INCOME AND MINING TAXES

12 Months Ended

Dec. 31, 2023

INCOME AND MINING TAXES.

INCOME AND MINING TAXES

NOTE 19 INCOME AND MINING TAXES

The Company’s income and mining tax (recovery) expense consisted of:

	2023		2022		2021
United States	$	971	$	—	$	—
Foreign		(4,107)		7,663		—
Current tax (recovery) expense	$	(3,136)	$	7,663	$	—
United States	$	—	$	—	$	(387)
Foreign		36,995		(1,856)		(6,928)
Deferred tax (recovery) expense	$	36,995	$	(1,856)	$	(7,315)
United States	$	971	$	—	$	(387)
Foreign		32,888		5,806		(6,928)
Total income and mining tax (recovery) expense	$	33,859	$	5,806	$	(7,315)

The Company’s (income) loss before income and mining tax consisted of:

	2023		2022		2021
United States	$	(7,702)	$	(20,618)	$	(24,808)
Foreign		74,738		(59,670)		(39,391)
Income (loss) before income and mining taxes	$	67,036	$	(80,288)	$	(64,199)

A reconciliation of the tax provision for 2023, 2022 and 2021 at statutory U.S. Federal and State income tax rates to the actual tax provision recorded in the consolidated financial statements is computed as follows:

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as at December 31, 2023 and 2022, respectively, are presented below:

Expected tax expense at	2023		2022		2021
Income (loss) before income and mining taxes	$	67,036	$	(80,288)	$	(64,199)
Statutory tax rate		21%		21%		21%
US Federal and State tax expense (recovery) at statutory rate		14,078		(16,860)		(13,482)
Reconciling items:
Equity loss / (income) from investments		15,310		(583)		1,326
Deconsolidation of McEwen Copper Inc.		(46,644)		—		—
Taxable gain on the disposal of McEwen Copper shares		6,179		—		—
Deferred tax liability on investment		38,340		—		—
Realized flow-through expenditures		3,570		2,169		6,148
Realized flow-through premium		(3,423)		(2,011)		(3,486)
Withholding tax		632		—		—
Adjustment for foreign tax rates		(13,769)		(8,384)		(3,039)
Permanent differences		9,909		9,353		4,371
Foreign exchange on translation of books		42		4,308		(2,720)
Losses expired		8,282		1,877		1,497
Proceeds received from sale of NSR		—		8,072		—
Adjustments in relation to prior years		(629)		7,760		6,446
Current and deferred mining tax liabilities		1,455		116		—
Movement in valuation allowance		821		(10)		(4,377)
Other		(294)		—		—
Income and mining tax expense (recovery)	$	33,859	$	5,806	$	(7,315)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as at December 31, 2023 and 2022 respectively are presented below:

	2023		2022
Deferred tax assets:
Net operating loss carryforward	$	57,983	$	65,174
Mineral properties		52,471		69,326
Other temporary differences		21,857		22,433
Total gross deferred tax assets		132,311		156,933
Less: valuation allowance		(130,002)		(149,342)
Net deferred tax liabilities (assets)	$	2,309	$	7,591
Deferred tax liabilities:
Acquired mineral property interests		(2,895)		(7,746)
Other taxable temporary differences		(39,986)		—
Total deferred tax liabilities	$	(42,881)	$	(7,746)
Deferred income and mining tax liability	$	(40,572)	$	(155)

The Company reviews the measurement of its deferred tax assets at each Consolidated Balance Sheet date. On the basis of available information at December 31, 2023, the Company has provided a valuation allowance for certain of its deferred assets where the Company believes it is more likely than not that some portion or all of such assets will not be realized.

The table below summarizes changes to the valuation allowance:

For the year ended December 31,	Balance at beginning of year		Additions(a)		Deductions(b)		Balance at end of year
2023	$	149,342	$	3,391	$	(22,731)	$	130,002
2022		149,921		6,600		(7,179)		149,342
2021		154,298		4,058		(8,435)		149,921

(a) The additions to valuation allowance mainly result from the Company and its subsidiaries incurring losses and exploration expenses for tax purposes which do not meet the more-likely-than-not criterion for recognition of deferred tax assets.

(b) The reductions to valuation allowance mainly result from the release of valuation allowance, expiration of the Company’s tax attributes, foreign exchange reductions of tax attributes in Canada, Mexico and Argentina and inflationary adjustments to tax attributes in Argentina.

As at December 31, 2023, 2022 and 2021, the Company did not have any income-tax-related accrued interest and tax penalties.

The following table summarizes the Company’s losses that can be applied against future taxable profit:

Country	Type of Loss	Amount		Expiry Period
United States(a)	Net-operating losses	$	184,095	2027-Unlimited
Mexico	Net-operating losses		53,596	2024-2033
Canada(a)	Net-operating losses		14,890	2025-2042
Argentina(a)	Net-operating losses		594	2024-2028

(a) The losses in the United States, Canada, and Argentina are part of multiple consolidating groups, and, therefore, may be restricted in use to specific projects.

The Company or its subsidiaries file income tax returns in the United States, Canada, Mexico, and Argentina. These tax returns are subject to examination by local taxation authorities provided the tax years remain open to audit under the relevant statute of limitations. The following summarizes the open tax years by major jurisdiction:

United States: 2018 to 2023

Canada: 2014 to 2023

Mexico: 2017 to 2023

Argentina: 2017 to 2023