McEwen Mining Inc. (NYSE:MUX) Q2 2022 Earnings Conference Call August 11, 2022 11:00 AM ET
Company Participants
Rob McEwen – Chairman and Chief Owner
Perry Ing – Chief Financial Officer
William Shaver – Chief Operating Officer
Stephen McGibbon – Executive Vice President-Exploration
Michael Meding – Vice President, McEwen Copper and General Manager
Conference Call Participants
Jacob Sekelsky – Alliance Global Partners
Mark Ehlert – LendUS
Operator
Hello, ladies and gentlemen. Welcome to McEwen Mining’s Q2 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 of Exploration; and Michael Meding, Vice President, McEwen Copper and General Manager.
After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I will now turn the call over to Mr. Rob McEwen, Chief Owner. Please go ahead, sir.
Rob McEwen
Thank you, operator. Good morning, ladies and gentlemen, and welcome – the first quarter of this year was a lot weaker than our second quarter. Second quarter was much stronger. We had higher production and lower cost per ounce. The drivers of this improvement were our Fox Complex that delivered its best performance since 2018 and the San Jose mine, which bounced back sharply, delivering in Q2, what it should have done in Q1.
Looking ahead, we expect Gold Bar South to be in production in the fourth quarter of this year, and it will be delivering more ounces, and lowering Gold Bar’s cost per ounce. Exploration at the Fox Complex has been successful, building the gold resources at Stock, and should result in a significant reduction in the payback period from its current six years towards our goal of less than three years for the FOX, PEA, which we published in January of this year.
The PEA, I’d like to stress, outlines a longer mine life extending into the mid-2030s, and a higher average annual production of 80,000 ounces, which is almost twice this year’s guidance for production at Fox Complex.
Progress at McEwen Copper’s Los Azules project has been substantial. During the year, a strong management team with extensive experience operating in Argentina has been assembled. Drilling, there has improved our knowledge of the deposit and will result in a big conversion of inferred resources into the indicated category. Multiple simulations have been conducted to optimize the mine planning. These results and other results will be included in the updated Los Azules PEA that will be released early next year.
I also want to stress what we believed was very important to preserve, and that was our listing on the New York Stock Exchange, and that led to a 10-for-1 consolidation. I say the importance of maintaining it because 90% of our trading volume occurs on that exchange.
Now I’d like to ask Perry to present our financials.
Perry Ing
Thanks, Rob. Good morning, everyone. It’s a pleasure to be back at the McEwen Mining as CFO after several years away, and having the opportunity to rejoin a strong management team. Having joined halfway through the second quarter, I do observe that, obviously, the company experienced significant operating challenges during the first quarter as well as various other times during the COVID pandemic. But I do believe the company is now well positioned from a financial, operating and leadership perspective for success in the second half of the year and into the future.
Looking at our results, I don’t intend to read out a lot of numbers, but I’ll just touch on our GAAP earnings. So starting with that, on a GAAP basis, we reported a consolidated net loss for the quarter of $12.4 million or $0.26 a share. That includes $19.2 million invested in exploration and advanced projects, of which $14.4 million relates to the Los Azules copper project. If you look at just our operating assets, we actually generated $4.2 million in positive gross profit from our operations.
As Rob mentioned, we completed a share consolidation just recently, in July, and our results on a per share basis for the second quarter are retroactively reflects that 10-for-1 consolidation.
Looking now at our gold – at our production for the quarter. Production improved significantly compared to the first quarter. Production was 27,600 ounces of gold and 704,600 ounces of silver for a total of 36,100 gold equivalent ounces. So this represents an increase of approximately 44% from the first quarter as we experienced COVID-related labor shortages at both the Fox Complex and San Jose mine during the first quarter.
The improved throughput in the second quarter is reflected in our cash cost and all-in sustaining costs for the quarter, which were $1,169 and $1,549 per ounce, which were 15% and 11% below the midpoint of our annual guidance for the year. As Rob noted, the highlight was strong production from the Fox Complex of 11,200 gold equivalent ounces.
Production was also very strong at the San Jose mine, which produced 19,600 ounces. The only disappointing result was from the Gold Bar mine, which produced 5,100 gold equivalent ounces for the quarter due to the continued presence of carbonaceous at ore. But as Rob noted, we have a plan in place to accelerate mining from the Gold Bar South project, and we believe we’ll show positive benefits from that by the fourth quarter. I’ll leave further discussion on this topic to Bill Shaver.
