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~~June 30, ~~2020~~2021

☐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~~(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: ~~408,841,891~~459,187,391 shares outstanding as of ~~October 29, 2020~~August 4, 2021.

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~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)	3

	Consolidated Balance Sheets at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 (unaudited)	4

	Consolidated Statements of Changes in Shareholders’ Equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)	5

	Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2122

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	45

Item 4.	Controls and Procedures	47

	Part II OTHER INFORMATION

Item 2.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	48

~~Item~~ 4.	Mine Safety Disclosures	48

~~Item 5.~~	~~Other Information~~	48

Item 6.	Exhibits	5049

SIGNATURES		5150

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

PART I – FINANCIAL INFORMATION

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,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Revenue from gold and silver sales	$	27,395	$	32,691	$	77,086	$	84,657	$	40,706	$	18,291	$	64,446	$	49,691
Production costs applicable to sales		(23,526)		(23,584)		(74,267)		(59,432)		(31,132)		(22,354)		(54,721)		(50,741)
Depreciation and depletion		(4,570)		(7,488)		(16,080)		(17,501)		(5,515)		(4,812)		(10,652)		(11,510)
Gross (loss) profit		(701)		1,619		(13,261)		7,724
Gross profit (loss)										4,059		(8,875)		(927)		(12,560)

OTHER OPERATING EXPENSES:
Advanced projects		(4,027)		(2,140)		(9,464)		(6,881)		(823)		(2,887)		(2,622)		(5,437)
Exploration		(4,423)		(13,695)		(11,761)		(23,717)		(6,916)		(3,548)		(11,872)		(7,338)
General and administrative		(2,532)		(2,645)		(6,836)		(8,078)		(2,834)		(2,240)		(4,917)		(4,304)
Income (loss) from investment in Minera Santa Cruz S.A. (note 10)		2,582		(328)		(1,139)		(6,775)
Loss from investment in Minera Santa Cruz S.A. (Note 9)										(1,853)		(1,045)		(2,427)		(3,721)
Depreciation		(88)		(96)		(317)		(417)		(75)		(114)		(150)		(229)
Revision of estimates and accretion of asset retirement obligations (note 12)		(886)		(495)		(2,003)		(1,383)
Impairment of mineral property interests and plant and equipment (note 9)		—		—		(83,805)		—
Other operating (note 4)		—		—		(1,968)		—
Revision of estimates and accretion of asset retirement obligations (Note 11)										(505)		(457)		(1,416)		(1,117)
Impairment of mineral property interests and plant and equipment (Note 8)										—		—		—		(83,805)
Other operating										—		(1,968)		—		(1,968)
		(9,374)		(19,399)		(117,293)		(47,251)		(13,006)		(12,259)		(23,404)		(107,919)
Operating loss		(10,075)		(17,780)		(130,554)		(39,527)		(8,947)		(21,134)		(24,331)		(120,479)

OTHER INCOME (EXPENSE):
Interest and other finance expense, net		(1,945)		(650)		(5,576)		(3,946)
Other income (note 5)		2,090		4,773		6,071		6,283
Interest and other finance expenses, net										(1,859)		(1,754)		(2,368)		(3,631)
Other income (Note 4)										3,795		3,044		5,207		3,981
Total other income		145		4,123		495		2,337		1,936		1,290		2,839		350
Loss before income and mining taxes		(9,930)		(13,657)		(130,059)		(37,190)		(7,011)		(19,844)		(21,492)		(120,129)
Income and mining tax recovery		152		2,192		1,276		2,575		1,022		30		3,037		1,124
Net loss	$	(9,778)	$	(11,465)	$	(128,783)	$	(34,615)
Net loss and comprehensive loss									$	(5,989)	$	(19,814)	$	(18,455)	$	(119,005)


Net loss per share (note 14):
Net loss per share (Note 13):
Basic and Diluted	$	(0.02)	$	(0.03)	$	(0.32)	$	(0.10)	$	(0.01)	$	(0.05)	$	(0.04)	$	(0.30)
Weighted average common shares outstanding (thousands) (note 14):
Weighted average common shares outstanding (thousands) (Note 13):
Basic and Diluted		403,887		362,175		401,603		356,218		459,187		400,513		450,539		400,442

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

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

MCEWEN MINING INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands of U.S. dollars)


	September 30,		December 31,		June 30,		December 31,
	2020		2019		2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	7,954	$	46,452	$	42,232	$	20,843
Restricted cash (note 18)		10,193		—
Investments (note 6)		—		1,885
Receivables, prepaids and other assets (note 7)		5,155		5,265
Inventories (note 8)		34,244		38,376
Investments (Note 5)						1,777		—
Receivables, prepaids and other assets (Note 6)						5,502		5,690
Inventories (Note 7)						25,430		26,964
Total current assets		57,546		91,978		74,941		53,497
Mineral property interests and plant and equipment, net (note 9)		330,202		418,791
Investment in Minera Santa Cruz S.A. (note 10)		108,762		110,183
Inventories, long-term (note 8)		5,457		9,603
Restricted cash (note 18)		3,595		48
Mineral property interests and plant and equipment, net (Note 8)						340,353		329,112
Investment in Minera Santa Cruz S.A. (Note 9)						98,338		108,326
Inventories, long-term (Note 7)						2,716		4,785
Restricted cash (Note 17)						3,625		3,595
Other assets		618		620		631		621
TOTAL ASSETS	$	506,180	$	631,223	$	520,604	$	499,936

LIABILITIES & SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	28,852	$	34,070	$	34,561	$	36,055
Flow-through share premium (note 13)		2,058		—
Debt, current portion (note 11)		—		5,000
Debt to related party, current portion (notes 11 and 15)		—		5,000
Flow-through share premium (Note 12)						2,581		3,827
Lease liabilities, current portion		2,213		2,115		2,960		2,440
Asset retirement obligation, current portion (note 12)		2,860		2,610
Asset retirement obligation, current portion (Note 11)						4,883		3,232
Total current liabilities		35,983		48,795		44,985		45,554
Lease liabilities, long-term		3,408		5,018		2,849		3,056
Debt (note 11)		23,997		19,758
Debt to related party (notes 11 and 15)		23,997		19,758
Asset retirement obligation, long-term (note 12)		30,932		29,591
Debt (Note 10)						24,250		24,080
Debt to related party (Notes 10 and 14)						24,250		24,080
Asset retirement obligation, long-term (Note 11)						30,001		30,768
Other liabilities		3,365		3,910		2,963		3,257
Deferred income and mining tax liability		3,697		4,914		3,334		3,813
Total liabilities	$	125,379	$	131,744	$	132,632	$	134,608

Shareholders’ equity:
Common shares: 408,842 as of September 30, 2020 and 400,339 as of December 31, 2019 issued and outstanding (in thousands) (note 13)	$	1,540,807	$	1,530,702
Common shares: 459,188 as of June 30, 2021 and 416,587 as of December 31, 2020 issued and outstanding (in thousands) (Note 12)					$	1,589,975	$	1,548,876
Accumulated deficit		(1,160,006)		(1,031,223)		(1,202,003)		(1,183,548)
Total shareholders’ equity		380,801		499,479		387,972		365,328
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	506,180	$	631,223	$	520,604	$	499,936

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

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

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 June 30, 2020 and 2021:	Shares	Amount		Deficit		Total
Balance, March 31, 2020	400,399	$	1,530,852	$	(1,130,414)	$	400,438
Stock-based compensation	—		213		—		213
Shares issued for debt refinancing	2,092		1,875		—		1,875
Net loss	—		—		(19,814)		(19,814)
Balance, June 30, 2020	402,491	$	1,532,940	$	(1,150,228)	$	382,712

Balance, March 31, 2021	459,188	$	1,589,763	$	(1,196,014)	$	393,749
Stock-based compensation	—		212		—		212
Net loss	—		—		(5,989)		(5,989)
Balance, June 30, 2021	459,188	$	1,589,975	$	(1,202,003)	$	387,972

Common Stock

and Additional

Paid-in Capital

Accumulated

Three months ended September 30, 2019 and 2020:

Shares

Amount

Deficit

Total
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

Balance, June 30, 2020

402,491

$
1,532,940

$
(1,150,228)

$
382,712
Stock-based compensation

—

30

—

30
Sale of flow-through common shares

6,298

7,767

—

7,767
Shares issued for acquisition of mineral property interests

53

70

—

70
Net loss

—

—

(9,778)

(9,778)
Balance, September 30, 2020

408,842

$
1,540,807

$
(1,160,006)

$
380,801


	Common Stock							Common Stock
	and Additional							and Additional
	Paid-in Capital			Accumulated				Paid-in Capital			Accumulated
Nine months ended September 30, 2019 and 2020:	Shares	Amount		Deficit		Total
Balance, December 31, 2018	344,560	$	1,457,422	$	(971,476)	$	485,946
Six months ended June 30, 2020 and 2021:								Shares	Amount		Deficit		Total
Balance, December 31, 2019								400,339	$	1,530,702	$	(1,031,223)	$	499,479
Stock-based compensation	—		481		—		481	—		302		—		302
Exercise of stock options	405		411		—		411	60		61		—		61
Units issued in connection with registered direct offering , net of issuance costs	16,129		22,910		—		22,910
Sale of shares in ATM offering	1,010		1,851		—		1,851
Shares issued for acquisition of mineral property interests	354		724		—		724
Shares issued for debt refinancing								2,092		1,875		—		1,875
Net loss	—		—		(34,615)		(34,615)	—		—		(119,005)		(119,005)
Balance, September 30, 2019	362,458	$	1,483,799	$	(1,006,091)	$	477,708
Balance, June 30, 2020								402,491	$	1,532,940	$	(1,150,228)	$	382,712

Balance, December 31, 2019	400,339	$	1,530,702	$	(1,031,223)	$	499,479
Balance, December 31, 2020								416,587	$	1,548,876	$	(1,183,548)	$	365,328
Stock-based compensation	—		332		—		332	—		439		—		439
Sale of flow-through common shares	6,298		7,767		—		7,767	12,601		10,785		—		10,785
Exercise of stock options	60		61		—		61
Shares issued for debt refinancing	2,092		1,875		—		1,875
Shares issued for acquisition of mineral property interests	53		70		—		70
Sale of shares for cash								30,000		29,875		—		29,875
Net loss	—		—		(128,783)		(128,783)	—		—		(18,455)		(18,455)
Balance, September 30, 2020	408,842	$	1,540,807	$	(1,160,006)	$	380,801
Balance, June 30, 2021								459,188	$	1,589,975	$	(1,202,003)	$	387,972

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

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

MCEWEN MINING INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands of U.S. dollars)

Nine months ended September 30,

2020

2019

Cash flows from operating activities:

Net loss

$
(128,783)

$
(34,617)

Adjustments to reconcile net loss from operating activities:

Impairment of mineral property interests and plant and equipment (note 9)

83,805

—

Loss from investment in Minera Santa Cruz S.A., net of amortization (note 10)

1,139

6,775

Loss (gain) on disposal of fixed assets

—

134

Depreciation and amortization

16,232

18,158

Loss (gain) on investments (note 6)

619

(4,972)

Income and mining tax (recovery)

(1,276)

(2,575)

Stock-based compensation

332

481

Revision of estimates and accretion of asset retirement obligations (note 12)

1,776

1,817

Foreign exchange (gain) loss

(11)

329

Decrease (increase) in other assets related to operations

6,572

(13,139)

(Decrease) increase in liabilities related to operations

(5,678)

5,693

Cash used in operating activities

$
(25,273)

$
(21,916)

Cash flows from investing activities:

Additions to mineral property interests and plant and equipment

$
(9,304)

$
(27,027)

Proceeds from sale of investments, net of investments (note 6)

1,266

4,204

Dividends received from Minera Santa Cruz S.A. (note 10)

282

4,045

Cash used in investing activities

$
(7,756)

$
(18,778)

Cash flows from financing activities:

Proceeds from sale of units, net of issuance costs (note 13)

$
—

$
22,910

Sale of flow-through common shares, net of issuance costs (note 13)

9,825

—

Proceeds of at-the-market share sale (note 13)

—

1,851

Proceeds of exercise of stock options

61

411

Payment of finance lease obligations

(1,626)

(1,564)

Cash provided by financing activities

$
8,260

$
23,608

Effect of exchange rate change on cash and cash equivalents

11

(329)

(Decrease) in cash, cash equivalents and restricted cash

(24,758)

(17,415)

Cash, cash equivalents and restricted cash, beginning of period

46,500

30,489

Cash, cash equivalents and restricted cash, end of period (note 18)

$
21,742

$
13,074

Supplemental disclosure of cash flow information:

Cash received (paid) during year for:

Interest paid

$
(3,850)

$
(3,911)

Interest received

158

60


	Six months ended June 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(18,455)	$	(119,005)
Adjustments to reconcile net loss from operating activities:
Impairment of mineral property interests and plant and equipment (Note 8)		—		83,805
Loss from investment in Minera Santa Cruz S.A., net of amortization (Note 9)		2,427		3,721
Gain on sale of mineral property interests (Note 5)		(2,270)		—
Depreciation and amortization		10,006		11,629
Loss on investments (Note 5)		—		620
Unrealized foreign exchange loss (gain) and adjustment to estimate (Note 11)		334		(969)
Income and mining tax (recovery)		(3,037)		(1,124)
Stock-based compensation		439		302
Revision of estimates and accretion of asset retirement obligations (Note 11)		1,416		666
Change in non-cash working capital items:
Decrease in other assets related to operations		3,647		6,705
Decrease in liabilities related to operations		(2,580)		(6,449)
Cash used in operating activities	$	(8,073)	$	(20,099)

Cash flows from investing activities:
Additions to mineral property interests and plant and equipment	$	(20,372)	$	(8,503)
Proceeds from disposal of property and equipment (Note 5)		492		—
Proceeds from sale of investments, net of investments		—		305
Dividends received from Minera Santa Cruz S.A. (Note 11)		7,561		282
Cash used in investing activities	$	(12,319)	$	(7,916)

Cash flows from financing activities:
Proceeds from sale of shares, net of issuance costs (Note 12)	$	29,875	$	—
Sale of flow-through common shares, net of issuance costs (Note 12)		11,966		—
Proceeds of exercise of stock options		—		61
Payment of finance lease obligations		(30)		(1,057)
Cash provided by (used in) financing activities	$	41,811	$	(996)
Effect of exchange rate change on cash and cash equivalents		—		969
Increase (decrease) in cash, cash equivalents and restricted cash		21,419		(28,042)
Cash, cash equivalents and restricted cash, beginning of period		24,438		46,500
Cash, cash equivalents and restricted cash, end of period (Note 17)	$	45,857	$	18,458

Supplemental disclosure of cash flow information:
Cash received (paid) during period for:
Interest paid	$	(2,449)	$	(2,570)
Interest received		13		151
Total cash, cash equivalents, and restricted cash	$	(2,436)	$	(2,419)

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

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION

McEwen Mining Inc. (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~~and development of copper.

The Company operates in the United States, Canada, Mexico and Argentina. The Company owns a 100% interest in the Gold Bar gold mine in Nevada, the Black Fox gold mine in Ontario, Canada, the El Gallo gold project and the Fenix silver-gold project in Sinaloa, Mexico, the Los Azules copper deposit in San Juan, Argentina and a portfolio of exploration properties in Nevada, Canada, Mexico and Argentina. It 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. While information and note disclosures normally included in financial statements which are 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, the Company believes that the information and disclosures included are adequate and not misleading.

In management’s opinion, the unaudited Consolidated Statements of Operations and Comprehensive Loss (“Statement of Operations”) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the unauditedConsolidated Balance Sheets as at ~~September~~June 30, ~~2020~~2021 and audited Consolidated Balance Sheets as at December 31, ~~2019,~~2020, the unaudited Consolidated Statement of Changes in Shareholders’ Equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, and the unaudited Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, 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 the summary of significant accounting policies included in the Company’s annual report on Form 10-K for the year ended December 31, ~~2019.~~2020. 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, ~~2019.~~2020. The consolidated financial statements include the accounts of the Company and its ~~wholly owned~~wholly-owned subsidiaries. Inter-company accounts and transactions have been eliminated.

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES

Risks and Uncertainties

COVID-19

~~On March 11,~~The Company continues to closely monitor and respond, as possible, to the ~~World Health Organization (“WHO”) declared the~~ongoing COVID-19 ~~virus a global~~ pandemic. As ~~a result~~the situation continues to rapidly change globally, ensuring the health and safety of the ~~pandemic, many~~Company’s employees and contractors is one of the Company’s top priorities. Many jurisdictions including the United States, Canada, Mexico, and Argentina ~~instituted~~have varied but continued restrictions onto travel, public gatherings, and certain business operations. ~~Even absent of government-mandated shut-downs,~~Unlike the ~~Company was required to suspend operations at its mines to protect the health and safety of its employees and contractors. This resulted in temporary shutdowns of all~~year 2020, there were no suspension mandated or ~~a portion of operations at all of the Company’s mine sites at the start of Q2 2020. Since that date, all of~~otherwise for the Company’s operations ~~including El Gallo~~during 2021. In addition, vaccination rates in ~~Mexico, have successfully recommenced operations. In~~countries where the ~~third quarter, operations at the San José mine were again in a ramp-up phase as a result of the ongoing countrywide restrictions on the movement of people. Resumption~~Company operates continues to increase.

The Company’s results of operations, ~~at normal capacity is expected towards the end of the year.~~

~~Table of Contents~~

~~MCEWEN MINING INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~September 30, 2020~~

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

~~The temporary shutdowns adversely impacted the Company’s operations,~~financial position, and cash flow, and liquidity in the second quarter of 2020 and some of these effects continued to be felt in the third quarter. In addition to the adverse effect on revenue, the Company incurred costs in connection with the shutdowns and subsequent ramp-up. This, in turn,flows were adversely affected ~~its liquidity.~~in 2020 due to COVID-19. The ~~long-term~~continuing impact of the COVID-19 ~~outbreak~~pandemic on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak, variants of the COVID-19 virus, the availability and ~~related~~distribution of vaccinations, and government advisories, restrictions, and ~~restrictions. These developments~~financial assistance offered. To ensure a safe working environment for the Company’s employees and contractors, and to prevent the spread of COVID-19, the Company continues to reinforce safety measures at all sites and offices including contact tracing, restricting non-essential travel, and complying with public health orders. The impact of COVID-19 on the global financial markets, ~~and~~ the overall economy and the Company are highly uncertain and cannot be predicted. ~~Achieving and maintaining~~Maintaining normal operating capacity is also ~~dependant~~dependent on the continued availability of supplies and contractors, which isare out of the Company’s control. If the financial markets and/or the overall economy ~~are~~continue to be impacted, ~~for an extended period,~~ the Company’s results of operations, financial position and cash flows may be further affected. As the situation continues to evolve, the Company will continue to monitor market conditions closely and respond accordingly.

~~The~~During the six months ended June 30, 2021, the Company ~~is not able to estimate the duration of the pandemic~~has raised $12.7 million and ~~potential impact on its business if disruptions or delays~~$31.5 million through a Canadian Development Expenses (“CDE”) flow-through common share issuance and an equity financing, and raised $20.2 million in ~~business developments and shipments of product occur. In addition,~~Canadian Exploration Expenditures (“CEE”) financings during 2020. However, a severe prolonged economic downturn could result in a variety of risks to the business, including impeding access to capital markets when needed on acceptable terms, if at all. ~~As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly.~~ The Company has completed various scenario planning analyses to consider the potential impacts of COVID-19 on its business, including volatility in commodity prices, temporary disruptions and/or curtailments of operating activities (voluntary or involuntary).

~~Going Concern~~

~~The accompanying interim financial statements have been prepared on the going concern basis of accounting, which assumes~~ However, there is no assurance that ~~the Company~~these measures will ~~continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments~~prevent adverse effects from COVID-19 in the normal course of business. In the preparation of the interim financial statements, management is required to identify when events or conditions indicate that substantial doubt may exist about the Company’s ability to continue as a going concern. Substantial doubt about the Company’s ability to continue as a going concern would exist when relevant conditions and events, considered in aggregate, indicate that the Company will not be able to meet its obligations as they become due for a period of at least, but not limited to, 12 months from the most recent balance sheet date. When the Company identifies conditions or events that raise potential for substantial doubt about its ability to continue as a going concern, the Company considers whether its plans that are intended to mitigate those relevant conditions or events will alleviate the potential substantial doubt.future.

The Company refinanced its senior secured term loan facility (note 11) in June 2020 and also completed a flow-through financing (note 13) in September 2020 and remains in full compliance with its debt covenants as at September 30, 2020. However, based on the significant expected resource reduction at the Gold Bar mine, resulting in an initial revised mine plan which yields less cash flow, coupled with operational challenges at Black Fox, the commitment to develop the Froome access portal, flow-through spending requirements, and the disruptions to the Company’s operations caused by the COVID-19 pandemic, there is uncertainty about the Company’s ability to generate sufficient operating cash flow to both conduct further operation, exploration and development of its mineral properties and to remain in compliance with certain of its financial debt covenants, over the next 12 months. Non-compliance with these covenants would result in a breach under the Company’s debt agreement.

In response to this uncertainty, the Company is evaluating all options, including accessing capital markets, sale of certain assets, and expenditure reductions across the Company. The Company’s ability to continue as a going concern is dependent on the successful completion of one or a combination of these initiatives to ensure that the Company has sufficient liquidity in order to fund its operations and remain in compliance with its debt covenants. After considering its plans, management has concluded that there are no material uncertainties relating to events or conditions that cast substantial doubt upon the Company’s ability to continue as a going concern for a period of 12 months from the consolidated balance sheet date. The estimates used by management in reaching this conclusion are based on information available as at the date these financial statements were authorized for issuance and include internally generated cash flow forecasts. Accordingly, actual results could differ from these estimates and resulting variances may be material to management’s assessment.

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

Recently Adopted Accounting Pronouncements

~~Accounting for Government Assistance:~~ In June 2020, the Company analogized guidance to account for the COVID relief funds received from the United States Small Business Administration (SBA) and the Canada Revenue Agency (“CRA”). The ability to analogize standards from other GAAP sources is provisioned under ASC 105-05-2 when guidance is not provided for certain transactions under US GAAP. The adoption of the standard had a material impact on the financial statements as of September 30, 2020. Under this policy, the Company has recognized the income from the relief funds in the Statement of Operations, as the criteria for recognition of the funds have been met.

