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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 September 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: 362,488,425 shares outstanding as of October 29, 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 nine months ended September 30, 2019 and 2018 (unaudited)

3

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

4

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

5

Consolidated Statements of Cash Flows for the nine months ended September 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

21

Item 3.

Quantitative and Qualitative Disclosure about Market Risk

43

Item 4.

Controls and Procedures

45

Part II        OTHER INFORMATION

Item 1A.

Risk Factors

46

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

46

Item 4

Mine Safety Disclosures

46

Item 5

Other Information

46

Item 6.

Exhibits

47

SIGNATURES

48

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 September 30,

Nine months ended September 30,

    

2019

    

2018

    

2019

    

2018

Revenue from gold and silver sales

$

32,691

$

26,896

$

84,657

$

101,743

Production costs applicable to sales

 

(23,584)

 

(17,740)

 

(59,432)

 

(62,078)

Depreciation and depletion

(7,488)

(3,143)

(17,501)

(10,332)

Gross profit

1,619

6,013

7,724

29,333

OTHER OPERATING EXPENSES:

Advanced projects

 

(2,140)

 

(5,230)

 

(6,881)

 

(10,990)

Exploration

 

(13,695)

 

(8,231)

 

(23,717)

 

(29,715)

General and administrative

 

(2,645)

 

(2,192)

 

(8,078)

 

(8,323)

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

 

(328)

 

(4,973)

 

(6,775)

 

(7,450)

Depreciation

 

(96)

 

(279)

 

(417)

 

(912)

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

 

(495)

 

(314)

 

(1,383)

 

(896)

 

(19,399)

 

(21,219)

 

(47,251)

 

(58,286)

Operating loss

 

(17,780)

 

(15,206)

 

(39,527)

 

(28,953)

OTHER (EXPENSE) INCOME:

Interest and other finance expense, net

 

(650)

 

(832)

 

(3,946)

 

(612)

Other income (note 3)

4,773

 

1,135

 

6,283

 

793

Total other income

 

4,123

 

303

 

2,337

 

181

Loss before income and mining taxes

(13,657)

(14,903)

(37,190)

(28,772)

Income and mining tax recovery

2,192

1,613

2,575

4,891

Net loss and comprehensive loss

$

(11,465)

$

(13,290)

$

(34,615)

$

(23,881)

Net loss per share (note 13):

Basic and Diluted

$

(0.03)

$

(0.04)

$

(0.10)

$

(0.07)

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

Basic and Diluted

 

362,175

 

337,278

 

356,218

 

337,083

Shareholders' distribution declared per common share (note 12)

$

$

0.005

$

$

0.010

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)

September 30,

December 31,

    

2019

    

2018

 

ASSETS

Current assets:

Cash and cash equivalents

$

4,262

$

15,756

Investments (note 4)

 

3,224

 

3,131

Receivables and other current assets (note 5)

 

6,268

 

3,765

Inventories (note 6)

 

34,368

 

22,039

Restricted cash (note 12)

8,764

14,685

Total current assets

 

56,886

 

59,376

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

 

424,837

 

423,879

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

 

116,994

 

127,814

Inventories, long-term (note 6)

7,737

4,591

Other assets

 

757

 

1,281

TOTAL ASSETS

$

607,211

$

616,941

LIABILITIES & SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

32,110

$

30,817

Flow-through share premium (note 12)

839

2,950

Long-term debt, current portion (note 10)

2,000

Long-term debt from related party, current portion (note 10)

2,000

Lease liabilities, current portion (note 9)

2,045

1,511

Asset retirement obligation, current portion (note 11)

 

1,435

 

734

Total current liabilities

 

40,429

 

36,012

Lease liabilities, long-term (note 9)

5,465

4,918

Long-term debt (note 10)

22,718

24,603

Long-term debt from related party (note 10)

22,718

24,603

Asset retirement obligation, long-term (note 11)

 

28,319

 

28,668

Other liabilities

4,018

5,765

Deferred income and mining tax liability

 

5,836

 

6,426

Total liabilities

$

129,503

$

130,995

Shareholders’ equity:

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

Common: 362,458 as of September 30, 2019 and 344,560 as of December 31, 2018 issued and outstanding (in thousands) (note 12)

 

1,483,799

 

1,457,422

Accumulated deficit

 

(1,006,091)

 

(971,476)

