 1 (500 lb of copper currently have the value of one oz of gold), Los Azules has a resource base equivalent to a 75-million-ounce gold deposit with annual gold equivalent production of 800,000 oz in the first five years, 644,000 oz over the following 22 years, low production costs of $535/oz cash costs and $820/oz AISC, generating the payback of its $2.5-billion initial capex in 3.2 years (based on a $3.75/lb copper price). Notably, these impressive results are achieved from extracting the economically minable portion representing just about one-third of the current resource estimate, as determined by the present PEA.

"Moreover, by implementing a sustainable approach, this potentially multigenerational asset could become a model for mines of the future. Compared to conventional copper mines, Los Azules is designed with a much lighter impact on the environment, emitting one-third the carbon initially to zero by 2038, utilizing one-fourth the water, 100 per cent powered by renewable energy sources and producing sustainable copper cathode. Investing with us in the future of Los Azules are two global companies, Rio Tinto and Stellantis (through their respective subsidiaries), the world's second-largest mining company and the world's fourth-largest automaker, each owning 14.2 per cent of McEwen Copper.

"The updated Los Azules PEA surpasses the 2017 assessment in key areas, including: 1. superior financial metrics, 2. larger copper resource estimate, 3. significantly lower water consumption and greenhouse gas emission, 4. substantial decrease in electricity consumption, and 5. a design optimized for permitting and development in the next five years. We are now focused on our next milestone, which is to deliver a final feasibility study by late 2024 to early 2025.

"We have invested heavily in exploration and the results have been most encouraging, particularly at Los Azules, where the resource base increased by 27 per cent, and at the Fox complex, where the results allow us to see the potential for significant increase in mine life. These large investments in exploration are treated on our income statement as expenses and are the primary reason for our consolidated loss this quarter. We will continue to report losses in McEwen Copper until Los Azules has reached a stage where costs can be capitalized under U.S. accounting rules."

Financial results

Notice to reader: Under U.S. generally accepted accounting principles, McEwen Mining consolidates 100 per cent of the accounts of its fully owned and majority owned subsidiaries in its reported financial results, including McEwen Copper. Entities over which it exerts significant influence but does not control (such as Minera Santa Cruz SA (MSC), the operator of the San Jose mine) are presented as an equity investment on the company's balance sheet.

McEwen's cash gross profit was $4.8-million and McEwen's gross loss in Q2 was $3.5-million, compared with a gross profit of $4.2-million and cash gross profit of $7.7-million in Q2 2022. Cash gross profit or loss excludes the non-cash depreciation included in the gross profit or loss. During Q2, gross loss was impacted by lower grades and longer recovery times at McEwen's Gold Bar mine operations, which are expected to reverse in H2, based on anticipated 25-per-cent-higher mined grades, faster recoveries and a 33-per-cent-lower strip ratio. This should result in higher production and improved margin expansion. McEwen's gross loss was also impacted by an increase in non-cash depreciation rates at Gold Bar resulting from a reduction in its mineral reserve base at the end of Q4 2022. McEwen's Fox complex operations generated a $6-million cash gross profit in Q2, and the company expects to build on this momentum during the second half of the year, as it mines higher-grade material and maintains McEwen's higher mill throughput.

Adjusted net loss was $13-million, or 27 cents per share in Q2, compared with $1.9-million, or four cents per share in Q2 2022. Adjusted net income or loss is a new non-GAAP financial measure intended to provide readers with a metric to evaluate McEwen's 100-per-cent-owned precious metal business, therefore excluding McEwen Copper, with its copper assets (52 per cent owned), and MSC, operator of the San Jose mine (49 per cent owned). Together with McEwen's gross loss described above, the company also invested $7.1-million in exploration and advanced project expenses, primarily at its Fox complex operations, where it continues to develop its Stock West project. Exploration expenditures at Fox complex are expected to decrease in the second half of the year as the company completes its flow-through expenditure commitments.

The company reported a consolidated net loss of $21.6-million, or 46 cents per share in Q2, compared with $12.5-million, or 26 cents per share in Q2 2022. This was driven by an investment of $28.5-million in the company's Los Azules project to complete its 2022 to 2023 drilling program and publish its updated PEA, which it expensed under U.S. GAAP. As the company progresses toward feasibility at Los Azules, it expects to continue to report losses until it meets the U.S. GAAP requirements for capitalization, which typically require a feasibility study establishing a mineral reserve estimate and permitting. As a result of the company's $130-million investment in exploration since 2021, it has increased the implied valuation of McEwen Copper on a 100-per-cent basis from $257-million to over $550-million.