~~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. The adoption of ASU 2018-13 in 2020 did not have a material impact on the Company’s financial statements and related disclosures.

~~Recently Issued Accounting Pronouncements~~

Income Taxes: In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740).” ASU 2019-12 simplifies the accounting for income taxes by reducing existing complexity in the accounting ~~standards.~~standard. The update to the accounting ~~standards~~standard is effective for the Company for the fiscal years beginning after December 15, 2020, with early adoption permitted. The ~~Company is currently evaluating the effect~~adoption of ~~this amendment and the~~ASU 2019-12 in 2021 did not have a material impact ~~it may have~~ on the Company’s ~~consolidated~~ financial ~~statements.~~statements and related disclosures.

NOTE 3 OPERATING SEGMENT REPORTING

~~McEwen Mining Inc.~~The Company is ~~engaged in the exploration, development,~~a mining and minerals production and ~~sale of gold and silver and~~ exploration ~~for copper, with operations located~~company focused on precious metals in the United States, Canada, Mexico, and Argentina. The Company’s chief operating ~~decisions~~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. 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.

Production costs applicable to sales for the El Gallo project of $11.2 million for the nine months ended September 30, 2020 (same period in 2019 - $14.6 million) include $5.2 million of residual leaching spending in the period, net of $3.1 million capitalized in inventory (same period in 2019 - $5.7 million, net of $2.7 million capitalized in inventory) with the remainder representing costs recorded in the leach pad inventory balances in prior periods.

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 June 30, 2021

USA

Canada

Mexico

MSC

Los Azules

Total

Revenue from gold and silver sales

26,343

12,178

2,185

—

40,706

Production costs applicable to sales

(21,067)

(6,331)

(3,734)

—

(31,132)

Depreciation and depletion

(2,326)

(3,189)

—

(5,515)

Gross profit (loss)

2,950

2,658

(1,549)

—

4,059

Advanced projects

116

(564)

(375)

—

(823)

Exploration

(1,591)

(4,281)

(10)

—

(1,034)

(6,916)

Income from investment in Minera Santa Cruz S.A.

—

(1,853)

—

(1,853)

Other operating

—

Segment (loss) income

1,475

(2,187)

(1,934)

(1,853)

(1,034)

(5,533)

General and Administrative and other

(1,478)

Loss before income and mining taxes

(7,011)

Capital expenditures

353

10,775

—

11,128

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

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

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 profit (loss)

152

(926)

73

—

—

(701)

Advanced projects

(240)

(2,784)

(1,003)

—

—

(4,027)
Exploration

(2,395)

(1,189)

(427)

—

(412)

(4,423)
Income from investment in Minera Santa Cruz S.A.

—

—

—

2,582

—

2,582
Segment (loss) income

$
(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 9)

(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

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)

Capital expenditures

$
1,190

$
2,500

$
—

$
—

$
—

$
3,690

~~Table of Contents~~

~~MCEWEN MINING INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~September 30, 2020~~

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


Nine months ended September 30, 2019	USA		Canada		Mexico		MSC		Los Azules		Total
Six months ended June 30, 2021													USA			Canada	Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	28,941	$	36,139	$	19,577	$	—	$	—	$	84,657	$	39,236	$	20,739	$	4,471	$	—	$	—	$	64,446
Production costs applicable to sales		(20,798)		(24,025)		(14,609)		—		—		(59,432)		(34,623)		(12,987)		(7,111)		—	$	—		(54,721)
Depreciation and depletion		(6,510)		(10,520)		(471)		—		—		(17,501)		(4,068)		(6,584)		—		—	$	—		(10,652)
Gross profit		1,633		1,594		4,497		—		—		7,724
Gross profit (loss)														545		1,168		(2,640)		—		—		(927)

Advanced projects		(632)		(384)		(5,865)		—		—		(6,881)		32		(1,188)		(1,466)		—	$	—		(2,622)
Exploration		(6,155)		(15,174)		(2)		—		(2,386)		(23,717)		(2,455)		(7,716)		(17)		—	$	(1,684)		(11,872)
Impairment of mineral property interests and plant and equipment (Note 8)														—		—		—		—	$	—		—
Loss from investment in Minera Santa Cruz S.A.		—		—		—		(6,775)		—		(6,775)		—		—		—		(2,427)	$	—		(2,427)
Other operating														—		—		—		—		—		—
Segment loss	$	(5,154)	$	(13,964)	$	(1,370)	$	(6,775)	$	(2,386)	$	(29,649)	$	(1,878)	$	(7,736)	$	(4,123)	$	(2,427)	$	(1,684)	$	(17,848)
General and Administrative and other												(7,541)												(3,644)
Loss before income and mining taxes											$	(37,190)											$	(21,492)

Capital expenditures	$	17,804	$	10,375	$	—	$	—	$	—	$	28,179	$	1,110	$	20,342	$	—	$	—	$	—	$	21,452

~~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,


2020

2019

2020

2019

2020

2019
USA

$
49,299

$
135,854

$
13,042

$
16,577

$
38,129

$
28,941
Canada

78,161

77,147

10,352

11,147

27,257

36,139
Mexico

20,051

23,551

4,001

4,967

11,700

19,577
Argentina ⁽²⁾

300,252

302,598

—

—

—

—
Total consolidated ⁽³⁾

$
447,763

$
539,150

$
27,395

$
32,691

$
77,086

$
84,657

~~(1)~~

~~Presented based on the location from which the product originated.~~

~~(2)~~

~~Includes Investment in MSC of~~ ~~$108.8~~ ~~million as of September 30, 2020 (December 31, 2019~~ –~~$110.2~~ ~~million).~~

~~(3)~~

~~Total excludes~~ ~~$0.9~~ ~~million related to the Company's office lease asset as the business activities related to corporate are not considered to be a part of the operating segments~~.


Three months ended June 30, 2020	USA		Canada		Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	10,770	$	4,166	$	3,355	$	—	$	—	$	18,291
Production costs applicable to sales		(11,039)		(8,150)		(3,165)		—		—		(22,354)
Depreciation and depletion		(2,565)		(2,184)		(63)		—		—		(4,812)
Gross (loss) profit		(2,834)		(6,168)		127		—		—		(8,875)

Advanced projects		(183)		(1,760)		(944)		—		—		(2,887)
Exploration		(2,031)		(840)		(36)		—		(641)		(3,548)
Loss from investment in Minera Santa Cruz S.A.		—		—		—		(1,045)		—		(1,045)
Other operating		(1,390)		(578)		—		—		—		(1,968)
Segment loss	$	(6,438)	$	(9,346)	$	(853)	$	(1,045)	$	(641)	$	(18,323)
General and Administrative and other												(1,521)
Loss before income and mining taxes											$	(19,844)

Capital expenditures	$	2,799	$	211	$	—	$	—	$	—	$	3,010

~~NOTE 4 OTHER OPERATING~~

During Q2 2020, the Company temporarily suspended operations at its Gold Bar and Black Fox mine sites as measures to combat COVID-19. Costs incurred while operations were suspended total $0.9 million at Gold Bar and $0.6 million at Black Fox during the nine months ended September 30, 2020. In addition, the Gold Bar operational shutdown was extended while the Company conducted a thorough review of its resource and mine plan during Q2 2020. Upon completion of this review, the Company commenced a controlled and phased ramp up of operations through the remainder of the second quarter. Costs incurred due to the resource review were $0.5 million.

1110

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

~~NOTE 5 OTHER INCOME~~

~~The following is a summary of other income for the three and nine months ended September 30, 2020~~ ~~and 2019:~~

Three months ended September 30,

Nine months ended September 30,


2020

2019

2020

2019
COVID Relief

$
2,628

$
—

$
5,319

$
—
Unrealized and realized (loss) gain on investments (note 6)

—

3,220

(619)

4,972
Foreign currency (loss) gain

(132)

1,616

1,736

1,242
Other (expense) income, net

(406)

(63)

(365)

69
Total other income

$
2,090

$
4,773

$
6,071

$
6,283

In response to COVID-19, the United States and Canadian governments enacted significant relief measures to support businesses directly and adversely impacted by the pandemic. During 2020, the Company secured $1.9 million of relief from the US government under the paychecks protection (“PPP”) program. The funds are fully forgivable so long as sufficient eligible expenditures are incurred in a 24 week period. The income from the PPP program is recognized on a systematic basis as eligible forgivable expenditures are incurred. As at September 30, 2020, the full amount has been recognized as other income. The Company also secured $3.4 million of government relief in Canada through the Canadian Emergency Wage Subsidy program all of which has been recognized in other income.


Six months ended June 30, 2020	USA		Canada		Mexico		MSC		Los Azules		Total
Revenue from gold and silver sales	$	25,088	$	16,905	$	7,698	$	—	$	—	$	49,691
Production costs applicable to sales		(28,071)		(15,357)		(7,313)		—		—		(50,741)
Depreciation and depletion		(6,428)		(4,932)		(150)		—		—		(11,510)
Gross (loss) profit		(9,411)		(3,384)		235		—		—		(12,560)

Advanced projects		(548)		(2,826)		(2,063)		—		—		(5,437)
Exploration		(2,840)		(3,245)		(36)		—		(1,217)		(7,338)
Impairment of mineral property interests and plant and equipment (Note 8)		(83,805)		—		—		—		—		(83,805)
Loss from investment in Minera Santa Cruz S.A.		—		—		—		(3,721)		—		(3,721)
Other operating		(1,390)		(578)		—		—		—		(1,968)
Segment loss	$	(97,994)	$	(10,033)	$	(1,864)	$	(3,721)	$	(1,217)	$	(114,829)
General and Administrative and other												(5,300)
Loss before income and mining taxes											$	(120,129)

Capital expenditures	$	4,606	$	3,940	$	—	$	—	$	—	$	8,546

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⁾
	June 30,		December 31,		Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020		2021		2020
USA	$	42,435	$	46,801	$	26,343	$	10,770	$	39,236	$	25,088
Canada		93,039		78,986		12,178		4,166		20,739		16,905
Mexico		20,361		20,021		2,185		3,355		4,471		7,698
Argentina ⁽²⁾		289,828		299,816		—		—		—		—
Total consolidated	$	445,663	$	445,624	$	40,706	$	18,291	$	64,446	$	49,691

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

(2)	Includes Investment in MSC of $98.3 million as of June 30, 2021 (December 31, 2020 –$108.3 million).

NOTE ~~6 INVESTMENTS~~4 OTHER INCOME

The following is a summary of ~~the activity in investments~~other income for the ~~nine~~three and six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:

As at

Additions/

Disposals/

Unrealized

Fair value

December 31,

transfers during

Net (loss) on

transfers during

(loss) on

September 30,


2019

period

securities sold

period

securities held

2020
Marketable equity securities

$
1,885

$
—

$
(619)

$
(1,266)

$
—

$
—


	As at		Additions/		Net gain		Disposals/		Unrealized		Fair value		Three months ended June 30,				Six months ended June 30,
	December 31,		transfers during		(loss) on		transfers during		gain on		September 30,		2021		2020		2021		2020
	2018		period		securities sold		period		securities held		2019
Marketable equity securities	$	2,718	$	2,314	$	3,375	$	(5,653)	$	470	$	3,224
Warrants		413		—		—		(1,540)		1,127		—
Investments	$	3,131	$	2,314	$	3,375	$	(7,193)	$	1,597	$	3,224
COVID-19 Relief													$	1,725	$	2,691	$	2,836	$	2,691
Unrealized and realized (loss) on investments (Note 5)														—		279		—		(619)
Foreign currency (loss) gain														(194)		60		97		1,868
Other income, net														2,264		14		2,274		41
Total other income													$	3,795	$	3,044	$	5,207	$	3,981

During the nine months ended September 30, 2020, the Company sold marketable equity securities for proceeds of $1.3 million (nine months ended September 30, 2019 - $5.7 million), and realized a loss of $0.6 million (nine months ended September 30, 2019 - realized a gain of $3.4 million).

~~The cost of marketable equity securities at September 30, 2020 was $nil (December 31, 2019 – $1.3 million).~~

1211

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

During the three and six months ended June 30, 2021, the Company recognized $1.7 million and $2.8 million, respectively (three and six months ended June 30, 2020 - $2.7 million and $2.7 million, respectively) of other income through COVID-19 relief programs.

During Q2 2021, the Company recognized $2.3 million in other income from the sale of 2 projects in Nevada. Refer to Note 5 Investments for further details.

NOTE 5 INVESTMENTS

The following is a summary of the activity in investments for the six months ended June 30, 2021 and 2020:

As at

Additions/

Disposals/

Unrealized

Fair value

December 31,

transfers during

Net gain (loss) on

transfers during

(loss) on

June 30,

2020

period

securities sold

year

securities held

2021

Marketable equity securities

—

1,616

—

1,616

Warrants

—

161

—

161

Investments

—

1,777

—

1,777

As at

Additions/

Net

Disposals/

Unrealized

Fair value

December 31,

transfers during

(loss) on

transfers during

(loss) on

June 30,

2019

period

securities sold

year

securities held

2020

Marketable equity securities

1,885

—

(619)

(1,266)

—

(0)

On June 23, 2021, the Company closed the sale of 2 projects in Nevada, Limousine Butte and Cedar Wash, with Nevgold Corp. (“Nevgold”, and formerly Silver Mountain Mines Inc.). In addition to $0.5 million cash received as part of the consideration, the Company received 4,963,455 common shares and 2,481,727 warrants of Nevgold. Upon issuance, the common shares received by the Company represented 10% of the issued and outstanding shares of Nevgold. The warrants have an exercise price of $0.60 and are exercisable upon receipt until June 23, 2023. The common shares trade on the TSX Venture Exchange.

During the six months ended June 30, 2020, the Company sold marketable equity securities for proceeds of $1.3 million.

During the three months ended June 30, 2020, the Company sold marketable equity securities for proceeds of $1.2 million.

NOTE 76 RECEIVABLES, PREPAIDS AND OTHER ASSETS

The following is a breakdown of balances in receivables, prepaids and other assets as at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:


	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
Government sales tax receivable		1,453		2,658		1,776	$	1,810
Prepaids and other assets		3,702		2,607		3,726		3,880
Receivables and other current assets	$	5,155	$	5,265	$	5,502	$	5,690

Government sales tax receivable includes ~~$0.7~~$0.6 million of Mexican ~~value added~~value-added tax (“VAT”) at ~~September~~June 30, ~~2020~~2021 (December 31, ~~2019~~2020 – ~~$0.7~~$0.9 million). The ~~Company~~Company collected ~~$1.1~~$1.0 million of VAT during the ~~nine~~six months ended ~~September~~June 30, 2021 (June 30, 2020 ~~(September 30, 2019~~ – ~~$1.3~~$0.5 million).

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

NOTE 87 INVENTORIES

Inventories at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 consisted of the following:


	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
Material on leach pads	$	29,069	$	37,328	$	12,758	$	21,003
In-process inventory		4,283		3,847		6,098		3,922
Stockpiles		586		1,384		2,736		635
Precious metals		945		1,038		1,696		1,344
Materials and supplies		4,818		4,382		4,858		4,845
Inventories	$	39,701	$	47,979	$	28,146	$	31,749
Less current portion		34,244		38,376		25,430		26,964
Long-term portion	$	5,457	$	9,603	$	2,716	$	4,785

During the first quarter of 2021, the inventory of Gold Bar and El Gallo were written down to their net realizable value by $2.2 million and by $0.8 million at El Gallo during the three months ended ~~September~~June 30, ~~2020 there were 0 inventory write downs to net realizable value.~~2021. During the ~~nine~~three and six months ended ~~September~~June 30, 2020, the inventory ofat the Black Fox Mine was written down to its net realizable ~~value. The write-down was~~value by $1.9 million and at Gold Bar during the first quarter of ~~which $1.5~~2020 by $1.2 million. Of these write-downs, a total of $2.9 million (three and six months ended June 30, 2020 – $2.6 million) was included in production costs applicable to sales ~~(three~~ and ~~nine months ended September 30, 2019 - $nil). In addition, the inventory of the Gold Bar Mine was written down to its net realizable value. The write-down was $1.2 million, of which $1.1~~$0.1 million was included in ~~production costs applicable to sales~~depreciation and depletion (three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 - ~~$nil)~~$0.5 million) in the Statement of Operations.

NOTE 98 MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT

The applicable definition of proven and probable reserves is set forth in the SEC Industry Guide 7. If proven and probable reserves exist at the Company’s properties, the relevant capitalized mineral property interests and asset retirement costs are charged to expense based on the units of production method upon commencement of production. The Company’s Gold Bar, Black Fox and San José properties have proven and probable reserves estimated in accordance with SEC Industry Guide 7.

The Company reviews and evaluates its long-lived assets for impairment on a quarterly basis or when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Once it is determined that impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its estimated fair value.

~~As part~~The evaluation resulted in an impairment charge of $83.8 million during the analysis conducted in Q1 2020, the Company determined that indicators of impairment existed for the long-lived assets at the Gold Bar mine and that the long-lived assets at the Gold Bar mine were not recoverable on an undiscounted basis. The fair value of the Gold Bar mine was estimated using the discounted cash flow method, coupled with an in-situ resource multiple for mineralized material not included in the life of mine plan. Future cash flows weresix months ended June 30, 2020.

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

estimated based on estimated quantities of recoverable mineralized material, expected gold prices, estimated production levels, operating costs, capital requirements and reclamation costs, all based on the life-of-mine plan using the preliminary estimated resources. The in-situ resource multiple applied to the mineralized material not included in the life-of-mine plan was estimated by evaluating observable market transactions. The Company concluded that the carrying value of the long-lived assets at the Gold Bar mine was impaired and recorded a non-cash impairment charge reducing plant and equipment and mineral property interests by the amount of $83.8 million.

The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company’s non-recurring Level 3 fair value measurement of the Gold Bar mine:



	~~Date of Fair Value Measurement~~	~~Valuation Technique~~	~~Unobservable Input~~	~~Range/ Weighted Average~~

~~Gold Bar Mine~~	~~March 31, 2020~~	~~Discounted Cash Flow~~	~~Discount Rate~~	9%
			~~Long Term Gold Price~~	~~$1,430/oz~~
			~~United States Inflation Index~~	2%

The estimated future cash flows are based on numerous assumptions and uncertainties. It is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold prices, production levels and costs of capital are each subject to significant risks and uncertainties.

NOTE 109 INVESTMENT IN MINERA SANTA CRUZ S.A. (“MSC”) – SAN JOSÉ MINE

The Company accounts for investments over which it exerts significant influence but does not control through majority ownership using the equity method of accounting. In applying the equity method of accounting to the Company’s investment in MSC, MSC’s financial statements, which are originally prepared by MSC in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, have been adjusted to conform with U.S. GAAP. As such, the summarized financial data presented under this heading is presented in accordance with U.S. GAAP.

A summary of the operating results for MSC for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 is as follows:


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Minera Santa Cruz S.A. (100%)
Minera Santa Cruz S.A. (100%)
Revenue from gold and silver sales	$	70,195	$	74,530	$	154,666	$	189,348	$	70,396	$	47,081	$	123,699	$	84,471
Production costs applicable to sales		(41,512)		(43,345)		(100,230)		(119,392)		(40,888)		(30,402)		(77,256)		(58,718)
Depreciation and depletion		(7,107)		(18,158)		(22,084)		(50,083)		(9,779)		(7,650)		(16,732)		(14,977)
Gross profit		21,576		13,027		32,352		19,873		19,729		9,029		29,711		10,776
Exploration		(2,814)		(1,482)		(7,855)		(7,373)		(2,941)		(2,175)		(5,177)		(5,041)
Other expenses(1)		(6,509)		(5,394)		(17,651)		(8,926)		(14,684)		(8,925)		(20,220)		(11,142)
Net income before tax	$	12,253	$	6,151	$	6,846	$	3,574
Net income (loss) before tax									$	2,104	$	(2,071)	$	4,314	$	(5,407)
Current and deferred tax expense		(4,922)		(4,512)		(2,989)		(8,350)		(1,937)		1,884		(3,566)		1,933
Net income (loss)	$	7,331	$	1,639	$	3,857	$	(4,776)	$	167	$	(187)	$	748	$	(3,474)

Portion attributable to McEwen Mining Inc. (49%)
Portion attributable to McEwen Mining Inc. (49%)
Net income (loss)	$	3,592	$	803	$	1,890	$	(2,340)	$	81	$	(92)	$	366	$	(1,703)
Amortization of fair value increments		(1,255)		(2,551)		(3,891)		(6,922)		(2,019)		(1,251)		(3,090)		(2,636)
Income tax recovery		245		1,420		862		2,487		85		298		297		618
Income (loss) from investment in MSC, net of amortization	$	2,582	$	(328)	$	(1,139)	$	(6,775)
Loss from investment in MSC, net of amortization									$	(1,853)	$	(1,045)	$	(2,427)	$	(3,721)

~~Table~~(1) Other expenses include foreign exchange, accretion of ~~Contents~~

~~MCEWEN MINING INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~September~~asset retirement obligations, other finance related expenses, and COVID-19 related expenses of $4.4 million and $11.9 million for the three and six months ended June 30, ~~2020~~

~~(tabular amounts are in thousands of U.S. dollars, unless otherwise noted) (Continued)~~2021.

Shutdown costs related to the COVID-19 pandemic for MSC were recognized in other expenses and totaled $nil during the three months ended September 30, 2020 and $7.2 million for the nine months ended September 30, 2020.

The ~~income or~~ loss from investment in MSC attributable to the Company includes ~~the~~ amortization of the fair value increments arising from the initial purchase price allocation and related income tax recovery. The income tax recovery reflects the impact of the devaluation of the Argentine peso against the U.S. dollar on the peso-denominated deferred tax liability recognized at the time of ~~acquisition.~~acquisition, as well as income tax rate changes over the periods.

Changes in the Company’s investment in MSC for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and year ended December 31, ~~2019~~2020 are as follows:


	Nine months ended September 30, 2020		Year ended December 31, 2019		June 30, 2021		December 31, 2020
Investment in MSC, beginning of period	$	110,183	$	127,814	$	108,326	$	110,183
Attributable net gain (loss) from MSC		1,890		(2,097)
Attributable net income from MSC						366		2,745
Amortization of fair value increments		(3,891)		(9,448)		(3,090)		(5,390)
Income tax recovery		862		2,791		297		1,128
Dividend distribution received		(282)		(8,877)		(7,561)		(340)
Investment in MSC, end of period	$	108,762	$	110,183	$	98,338	$	108,326

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company received ~~$nil~~$2.6 million and ~~$0.3~~$7.6 million, respectively, in dividends from MSC ~~respectively~~ (three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 – ~~$2.0 million~~$nil and ~~$4.0~~$0.3 million, respectively).

