Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 29, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 001-33190 | |
Entity Registrant Name | MCEWEN MINING INC. | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 84-0796160 | |
Entity Address, Address Line One | 150 King Street West | |
Entity Address, Address Line Two | SuiteĀ 2800 | |
Entity Address, City or Town | Toronto | |
Entity Address, State or Province | ON | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | M5H 1J9 | |
City Area Code | 866 | |
Local Phone Number | 441-0690 | |
Title of 12(b) Security | Common stock, no par value | |
Trading Symbol | MUX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 408,841,891 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000314203 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUE: | ||||
Revenue | $ 27,395 | $ 32,691 | $ 77,086 | $ 84,657 |
OPERATING EXPENSES: | ||||
Production costs applicable to sales | (23,526) | (23,584) | (74,267) | (59,432) |
Depreciation and depletion | (4,570) | (7,488) | (16,080) | (17,501) |
Gross (loss) profit | (701) | 1,619 | (13,261) | 7,724 |
OTHER OPERATING EXPENSES: | ||||
Advanced projects | (4,027) | (2,140) | (9,464) | (6,881) |
Exploration | (4,423) | (13,695) | (11,761) | (23,717) |
General and administrative | (2,532) | (2,645) | (6,836) | (8,078) |
Income (loss) from investment in Minera Santa Cruz S.A. (note 10) | 2,582 | (328) | (1,139) | (6,775) |
Depreciation | (88) | (96) | (317) | (417) |
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) | |||
Total other operating expenses | (9,374) | (19,399) | (117,293) | (47,251) |
Operating loss | (10,075) | (17,780) | (130,554) | (39,527) |
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 |
Total other income | 145 | 4,123 | 495 | 2,337 |
Loss before income and mining taxes | (9,930) | (13,657) | (130,059) | (37,190) |
Income and mining tax recovery | 152 | 2,192 | 1,276 | 2,575 |
Net loss | $ (9,778) | $ (11,465) | $ (128,783) | $ (34,615) |
Net loss per share (note 14): | ||||
Basic and Diluted (in dollars per share) | $ (0.02) | $ (0.03) | $ (0.32) | $ (0.10) |
Weighted average common shares outstanding (thousands) (note 14): | ||||
Basic and Diluted (in shares) | 403,887 | 362,175 | 401,603 | 356,218 |
Gold and silver sales | ||||
REVENUE: | ||||
Revenue | $ 27,395 | $ 32,691 | $ 77,086 | $ 84,657 |
Production costs applicable to sales | ||||
OPERATING EXPENSES: | ||||
Production costs applicable to sales | $ (23,526) | $ (23,584) | $ (74,267) | $ (59,432) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 7,954 | $ 46,452 |
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 |
Total current assets | 57,546 | 91,978 |
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 |
Other assets | 618 | 620 |
TOTAL ASSETS | 506,180 | 631,223 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 28,852 | 34,070 |
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 | |
Lease liabilities, current portion | 2,213 | 2,115 |
Asset retirement obligation, current portion (note 12) | 2,860 | 2,610 |
Total current liabilities | 35,983 | 48,795 |
Lease liabilities, long-term | 3,408 | 5,018 |
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 |
Other liabilities | 3,365 | 3,910 |
Deferred income and mining tax liability | 3,697 | 4,914 |
Total liabilities | 125,379 | 131,744 |
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 |
Accumulated deficit | (1,160,006) | (1,031,223) |
Total shareholders' equity | 380,801 | 499,479 |
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ 506,180 | $ 631,223 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Common, shares issued | 408,842 | 400,339 |
Common, shares outstanding | 408,842 | 400,339 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock and Additional Paid-in CapitalFlow-through common shares | Common Stock and Additional Paid-in CapitalRegistered direct offering | Common Stock and Additional Paid-in CapitalATM offering | Common Stock and Additional Paid-in Capital | Accumulated Deficit | Flow-through common shares | Registered direct offering | ATM offering | Total |
Balance at Dec. 31, 2018 | $ 1,457,422 | $ (971,476) | $ 485,946 | ||||||
Balance (in shares) at Dec. 31, 2018 | 344,560,000 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||
Stock-based compensation | $ 481 | 481 | |||||||
Exercise of stock options | $ 411 | $ 411 | |||||||
Exercise of stock options (in shares) | 405,000 | 405,000 | |||||||
Units issued in connection with registered direct offering , net of issuance costs | $ 22,910 | $ 22,910 | |||||||
Units issued in connection with registered direct offering , net of issuance costs (in shares) | 16,129,000 | ||||||||
Stock issued during the period | $ 1,851 | $ 1,851 | |||||||
Stock issued during the period (in shares) | 1,010,000 | ||||||||
Shares issued for acquisition of mineral property interests | $ 724 | $ 724 | |||||||
Shares issued for acquisition of mineral property interests (in shares) | 354,000 | ||||||||
Net loss | (34,615) | (34,615) | |||||||
Balance at Sep. 30, 2019 | $ 1,483,799 | (1,006,091) | 477,708 | ||||||
Balance (in shares) at Sep. 30, 2019 | 362,458,000 | ||||||||
Balance at Jun. 30, 2019 | $ 1,482,640 | (994,626) | 488,014 | ||||||
Balance (in shares) at Jun. 30, 2019 | 361,957,000 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||
Stock-based compensation | $ 284 | 284 | |||||||
Exercise of stock options | $ 151 | 151 | |||||||
Exercise of stock options (in shares) | 147,000 | ||||||||
Shares issued for acquisition of mineral property interests | $ 724 | 724 | |||||||
Shares issued for acquisition of mineral property interests (in shares) | 354,000 | ||||||||
Net loss | (11,465) | (11,465) | |||||||
Balance at Sep. 30, 2019 | $ 1,483,799 | (1,006,091) | 477,708 | ||||||
Balance (in shares) at Sep. 30, 2019 | 362,458,000 | ||||||||
Balance at Dec. 31, 2019 | $ 1,530,702 | (1,031,223) | 499,479 | ||||||
Balance (in shares) at Dec. 31, 2019 | 400,339,000 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||
Stock-based compensation | $ 332 | 332 | |||||||
Exercise of stock options | $ 61 | $ 61 | |||||||
Exercise of stock options (in shares) | 60,000 | 60,000 | |||||||
Stock issued during the period | $ 7,767 | $ 7,767 | |||||||
Stock issued during the period (in shares) | 6,298,000 | ||||||||
Shares issued for debt refinancing | $ 1,875 | $ 1,875 | |||||||
Shares issued for debt refinancing (in shares) | 2,092,000 | ||||||||
Shares issued for acquisition of mineral property interests | $ 70 | 70 | |||||||
Shares issued for acquisition of mineral property interests (in shares) | 53,000 | ||||||||
Net loss | (128,783) | (128,783) | |||||||
Balance at Sep. 30, 2020 | $ 1,540,807 | (1,160,006) | 380,801 | ||||||
Balance (in shares) at Sep. 30, 2020 | 408,842,000 | ||||||||
Balance at Jun. 30, 2020 | $ 1,532,940 | (1,150,228) | 382,712 | ||||||
Balance (in shares) at Jun. 30, 2020 | 402,491,000 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||
Stock-based compensation | $ 30 | 30 | |||||||
Stock issued during the period | $ 7,767 | $ 7,767 | |||||||
Stock issued during the period (in shares) | 6,298,000 | ||||||||
Shares issued for acquisition of mineral property interests | $ 70 | $ 70 | |||||||
Shares issued for acquisition of mineral property interests (in shares) | 53,000 | 53,600 | |||||||
Net loss | (9,778) | $ (9,778) | |||||||
Balance at Sep. 30, 2020 | $ 1,540,807 | $ (1,160,006) | $ 380,801 | ||||||
Balance (in shares) at Sep. 30, 2020 | 408,842,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 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 |
Change in non-cash working capital items: | ||
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: | ||
Interest paid | (3,850) | (3,911) |
Interest received | $ 158 | $ 60 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION McEwen Mining Inc. (the āCompanyā) was organized under the laws of the State of Colorado on July 24, 1979. The Company is engaged in the exploration, development, production and sale of gold and silver and exploration for copper. The Company operates in the United States, Canada, Mexico and Argentina. The Company owns 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. (āMSCā), owner of the producing San JosĆ© 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 (āSECā) 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 (āU.S. GAAPā) 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 managementās opinion, the unaudited Consolidated Statements of Operations and Comprehensive Loss Statement of Operations Consolidated Balance Sheets Consolidated Statement of Changes in Shareholdersā Equity Consolidated Statements of Cash Flows |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES Risks and Uncertainties COVID-19 On March 11, the World Health Organization (āWHOā) declared the COVID-19 virus a global pandemic. As a result of the pandemic, many jurisdictions, including the United States, Canada, Mexico and Argentina, instituted restrictions on travel, public gatherings, and certain business operations. Even absent of government-mandated shut-downs, 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 or a portion of operations at all of the Companyās mine sites at the start of Q2 2020. Since that date, all of the Companyās operations, including El Gallo in Mexico, have successfully recommenced operations. In the third quarter, operations at the San JosĆ© 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. ā ā The temporary shutdowns adversely impacted the Companyās operations, 