Should McEwen’s (MUX) El Gallo Leach-Pad Plan Signal a Shift in Its Capital Strategy?

• McEwen Inc. recently received an extension of the Environmental Impact Assessment for its El Gallo Mine in Mexico, clearing the way for Phase 1 mill construction targeting mid-2026 and an initial gold pour in mid-2027, supported by a purchased ball mill already onsite and an estimated remaining capital cost of US$25,000,000.
• A distinctive aspect of this development is that Phase 1 production will come from reprocessing previously mined leach-pad material, which is expected to limit new development spending and could improve free cash flow while Phase 2 work on in-situ silver aims to lengthen the mine’s operating life.
• We’ll now examine how using previously mined El Gallo material to generate new production could reshape McEwen’s broader investment narrative.

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McEwen Investment Narrative Recap

To own McEwen, you need to believe the company can turn its project pipeline into profitable, growing production despite recent losses and a high price to sales ratio. The El Gallo EIA extension strengthens the near term production growth story by adding a relatively low capital, 20,000 GEOs per year phase, but it does not remove the broader execution and financing risks that still sit around the portfolio.

The most relevant recent development alongside El Gallo is the Gold Bar Mine Complex work in Nevada, where McEwen is trying to convert resources and extend mine life at Lookout Mountain, Windfall and Unity Ridge. Together with El Gallo, these projects frame the main production growth catalysts investors are watching, while also adding to the list of developments that need to be delivered without cost overruns or delays.

Yet investors should also be aware that cost overruns or permitting setbacks at these growth projects could...

Read the full narrative on McEwen (it's free!)

McEwen's narrative projects $446.1 million revenue and $201.4 million earnings by 2028.

Uncover how McEwen's forecasts yield a $22.20 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Seven fair value estimates from the Simply Wall St Community range from US$8.69 to US$160.54 per share, underscoring how far apart individual views can be. When you weigh those opinions against the execution risk around McEwen’s major development projects, it becomes even more important to stress test your own expectations for future performance.

Explore 7 other fair value estimates on McEwen - why the stock might be worth less than half the current price!

Build Your Own McEwen Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your McEwen research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free McEwen research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate McEwen's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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