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

A summary of the key assets and liabilities of MSC on a 100% basis as at ~~September~~June 30, ~~2020,~~2021, before and after adjustments to fair value on acquisition and amortization of the fair value increments arising from the purchase price allocation, are as follows:

As at September 30, 2020

Balance excluding FV increments

Adjustments

Balance including FV increments

As at June 30, 2021

Balance excluding FV increments

Adjustments

Balance including FV increments

Current assets

95,364

854

96,218

84,938

437

85,375

Total assets

190,746

110,885

301,631

177,194

101,013

278,207

Current liabilities

(44,761)

—

(44,761)

(44,327)

—

(44,327)

Total liabilities

(75,190)

(4,478)

(79,668)

(74,196)

(3,331)

(77,527)

NOTE 1110 DEBT

On August 10, 2018, the Company finalized a $50.0 million senior secured ~~three year~~three-year term loan facility with Royal Capital Management Corp., as administrative agent, and the lenders party thereto. Interest on the loan accrued at the rate of 9.75% per annum with interest due monthly and was secured by a lien on certain of the Company’s and its subsidiaries’ assets.

On June 25, 2020, the Company entered into an Amended and Restated Credit Agreement (“ARCA”) which refinanced the outstanding $50 million and which terms differed in material respects from the old loan as follows:

●

Sprott Private Resource Lending II (Collector), LP replaced Royal Capital Management Corp. as the administrative agent.

●

Sprott Private Resource Lending II (Collector), LP replaced certain lenders. An affiliate of Robert McEwen remains as a lender.

●

Scheduled repayments of the principal ~~are~~were extended by two ~~years. Monthly~~years; monthly repayments of principal in the amount of $2.0 million are now due beginning on August 31, 2022 and continuing for 1211 months, followed by a final principal payment of $26.0 million, ~~plus~~and any accrued interest on August 31, 2023.

●

The minimum working capital maintenance requirement was reduced from $10.0 million under the original term loan to $nil at June 30, 2020 to December 31, 2020 and from $10.0 million to $2.5 million at March 31, 2021 and until the end of 2021. The working capital requirement increases to $5.0 million at March 31, 2022, $7.0 million at June 30, 2022, and $10 million at September 30, 2022 and each fiscal quarter thereafter.

●

The Company issued 2,091,700 shares of common stock valued at $1,875,000 to the lenders as consideration for the maintenance, continuation, and extension of the maturity date of the loan. The value of the shares plus the unamortized costs of the original term loan are being amortized over the modified term of the loan.

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

~~the end of 2021. The working capital requirement increases to $5.0 million for March 31, 2022, $7.0 million for June 30, 2022, and $10 million for September 30, 2022 and thereafter.~~

●

The Company issued 2,091,700 shares valued at $1,875,000 to the lenders as bonus interest. The value of the shares plus the unamortized costs of the original term loan will be amortized over the modified term of the loan.

The remaining principal terms of the original agreement remain unchanged. The Company was in compliance with all covenants as at June 30, 2021.

A reconciliation of the Company’s long-term debt for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and for the year ended December 31, ~~2019~~2020 is as follows:


	Nine months ended September 30, 2020		Year ended December 31, 2019		Six months ended June 30, 2021		Year ended December 31, 2020
Balance, beginning of period	$	49,516	$	49,206	$	48,160	$	49,516
Interest expense		4,003		5,185		2,757		5,394
Interest payments		(3,650)		(4,875)		(2,417)		(4,875)
Debt amendment - Equity-based fees		(1,875)		—
Bonus Interest - Equity based financing fee						—		(1,875)
Balance, end of period	$	47,994	$	49,516	$	48,500	$	48,160
Less current portion		—		10,000		—		—
Long-term portion	$	47,994	$	39,516	$	48,500	$	48,160

~~During the nine months ended September 30, 2020, $nil of interest was capitalized in plant and equipment (nine months ended September 30, 2019 – $0.6 million, capitalized to Gold Bar construction).~~

NOTE 1211 ASSET RETIREMENT OBLIGATIONS

The Company is responsible for the reclamation of certain past and future disturbances at its properties. The most significant properties subject to these obligations are the Gold Bar and Tonkin properties in Nevada, the Timmins properties in Canada and the El Gallo Project in Mexico.

A reconciliation of the Company’s asset retirement obligations for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and for the year ended December 31, ~~2019~~2020 are as follows:


	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
Asset retirement obligation liability, beginning balance	$	32,201	$	29,402	$	34,000	$	32,201
Settlements		(185)		(513)		(866)		(267)
Accretion of liability		1,389		1,680		991		1,901
Adjustment reflecting updated estimates		673		1,012		425		(54)
Foreign exchange revaluation		(286)		620		334		219
Asset retirement obligation liability, ending balance	$	33,792	$	32,201	$	34,884	$	34,000
Less current portion		2,860		2,610		4,883		3,232
Long-term portion	$	30,932	$	29,591	$	30,001	$	30,768

The Company’s reclamation expenses for the periods presented consisted of the following:

Three months ended September 30,

Nine months ended September 30,

2020

2019

2020

2019
Reclamation adjustment reflecting updated estimates

$
411

$
—

$
614

$
88
Reclamation accretion

475

495

1,389

1,295
Total

$
886

$
495

$
2,003

1,383


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Reclamation adjustment reflecting updated estimates	$	—	$	—	$	425	$	203
Reclamation accretion		505		457		991		914
Total	$	505	$	457	$	1,416		1,117

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~JUNE 30, ~~2020~~2021

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

NOTE 1312 SHAREHOLDERS’ EQUITY

Equity Issuances

~~September~~Amendment to the Articles of Incorporation

On June 30, 2021, the Company filed Articles of Amendment to its Amended and Restated Articles of Incorporation with the Colorado Secretary of State providing for an increase in its authorized capital to increase the number of shares of common stock that the Company can issue from 500,000,000 to 675,000,000. The Amendment was approved by the Company’s shareholders at the annual meeting held on June 28, 2021.

Equity Financing

On February 9, 2021, the Company completed a registered direct offering of common stock with several existing and new institutional investors and issued 30,000,000 shares priced at $1.05 per share for gross proceeds of $31.5 million. The purpose of this financing was to fund the continued development of the Froome deposit, which is part of the Fox Complex in Timmins, Ontario, and to strengthen the Company’s balance sheet and working capital position. Total issuance costs amounted to $1.7 million for net proceeds of $29.9 million.

Flow-Through Shares Issuance – Canadian Development Expenses (“CDE”)

On January 29, 2021, the Company issued 12,600,600 flow-through common shares priced at $1.01 per share for gross proceeds of $12.7 million. The purpose of this offering was also to fund the continued development of the Froome deposit. The total proceeds were allocated between the sale of tax benefits and the sale of common shares. The total issuance costs related to the issuance of the flow-through shares was $0.7 million, which were accounted for as a reduction to the common shares. The net proceeds of $12.0 million were allocated between the sale of tax benefits in the amount of $1.2 million and the sale of common shares in the amount of $10.8 million.

The Company is required to spend these flow-through share proceeds on flow-through eligible CDE as defined by subsection 66.2(5) of the Income Tax Act (Canada). As of June 30, 2021, the Company had reached the total $12.7 million CDE spend requirement.

Flow-Through Shares Issuance – Canadian Exploration Expenditures (“CEE”)

On December 31, 2020, ~~Flow-through~~the Company issued an additional 7,669,900 flow-through common shares priced at $1.28 per share for gross proceeds of $9.8 million. The purpose of this offering was to fund exploration activities on the Company’s properties in the Timmins region of Canada. NaN issuance costs were incurred as part of this issuance. Proceeds of $9.8 million were allocated between the sale of tax benefits in the amount of $2.1 million and ~~Restricted cash~~the sale of common shares in the amount of $7.7 million.

On September 10, 2020, the Company issued 6,298,166 flow-through common shares priced at $1.65 per share for gross proceeds of $10.4 million. The purpose of this offering was to fund exploration activities on the Company’s properties in the Timmins region of Canada. The total ~~proceeds were allocated between the sale of tax benefits and the sale of common shares. The total~~ issuance costs related to the issuance of the flow-through shares was $0.6 million, which are accounted for as a reduction to the common shares. The net proceeds of $9.8 million ~~was~~were allocated between the sale of tax benefits in the amount of $2.0 million and the sale of common shares in the amount of $7.8 ~~million~~million.

The Company is required to spend these flow-through share proceeds on flow-through eligible ~~Canadian exploration expenditures (“CEE”)~~CEE as defined by subsection ~~66(15)~~66.1(6) of the Income Tax Act (Canada). As of June 30, 2021, the Company had incurred a total of $7.7 million in eligible CEE ($1.9 million in 2020 and ~~accordingly recorded the proceeds~~$5.8 million as ~~restricted cash on the~~ ~~Consolidated Balance Sheets~~ as ~~at September 30, 2020.~~of Q2 2021). The Company expects to fulfill its CEE commitments by the end of 2022.

Table of Contents

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

All 21,706,250 and 8,064,516 warrants issued under the November 2019 and March 2019 offerings remain outstanding and unexercised as at June 30, 2021.

~~Shares issued~~Stock Options

The Company’s Amended and Restated Equity Incentive Plan (“Plan”) allows for ~~acquisition~~equity awards to be granted to employees, consultants, advisors, and directors. The Plan is administered by the Compensation Committee of ~~mineral property interest~~

~~During~~ the ~~three months ended September 30, 2020,~~Board of Directors (“Committee”), which determines the ~~Company issued a total~~terms pursuant to which any award is granted. The Committee may delegate to certain officers the authority to grant awards to certain employees (other than such officers), consultants and advisors. On April 16, 2021, the Board approved an amendment to the Plan which increased the number of ~~53,600~~ shares of common stock reserved for issuance by 12.5 million shares to a maximum of 30.0 million shares. This includes shares issued under the Plan before it was amended, with no more than 0.5 million shares subject to grants of options to an individual in ~~exchange~~a calendar year. The Plan provides for the ~~acquisition~~grant of ~~mineral interests in Nevada.~~

~~Stock-based compensation~~

~~During~~incentive options under Section 422 of the ~~three months ended September~~Internal Revenue Code (the “Code”), which provide potential tax benefits to the recipients compared to non-qualified options. At June 30, 2021, 5,716,150 options were awarded under the Plan (June 30, 2020 ~~4,796,550~~– 4,963,516 awards).

NaN stock options were ~~granted to officers, directors and certain employees at a weighted average exercise price of $1.25 per share.~~

~~Stock option expense for~~exercised during the ~~three and nine~~six months ended ~~September~~June 30, ~~2020 was $0.3 million, (September 30, 2019 – $0.3 million and $0.5 million, respectively).~~

2021. During the ~~nine months ended September 30,~~same period in 2020, the Company issued 60,000 shares of common stock for proceeds of $0.1 million upon the exercise of the same number of stock options at a weighted average exercise price of $1.06 per share. During the nine months ending September 30, 2019, the Company issued 405,000 shares of common stock for proceeds of $0.4 million upon the exercise of the same number of stock options at a weighted average exercise price of $1.01 per share.

~~June 2020 Amended and Restated Credit Agreement~~

Pursuant to the ARCA executed on June 25, 2020, the Company issued 2,091,700 shares of common stock during Q2 2020 to the lenders as consideration for the maintenance, continuation, and the extension of the maturity date of the loan. The Company valued the shares at $1.9 million.

~~March 2019 Registered Offering~~

~~On March 29, 2019, the Company issued 14,193,548 Units at $1.55 per Unit, for net proceeds of $20.3 million (net of issuance costs of $1.7 million). Each Unit consisted of 1 share of common stock and~~ ~~one~~-half of one warrant. Each whole warrant is exercisable at any time for 1 share of common stock at a price of $2.00, subject to customary adjustments, expiring three years from the date of issuance. The warrants issued under the offering are not listed for trading.

On March 29, 2019, the Company also issued 1,935,484 Subscription Receipts at $1.55 per Subscription Receipt to certain executive officers, directors, employees and consultants. Upon shareholder and NYSE approval on May 23, 2019, the

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~~MCEWEN MINING INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~September 30, 2020~~

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

~~Subscription Receipts were converted into 1,935,484 Units for net proceeds of $2.6 million (net of issuance costs of $0.4 million). All Units issued under the offering have identical terms.~~

~~At-the-market (“ATM”) Offering~~

Pursuant to an equity distribution agreement dated November 8, 2018, the Company was permitted to offer and sell from time to time shares of its common stock having an aggregate offering price of up to $90.0 million, with the net proceeds to fund working capital and general corporate purposes. During the three months ended March 31, 2019, the Company issued an aggregate of 1,010,545 shares of common stock for gross and net proceeds of $1.9 million. The Company terminated the agreement on March 13, 2019.

Shareholders’ Distributions

Pursuant to the ARCA (Note 11), the Company is prevented from paying any dividends on its common stock, so long as the loan is outstanding.

NOTE 1413 NET LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Potentially dilutive instruments are not included in the calculation of diluted net loss per share for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, as they would be anti-dilutive.

For the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, all of the outstanding options ~~(8,808,001)~~(5,716,150) and all of the outstanding warrants (29,770,766) were excluded from the computation of diluted loss per share ~~(September~~(June 30, ~~2019~~2020 – ~~5,672,944~~4,436,784 outstanding options and ~~8,064,150~~29,770,766 outstanding warrants).

NOTE 1514 RELATED PARTY TRANSACTIONS

The Company recorded the following expense in respect to the related parties outlined below during the periods presented:


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Lexam L.P.	$	—	$	36	$	87	$	113	$	—	$	—	$	11	$	76
REVlaw		34		56		122		184		107		50		142		88

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

The Company has the following outstanding accounts payable balances in respect to the related parties outlined below:


	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
Lexam L.P.	$	71	$	65	$	64	$	72
REVlaw		53		12		379		90

An aircraft owned by Lexam L.P. (controlled by Robert R. McEwen, limited partner and beneficiary of Lexam L.P. and the Company’s Chairman and Chief Executive Officer) has been made available to the Company to expedite business travel. As Chairman and Chief Executive Officer of the Company, Mr. McEwen must travel extensively and frequently on short notice. Mr. McEwen is able to charter the aircraft from Lexam L.P. at a preferential rate approved by the Company’s independent board members under a policy whereby only the variable expenses of operating this aircraft for business related travel are eligible for reimbursement by the Company.

REVlaw is a company owned by Carmen Diges, General Counsel of the Company. The legal services of Ms. Diges as General Counsel and other support staff, as needed, are provided by REVlaw in the normal course of business and have been recorded at their exchange amount.

An affiliate of Mr. McEwen participated as a lender in the $50.0 million term loan by providing $25.0 million of the total $50.0 million funding and continued as such under the ARCA. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company paid $0.6 million and ~~$1.8~~$1.2 million ~~respectively,~~ (three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 – $0.6 million and ~~$1.8~~$1.2 million, respectively) in interest to this ~~affiliate.Furthermore, pursuant to the ARCA, 1,045,850 shares of common stock valued at $0.9 million were issued to the~~ affiliate. The payments to the affiliate of Mr. McEwen are on the same terms as the non-affiliated lender (Note 11).

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~~MCEWEN MINING INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~September 30, 2020~~

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

NOTE 1615 FAIR VALUE ACCOUNTING

As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Warrants

Upon initial recognition, the warrants received as part of the sale to Nevgold (see Note 5) transaction were fair valued using the Black-Scholes valuation model as they are not quoted in an active market. The warrants received have been accounted for as equity investment at cost. Average volatility of 94.6% was determined based on a selection of similar junior mining companies. The warrants are exercisable upon receipt and have an exercise price of $0.60 and expire June 23, 2023. As of June 30, 2021, 0 warrants related to the Nevgold transaction have been exercised.

Assets and liabilities measured at fair value on a recurring basis.

The following table identifies certain of the Company’s assets and liabilities measured at fair value on a recurring basis ~~(at least annually)~~ by level within the fair value hierarchy as at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, as reported in the Consolidated Balance Sheets:


	Fair value as at September 30, 2020						Fair value as at December 31, 2019						Fair value as at June 30, 2021						Fair value as at December 31, 2020
	Level 1		Level 2		Total		Level 1		Level 2		Total		Level 1		Level 2		Total		Level 1		Level 2		Total
Marketable equity securities	$	—	$	—	$	—	$	1,885	$	—	$	1,885	$	1,616	$	—	$	1,616	$	—	$	—	$	—
Total investments													$	1,616	$	—	$	1,616	$	—	$	—	$	—

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

~~The Company’s investments consisted of marketable~~Marketable equity securities ~~which were~~that the Company holds are exchange-traded and are valued using quoted market prices in active markets and as such ~~were~~are classified within Level 1 of the fair value hierarchy. The fair value of the investments ~~was~~is calculated as the quoted market price of the marketable equity security multiplied by the ~~quantity~~number of shares held by the Company.

The fair value of financial assets and liabilities held at June 30, 2021 were assumed to approximate their carrying values due to their historically negligible credit losses.

Debt is recorded at a carrying value of $48.5 million (December 31, 2020 – $48.2 million). The debt is not traded on quoted markets and approximates its fair value based on recent refinancing.

Impairment of Mineral Property

During the ~~nine~~six months ended ~~September~~June 30, 2021, there were no indicators of impairment for the Company’s long-lived assets and the Company did not record any impairments. During the six months ended June 30, 2020, the Company recorded an impairment of long-lived assets at the Gold Bar ~~Mine~~mine totaling $83.8 million ~~based on~~using Level 3 inputs. ~~See~~ ~~Note 9~~ ~~for details.~~

~~Debt is recorded at an amortized cost of $47.9 million (December 31, 2019 – $49.5 million). The debt is not traded on quoted markets.~~

~~The fair value of other financial assets and liabilities were assumed to approximate their carrying values due to their historically negligible credit losses.~~

NOTE 1716 COMMITMENTS AND CONTINGENCIES

In addition to the commitments for payments on operating and finance leases and the repayment of long-term debt (Note 11), as at ~~September~~June 30, ~~2020,~~2021, the Company has the following commitments and contingencies:

Reclamation Obligations

As part of its ongoing business and operations, the Company is required to provide bonding for its environmental reclamation obligations of $20.1 million in Nevada pertaining primarily to the Tonkin and the Gold Bar properties and ~~$11.2~~$11.9 million (C$~~14.9~~14.7 million) in Canada with respect to the Black Fox Complex. In addition, under Canadian regulations, the Company was required to deposit approximately $0.1 million with respect to its Lexam properties in Timmins, which is recorded as non-current restricted cash (Note ~~18)~~17).

Surety Bonds

As at ~~September~~June 30, ~~2020,~~2021, the Company ~~has~~had a surety facility in place to cover all its bonding obligations, which include $20.1 million of bonding in Nevada and ~~$11.2~~$11.9 million (C$~~14.9~~14.7 million) of bonding in Canada. The terms of the facility carry an average annual financing fee of 2.3% and require a deposit of 11%. The surety bonds are available for ~~draw down~~draw-down by the beneficiary in the event the Company does not perform its reclamation obligations. If the specific reclamation requirements are met, the beneficiary of the surety bonds will release the instrument to the issuing entity. The Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements, through existing or alternative means, as they arise. As at ~~September~~June 30, ~~2020~~2021, the Company ~~held~~recorded $3.6 million in restricted cash as a deposit against the surety facility.

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~~MCEWEN MINING INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~September 30, 2020~~

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

Streaming Agreement

As part of the acquisition of the Black Fox Complex in 2017, the Company assumed a gold purchase agreement (streaming contract) related to production from certain land claims. The Company is obligated to sell 8% of gold production from the Black Fox mine and 6.3% from the adjoining Pike River property (Black Fox extension) to Sandstorm Gold Ltd. at the lesser of market price or $561 per ounce (with inflation adjustments of up to 2% per year) until 2090.

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MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2021

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

The Company records the revenue from these shipments based on the contract price at the time of delivery to the customer. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company recorded revenue of $0.2 million and ~~$0.9~~$0.6 million, respectively, (for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 – ~~$0.4~~$0.2 million and ~~$1.2~~$0.7 million, respectively) related to the gold stream sales.

Flow-through Eligible Expenses

In January 2021, the Company closed a flow-through share issuance to fund the development at the Froome deposit. As of June 30, 2021, the Company incurred the full required spend of $12.7 million in CDE (during Q2 2021, the Company incurred the remaining $4.8 million in CDE requirement).

In 2020, the Company completed 2 flow-through share issuances. The total proceeds of $18.3 million will be used to incur qualifying CEE in the Timmins region of Ontario by December 31, 2022. As of June 30, 2021, the Company has incurred $7.3 million of the required CEE spend ($1.9 million in 2020).

NOTE 1817 CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheets to the amounts disclosed in the Consolidated Statements of Cash ~~flows~~Flows:


	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
Cash and cash equivalents	$	7,954	$	46,452	$	42,232	$	20,843
Restricted cash - current (Note 13)		10,193		-
Restricted cash - non-current (Note 17)		3,595		48
Restricted cash - non-current						3,625		3,595
Total cash, cash equivalents, and restricted cash	$	21,742	$	46,500	$	45,857	$	24,438

Restricted cash includes ~~proceeds received from the Flow Through Financing~~ ~~(Note 13)~~ ~~of $10.2 million completed on September 10, 2020 and $3.6 million associated with~~ deposits related to ~~our~~the Company’s reclamation obligations and surety facility (Note ~~17)~~16).

NOTE 18 SUBSEQUENT EVENTS

McEwen Copper Inc. (“McEwen Copper”)

On July 6, 2021, the Company announced its wholly-owned subsidiary which holds 100% of the Los Azules Copper project will be raising a financing for the continued development of this project, as well as to fund a modest exploration program for its Elder Creek Copper exploration properties in Nevada. McEwen Copper is seeking to raise up to $80 million in a private offering and Rob McEwen has committed the first $40 million dollars of this financing.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In the following discussion, “McEwen Mining”, the “Company”, “we”, “our”, and “us” refers to McEwen Mining Inc. and as the context requires, its consolidated subsidiaries.