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, adversely affected its liquidity. The long-term impact of the COVID-19 outbreak on the Companyās results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the global financial markets and the overall economy are highly uncertain and cannot be predicted. Achieving and maintaining normal operating capacity is also dependant on the continued availability of supplies, which is out of the Companyās control. If the financial markets and/or the overall economy are impacted for an extended period, the Companyās results of operations, financial position and cash flows may be further affected. The Company is not able to estimate the duration of the pandemic and potential impact on its business if disruptions or delays in business developments and shipments of product occur. In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including 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 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 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 Companyās ability to continue as a going concern. Substantial doubt about the Companyās 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. ā 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 Companyās operations caused by the COVID-19 pandemic, there is uncertainty about the Companyās 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 Companyās debt agreement. ā 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 Companyās 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 Companyās 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 managementās assessment. ā 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 (āCRAā). 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: Recently Issued Accounting Pronouncements Income Taxes: ā |
OPERATING SEGMENT REPORTING
OPERATING SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2020 | |
OPERATING SEGMENT REPORTING | |
OPERATING SEGMENT REPORTING | NOTE 3 OPERATING SEGMENT REPORTING McEwen Mining Inc. is engaged in the exploration, development, production and sale of gold and silver and exploration for copper, with operations located in the United States, Canada, Mexico, and Argentina. The Companyās chief operating decisions maker (āCODMā) reviews the operating results, assesses performance and makes decisions about allocation of resources to these segments at the geographic region level or major mine/project where the economic characteristics of the individual mines or projects within a geographic region are not alike. As a result, these operating segments also represent the Companyās reportable segments. The Companyās business activities that are not considered operating segments are included in General and Administrative and other 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. ā Significant information relating to the Companyās reportable operating segments is summarized in the tables below: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, 2020 USA Canada Mexico MSC Los Azules Total Revenue from gold and silver sales ā $ 13,042 ā $ 10,352 ā $ 4,001 ā $ ā ā $ ā ā $ 27,395 Production costs applicable to sales ā ā (10,791) ā ā (8,874) ā ā (3,861) ā ā ā ā ā ā ā (23,526) Depreciation and depletion ā ā (2,099) ā ā (2,404) ā ā (67) ā ā ā ā ā ā ā ā (4,570) Gross profit (loss) ā ā 152 ā ā (926) ā ā 73 ā ā ā ā ā ā ā ā (701) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (240) ā ā (2,784) ā ā (1,003) ā ā ā ā ā ā ā (4,027) Exploration ā ā (2,395) ā ā (1,189) ā ā (427) ā ā ā ā ā (412) ā ā (4,423) Income from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā 2,582 ā ā ā ā 2,582 Segment (loss) income ā $ (2,483) ā $ (4,899) ā $ (1,357) ā $ 2,582 ā $ (412) ā $ (6,569) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (3,361) Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (9,930) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 106 ā ā 488 ā ā ā ā ā ā ā ā ā ā $ 594 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2020 USA ā Canada ā Mexico ā MSC Los Azules Total Revenue from gold and silver sales ā $ 38,129 ā $ 27,257 ā $ 11,700 ā $ ā ā $ ā ā $ 77,086 Production costs applicable to sales ā ā (38,863) ā ā (24,231) ā ā (11,173) ā ā ā ā $ ā ā (74,267) Depreciation and depletion ā ā (8,527) ā ā (7,336) ā ā (217) ā ā ā ā $ ā ā ā (16,080) Gross (loss) profit ā ā (9,261) ā ā (4,310) ā ā 310 ā ā ā ā ā ā ā ā (13,261) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (789) ā ā (5,609) ā ā (3,066) ā ā ā ā $ ā ā (9,464) Exploration ā ā (5,235) ā ā (4,434) ā ā (463) ā ā ā ā $ (1,629) ā (11,761) Impairment of mineral property interests and plant and equipment (note 9) ā ā (83,805) ā ā ā ā ā ā ā ā ā ā $ ā ā ā (83,805) Loss from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā (1,139) ā $ ā ā (1,139) Other operating ā ā (1,390) ā ā (578) ā ā ā ā ā ā ā ā ā ā ā (1,968) Segment loss ā $ (100,480) ā $ (14,931) ā $ (3,219) ā $ (1,139) ā $ (1,629) ā $ (121,398) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (8,661) Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (130,059) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 4,712 ā $ 4,428 ā $ ā ā $ ā ā $ ā ā $ 9,140 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, 2019 USA Canada Mexico MSC Los Azules Total Revenue from gold and silver sales ā $ 16,577 ā $ 11,147 ā $ 4,967 ā $ ā ā $ ā ā $ 32,691 Production costs applicable to sales ā ā (12,156) ā ā (7,550) ā ā (3,878) ā ā ā ā ā ā ā ā (23,584) Depreciation and depletion ā ā (3,790) ā ā (3,589) ā ā (109) ā ā ā ā ā ā ā ā (7,488) Gross profit ā ā 631 ā ā 8 ā ā 980 ā ā ā ā ā ā ā ā 1,619 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (46) ā ā (384) ā ā (1,710) ā ā ā ā ā ā ā ā (2,140) Exploration ā ā (4,253) ā ā (8,691) ā ā (2) ā ā ā ā ā (749) ā ā (13,695) Loss from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā (328) ā ā ā ā ā (328) Segment loss ā $ (3,668) ā $ (9,067) ā $ (732) ā $ (328) ā $ (749) ā $ (14,544) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 887 Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (13,657) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 1,190 ā $ 2,500 ā $ ā ā $ ā ā $ ā ā $ 3,690 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2019 USA Canada Mexico MSC Los Azules Total Revenue from gold and silver sales ā $ 28,941 ā $ 36,139 ā $ 19,577 ā $ ā ā $ ā ā $ 84,657 Production costs applicable to sales ā ā (20,798) ā ā (24,025) ā ā (14,609) ā ā ā ā ā ā ā ā (59,432) Depreciation and depletion ā ā (6,510) ā ā (10,520) ā ā (471) ā ā ā ā ā ā ā ā (17,501) Gross profit ā ā 1,633 ā ā 1,594 ā ā 4,497 ā ā ā ā ā ā ā ā 7,724 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (632) ā ā (384) ā ā (5,865) ā ā ā ā ā ā ā ā (6,881) Exploration ā ā (6,155) ā ā (15,174) ā ā (2) ā ā ā ā ā (2,386) ā ā (23,717) Loss from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā (6,775) ā ā ā ā ā (6,775) Segment loss ā $ (5,154) ā $ (13,964) ā $ (1,370) ā $ (6,775) ā $ (2,386) ā $ (29,649) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (7,541) Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (37,190) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 17,804 ā $ 10,375 ā $ ā ā $ ā ā $ ā ā $ 28,179 ā ā G eographic information Geographic information includes the long-lived assets balance and revenues presented for the Companyās operating segments, as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Long-lived Assets ā Revenue (1) ā ā September 30, ā December 31, ā Three months ended September 30, ā Nine months ended September 30, ā 2020 2019 2020 2019 2020 ā 2019 USA ā $ 49,299 ā $ 135,854 ā $ 13,042 ā $ 16,577 ā $ 38,129 ā $ 28,941 Canada ā ā 78,161 ā ā 77,147 ā ā 10,352 ā ā 11,147 ā ā 27,257 ā ā 36,139 Mexico ā ā 20,051 ā ā 23,551 ā ā 4,001 ā ā 4,967 ā ā 11,700 ā ā 19,577 Argentina (2) ā ā 300,252 ā ā 302,598 ā ā ā ā ā ā ā ā ā ā ā ā Total consolidated (3) ā $ 447,763 ā $ 539,150 ā $ 27,395 ā $ 32,691 ā $ 77,086 ā $ 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 ā $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 . |
OTHER OPERATING
OTHER OPERATING | 9 Months Ended |
Sep. 30, 2020 | |
OTHER OPERATING | |
OTHER OPERATING | ā NOTE 4 OTHER OPERATING ā 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. ā |
OTHER INCOME
OTHER INCOME | 9 Months Ended |
Sep. 30, 2020 | |
OTHER (EXPENSE) INCOME | |
OTHER (EXPENSE) INCOME | NOTE 5 OTHER INCOME The following is a summary of other income for the three and nine months ended September 30 and 2019 : ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, ā Nine months ended September 30, ā 2020 2019 2020 2019 COVID Relief ā $ 2,628 ā $ ā ā $ 5,319 ā $ ā Unrealized and realized (loss) gain on investments (note 6) ā ā ā ā ā 3,220 ā ā (619) ā ā 4,972 Foreign currency (loss) gain ā ā (132) ā ā 1,616 ā ā 1,736 ā ā 1,242 Other (expense) income, net ā ā (406) ā ā (63) ā ā (365) ā ā 69 Total other income ā $ 2,090 ā $ 4,773 ā $ 6,071 ā $ 6,283 ā 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 (āPPPā) 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. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2020 | |
INVESTMENTS | |