Total shareholders’ equity

 

477,708

 

485,946

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY

$

607,211

$

616,941

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

Subsequent event: note 10

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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

Accumulated

Three months ended September 30, 2018 and 2019:

    

Shares

    

Amount

Deficit

Total

Balance, June 30, 2018

 

337,268

$

1,447,025

$

(937,197)

$

509,828

Stock-based compensation

 

(214)

(214)

Exercise of stock options

 

18

18

18

Shareholder distribution

 

(1,687)

(1,687)

Net loss

(13,290)

(13,290)

Balance, September 30, 2018

 

337,286

$

1,445,142

$

(950,487)

$

494,655

Balance, June 30, 2019

361,957

$

1,482,640

$

(994,626)

$

488,014

Stock-based compensation

 

284

284

Exercise of stock options

147

151

151

Shares issued for acquisition of mineral property interests

354

724

724

Net loss

 

(11,465)

(11,465)

Balance, September 30, 2019

 

362,458

$

1,483,799

$

(1,006,091)

$

477,708

Common Stock

 

and Additional

 

Paid-in Capital

Accumulated

 

Nine months ended September 30, 2018 and 2019:

    

Shares

    

Amount

Deficit

Total

 

Balance, December 31, 2017

 

337,051

$

1,447,879

$

(926,606)

$

521,273

Stock-based compensation

 

 

182

 

 

182

Exercise of stock options

 

57

 

63

 

 

63

Shareholder distribution

 

 

(3,373)

(3,373)

Shares issued for acquisition of mineral property interests

178

391

391

Net loss

(23,881)

(23,881)

Balance, September 30, 2018

 

337,286

$

1,445,142

$

(950,487)

$

494,655

Balance, December 31, 2018

344,560

$

1,457,422

$

(971,476)

$

485,946

Stock-based compensation

 

481

481

Exercise of stock options

405

411

411

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

16,129

22,910

22,910

Sale of common stock in ATM offering

1,010

1,851

1,851

Shares issued for acquisition of mineral property interests

354

724

724

Net loss

 

(34,615)

(34,615)

Balance, September 30, 2019

 

362,458

$

1,483,799

$

(1,006,091)

$

477,708

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)

Nine months ended September 30,

    

2019

    

2018

Cash flows from operating activities:

Cash paid to suppliers and employees

$

(102,722)

$

(102,775)

Cash flow from revenues

 

84,657

 

102,360

Interest paid (note 9 and note 10)

(3,911)

(695)

Interest received

 

60

 

276

Cash used in operating activities

 

(21,916)

 

(834)

Cash flows from investing activities:

Additions to mineral property interests and plant and equipment

 

(27,027)

 

(53,228)

Investment in marketable equity securities (note 4)

 

(510)

 

(1,384)

Proceeds from sale of investments (note 4)

 

4,714

 

3,667

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

 

4,045

 

9,360

Cash used in investing activities

 

(18,778)

 

(41,585)

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)

411

63

Payment of lease obligations

(1,564)

(392)

Shareholders' distribution (note 12)

(3,372)

Proceeds of loan from related party (note 10 and note 14)

25,000

Proceeds of loan (note 10)

25,000

Debt issuance costs and lender fees (note 10)

(908)

Cash provided by financing activities

 

23,608

 

45,391

Effect of exchange rate change on cash and cash equivalents

 

(329)

 

763

(Decrease) increase in cash, cash equivalents and restricted cash

 

(17,415)

 

3,735

Cash, cash equivalents and restricted cash, beginning of period

 

30,489

 

37,153

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

$

13,074

$

40,888

Reconciliation of net loss to cash used in operating activities:

Net loss

$

(34,615)

$

(23,881)

Adjustments to reconcile net loss from operating activities:

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

 

6,775

 

7,450

(Gain) loss on investments (note 4)

(4,972)

2,526

Loss on disposal of fixed assets

 

134

 

99

Income and mining tax recovery

 

(2,575)

 

(4,891)

Stock-based compensation (note 12)

 

481

 

182

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

1,383

896

Unrealized foreign exchange loss (gain) (note 11)

434

(411)

Depreciation and amortization

 

18,158

 

12,276

Effect of exchange rate changes on cash and cash equivalents

 

329

 

(763)

Change in non-cash working capital items:

(Increase) decrease in other assets related to operations

 

(13,139)

 

12,241

Increase (decrease) in liabilities related to operations

5,691

(6,558)

Cash used in operating activities

$

(21,916)

$

(834)

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)

September 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 nine months ended September 30, 2019 and 2018, the unaudited Consolidated Balance Sheets as at September 30, 2019 and December 31, 2018, the unaudited Consolidated Statement of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2019 and 2018, and the unaudited Consolidated Statements of Cash Flows for the nine months ended September 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)

September 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 resulted in an increase in the Company’s recorded assets and liabilities and a nominal cumulative-effect adjustment to the opening accumulated deficit balance (note 9 Lease Liabilities).