The following discussion updates our plan of operation for the foreseeable future. It also analyzes our financial condition at ~~September~~June 30, ~~2020~~2021 and compares it to our financial condition at December 31, ~~2019.~~2020. Finally, the discussion analyzes our results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and compares those to the results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. With regard to properties or projects that are not in production, we provide some details of our plan of operation. We suggest that you read this discussion in conjunction with MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and our audited consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, ~~2019.~~2020.

The discussion contains financial performance measures that are not prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP” or “GAAP”). Each of the following is a non-GAAP measure: cash gross profit, cash costs, cash cost per ounce, all-in sustaining costs, all-in sustaining cost per ounce, average realized price per ounce, and liquid assets. These non-GAAP measures are used by management in running the business and we believe they provide useful information that can be used by investors to evaluate our performance, our ability to generate cash flows and our liquidity. These measures do not have standardized definitions and should not be relied upon in isolation or as a substitute for measures prepared in accordance with GAAP. Cash Costs equals Production Costs Applicable to Sales and is used interchangeably throughout ~~the document.~~this report.

For a reconciliation of these non-GAAP measures to the amounts included in our Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 and to our Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 and certain limitations inherent in such measures, please see the discussion under “Non-GAAP Financial Performance Measures”, on page 38.

This discussion also includes references to “advanced-stage properties”, which are defined as properties for which advanced studies and reports have been completed indicating the presence of mineralized material or proven and probable reserves, or that have obtained or are in the process of obtaining the required permitting. Our designation of certain properties as “advanced-stage properties” should not suggest that we have or will have proven or probable reserves at those properties as defined by ~~the~~ Guide 7.

OVERVIEW

We were organized under the laws of the State of Colorado on July 24, 1979. We are engaged in the exploration, development, production and sale of gold and silver and exploration for copper.

We operate in the United States, Canada, Mexico and Argentina. We own a 100% interest in the Gold Bar mine in Nevada, the Black Fox gold mine in Ontario, Canada, the El Gallo Project and the Fenix silver-gold project in Sinaloa, Mexico, the Los Azules copper deposit in San Juan, Argentina, and a portfolio of exploration properties in Nevada, Canada, Mexico and Argentina. We also own 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.

In this report, “Au” represents gold; “Ag” represents silver; “oz” represents troy ounce; “t” represents metric tonne; “gpt” represents grams per metric tonne; “ft.” represents feet; “m” represents meter; “sq.” represents square; and C$ refers to Canadian dollars. All of our financial information is reported in United States (U.S.) dollars, unless otherwise noted. Throughout this Management’s Discussion and Analysis (“MDA”), the reporting periods for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 are abbreviated as ~~Q3/20~~Q2/21 and ~~Q3/19~~Q2/20, respectively, and the reporting periods for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 are abbreviated as ~~9M/20~~H1/21 and ~~9M/19~~H1/20, respectively.

In addition, in this report, gold equivalent ounces (“Au Eq. oz”) includes gold and silver ounces calculated based on a ~~94:~~68:1 silver to gold ratio for the first quarter of ~~2020, 104:~~2021, 68:1 silver to gold ratio for the second quarter of ~~2020, 79:~~2021, 94:1 silver to gold

21 ratio for the first quarter of 2020 and 104:1 for the second quarter of 2020.

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ratio for the third quarter of 2020, 75:1 silver to gold ratio for the first quarter of 2019, 88:1 for the second quarter of 2019, and 87:1 for the third quarter of 2019. Beginning with the second quarter of 2019, we adopted a variable silver:gold ratio for reporting that approximates the average price during each fiscal quarter.

Note: We ceased active mining and processing at the El Gallo mine in the second quarter of 2018. We use the term “El Gallo Project” to refer to the ongoing reclamation and residual ~~heap-leaching that is~~heap leaching taking place at this ~~formerly-producing~~formerly producing mine.

Reliability of Information: MSC, the owner of the San José mine, is responsible for and has supplied to us all reported results from the San José mine. The technical information regarding the San José mine contained herein is, with few exceptions as noted, based entirely on information provided to us by MSC. Our joint venture partner, which is a subsidiary of Hochschild Mining plc, and its affiliates other than MSC do not accept responsibility for the use of project data or the adequacy or accuracy of this document.

Response to the COVID-19 Pandemic

~~On March 11, 2020,~~We are continuing to closely monitor and respond, as possible, to the ~~World Health Organization (“WHO”) declared~~ongoing COVID-19 pandemic. As the ~~COVID-19 virus a global pandemic. During late March and early April, our operations were disrupted by temporary shutdowns~~situation continues to ~~protect our workforce from~~rapidly evolve, ensuring the ~~spread of the virus. An update of our operations is as follows:~~

●

~~All operations at Black Fox were temporarily suspended on March 26 and resumed on April 13;~~

●

~~Mining operations at the Gold Bar mine were suspended on April 1 and resumed on May 4, while leaching activities continued throughout the suspended period;~~

●

~~Operating activities at the El Gallo Project were suspended on April 1, while leaching activities continued. Operations resumed June 1;~~

●

Operations at the San José mine owned by MSC (operated by our joint venture partner) closed March 20 and resumed with scaled back operations by the end of April. In the third quarter, operations at the San José mine were again in a ramp-up phase as a result of the ongoing countrywide restrictions on the movement of people. Resumption of operations at normal capacity is expected towards the end of the year; and

●

~~Our head office in Toronto, Canada was shut down on March 13 and remains closed. All employees are performing their functions remotely.~~

~~During the shutdown periods, rigorous policies and procedures have been implemented at each site to minimize potential~~ health and safety ~~risks to our workforce.~~

~~The temporary shutdowns continue to adversely impact our mine operations, cash flow,~~of the Company’s employees and liquidity and are expected to continue to have adverse consequences to us beyond Q3/20. In addition to the adverse effect on production and revenue, we have incurred costs in connection with the shutdowns and subsequent ramp-up at each operation. Our liquidity and financial condition have been adversely affected and we are at an increased risk of not having sufficient cash flow to fund our operations as well as an increased risk of default under our debt agreement. Achieving and maintaining normal operating capacitycontractors is ~~also dependent on the continued availability and logistical delivery of supplies, which remains out~~one of our ~~control.~~ top priorities. Many jurisdictions including the United States, Canada, Mexico, and Argentina have varied but continued restrictions to travel, holding public gatherings, and certain business operations.

The long-term impact of the COVID-19 ~~outbreak~~pandemic on our results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak, ~~and~~variants of the COVID-19 virus, related advisories and restrictions. Management is actively monitoring the global situation on our financial condition, liquidity, operations, suppliers, industry and workforce.

In response to the need of protecting our employees and our company, we formed our COVID-19 Task Team. The Task Team consists of management members from each operating site and office and have coordinated steps to prevent a wider spread of the virus, while exchanging information with associations, governments and industry peers. We have implemented preventative measures to ensure a safe working environment for our employees and contractors and to prevent the spread of COVID-19. These measures include:

●

Continuing to reinforce safety measures at all sites and offices, including contact tracing, restricting non-essential travel, and complying with public health orders,

●

Facilitating the access to vaccinations at our sites by coordinating with local health authorities,

●

Performing functions remotely as advised by certain jurisdictions. Our head office in Toronto, Canada was shut down on March 13, 2020. As of June 30, 2021, all corporate employees have continued to perform their functions remotely.

~~The governments of the United States, Canada, Mexico~~During Q2/21 and ~~Argentina have enacted or proposed legislation to provide relief to companies and/or individuals affected by the enforced reduction in operations. In Q3/20 and 9M/20,~~H1/21, we secured $nil and $1.9 million of relief from the US government under the paycheck protection program (“PPP”). The funds are fully forgivable so long as eligible expenditures are incurred in a 24-week period. In Q3/20 and 9M/20, we also secured $1.9qualified for $1.7 million and ~~$3.4~~$2.8 million, respectively, ~~of government~~in COVID-19 relief ~~in Canada~~funds through the Canadian government’s Canadian Emergency Wage Subsidy (“CEWS”) ~~program.~~and Canadian Emergency Rent Subsidy (“CERS”) programs.

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Index to Management’s Discussion and Analysis:

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OPERATING AND FINANCIAL HIGHLIGHTS

Highlights for ~~Q3/20~~Q2/21 are included below and discussed further under Consolidated Financial Performance:

~~COVID-19 shutdowns~~Operational Highlights & Impacts

●

~~During Q3/20,~~Our operations delivered strong production ~~rebounded after the successful restart of all operations at~~results in line with our ~~operating mines~~expectations and ~~the El Gallo Project. As previously disclosed, operations were temporary suspended during the second quarter, mainly due~~we expect to ~~actions taken to prevent the spread of COVID-19 among~~meet our ~~workers, business partners, and communities.~~2021 production guidance.

●

~~The San José mine~~Operating costs at our 100% owned operations are trending down; AISC per ounce ($/Au Eq. oz sold)⁽¹⁾~~continued~~ from $1,777/oz in Q1/21 to ~~operate below normal capacity during Q3/20 due to continued government-imposed COVID-19 travel restrictions, which has created challenges~~$1,447/oz in ~~mobilizing personnel to the mine site.~~Q2/21.

~~Performance~~

●

~~We produced 30,400~~A total of 40,700 gold equivalent ounces were produced in the Q2/21, including ~~15,900~~18,200 attributable gold equivalent ounces from the San José mine⁽¹⁾⁽²⁾.

●

Mining at Black Fox has transitioned to the Froome mine deposit, with commercial production expected in Q4/21.

●

~~We sold 30,500 gold equivalent ounces, including 16,000 attributable gold equivalent ounces from~~Subsequent to quarter end, we announced a non-brokered private placement financing of our wholly owned subsidiary which owns the large copper asset Los Azules in the province of San ~~José mine.~~Juan, Argentina.

Cash Flow and Results of Operations

●

WeCash, cash equivalents and restricted cash of $45.9 million were reported ~~revenue~~as at June 30, 2021.

●

Revenues of ~~$27.4~~$40.7 million were reported from the sale of ~~14,500~~22,500 gold equivalent ounces from our 100% owned ~~properties~~operations at an average realized price⁽²⁾ of ~~$1,925~~$1,830 per gold equivalent ounce.

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●

~~We reported cash gross profit~~⁽²⁾ ~~of $3.9 million~~

●

We reported a cash gross ~~loss~~profit⁽²⁾ of ~~$0.7~~$9.6 million onin Q2/21, with a ~~US GAAP basis.~~

●

gross profit of $4.1 million. We reported a net loss of ~~$9.8~~$6.0 million, ~~primarily due to a gross loss of $0.7~~which included $7.7 million ~~and $8.5 million spent~~invested on exploration and advanced projects.

●

We ~~reported positive working capital~~received dividends of ~~$21.6~~$2.6 million

●

~~We reported cash, cash equivalents and restricted cash of $21.7 million at September 30, 2020, which includes cash and cash equivalents of $7.9 million and restricted cash of $13.8 million.~~ from Minera Santa Cruz S.A (“MSC”) in Q2/21 related to our 49% interest in the San José mine in Argentina.

Exploration and Reserves

●

~~During Q3, we completed a flow-through financing, which provided gross proceeds of $10.4~~We spent $7.7 million ~~for~~on exploration ~~activities~~and advanced projects in Q2/21, with the ~~Timmins region over~~primary focus on the ~~next one to two years. The initial focus is on two high-potential targets, Stock West and Whiskey Jack.~~

●

~~We completed 53,400 feet (16,300 meters) of underground diamond drilling in the Black~~ Fox ~~Mine focused on refining the known limits of several ore blocks adjacent to the existing Black Fox ore body.~~Complex expansion.

●

~~We continued~~A Preliminary Economic Assessment (PEA) to expand the ~~review of our Gold Bar mine reserve. A new reserve estimate and feasibility study update for Gold Bar are~~production from the Fox Complex is expected to be ~~announced toward~~released in H2/21 following additional drilling at the ~~end of 2020.~~Stock and Grey Fox properties.

(1)	~~At our 49% attributable interest.~~

~~(2)~~

As used here and elsewhere in this report, this is a Non-GAAP financial performance measure. See “Non-GAAP Financial Performance Measures” beginning on page 38.

(2)	At our 49% attributable interest.

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SELECTED CONSOLIDATED FINANCIAL AND OPERATING RESULTS

The following tables present select financial and operating results of our company for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in thousands, except per share)								(in thousands, except per share)
Revenue from gold and silver sales⁽¹⁾	$	27,395	$	32,691	$	77,086	$	84,657	$	40,706	$	18,291	$	64,446	$	49,691
Production costs applicable to sales	$	(23,526)	$	(23,584)	$	(74,267)	$	(59,432)	$	(31,132)	$	(22,354)	$	(54,721)	$	(50,741)
Loss before income and mining taxes	$	(9,930)	$	(13,657)	$	(130,059)	$	(37,190)	$	(7,011)	$	(19,844)	$	(21,492)	$	(120,129)
Net loss⁽²⁾	$	(9,778)	$	(11,465)	$	(128,783)	$	(34,615)	$	(5,989)	$	(19,814)	$	(18,455)	$	(119,005)
Net loss per share⁽²⁾	$	(0.02)	$	(0.03)	$	(0.32)	$	(0.10)	$	(0.01)	$	(0.05)	$	(0.04)	$	(0.30)
Cash (used in) operating activities	$	(5,174)	$	(12,764)	$	(25,273)	$	(21,916)
Cash provided by (used in) operating activities									$	7,563	$	(8,191)	$	(2,580)	$	(20,099)
Cash additions to mineral property interests and plant and equipment	$	801	$	2,543	$	9,304	$	27,027	$	10,287	$	3,000	$	20,372	$	8,503

(1)	Excludes revenue from the San José mine, which is accounted for under the equity method.

(2)	Results for the ~~nine~~six months ended ~~September~~June 30, 2020 include an impairment charge of $83.8 million, or $0.21 per share.


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

	(in thousands, except per ounce)								(in thousands, except per ounce)
Produced - gold equivalent ounces⁽¹⁾		30.4		45.9		84.6		128.1		40.7		19.2		71.3		54.2
100% owned operations		14.5		21.5		44.9		60.6		22.5		10.2		36.4		30.4
San José mine (49% attributable)		15.9		24.4		39.7		67.5		18.2		9.0		34.9		23.8
Sold - gold equivalent ounces⁽¹⁾		30.5		45.8		85.5		129.3		40.6		22.4		70.8		54.9
100% owned operations		14.5		22.6		45.6		63.0		22.5		10.8		36.3		31.1
San José mine (49% attributable)		16.0		23.2		39.9		66.3		18.1		11.6		34.5		23.8
Average realized price ($/Au Eq. oz)⁽²⁾⁽³⁾	$	1,925	$	1,478	$	1,732	$	1,372	$	1,830	$	1,733	$	1,808	$	1,641
P.M. Fix Gold ($/oz)(4)	$	1,909	$	1,472	$	1,735	$	1,364	$	1,817	$	1,711	$	1,805	$	1,645
Cash cost per ounce ($/Au Eq. oz sold):⁽²⁾
100% owned operations	$	1,583	$	1,027	$	1,622	$	924	$	1,286	$	2,170	$	1,407	$	1,641
San José mine (49% attributable)	$	1,269	$	915	$	1,232	$	883	$	1,105	$	1,280	$	1,097	$	1,207
AISC per ounce ($/Au Eq. oz sold):⁽²⁾
100% owned operations	$	1,713	$	1,289	$	1,967	$	1,272	$	1,447	$	2,719	$	1,565	$	2,086
San José mine (49% attributable)	$	1,538	$	1,204	$	1,536	$	1,179	$	1,500	$	1,476	$	1,418	$	1,535
Cash gross profit⁽²⁾	$	3,869	$	9,107	$	2,819		25,225
Cash gross profit (loss)⁽²⁾									$	9,574	$	(4,063)	$	9,725		(1,050)
Silver : Gold ratio⁽¹⁾		79 : 1		87:1		86 : 1		84:1		68 : 1		104:1		68 : 1		100:1

(1)	Silver production is presented as a gold equivalent; silver:gold ratio of ~~79:~~68:1 for ~~Q3/20~~Q2/21 and ~~87:~~104:1 for ~~Q3/19.~~Q2/20. See page ~~21.~~22.

(2)	As used here and elsewhere in this report, this is a Non-GAAP financial performance measure. See “Non-GAAP Financial Performance Measures” beginning on page 38.

(3)	On sales from 100% owned operations only, excluding sales from our stream.

(4)	Average for the Q2/21 period.

CONSOLIDATED PERFORMANCE

~~For Q3/20,~~In Q2/21, we reported a net loss of ~~$9.8~~$6.0 million (or ~~$0.02~~$0.01 per share) compared to a ~~$11.5~~loss of $19.8 million ~~loss in Q3/19~~ (or ~~$0.03~~$0.05 per share)~~. Exploration expenses decreased $9.3 million~~ in the ~~2020 period, as we tried to conserve capital.~~quarter ended June 30, 2020. The ~~$2.6 million income from our investment~~improvement in ~~MSC resulting from improved operations at the San José mine contributed to the reduced loss. These were partially offset~~Q2/21 is primarily driven by a ~~$2.3~~$13.5 million ~~decrease~~increase in gross profit ~~a $2.7 million reduction in other income and a $2.0 million decrease in income and mining tax compared to 2019.~~

~~The larger drill program for Q3/19 was also~~ due to ~~flow-through exploration commitments that needed to be expended in 2019. MSC’s results benefited from significantly~~increased production and sales and a higher average realized gold price.

Cash gross profit (a non-GAAP measure) of $9.6 million for Q2/21 increased by $13.6 million from the $4.1 million Q2/20 cash gross loss. The change is attributed to increased production and ~~silver prices (30% and 58%~~sales in Q2/21, higher average realized gold prices and ~~silver prices, respectively, in Q3/20 compared~~decreased per ounce cash costs as operations at Gold Bar significantly improved and as the Fox Complex ramped up activities at the Froome mine. See “Non-GAAP Financial Performance Measures” for a reconciliation to ~~Q3/19) and lower depreciation and depletion expenses due to lower mineralized material mined and processed.~~gross (loss) profit, the nearest GAAP measure.

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Lower gross profit was the result of less gold and silver ounces produced and sold and higher cash cost per ounce which were partially offset by higher average realized gold prices. Other income was lower in Q3/20 due to $nil gain on investments ($3.2 million gain in Q3/19) and a $0.1 million foreign currency loss ($1.6 million foreign currency gain in Q3/19), both partially offset by $2.6 million COVID relief received in Q3/20 ($nil in Q3/19).

In Q2/19, we adopted a variable silver:gold ratio for reporting gold equivalent ounces produced and sold, which approximates the average market ratio during the current period. We had previously we used a fixed 75:1 silver:gold ratio. The change in the silver:gold ratio primarily impacts gold equivalent ounces produced and sold as well as cash cost and all-in sustaining cost per gold equivalent ounce for the San José mine.

Production from our 100% owned mines ~~were 14,500~~of 22,500 gold equivalent ounces (GEOs) in ~~Q3/20, which decreased~~Q2/21 increased by ~~7,000 gold equivalent ounces, or 33%,~~12,300 GEOs compared to ~~Q3/19.~~Q2/20. The ~~decline reflects~~increases relative to the ~~ramp-up~~prior period at the Fox Complex (4,900 more GEOs) and Gold Bar (8,000 more GEOs) operations were in line with our expectations given the transition to ~~normal capacity being phased over~~Froome production at the ~~quarter~~Fox Complex and the improvement of operations as a result of increased efficiencies at the Gold Bar ~~mine (4,200 fewer ounces), where day and night shifts only resumed during September, and the Black Fox mine (1,700 fewer ounces). In addition, there was lower expected~~mine. The decrease in production ~~from residual leaching~~ at the El Gallo ~~Project (1,100~~project (600 fewer ~~ounces).~~GEOs relative to Q2/20) is in line with our expectation as residual heap leach operations wind down.

Our share of the San José mine production was ~~15,900 gold equivalent ounces~~18,200 GEOs in ~~Q3/20,~~Q2/21 which was ~~8,500 ounces, or 35%, lower~~102% higher than the 9,000 GEOs produced in Q3/19. Although the mine was able to restart operations in late April, the operations remain below capacity due to government imposed travel restrictions to combat the spread of COVID-19. This continues to pose significant challenges in mobilizing personnel to the mine site.Q2/20.

CONSOLIDATED FINANCIAL REVIEW

Revenue from gold and silver sales in ~~Q3/20 decreased~~Q2/21 of $40.7 million increased by ~~16% to $27.4~~123% or $22.4 million compared to ~~Q3/19,reflecting 8,100, or 36%, fewer gold equivalent ounces~~Q2/20. The increase reflects 11,700 more GEOs sold from our 100% owned ~~mines, partly offset~~operations. The increase in revenues was also positively impacted by a higher average realized gold price ~~per ounce~~in the quarter compared to ~~same period in 2019~~Q2/20 ($~~1,925/~~1,830/oz in ~~Q3/~~Q2/21; $1,733/oz in Q2/20).

The increase in sales in Q2/21 relative Q2/20 ~~or $447/oz higher).The decrease in gold equivalent ounces~~includes 8,200 and 4,300 more GEOs sold ~~in Q3/20 is due to lower production reflecting the phased ramp-up to normal capacity at the~~from Gold Bar and ~~Black~~the Fox ~~mines noted above.~~Complex, respectively.

Revenue from gold and silver sales in ~~9M/20 decreased~~H1/21 of $64.4 million increased by ~~9% to $77.1 million~~30% compared to ~~9M/19,reflecting 17,400, or 28%, fewer~~revenues of $49.7 million in H1/20. The increase reflects the sale of 5,200 more gold equivalent ounces ~~sold~~ from our 100% owned ~~mines, which~~mines. The increase in revenues was ~~partly offset~~also positively impacted by a higher average realized gold price ~~per ounce~~in the H1/21 compared to ~~same period in 2019~~H1/20 ($~~1,732/~~1,808/oz in ~~9M/~~H1/21; $1,641/oz in H1/20).