Liquidity and capital resources

Consolidated cash and equivalents increased to $84.6-million at the end of Q2 from $39.8-million at the end of 2022. Additionally, investments totalled $29.2-million, primarily in equity securities held in Argentina, to mitigate the impact of high inflation and devaluation. Consolidated working capital was $92-million at June 30, 2023.

During Q2, the company decreased its total debt by $25-million to $40-million and entered into the third amended and restated credit agreement, effective May 23, 2023. As a result, the company's interest expenses associated with long-term debt were decreased by $2.2-million per year.

In addition, the company's 52-per-cent ownership of McEwen Copper has an implied market value of $285-million, based on the last financing round with Rio Tinto (through Nuton LLC) and Stellantis (one of the world's leading automakers and owner of 14 iconic brands including such names as Alfa Romeo, Chrysler, Dodge, Fiat, Jeep and Maserati).

The company also maintains a portfolio of royalties including a 1.25-per-cent net smelter royalty at both its Los Azules and Elder Creek properties, together with three other royalties on properties in Nevada and in Santa Cruz, Argentina.

Gold and silver production

Production from the company's three operating mines was 35,625 gold equivalent ounces (GEOs) in Q2 and 66,100 GEOs in H1, compared with 36,218 GEOs in Q2 2022 and 61,200 GEOs in H1 2022. Its consolidated production guidance remains 150,000 to 170,000 GEOs for 2023. Details on how the company plans to achieve guidance are outlined in the section below.

Individual mine performance

Fox complex: Timmins, Canada

Fox performed well in the quarter and achieved its budgeted production. Mill throughput in Q2 was 31 per cent higher than in Q4 2022, reaching a record 1,250 tonnes per day, an important achievement by the company's team in Canada, as it aims to consistently maintain higher throughput. Cash costs were slightly higher than McEwen's annual guidance due to moving to contractor crushing in early 2023; however, the company expects AISC to remain in line with guidance as a result of reduced capital expenditure requirements. Gold grades are expected to be approximately 10 to 15 per cent higher in H2, which will also bring down the company's per-ounce costs for the second half of the year.

Gold Bar: Nevada, United States

Despite the historic difficulties at Gold Bar, McEwen is confident in its team's plan at the mine to ramp up gold production during H2, which will also result in lower costs and increased profitability. This will be achieved by mining 25-per-cent-higher grades by prioritizing material from the Pick open pit, which also allows for a 33-per-cent-lower strip ratio and faster leaching recoveries. Based on these factors McEwen expects Gold Bar to meet production guidance of 42,000 to 48,000 GEOs for the full year. With the anticipated improvements to gold production, the company also expects to lower cash costs/oz and AISC/oz in H2, to meet its annual guidance figures.

San Jose: Santa Cruz, Argentina

San Jose had a difficult start to 2023 as seen in the company's Q1 results. The team at San Jose has been quick to respond by implementing operational changes that resulted in production increasing 54 per cent and cash costs/oz decreasing by 24 per cent in Q2 as compared with Q1. This was achieved through mining and processing more tonnes containing higher average gold and silver grades. As a result, San Jose's revised production targets were met in the quarter, and production guidance of 66,000 to 74,000 GEOs for the full year is reiterated. Although San Jose's cash costs and AISC per ounce sold for the full year are forecast to remain 10 to 20 per cent above guidance due to the difficulties encountered in Q1 and the additional investments required to derisk mine production, the team deserves congratulations for all its efforts in identifying the operational issues and putting in corrective measures.

Exploration

Exploration results from the Fox complex were published in a separate press release on May 8 and an additional update is planned in early September. Gold Bar exploration activities are focused on discovering near-mine resources. Two drills will be active on the property in H2, with one drill outside the mining area testing the Wall fault, which is believed to be a primary feeder fault for the mineralization at Gold Bar.

McEwen Copper

Infill and exploration results from Los Azules were published on April 5, May 5, July 12 and Aug. 1. The drilling campaign at Los Azules ended mid-June and is expected to resume in October, after the South American winter.

Additional assay results from the recently completed drilling campaign will be published over the next months. All drilling information received after the Dec. 31, 2022, cut-off date for the PEA will be incorporated in our upcoming feasibility study.

McEwen owns a 52-per-cent interest in McEwen Copper, which holds a 100-per-cent interest in the Los Azules copper project in San Juan, Argentina, and the Elder Creek exploration project in Nevada, U.S. The last financings completed by McEwen Copper with Stellantis and Rio Tinto (Nuton) gave the company an implied market value of $550-million. This translates to $285-million for McEwen Mining shareholders' 52-per-cent ownership. This value is equal to approximately 67 per cent of the current fully diluted market capitalization of McEwen Mining.

