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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to

Commission File Number: 001-33190

MCEWEN MINING INC.

(Exact name of registrant as specified in its charter)

Colorado

84-0796160

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

150 King Street West, Suite 2800, Toronto, Ontario Canada M5H 1J9

(Address of principal executive offices) (Zip code)

(866) 441-0690

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, no par value

MUX

New York Stock Exchange (“NYSE”)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 362,010,925 shares outstanding as of July 30, 2019.

Table of Contents

MCEWEN MINING INC.

FORM 10-Q

Index

Part I        FINANCIAL INFORMATION

Item 1.

    

Financial Statements

    

3

Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2019 and 2018 (unaudited)

3

Consolidated Balance Sheets at June 30, 2019 and December 31, 2018 (unaudited)

4

Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2019 and 2018 (unaudited)

5

Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018 (unaudited)

6

Notes to Consolidated Financial Statements (unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosure about Market Risk

40

Item 4.

Controls and Procedures

42

Part II        OTHER INFORMATION

Item 1A.

Risk Factors

43

Item 4

Mine Safety Disclosures

43

Item 6.

Exhibits

44

SIGNATURES

45

2

Table of Contents

PART I

Item 1. FINANCIAL STATEMENTS

MCEWEN MINING INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

(in thousands of U.S. dollars, except per share)

Three months ended June 30,

Six months ended June 30,

    

2019

    

2018

    

2019

    

2018

Revenue from gold and silver sales

$

36,383

$

33,806

$

51,966

$

74,847

OPERATING EXPENSES:

Production costs applicable to sales

 

24,699

 

20,615

 

35,848

 

44,338

Depreciation and depletion

7,007

4,099

10,013

7,189

Gross profit

4,677

9,092

6,105

23,320

OTHER OPERATING EXPENSES:

Advanced projects

 

2,095

 

2,756

 

4,741

 

5,760

Exploration

 

5,872

 

9,609

 

10,022

 

21,484

General and administrative

 

3,172

 

2,997

 

5,433

 

6,131

Loss from investment in Minera Santa Cruz S.A. (note 8)

 

4,137

 

2,265

 

6,447

 

2,477

Depreciation

 

169

 

273

 

321

 

633

Revision of estimates and accretion of asset retirement obligations (note 11)

 

427

 

288

 

888

 

582

 

15,872

 

18,188

 

27,852

 

37,067

Operating loss

 

(11,195)

 

(9,096)

 

(21,747)

 

(13,747)

OTHER (EXPENSE) INCOME:

Interest and other finance (expense) income, net

 

(2,783)

 

354

 

(3,296)

 

220

Other income (expense) (note 3)

463

1,222

1,510

(342)

Total other (expense) income

 

(2,320)

 

1,576

 

(1,786)

 

(122)

Loss before income and mining taxes

(13,515)

(7,520)

(23,533)

(13,869)

Income and mining tax recovery

501

2,140

383

3,278

Net loss and comprehensive loss

$

(13,014)

$

(5,380)

$

(23,150)

$

(10,591)

Net loss per share (note 13):

Basic and Diluted

$

(0.04)

$

(0.02)

$

(0.07)

$

(0.03)

Weighted average common shares outstanding (thousands) (note 13):

Basic and Diluted

 

346,998

 

337,087

 

346,095

 

337,075

Shareholders' distribution declared per common share (note 12)

$

$

$

$

0.005

The accompanying notes are an integral part of these consolidated financial statements.

3

Table of Contents

MCEWEN MINING INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands of U.S. dollars)

June 30,

December 31,

    

2019

    

2018

 

ASSETS

Current assets:

Cash and cash equivalents

$

9,325

$

15,756

Investments (note 4)

 

5,147

 

3,131

Receivables and other current assets (note 5)

 

4,605

 

3,765

Inventories (note 6)

 

32,987

 

22,039

Restricted cash (note 12)

13,112

14,685

Total current assets

 

65,176

 

59,376

Mineral property interests and plant and equipment, net (note 7)

 

436,120

 

423,879

Investment in Minera Santa Cruz S.A. (note 8)