INVESTMENTS | ā NOTE 6 INVESTMENTS ā The following is a summary of the activity in investments for the nine months ended September 30, 2020 and 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā As at ā Additions/ ā ā ā Disposals/ ā Unrealized ā Fair value ā ā December 31, ā transfers during ā Net (loss) on ā transfers during ā (loss) on ā September 30, ā 2019 period securities sold period securities held 2020 Marketable equity securities ā $ 1,885 ā $ ā ā $ (619) ā $ (1,266) ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā As at ā Additions/ ā Net gain ā Disposals/ ā Unrealized ā Fair value ā ā December 31, ā transfers during ā (loss) on ā transfers during ā gain on ā September 30, ā 2018 period securities sold ā period ā securities held ā 2019 Marketable equity securities ā $ 2,718 ā $ 2,314 ā $ 3,375 ā $ (5,653) ā $ 470 ā $ 3,224 Warrants ā 413 ā ā ā ā ā ā ā ā (1,540) ā ā 1,127 ā ā ā Investments ā $ 3,131 ā $ 2,314 ā $ 3,375 ā $ (7,193) ā $ 1,597 ā $ 3,224 ā 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 ā $1.3 million). |
RECEIVABLES, PREPAIDS AND OTHER
RECEIVABLES, PREPAIDS AND OTHER ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
RECEIVABLES, PREPAIDS AND OTHER ASSETS | |
RECEIVABLES, PREPAIDS AND OTHER ASSETS | ā ā NOTE 7 RECEIVABLES, PREPAIDS AND OTHER ASSETS The following is a breakdown of balances in receivables, prepaids and other assets as at September 30, 2020 and December 31, 2019: ā ā ā ā ā ā ā ā ā September 30, 2020 December 31, 2019 Government sales tax receivable ā ā 1,453 ā ā 2,658 Prepaids and other assets ā ā 3,702 ā ā 2,607 Receivables and other current assets ā $ 5,155 ā $ 5,265 ā Government sales tax receivable includes $0.7 million of Mexican value added tax (āVATā) at September 30, 2020 (December 31, 2019 ā $0.7 million). The Company collected $1.1 million of VAT during the nine months ended September 30, 2020 (September 30, 2019 ā $1.3 million). |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2020 | |
INVENTORIES | |
INVENTORIES | NOTE 8 INVENTORIES Inventories at September 30, 2020 and December 31, 2019 consisted of the following: ā ā ā ā ā ā ā ā ā September 30, 2020 December 31, 2019 Material on leach pads ā $ 29,069 ā $ 37,328 In-process inventory ā 4,283 ā 3,847 Stockpiles ā 586 ā 1,384 Precious metals ā 945 ā 1,038 Materials and supplies ā 4,818 ā 4,382 Inventories ā $ 39,701 ā $ 47,979 Less current portion ā ā 34,244 ā ā 38,376 Long-term portion ā $ 5,457 ā $ 9,603 ā During the three months ended September 30, 2020 there were no inventory write downs to net realizable value. During the nine months ended September 30, 2020, the inventory of the Black Fox Mine was written down to its net realizable value. The write-down was $1.9 million, of which $1.5 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 million was included in production costs applicable to sales (three and nine months ended September 30, 2019 - $nil). ā |
MINERAL PROPERTY INTERESTS AND
MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT | |
MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT | NOTE 9 MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT The definition of proven and probable reserves is set forth in the SEC Industry Guide 7. If proven and probable reserves exist at the Companyās 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 Companyās Gold Bar, Black Fox and San JosĆ© 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. ā As part of 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 were 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. ā The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Companyās non-recurring Level 3 fair value measurement of the Gold Bar mine: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Date of Fair Value Measurement ā Valuation Technique ā Unobservable Input ā Range/ Weighted Average ā ā ā ā ā ā ā ā ā Gold Bar Mine ā March 31, 2020 ā Discounted Cash Flow ā Discount Rate ā 9% ā ā ā ā ā ā Long Term Gold Price ā $1,430/oz ā ā ā ā ā ā United States Inflation Index ā 2% ā 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. |
INVESTMENT IN MINERA SANTA CRUZ
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | 9 Months Ended |
Sep. 30, 2020 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | NOTE 10 INVESTMENT IN MINERA SANTA CRUZ S.A. (āMSCā) ā SAN JOSĆ 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 Companyās investment in MSC, MSCās 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 in accordance with U.S. GAAP. A summary of the operating results for MSC for the three and nine months ended September 30, 2020 and 2019 is as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, ā Nine months ended September 30, ā ā 2020 ā 2019 ā 2020 ā 2019 ā Minera Santa Cruz S.A. (100%) ā ā ā ā ā ā ā ā ā ā ā ā ā Revenue from gold and silver sales ā $ 70,195 ā $ 74,530 ā $ 154,666 ā $ 189,348 ā Production costs applicable to sales ā ā (41,512) ā ā (43,345) ā ā (100,230) ā ā (119,392) ā Depreciation and depletion ā ā (7,107) ā ā (18,158) ā ā (22,084) ā ā (50,083) ā Gross profit ā ā 21,576 ā ā 13,027 ā ā 32,352 ā ā 19,873 ā Exploration ā ā (2,814) ā ā (1,482) ā ā (7,855) ā ā (7,373) ā Other expenses ā ā (6,509) ā ā (5,394) ā ā (17,651) ā ā (8,926) ā Net income before tax ā $ 12,253 ā $ 6,151 ā $ 6,846 ā $ 3,574 ā Current and deferred tax expense ā ā (4,922) ā ā (4,512) ā ā (2,989) ā ā (8,350) ā Net income (loss) ā $ 7,331 ā $ 1,639 ā $ 3,857 ā $ (4,776) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Portion attributable to McEwen Mining Inc. (49%) ā ā ā ā ā ā ā ā ā ā ā ā ā Net income (loss) ā $ 3,592 ā $ 803 ā $ 1,890 ā $ (2,340) ā Amortization of fair value increments ā (1,255) ā (2,551) ā (3,891) ā (6,922) ā Income tax recovery ā ā 245 ā ā 1,420 ā ā 862 ā ā 2,487 ā Income (loss) from investment in MSC, net of amortization ā $ 2,582 ā $ (328) ā $ (1,139) ā $ (6,775) ā ā 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 devaluation of the Argentine peso against the U.S. dollar on the peso-denominated deferred tax liability recognized at the time of acquisition. Changes in the Companyās investment in MSC for the nine months ended September 30, 2020 and year ended December 31, 2019 are as follows: ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2020 Year ended December 31, 2019 Investment in MSC, beginning of period ā $ 110,183 ā $ 127,814 Attributable net gain (loss) from MSC ā ā 1,890 ā ā (2,097) Amortization of fair value increments ā (3,891) ā (9,448) Income tax recovery ā ā 862 ā ā 2,791 Dividend distribution received ā (282) ā (8,877) Investment in MSC, end of period ā $ 108,762 ā $ 110,183 ā During the three and nine months ended September 30, 2020, the Company received $nil and $0.3 million A summary of the key assets and liabilities of MSC on a 100% basis as at September 30, 2020, 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: ā ā ā ā ā ā ā ā ā ā ā As at September 30, 2020 ā Balance excluding FV increments ā Adjustments ā Balance including FV increments Current assets ā $ 95,364 ā $ 854 ā $ 96,218 Total assets ā $ 190,746 ā $ 110,885 ā $ 301,631 ā ā ā ā ā ā ā ā ā ā Current liabilities ā $ (44,761) ā $ ā ā $ (44,761) Total liabilities ā $ (75,190) ā $ (4,478) ā $ (79,668) ā |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
DEBT | |
DEBT | NOTE 11 DEBT On August 10, 2018, the Company finalized a $50.0 million senior secured 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 Companyās and its subsidiariesā assets. On June 25, 2020, the Company entered into an Amended and Restated Credit Agreement (āARCAā) which refinanced the outstanding $50 million and which terms differed in material respects from the old loan as follows: ā ā Sprott Private Resource Lending II (Collector), LP replaced Royal Capital Management Corp. as the administrative agent. ā Sprott Private Resource Lending II (Collector), LP replaced certain lenders. An affiliate of Robert McEwen remains as a lender. ā Scheduled repayments of the principal are extended by two years . Monthly repayments of principal in the amount of $2.0 million are due beginning on August 31, 2022 and continuing for 12 months , followed by a final principal payment of $26.0 million plus any accrued interest on August 31, 2023. ā 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 to 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. ā 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. A reconciliation of the Companyās long-term debt for the nine months ended September 30, 2020 and for the year ended December 31, 2019 is as follows: ā ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2020 Year ended December 31, 2019 ā Balance, beginning of period ā $ 49,516 ā $ 49,206 ā Interest expense ā 4,003 ā 5,185 ā Interest payments ā (3,650) ā (4,875) ā Debt amendment - Equity-based fees ā ā (1,875) ā ā ā ā Balance, end of period ā $ 47,994 ā $ 49,516 ā Less current portion ā ā ā ā ā 10,000 ā Long-term portion ā $ 47,994 ā $ 39,516 ā ā During the nine months ended September 30, 2020, $nil of interest was capitalized in plant and equipment (nine months ended September 30, 2019 ā $0.6 million, capitalized to Gold Bar construction). |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2020 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | NOTE 12 ASSET RETIREMENT OBLIGATIONS The Company is responsible for 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 Companyās asset retirement obligations for the nine months ended September 30, 2020 and for the year ended December 31, 2019 are as follows: ā ā ā ā ā ā ā ā ā September 30, 2020 December 31, 2019 Asset retirement obligation liability, beginning balance ā $ 32,201 ā $ 29,402 Settlements ā (185) ā (513) Accretion of liability ā 1,389 ā 1,680 Adjustment reflecting updated estimates ā 673 ā 1,012 Foreign exchange revaluation ā ā (286) ā ā 620 Asset retirement obligation liability, ending balance ā $ 33,792 ā $ 32,201 Less current portion ā ā 2,860 ā ā 2,610 Long-term portion ā $ 30,932 ā $ 29,591 ā The Companyās reclamation expenses for the periods presented consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, ā Nine months ended September 30, ā 2020 2019 ā 2020 ā 2019 Reclamation adjustment reflecting updated estimates ā $ 411 ā $ ā ā $ 614 ā $ 88 Reclamation accretion ā ā 475 ā ā 495 ā ā 1,389 ā ā 1,295 Total ā $ 886 ā $ 495 ā $ 2,003 ā ā 1,383 ā |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 13 SHAREHOLDERSā EQUITY Equity Issuances September 2020 Flow-through shares issuance and Restricted cash 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 Companyās 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 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 The Company is required to spend flow-through share proceeds on flow-through eligible Canadian exploration expenditures (āCEEā) as defined by subsection 66(15) of the Income Tax Act (Canada) and accordingly recorded the proceeds as restricted cash on the Consolidated Balance Sheets at September 30, 2020. Shares issued for acquisition of mineral property interest During the three months ended September 30, 2020, the Company issued a total of 53,600 shares of common stock in exchange for the acquisition of mineral interests in Nevada. Stock-based compensation During the three months ended September 30, 2020, 4,796,550 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 the three and nine months ended September 30, 2020 was $0.3 million, (September 30, 2019 ā $0.3 million and $0.5 million, respectively). During the nine months ended September 30, 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 one share of common stock and one 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 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 (āATMā) 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. Shareholdersā Distributions Pursuant to the ARCA ( Note 11 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | NOTE 14 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 months ended September 30, 2020 and 2019, as they would be anti-dilutive. For the nine months ended September 30, 2020, all of the outstanding options (8,808,001) and all of the outstanding warrants (29,770,766) were excluded from the computation of diluted loss per share (September 30, 2019 ā 5,672,944 outstanding options and 8,064,150 outstanding warrants). ā |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 15 RELATED PARTY TRANSACTIONS The Company recorded the following expense in respect to the related parties outlined below during the periods presented: ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, Nine months ended September 30, ā ā 2020 2019 ā 2020 2019 Lexam L.P. ā $ ā ā $ 36 ā $ 87 ā $ 113 REVlaw ā ā 34 ā ā 56 ā ā 122 ā ā 184 The Company has the following outstanding accounts payable balances in respect to the related parties outlined below: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā December 31, 2019 Lexam L.P. ā ā ā ā ā ā ā $ 71 ā $ 65 REVlaw ā ā ā ā ā ā ā ā 53 ā ā 12 ā 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 months ended September 30, 2020, the Company paid $0.6 million and $1.8 million, respectively, (three and nine months ended September 30, 2019 ā $0.6 million and $1.8 million, respectively) in interest to this affiliate. Note 11 |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE ACCOUNTING | |
FAIR VALUE ACCOUNTING | NOTE 16 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. Assets and liabilities measured at fair value on a recurring basis. The following table identifies the Companyās assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy as at September 30, 2020 and December 31, 2019, as reported in the Consolidated Balance Sheets ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair value as at September 30, 2020 Fair value as at December 31, 2019 ā Level 1 Level 2 Total Level 1 Level 2 Total Marketable equity securities ā $ ā ā $ ā ā $ ā ā $ 1,885 ā $ ā ā $ 1,885 ā The Companyās investments consisted of marketable equity securities which were exchange-traded and valued using quoted market prices in active markets and as such were classified within Level 1 of the fair value hierarchy. The fair value of the investments was calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company. During the nine months ended September 30, 2020, the Company recorded an impairment of long-lived assets at the Gold Bar Mine totaling $83.8 million based on Level 3 inputs. See Note 9 Debt is recorded at an amortized cost of $47.9 million (December 31, 2019 ā $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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 17 COMMITMENTS AND CONTINGENCIES In addition to the commitments for payments on operating and finance leases and the repayment of long-term debt ( Note 11 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 million (C$14.9 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) Surety Bonds As at September 30, 2020, the Company has a surety facility in place to cover all its bonding obligations, which include $20.1 million of bonding in Nevada and $11.2 million (C$14.9 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 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 30, 2020 the Company held $3.6 million in restricted cash as deposit against the surety facility. ā 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. 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 months ended September 30, 2020, the Company recorded revenue of $0.2 million and $0.9 million, respectively, (for the three and nine months ended September 30, 2019 ā $0.4 million and $1.2 million, respectively) related to the gold stream sales. |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2020 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | NOTE 18 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 Consolidated Statements of Cash flows ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā December 31, 2019 Cash and cash equivalents ā $ 7,954 ā $ 46,452 Restricted cash - current (Note 13) ā ā 10,193 ā ā - Restricted cash - non-current (Note 17) ā ā 3,595 ā ā 48 Total cash, cash equivalents, and restricted cash ā $ 21,742 ā $ 46,500 ā Restricted cash includes proceeds received from the Flow Through Financing (Note 13) (Note 17). |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
Risks and Uncertainties | Risks and Uncertainties COVID-19 On March 11, the World Health Organization (āWHOā) declared the COVID-19 virus a global pandemic. As a result of the pandemic, many jurisdictions, including the United States, Canada, Mexico and Argentina, instituted restrictions on travel, public gatherings, and certain business operations. Even absent of government-mandated shut-downs, 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 or a portion of operations at all of the Companyās mine sites at the start of Q2 2020. Since that date, all of the Companyās operations, including El Gallo in Mexico, have successfully recommenced operations. In the third quarter, operations at the San JosĆ© 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. ā ā The temporary shutdowns adversely impacted the Companyās operations, 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, adversely affected its liquidity. The long-term impact of the COVID-19 outbreak on the Companyās results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the global financial markets and the overall economy are highly uncertain and cannot be predicted. Achieving and maintaining normal operating capacity is also dependant on the continued availability of supplies, which is out of the Companyās control. If the financial markets and/or the overall economy are impacted for an extended period, the Companyās results of operations, financial position and cash flows may be further affected. The Company is not able to estimate the duration of the pandemic and potential impact on its business if disruptions or delays in business developments and shipments of product occur. In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including 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 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 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 Companyās ability to continue as a going concern. Substantial doubt about the Companyās 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. ā 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 Companyās operations caused by the COVID-19 pandemic, there is uncertainty about the Companyās 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 Companyās debt agreement. ā 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 Companyās 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 Companyās 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 managementās assessment. |
Recently Adopted And Issued Accounting Pronouncements | 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 (āCRAā). 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: Recently Issued Accounting Pronouncements Income Taxes: |
OPERATING SEGMENT REPORTING (Ta
OPERATING SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OPERATING SEGMENT REPORTING | |