The increase in sales in H1/21 relative to H1/20 ~~or $360/oz higher). The decrease in gold equivalent ounces sold in 9M/20 is mainly due to lower production in the second~~includes 6,400 and ~~third quarters of 2020 as result of the temporary shutdown and phased ramp-up of operations due to the COVID-19 pandemic; partially offset by increased production at~~1,000 more GEOs from the Gold Bar ~~mine in the first quarter of 2020 compared~~and Fox Complex operations, respectively, and 2,100 fewer GEOs from El Gallo as operations continue to ~~the same period of 2019, when the Gold Bar mine was in pre commercial production.~~wind down.

Production Costs applicable to sales in ~~Q3/20remained consistent at $23.5~~Q2/21 increased by 39% to $31.1 million compared to ~~Q3/19, despite 36% less gold equivalent ounces sold, which was almost totally~~Q2/20.The increase is driven by an increase in sales production in the quarter partially offset by a ~~significantly higher~~decrease in the consolidated cash cost per ounce ~~at all our operations (details in~~sold. Refer to the ~~“Operations Review” section).~~“Results of Operations” sections for further details.

Production Costs applicable to sales in ~~9M/20~~H1/21 increased by ~~25%~~8% to ~~$74.3~~$54.7 million compared to ~~9M/19, despite 28% less gold equivalent ounces sold, which was more than offset by a significantly higher~~H1/20. Despite the increase in sales volume relative to H1/20, consolidated cost per ounce decreased as a result of improved grades at ~~all our operations (details in~~ the ~~“Operations Review” section).~~

~~Depreciation~~Fox Complex and ~~depletion~~ ~~for Q3/20 decreased by 39% to $4.6 million compared to Q3/19, reflecting fewer gold ounces sold from all our sites and a lower depreciable and depletable asset base after the~~increased efficiencies at Gold ~~Bar impairment in the first quarter.~~

~~Depreciation and depletion~~ ~~for 9M/20 decreased by 8% to $16.1 million compared to 9M/19, reflectingfewer gold ounces sold from the Black Fox mine and the El Gallo Project, which was partly offset by slightly more gold ounces sold from the Gold Bar mine in 9M/20.~~Bar.

Advanced projects costs for ~~Q3/~~Q2/21 and H1/21 of $0.8 million and $2.6 million, respectively,decreased from the $2.9 million and $5.4 million, respectively, spent in Q2/20 and ~~9M/~~H1/20. Costs during Q2/21 included continued spending for the Fox Complex expansion PEA, and the Fenix project in Mexico. Expenditures during H2/20 ~~increased~~also included costs related to ~~$4.0~~Froome developments.

Exploration costs of $6.9 million and ~~$9.5~~$11.9 million ~~or 88%~~for Q2/21 and ~~38% higher,~~H1/21, respectively, increased by $3.4 million and $4.5 million, compared to the same periods in 2020.Exploration activities ramped up in 2021 following the funding received from our 2020 flow-through share programs. The funds are being used to expand high potential target areas and are incurring eligible Canadian exploration expenditures (“CEE”) in the Timmins region of ~~2019. Advanced projects~~Ontario. Refer to Note 12 to the Consolidated Financial Statements, Shareholders’ Equity.

Loss from investment in ~~Q3/~~MSC of $1.9 million and $2.4 million in Q2/21 and H1/21, respectively, increased by $0.8 million and decreased by $1.3 million relative to Q2/20 and ~~9M/~~H1/20, ~~included spending for~~respectively. The Q2/21 change is largely driven by higher than expected costs related to COVID-19, in Q1/21. The change from H1/20 to H1/21 is driven by an increase in attributable net income partially offset by an increase in the fair value amortization.

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advancing the Froome project in Timmins, Ontario, expenditures related to property holding payments and other spending for the Fenix project in Mexico and engineering and permit work at the Gold Bar South property in Nevada.

~~Exploration costs~~ ~~of $4.4 million and $11.8 million, respectively for Q3/20 and 9M/20, decreased by 68% and 50%, compared to the same periods of 2019.~~Exploration activities decreased since we did not have any flow-through spending requirements to satisfy during the first eight months in 2020. During 9M/19, $11.0 million of flow-through qualifying exploration expenditures were incurred compared to $0.4 million during 9M/20.

~~General and administrative~~ ~~expenses of $2.5 million and $6.8 million in Q3/20 and 9M/20, respectively, decreased by 4% and 15% compared to 2019 as a result of the reduction of corporate activities in 2020.~~

~~Income from investment in MSC~~ of $2.6 million in Q3/20 compared to a loss of $0.3 million in Q3/19, while a loss from investment in MSC of $1.1 million in 9M/20 compared to a loss of $6.8 million in the same period of 2019. Improved performance in Q3/20 and 9M/20 reflects significantly higher gross profit of $21.6 million and $32.4 million, respectively, on a 100% basis, compared to $13.0 million and $19.9 million in Q3/19 and 9M/19, and lower current and deferred income and mining tax expense of $3.0 million in 9M/20, compared to $8.4 million in 9M/19. Higher gross profit in Q3/20 was partially offset by higher exploration expenses ($2.8 million compared to $1.5 million in Q3/19). Higher gross profit and lower current and deferred income and mining tax expense in 9M/20 were partially offset by $7.2 million of other expenses incurred during the shutdown of operations in 2020 ($nil in 2019). Higher gross profit in 2020 was due primarily to higher average realized gold and silver prices, despite fewer gold equivalent ounces sold and $10.2 million and $15.5 million operating costs due to the COVID-19 pandemic in Q3/20 and 9M/20, respectively.

Revision of estimates and accretion of asset retirement obligations of ~~$0.9 million and $2.0~~$0.5 million in ~~Q3/20 and 9M/20~~Q2/21 remained consistent relative to Q2/20. The H1/21 balance of $1.4 million increased by ~~79% and 45% respectively, compared to Q3/19 and 9M/19,~~$0.3 million from H1/20 due ~~primarily to~~ reclamation adjustments reflecting ~~updated estimates of $0.4 million and $0.6 million in 2020, compared to $nil and $0.1 million in 2019.~~

~~Impairment~~ of Gold Bar mine mineral property interests and plant and equipment carrying value for 9M/20 was $83.8 million. During the first quarter of 2020, we performed a comprehensive review of our Gold Bar mine and determined that indicators of impairment existed. A recoverability test was performed and we concluded that the carrying value of the long-lived assets for the Gold Bar mine was impaired based on a reduction in preliminary estimated resources and expected future production.

~~Other operating~~ of $nil and $2.0 million in Q3/20 and 9M/20 compared to $nil in the same periods of 2019. Other operating relate to the expenses of the temporary suspension or curtailment of our operations at the Gold Bar and Black Fox mines resulting from the pandemic.estimate updates.

Interest and other finance ~~expense,~~expenses, net ~~was $2.0 million and $5.6~~of $1.9 million in ~~Q3/20~~Q1/21 remained consistent relative to Q1/20. The H1/21 balance decreased by $1.2 million, driven by the amortization of the flow-through premium as eligible CDE and 9M/20 compared to $0.7 million and $3.9 million in Q3/19 and 9M/19. The increase in Q3/20 was mainly due to $0.3 million higher interest expense for the debt facility and other finance expense. The increase in 9M/20 is due primarily to the capitalization of $0.6 million of interest expense for the debt facility whichCEE expenditures were ~~capitalized to the Gold Bar mine construction in 2019, while $nil was capitalized in 2020 as the mine is in full production, and other finance expense.~~incurred.

Other income of ~~$2.1~~$3.8 million and ~~$6.1~~$5.2 million ~~for Q3/~~in Q2/21 and H1/21, increased by $0.8 million and $1.3 million compared to the same periods of 2020. The Q2/21 and H1/21 balances relate to proceeds from COVID-19 relief programs in Canada and income from the sale of certain property. Please see Note 5 to the Consolidated Financial Statements, Investments. The Q2/20 and ~~9M/~~H1/20 ~~respectively, decreased by $2.7~~balances relate largely to the proceeds received from both the Canadian and $0.2 million when compared to Q3/19 and 9M/19. Other income in Q3/20 decreased mainly due to $nil gain on investments ($3.2 million gain in Q3/19) and a $0.1 million foreign currency loss ($1.6 million foreign currency gain in Q3/19). Both were partially offset by $2.6 million COVID relief funds in Q3/20 ($nil in Q3/19). Other income in 9M/20 decreased mainly due to a $0.6 million loss on investments ($5.0 million gain in 9M/19) partly offset by $5.3 million COVID relief funds in Q3/20 ($nil in Q3/19).U.S. governments for COVID-19 support.

Income and mining tax recovery of ~~$0.2~~$1.0 million and ~~$1.3~~$3.0 million, respectively, for ~~Q3/20~~Q2/21 and ~~9M/20,~~H1/21, increased compared to ~~$2.2~~$0.1 million and ~~$2.6~~$1.1 million in the same periods of ~~2019.~~2020. The ~~changes~~increase in the ~~income and mining tax~~ recovery in the 2021 periods is primarily ~~reflect~~due to the ~~fluctuations of~~flow-through share premium amortization partially offset by lower recoveries from the weakening Argentine and Mexican pesos against the U.S. dollar, causing fluctuations to the Company’s deferred tax liabilities denominated in the respective foreign ~~currency.~~currencies.

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LIQUIDITY AND CAPITAL RESOURCES

Our cash ~~balance at September 30, 2020 of $18.1 million, which includes cash~~ and cash equivalents balance as at June 30, 2021 of ~~$7.9~~$42.2 million, ~~and current restricted cash of $10.2~~increased from $20.8 million ~~decreased from $46.5 million~~as at December 31, ~~2019 ($46.5 million cash and cash equivalents).~~2020. The ~~decrease~~increase in cash and cash equivalents as at ~~September~~June 30, ~~2020 is mainly~~2021 was primarily due to ~~$25.3~~cash provided from financing activities of $41.8 million, $7.5 million in dividends received from MSC, offset by $8.1 million in cash used in operations, ~~including a $5.2 million reduction in accounts payable~~ and ~~accrued liabilities, and $9.3~~$20.4 million invested in mineral property, ~~interests and~~ plant and equipment. Restricted cash represents remaining exploration commitments of $10.2 million from the flow-through financing completed on September 10, 2020. For more details on our flow-through financing refer to Note 13 to the Consolidated Financial Statements, ~~Shareholders’ Equity.~~

Cash from financing activities included gross proceeds of $12.7 million (net proceeds of $12.0 million) from the issuance of Canadian development expenditures (“CDE”) flow-through shares on January 29, 2021 and gross proceeds of $31.5 million (net proceeds of $29.9 million) from a registered direct equity offering on February 9, 2021. We are required to spend the flow-through share proceeds on CDE flow-through eligible ~~Canadian exploration expenditures (“CEE”)~~ as defined by subsection ~~66(15)~~66.2(5) of the Income Tax Act (Canada). ~~We expect~~As of June 30, 2021, we have met the CDE spend requirement. For more details on our flow-through share financing refer to ~~fulfill our CEE commitments in 2021.~~Note 12 to the Consolidated Financial Statements, Shareholders’ Equity.

Working capital as at ~~September~~June 30, ~~2020~~2021 of ~~$21.6~~$30.0 million ~~decreased~~increased by ~~$21.6~~$22.0 million from December 31, ~~2019, reflecting~~2020. The change is largely attributed to the ~~decrease~~increase in cash and cash equivalents ~~and current restricted cash of $28.4 million and~~driven by the decrease of $4.1 million in our heap leach pad inventory balances. These factors were partly offset by $10.0 million of current debt as of December 31, 2019 reclassified to non-current liabilities due to the two-year extension of the principal repayments under the Amended and Restated Credit Agreement (“ARCA”) closed on June 25, 2020. For more details on the ARCA, please refer to Note 11 to the Consolidated Financial Statements, ~~Debt.~~financing activities discussed above.

Cash used in operations ~~during 9M/20 was $25.3~~in H1/21 of $8.1 million ~~compared to $21.9~~decreased from the $20.1 million ~~cash~~ used in operations in ~~9M/19,~~H1/20. The $12.0 million variance is primarily driven by the ~~change was due to~~$16.1 million reduction in net loss versus the ~~lower revenue from the sale~~same period last year (H1/20 loss; net of 28% fewer ounces and higher production costs applicable to sales in 2020. Both lower revenue and higher production costs applicable to sales in 2020 were partially offset by a 26% higher average realized price per ounce sold, lower exploration spending due to not having any flow-through spending commitments during the first eight months of 2020 and an increase in other income as a result of COVID-19 relief funds.Q1/20 impairment charge).

Cash used in investing activities of ~~$7.8~~$12.3 million in ~~9M/20 decreased significantly compared~~H1/21 increased relative to ~~$18.8~~the $7.9 million used in ~~9M/19, with~~H1/20. The change is largely attributed to the ~~reduction primarily due~~increased capital development costs incurred at the Froome mine deposit at the Fox Complex, as we transition to ~~$17.7 million less spending for mineral property interests and plant and equipment as the construction of the Gold Bar mine was completed~~production in ~~May 2019. This decrease was~~2021, partially offset by ~~lower proceeds from sale of investments ($1.3~~a $7.6 million ~~in 2020 compared to $4.2 million in 2019) and lower dividends~~dividend received from MSC in ~~9M/20 ($0.3 million in 2020 compared to $4.0 million in 2019).~~the H1/21 period.

During ~~9M/20,~~H1/21, we spent ~~$9.3~~$20.4 million on mineral property and plant and equipment ~~predominately for~~(an increase of $11.9 million relative to the H1/20 period). The additions were primarily related to capital development costs at the ~~Black Fox mine and infill drilling at the Gold Bar mine.~~Froome project as we are on schedule to transition to commercial production in Q4/21.

Financing activities provided ~~$8.3~~$41.8 million in cash in ~~9M/20, with $9.8~~H1/21, primarily from $12.0 million ~~coming~~provided from the net proceeds from the “CDE” flow-through ~~financing~~share raise completed in ~~September 2020 (less the issuance costs); compared to $23.6~~January 2021 and $29.8 million ~~generated in 9M/19, with $22.9 million coming~~provided from the ~~March 2019 Registered Offering.~~February 2021 registered direct common stock offering.

~~Going concern~~

~~The accompanying interim financial statements~~We believe we have ~~been prepared on~~sufficient liquidity along with funds generated from ongoing operations, to fund anticipated cash requirements for operations, capital expenditures and working capital purposes for the going concern basis of accounting, which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. In the preparation of the interim financial statements, management is required to identify when events or conditions indicate that substantial doubt may exist about the Company’s ability to continue as a going concern. Substantial doubt about the Company’s ability to continue as a going concern would exist when relevant conditions and events, considered in aggregate, indicate that the Company will not be able to meet its obligations as they become due for a period of at least, but not limited to,next 12 months from the balance sheet date. When the Company identifies conditions or events that raise potential for substantial doubt about its ability to continue as a going concern, the Company considers whether its plans that are intended to mitigate those relevant conditions or events will alleviate the potential substantial doubt.

~~In June 2020, the Company refinanced its senior secured term loan facility (for more information refer to Note 11 to the Consolidated Financial Statements,~~ ~~Debt~~~~) and in September 2020, the Company completed a flow through financing (for more information refer to Note 13 to the Consolidated Financial Statements,~~ ~~Shareholder’s Equity~~ ~~). The Company was~~months.

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also in full compliance with its debt covenants as at September 30, 2020. However, based on the significant expected resource reduction at the Gold Bar mine, resulting in an initial revised mine plan which yields less cash flow, operational challenges at Black Fox, the capital investment commitment required to develop the Froome access portal and the disruptions to the Company’s operations caused by the COVID-19 pandemic, there is uncertainty about our ability to both generate sufficient operating cash flow to conduct further operation, exploration and development of our mineral properties and to remain in compliance with certain of our debt covenants over the next 12 months. Non-compliance with these covenants would result in a breach under the Company’s debt agreement.

In response to this uncertainty, we are evaluating all options, including accessing capital markets, sale of certain assets, and expenditure reductions across the Company. Our ability to continue as a going concern is dependent on the successful completion of one or a combination of these initiatives to ensure that we have sufficient liquidity in order to fund our operations and remain in compliance with our debt covenants. After considering these plans, management has concluded that there are no material uncertainties relating to events or conditions that cast substantial doubt upon the our ability to continue as a going concern for a period of 12 months from the consolidated balance sheet date. The estimates used by management in reaching this conclusion are based on information available as at the date these financial statements were authorized for issuance, and include internally generated cash flow forecasts. Accordingly, actual results could differ from these estimates and resulting variances may be material to management’s assessment.

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OPERATIONS REVIEW

U.S.A. Segment

The U.S.A. segment is comprised of the Gold Bar mine and ~~certain~~other exploration ~~properties.~~properties in Nevada, U.S.A.

Gold Bar Mine

The following table sets out certain operating results for the Gold Bar mine for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and 2019. As the Gold Bar mine achieved commercial production on May 23, 2019, the comparatives for cash costs, cash cost per ounce, all-in sustaining costs and all-in sustaining costs per ounce for the nine months ended September 30, 2019 include sales and costs from pre-commercial production during the first months of 2019:2020.


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020			2019	2020		2019		2021			2020	2021		2020

Operating Results	(in thousands, unless otherwise indicated)								(in thousands, unless otherwise indicated)
Mined mineralized material (t)		222		631		715		1,302		646		65		1,110		492
Average grade (gpt Au)		0.73		0.88		0.70		0.93		0.73		0.82		0.74		0.69
Processed mineralized material (t)		229		867		812		1,690		727		108		1,129		583
Average grade (gpt Au)		0.73		0.92		0.68		0.91		0.76		0.77		0.76		0.66
Gold ounces:
Produced		6.8		11.0		22.0		21.0
Sold		6.8		11.2		22.1		20.5
Silver ounces:
Produced		0.1		0.2		0.5		0.4
Sold		0.0		0.3		0.6		0.3
Gold equivalent ounces:
Produced		6.8		11.0		22.0		21.0		14.1		6.1		21.5		15.2
Sold		6.8		11.2		22.1		20.5		14.4		6.2		21.7		15.3
Revenue from gold and silver sales	$	13,042	$	16,577	$	38,129	$	28,941	$	26,343	$	10,770	$	39,236	$	25,088
Cash costs⁽¹⁾	$	10,791	$	12,156	$	38,863	$	20,798	$	21,067	$	11,039	$	34,623	$	28,071
Cash cost per ounce ($/Au Eq. oz sold)⁽¹⁾	$	1,585	$	1,088	$	1,762	$	1,014	$	1,463	$	1,772	$	1,598	$	1,840
All‑in sustaining costs⁽¹⁾	$	12,043	$	13,795	$	47,031	$	24,613	$	23,314	$	15,336	$	37,374	$	34,985
AISC per ounce ($/Au Eq. oz sold)⁽¹⁾	$	1,769	$	1,235	$	2,132	$	1,200	$	1,619	$	2,462	$	1,725	$	2,293
Silver : gold ratio		79 : 1		87 : 1		86 : 1		83 : 1		68 : 1		104 : 1		68 : 1		100 : 1

(1)	As used here and elsewhere in this report, this is a Non-GAAP financial performance measure. Cash costs for the Company’s 100% owned operations equal Production costs applicable to sales. See “Non-GAAP Financial Performance Measures” beginning on page 38 for additional information.

~~In Q3/20,~~ 2021 compared to 2020

Gold Bar produced ~~6,800~~14,064 and 21,479 gold equivalent ~~ounces. Full operations with day~~ounces in Q2/21 and ~~night shifts resumed~~H1/21, respectively. This reflects a 132% and 41% increase from the 6,061 and 15,194 gold equivalent ounces produced in ~~September. The slower ramp up at Gold Bar, after the COVID-19 related shut down, was due to the Company completing drilling, assaying,~~Q2/20 and ~~a new in-house resource model to develop a plan forward that includes mining from Gold Bar South. During the quarter,~~H1/20, respectively. In H1/21, we ~~progressed several key business improvement initiatives intended to support the turnaround of our operations, which include mining optimization evaluations, improving~~improved contractor mining efficiencies, ~~assessing material handling~~processing optimizations, and ~~processing alternatives,~~ore control. In Q2/20 and ~~further definition drilling at the Gold Pick. A new reserve estimate and feasibility study update for Gold Bar are expected to be announced towards the end of the fourth quarter.~~H1/20, production results were negatively impacted by COVID-19 related operation suspensions.

Revenue from gold and silver sales ~~decreased~~of $26.3 million increased in ~~Q3/20~~Q2/21 by ~~$3.5~~$15.6 million compared to ~~Q3/19,~~Q2/20, reflecting ~~the decrease~~a 131% increase in gold equivalent ounces produced and ~~sold, which was partially offset by higher average realized gold prices in 2020.~~

sold. Revenue from gold and silver sales ~~significantly increased~~ were $39.2 million in ~~9M/20 by $9.2 million~~H1/21 compared to ~~9M/19, mainly~~$25.1 million in H1/20, due to ~~higher average realized gold prices~~the operation suspensions discussed above.

Production costs applicable to sales of $21.1 million in ~~2020, coupled with a slight~~Q2/21 increased by $10.1 million from $11.0 million in Q2/20. The increase inis primarily attributed to the ~~number of~~increase in gold equivalent ounces produced and sold. Production costs applicable to sales were $34.6 million in H1/21, compared to $28.1 million in H1/20, reflecting 63% more gold equivalent ounces sold in ~~2020.~~H1/20 and higher drawdown of gold ounces from our inventories.

Cash cost and AISC per gold equivalent ounce were $1,463 and $1,619 in Q2/21 respectively; and $1,772 and $2,462 in Q2/20, respectively. Cash costs and AISC per GEO decreased by 18% and 35% relative to the 2020 periods. The cost decrease is driven by the increase in production and by the significant operational improvements we have been continuing to work through the past year. We expect to see this trend continue into H2/2021.

Cash cost and AISC per gold equivalent ounce were $1,598 and $1,725 in H1/21 and $1,840 and $2,293 in H1/20. The decrease in cash cost per GEO is driven by the improvement operations discussed above.

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Exploration Activities – Nevada

In Q2/21 and H1/21, we incurred $1.3 million and $1.7 million, respectively, ($1.6 million and $2.0 million in Q2/20 and H1/20, respectively) in exploration expenditures in the Gold Bar mine ~~reached commercial production in May 2019.~~area. Drilling activities during 2021 were focused primarily on the Ridge deposit located west of the active Pick mine. Exploration efforts focused on de-risking known mineralization and on potential deposit expansion.

