OPERATING SEGMENT REPORTING

3 Months Ended

Mar. 31, 2017

OPERATING SEGMENT REPORTING

OPERATING SEGMENT REPORTING

NOTE 11 OPERATING SEGMENT REPORTING

McEwen Mining is a mining and minerals exploration company focused on precious metals in Argentina, Mexico and the United States. The Company’s chief operating decision maker (“CODM”) reviews the operating results, assesses performance and makes decisions about allocation of resources to these segments at the geographic region level or major mine/project where the economic characteristics of the individual mines or projects are not alike.  As a result, these operating segments also represent the Company’s reportable segments. The Company’s business activities that are not considered operating segments and not provided to the CODM for review are included in Corporate and other and are provided in this note for reconciliation purposes.

The CODM reviews segment income (loss), defined as gold and silver sales less production costs applicable to sales, mine development costs, exploration costs, property holding costs and general and administrative expenses for all segments except for the MSC segment which is evaluated based on the attributable equity income. Gold and silver sales and production costs applicable to sales for the reportable segments are reported net of intercompany transactions. 

Significant information relating to the Company’s reportable operating segments is summarized in the tables below:

									Total
									Segment
Three months ended March 31, 2017	Mexico		MSC		Los Azules		Nevada		Income (loss)
Gold and silver sales	$	14,833	$	—	$	—	$	—	$	14,833
Production costs applicable to sales		(6,984)		—		—		—		(6,984)
Mine development costs		(155)		—		—		(960)		(1,115)
Exploration costs		(1,539)		—		(6,301)		(484)		(8,324)
Property holding costs		(982)		—		(1)		(205)		(1,188)
General and administrative expenses		(839)		—		(208)		(426)		(1,473)
Income from investment in Minera Santa Cruz S.A. (net of amortization)		—		190		—		—		190
Segment income (loss)	$	4,334	$	190	$	(6,510)	$	(2,075)	$	(4,061)
Corporate and other
Other exploration										(120)
General and administrative expenses										(2,820)
Depreciation										(327)
Revision of estimates and accretion of reclamation obligations										(105)
Interest and other expense										(68)
Gain on sale of assets										11
Unrealized gain on derivatives										1,791
Foreign currency gain										25
Net loss before income taxes									$	(5,674)

									Total
									Segment
Three months ended March 31, 2016	Mexico		MSC		Los Azules		Nevada		Income (loss)
Gold and silver sales	$	21,190	$	—	$	—	$	—	$	21,190
Production costs applicable to sales		(9,067)		—		—		—		(9,067)
Mine development costs		(78)		—		—		(620)		(698)
Exploration costs		(785)		—		(310)		(588)		(1,683)
Property holding costs		(830)		—		(93)		(224)		(1,147)
General and administrative expenses		(719)		—		(39)		(55)		(813)
Income from investment in Minera Santa Cruz S.A. (net of amortization)		—		4,963		—		—		4,963
Segment income (loss)	$	9,711		4,963	$	(442)	$	(1,487)	$	12,745
Corporate and other
Other exploration										(57)
General and administrative expenses										(1,955)
Depreciation										(239)
Revision of estimates and accretion of reclamation obligations										(124)
Interest and other income										228
Other-than-temporary impairment on marketable equity securities										(285)
Gain on sale of marketable securities										22
Foreign currency gain										783
Net income before income taxes									$	11,118

Geographic information

	Long-lived Assets as at				Revenue(1)
	March 31,		December 31		Three months ended March 31,
	2017		2016		2017		2016
Canada	$	1,409	$	663	$	—	$	—
Mexico		27,098		27,582		14,833		21,190
USA		37,646		37,620		—		—
Argentina(2)		351,510		353,879		—		—
Total consolidated	$	417,663	$	419,744	$	14,833	$	21,190

(1) Presented based on the location from which the product originated. 

(2) Includes Investment in MSC of $160.0 million as of March 31, 2017 (December 31, 2016 - $162.3 million).