Schedule of the financial information relating to the Company's segments | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, 2020 USA Canada Mexico MSC Los Azules Total Revenue from gold and silver sales ā $ 13,042 ā $ 10,352 ā $ 4,001 ā $ ā ā $ ā ā $ 27,395 Production costs applicable to sales ā ā (10,791) ā ā (8,874) ā ā (3,861) ā ā ā ā ā ā ā (23,526) Depreciation and depletion ā ā (2,099) ā ā (2,404) ā ā (67) ā ā ā ā ā ā ā ā (4,570) Gross profit (loss) ā ā 152 ā ā (926) ā ā 73 ā ā ā ā ā ā ā ā (701) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (240) ā ā (2,784) ā ā (1,003) ā ā ā ā ā ā ā (4,027) Exploration ā ā (2,395) ā ā (1,189) ā ā (427) ā ā ā ā ā (412) ā ā (4,423) Income from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā 2,582 ā ā ā ā 2,582 Segment (loss) income ā $ (2,483) ā $ (4,899) ā $ (1,357) ā $ 2,582 ā $ (412) ā $ (6,569) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (3,361) Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (9,930) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 106 ā ā 488 ā ā ā ā ā ā ā ā ā ā $ 594 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2020 USA ā Canada ā Mexico ā MSC Los Azules Total Revenue from gold and silver sales ā $ 38,129 ā $ 27,257 ā $ 11,700 ā $ ā ā $ ā ā $ 77,086 Production costs applicable to sales ā ā (38,863) ā ā (24,231) ā ā (11,173) ā ā ā ā $ ā ā (74,267) Depreciation and depletion ā ā (8,527) ā ā (7,336) ā ā (217) ā ā ā ā $ ā ā ā (16,080) Gross (loss) profit ā ā (9,261) ā ā (4,310) ā ā 310 ā ā ā ā ā ā ā ā (13,261) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (789) ā ā (5,609) ā ā (3,066) ā ā ā ā $ ā ā (9,464) Exploration ā ā (5,235) ā ā (4,434) ā ā (463) ā ā ā ā $ (1,629) ā (11,761) Impairment of mineral property interests and plant and equipment (note 9) ā ā (83,805) ā ā ā ā ā ā ā ā ā ā $ ā ā ā (83,805) Loss from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā (1,139) ā $ ā ā (1,139) Other operating ā ā (1,390) ā ā (578) ā ā ā ā ā ā ā ā ā ā ā (1,968) Segment loss ā $ (100,480) ā $ (14,931) ā $ (3,219) ā $ (1,139) ā $ (1,629) ā $ (121,398) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (8,661) Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (130,059) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 4,712 ā $ 4,428 ā $ ā ā $ ā ā $ ā ā $ 9,140 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, 2019 USA Canada Mexico MSC Los Azules Total Revenue from gold and silver sales ā $ 16,577 ā $ 11,147 ā $ 4,967 ā $ ā ā $ ā ā $ 32,691 Production costs applicable to sales ā ā (12,156) ā ā (7,550) ā ā (3,878) ā ā ā ā ā ā ā ā (23,584) Depreciation and depletion ā ā (3,790) ā ā (3,589) ā ā (109) ā ā ā ā ā ā ā ā (7,488) Gross profit ā ā 631 ā ā 8 ā ā 980 ā ā ā ā ā ā ā ā 1,619 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (46) ā ā (384) ā ā (1,710) ā ā ā ā ā ā ā ā (2,140) Exploration ā ā (4,253) ā ā (8,691) ā ā (2) ā ā ā ā ā (749) ā ā (13,695) Loss from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā (328) ā ā ā ā ā (328) Segment loss ā $ (3,668) ā $ (9,067) ā $ (732) ā $ (328) ā $ (749) ā $ (14,544) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 887 Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (13,657) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 1,190 ā $ 2,500 ā $ ā ā $ ā ā $ ā ā $ 3,690 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2019 USA Canada Mexico MSC Los Azules Total Revenue from gold and silver sales ā $ 28,941 ā $ 36,139 ā $ 19,577 ā $ ā ā $ ā ā $ 84,657 Production costs applicable to sales ā ā (20,798) ā ā (24,025) ā ā (14,609) ā ā ā ā ā ā ā ā (59,432) Depreciation and depletion ā ā (6,510) ā ā (10,520) ā ā (471) ā ā ā ā ā ā ā ā (17,501) Gross profit ā ā 1,633 ā ā 1,594 ā ā 4,497 ā ā ā ā ā ā ā ā 7,724 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Advanced projects ā ā (632) ā ā (384) ā ā (5,865) ā ā ā ā ā ā ā ā (6,881) Exploration ā ā (6,155) ā ā (15,174) ā ā (2) ā ā ā ā ā (2,386) ā ā (23,717) Loss from investment in Minera Santa Cruz S.A. ā ā ā ā ā ā ā ā ā ā ā (6,775) ā ā ā ā ā (6,775) Segment loss ā $ (5,154) ā $ (13,964) ā $ (1,370) ā $ (6,775) ā $ (2,386) ā $ (29,649) General and Administrative and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (7,541) Loss before income and mining taxes ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā $ (37,190) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Capital expenditures ā $ 17,804 ā $ 10,375 ā $ ā ā $ ā ā $ ā ā $ 28,179 |
Schedule Of Geographic information | G eographic information Geographic information includes the long-lived assets balance and revenues presented for the Companyās operating segments, as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Long-lived Assets ā Revenue (1) ā ā September 30, ā December 31, ā Three months ended September 30, ā Nine months ended September 30, ā 2020 2019 2020 2019 2020 ā 2019 USA ā $ 49,299 ā $ 135,854 ā $ 13,042 ā $ 16,577 ā $ 38,129 ā $ 28,941 Canada ā ā 78,161 ā ā 77,147 ā ā 10,352 ā ā 11,147 ā ā 27,257 ā ā 36,139 Mexico ā ā 20,051 ā ā 23,551 ā ā 4,001 ā ā 4,967 ā ā 11,700 ā ā 19,577 Argentina (2) ā ā 300,252 ā ā 302,598 ā ā ā ā ā ā ā ā ā ā ā ā Total consolidated (3) ā $ 447,763 ā $ 539,150 ā $ 27,395 ā $ 32,691 ā $ 77,086 ā $ 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 ā $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 . |
OTHER INCOME (Tables)
OTHER INCOME (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OTHER (EXPENSE) INCOME | |
Schedule of other income (expense) | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, ā Nine months ended September 30, ā 2020 2019 2020 2019 COVID Relief ā $ 2,628 ā $ ā ā $ 5,319 ā $ ā Unrealized and realized (loss) gain on investments (note 6) ā ā ā ā ā 3,220 ā ā (619) ā ā 4,972 Foreign currency (loss) gain ā ā (132) ā ā 1,616 ā ā 1,736 ā ā 1,242 Other (expense) income, net ā ā (406) ā ā (63) ā ā (365) ā ā 69 Total other income ā $ 2,090 ā $ 4,773 ā $ 6,071 ā $ 6,283 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
INVESTMENTS | |
Summary of investment portfolio | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā As at ā Additions/ ā ā ā Disposals/ ā Unrealized ā Fair value ā ā December 31, ā transfers during ā Net (loss) on ā transfers during ā (loss) on ā September 30, ā 2019 period securities sold period securities held 2020 Marketable equity securities ā $ 1,885 ā $ ā ā $ (619) ā $ (1,266) ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā As at ā Additions/ ā Net gain ā Disposals/ ā Unrealized ā Fair value ā ā December 31, ā transfers during ā (loss) on ā transfers during ā gain on ā September 30, ā 2018 period securities sold ā period ā securities held ā 2019 Marketable equity securities ā $ 2,718 ā $ 2,314 ā $ 3,375 ā $ (5,653) ā $ 470 ā $ 3,224 Warrants ā 413 ā ā ā ā ā ā ā ā (1,540) ā ā 1,127 ā ā ā Investments ā $ 3,131 ā $ 2,314 ā $ 3,375 ā $ (7,193) ā $ 1,597 ā $ 3,224 |
RECEIVABLES, PREPAIDS AND OTH_2
RECEIVABLES, PREPAIDS AND OTHER ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
RECEIVABLES, PREPAIDS AND OTHER ASSETS | |
Schedule of balances in receivables and other current assets | ā ā ā ā ā ā ā ā ā September 30, 2020 December 31, 2019 Government sales tax receivable ā ā 1,453 ā ā 2,658 Prepaids and other assets ā ā 3,702 ā ā 2,607 Receivables and other current assets ā $ 5,155 ā $ 5,265 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
INVENTORIES | |
Schedule of inventories | ā ā ā ā ā ā ā ā ā September 30, 2020 December 31, 2019 Material on leach pads ā $ 29,069 ā $ 37,328 In-process inventory ā 4,283 ā 3,847 Stockpiles ā 586 ā 1,384 Precious metals ā 945 ā 1,038 Materials and supplies ā 4,818 ā 4,382 Inventories ā $ 39,701 ā $ 47,979 Less current portion ā ā 34,244 ā ā 38,376 Long-term portion ā $ 5,457 ā $ 9,603 |
MINERAL PROPERTY INTERESTS AN_2
MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT | |
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 measurements | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Date of Fair Value Measurement ā Valuation Technique ā Unobservable Input ā Range/ Weighted Average ā ā ā ā ā ā ā ā ā Gold Bar Mine ā March 31, 2020 ā Discounted Cash Flow ā Discount Rate ā 9% ā ā ā ā ā ā Long Term Gold Price ā $1,430/oz ā ā ā ā ā ā United States Inflation Index ā 2% |
INVESTMENT IN MINERA SANTA CR_2
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |
Summary of MSC's financial information from operations | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, ā Nine months ended September 30, ā ā 2020 ā 2019 ā 2020 ā 2019 ā Minera Santa Cruz S.A. (100%) ā ā ā ā ā ā ā ā ā ā ā ā ā Revenue from gold and silver sales ā $ 70,195 ā $ 74,530 ā $ 154,666 ā $ 189,348 ā Production costs applicable to sales ā ā (41,512) ā ā (43,345) ā ā (100,230) ā ā (119,392) ā Depreciation and depletion ā ā (7,107) ā ā (18,158) ā ā (22,084) ā ā (50,083) ā Gross profit ā ā 21,576 ā ā 13,027 ā ā 32,352 ā ā 19,873 ā Exploration ā ā (2,814) ā ā (1,482) ā ā (7,855) ā ā (7,373) ā Other expenses ā ā (6,509) ā ā (5,394) ā ā (17,651) ā ā (8,926) ā Net income before tax ā $ 12,253 ā $ 6,151 ā $ 6,846 ā $ 3,574 ā Current and deferred tax expense ā ā (4,922) ā ā (4,512) ā ā (2,989) ā ā (8,350) ā Net income (loss) ā $ 7,331 ā $ 1,639 ā $ 3,857 ā $ (4,776) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Portion attributable to McEwen Mining Inc. (49%) ā ā ā ā ā ā ā ā ā ā ā ā ā Net income (loss) ā $ 3,592 ā $ 803 ā $ 1,890 ā $ (2,340) ā Amortization of fair value increments ā (1,255) ā (2,551) ā (3,891) ā (6,922) ā Income tax recovery ā ā 245 ā ā 1,420 ā ā 862 ā ā 2,487 ā Income (loss) from investment in MSC, net of amortization ā $ 2,582 ā $ (328) ā $ (1,139) ā $ (6,775) ā |
Schedule of change in the entity's investment in MSC | ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2020 Year ended December 31, 2019 Investment in MSC, beginning of period ā $ 110,183 ā $ 127,814 Attributable net gain (loss) from MSC ā ā 1,890 ā ā (2,097) Amortization of fair value increments ā (3,891) ā (9,448) Income tax recovery ā ā 862 ā ā 2,791 Dividend distribution received ā (282) ā (8,877) Investment in MSC, end of period ā $ 108,762 ā $ 110,183 |