And finally, looking at our treasury. Our cash and equivalent balance stood at $44 million, and including restricted cash at $48 million at June 30. This is down just over $10 million from the beginning of the year. But I’ll note that our accounts payable and accrued liabilities balance decreased by approximately $14 million since the beginning of the year.
From a capital market standpoint, our primary activity during the quarter was the completion of a $15 million private placement by our McEwen Copper subsidiary in late June. So now McEwen Copper has raised $55 million of the intended $80 million first tranche financing. Following this transaction, McEwen Mining’s ownership of Los Azules is now – now stands at 76%.
So with that, I’ll now turn the call over to Bill for a review of operations.
William Shaver
Thank you very much, Perry, and good morning. I am also happy to have been called upon to join the McEwen management team as COO. I’ve been here about three months, and in that time, have visited all of our operations, including Mexico and Argentina, and have been to each of the operating entities several times. We are happy to report that Q2 has been a safe quarter with 1 minor medical aid involving a diamond driller who had a cut to his hand that required some stitches. I might just comment in my visits around to the various sites. I’m reasonably happy with state of our environmental, social and reclamation matters as well as our safety programs.
At the Fox Complex, we had a relatively good quarter, producing 11,200 gold equivalent ounces of record, apparently for the best quarter in three years. The cost per ton and per ounce were in line with budgets and expectations, and the mine was significantly ahead of schedule and tons of ore produced and most of the other measures for development, production drilling and backfilling.
Exploration is also confirming lower extension of the ore at the Froome deposit, which will extend the mine life into late 2024 and/or early 2025. We are also fully engaged in debottlenecking the process plant, which we hope will improve no throughput, improve reliability and reduce unanticipated downtime. To that end, we’ve installed a new screen tower in the month of July, and have purchased a rebuilt cone crusher to improve reliability in this portion of the plant.
The screen will direct the pine ore that is already the right size directly to the ball mill, thereby passing the cone crusher and improving the performance of the cone crusher and allowing more time for maintenance of this part of the plant. At the same time, we’re improving maintenance capability of the plant personnel. All of these things will increase the mill throughput, which will result in more gold production at a lower cost as we move forward.
At Gold Bar, we had a tough quarter due to the carbonaceous ore that Perry mentioned. This was encountered in the pit. This ore, which is preg-robbing, cannot be placed on the leach pad as it attracts and keeps gold captured in this material. This impacted our productions and costs for the quarter. We were able to mitigate this situation to some extent by pivoting to other ore sources.
We did carry out a 10-hole drilling program on an very intense basis to try to quantify the carbonaceous material, and we now have the results of that study. And we feel we have the situation under control in terms of understanding where we cannot mine. And we see – but we do see the impact of this continuing into Q3 in terms of our production.
Part of our strategy is to move ahead more quickly on the Gold Bar South project. To that end, we have all of the permits now in hand, and we’ll be starting the access road and site development this month. This will allow us to have ore production from Gold Bar South in Q4. And – as you may know, the grade at Gold Bar South is generally a little bit better. And of course, the ore is very clean of deleterious elements.
The stripping ratio at Gold Bar South will be lower and the ore haul is shorter, although the recovery may be lower long-term. And we plan to mine as much ore from Gold Bar South in Q4, and continue mining into 2023. And the plan is to concentrate on the best grades possible in Q4 and into 2023.
In Mexico, we have completed the leaching as planned in the month of July. And I would say I’m happy to say that we’re carrying on with the remediation plan for the waste dumps and other parts of the site. And this work is going well and looks very, very good.
We also have come up with a different approach to the processing of the leach pad material with a traditional mill in a manner which will reduce the CapEx significantly, and basically make that a project that we should be able to finance from a mixture of some of our present financing, a little bit better production from some of our operations. And this will – we’re in the midst of completing a study on this, and we anticipate that this might start in 2022 – 2023, rather.
So in summary, I’m relatively happy with our progress to date. We have a good dedicated group of people working hard to do a little bit better. We have some critical personnel holes that we need to fill, and there’s some more process driven discipline that we need in the organization, but we’re in the midst of putting that into place.
So with that, I’ll thank you very much. And now I’ll turn it over to Steve for some exciting exploration results, both in Timmins and at Los Azules. Thank you.
