OPERATING SEGMENT REPORTING

9 Months Ended

Sep. 30, 2021

OPERATING SEGMENT REPORTING

OPERATING SEGMENT REPORTING

NOTE 3 OPERATING SEGMENT REPORTING

The Company is a mining and minerals production and exploration company focused on precious metals in the United States, Canada, Mexico, and Argentina. The Company’s chief operating decision maker (“CODM”) reviews the operating results, assesses performance and makes decisions about the 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 within a geographic region are not alike. As a result, these operating segments also represent the Company’s reportable segments for accounting purposes. 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 or 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.

Capital expenditures include costs capitalized in mineral property interests and plant and equipment in the respective periods.

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

Three months ended September 30, 2021	USA		Canada		Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	21,683	$	14,227	$	1,219	$	—	$	—	$	37,129
Production costs applicable to sales		(18,753)		(9,635)		(2,372)		—		—		(30,760)
Depreciation and depletion		(2,140)		(3,885)		—		—		—		(6,025)
Gross profit (loss)		790		707		(1,153)		—		—		344
Advanced projects		(234)		(871)		(1,872)		—		(1,036)		(4,013)
Exploration		(1,432)		(4,817)		4		—		—		(6,245)
Loss from investment in Minera Santa Cruz S.A.		—		—		—		(2,650)		—		(2,650)
Other operating		—		—		—		—		—		—
Segment (loss)	$	(876)	$	(4,981)	$	(3,021)	$	(2,650)	$	(1,036)	$	(12,564)
General and Administrative and other		—		—		—		—		—		(5,678)
Loss before income and mining taxes		—		—		—		—		—	$	(18,242)
Capital expenditures	$	353		10,775		—		—		—	$	11,128

Nine months ended September 30, 2021	USA			Canada	Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	60,919	$	34,966	$	5,690	$	—	$	—	$	101,575
Production costs applicable to sales		(53,376)		(22,622)		(9,483)		—		—		(85,481)
Depreciation and depletion		(6,208)		(10,469)		—		—		—		(16,677)
Gross profit (loss)		1,335		1,875		(3,793)		—		—		(583)
Advanced projects		(203)		(2,058)		(3,338)		—	$	(1,036)		(6,635)
Exploration		(3,887)		(12,532)		(14)		—		(1,684)		(18,117)
Impairment of mineral property interests and plant and equipment (Note 8)		—		—		—		—		—		—
Loss from investment in Minera Santa Cruz S.A.		—		—		—		(5,077)		—		(5,077)
Other operating		—		—		—		—		—		—
Segment loss	$	(2,755)	$	(12,715)	$	(7,145)	$	(5,077)	$	(2,720)	$	(30,412)
General and Administrative and other		—		—		—		—		—		(9,322)
Loss before income and mining taxes		—		—		—		—		—	$	(39,734)
Capital expenditures	$	1,110	$	20,342	$	—	$	—	$	—	$	21,452

Three months ended September 30, 2020	USA		Canada		Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	13,042	$	10,352	$	4,001	$	—	$	—	$	27,395
Production costs applicable to sales		(10,791)		(8,874)		(3,861)		—		—		(23,526)
Depreciation and depletion		(2,099)		(2,404)		(67)		—		—		(4,570)
Gross (loss) profit		152		(926)		73		—		—		(701)
Advanced projects		(240)		(2,784)		(1,003)		—		—		(4,027)
Exploration		(2,395)		(1,189)		(427)		—		(412)		(4,423)
Loss from investment in Minera Santa Cruz S.A.		—		—		—		2,582		—		2,582
Segment loss	$	(2,483)	$	(4,899)	$	(1,357)	$	2,582	$	(412)	$	(6,569)
General and Administrative and other		—		—		—		—		—		(3,361)
Loss before income and mining taxes		—		—		—		—		—	$	(9,930)
Capital expenditures	$	106	$	488	$	—	$	—	$	—	$	594

Nine months ended September 30, 2020	USA		Canada		Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	38,129	$	27,257	$	11,700	$	—	$	—	$	77,086
Production costs applicable to sales		(38,863)		(24,231)		(11,173)		—		—		(74,267)
Depreciation and depletion		(8,527)		(7,336)		(217)		—		—		(16,080)
Gross (loss) profit		(9,261)		(4,310)		310		—		—		(13,261)
Advanced projects		(789)		(5,609)		(3,066)		—		—		(9,464)
Exploration		(5,235)		(4,434)		(463)		—		(1,629)		(11,761)
Impairment of mineral property interests and plant and equipment (Note 8)		(83,805)		—		—		—		—		(83,805)
Loss from investment in Minera Santa Cruz S.A.		—		—		—		(1,139)		—		(1,139)
Other operating		(1,390)		(578)		—		—		—		(1,968)
Segment loss	$	(100,480)	$	(14,931)	$	(3,219)	$	(1,139)	$	(1,629)	$	(121,398)
General and Administrative and other		—		—		—		—		—		(8,661)
Loss before income and mining taxes		—		—		—		—		—	$	(130,059)
Capital expenditures	$	4,712	$	4,428	$	—	$	—	$	—	$	9,140

Geographic Information

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

	Long-lived Assets				Revenue (1)				Revenue (1)
	September 30,		December 31,		Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020		2021		2020
USA	$	43,176	$	46,801	$	21,683	$	13,042	$	60,919	$	38,129
Canada		97,187		78,986		14,227		10,352		34,966		27,257
Mexico		20,018		20,021		1,219		4,001		5,690		11,700
Argentina (2)		287,268		299,816		—		—		—		—
Total consolidated	$	447,649	$	445,624	$	37,129	$	27,395	$	101,575	$	77,086

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

(2) Includes Investment in MSC of $95.7 million as of September 30, 2021 (December 31, 2020 – $108.3 million).