Summary of key assets and liabilities, before and after adjustments to fair value | ā ā ā ā ā ā ā ā ā ā ā As at September 30, 2020 ā Balance excluding FV increments ā Adjustments ā Balance including FV increments Current assets ā $ 95,364 ā $ 854 ā $ 96,218 Total assets ā $ 190,746 ā $ 110,885 ā $ 301,631 ā ā ā ā ā ā ā ā ā ā Current liabilities ā $ (44,761) ā $ ā ā $ (44,761) Total liabilities ā $ (75,190) ā $ (4,478) ā $ (79,668) |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DEBT | |
Schedule of Movements In Debt | ā ā ā ā ā ā ā ā ā ā Nine months ended September 30, 2020 Year ended December 31, 2019 ā Balance, beginning of period ā $ 49,516 ā $ 49,206 ā Interest expense ā 4,003 ā 5,185 ā Interest payments ā (3,650) ā (4,875) ā Debt amendment - Equity-based fees ā ā (1,875) ā ā ā ā Balance, end of period ā $ 47,994 ā $ 49,516 ā Less current portion ā ā ā ā ā 10,000 ā Long-term portion ā $ 47,994 ā $ 39,516 ā |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
ASSET RETIREMENT OBLIGATIONS | |
Schedule of reconciliation of asset retirement obligations | ā ā ā ā ā ā ā ā ā September 30, 2020 December 31, 2019 Asset retirement obligation liability, beginning balance ā $ 32,201 ā $ 29,402 Settlements ā (185) ā (513) Accretion of liability ā 1,389 ā 1,680 Adjustment reflecting updated estimates ā 673 ā 1,012 Foreign exchange revaluation ā ā (286) ā ā 620 Asset retirement obligation liability, ending balance ā $ 33,792 ā $ 32,201 Less current portion ā ā 2,860 ā ā 2,610 Long-term portion ā $ 30,932 ā $ 29,591 |
Schedule of reclamation expense | The Companyās reclamation expenses for the periods presented consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, ā Nine months ended September 30, ā 2020 2019 ā 2020 ā 2019 Reclamation adjustment reflecting updated estimates ā $ 411 ā $ ā ā $ 614 ā $ 88 Reclamation accretion ā ā 475 ā ā 495 ā ā 1,389 ā ā 1,295 Total ā $ 886 ā $ 495 ā $ 2,003 ā ā 1,383 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party expense and outstanding accounts payable | The Company recorded the following expense in respect to the related parties outlined below during the periods presented: ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended September 30, Nine months ended September 30, ā ā 2020 2019 ā 2020 2019 Lexam L.P. ā $ ā ā $ 36 ā $ 87 ā $ 113 REVlaw ā ā 34 ā ā 56 ā ā 122 ā ā 184 The Company has the following outstanding accounts payable balances in respect to the related parties outlined below: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā December 31, 2019 Lexam L.P. ā ā ā ā ā ā ā $ 71 ā $ 65 REVlaw ā ā ā ā ā ā ā ā 53 ā ā 12 |
FAIR VALUE ACCOUNTING (Tables)
FAIR VALUE ACCOUNTING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE ACCOUNTING | |
Schedule of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair value as at September 30, 2020 Fair value as at December 31, 2019 ā Level 1 Level 2 Total Level 1 Level 2 Total Marketable equity securities ā $ ā ā $ ā ā $ ā ā $ 1,885 ā $ ā ā $ 1,885 |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |
Reconciliation of cash and cash equivalents and restricted cash | ā ā ā ā ā ā ā ā ā ā September 30, 2020 ā December 31, 2019 Cash and cash equivalents ā $ 7,954 ā $ 46,452 Restricted cash - current (Note 13) ā ā 10,193 ā ā - Restricted cash - non-current (Note 17) ā ā 3,595 ā ā 48 Total cash, cash equivalents, and restricted cash ā $ 21,742 ā $ 46,500 |
NATURE OF OPERATIONS AND RECENT
NATURE OF OPERATIONS AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Ownership interest (as a percent) | 49.00% |
Subsidiary (as a percent) | 100.00% |
MSC | Equity Method Investment | |
Ownership interest (as a percent) | 49.00% |
OPERATING SEGMENT REPORTING (De
OPERATING SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Operating Segment Reporting | ||||||
Inventory | $ 34,244 | $ 34,244 | $ 38,376 | |||
Revenue from gold and silver sales | 27,395 | $ 32,691 | 77,086 | $ 84,657 | ||
Production costs applicable to sales | (23,526) | (23,584) | (74,267) | (59,432) | ||
Depreciation and depletion | (4,570) | (7,488) | (16,080) | (17,501) | ||
Gross (loss) profit | (701) | 1,619 | (13,261) | 7,724 | ||
Advanced projects | (4,027) | (2,140) | (9,464) | (6,881) | ||
Impairment of mineral property interests and plant and equipment (note 8) | $ (83,800) | (83,805) | ||||
Income (Loss) from investment in Minera Santa Cruz S.A. (note 10) | 2,582 | (328) | (1,139) | (6,775) | ||
Segment (loss) income | (6,569) | (14,544) | (121,398) | (29,649) | ||
General and Administrative and other | (3,361) | 887 | (8,661) | (7,541) | ||
(Gain) on disposal of fixed assets | (134) | |||||
Loss before income and mining taxes | (9,930) | (13,657) | (130,059) | (37,190) | ||
Capital expenditures | 594 | 3,690 | 9,140 | 28,179 | ||
Other operating | (1,968) | |||||
El Gallo Project | ||||||
Operating Segment Reporting | ||||||
Inventory | 3,100 | 2,700 | 3,100 | 2,700 | ||
Production costs applicable to sales | (11,200) | (14,600) | ||||
Sunk costs | 5,200 | 5,700 | ||||
U.S. | ||||||
Operating Segment Reporting | ||||||
Depreciation and depletion | (2,099) | (3,790) | (8,527) | (6,510) | ||
Gross (loss) profit | 152 | 631 | (9,261) | 1,633 | ||
Advanced projects | (240) | (46) | (789) | (632) | ||
Impairment of mineral property interests and plant and equipment (note 8) | (83,805) | |||||
Segment (loss) income | (2,483) | (3,668) | (100,480) | (5,154) | ||
Capital expenditures | 106 | 1,190 | 4,712 | 17,804 | ||
Other operating | (1,390) | |||||
Canada | ||||||
Operating Segment Reporting | ||||||
Depreciation and depletion | (2,404) | (3,589) | (7,336) | (10,520) | ||
Gross (loss) profit | (926) | 8 | (4,310) | 1,594 | ||
Advanced projects | (2,784) | (384) | (5,609) | (384) | ||
Segment (loss) income | (4,899) | (9,067) | (14,931) | (13,964) | ||
Capital expenditures | 488 | 2,500 | 4,428 | 10,375 | ||
Other operating | (578) | |||||
Mexico | ||||||
Operating Segment Reporting | ||||||
Depreciation and depletion | (67) | (109) | (217) | (471) | ||
Gross (loss) profit | 73 | 980 | 310 | 4,497 | ||
Advanced projects | (1,003) | (1,710) | (3,066) | (5,865) | ||
Segment (loss) income | (1,357) | (732) | (3,219) | (1,370) | ||
MSC | ||||||
Operating Segment Reporting | ||||||
Income (Loss) from investment in Minera Santa Cruz S.A. (note 10) | 2,582 | (328) | (1,139) | (6,775) | ||
Segment (loss) income | 2,582 | (328) | (1,139) | (6,775) | ||
Los Azules | ||||||
Operating Segment Reporting | ||||||
Segment (loss) income | (412) | (749) | (1,629) | (2,386) | ||
MSC | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 70,195 | 74,530 | 154,666 | 189,348 | ||
Production costs applicable to sales | (41,512) | (43,345) | (100,230) | (119,392) | ||
Depreciation and depletion | (7,107) | (18,158) | (22,084) | (50,083) | ||
Gross (loss) profit | 21,576 | 13,027 | 32,352 | 19,873 | ||
Income (Loss) from investment in Minera Santa Cruz S.A. (note 10) | 2,582 | (328) | (1,139) | (6,775) | ||
Loss before income and mining taxes | 12,253 | 6,151 | 6,846 | 3,574 | ||
Gold and silver sales | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 27,395 | 32,691 | 77,086 | 84,657 | ||
Gold and silver sales | U.S. | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 13,042 | 16,577 | 38,129 | 28,941 | ||
Gold and silver sales | Canada | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 10,352 | 11,147 | 27,257 | 36,139 | ||
Gold and silver sales | Mexico | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 4,001 | 4,967 | 11,700 | 19,577 | ||
Production costs applicable to sales | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (23,526) | (23,584) | (74,267) | (59,432) | ||
Production costs applicable to sales | U.S. | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (10,791) | (12,156) | (38,863) | (20,798) | ||
Production costs applicable to sales | Canada | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (8,874) | (7,550) | (24,231) | (24,025) | ||
Production costs applicable to sales | Mexico | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (3,861) | (3,878) | (11,173) | (14,609) | ||
Exploration | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (4,423) | (13,695) | (11,761) | (23,717) | ||
Exploration | U.S. | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (2,395) | (4,253) | (5,235) | (6,155) | ||
Exploration | Canada | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (1,189) | (8,691) | (4,434) | (15,174) | ||
Exploration | Mexico | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | (427) | (2) | (463) | (2) | ||
Exploration | Los Azules | ||||||
Operating Segment Reporting | ||||||
Production costs applicable to sales | $ (412) | $ (749) | $ (1,629) | $ (2,386) |
OPERATING SEGMENT REPORTING - G
OPERATING SEGMENT REPORTING - Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | $ 27,395 | $ 32,691 | $ 77,086 | $ 84,657 | ||
Long-lived Assets | 447,763 | 447,763 | $ 539,150 | |||
Investment in MSC | 108,762 | 108,762 | 110,183 | |||
Lease assets | 900 | 900 | ||||
MSC | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 70,195 | 74,530 | 154,666 | 189,348 | ||
Investment in MSC | 108,762 | 108,762 | 110,183 | $ 127,814 | ||
USA | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 13,042 | 16,577 | 38,129 | 28,941 | ||
Long-lived Assets | 49,299 | 49,299 | 135,854 | |||
Canada | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 10,352 | 11,147 | 27,257 | 36,139 | ||
Long-lived Assets | 78,161 | 78,161 | 77,147 | |||
Mexico | ||||||
Operating Segment Reporting | ||||||
