Last Update 15 Dec 25

MUX: Future Returns Will Benefit From Los Azules Post Feasibility Economics

Analysts have raised their price target on McEwen to $21.50 from $17.00, citing the Los Azules feasibility study's robust $2.9B post tax NPV, 19.8% IRR, attractive payback period, and manageable financing needs, despite higher capital costs.

Analyst Commentary

Bullish analysts view the updated price target as a reflection of Los Azules evolving into a cornerstone asset, with the feasibility study confirming a sizable, long duration production profile that can materially reshape McEwen's earnings and net asset value over time.

Bullish Takeaways

Bullish analysts highlight the $2.9B post tax NPV and 19.8 percent IRR as supportive of a higher valuation multiple, arguing that the project underpins long term cash flow visibility.
The 3.9 year payback period is seen as enhancing capital efficiency, shortening the time to value realization and reducing perceived execution risk in discounted cash flow models.
The 21 year mine life and strong early year output, averaging more than 200,000 tonnes annually in the first five years, are viewed as key drivers of scale, positioning McEwen for sustained growth in copper exposure.
Interest from the Argentinian government, coupled with the low cost, low impact operating profile, is seen as a strategic advantage that could facilitate permitting, infrastructure support, and ultimately lower risk around project execution.

Bearish Takeaways

Bearish analysts remain cautious on the steep upfront capital requirements, warning that any cost overruns or delays could erode the IRR and extend the payback profile relative to projections.
There is concern that securing financing on attractive terms may prove challenging in volatile capital markets, potentially leading to equity dilution that tempers per share upside.
Some analysts flag country and regulatory risk in Argentina as a lingering overhang, noting that changes in fiscal regimes, inflation, or political priorities could pressure project economics.
Execution risk around building and ramping a large scale copper project is seen as nontrivial, with any setbacks in construction or commissioning likely to weigh on sentiment and constrain multiple expansion.

What's in the News

McEwen is advancing three growth targets at the Gold Bar Mine Complex in Nevada, with drilling at Lookout Mountain completed for 2025 and engineering and permitting now moving the project toward potential production, alongside ongoing work at Windfall and Unity Ridge to extend mine life and increase resources (Key Developments).
New drill results at the Froome Mine in the Fox Complex have significantly extended high grade gold mineralization vertically and to the west, supporting plans for concurrent mining with the Stock Mine from 2026 and potentially lowering future production costs per ounce (Key Developments).
Encouraging 2025 drilling at Windfall, part of the Gold Bar Mine Complex, continues to expand near surface oxide and deeper high grade mineralization, reinforcing expectations of a larger resource base and improved economics for the complex (Key Developments).
McEwen reported lower consolidated production for the third quarter and first nine months of 2025 versus the prior year and reduced its full year 2025 production guidance to a range of 112,000 to 123,000 gold equivalent ounces, compared with the prior range of 120,000 to 140,000 GEOs (Key Developments).
An updated feasibility study and technical work on the Los Azules copper project in Argentina highlight additional porphyry targets, potential mine life extensions using Nuton leach technology, and a renewable power line to be built and funded by YPF Luz under a long term agreement, supporting a large scale, lower impact development case (Key Developments).

Valuation Changes

Fair Value Estimate is unchanged at $22.20 per share, indicating no revision to the long term intrinsic value assessment.
The Discount Rate has risen slightly from 7.86 percent to approximately 7.92 percent, modestly increasing the required return and marginally reducing discounted cash flow valuations.
Revenue Growth has fallen meaningfully from about 55.25 percent to 44.78 percent, reflecting a more tempered outlook for top line expansion.
Net Profit Margin has increased from roughly 73.18 percent to 78.07 percent, signaling expectations for improved profitability and operating leverage.
Future P/E has expanded from 3.42x to 3.96x, implying a somewhat higher valuation multiple on forward earnings in light of the updated forecasts.

Progress on copper projects and focus on responsible mining could enhance growth prospects, equity value, and access to ESG-focused capital.
Ongoing operational improvements and successful exploration at gold and silver mines may drive higher margins, production, and long-term revenue growth.
Persistent operational setbacks, execution risks, and prolonged permitting could weigh on profitability, strain capital resources, and limit future growth and returns for shareholders.

Catalysts

About McEwen

Engages in the exploration, development, production, and sale of gold and silver deposits in the United States, Canada, Mexico, and Argentina.What are the underlying business or industry changes driving this perspective?

The accelerating global demand for copper driven by clean energy transition and electrification is likely to positively impact McEwen's future revenue growth; progress on the Los Azules project, with feasibility study due in 2025 and improved government support (e.g., elimination of export duties), positions the company to capitalize on this trend as copper prices rise.
Continued investment in exploration and drill success at existing mines (e.g., Froome West, Grey Fox, Tartan) support the potential for higher future gold and silver production, extending mine life and lowering production costs, which can boost both revenue and operating margins over time.
Ongoing cost optimization and operational improvements at key assets like Fox Complex and Gold Bar, combined with increased production expected in the second half of the year, are likely to expand net margins and increase operating cash flow.
The spin-out and potential IPO of McEwen Copper, supported by progress on regulatory approvals (RIGI) and robust market interest, could unlock higher equity value and provide additional liquidity for balance sheet flexibility and future growth initiatives.
The company's focus on responsible mining, safety, and community engagement aligns with growing institutional preference for ESG-friendly projects, improving potential access to premium financing and offtake agreements, which could lower long-term cost of capital and support earnings growth.

McEwen Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming McEwen's revenue will grow by 38.4% annually over the next 3 years.
Analysts assume that profit margins will increase from -8.1% today to 45.1% in 3 years time.
Analysts expect earnings to reach $201.4 million (and earnings per share of $2.59) by about September 2028, up from $-13.5 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 5.4x on those 2028 earnings, up from -54.2x today. This future PE is lower than the current PE for the CA Metals and Mining industry at 22.5x.
Analysts expect the number of shares outstanding to grow by 2.23% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.32%, as per the Simply Wall St company report.

McEwen Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing operational underperformance and production shortfalls at core assets, such as the Q2 production being slightly behind objectives due to manpower issues and ore blend/recovery challenges at San José, could persist, resulting in lower-than-expected revenue and reduced cash flow.
Execution risks around major development projects, including Los Azules in Argentina and the Tartan mine restart, may lead to cost overruns, delays in permitting (notably 2–3 years for Nevada projects and uncertainty around RIGI approval in Argentina), and higher capital requirements, compressing net margins and hindering earnings growth.
Heightened regulatory and permitting timelines, as evidenced by multiyear approval periods in Nevada and Argentina (with the RIGI process described as new and subject to delays), could restrict project development pace, delaying future revenue streams and impacting long-term growth projections.
The need for updated infrastructure, such as the dewatering and replacement of obsolete milling and crushing circuits at the Tartan mine, presents unforeseen capital expenditures and potentially prolonged downtimes, which could pressure profitability and delay the expected increase in operating income.
The history and likelihood of future equity raises or debt financing to fund capital-intensive exploration and expansion-despite current liquidity-could lead to shareholder dilution, higher interest costs, and consequently limit future per-share earnings and share price appreciation.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $15.312 for McEwen based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $17.0, and the most bearish reporting a price target of just $13.75.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $446.1 million, earnings will come to $201.4 million, and it would be trading on a PE ratio of 5.4x, assuming you use a discount rate of 7.3%.
Given the current share price of $13.56, the analyst price target of $15.31 is 11.4% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

MUX: Robust Los Azules Study Will Drive Long-Term Value And Production Uplift