 

119,347

 

127,814

Other assets (note 6 and note 17)

 

2,564

 

5,872

TOTAL ASSETS

$

623,207

$

616,941

LIABILITIES & SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

28,726

$

30,817

Flow-through share premium (note 12)

2,344

2,950

Lease liabilities, current portion (note 9)

2,007

1,511

Asset retirement obligation, current portion (note 11)

 

1,218

 

734

Total current liabilities

 

34,295

 

36,012

Lease liabilities, long-term (note 9)

 

6,001

 

4,918

Long-term debt (note 10)

 

24,678

 

24,603

Long-term debt from related party (note 10)

24,678

24,603

Asset retirement obligation, long-term (note 11)

33,771

28,668

Other liabilities

5,208

5,765

Deferred income and mining tax liability

6,562

6,426

Total liabilities

$

135,193

$

130,995

Shareholders’ equity:

Common stock and additional paid-in capital, no par value, 500,000 shares authorized (in thousands);

Common: 361,957 as of June 30, 2019 and 344,560 as of December 31, 2018 issued and outstanding (in thousands) (note 12)

 

1,480,006

 

1,457,422

Warrants (note 12)

2,634

Accumulated deficit

 

(994,626)

 

(971,476)

Total shareholders’ equity

 

488,014

 

485,946

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY

$

623,207

$

616,941

The accompanying notes are an integral part of these consolidated financial statements.

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MCEWEN MINING INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands of U.S. dollars and shares)

Common Stock

and Additional

Paid-in Capital

Warrants

Accumulated

Three months ended June 30, 2018 and 2019:

    

Shares

    

Amount

  

Amount

  

Deficit

  

Total

Balance, March 31, 2018

 

337,086

$

1,442,613

$

3,823

$

(931,817)

$

514,619

Stock-based compensation

 

193

193

Exercise of stock options

 

4

5

5

Shares issued for acquisition of mineral property interests

178

391

391

Net loss

(5,380)

(5,380)

Balance, June 30, 2018

 

337,268

$

1,443,202

$

3,823

(937,197)

$

509,828

Balance, March 31, 2019

359,986

$

1,477,342

$

2,467

$

(981,612)

$

498,197

Stock-based compensation

 

136

136

Exercise of stock options

36

37

37

Units issued in connection with registered direct offering, net of share issue costs

1,935

2,491

167

2,658

Net loss

 

(13,014)

(13,014)

Balance, June 30, 2019

 

361,957

$

1,480,006

$

2,634

(994,626)

$

488,014

Common Stock

 

and Additional

 

Paid-in Capital

Warrants

Accumulated

 

Six months ended June 30, 2018 and 2019:

    

Shares

    

Amount

    

Amount

    

Deficit

    

Total

 

Balance, December 31, 2017

 

337,051

$

1,444,056

$

3,823

$

(926,606)

$

521,273

Stock-based compensation

 

 

396

 

 

396

Exercise of stock options

 

39

 

45

 

 

45

Shareholder distribution

 

 

(1,686)

(1,686)

Shares issued for acquisition of mineral property interests

178

391

391

Net loss

(10,591)

(10,591)

Balance, June 30, 2018

 

337,268

$

1,443,202

$

3,823

$

(937,197)

$

509,828

Balance, December 31, 2018

344,560

$

1,457,422

$

$

(971,476)

$

485,946

Stock-based compensation

 

197

197

Exercise of stock options

258

260

260

Units issued in connection with registered direct offering, net of share issue costs

16,129

20,276

2,634

22,910

Sale of common stock in ATM offering

1,010

1,851

1,851

Net loss

 

(23,150)

(23,150)

Balance, June 30, 2019

 

361,957

$

1,480,006

$

2,634

$

(994,626)

$

488,014

The accompanying notes are an integral part of these consolidated financial statements.