Stephen McGibbon
Thank you, Bill, and good morning, everyone. Our Q2 exploration investments in Ontario and Nevada totaled $3.8 million, and they’re generating exciting results and positioning us for a strong second half of the year. The goal at each is to extend the life of our mines and grow our mineral resource base. Firstly, at the Fox Complex near Timmins. True underground drilling has continued to produce positive exploration results, as Bill alluded to, and these are extending mineralization to depth. Recently, hole 225-L041-118, around 5.2 grams per tonne gold over 8.6 meters at 100 meters below the mine’s access ramp. We are drilling and delineating to depth with 2 drills at the 20 to 25 level in the mine.
On surface, our stock property covers 8 kilometers or 5 miles of the Destor-Porcupine Fault Zone, and includes 3 gold deposits that occur within a 3-kilometer or 2-mile length that are open for expansion. In 2022, we have four key target areas near our stock property mill with excellent potential to materially grow mineral resources based on poorly tested vertical and lateral trends.
During Q2, we continued drilling mineralization proximal to the past producing stock mine with a view that a successful campaign could shorten the payback period in the Fox PEA delivered earlier this year. We have confirmed multiple areas with attractive initial results that can be expanded with additional drilling from surface or in time from underground.
Recently, our success included identifying a deeper mineralized body close to the Destor-Porcupine Fault Zone. Today, we reported on encouraging drill results at the Stock property hosted in our green carbonate or host that may support improvement to the PEA.
These results included two holes, 5.47 grams per tonne over 7.7 meters true width, and 6.62 grams per tonne gold over 8.3 meters true width. These holes intercept mineralization at about 500 meters below surface. We have a third hole, pending results, that includes visible gold noticed while core logging. We anticipate reporting on these and other exploration results from Fox in a press release in the very near future.
At Gold Bar, Q2 result activities focused on several areas in the mine on the Pick extensions to the north and infill of the Pick Phase 2 pit. At the Atlas pit, our highest grade past-producing open pit located 3 miles west of the Gold Bar mine, drilling got underway on three target areas proximal to the historic pit, including following up on hole OGB-010 drilled in 2021 that intersected 3.1 grams per tonne gold over 27 meters or about 90 feet at the East Atlas target. That drilling has been just completed, and we hope to be reporting on results in the near future as on.
At San Jose, in Argentina, 3,600 meters of drilling were completed on the mine site exploration program and a further 700 meters of drilling at the Ciclon Este project located about 70 kilometers south of San Jose. Mine site drilling result highlights include 7.5 tonnes or – grams per tonne gold and 84 grams per tonne silver over 4.1 meters, and 6.9 grams per tonne gold and 648 grams per tonne silver over 1.5 meters.
An additional 2,000 meters, or 6,600 feet of exploration drilling is planned in Q3. The San Jose property surrounds Newmont’s Cerro Negro mine and is host to high-grade epithermal gold and silver deposits.
Finally, at Los Azules, our exploration program completed about 13,500 meters or more than 44,000 feet of drilling prior to the close of the field season in late May. All assay results from the exploration holes have been returned and are being included in the PEA update slated for early 2023.
This drilling is confirming mineralization of historic intercepts using the 2017 PEA mineral resource estimate. Recently, return to assays include hole AZ22-158, which intersected 222 meters of 0.95% copper, including an interval comprising 44 meters of 1.38% copper in the supergene-enriched zone.
Importantly, we believe we are meeting one of our primary goals of converting previous inferred mineral resources to indicated resources and thus improving our confidence in the ore body. Our drilling often extended to depth well below the 2017 PEA pit with mineralization that continued to the bottom of the completed holes, giving us more confidence that there is plenty of room for the resource to grow much more.
I will now turn the presentation over to Michael, who will tell you more about our developments at Los Azules.
Michael Meding
Thank you, Steve. The Los Azules project located in San Juan, Argentina is one of the world’s largest undeveloped open pit copper porphyry deposits. According to Mining Intelligence, we are a top 10 by resource. If you look at it, we are top five by resource not owned by a major. As Steve mentioned, we completed some 13.5 kilometers surface drilling with good results, as we have published in our latest press releases.
Three primary objectives of the past and upcoming drilling program includes: to improve confidence in the resource by converting Inferred mineral resources to the Indicated measures category, accelerate project advancement with metallurgical, hydrological and geotechnical drilling, and to test the limits of the depth extension of the higher-grade mineralization.
Results from this drill program will be used to update the 2017 preliminary economic assessment in which estimated indicated Inferred mineral results were 10.2 billion and 19.3 billion pounds of copper, respectively. The update of PEA study, as Steve mentioned, is planned to be released in the beginning of 2023.