Revenue from gold and silver sales | 4,001 | $ 4,967 | 11,700 | $ 19,577 | ||
Long-lived Assets | 20,051 | 20,051 | 23,551 | |||
Argentina | ||||||
Operating Segment Reporting | ||||||
Long-lived Assets | 300,252 | 300,252 | 302,598 | |||
Argentina | MSC | ||||||
Operating Segment Reporting | ||||||
Investment in MSC | $ 108,800 | $ 108,800 | $ 110,200 |
OTHER OPERATING (Details)
OTHER OPERATING (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Shut Down Costs [Line Items] | |
Costs incurred while operations were suspended | $ 1,968 |
Costs incurred in review of resources | 500 |
Gold Bar mine | |
Shut Down Costs [Line Items] | |
Costs incurred while operations were suspended | 900 |
Black Fox | |
Shut Down Costs [Line Items] | |
Costs incurred while operations were suspended | $ 600 |
OTHER INCOME - Summary of Other
OTHER INCOME - Summary of Other Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
OTHER (EXPENSE) INCOME | ||||
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 income, net | 69 | |||
Other expense, net | (406) | (63) | (365) | |
Total other (expense) income | $ 2,090 | $ 4,773 | $ 6,071 | $ 6,283 |
OTHER INCOME (Details)
OTHER INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | |||||
Costs incurred | $ 500 | ||||
Other income | $ 2,090 | $ 4,773 | 6,071 | $ 6,283 | |
Paycheck Protection Program | |||||
Debt Instrument [Line Items] | |||||
Amount of relief secured | 1,900 | $ 1,900 | 1,900 | ||
Period over which paychecks protection ("PPP") program funds are fully forgiven so long eligible expenditures are incurred | 168 days | ||||
Canadian Emergency Wage Subsidy | |||||
Debt Instrument [Line Items] | |||||
Amount of relief secured | $ 3,400 | $ 3,400 | $ 3,400 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Investments rollforward | |||
Opening balance | $ 1,885 | $ 3,131 | $ 3,131 |
Additions/transfers during the period | 2,314 | ||
Net (loss) on securities sold | 3,375 | ||
Disposals/transfers during period | (7,193) | ||
Unrealized (loss) on securities held | 1,597 | ||
Fair Value end of the period | 3,224 | 1,885 | |
Proceeds from sale of investments | 1,266 | 4,204 | |
Cost of purchase of marketable equity securities | 1,300 | ||
Marketable equity securities | |||
Investments rollforward | |||
Opening balance | 1,885 | 2,718 | 2,718 |
Additions/transfers during the period | 2,314 | ||
Net (loss) on securities sold | (619) | 3,375 | |
Disposals/transfers during period | (1,266) | (5,653) | |
Unrealized (loss) on securities held | 470 | ||
Fair Value end of the period | 3,224 | 1,885 | |
Proceeds from sale of investments | $ 1,300 | 5,700 | |
Warrants | |||
Investments rollforward | |||
Opening balance | 413 | $ 413 | |
Disposals/transfers during period | (1,540) | ||
Unrealized (loss) on securities held | $ 1,127 |
RECEIVABLES, PREPAIDS AND OTH_3
RECEIVABLES, PREPAIDS AND OTHER ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Receivables, prepaids and other assets | |||
Government sales tax receivable | $ 1,453 | $ 2,658 | |
Prepaids and other assets | 3,702 | 2,607 | |
Receivables and other current assets | 5,155 | 5,265 | |
VAT collected | 1,100 | $ 1,300 | |
Mexican Tax Authority | |||
Receivables, prepaids and other assets | |||
Government sales tax receivable | $ 700 | $ 700 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Inventories | |||
Material on leach pads | $ 29,069 | $ 29,069 | $ 37,328 |
In-process inventory | 4,283 | 4,283 | 3,847 |
Stockpiles | 586 | 586 | 1,384 |
Precious metals | 945 | 945 | 1,038 |
Materials and supplies | 4,818 | 4,818 | 4,382 |
Inventories | 39,701 | 39,701 | 47,979 |
Less current portion | 34,244 | 34,244 | 38,376 |
Long-term portion | 5,457 | 5,457 | $ 9,603 |
Inventory write-down | $ 0 | ||
Black Fox | |||
Inventories | |||
Inventory write-down | 1,900 | ||
Black Fox | Production cost of sales | |||
Inventories | |||
Inventory write-down | 1,500 | ||
Gold Bar mine | |||
Inventories | |||
Inventory write-down | 1,200 | ||
Gold Bar mine | Production cost of sales | |||
Inventories | |||
Inventory write-down | $ 1,100 |
MINERAL PROPERTY INTERESTS AN_3
MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020USD ($)$ / oz | Sep. 30, 2020USD ($) | |
Mineral property interests and plant and equipment | ||
Impairment charges | $ | $ 83,800 | $ 83,805 |
Nonrecurring | Level 3 | Gold Bar mine | ||
Mineral property interests and plant and equipment | ||
Long term gold price (in dollars per ounce) | $ / oz | 1,430 | |
Nonrecurring | Level 3 | Gold Bar mine | Discounted Cash Flow | Weighted Average | ||
Mineral property interests and plant and equipment | ||
Discount Rate (as a percent) | 9.00% | |
Nonrecurring | Level 3 | Gold Bar mine | Discounted Cash Flow | USA | Weighted Average | ||
Mineral property interests and plant and equipment | ||
Inflation index (as a percent) | 2.00% |
INVESTMENT IN MINERA SANTA CR_3
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Summary of Operating Results from MSC (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Revenue from gold and silver sales | $ 27,395 | $ 32,691 | $ 77,086 | $ 84,657 | |
Production costs applicable to sales | (23,526) | (23,584) | (74,267) | (59,432) | |
Depreciation and depletion | (4,570) | (7,488) | (16,080) | (17,501) | |
Gross Profit | (701) | 1,619 | (13,261) | 7,724 | |
Net income (loss) before tax | (9,930) | (13,657) | (130,059) | (37,190) | |
Net loss | (9,778) | (11,465) | (128,783) | (34,615) | |
Revenue | 27,395 | 32,691 | 77,086 | 84,657 | |
Income tax recovery | 152 | 2,192 | 1,276 | 2,575 | |
Net loss | (128,783) | (34,617) | |||
(Loss) from investment in MSC, net of amortization | $ 2,582 | (328) | $ (1,139) | (6,775) | |
Subsidiary (as a percent) | 100.00% | ||||
Ownership interest (as a percent) | 49.00% | 49.00% | |||
Shutdown Costs | $ 1,968 | ||||
Cost of Sales And Other Expenses | |||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Shutdown Costs | 7,200 | ||||
MSC | |||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Revenue from gold and silver sales | $ 70,195 | 74,530 | 154,666 | 189,348 | |
Production costs applicable to sales | (41,512) | (43,345) | (100,230) | (119,392) | |
Depreciation and depletion | (7,107) | (18,158) | (22,084) | (50,083) | |
Gross Profit | 21,576 | 13,027 | 32,352 | 19,873 | |
Exploration | (2,814) | (1,482) | (7,855) | (7,373) | |
Other expenses | (6,509) | (5,394) | (17,651) | (8,926) | |
Net income (loss) before tax | 12,253 | 6,151 | 6,846 | 3,574 | |
Current and deferred tax expense | (4,922) | (4,512) | (2,989) | (8,350) | |
Net loss | 7,331 | 1,639 | 3,857 | (4,776) | |
Revenue | 70,195 | 74,530 | 154,666 | 189,348 | |
Net income (loss) | 1,890 | $ (2,097) | |||
Amortization of fair value increments | (3,891) | (9,448) | |||
Income tax recovery | 862 | $ 2,791 | |||
(Loss) from investment in MSC, net of amortization | 2,582 | (328) | (1,139) | (6,775) | |
MSC | Equity Method Investment | |||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Net income (loss) | 3,592 | 803 | 1,890 | (2,340) | |
Amortization of fair value increments | (1,255) | (2,551) | (3,891) | (6,922) | |
Income tax recovery | $ 245 | $ 1,420 | $ 862 | $ 2,487 | |
Ownership interest (as a percent) | 49.00% | 49.00% |
INVESTMENT IN MINERA SANTA CR_4
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Changes in Company's Investment in MSC (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Change in the investment in MSC | |||||
Investment in MSC, beginning of period | $ 110,183 | ||||
Income tax recovery | $ 152 | $ 2,192 | 1,276 | $ 2,575 | |
Dividend distribution received | (282) | (4,045) | |||
Investment in MSC, end of period | 108,762 | $ 108,762 | $ 110,183 | ||
Subsidiary (as a percent) | 100.00% | ||||
MSC | |||||
Change in the investment in MSC | |||||
Investment in MSC, beginning of period | $ 110,183 | 127,814 | 127,814 | ||
Attributable net loss from MSC | 1,890 | (2,097) | |||
Amortization of fair value increments | (3,891) | (9,448) | |||
Income tax recovery | 862 | 2,791 | |||
Dividend distribution received | (282) | (8,877) | |||
Investment in MSC, end of period | $ 108,762 | 108,762 | $ 110,183 | ||
Proceeds from Dividends Received | $ 2,000 | $ 300 | $ 4,000 |
INVESTMENT IN MINERA SANTA CR_5
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Assets and Liabilities Associated with MSC (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | $ 57,546 | $ 91,978 |
Total assets | 506,180 | 631,223 |
Current liabilities | (35,983) | (48,795) |
Total liabilities | (125,379) | $ (131,744) |
Balance excluding FV increments | MSC | ||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | 95,364 | |
Total assets | 190,746 | |
Current liabilities | (44,761) | |
Total liabilities | (75,190) | |
Adjustments | MSC | ||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | 854 | |
Total assets | 110,885 | |
Total liabilities | (4,478) | |
Balance including FV increments | MSC | ||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | 96,218 | |
Total assets | 301,631 | |
Current liabilities | (44,761) | |
Total liabilities | $ (79,668) |
DEBT (Details)
DEBT (Details) - USD ($) | Jun. 25, 2020 | May 23, 2019 | Mar. 29, 2019 | Aug. 10, 2018 | Mar. 31, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
LONG-TERM DEBT | ||||||||||||
Long-term debt from related party | $ 23,997,000 | $ 19,758,000 | ||||||||||
Shares issued as bonus interest | 1,935,484 | 14,193,548 | ||||||||||
Stock issued during the period | $ 2,600,000 | $ 20,300,000 | ||||||||||
Reduction of minimum working capital covenant | $ 10,000,000 | |||||||||||