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MCEWEN MINING INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands of U.S. dollars)

Six months ended June 30,

    

2019

    

2018

Cash flows from operating activities:

Cash paid to suppliers and employees

$

(57,286)

$

(74,939)

Cash flow from revenues

 

50,672

 

75,464

Interest paid (note 10)

(2,598)

Interest received

 

60

 

96

Cash (used in) provided by operating activities

 

(9,152)

 

621

Cash flows from investing activities:

Additions to mineral property interests and plant and equipment

 

(24,484)

 

(27,405)

Investment in marketable equity securities (note 4)

 

 

(510)

Proceeds from sale of investments (note 4)

 

 

3,667

Return of investment received from Minera Santa Cruz S.A. (note 8)

 

2,020

 

7,231

Cash used in investing activities

 

(22,464)

 

(17,017)

Cash flows from financing activities:

Net proceeds from equity registered direct offering (note 12)

22,910

Proceeds of at-the-market common share issuance (note 12)

1,851

Proceeds of exercise of stock options (note 12)

260

45

Payment of lease obligations (note 9)

(1,026)

Shareholders' distribution (note 12)

(1,685)

Cash provided by (used in) financing activities

 

23,995

 

(1,640)

Effect of exchange rate change on cash and cash equivalents

 

(383)

 

580

(Decrease) in cash, cash equivalents and restricted cash

 

(8,004)

 

(17,456)

Cash, cash equivalents and restricted cash, beginning of period

 

30,489

 

37,153

Cash, cash equivalents and restricted cash, end of period (note 17)

$

22,485

$

19,697

Reconciliation of net loss to cash (used in) provided by operating activities:

Net loss

$

(23,150)

$

(10,591)

Adjustments to reconcile net loss from operating activities:

Loss from investment in Minera Santa Cruz S.A., net of amortization (note 8)

 

6,447

 

2,477

(Gain) loss on investments (note 4)

(1,752)

2,502

Loss on disposal of fixed assets

 

 

99

Income and mining tax recovery

 

(383)

 

(3,278)

Stock-based compensation (note 12)

 

197

 

396

Revision of estimates and accretion of asset retirement obligations (note 11)

888

582

Unrealized foreign exchange loss (gain) (note 11)

610

(629)

Depreciation and amortization

 

6,768

 

8,188

Effect of exchange rate changes on cash and cash equivalents

 

383

 

(580)

Change in non-cash working capital items:

(Increase) decrease in other assets related to operations

 

(2,895)

 

6,492

Increase (decrease) in liabilities related to operations

3,735

(5,037)

Cash (used in) provided by operating activities

$

(9,152)

$

621

The accompanying notes are an integral part of these consolidated financial statements.

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2019

(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)

NOTE 1 NATURE OF OPERATIONS AND RECENT ACCOUNTING PRONOUNCEMENTS

Nature of Operations and Basis of Presentation

McEwen Mining Inc. (“McEwen Mining”, or the “Company”) was organized under the laws of the State of Colorado on July 24, 1979. The Company is engaged in the exploration, development, production and sale of gold and silver and exploration for copper.

The Company operates in the United States, Canada, Mexico and Argentina.  The Company owns the Gold Bar gold mine in Nevada, the Black Fox gold mine in Ontario, Canada, the El Gallo Project in Sinaloa, Mexico, the Los Azules copper deposit in San Juan, Argentina, the Fenix silver-gold project in Sinaloa, Mexico, and a portfolio of exploration properties in Nevada, Canada, Mexico and Argentina. The Company also owns a 49% interest in Minera Santa Cruz S.A. (“MSC”), owner of the producing San José silver-gold mine in Santa Cruz, Argentina, which is operated by the joint venture majority owner, Hochschild Mining plc.

The interim consolidated financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and are unaudited. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading.

In management’s opinion, the unaudited Consolidated Statements of Operations and Comprehensive Loss (“Statement of Operations”) for the three and six months ended June 30, 2019 and 2018, the unaudited Consolidated Balance Sheets as at June 30, 2019 and December 31, 2018, the unaudited Consolidated Statement of Changes in Shareholders’ Equity for the three and six months ended June 30, 2019 and 2018, and the unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited consolidated financial statements. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto and summary of significant accounting policies included in the Company’s annual report on Form 10-K for the year ended December 31, 2018. Except as noted below, there have been no material changes in the footnotes from those accompanying the audited consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2018. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Inter-company accounts and transactions have been eliminated.