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, interest expense and rent expense for operating leases 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)

September 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 advanced stage projects. 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 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 September 30, 2019

    

USA

    

Canada

    

Mexico

    

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

16,577

$

11,147

$

4,967

$

$

$

32,691

Production costs applicable to sales

(12,156)

(7,550)

(3,878)

 

(23,584)

Depreciation and depletion

(3,790)

(3,589)

(109)

(7,488)

Gross profit

631

8

980

1,619

Advanced projects

(46)

(384)

(1,710)

 

(2,140)

Exploration

(4,253)

(8,691)

(2)

(749)

(13,695)

Loss from investment in Minera Santa Cruz S.A.

(328)

 

(328)

Segment loss

$

(3,668)

$

(9,067)

$

(732)

$

(328)

$

(749)

$

(14,544)

General and Administrative and other

887

Loss before income and mining taxes

$

(13,657)

Nine months ended September 30, 2019

    

USA

    

Canada

Mexico

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

28,941

$

36,139

$

19,577

$

$

$

84,657

Production costs applicable to sales

(20,798)

(24,025)

(14,609)

 

(59,432)

Depreciation and depletion

(6,510)

(10,520)

(471)

(17,501)

Gross profit

1,633

1,594

4,497

7,724

Advanced projects

(632)

(384)

(5,865)

 

(6,881)

Exploration

(6,155)

(15,174)

(2)

(2,386)

 

(23,717)

Loss from investment in Minera Santa Cruz S.A.

(6,775)

 

(6,775)

Segment loss

$

(5,154)

$

(13,964)

$

(1,370)

$

(6,775)

$

(2,386)

$

(29,649)

General and Administrative and other

(7,541)

Loss before income and mining taxes

$

(37,190)

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2019

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

Three months ended September 30, 2018

    

USA

    

Canada

    

Mexico

    

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

$

11,395

$

15,501

$

$

$

26,896

Production costs applicable to sales

(9,179)

(8,561)

(17,740)

Depreciation and depletion

(2,729)

(414)

(3,143)

Gross profit (loss)

(513)

6,526

6,013

Advanced projects

(2,538)

(2,692)

(5,230)

Exploration

(1,039)

(6,356)

(296)

(540)

(8,231)

Loss from investment in Minera Santa Cruz S.A.

(4,973)

(4,973)

Segment (loss) income

$

(3,577)

$

(6,869)

$

3,538

$

(4,973)

$

(540)

$

(12,421)

General and Administrative and other

(2,482)

Loss before income and mining taxes

$

(14,903)

Nine months ended September 30, 2018

    

USA

    

Canada

    

Mexico

    

MSC

    

Los Azules

    

Total

Revenue from gold and silver sales

$

$

46,444

$

55,299

$

$

$

101,743

Production costs applicable to sales

(31,711)

(30,367)

(62,078)

Depreciation and depletion

(8,513)

(1,819)

(10,332)

Gross profit

6,220

23,113

29,333

Advanced projects

(5,171)

(5,819)

(10,990)

Exploration

(4,190)

(17,523)

(1,596)

(6,406)

(29,715)

Loss from investment in Minera Santa Cruz S.A.

(7,450)

(7,450)

Segment (loss) income

$

(9,361)

$

(11,303)

$

15,698

$

(7,450)

$

(6,406)

$

(18,822)

General and Administrative and other

(9,950)

Loss before income and mining taxes

$

(28,772)

Geographic information

Geographic information includes the long-lived assets balance and revenues presented for the Company’s operating segments, as follows:

Long-lived Assets

Revenue(1)

September 30,

December 31,

Three months ended September 30,

Nine months ended September 30,

    

2019

    

2018

    

2019

    

2018

  

  

2019

2018

Canada

$

78,770

$