Additional exploration activities at the Atlas Pit (formerly Old Gold Bar) are targeting potential unmined mineralization and extending known mineralized structures. Geologic mapping and modelling identified several drill targets for a Phase I program. Activities at the Tonkin property include evaluating regional geology and mineralization controls, outcropping oxide mineralization and collecting samples for metallurgical test work.

Ongoing exploration activities at the Tonkin, East Pick, Cabin, Pot Canyon, and Gold Canyon targets are planned to continue through H2/21.

Exploration at Gold Bar South has successfully advanced the project and is expected to contribute to Gold Bar mine’s future production.

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~~Production costs applicable to sales~~ were $10.8 million in Q3/20, compared to $12.2 million in Q3/19, reflecting 39% fewer gold ounces sold in Q3/20, partly offset by higher costs of the gold ounces drawn down from the heap leach and in-circuit inventory balances. Production costs applicable to sales were $38.9 million in 9M/20, compared to $20.8 million in 9M/19, due primarily to a 8% increase in gold ounces sold in 9M/20 and the higher costs of the gold ounces drawn down from our inventories as noted above.

~~Cash cost and AISC per gold equivalent ounce~~ of $1,585 and $1,769 in Q3/20 were negatively impacted by lower tonnes mined and placed on the heap leach pad, as noted above, and slower than expected ramp up after the temporary suspension caused by the COVID-19 pandemic in the second quarter.

~~Cash cost and AISC per gold equivalent ounce~~ of $1,762 and $2,132 in 9M/20 were also significantly impacted by $4.5 million of pre-strip costs, $1.3 million of in-mine exploration expenditures and a $1.0 million write-down of the stockpile, heap leach and in-circuit inventory balances earlier in the year.

~~Gold Bar mine impairment~~

In Q1/20, we recorded an impairment charge of $83.8 million based on the preliminary revised mine plan, which indicated a significant reduction in contained ounces relative to the 2018 reserve estimate. The impairment charge reduced the carrying value of the Gold Bar mine mineral property interests and plant and equipment.

Evaluation of the resource estimate continued in the third quarter of 2020 and a new reserve estimate and feasibility study update for Gold Bar are expected to be announced towards the end of the fourth quarter of 2020.

~~Exploration Activities – Nevada~~

In Q3/20 and 9M/20, we spent $2.4 million and $5.2 million, respectively, on exploration activities in and around the Gold Bar mine, compared to $4.3 million and $6.2 million spent on same activities in Q3/19 and 9M/19.

~~Exploration drilling was conducted in and around the Pick pit in Q3/20 and increased our confidence in the revised geologic model and demonstrated potential near mine exploration opportunities.~~

Drilling at the Gold Bar South satellite deposit continued in Q3/20. We verified and extended mineralization toward the north and south of the deposit. Permitting for development and production from Gold Bar South is also in progress and we expect to start mining this satellite deposit in the second half of 2021.

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Canada Segment

The Canada segment is comprised of the ~~Black~~ Fox Complex gold assets, which includes the Black Fox ~~gold~~underground mine, ~~and~~the Froome underground mine, the Grey Fox ~~Stock~~ and ~~Froome~~Stock advanced-stage projects, the Stock mill, and other gold exploration properties located in Timmins, Ontario, Canada.

Black Fox ~~Mine~~mine and Froome mine

~~The~~ Black Fox mine ~~currently has less than one year remaining~~production continues to wind down as production shifts to the Froome mine. Commercial production at the Froome mine is expected to be reached in ~~its expected~~Q4/21. More underground exploration drilling on the East and West Flanks is planned with the objective of extending the Froome deposit near existing and planned infrastructure. The deposit remains open at depth. Potential exists for echelon mineralization in the hanging-wall and footwall.

In Q2/21, work progressed on efforts to expand the Fox Complex with a PEA examining the potential for increasing gold production and mine life. ~~We plan~~The PEA will analyze mining from several potential deposits that could be economically processed at the Stock Mill. The results of the PEA are expected to ~~continue our near-mine exploration efforts, even when operations commence at Froome, with the goal of increasing resources, converting resources to reserves and extending the mine life.~~be released in H2/21.

The following table ~~sets out certain~~summarizes the operating results for the Black Fox mine for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Operating Results	(in thousands, unless otherwise indicated)									(in thousands, unless otherwise indicated)
Mined mineralized material (t)		67		48		139		145		57		32		104		72
Average grade (gpt Au)		3.00		4.82		3.28		5.05		3.06		2.25		3.14		3.55
Processed mineralized material (t)		70		58		167		164		71		41		118		97
Average grade (gpt Au)		2.96		4.02		2.95		4.99		3.27		2.15		3.26		2.95
Gold equivalent ounces:
Produced		5.8		7.4		16.3		25.8		7.1		2.2		12.3		10.5
Sold		5.6		8.0		16.8		28.0		6.9		2.6		12.2		11.2
Revenue from gold and silver sales	$	10,352	$	11,147	$	27,257	$	36,139	$	12,178	$	4,166	$	20,739	$	16,905
Cash costs(1)	$	8,874	$	7,550	$	24,231	$	24,025	$	6,331	$	8,150	$	12,987	$	15,357
Cash cost per ounce ($/Au Eq. oz sold)(1)	$	1,581	$	941	$	1,440	$	859	$	917	$	3,121	$	1,066	$	1,369
All‑in sustaining costs(1)	$	9,230	$	10,939	$	29,450	$	37,097	$	7,514	$	8,700	$	15,614	$	20,219
AISC per ounce ($/Au Eq. oz sold)(1)	$	1,644	$	1,363	$	1,750	$	1,326	$	1,088	$	3,332	$	1,282	$	1,803
Silver : gold ratio		79 : 1		87 : 1		86 : 1		83 : 1		68 : 1		104 : 1		68 : 1		100 : 1

(1) As used here and elsewhere in this report, this is a Non-GAAP financial performance measure. Cash costs for the Company’s 100% owned operations equal Production costs applicable to sales. See “Non-GAAP Financial Performance Measures” beginning on page 38 for additional information.

2021 compared to 2020

Production in ~~Q3/~~Q2/21 and H1/21 was 7,073 and 12,300 GEOs, respectively, compared to 2,202 GEOs in Q2/20 and ~~9M/20 were 5,800~~10,530 GEOs in H1/20. The Froome mine contributed 6,573 GEOs in H1/21 and ~~16,300 gold equivalent ounces, respectively, or 22% and 37% fewer ounces compared~~we expect this to ~~the same periods of 2019. Production decreased mainly due to lower gold grades of processed mineralized material~~increase throughout H2/21 as we reach commercial production capacity anticipated in ~~Q3/~~Q4/21. In Q2/20 and ~~9M/~~H1/20, ~~and despite 21% and 2% increases in tonnes processed. We expect~~ production to trend higher in the fourth quarter and mining from Black Fox to continue into the first quarter of 2021, with the potential of extending further into the year, while we transition to mining the Froome deposit.results were negatively impacted by COVID-19 related operation suspensions.

Revenue from gold ~~and silver~~ sales ~~decreased~~increased in ~~Q3/20~~Q2/21 and ~~9M/20~~H1/21 by ~~$0.8~~$8.0 million and ~~$8.9~~$3.8 million, respectively, compared to ~~Q3/19~~Q2/20 and ~~9M/19, reflecting the decrease in gold equivalent ounces~~H1/20. The increase reflects more GEOs produced and sold ~~which was partially offset by~~and higher average realized gold ~~prices~~price in 2021 versus 2020.

Production costs applicable to sales ~~increased by $1.3~~of $6.3 million decreased from $8.2 million, or ~~18%~~by 22% in ~~Q3/20,~~Q2/21, compared to ~~Q3/19, despite fewer gold ounces produced and sold.~~Q2/20. The ~~68% increase~~decrease in cash cost per ~~gold equivalent ounce~~GEO in ~~Q3/20 reflects the impact of 26% lower~~Q2/21 was driven by improved average ~~grade of the mineralized material processed~~milled grades and increased mill throughput resulting in ~~Q3/20~~more production in Q2/21 as compared to ~~Q3/19. In addition, production costs applicable to sales included underground development costs that were not capitalized given the mine life is less than one year.~~Q2/20.

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Production costs applicable to sales ~~increased marginally~~decreased by ~~$0.2~~$2.4 million, or 1%by 15% in ~~9M/20~~H1/21 compared to ~~9M/19, despite fewer gold ounces produced~~H1/20. The decrease in costs is primarily driven by improved average grades as we ramped up production at the Froome mine (only Black Fox was mined in the same period last year), as well as improved contractor cost efficiencies.

All-in sustaining costs decreased in Q2/21 and H1/21 by $1.2 million and $4.6 million, respectively, compared to the same periods in 2020. The decrease in AISC per GEO in the 2021 periods was largely driven by lower cash costs due our improved average grades, mining contractor efficiencies and increased GEOs sold. In addition, there were sustaining capital development costs related to the Black Fox mine in Q2/20 and H1/20, whereas minimal costs were incurred in Q2/21 and H1/21. AISC results were also negatively impacted by COVID-19 related suspensions in 2020.

Froome Mine

The ~~68% increase in cash cost per gold equivalent ounce in 9M/20, reflects the impact of 41% lower average grade~~Froome deposit, which is part of the ~~mineralized material processed~~overall Fox Complex, is accessed from two declines at the bottom of the Black Fox pit and situated approximately one-half mile west of the Black Fox mine. As with the ore from the Black Fox mine, Froome ore is hauled approximately 20 miles to the Stock Mine mill for processing.

Underground development successfully reached the Froome ore in ~~9M/20~~Q2/21. Plans remain on schedule to reach commercial production in Q4/21. To date, ore extracted from the Froome mine produced grades that are consistent with the resource model and mine plan. The low-cost and bulk mining method is expected to bridge production while the Grey Fox and Stock projects are advanced towards production. Exploration will continue at Black Fox through 2021.

We are targeting higher production and lower cost profiles at the Fox Complex. We intend to leverage the potential for operational synergies through shared resources and infrastructure, a longer life of mine and expanded production scale for the combined projects.

Exploration Activities

We remain focused on our principal exploration goal of cost-effectively discovering and extending gold deposits adjacent to our existing operations to contribute to near-term gold production. We incurred $3.5 million and $6.3 million in Q2/21 and H1/21, respectively, for exploration initiatives, compared to ~~9M/19.~~$0.8 million and $3.2 million of exploration expenditures in Q2/20 and H1/20.

Exploration activities ramped up following the proceeds received from the flow-through share programs in 2020. Exploration efforts were focused around the Stock West and Stock Main (historical mine) targets.

Black Fox mine

In Q2/21, underground drilling at the Black Fox Mine continued to return encouraging high-grade intercepts at 160 West and 130 East targets areas proximal to the main ramp. Underground diamond drilling is being completed to identify additional mineralization adjacent to the Black Fox orebody where mineralization remains unconstrained in multiple directions.

Grey Fox project

Activities at the Grey Fox project included drilling shallow targets which focused on the re-interpretation of local veining trends at the Whiskey Jack and Gibson targets. We expect the resource model to be updated in H2/21 in line with our PEA study.

Stock Property

The Stock exploration area sits adjacent to our Stock mill, which currently processes ore from our Black Fox and Froome mines. This facility processed ore from the historical underground Stock mine, which operated intermittently from the early 1980s until 2004, producing a total of 137,000 ounces of gold.

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~~All-in sustaining costs~~ ~~decreased by $1.7 million~~The Stock West mineralized zone was discovered in mid-2019; in 2020 exploration activities were focused on follow-up drilling. Initial results suggest the potential to define a significant new zone of mineralization 1/2 mile (800m) from our Stock processing facility. In Q2/21, four drill rigs were secured at Stock in an effort to infill and expand the known dimensions of the gold mineralization. A total of 65,626 feet (or 20,008 meters) of surface exploration drilling was completed in Q2/21 at Stock West and Stock Main with the primary focus at the Stock West mineralized zone. Two drill rigs also completed 6,106 feet or ~~16% and $7.6 million or 20% in Q3/20 and 9M/20, respectively, compared~~(1,861) meters to ~~Q3/19 and 9M/19, mainly due to significantly lower in-mine exploration expenses, capitalized~~test the depth extension of shoots below the historical underground ~~mine development costs and capital expenditures.~~

~~Advanced-Stage Properties – Froome Project~~Stock mine.

Part of the Black Fox Complex located in Ontario, Canada, the Froome deposit is located approximately one-half mile west of the Black Fox mine and approximately 20 miles from the Black Fox (Stock Mine) mill, where we expect the ore will be processed.

The Froome deposit is being developed as an underground mine and will be accessed from the bottom of the Black Fox pit. We commenced the development of the underground access to the Froome deposit in late February 2020 and as of September 30, 2020 have advanced 47% of the way. The plan is to reach the main deposit in the second quarter of 2021 and begin production in the fourth quarter of 2021. Production from the Froome deposit will strategically supplement Black Fox production while we assess potential additional resources at the Black Fox, Grey Fox and Stock projects for future development and production.

The estimated mine life of Froome is two years once production begins following a one-year ramp-up construction phase. We expect that operational synergies through shared resources and infrastructure with the ongoing production of the Black Fox Complex would improve cash flow for both sites.

~~Exploration Activities – Timmins~~

In 2020, we continued to focus on growing the resources and reserves adjacent to our existing operations in order to contribute to near-term gold production. We incurred $1.2 million and $4.4 million in Q3/20 and 9M/20, respectively, for exploration initiatives, compared to $8.7 million and $15.2 million of exploration expenditures in Q3/19 and 9M/19. We had flow-through exploration commitments to satisfy in 2019, which also resulted in a larger drill program for 2019.

In Q3/20, we completed a flow-through financing, which provided gross proceeds of $10.4 million for exploration activities in the Timmins region over the next one to two years. The initial focus is on two high-potential targets, Stock West and Whiskey Jack. Both of these targets returned very encouraging results during the 2018-2019 drilling campaigns and we are looking forward to continue exploration at these exciting discoveries, with the objective of defining additional resources.

~~Whiskey Jack Target~~

Drilling 650 feet (200 m) north of existing resource blocks at the Grey Fox deposit in 2019 resulted in the discovery of a new zone called Whiskey Jack. The 2020 drilling has been designed to: a) test for extensions of the gold mineralization, which is open at depth and along strike, and b) infill the central discovery area with 100 ft (30 m) spaced drilling, in order to assess gold distribution. Drilling commenced in September 2020.

~~Black Fox Mine~~

A total of 53,400 feet (16,300 meters) of underground diamond drilling was completed at the Black Fox Mine during Q3/20, focused on refining the known limits of several ore blocks adjacent to the existing Black Fox ore body.

~~Black~~ Fox Complex Expansion – Economic Study

We have engaged an independent engineering group to complete a Preliminary Economic Assessment (PEA) on the Grey Fox - Black Fox, Froome, Stock and Timmins resources ~~utilizing~~using our existing ~~central~~centralized milling ~~capacity. The PEA is expected to be completed in fourth quarter of 2020.~~capacity at Stock. The objective of the PEA is to ~~develop~~determine a ~~plan~~potential low cost, near term business case to increase production and life of mine for the ~~Black~~ Fox ~~Complex over a 10-year life. Production growth is envisioned~~Complex. The PEA activities in H1/21 included ongoing drilling, preliminary modelling of mineralization, baseline work to ~~start ramping up~~support permitting, environmental, mine planning and tradeoff studies, metallurgical assessment reviews and process flowsheet assessments, and preliminary cash-flow analyses. The PEA will include resource estimates and an underground design which are expected to be completed in ~~2022.~~

H2/21.

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Mexico Segment

The Mexico segment includes the El Gallo Project (formerly “El Gallo 1” or “El Gallo Mine”) and the advanced-stage Fenix Project, located in ~~Sinaloa.~~Sinaloa, Mexico.

El Gallo Project

Current activities at the El Gallo Project are limited to residual leaching as part of closure and reclamation plans.

The economics of residual leaching are measured by incremental revenues exceeding incremental costs. Residual leaching is expected to continue as long as incremental revenues exceed incremental costs. Incremental residual leaching costs for Q3/20 and 9M/20 were $3.1 million or $1,505 per gold equivalent ounce sold and $8.3 million or $1,242 per gold equivalent ounce sold, respectively, compared to $2.8 million or $832 and $8.4 million or $581 per gold equivalent ounce sold in the same periods of 2019.

~~The~~ following table summarizes certain operating results at the El Gallo Project for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Operating Results	(in thousands, unless otherwise indicated)								(in thousands, unless otherwise indicated)
Gold ounces:
Produced		1.9		3.0		6.5		13.8		1.2		1.9		2.5		4.6
Sold		2.0		3.3		6.6		14.5		1.1		1.9		2.4		4.6
Silver ounces:
Produced		3.5		3.4		4.7		6.0		4.7		0.5		4.9		1.2
Sold		3.1		6.6		5.0		6.8		4.5		1.9		4.5		1.9
Gold equivalent ounces:
Produced		2.0		3.1		6.6		13.8		1.3		1.9		2.5		4.6
Sold		2.1		3.4		6.7		14.5		1.2		1.9		2.5		4.6
Revenue from gold and silver sales	$	4,001	$	4,967	$	11,700	$	19,577	$	2,185	$	3,355	$	4,471	$	7,698
Silver : gold ratio		79 : 1		87 : 1		86 : 1		83 : 1		68 : 1		104 : 1		68 : 1		100 : 1

~~Production~~Cash costs and ~~revenue decreased in Q3/20~~All-in-sustaining costs and ~~9M/20, compared to Q3/19~~Cash cost and ~~9M/19, reflecting decreasing recoveries, as expected, as~~AISC per gold equivalent ounce

As the El Gallo ~~Project has been in~~Project’s gold production and sales are the result of residual leaching ~~since mid-2018.~~activities, we have ceased relying on and disclosing, cash cost and all-in sustaining cost per gold equivalent ounce as key metrics for the operation. Incremental residual leaching costs included production costs less inventory movements.

Incremental residual leaching costs for the Q2/21 period were $2.7 million, or $2,395 per gold equivalent ounce resulting in a $0.8 million write-down of the heap leach and in-circuit inventory balances. The residual leaching activities at El Gallo are expected to wind down in early 2022.

2021 compared to 2020

Production and revenue, as expected, decreased in Q2/21 and H1/21, compared to Q2/20 and H1/20, as we begin to wind down our operation as a residual heap leach production.

The decrease in revenue, due to a decrease in production, was partially offset by a ~~significantly~~ higher average realized gold price during ~~Q3/20~~Q2/21 and ~~9M/20,~~H1/21, compared to the same periods of ~~2019.~~2020.

Advanced-Stage Properties – Fenix Project

~~Strengthening~~In December 2020, we announced the positive results of a feasibility study for the development of our 100%-owned Fenix Project, which includes the El Gallo Gold and El Gallo Silver deposits.

The study envisions a 9.5-year mine life with an after-tax IRR of 28% using $1,500/oz gold and $17/oz silver, ~~prices have renewed our focus on advancing the Fenix Project~~with an estimated initial capital expenditure of $42 million for Phase 1 and ~~the Feasibility Study~~$24 million for Phase 2. The project implementation is ~~expected~~envisioned in two distinct phases: Phase 1 (years 1 to ~~be published in the fourth quarter of 2020.~~

~~Mine permitting continued~~6) - gold production from heap leach reprocessing, and Phase 2 (years 7 to progress during 2020, building upon the environmental permit approval for in-pit tailings storage in the Samaniego pit and the additional approval for the process plant for phase 1 received in September 2019.10) - silver production from open-pit mining.

We incurred $0.7 million and $1.9 million in Q3/20 and 9M/20, respectively, on activities required to advance the Fenix Project as well as property holding payments for land titles. This compares to $0.5 million and $2.1 million spent during Q3/19 and 9M/19. The Fenix Project PEA is available for review on our website and SEDAR (www.sedar.com).

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The Fenix Project feasibility study was published on February 16, 2021. The feasibility study is available for review on our website and SEDAR (www.sedar.com).

The key environmental permits for Phase 1 were received in 2019, including the approval for an in-pit tailings storage facility and process plant construction.

The Company incurred $0.8 million and $2.1 million in Q2/21 and H1/21, respectively, ($0.5 million and $1.2 million in Q2/20 and H1/20 respectively) on activities required to advance the Fenix Project and is currently evaluating multiple strategic alternatives, including the potential divestiture of our Mexican business unit.

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MSC Segment, Argentina

The MSC ~~segment~~Segment is comprised of a 49% interest in the San José mine, located in Santa Cruz, Argentina.

~~MSC – Operating Results~~

The following table sets out certain operating results for the San José mine for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 on a 100% basis:


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Operating Results	(in thousands, except otherwise indicated)								(in thousands, except otherwise indicated)
San José Mine—100% basis
Mined mineralized material (t)		126		140		305		400		142		73		238		179
Average grade mined (gpt)
Gold		4.6		6.9		5.8		6.8		4.8		5.3		5.2		6.6
Silver		336		498		403		476		321		370.1		338		449
Processed mineralized material (t)		129		147		291		399		145		77.5		246		162
Average grade processed (gpt)
Gold		4.7		6.6		5.6		6.8		4.7		5.0		5.4		6.4
Silver		313		456		362		450		304		329		321		401
Average recovery (%):
Gold		90.2		89.2		89.5		88.5		87.3		89.8		89.0		89.2
Silver		89.9		89.4		89.2		88.2		87.4		89.2		88.4		88.8
Gold ounces:
Produced		17.6		27.7		47.2		76.8		19.1		11.3		38.4		29.6
Sold		17.6		26.1		47.3		75.0		18.8		15.1		37.5		29.7
Silver ounces:
Produced		1,165		1,925		3,024		5,087		1,239		732		2,244		1,858
Sold		1,192		1,852		3,060		5,041		1,239		904		2,236		1,868
Gold equivalent ounces:
Produced		32.4		49.8		81.0		137.7		37.2		18.3		71.3		48.6
Sold		32.7		47.4		81.3		135.3		37.0		23.8		70.4		48.6
Revenue from gold and silver sales	$	70,195	$	74,530	$	154,666	$	189,348	$	70,396	$	47,081	$	123,699	$	84,471
Average realized price:
Gold ($/Au oz)	$	2,002	$	1,542	$	1,873	$	1,424	$	1,903	$	1,893	$	1,757	$	1,796
Silver ($/Ag oz)	$	29.30	$	18.54	$	21.59	$	16.39	$	27.99	$	20.55	$	25.83	$	16.67
Cash costs(1)	$	41,512	$	43,345	$	100,230	$	119,392	$	40,888	$	30,402	$	77,256	$	58,718
Cash cost per ounce ($/Au Eq. oz sold)(1)	$	1,269	$	915	$	1,232	$	883	$	1,105	$	1,280	$	1,097	$	1,207
All‑in sustaining costs(1)	$	50,311	$	57,016	$	124,968	$	159,449	$	55,481	$	35,047	$	99,872	$	74,657
AISC per ounce ($/Au Eq. oz sold)(1)	$	1,538	$	1,204	$	1,536	$	1,179	$	1,500	$	1,476	$	1,418	$	1,535
Silver : gold ratio		79 : 1		87 : 1		90 : 1		84 : 1		68 : 1		104 : 1		68 : 1		98 : 1

The analysis below compares the operating and financial results of MSC on a 100% basis.