Recently Adopted Accounting Pronouncements

Leases – ASC 842: From 2016 to 2019, the FASB issued multiple accounting standard updates (“ASU”) regarding the new ASC 842. The ASUs outline amendments and updates to ASC 842, which provides that a lessee should recognize the assets and the liabilities that arise from leases, including operating leases. Under the new requirements, a lessee is required to recognize in the statement of financial position a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. Adoption of this ASC was completed by the Company under a modified retrospective transition method with certain practical expedients. The Company’s initial date of adoption was January 1, 2019; the adoption of ASC 842 did not result in significant changes to the financial statements.

Practical expedients and elections under ASUs and ASC 842 made by the Company are as follows:

ASU 2018-11: This update permitted an entity to elect an optional transitional practical expedient to continue to apply ASC 840, Leases, including its disclosure requirements, in the comparative periods presented in the year of adoption of ASC 842. Under this optional practical expedient, the Company applied the transition provisions

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2019

(tabular amounts are in thousands of U.S. dollars, unless otherwise noted) (Continued)

on January 1, 2019 (the date of adoption) rather than January 1, 2017 (the beginning of the earliest comparative period presented); first reporting under the new standard was for the first quarter of 2019.  Upon adoption of ASC 842, the Company recognized a cumulative-effect adjustment to the opening accumulated deficit balance.

Package of practical expedients – which permits an entity to (a) not reassess whether expired or existing contracts contain leases, (b) not reassess lease classification for existing or expired leases and (c) not consider whether previously capitalized initial direct costs would be appropriate under the new standard. The Company opted to elect the package of practical expedients.

Hindsight practical expedient – which permits an entity to use hindsight in determining the lease term. The Company opted to elect this provision.

Easements practical expedient – which permits an entity to elect an optional transitional practical expedient to not evaluate land easements that exist or expire before the entity’s adoption of ASC 842 that were not previously accounted for as leases under ASC 840. The Company opted to elect this transitional provision and as a result did not evaluate any of its land agreements.

Short term election – which permits an entity to elect not to apply lease accounting to leases that are not greater than 12 months. The Company elected this short term election.

Non-lease component election – which permits lessees to elect to account for non-lease components as part of the lease component to which they relate; an election made by class of underlying asset. This election is not relevant for the Company and therefore, the Company did not make the election.

The adoption included the following overall impact (a) increase the Company’s recorded assets and liabilities, (b) increase related depreciation and amortization expense, (c) increase interest expense and (d) decrease lease/rental expenses. Note 9 Leases within the financial statements details the Company’s cumulative-effect adjustment to the opening accumulated deficit balance.

Lease Accounting Policy: Contracts entered into are analyzed to identify whether the contract contains an operating or financing lease according to ASC 842.  If a contract is determined to contain a lease, the Company includes the lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term within the Consolidated Balance Sheets. Related depreciation and amortization expense and interest expense is recorded within the Consolidated Statements of Operations. For leases with a term of twelve months or less, an accounting policy election is made to not recognize lease assets and lease liabilities. The Company has not elected to account for non-lease components as part of the lease component to which they relate.

Operating and right-of-use (“ROU”) asset balances and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term.  The Company utilizes the incremental borrowing rate (“IBR”) in determining the present value of the future lease payments. IBR represents the rate of interest that a lessee would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. Each lease’s IBR is determined by using the average bond yield ratings for comparable companies.

Recently Issued Accounting Pronouncements

Changes to the Disclosure Requirements for Fair Value Measurement: In August 2018, the FASB issued ASU 2018- 13, “Fair Value Measurement (ASC 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the disclosure requirements for fair value measurements by removing, modifying or adding disclosures. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. Certain disclosures in the update will be applied retrospectively, while others will be applied prospectively. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements.

