OPERATING SEGMENT REPORTING

9 Months Ended

Sep. 30, 2022

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 level 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, 2022	USA		Canada		Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	12,596	$	13,058	$	334	$	—	$	—	$	25,988
Production costs applicable to sales		(12,357)		(6,196)		(1,619)		—		—		(20,172)
Depreciation and depletion		(1,514)		(2,799)		—		—		—		(4,313)
Gross profit (loss)		(1,275)		4,063		(1,285)		—		—		1,503
Advanced projects		(4)		(30)		(1,160)		—		(7,623)		(8,817)
Exploration		(1,055)		(2,733)		—		—		(141)		(3,929)
Income from investment in Minera Santa Cruz S.A.		—		—		—		758		—		758
Segment income (loss)	$	(2,334)	$	1,300	$	(2,445)	$	758	$	(7,764)	$	(10,485)
General and administrative and other												(581)
Loss before income and mining taxes											$	(11,066)
Capital expenditures	$	1,012	$	4,080	$	2,827	$	—	$	159	$	8,078

Nine months ended September 30, 2022	USA			Canada	Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	34,334	$	46,200	$	1,643	$	—	$	—	$	82,177
Production costs applicable to sales		(34,834)		(26,103)		(10,002)		—		—		(70,939)
Depreciation and depletion		(3,275)		(8,219)		—		—		—		(11,494)
Gross profit (loss)		(3,775)		11,878		(8,359)		—		—		(256)
Advanced projects		(52)		(227)		(3,135)		—		(31,460)		(34,874)
Exploration		(3,747)		(7,056)		—		—		(629)		(11,432)
Impairment of mineral property interests and plant and equipment (Note 8)		—		—		—		—		—		—
Income from investment in Minera Santa Cruz S.A.		—		—		—		2,149		—		2,149
Segment income (loss)	$	(7,574)	$	4,595	$	(11,494)	$	2,149	$	(32,089)	$	(44,413)
General and Administrative and other												(938)
Loss before income and mining taxes											$	(45,351)
Capital expenditures	$	1,508	$	11,633	$	2,827	$	—	$	544	$	16,512

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)
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)
Loss from investment in Minera Santa Cruz S.A.		—		—		—		(5,077)		—		(5,077)
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

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,
	2022		2021		2022		2021		2022		2021
USA	$	38,404	$	37,877	$	12,596	$	21,683	$	34,334	$	60,919
Canada		95,570		93,294		13,058		14,227		46,200		34,966
Mexico		29,385		26,561		334		1,219		1,643		5,690
Argentina (2)		285,709		282,583		—		—		—		—
Total consolidated (3)	$	449,068	$	440,315	$	25,988	$	37,129	$	82,177	$	101,575

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

(2) Includes Investment in MSC and other subsidiaries of $92.8 million as of September 30, 2022 (December 31, 2021 – $90.9 million).

(3) Total excludes $0.4 million related to the Company's Right of use office lease asset as the business activities related to corporate are not considered to be a part of the operating segments.