During Q2, McEwen Copper spent $28.5-million to advance a major drilling campaign involving up to 15 rigs, continuing road maintenance and improvements, hyperspectral scanning of the entire drill core data, technical studies necessary for the updated PEA, environmental baseline work, project optimization and trade-off studies (including renewable power supplies and mining methods), and metallurgical test work. The environmental impact report for exploitation was submitted during the quarter to the Argentinian authorities for review, and the team is now working on advancing Los Azules to the feasibility study level.

At the Elder Creek project operated by Kennecott Exploration Company, a subsidiary of Rio Tinto, six exploration drill holes have been completed with results pending. Kennecott has the option to earn a 60-per-cent interest in Elder Creek by investing $18-million over a maximum of seven years.

PEA highlights

Please refer to McEwen's June 20, 2023, news release for summary results of the Los Azules PEA update. The technical report has been filed on SEDAR and on the company's website.

Base case highlights (nameplate capacity of 175,000 tonnes per year of copper cathode production, $3.75/lb Cu price):

• Updated independent mineral resource estimate, which increased to 10.9 billion lb Cu indicated (0.40 per cent grade) and 26.7 Blb Cu inferred (0.31 per cent grade);
• Average annual Cu cathode production of 401 million lb (182,100 tonnes) during the first five years of operation, and 322 million lb (145,850 tonnes) over the 27-year life of the mine (LOM);
• Total Cu recoverable to cathode of 8.68 billion lb (3.94 million tonnes), based on the LOM extraction of mineralized material containing approximately 11.90 billion lb of total Cu (5.40 million tonnes), and average copper recovery of 72.8 per cent;
• After-tax net present value (8 per cent) of $2,659-million, internal rate of return (IRR) of 21.2 per cent and a payback period of 3.2 years;
• Initial capital expenditure of $2,462-million, and a project capital intensity of $7.66 per lb Cu ($16,880 per tonne Cu);
• Average C1 cash costs of $1.07 per lb Cu and all-in sustaining costs of $1.64 per lb Cu (AISC margin of 56 per cent);
• Average EBITDA (earnings before interest, taxes, depreciation and amortization) per year of $1,101-million (years 1 to 5) and $692-million (years 6 to 27);
• Estimated carbon intensity of 826 kilograms carbon dioxide equivalent per tonne of Cu (CO2-e/t Cu) for scope 1 and 2 GHG emissions, well below the industry average of 1,980 kg CO2-e/t Cu. McEwen Copper's goal at Los Azules is to be carbon neutral by 2038, a target achievable through the use of emerging technologies and offsets;
• Estimated site-wide water consumption of 137 litres per second (L/s) from years 1 to 10, increasing to 163 L/s from years 11 to 27. This compares with approximately 600 L/s for a conventional mill producing copper concentrate;
• Upside case with the addition of Nuton technologies increases NPV (8 per cent) to $3,701-million, IRR to 23.9 per cent and mine life to 39 years, and reduces payback to 2.7 years.

Management conference call

Management will discuss McEwen's Q2 financial results and project developments and follow with a question-and-answer session. Questions can be asked directly by participants over the phone during the webcast.

Thursday, Aug. 10, 2023, at 11 a.m. EDT

Toll-free (U.S. and Canada): 888-210-3454

Outside U.S. and Canada: 646-960-0130

Conference ID No.: 3232920

An archived replay of the webcast will be available approximately two hours following the conclusion of the live event. Access the replay on the company's media page on its website.

The attached table provides production and cost results for Q2 and H1, with comparative results from Q2 and H1 2022 and the company's guidance range for 2023.

Technical information

The technical content of this news release related to financial results, mining and development projects has been reviewed and approved by William (Bill) Shaver, PEng, chief operating officer of McEwen Mining and a qualified person as defined by SEC S-K 1300 and the Canadian Securities Administrators National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

Reliability of information regarding San Jose

Minera Santa Cruz, the owner of the San Jose mine, is responsible for and has supplied to the company all reported results from the San Jose mine. McEwen Mining's joint venture partner, a subsidiary of Hochschild Mining PLC, and its affiliates other than MSC do not accept responsibility for the use of project data or the adequacy or accuracy of this release.

About McEwen Mining Inc.

McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. In addition, it owns approximately 52 per cent of McEwen Copper which owns the large, advanced-stage Los Azules copper project in Argentina. The company's goal is to improve the productivity and life of its assets with the objective of increasing its share price and providing a yield. Mr. McEwen, chairman and chief owner, has a personal investment in the company of $220-million (U.S.). His annual salary is $1 (U.S.).

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