~~Q3/20~~2021 compared to ~~Q3/19~~2020

Gold and silver production ~~decreased~~both increased by ~~36% and 39%, respectively,~~69% in ~~Q3/20~~Q2/21 compared to ~~Q3/19 as a result of a 12% decrease~~Q2/20. The increase is attributed to an increase in processed mineralized material ~~coupled with 28% and 31% decreases in the average grades of gold and silver, respectively, of the mineralized material~~slightly offset by lower processed ~~in Q3/20.~~grades. The ~~decrease~~increase in processed ~~mineralized~~ material, ~~reflected the impact of operating below capacity throughout the entire period, as the ongoing countrywide restrictions on the movement of people resulted~~ in ~~the ramp-up being phased over a significant period of time with full production expected toward the end of the year.~~turn, primarily results from reduced interruptions from government-mandated suspensions from COVID-19.

Gold and silver production ~~decreased~~increased by ~~39%~~30% and ~~41%~~21%, respectively, in ~~9M/20~~H1/21 compared to ~~9M/19 due~~H1/20. The increase is attributed to ~~a 27% decrease~~an increase in processed mineralized material ~~and 17% and 19% decreases in the average grades of gold and silver of the mineralized material~~slightly offset by lower processed ~~in 9M/20, mainly due to the same operational and labor challenges noted above.~~grades.

3536

Table of Contents

Revenue from gold and silver sales ~~decreased~~increased by 6%50% and ~~18%~~46% in ~~Q3/20~~Q2/21 and ~~9M/20~~H1/21 respectively, compared to ~~Q3/19~~Q2/20 and ~~9M/19,~~H1/20, reflecting ~~fewer~~an increase in gold equivalent ounces ~~sold due to lower production as noted above, partly offset by higher~~sold. Significant increases in average realized ~~price of gold (30% and 32% higher in Q3/20 and 9M/20, respectively, compared~~silver prices contributed to the ~~same periods of 2019) and silver (58% and 32% higher~~increase in ~~Q3/20 and 9M/20, respectively, compared to 2019).~~revenues in the 2021 periods. Revenues on concentrate sales include adjustments from prior sales’ provisional invoice amounts.

Cash costs in ~~Q3/20~~Q2/21 and ~~9M/20 decreased~~H1/21 increased by ~~$1.8~~$10.5 million, or 4%34%, and ~~$19.2~~$18.5 million, or ~~16%~~32%, respectively, compared to ~~Q3/19~~Q2/20 and ~~9M/19, reflecting lower tonnes~~H1/20. The change is attributed to increased tons of mineralized material processed and ~~fewer~~increased gold equivalent ounces produced and ~~sold. All-in sustaining~~sold in the 2021 period. Notwithstanding the aggregate increase, cash costs ~~for Q3/20 and 9M/20~~per ounce decreased ~~by $6.7 million or 12% and $34.5 million or 22%, compared~~slightly due to the ~~same periods~~diminished impact of ~~2019, mainly due to lower cash costs, coupled with lower capitalized underground mine development and sustaining capital investment~~COVID-19 interruptions in ~~plant and equipment.~~2021.

~~Cash cost~~ ~~and~~ All-in sustaining costper gold equivalent ouncesold ~~were higher for Q3/~~ in Q2/21 and H1/21 remained consistent relative to the Q2/20 and ~~9M/~~H1/20 ~~compared to the same periods in 2019, as lower aggregate cash costs and AISC were spread over 31% and 40% fewer gold equivalent ounces sold, respectively, as noted above.~~periods.

Investment in MSC

Our 49% attributable share of operations from our investment in MSC was ~~income of $2.6 million and~~ a loss of ~~$1.1~~$1.9 million and $2.4 million in ~~Q3/20~~Q2/21 and ~~9M/20,~~H1/21, respectively, compared to a loss of ~~$0.3~~$1.0 million and ~~$6.8~~$3.7 million in ~~Q3/19~~Q2/20 and ~~9M/19.~~H1/20. The change between Q2/21 and Q2/20 is largely driven by an $0.8 million increase in the fair value amortization. The H1/21 change relative to the H1/20 period is largely driven by the increase in gross profit (due to higher realized metal prices and increased GEOs sold) offset by an increase in other expenditures from financing activities.

~~On a 100% basis, improved performance reflects significantly higher gross profit of $21.6 million and $32.4 million~~We are currently evaluating strategic alternatives for our investment in Q3/20 and 9M/20, respectively, compared to $13.0 million and $19.9 million in Q3/19 and 9M/19 and lower current and deferred income and mining tax expense of $3.0 million in 9M/20, compared to $8.4 million in 9M/19. Higher gross profit in Q3/20 were partially offset by higher exploration expenses ($2.8 million compared to $1.5 million in Q3/19). Higher gross profit and lower current and deferred income and mining tax expense in 9M/20 were partially offset by $7.2 million of other expenses incurred during the shutdown of operations in 2020 ($nil in 2019).

Higher gross profit in 2020 was due primarily to higher average realized gold and silver prices. In addition, there were lower production costs applicable to sales and depreciation and depletion expense mainly as a result of fewer gold equivalent ounces sold. These all were partially offset by $10.2 million and $15.5 million operating costs due to the COVID-19 pandemic in Q3/20 and 9M/20, respectively. The additional costs include labor costs for idle employees, additional transportation and accommodation costs to maintain social distancing and additional personal protective equipment.

In Q3/20, on a 100% basis, MSC generated a cash gross profit of $28.7 million and incurred $6.1 million of development and other capital expenditures, $2.8 million of exploration spending and $6.5 million of other expenditures. Other expenditures primarily included $5.2 million of financial expenses and ~~foreign exchange losses.~~

In 9M/20, on a 100% basis, MSC generated a cash gross profit of $54.4 million and incurred $18.7 million of development and other capital expenditures, $7.9 million of exploration spending and $17.7 million of other expenditures. Other expenditures primarily included $7.2 million related to costs of suspending activities in connection with the COVID-19 pandemic, $6.6 million of financial expenses, as noted above, and foreign exchange losses.MSC.

MSC Dividend Distribution (49%)

We received ~~$nil~~$2.6 million and ~~$0.3~~$7.6 million in dividends from MSC in ~~Q3/20~~Q2/21 and ~~9M/20,~~H1/21, compared to ~~$2.0 million and $4.0~~$0.3 million in dividends received during the same periods in ~~2019. For more details on our Investment in MSC, refer to Note 10 to the Consolidated Financial Statements,~~ ~~Investment in Minera Santa Cruz S.A. (“MSC”) — San José mine.~~2020.

~~Table of Contents~~

Los Azules Segment, Argentina

The Los Azules project is a copper exploration project located in San Juan, Argentina.

On July 6, 2021, the Company announced its wholly-owned subsidiary which holds 100% of the Los Azules ~~Project~~Copper project will be raising a financing for the continued development of this project, as well as to fund a modest exploration program for its Elder Creek Copper exploration properties in Nevada. McEwen Copper is seeking to raise up to $80 million in a private offering and Rob McEwen has committed the first $40 million dollars of this financing. A PEA was completed on Los Azules in 2017. Please refer to our website at www.mcewenmining.com for further details.

~~During Q3/20,~~In H1/21, preliminary engineering work to advance the ~~environmental baseline monitoring work continued as planned. We expect to continue environmental studies the rest~~proposed low altitude all-year access route was completed. Most of the ~~year~~surveying and staking of the mining rights was completed to ~~gather further information necessary~~prepare for consolidation of all the ~~Environmental Impact Assessment for~~mining rights into a single mining group. Site surveying and staking at the ~~next development phase.~~

~~The preliminary economic assessment for the Los Azules Project,~~Escorpio IV and Mercedes areas were completed ~~and announced~~ in ~~September 2017, is available on our website at www.mcewenmining.com.~~January 2021.

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NON-GAAP FINANCIAL PERFORMANCE MEASURES

We have included in this report certain non-GAAP financial performance measures as detailed below. In the gold mining industry, these are common performance measures but do not have any standardized meaning and are considered non-GAAP measures. We use these measures in evaluating our business and believe that, in addition to conventional measures prepared in accordance with GAAP, certain investors use such non-GAAP measures to evaluate our performance and ability to generate cash flow. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. There are limitations associated with the use of such non-GAAP measures. We compensate for these limitations by relying primarily on our U.S. GAAP results and using the non-GAAP measures supplementally.

The non-GAAP measures are presented for our ~~wholly owned~~wholly-owned mines and the San José mine. The GAAP information used for the reconciliation to the non-GAAP measures for the San José mine may be found in Note ~~10,~~9, Investment in Minera Santa Cruz S.A. (“MSC”) – San José Mine. We do not control the interest in or operations of MSC and the presentations of assets and liabilities and revenues and expenses of MSC do not represent our legal claim to such items. The amount of cash we receive is based upon specific provisions of the Option and Joint Venture Agreement (“OJVA”) and varies depending on factors including the profitability of the operations.

The presentation of these measures, including those for MSC, has limitations as an analytical tool. Some of these limitations include:

●

The amounts shown on MSC’s individual line items do not represent our legal claim to its assets and liabilities, or the revenues and expenses; and

●

Other companies in our industry may calculate their cash gross profit, cash costs, cash cost per ounce, ~~all in~~all-in sustaining costs, ~~all in~~all-in sustaining cost per ounce, average realized price per ounce, and liquid assets differently than we do, limiting the usefulness as a comparative measure.

Cash Gross Profit or Loss

Cash gross profit or loss is a non-GAAP financial measure and does not have any standardized meaning under GAAP. We use cash gross profit to evaluate our operating performance and ability to generate cash flow; we disclose cash gross profit as we believe this measure provides valuable assistance to investors and analysts in evaluating our ability to finance our ongoing business and capital activities. The most directly comparable measure prepared in accordance with GAAP is gross profit or loss. Cash gross profit is calculated by adding back the depreciation and depletion expense to gross profit or loss.

The following tables present a reconciliation of cash gross profit or loss to the most directly comparable GAAP measure, gross profit or loss:


	Three months ended September 30, 2020								Nine months ended September 30, 2020								Three months ended June 30, 2021								Six months ended June 30, 2021
	Gold Bar		Black Fox		El Gallo		Total (100% owned)		Gold Bar		Black Fox		El Gallo		Total (100% owned)		Gold Bar		Black Fox		El Gallo		Total (100% owned)		Gold Bar		Black Fox		El Gallo		Total (100% owned)

	(in thousands)								(in thousands)								(in thousands)								(in thousands)
Gross profit (loss)	$	152	$	(926)	$	73	$	(701)	$	(9,261)	$	(4,310)	$	310	$	(13,261)	$	2,950	$	2,658	$	(1,549)	$	4,059	$	545	$	1,168	$	(2,640)	$	(927)
Add: Depreciation and depletion		2,099		2,404		67		4,570		8,527		7,336		217		16,080		2,326		3,189		—		5,515		4,068		6,584		—		10,652
Cash gross profit (loss)	$	2,251	$	1,478	$	140	$	3,869	$	(734)	$	3,026	$	527	$	2,819	$	5,276	$	5,847	$	(1,549)	$	9,574	$	4,613	$	7,752	$	(2,640)	$	9,725

Table of Contents


	Three months ended September 30, 2019								Nine months ended September 30, 2019								Three months ended June 30, 2020								Six months ended June 30, 2020
	Gold Bar		Black Fox		El Gallo		Total (100% owned)		Gold Bar		Black Fox		El Gallo		Total (100% owned)		Gold Bar		Black Fox		El Gallo		Total (100% owned)		Gold Bar		Black Fox		El Gallo		Total (100% owned)

	(in thousands)								(in thousands)								(in thousands)								(in thousands)
Gross profit	$	631	$	8	$	980	$	1,619	$	1,633	$	1,594	$	4,497	$	7,724
Gross (loss) profit																	$	(2,834)	$	(6,168)	$	127	$	(8,875)	$	(9,411)	$	(3,384)	$	235	$	(12,560)
Add: Depreciation and depletion		3,790		3,589		109		7,488		6,510		10,520		471		17,501		2,565		2,184		63		4,812		6,428		4,932		150		11,510
Cash gross profit	$	4,421	$	3,597	$	1,089	$	9,107	$	8,143	$	12,114	$	4,968	$	25,225
Cash gross (loss) profit																	$	(269)	$	(3,984)	$	190	$	(4,063)	$	(2,983)	$	1,548	$	385	$	(1,050)


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

San José mine cash gross profit (100% basis)	(in thousands)								(in thousands)
Gross profit	$	21,576	$	13,027	$	32,352	$	19,873	$	19,728	$	9,029	$	29,711	$	10,776
Add: Depreciation and depletion		7,107		18,158		22,084		50,083		9,779		7,650		16,732		14,977
Cash gross profit	$	28,683	$	31,185	$	54,436	$	69,956	$	29,507	$	16,679	$	46,443	$	25,753

Cash Costs and All-In Sustaining Costs

The terms cash costs, cash cost per ounce, all-in sustaining costs, and all-in sustaining cost per ounce used in this report are non-GAAP financial measures. We report these measures to provide additional information regarding operational efficiencies on an individual mine basis, and believe these measures provide investors and analysts with useful information about our underlying costs of operations.

Cash costs consist of mining, processing, on-site general and administrative expenses, community and permitting costs related to current operations, royalty costs, refining and treatment charges (for both doré and concentrate products), sales costs, export taxes and operational stripping costs, but exclude depreciation and amortization, which are non-cash items. The sum of these costs is divided by the corresponding gold equivalent ounces sold to determine a per ounce amount.

All-in sustaining costs consist of cash costs (as described above), plus accretion of retirement obligations and amortization of the asset retirement costs related to operating sites, environmental rehabilitation costs for mines with no reserves, sustaining exploration and development costs, sustaining capital expenditures and sustaining lease payments. Our all-in sustaining costs exclude the allocation of corporate general and administrative costs. Following is additional information regarding our all-in sustaining costs:

●

Sustaining operating costs represent expenditures incurred at current operations that are considered necessary to maintain current annual production at the mine site and include mine development costs and ongoing replacement of mine equipment and other capital facilities. Sustaining capital costs do not include costs of expanding the project that would result in improved productivity of the existing asset, increased existing capacity or extended useful life.

●

Sustaining exploration and development costs include expenditures incurred to sustain current operations and to replace reserves and/or resources extracted as part of the ongoing production. Exploration activity performed near-mine (brownfield) or new exploration projects (greenfield) are classified as non-sustaining.

The sum of all-in sustaining costs is divided by the corresponding gold equivalent ounces sold to determine a per ounce amount.

Costs excluded from cash costs and all-in sustaining costs, in addition to depreciation and depletion, are income and mining tax expense, all corporate financing charges, costs related to business combinations, asset acquisitions and asset disposal, impairment charges and any items that are deducted for the purpose of normalizing items.

Table of Contents

The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measure, production costs applicable to sales; the El Gallo project results are excluded from this reconciliation as the economics of residual leaching operations are measured by incremental revenue exceeding incremental costs. Incremental residual leaching costs for ~~Q3/20~~the three and ~~9M/20~~six months ended June 30, 2021 were ~~$3.1~~$2.7 million or ~~$1,505~~$2,395 per gold equivalent ounce sold and ~~$8.3~~$5.3 million or ~~$1,242~~$2,204 per gold equivalent ounce sold, respectively, compared to ~~$2.8~~$2.4 million or ~~$832~~$1,262 and ~~$8.4~~$5.2 million or ~~$581~~$1,124 per gold equivalent ounce sold in the same periods of ~~2019.~~2020.


	Three months ended September 30, 2020						Nine months ended September 30, 2020						Three months ended June 30, 2021						Six months ended June 30, 2021
	Gold Bar		Black Fox		Total		Gold Bar		Black Fox		Total		Gold Bar		Black Fox		Total		Gold Bar		Black Fox		Total

	(in thousands, except per ounce)						(in thousands, except per ounce)						(in thousands, except per ounce)						(in thousands, except per ounce)
Production costs applicable to sales - Cash costs (100% owned)	$	10,791	$	8,874	$	19,665	$	38,863	$	24,231	$	63,094	$	21,067	$	6,331	$	27,398	$	34,623	$	12,987	$	47,610
Mine site reclamation, accretion and amortization		230		101		331		738		295		1,033		159		116		276		316		654		970
In‑mine exploration		474		90		564		1,315		707		2,022		775		667		1,441		960		1,243		2,203
Capitalized underground mine development (sustaining)		—		—		—		—		3,646		3,646		—		—		—		—		231		231
Capital expenditures on plant and equipment (sustaining)		75		61		136		4,663		322		4,985		421		270		692		543		243		785
Sustaining leases		473		104		577		1,452		249		1,701		892		129		1,021		892		256		1,148
All‑in sustaining costs	$	12,043	$	9,230	$	21,273	$	47,031	$	29,450	$	76,481	$	23,314	$	7,514	$	30,828	$	37,333	$	15,614	$	52,947
Ounces sold, including stream (Au Eq. oz)⁽¹⁾		6.8		5.6		12.4		22.1		16.8		38.9		14.4		6.9		21.3		21.7		12.2		33.8
Cash cost per ounce ($/Au Eq. oz sold)	$	1,585	$	1,581	$	1,583	$	1,762	$	1,440	$	1,622	$	1,463	$	917	$	1,286	$	1,598	$	1,066	$	1,407
AISC per ounce ($/Au Eq. oz sold)	$	1,769	$	1,644	$	1,713	$	2,132	$	1,750	$	1,967	$	1,619	$	1,088	$	1,447	$	1,723	$	1,282	$	1,564

(1)

Total gold equivalent ounces sold for ~~Q3/20~~Q2/21 and ~~9M/20 is 14,500~~H1/21 was 22,500 and ~~45,600,~~36,400 respectively, and includes gold equivalent ounces sold from the operating mines of ~~12,400~~21,300 and ~~38,900,~~33,800, as disclosed above, and ~~2,100~~1,200 and ~~6,700~~2,500 gold equivalent ounces sold from the El Gallo Project for ~~Q3/20~~Q2/21 and ~~9M/20,~~H1/21, respectively.


	Three months ended September 30, 2019						Nine months ended September 30, 2019						Three months ended June 30, 2020						Six months ended June 30, 2020
	Gold Bar		Black Fox		Total		Gold Bar		Black Fox		Total		Gold Bar		Black Fox		Total		Gold Bar		Black Fox		Total

	(in thousands, except per ounce)						(in thousands, except per ounce)						(in thousands, except per ounce)						(in thousands, except per ounce)
Production costs applicable to sales - Cash costs (100% owned)	$	12,156	$	7,550	$	19,706	$	20,798	$	24,025	$	44,823	$	11,039	$	8,150	$	19,189	$	28,071	$	15,357	$	43,428
Mine site reclamation, accretion and amortization		489		155		644		860		475		1,335		156		99		255		507		194		701
In‑mine exploration		—		955		955		—		3,430		3,430		841		191		1,032		841		617		1,458
Capitalized underground mine development (sustaining)		—		1,711		1,711		—		7,286		7,286		—		—		—		—		3,646		3,646
Capital expenditures on plant and equipment (sustaining)		663		470		1,133		1,533		1,610		3,143		2,798		211		3,009		4,588		261		4,849
Sustaining leases		487		98		585		1,422		271		1,693		502		49		551		978		144		1,122
All‑in sustaining costs	$	13,795	$	10,939	$	24,734	$	24,613	$	37,097	$	61,710	$	15,336	$	8,700	$	24,036	$	34,985	$	20,219	$	55,204
Ounces sold, including stream (Au Eq. oz)⁽¹⁾		11.2		8.0		19.2		20.5		28.0		48.5		6.2		2.6		8.8		15.3		11.2		26.5
Cash cost per ounce ($/Au Eq. oz sold)	$	1,088	$	941	$	1,027	$	1,014	$	859	$	924	$	1,772	$	3,121	$	2,170	$	1,840	$	1,369	$	1,641
AISC per ounce ($/Au Eq. oz sold)	$	1,235	$	1,363	$	1,289	$	1,200	$	1,326	$	1,272	$	2,462	$	3,332	$	2,719	$	2,293	$	1,803	$	2,086

(1)

Total gold equivalent ounces sold for ~~Q3/19~~Q2/20 and ~~9M/19 is 22,600~~H1/20 was 10,800 and ~~63,000,~~31,000, respectively, and includes gold equivalent ounces sold from the operating mines of ~~19,200~~8,800 and ~~48,500~~26,500 as disclosed above, and ~~3,400~~1,900 and ~~14,500~~4,600 gold equivalent ounces sold from the El Gallo Project for ~~Q3/19~~Q2/20 and ~~9M/19, respectively.~~H1/20.