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2019

(tabular amounts are in thousands of U.S. dollars, unless otherwise noted) (Continued)

Reclassifications

Certain amounts in prior years have been reclassified to conform to the 2019 presentation. Reclassified amounts were not material to the financial statements and relate to the presentation of Other Operating Expenses. Advanced projects in the Statement of Operations includes mine development costs, property holding and general and administrative costs associated with our projects at an advanced stage. Exploration in the Statement of Operations includes exploration expenses, property holding and general and administrative costs associated with exploration stage projects. General and Administrative in the Statement of Operations include corporate (head office) general and administrative costs

NOTE 2 OPERATING SEGMENT REPORTING

McEwen Mining is a mining and minerals production and exploration company focused on precious metals in Argentina, Mexico, Canada, and the United States. The Company’s chief operating decisions 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 are included in General and Administrative 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, depreciation and depletion, advanced projects and exploration costs, for all segments except for the MSC segment which is evaluated based on the attributable equity income or loss. 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:

Three months ended June 30, 2019

    

USA

    

Canada

    

Mexico

    

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

11,522

$

16,049

$

8,812

$

$

$

36,383

Production costs applicable to sales

(7,835)

(10,639)

(6,225)

 

(24,699)

Depreciation and depletion

(2,568)

(4,221)

(218)

(7,007)

Gross profit

1,119

1,189

2,369

4,677

Advanced projects

(390)

(1,705)

 

(2,095)

Exploration

(1,292)

(4,062)

(518)

(5,872)

Loss from investment in Minera Santa Cruz S.A.

(4,137)

 

(4,137)

Segment (loss) income

$

(563)

$

(2,873)

$

664

$

(4,137)

$

(518)

$

(7,427)

General and Administrative and other

(6,088)

Loss before income and mining taxes

$

(13,515)

Six months ended June 30, 2019

    

USA

    

Canada

Mexico

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

12,364

$

24,992

$

14,610

$

$

$

51,966

Production costs applicable to sales

(8,643)

(16,475)

(10,730)

 

(35,848)

Depreciation and depletion

(2,720)

(6,931)

(362)

(10,013)

Gross profit

1,001

1,586

3,518

6,105

Advanced projects

(586)

(4,155)

 

(4,741)

Exploration

(1,902)

(6,483)

(1,637)

 

(10,022)

Loss from investment in Minera Santa Cruz S.A.

(6,447)

 

(6,447)

Segment loss

$

(1,487)

$

(4,897)

$

(637)

$

(6,447)

$

(1,637)

$

(15,105)

General and Administrative and other

(8,428)

Loss before income and mining taxes

$

(23,533)

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2019

(tabular amounts are in thousands of U.S. dollars, unless otherwise noted) (Continued)

Three months ended June 30, 2018

    

USA

    

Canada

    

Mexico

    

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

$

19,425

$

14,381

$

$

$

33,806

Production costs applicable to sales

(11,981)

(8,634)

(20,615)

Depreciation and depletion

(3,526)

(573)

(4,099)

Gross profit

3,918

5,174

9,092

Advanced projects

(1,591)

(1,165)

(2,756)

Exploration

(1,151)

(5,788)

(329)

(2,341)

(9,609)

Loss from investment in Minera Santa Cruz S.A.

(2,265)

(2,265)

Segment (loss) income

$

(2,742)

$

(1,870)

$

3,680

$

(2,265)

$

(2,341)

$

(5,538)

General and Administrative and other

(1,982)

Loss before income and mining taxes

$

(7,520)

Six months ended June 30, 2018

    

USA

    

Canada

    

Mexico

    

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

$

35,049

$

39,798

$

$

$

74,847

Production costs applicable to sales

(22,532)

(21,806)

(44,338)

Depreciation and depletion

(5,784)

(1,405)

(7,189)

Gross profit

6,733

16,587

23,320

Advanced projects

(2,633)

(3,127)

(5,760)

Exploration

(3,151)

(11,167)

(1,300)

(5,866)

(21,484)

Loss from investment in Minera Santa Cruz S.A.

(2,477)

(2,477)

Segment (loss) income

$

(5,784)

$

(4,434)

$

12,160

$

(2,477)

$

(5,866)

$

(6,401)

General and Administrative and other

(7,468)

Loss before income and mining taxes

$

(