We have built a strong management team in Argentina, as already mentioned by Rob, that will support us going from the updated PEA into the preparation of a definitive feasibility study and demonstrates our confidence in the accelerated development of this project. As shown in our annual meeting presentation, we have seen significant mineralization below the prior pit outline and in our deeper vertical holes.
Our existing geophysical work indicates promising targets to the Southwest and the Northeast of our main mineralization that we aim to test further in our upcoming drilling program, combined with infill resource drilling.
There our aim is to convert resource to the measured category for the first five years of future production, and we are executing additional metallurgical testing to analyze the option of an initial long-life heap leach operation, which could significantly lower the required CapEx, logistics costs and environmental footprint, and should provide an attractive business case.
We have brought together a world-class team, including seminal engineering, Bechtel, Stantec and most recently [indiscernible] to support the definition and development board for the PEA update. Work towards the development of the PEA basis has begun with the initiation of metallurgical testing program leveraging prior work and the completion of the geo metallurgical model to ensure a comprehensive understanding of the deposits.
Extensive enterprise optimization work with middle consulting from Australia is underway on a potential, larger scale, lower cost and lower carbon footprint alternatives. Based on the new information from the completed drilling and geological logging, resource and geological modeling upgrades are being refined for the inclusion in the PEA.
McLane Design, a renowned architectural design from the green architectural space, has also been working to assist in incorporating regenerative and sustainable design concepts already into the PEA at this point in time. As reported, Los Azules is now accessible during most of the year via two access roads, which will make further development safer and more cost effective.
We have successfully used the Southern Access Road at the end of last season, and leveraged shared resource together with Altar from Aldebaran Resources and Glencore, El Pachón, which are neighboring projects. The company is currently preparing for the upcoming drilling season beginning of Q4 this year. Our road crew is already improving access to the project size for an early start.
I will now turn back the presentation to Rob. Thank you.
Rob McEwen
Thank you, Michael. I trust you will agree that our operating performance represents a big improvement over our past. In addition to our improving precious metal operations, you’ve heard from Michael is that there’s a lot of activity at Los Azules and McEwen Copper. And I’d just like to go over some numbers with you and illustrate why we believe that Los Azules represents a very large asset for us, and will play a big role in the future value of the company.
So what’s Los Azules works? Well, one comparison could be with a project, a copper project in the same province in Argentina that sold earlier this year for $485 million. It’s called Los Azules – Josemaria. Josemaria is located at a higher altitude than us that are 900 meters higher. So they’re into an area that has potential problems with glaciers. The resource base of Los Azules is over twice the size of Josemaria.
Los Azules’ copper grade is significantly higher than Josemaria’s. The projected CapEx of Los Azules is lower, and the NPV higher. Los Azules is closer to infrastructure such as highways and power grid. And according to Goldman Sachs, based on 2018 numbers, Los Azules was in the lowest cost quartile of the industry for undeveloped copper projects, and Josemaria was in the highest cost quartile.
So I thought I’d look at it and say, well, if we were to look at that $485 million and say – discounted by 50%, and say that’s the value of it for McEwen Mining. And that would be – McEwen Mining owns 76% of McEwen copper right now. That – at a 50% discount of the $485 million, that would work out to a per share value of $3.88 a share.
If you said, well, it’s not 50% discount, maybe it’s the same price. Los Azules is worth $485 million. Then there is a $7.78 value per share behind every share of McEwen Mining. And then if you said, well, it’s more than twice the size. It’s higher grade, it’s closer to infrastructure, and you get a 50% premium, then you have better than $11.60 a share value behind every share McEwen Mining for that 76% interest.
So when you’re looking at McEwen Mining, we have exposure to two of the critical metals for the future. We have gold, which is the ultimate form of money. And we have copper, which is the metal of electrification of clean energy going forward. So what you get is 100,000 to 150,000 ounces of gold at an improving cost, plus 76% interest in one of the world’s largest undeveloped copper projects.
And right now, we are trading well below the value of Los Azules contained in our company. I’m quite optimistic that we’re going to see improving results for our operations, and the advancement of Los Azules is quite exciting in terms of building value for all of us shareholders.
I’d now like to open the session up to question and answers. Operator, if you could do that.
Question-and-Answer Session
A – Rob McEwen
And before you get any questions online, I have a number of them that have come in ahead of this call. So there’s – the first question comes from Angie’s and Christian [indiscernible] of Oregon. They say, we are long-time shareholders who want to know when you will declare regular dividends again with the investment in new mines behind us? What is the plan for sustained growing income that supports a dividend.