Table of Contents

Three months ended September 30,

Nine months ended September 30,


2020

2019

2020

2019
San José mine cash costs (100% basis)

(in thousands, except per ounce)
Production costs applicable to sales - Cash costs

$
41,512

$
43,345

$
100,230

$
119,392
Mine site reclamation, accretion and amortization

113

301

359

859
Site exploration expenses

2,820

1,482

6,603

7,373
Capitalized underground mine development (sustaining)

4,292

8,150

13,411

20,061
Less: Depreciation

(229)

(672)

(916)

(1,732)
Capital expenditures (sustaining)

1,803

4,410

5,281

13,496
All‑in sustaining costs

$
50,311

$
57,016

$
124,968

$
159,449
Ounces sold (Au Eq. oz)

32.7

47.4

81.3

135.3
Cash cost per ounce ($/Au Eq. oz sold)

$
1,269

$
915

$
1,232

$
883
AISC per ounce ($/Au Eq. oz sold)

$
1,538

$
1,204

$
1,536

$
1,179


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020

San José mine cash costs (100% basis)	(in thousands, except per ounce)
Production costs applicable to sales - Cash costs	$	40,888	$	30,402	$	77,256	$	58,718
Mine site reclamation, accretion and amortization		117		111		216		246
Site exploration expenses		2,411		917		5,251		3,783
Capitalized underground mine development (sustaining)		6,642		2,674		11,314		9,119
Less: Depreciation		(430)		(344)		(826)		(687)
Capital expenditures (sustaining)		5,853		1,287		6,661		3,478
All‑in sustaining costs	$	55,481	$	35,047	$	99,872	$	74,657
Ounces sold (Au Eq. oz)		37.0		23.8		70.4		48.6
Cash cost per ounce ($/Au Eq. oz sold)	$	1,105	$	1,280	$	1,097	$	1,207
AISC per ounce ($/Au Eq. oz sold)	$	1,500	$	1,476	$	1,418	$	1,535

Average realized price

The term average realized price per ounce used in this report is also a non-GAAP financial measure. We prepare this measure to evaluate our performance against market (London P.M. Fix). Average realized price is calculated as gross sales of gold and silver, less streaming revenue, divided by the number of net ounces sold in the period, less ounces sold under the streaming agreement.

The following table reconciles the average realized prices to the most directly comparable U.S. GAAP measure, revenue from gold and silver sales. Ounces of gold and silver sold for the San José mine are provided to us by MSC.


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Average realized price - 100% owned	(in thousands, except per ounce)								(in thousands, except per ounce)
Revenue from gold and silver sales	$	27,395	$	32,691	$	77,086	$	84,657	$	40,706	$	18,291	$	64,446	$	49,691
Less: revenue from gold sales, stream		202		380		883		1,231		214		179		569		681
Revenue from gold and silver sales, excluding stream	$	27,193	$	32,311	$	76,203	$	83,426	$	40,492	$	18,112	$	63,877	$	49,010
Gold equivalent ounces sold		14.5		22.6		45.6		63.0		22.5		10.8		36.3		31.1
Less: gold ounces sold, stream		0.4		0.7		1.6		2.2		0.4		0.3		1.0		1.2
Gold equivalent ounces sold, excluding stream		14.1		21.9		44.0		60.8		22.1		10.5		35.3		29.9
Average realized price per Au Eq. oz sold, excluding stream	$	1,925	$	1,478	$	1,732	$	1,372	$	1,830	$	1,733	$	1,808	$	1,641


	Three months ended September 30,				Nine months ended September 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Average realized price - San José mine (100% basis)	(in thousands, except per ounce)								(in thousands, except per ounce)
Gold sales	$	35,265	$	40,203	$	88,602	$	106,728	$	35,728	$	28,499	$	65,947	$	53,337
Silver sales		34,930		34,327		66,064		82,620		34,668		18,582		57,752		31,134
Gold and silver sales	$	70,195	$	74,530	$	154,666	$	189,348	$	70,396	$	47,081	$	123,699	$	84,471
Gold ounces sold		17.6		26.1		47.3		75.0		18.8		15.1		37.5		29.7
Silver ounces sold		1,192		1,852		3,060		5,041		1,239		904		2,236		1,868
Gold equivalent ounces sold		32.7		47.4		81.3		135.3		37.0		23.8		70.4		48.6
Average realized price per gold ounce sold	$	2,002	$	1,542	$	1,873	$	1,424	$	1,903	$	1,893	$	1,757	$	1,796
Average realized price per silver ounce sold	$	29.30	$	18.54	$	21.59	$	16.39	$	27.99	$	20.55	$	25.83	$	16.67
Average realized price per gold equivalent ounce sold	$	2,146	$	1,574	$	1,901	$	1,400	$	1,903	$	1,982	$	1,757	$	1,737

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Liquid assets

The term liquid assets is also a non-GAAP financial measure. We report this measure to better understand our liquidity in each reporting period.

Liquid assets is calculated as the sum of the Balance Sheet line items of cash and cash equivalents, restricted cash, investments, and ~~investments,~~receivables plus ounces of doré held in precious metals inventories valued at the London PM Fix spot price at the corresponding period. The following table summarizes the calculation of liquid assets as at ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	September 30,				June 30,
	2020		2019		2021		2020

	(in thousands)				(in thousands)
Cash and cash equivalents	$	7,954	$	4,262	$	42,232	$	18,410
Restricted cash		10,193		8,764		3,625		—
Investments		-		3,224		1,777		—
Trade receivables						-		882
Receivables from marketable securities sales		-		928		-		960
Precious Metals valued at market value ⁽¹⁾⁽²⁾		676		1,284		1,306		592
Total liquid assets	$	18,823	$	18,462	$	48,940	$	20,844

(1)	As at ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 we held ~~358~~761 and ~~864~~335 gold equivalent ounces in inventory, respectively, net of our streaming agreement, valued at ~~$1,887~~$1,763 and ~~$1,485~~$1,768 per ounce, respectively.

(2)	Precious metals valued at cost, inclusive of ounces to be delivered under the streaming agreement, equals ~~$945 and $1,278, respectively.~~$1,696.

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CRITICAL ACCOUNTING POLICIES

Critical accounting policies and estimates used to prepare our financial statements are discussed with our Audit Committee as they are implemented and on an annual basis.

The were no significant changes in our Critical Accounting Policies since December 31, ~~2019~~2020. For further details on the Company’s accounting policies, refer to the December 31, 2020 10-K.

FORWARD-LOOKING STATEMENTS

This report contains or incorporates by reference “forward-looking statements”, as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:

●

statements about our anticipated exploration results, costs and feasibility of production, production estimates, receipt of permits or other regulatory or government approvals and plans for the development of our properties;

●

statements regarding the potential impacts of the COVID-19 pandemic, government responses to the continuing pandemic, and our response to those issues;

●

statements regarding strategic alternatives that we are, or may in the future, evaluate in connection with our business;

●

statements concerning the benefits or outcomes that we expect will result from our business activities and certain transactions that we contemplate or have completed, such as receipt of proceeds, increased revenues, decreased expenses and avoided expenses and expenditures; and

●

statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts.

These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. Many of these statements can be found by looking for words such as “believes”, “expects”, “anticipates”, “estimates” or similar expressions used in this report or incorporated by reference in this report.

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Forward-looking statements and information are based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information.

We caution you not to put undue reliance on these forward-looking statements, which speak only as of the date of this report. Further, the forward-looking information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, and may change at any time and without notice, based on changes in such facts or assumptions. Readers should not place undue reliance on forward-looking statements.

Risk Factors Impacting Forward-Looking Statements

Important factors that could prevent us from achieving our stated goals and objectives include, but are not limited to, those set forth in the “Risk Factors” section in our report on Form 10-K and other reports filed with the SEC, and the following:

●

our ability to raise funds required for the execution of our business strategy;

●

the effects of pandemics such as COVID-19 on health in our operating jurisdictions and the ~~world-wide,~~worldwide, national, state and local responses to such pandemics;

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●

our ability to secure permits or other regulatory and government approvals needed to operate, develop or explore our mineral properties and projects;

●

decisions of foreign countries, banks and courts within those countries;

●

unexpected changes in business, economic, and political conditions;

●

operating results of MSC;

●

fluctuations in interest rates, inflation rates, currency exchange rates, or commodity prices;

●

timing and amount of mine production;

●

our ability to retain and attract key personnel;

●

technological changes in the mining industry;

●

changes in operating, exploration or overhead costs;

●

access and availability of materials, equipment, supplies, labor and supervision, power and water;

●

results of current and future exploration activities;

●

results of pending and future feasibility studies or the expansion or commencement of mining operations without feasibility studies having been completed;

●

changes in our business strategy;

●

interpretation of drill hole results and the geology, grade and continuity of mineralization;

●

the uncertainty of reserve estimates and timing of development expenditures;

●

litigation or regulatory investigations and procedures affecting us;

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●

changes in federal, state, provincial and local laws and regulations;

●

local and community impacts and issues including criminal activity and violent crimes;

●

accidents, public health issues, and labor disputes;

●

our continued listing on a public exchange;

●

uncertainty relating to title to mineral properties; ~~and~~

●

changes in relationships with the local communities in the areas in which we ~~operate.~~operate; and

●

decisions by third parties over which we have no control.

We undertake no responsibility or obligation to update publicly these forward-looking statements, except as required by law and may update these statements in the future in written or oral statements. Investors should take note of any future statements made by or on our behalf.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Our exposure to market risks includes, but is not limited to, the following risks: changes in foreign currency exchange rates, equity price risks, commodity price fluctuations, credit risk, interest rate risk and inflationary risk. We do not use derivative financial instruments as part of an overall strategy to manage market risk.

Further, our participation in the joint venture with Hochschild for the 49% interest held at MSC creates additional risks because, among other things, we do not exercise decision-making power over the day-to-day activities at MSC; however, implications from our partner’s decisions may result in us having to provide additional funding to MSC or result in a decrease in our percentage of ownership.

Foreign Currency Risk

In general, the devaluation of non-U.S. dollar currencies with respect to the U.S. dollar has a positive effect on our costs and liabilities which are incurred outside the U.S. while it has a negative effect on our assets denominated in non-U.S. dollar currency. Although we transact most of our business in U.S. dollars, some expenses, labor, operating supplies and property and equipment are denominated in Canadian dollars, Mexican pesos or Argentine pesos.

Since 2008, the Argentine peso has been steadily devaluing against the U.S. dollar by 10% to 40% on an annual basis. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Argentine peso devalued ~~21%~~12% compared to a devaluation of ~~52%~~15% in the same period of ~~2019.~~2020.

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Mexican peso devalued ~~15%,~~by 0.1% compared to ~~it staying relatively flat~~a devaluation of 18% against the U.S Dollar in the same period in ~~2019.~~2020.

The Canadian dollar experienced a 3% ~~depreciation~~appreciation against the U.S. dollar for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared to a ~~3% appreciation~~5% depreciation in the comparable period of ~~2019.~~2020.

The value of cash and cash equivalents denominated in foreign currencies also fluctuates with changes in currency exchange rates. Appreciation of non-U.S. dollar currencies results in a foreign currency gain on such investments and a depreciation in non-U.S. dollar currencies results in a loss. We have not utilized material market risk-sensitive instruments to manage our exposure to foreign currency exchange rates but may do so in the future. We hold portions of our cash reserves in non-U.S. dollar currencies.

Based on our Canadian cash balance of ~~$7.4~~$1.7 million (C$~~9.8~~2.0 million) at ~~September~~June 30, ~~2020,~~2021, a 1% change in the Canadian dollar would result in a gain/loss of less than $0.1 million in the Consolidated Statements of Operations. We also hold negligible portions of our cash reserves in Mexican and Argentina pesos, with the effect that a 1% change in these respective currencies would result in gains/losses immaterial for disclosure.

Further, we are also subject to foreign currency risk on the fluctuation of the Mexican peso on our VAT receivable balance. As of ~~September~~June 30, ~~2020,~~2021, our VAT receivable balance was Mexican peso ~~15,350,664,~~12,732,326, equivalent to approximately ~~$0.7~~$0.6 million, for which a 1% change in the Mexican peso would have resulted in a gain/loss of less than $0.1 million in the Consolidated Statements of Operations.

Equity Price Risk

We have in the past sought and will likely in the future seek to acquire additional funding by sale of common stock or other equity securities. Movements in the price of our common stock have been volatile in the past and may also be volatile in the future. As a result, there is a risk that we may not be able to sell equity securities at an acceptable price to meet future funding requirements.

We have invested and may continue to invest in shares of common stock of other entities in the mining sector. Some of our investments may be highly volatile and lack liquidity caused by lower trading volumes. As a result, we are inherently exposed to fluctuations in the fair value of our investments, which may result in gains or losses upon their valuation.

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Commodity Price Risk

We produce and sell gold and silver, therefore changes in the market price of gold and silver have and could in the future significantly affect our results of operations and cash flows. Change in the price of gold and silver could materially affect our revenues. Based on our revenues from gold and silver sales of ~~$77.1~~$64.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, a 10% change in the price of gold and silver would have had an impact of approximately ~~$7.7~~$6.4 million on our revenues. Changes in the price of gold and silver can also affect the ~~provisionally-priced~~provisionally priced sales that we make under agreements with refiners and other purchasers of our products. At ~~September~~June 30, ~~2020,~~2021, we had no gold or silver sales subject to final pricing.

We have in the past and may in the future hold a portion of our treasury in gold and silver bullion, where the value is recorded at the lower of cost or market. Gold and silver prices may affect the value of any bullion that we hold in treasury.

We do not hedge any of our sales and are therefore subject to all changes in commodity prices.

Credit Risk

We may be exposed to credit loss through our precious metals and doré sales agreements with Canadian financial institutions and refineries if these customers are unable to make payment in accordance with the terms of the agreements. However, based on the history and financial condition of our counterparties, we do not anticipate that any of the financial institutions or refineries will default on their obligation. As of ~~September~~June 30, ~~2020,~~2021, we do not believe we have any significant credit exposure associated with precious metals and our doré sales agreements.

In Mexico, we are exposed to credit loss regarding our VAT receivable if the Mexican tax authorities are unable or unwilling to make payments in accordance with our monthly filings. Timing of collection on VAT receivables is uncertain as VAT refund procedures require a significant amount of information and follow-up. The risk is mitigated to the extent that the VAT receivable balance can be applied against future income taxes payable. However, at this time we are uncertain when, if ever, our Mexican operations will generate sufficient taxable operating profits to offset this receivable against taxes payable. We continue to face risk on the collection of our VAT receivables, which amount to ~~$0.7~~$0.6 million as at ~~September~~June 30, ~~2020.~~2021.

In Nevada and Ontario, Canada we are required to provide security to cover our projected reclamation costs. As at ~~September~~June 30, ~~2020,~~2021, we have surety bonds of ~~$31.3~~$32.4 million in place to satisfy bonding requirements for this purpose. The bonds have an annual fee of 2.3% of their value and require a deposit of 11% of the amount of the bond. Although we do not believe we have any significant credit exposure associated with these bonds or the deposit, we are exposed to the risk that the surety may default in returning our deposit or that the surety bonds may no longer be accepted by the governmental agencies as satisfactory reclamation coverage, in which case we would be required to replace the surety bonding with cash.

Interest rate risk

Our outstanding debt consists of various equipment leases and the senior secured credit facility. As the debt is at fixed rates, we consider our interest rate risk exposure to be insignificant at this time.

Inflationary Risk

Argentina has experienced a significant amount of inflation over the last ~~nine~~ten years and has been classified as a highly inflationary economy. ASC 830 defines a hyperinflationary economy as one where the cumulative inflation rate exceeds 100% over the last three years preceding the reporting period. In this scenario, ASC 830 requires companies to change the functional currency of its foreign subsidiaries operating in a highly inflationary economy, to match the company’s reporting currency. In our case, the functional currency of all our Argentine subsidiaries has always been our reporting currency, the U.S. dollar. As such, we do not expect the classification of Argentina’s economy as a highly inflationary economy to change our financial reporting methodology.

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Item 4. CONTROLS AND PROCEDURES

(a)

We maintain a system of controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (“Exchange Act”), is recorded, processed, summarized and reported, within time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of ~~September~~June 30, ~~2020,~~2021, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.

(b)	There were no changes in our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2020~~2021 that materially affected or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II OTHER INFORMATION

~~Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

On September 10, 2020, we sold 6,298,166 shares of our common stock in a transaction that was not registered under the Securities Act of 1933, as amended (the “Securities Act”). The shares were sold to institutional investors pursuant to an Underwriting Agreement with Cantor Fitzgerald Canada Corporation, as representative of the underwriters listed therein, for gross proceeds of $10.4 million, before deducting underwriting discounts and commissions and other estimated offering expenses payable by us. We paid the underwriters discounts and commissions of $0.4 million in connection with the sale.

The common stock sold in the transaction was not registered under the Securities Act in reliance on the exemption provided by Rule 903 of Regulation S promulgated under the Securities Act. The sale of the common stock was made in an offshore transaction, was not offered or sold to a “U.S. Person” within the meaning of Regulation S and offering restrictions were implemented.

Item 4. MINE SAFETY DISCLOSURES

At McEwen Mining, safety is a core value, and we strive for superior performance. Our health and safety management system, which includes detailed standards and procedures for safe production, addresses topics such as employee training, risk management, workplace inspection, emergency response, accident investigation and program auditing. In addition to strong leadership and involvement from all levels of the organization, these programs and procedures form the cornerstone of safety at McEwen Mining, ensuring that employees are provided a safe and healthy environment and are intended to reduce workplace accidents, incidents and losses, comply with all mining-related regulations and provide support for both regulators and the industry to improve mine safety.

The operation of our Gold Bar mine is subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects our Gold Bar mine on a regular basis and may issue citations and orders when it believes a violation has occurred under the Mine Act. While we contract a majority of the mining operations at Gold Bar to an independent contractor, we may be considered an “operator” for purposes of the Mine Act and may be issued notices or citations if MSHA believes that we are responsible for violations.

We are required to report certain mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, and that required information is included in Exhibit 95 filed with this report.

~~Item 5. OTHER INFORMATION~~

~~As previously reported on Form 8-K filed on October 1, 2020, Anna~~ ~~Ladd-Kruger was appointed as our Chief Financial Officer,~~ effective September 29, 2020. On October 2, 2020, we finalized the terms and conditions of her employment and memorialized those terms in an offer letter (the “Offer Letter”). This summary of the terms of the Offer Letter is provided in lieu of an amendment to the Form 8-K, as stated in the original filing.

Ms. Ladd-Kruger will be paid a salary of CAD $320,000 per year and is entitled to participate in all employee benefit plans consistent with other senior executives of the Company. Ms. Ladd-Kruger is also entitled to earn a performance bonus in the discretion of the Compensation Committee of the Board of Directors based on achievement of certain key performance indicators. The target for this bonus is 60% of Ms. Ladd-Kruger’s annual salary.

The Offer Letter provides certain severance benefits and change of control protections. If Ms. Ladd-Kruger is terminated by the Company without cause during her first year of employment, we would be obligated to provide her with twelve months’ notice or pay in lieu of such notice. If Ms. Ladd-Kruger is terminated without cause following the first year of her employment, she would be entitled to the greater of (i) three weeks notice for the first year of employment, plus an additional three weeks notice for every completed year thereafter, to a maximum of twelve weeks, or pay in lieu of such

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notice, or (ii) her minimum entitlement under the Ontario Employment Standards Act, 2000, as amended. If we terminate her employment without cause following a change in control of the company (as such term is defined in the Offer Letter), we would be obligated to pay her an amount equal to 18 months of salary, plus her target bonus and required benefits.

~~A copy of the Offer Letter is filed with this report as Exhibit 10.1 and the summary of the Offer Letter in this report is expressly qualified by reference to such Exhibit.~~

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Item 6. EXHIBITS

The following exhibits are filed or incorporated by reference with this report:


3.1.1		Second Amended and Restated Articles of Incorporation of the Company as filed with the Colorado Secretary of State on January 20, 2012 (incorporated by reference from the Current Report on Form 8-K filed with the SEC on January 24, 2012, Exhibit 3.1, File No. 001-33190).
3.1.2		Articles of Amendment to the Second Amended and Restated Articles of Incorporation of the Company as filed with the Colorado Secretary of State on January 24, 2012 (incorporated by reference from the Current Report on Form 8-K filed with the SEC on January 24, 2012, Exhibit 3.2, File No. 001-33190).
3.1.3		Second Amendment to the Second Amended and Restated Articles of Incorporation of the Company as filed with the Colorado Secretary of State on June 30, 2021 (incorporated by reference from the Current Report on the Form 8-K filed with the SEC on June 30, 2021, Exhibit 3.1, File No. 001-33190).
3.2		Amended and Restated Bylaws of the Company (incorporated by reference from the Current Report on Form 8-K filed with the SEC on March 12, 2012, Exhibit 3.2, File No. 001-33190).
~~10.1~~10.1*		~~Employment Agreement between~~Amendment to the ~~Company~~Company’s Amended and ~~Anna Ladd-Kruger dated October 2, 2020.~~Restated Equity Incentive Plan effective April 16, 2021 (incorporated by reference from the Current Report on Form 8-K filed with the SEC on June 30, 2021, Exhibit 10.1, File No. 001-33190).
31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Robert R. McEwen, principal executive officer.
31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Anna Ladd-Kruger, principal financial officer.
32		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Robert R. McEwen and Anna Ladd-Kruger.
95		Mine safety disclosure.
101		The following materials from McEwen Mining Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2020~~2021 are filed herewith, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Unaudited Consolidated Statements of Operations and Comprehensive (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, (ii) the Unaudited Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, (iii) the Unaudited Consolidated Statement of Changes in Shareholders’ Equity for the three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, (iv) the Unaudited Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, and (v) the Unaudited Notes to the Consolidated Financial Statements.
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2020,~~2021, formatted in Inline ~~XBRL~~XBLR and contained in Exhibit 101.

*		Compensatory plan or arrangement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MCEWEN MINING INC.

	/s/ Robert R. McEwen
Date: ~~October 29, 2020~~August 4, 2021	By: Robert R. McEwen,
	Chairman and Chief Executive Officer

	/s/ Anna Ladd-Kruger
Date: ~~October 29, 2020~~August 4, 2021	By: Anna Ladd-Kruger,
	Chief Financial Officer

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Operating and Financial Highlights	2325
Selected Consolidated Financial and Operating Results	2526
Consolidated Performance	2526
Consolidated Financial Review	2627
Liquidity and Capital Resources	28
Operations Review	3029
U.S.A Segment	3029
Gold Bar mine operating results	3029
Exploration Activities – Nevada	3129
Canada Segment	3231
Black Fox mine operating results	3231
Advanced-Stage Properties – Froome Project	3332
Exploration Activities – Timmins	3332
Mexico Segment	34
El Gallo Project operating results	34
Advanced-Stage Properties – Fenix Project	34
MSC Segment, Argentina	3536
MSC operating results	3536
Los Azules Segment, Argentina	37
Los Azules Project	37
Non-GAAP Financial Performance Measures	38
Critical Accounting Policies	4243
Forward-Looking Statements	4243
Risk Factors Impacting Forward-Looking Statements	43