McEwen reported a 23% jump in Indicated resources at Grey Fox to 1.9 million ounces, plus 436,000 ounces Inferred, and reset its development plan to include both underground and open pit options. The resource was estimated at a US$3,000 per ounce gold price and feeds a prefeasibility study slated for Q2 2026. The scale is now material for the Fox Complex, but valuation will hinge on price assumptions, mine scheduling between underground and open pit, and land access for pit laybacks.
Grey Fox now carries 19.5 million tonnes at 3.02 g/t Au Indicated (1.892 Moz) and 5.1 million tonnes at 2.66 g/t Au Inferred (0.436 Moz). Within that, the open pit component stands at 404,000 ounces Indicated at 2.55 g/t, while underground accounts for 1.487 million ounces Indicated at 3.18 g/t. For Timmins, these grades are competitive: 2.5 g/t open pit is high quality and 3.0 g/t underground is workable if geometry supports bulk mining. Management ties Grey Fox to a plan to double production by 2030, but investors should remember resources are not reserves and have no demonstrated economic viability until the PFS converts a portion under realistic price and cost decks.
The resource uses a US$3,000 per ounce gold price and variable cut-offs: 0.4 g/t for open pit and 1.35 g/t for underground. These choices expand pit shells and envelopes to meet Reasonable Prospects for Eventual Economic Extraction. They are defensible for resource reporting, but reserve conversion in the PFS will almost certainly use lower price assumptions and detailed cost models. That can tighten cut-offs, shrink pit shells, and reduce contained ounces, particularly at the margins. Sensitivity tables in the PFS will matter more than the headline resource. Watch the price deck, processing recovery assumptions, and strip ratios in the open pit cases, as well as development meters per ounce and dilution in the underground cases.
The company is signaling an underground-first phase to bring forward cash flow using existing ramp and portal infrastructure at Grey Fox. Two zones stand out. Gibson carries 393,000 ounces Indicated at 2.72 g/t and 297,000 ounces Inferred at 2.59 g/t and sits near the ramp. Whiskey Jack, smaller but higher grade, holds 122,000 ounces Indicated at 5.16 g/t. In Archean greenstones, underground ore in the 2.5–3.5 g/t range is typically mined via mechanized longhole stoping if veins are continuous and widths allow. Proximity to existing access can cut initial capex and time to ore. The trade-off is execution risk: grade control, dilution management, and stope sequencing need to be tight to realize margins at these grades.
Open pit tonnage is included in the resource, but only within current mineral claims. The company notes that a layback agreement with an adjacent owner could unlock more open pit resources in future updates. This is a common constraint in Timmins where property boundaries bisect pits. The risk is schedule slippage and additional capital if negotiations take time or require compensation. On the permitting side, open pits add surface disturbance and can complicate timelines compared with underground-only starts. The upside is that a 2.55 g/t open pit feed is unusually strong and, if accessible, can drive high margins early in the mine life. The PFS should quantify the value gap between a constrained pit and a layback-enabled case.
The adjacent Stroud Project, acquired in 2024, carries a historical estimate of roughly 270,000 ounces that is not NI 43-101 compliant. The company drilled over 6,000 meters in 2025 to validate this and intends to fold it into a future Fox Complex update. Until a compliant resource is published, treat Stroud as upside rather than base case. If verified and contiguous with Grey Fox mineralization, Stroud could extend pit shells or add underground panels and smooth a multi-year mine schedule. The geological question is continuity at economic widths across property lines; the PFS and subsequent updates should clarify domain modeling and structural controls.
Recent holes received after the resource cut-off include 10.1 g/t over 5.8 meters, 5.2 g/t over 5.4 meters, and 23.8 g/t over 1.6 meters. These intercepts point to a favorable grade distribution tail within the system, which is important for underground stoping economics and for blending in an open pit scenario. A $5–10 million 2026 drilling budget is aligned with the goal of converting Inferred to Indicated in development areas and extending mineralization along strike and at depth. Across the sector, sustained exploration spend has supported reserve life; Coeur’s 2025 program at Kensington is a case in point, where targeted expansion and infill drilling underpinned production gains and lower unit costs. Grade remains the most reliable lever for cost control.
The financing window for juniors improved in 2025, with several peers raising sizable equity. That matters because Grey Fox, if advanced, will require capital beyond PFS spend. Options include equity, project debt, and selective streaming or royalty deals. Strategic partnerships are also back in play. Majors have been co-funding early-stage work with juniors to secure optionality, as seen in BHP’s exploration agreements in Scandinavia. While Grey Fox sits in a mature Canadian district with established infrastructure and permitting pathways, investors should still factor regulatory and social license timelines into risk-adjusted valuations. The contrast with South Africa’s tightening regime underscores the relative jurisdictional strength of Ontario.
Key deliverables include the mine plan split between underground and open pit, reserve conversion rates from the current resource, initial and sustaining capex, operating cost per tonne, metallurgical recoveries, and a clear schedule to first ore. Pay attention to the price deck and sensitivity to lower gold prices, the status of any open pit layback negotiations, and how the model treats dilution and ore loss in Gibson and Whiskey Jack. A credible path to early underground tonnage using existing ramps, plus a line of sight on open pit access, would position Grey Fox as a core contributor to the Fox Complex. Delays on land access or a significant reduction in ounces at reserve cut-offs would be notable red flags.