I’m a big believer in dividends. And when we are in Goldcorp, we got to a point we are paying monthly dividends. We’re not at that point, yet. I think we’re a considerable distance from that, but we’re building our assets to get to that point in the future.
The second question from Gillian Tessier. What is management planning to do in order to stop the slide in the stock? Well, I think we have better results this quarter, and we’re going to see continued improvements in our operations and continued growth in our copper and that should translate into an improving share price.
John from British Columbia. Will the company need to do any financing for the remainder of 2022? I’ll ask Perry to jump in?
Perry Ing
Sure, Rob. I think from the treasury side, I think on McEwen Mining, we’ve stabilized the balance sheet. So we don’t foresee any need for McEwen Mining to raise equity during the remainder of 2022. Obviously, for McEwen copper, it’s now completed a $55 million of the intended $80 million first tranche financing to advance the Los Azules copper project. So there’s a potential to execute that before the IPO. But other than that, no plans to raise financing.
Rob McEwen
And another question for Perry. This is from Steve Ellis. What are the current projections on when the company will make a profit?
Perry Ing
That’s a good question, Rob. Obviously, as McEwen Mining, the U.S. GAAP reporting company, we expense exploration. So as long as we’re consolidating the results of Los Azules and continuing to spend lots of money advancing the project. Those will always be deducted from the company’s actual profitable operations. So it’s really a bit of an accounting exercise, but I’ll say that the company’s operations as demonstrated this quarter were quite profitable.
Rob McEwen
Thank you, Perry. Next question from [indiscernible] from Belgium. And I’m going to refer this to Michael. With the recent sharp decline in copper prices, how does management see the evolution of McEwen copper in the near future?
Michael Meding
So we don’t build a mine based on a McEwen spot price. We look into the longer-term future. But even looking at today’s spot prices for copper, we think that the Los Azules project will be very profitable. At the moment, we use in our simulations, $3.25 for valuation. And looking forward into the electrification, and what is going on with greenification of our economies, we think there will be significant need for copper in the future, and this will be supported by the copper price, and there’s a significant upside potential for Los Azules. So we’re quite comfortable with regards to the Los Azules project at this point in time.
Rob McEwen
Thank you, Michael. Marie, says, second question, how does management see the evolution of McKean Mining for the rest of this year and for the coming year?
That’s an easy one. We see continued improvement in operations. As Michael said, we see the copper project growing in profile, and we’ll be delivering updated preliminary economic assessment early next year, and we’re driving towards – after that, a feasibility study on the project, where we think there’s – it will become a property that should attract significant attention. And just this morning, I saw someone commenting on the copper price and suggesting a $10 a pound that’s coming in the future. Operator, open for questions online.
Operator
[Operator Instructions] Your first question comes from the line of Jacob Sekelsky with Alliance Global Partners. Your line is open.
Jacob Sekelsky
Hey, Rob.
Rob McEwen
Hi, Jake.
Jacob Sekelsky
Thanks for taking the question. Hey, Rob. So just looking at costs, I mean, they obviously decreased substantially quarter-over-quarter. Do you think there’s further room for improvement in the second half? Or should we expect levels to what we saw in Q2. I know it’s a difficult question with the inflationary environment, but any color there would be helpful.
Rob McEwen
I’ll ask Bill to jump in there.
William Shaver
Yes. So yes, that’s a good question. And I guess the – where we have to look to improve cost is improve production at the Fox complex. So if we look at our cost for Q2, we were slightly under our budget in terms of production, but right on target for cost per ounce and cost per ton. So if we can improve the ore production or the ore processing production, that will have a follow-on impact on our operating costs. So I guess in terms of that operation, it will lower the cost.
In the third – in the – yes, in the third quarter, at Gold Bar, we hope to get back closer to our budget numbers. And so that – in terms of the production of coal. So that should help the cost per ounce at Gold Bar. And then the combination of those two will overall hopefully reduce the cost.
And going forward, when we ramp up Gold Bar South, which has a little bit higher grade, shorter distance to the mill, a little bit lower recovery, lower stripping ratio, then that should help the overall operating cost. And again, I think as we move forward, the ore grade in some of the exploration work that Steve has been doing appears to be at least consistent with what we have seen in the mining operations up till now. So I think the road forward is around trying to improve each of our assets that are operating, and to look to the future expansion in any way that we can.
Jacob Sekelsky
Okay. That makes sense. And sticking with Gold Bar South, can you maybe just touch on the number of ounces that you guys have in the mine plan for that area? And I guess, how long do you expect Gold Bar South to be the dominant source of feed at Gold Bar?