Gold Bar mine | Construction in Process | ||||||||||||
LONG-TERM DEBT | ||||||||||||
Interest costs capitalized | $ 600,000 | |||||||||||
Affiliate of Robert McEwen | ||||||||||||
LONG-TERM DEBT | ||||||||||||
Shares issued as bonus interest | 1,045,850 | |||||||||||
Stock issued during the period | $ 900,000 | |||||||||||
Term Loan | Robert McEwen | ||||||||||||
LONG-TERM DEBT | ||||||||||||
Face amount | $ 50,000,000 | |||||||||||
Term of debt instrument | 3 years | |||||||||||
Long-term debt from related party | $ 25,000,000 | |||||||||||
Stated interest rate (as a percent) | 9.75% | |||||||||||
Amended loan agreement | ||||||||||||
LONG-TERM DEBT | ||||||||||||
Face amount | $ 50,000,000 | |||||||||||
Principal repayments | $ 2,000,000 | |||||||||||
Term loan retirement period | 12 months | |||||||||||
Final payment | $ 26,000,000 | |||||||||||
Extension term for repayment of debt | 2 years | |||||||||||
Shares issued as bonus interest | 2,091,700 | |||||||||||
Stock issued during the period | $ 1,875,000 | |||||||||||
Reduction of minimum working capital covenant | $ 2,500,000 | $ 10,000,000 | ||||||||||
Increase in working capital covenant | $ 10,000,000 | $ 7,000,000 | $ 5,000,000 |
DEBT- Rollforward (Details)
DEBT- Rollforward (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Long-term debt | ||
Long-term portion | $ 23,997 | $ 19,758 |
Term Loan | Gold Bar Complex | ||
Long-term debt | ||
Balance, beginning of year | 49,516 | 49,206 |
Interest expense | 4,003 | 5,185 |
Interest payments | (3,650) | (4,875) |
Debt amendment fee | (1,875) | |
Balance, end of year | 47,994 | 49,516 |
Less current portion | 10,000 | |
Long-term portion | $ 47,994 | $ 39,516 |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Retirement obligation rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Changes in the asset retirement obligations | |||||
Asset retirement obligation, beginning of the period | $ 32,201 | $ 29,402 | $ 29,402 | ||
Settlements | (185) | (513) | |||
Accretion of liability | 1,389 | 1,680 | |||
Adjustment reflecting updated estimates | 673 | 1,012 | |||
Foreign exchange revaluation | (286) | 620 | |||
Asset retirement obligation, ending balance | $ 33,792 | 33,792 | 32,201 | ||
Less current portion | 2,860 | 2,860 | 2,610 | ||
Long-term portion | 30,932 | 30,932 | $ 29,591 | ||
Reclamation obligations | |||||
Reclamation adjustment reflecting updated estimates | 411 | 614 | 88 | ||
Remediation Accretion | 475 | $ 495 | 1,389 | 1,295 | |
Total | $ 886 | $ 495 | $ 2,003 | $ 1,383 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 10, 2020 | May 23, 2019 | Mar. 29, 2019 | Nov. 08, 2018 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Number of units issued | 1,935,484 | 14,193,548 | ||||||||
Price per unit | $ 1.55 | |||||||||
Net proceeds | $ 2,600 | $ 20,300 | ||||||||
Issuance costs | $ 400 | $ 1,700 | ||||||||
Flow-through share premium received | $ 2,058 | $ 2,058 | ||||||||
Number of shares of common stock | 1 | |||||||||
Number of warrants received for each share of common stock share sold | 0.5 | |||||||||
Sale of common stock for cash, net of issuance costs | $ 22,910 | |||||||||
Shares of common stock issued upon exercise of stock options | 60,000 | 405,000 | ||||||||
Proceeds from exercise of stock options | $ 61 | $ 411 | ||||||||
Weighted average exercise price of stock options (in dollars per share) | $ 1.06 | $ 1.01 | ||||||||
Stock-based compensation | $ 300 | $ 300 | $ 332 | $ 481 | ||||||
Shares issued for acquisition of mineral property interests (in shares) | 53,600 | |||||||||
Officers, directors and certain employees | ||||||||||
Weighted average exercise price of stock options (in dollars per share) | $ 1.25 | |||||||||
Stock options granted (in shares) | 4,796,550 | |||||||||
June 2020 Amended and Restated Credit Agreement | ||||||||||
Number of units issued | 2,091,700 | |||||||||
Net proceeds | $ 1,900 | |||||||||
Common Stock and Additional Paid-in Capital | ||||||||||
Shares of common stock issued upon exercise of stock options | 147,000 | 60,000 | 405,000 | |||||||
Shares issued for acquisition of mineral property interests (in shares) | 53,000 | 354,000 | 53,000 | 354,000 | ||||||
Warrants | ||||||||||
Number of shares of common stock | 1 | |||||||||
Price per common share for each warrant | $ 2 | |||||||||
Warrant expiration term | 3 years | |||||||||
Subscription Receipts | Officers, directors and certain employees | ||||||||||
Number of units issued | 1,935,484 | |||||||||
Price per unit | $ 1.55 | |||||||||
Flow Through Common Shares | ||||||||||
Number of units issued | 6,298,166 | |||||||||
Price per unit | $ 1.65 | |||||||||
Net proceeds | $ 9,800 | |||||||||
Net proceeds allocated to the sale of tax benefits | 2,000 | |||||||||
Issuance costs | 600 | |||||||||
Gross proceeds | 10,400 | |||||||||
Sale of common stock for cash, net of issuance costs | $ 7,800 | |||||||||
ATM offering | ||||||||||
Number of units issued | 1,010,545 | |||||||||
Net proceeds | $ 1,851 | |||||||||
Aggregate offering price | $ 90,000 | |||||||||
Sale of common stock for cash, net of issuance costs | $ 1,900 | |||||||||
ATM offering | Common Stock and Additional Paid-in Capital | ||||||||||
Number of units issued | 1,010,000 | |||||||||
Net proceeds | $ 1,851 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options and warrants outstanding not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | 8,808,001 | |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options and warrants outstanding not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | 5,672,944 | |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options and warrants outstanding not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | 29,770,766 | 8,064,150 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | May 23, 2019 | Mar. 29, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Aug. 10, 2018 |
RELATED PARTY TRANSACTIONS | ||||||||
Long-term debt from related party (note 18) | $ 23,997 | $ 23,997 | $ 19,758 | |||||
Number of units issued | 1,935,484 | 14,193,548 | ||||||
Net proceeds | $ 2,600 | $ 20,300 | ||||||
Robert McEwen | Term Loan | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
Face amount | $ 50,000 | |||||||
Long-term debt from related party (note 18) | $ 25,000 | |||||||
Affiliate of Robert McEwen | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
Debt interest expense | 600 | $ 600 | $ 1,800 | $ 1,800 | ||||
Number of units issued | 1,045,850 | |||||||
Net proceeds | $ 900 | |||||||
Entity Affiliated With Related Party | Lexam L.P. | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
Expense | 36 | 87 | 113 | |||||
Related party outstanding accounts payable | 71 | 71 | 65 | |||||
Entity Affiliated With Related Party | REVlaw | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
Expense | 34 | $ 56 | 122 | $ 184 | ||||
Related party outstanding accounts payable | $ 53 | $ 53 | $ 12 |
FAIR VALUE ACCOUNTING (Details)
FAIR VALUE ACCOUNTING (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Assets: | ||
Long term debt | $ 47,900 | $ 49,500 |
Gold Bar mine | ||
Assets: | ||
Impairment of long-lived assets | $ 83,800 | |
Marketable equity securities. | Recurring | ||
Assets: | ||
Investments | 1,885 | |
Marketable equity securities. | Recurring | Level 1 | ||
Assets: | ||
Investments | $ 1,885 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Reclamation Bonds, surety bonds (Details) $ in Thousands, $ in Millions | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2020CAD ($) | |
Reclamation Bonds | ||
Restricted cash | $ 10,193 | |
Timmins | ||
Reclamation Bonds | ||
Restrictive time deposits for reclamation bonding | $ 100 | |
Surety Bonds | ||
Reclamation Bonds | ||
Percentage of annual fees on surety bonds | 2.30% | 2.30% |
Percentage of required deposit on value of surety bonds | 11.00% | 11.00% |
Restricted cash | $ 3,600 | |
Surety Bonds | Nevada | ||
Reclamation Bonds | ||
Surety bonding obligation | 20,100 | |
Surety Bonds | Canada | ||
Reclamation Bonds | ||
Surety bonding obligation | 11,200 | $ 14.9 |
Reclamation Bonds | Tonkin and Gold Bar Properties | ||
Reclamation Bonds | ||
Reclamation bonding obligation | 20,100 | |
Black Fox | Reclamation Bonds | ||
Reclamation Bonds | ||
Reclamation bonding obligation | 11,200 | $ 14.9 |
Flow Through Common Shares | ||
Reclamation Bonds | ||
Restricted cash | $ 10,200 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Streaming Agreement (Details) $ in Millions | Aug. 25, 2017$ / oz | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Black Fox | |||||
Other commitments | |||||
Obligation to sell (as a percent) | 8.00% | ||||
Long term gold price (in dollars per ounce) | $ / oz | 561 | ||||
Revenue of acquiree since acquisition date and implementation of streaming agreement | $ | $ 0.2 | $ 0.4 | $ 0.9 | $ 1.2 | |
Black Fox | Maximum | |||||
Other commitments | |||||
Inflation adjustment (as a percent) | 2.00% | ||||
Pike River property | |||||
Other commitments | |||||
Obligation to sell (as a percent) | 6.30% |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Cash and cash equivalents | $ 7,954 | $ 46,452 | ||
Restricted cash - current (Note 13) | 10,193 | |||
Restricted cash - non-current (Note 17) | 3,595 | 48 | ||
Total cash, cash equivalents, and restricted cash | 21,742 | $ 46,500 | $ 13,074 | $ 30,489 |
Flow Through Common Shares | ||||
Restricted cash - current (Note 13) | 10,200 | |||
Surety Bonds | ||||
Restricted cash - current (Note 13) | 3,600 | |||
Reclamation and Surety Bonds | ||||
Restricted cash - current (Note 13) | $ 3,600 |