William Shaver
So the total ounces in Gold Bar South recovered is something in the order of 120,000 ounces. And it should operate through 2023 and on into 2024. Based on the present data, it will – in terms of the resource and – that operation will end in 2024. But what we’re hoping is that once we get into the operation and see exactly where the ore is that we’re a bit optimistic that we’re going to find some more ore there.
So once we get our teeth into Gold Bar South and understand how the all occurs and so on, there will be some exploration work that we have to do to understand the extensions of the ore to the north and south, and also downward to lower elevations, which – I would say, the north and south, we’re a bit more optimistic about than the possibility of the ore extending deeper. So I hope that answers your question to some extent.
Jacob Sekelsky
That was helpful. That’s all for me. Thanks again.
Rob McEwen
Thank you, Jake.
Operator
Your next question is from the line of Heiko Ihle with H.C. Wainwright. Your line is open.
Unidentified Analyst
Hey, everyone. This is May [ph] calling in for Heiko. Thanks for taking our call today. So we’re looking at Fox, and you spent $2.6 million on exploration in the quarter. Extrapolating that to the year, we’re at $10.4 million. So right in line with your forecast of $10 million. And then next year, we’re looking at $15 million of spend. So a strong 50% increase. Can you provide a bit of color on where exactly those funds will be spent? And how much of the 50% increase is attributable to higher costs? And how many meters do you think you can drill in 2023?
Rob McEwen
Steve, would you like to do…
Stephen McGibbon
Yes. So I can certainly add color to that question. Firstly, drilling costs – if we look back a year ago, our two primary concerns with respect to drilling was: one, the availability of drills; and two, the likely cost increase in drilling in the future, late 2022, 2023. And what we’ve seen so far this year that drills generally have been more available than what we had felt a year earlier. Perhaps the drillers are increasing their capacity with more drills. And we found that our drilling costs are in line and specifically at Fox, below what we had budgeted for unit cost for the year. So that has been gratifying certainly for us.
You mentioned the spend on the year-to-date for exploration. Our plan on surface at the Fox Complex for the second half of this year is to complete about 39,000 meters of drilling, and that will take for the most part, five drills drilling continuously, both at the Stock property and at the Fox – Black Fox property, primarily at Grey Fox. We – in order to complete our goals for 2023. A very important part of the program next year will be to ensure we’re prepared and actively drilling on targets that can typically only be drilled in winter often because of difficult conditions, and we’re beginning preparation for that part of our program next year.
And on average, the exploration program this year has begun to migrate from delineation-related work focused on improving the payback on the PEA, in and around the Stock Mine and on the margins of Stock West. That drilling is continuing. But now we’re also migrating toward looking at a very attractive targets that we’ve been aware of and we have been planning to follow up in the future program, some of those targets will be deeper than have been drilled in the last year, 1.5 years, but also have the potential to – with success bring meaningful improvement to our resource base, either at Stock or on Grey Fox.
So we believe the second half of the year is going to be quite an exciting one. We are accelerating our spend versus the first half of the year. And we expect the second half of the year, the spend will be in the order of about $7 million at the Fox Complex. And similarly, we’re – we expect to be ramping up drilling in time in Nevada as well. But specific to Fox, we are planning already for our winter drill program and expect to have quite an exciting program taking us through to the end of next year.
Unidentified Analyst
Great. Thank you. That helps a lot.
Operator
[Operator Instructions] Your next question comes from the line of Mark Ehlert with LendUS. Your line is open.
Mark Ehlert
Okay. Thank you so much. Just a question for Rob. When you were going over the valuation and comparing it to Josemaria, were you talking about pre or post split value?
Perry Ing
Hi, Mark. Rob had to step out of the room for – take a call. But maybe Stephen can answer these questions.
Stephen McGibbon
Yes. So Rob’s numbers were split as reverse basis [indiscernible] per share value.
Mark Ehlert
Great. Thank you so much. I only asked because I know that it is highly sensitive to the price of copper. Just wanted to make sure. That’s all for me. Thank you all.
Perry Ing
Thanks, Mark.
Operator
There are no further questions at this time. Mr. Rob McEwen, I turn the call back over to you.
Perry Ing
Thanks, operator. As I mentioned, Rob, I had to step out of the room. But on behalf of the management team at McEwen Mining, thanks for joining the second quarter results call, and we look forward to speaking to you again in the future.
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