McEwen Mining Files Q2 2024 10-Q

TL;DR

McEwen Mining's Q2 10-Q is in. They issued flow-through shares for Canadian exploration in June '24.

AI Summary

McEwen Mining Inc. filed its 10-Q for the period ending June 30, 2024. The company, incorporated in Colorado and headquartered in Toronto, operates in the gold and silver ores sector. Key financial activities include the issuance of flow-through common shares for Canadian exploration and development expenses on June 14, 2024, and December 14, 2023.

Why It Matters

This filing provides investors with an update on McEwen Mining's financial performance and operational activities for the second quarter of 2024, including details on share issuances for exploration.

Risk Assessment

Risk Level: medium — Mining companies face inherent risks related to commodity prices, exploration success, and regulatory environments.

Key Numbers

• 20240630 — Reporting Period End Date (Indicates the end of the fiscal quarter for this filing.)
• 20240807 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• McEwen Mining Inc. (company) — Filer
• June 30, 2024 (date) — Reporting period end date
• Colorado (location) — State of incorporation
• Toronto (location) — Business and mailing address city
• Gold & Silver Ores (industry) — Standard Industrial Classification
• June 14, 2024 (date) — Date of issuance of flow-through common shares
• December 14, 2023 (date) — Date of issuance of flow-through common shares

FAQ

Filing Documents

• mux-20240630x10q.htm (10-Q) — 2505KB
• mux-20240630xex31d1.htm (EX-31.1) — 15KB
• mux-20240630xex31d2.htm (EX-31.2) — 15KB
• mux-20240630xex32.htm (EX-32) — 9KB
• mux-20240630xex95.htm (EX-95) — 24KB
• 0001558370-24-011396.txt ( ) — 9767KB
• mux-20240630.xsd (EX-101.SCH) — 57KB
• mux-20240630_cal.xml (EX-101.CAL) — 58KB
• mux-20240630_def.xml (EX-101.DEF) — 233KB
• mux-20240630_lab.xml (EX-101.LAB) — 428KB
• mux-20240630_pre.xml (EX-101.PRE) — 329KB
• mux-20240630x10q_htm.xml (XML) — 2084KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024, and 2023 (unaudited) 3 Consolidated Balance Sheets at June 30, 2024 (unaudited) and December 31, 2023 4 Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2024, and 2023 (unaudited) 5 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited) 6

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3. Quantitative and Qualitative Disclosure about Market Risk 37 Item 4.

Controls and Procedures

Controls and Procedures 39

OTHER INFORMATION

PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3. Defaults upon Senior Securities 40 Item 4. Mine Safety Disclosures 40 Item 5. Other Information 40 Item 6. Exhibits 41

SIGNATURES

SIGNATURES 43 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENT S

Item 1. FINANCIAL STATEMENT S MCEWEN MINING INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) (in thousands of U.S. dollars, except per share) Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Revenue from gold and silver sales $ 47,476 $ 34,395 $ 88,704 $ 69,147 Production costs applicable to sales ( 32,066 ) ( 29,570 ) ( 57,176 ) ( 52,983 ) Depreciation and depletion ( 4,652 ) ( 8,293 ) ( 14,759 ) ( 15,189 ) Gross profit (loss) 10,758 ( 3,468 ) 16,769 975 OTHER OPERATING EXPENSES: Advanced projects - Los Azules — ( 28,524 ) — ( 60,405 ) Advanced projects - Other ( 2,990 ) ( 1,275 ) ( 5,444 ) ( 2,954 ) Exploration ( 4,984 ) ( 5,852 ) ( 8,855 ) ( 11,752 ) General and administrative ( 4,461 ) ( 2,050 ) ( 8,534 ) ( 5,491 ) Loss from investment in McEwen Copper Inc. (Note 9) ( 16,816 ) — ( 34,828 ) — Income (loss) from investment in Minera Santa Cruz S.A. (Note 9) 4,701 ( 914 ) 5,979 ( 4,375 ) Depreciation ( 158 ) ( 309 ) ( 329 ) ( 591 ) Reclamation and remediation (Note 11) 3 ( 620 ) ( 687 ) ( 1,250 ) ( 24,705 ) ( 39,544 ) ( 52,698 ) ( 86,818 ) Operating loss ( 13,947 ) ( 43,012 ) ( 35,929 ) ( 85,843 ) OTHER INCOME (EXPENSE): Interest and other finance income (expense), net ( 1,734 ) 19,577 ( 2,604 ) 28,041 Other income (expense) (Note 3) 310 ( 21,875 ) 222 ( 24,454 ) Total other income (expense) ( 1,424 ) ( 2,298 ) ( 2,382 ) 3,587 Loss before income and mining taxes ( 15,371 ) ( 45,310 ) ( 38,311 ) ( 82,256 ) Income and mining tax recovery 2,376 2,049 4,933 2,585 Net loss after income and mining taxes ( 12,995 ) ( 43,261 ) ( 33,378 ) ( 79,671 ) Net loss attributable to non-controlling interests — 21,634 — 14,968 Net loss and comprehensive loss attributable to McEwen shareholders $ ( 12,995 ) $ ( 21,627 ) $ ( 33,378 ) $ (

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30 , 2024 (tabular amounts are in thousands of U.S. dollars, unless otherwise noted) NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION McEwen Mining Inc. (the "Company") was organized under the laws of the State of Colorado on July 24, 1979. The Company is engaged in the production and sale of gold and silver, as well as the development and exploration of copper, gold, and silver mineral properties across North and South America. The Company owns a 100 % interest in the Gold Bar mine in Nevada, United States, the Fox Complex in Ontario, Canada, the Fenix Project in Sinaloa, Mexico and a portfolio of exploration properties in the United States, Canada, Mexico and Argentina. As of June 30, 2024, the Company also owns a 47.7 % interest in McEwen Copper Inc. ("McEwen Copper"), owner of the Los Azules copper project in San Juan, Argentina and a 49.0 % interest in Minera Santa Cruz S.A. ("MSC"), owner of the producing San Jos silver-gold mine in Santa Cruz, Argentina, which is operated by the joint venture majority owner Hochschild Mining plc. The Company reports its investments in McEwen Copper and MSC under the equity method of accounting. The interim consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and are unaudited. While information and note disclosures normally included in annual financial statements and prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations, the Company believes that the information and disclosures included in the interim consolidated financial statements are adequate and not misleading. Therefore, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30 , 2024 (tabular amounts are in thousands of U.S. dollars, unless otherwise noted) 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 and McEwen Copper segments, which are evaluated based on the attributable equity income or loss. Gold and silver sales and production costs applicable to sales for the reportable segments are reported net of intercompany transactions. Capital expenditures include costs capitalized in mineral property interests and plant and equipment in the respective periods. Significant information relating to the Company's reportable operating segments for the periods presented is summarized in the tables below: Three months ended June 30, 2024 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 29,686 $ 17,790 $ — $ — $ — $ 47,476 Production costs applicable to sales ( 19,170 ) ( 12,896 ) — — — ( 32,066 ) Depreciation and depletion ( 434 ) ( 4,218 ) — — — ( 4,652 ) Gross profit 10,082 676 — — — 10,758 Advanced projects — — ( 2,990 ) — — ( 2,990 ) Exploration ( 2,547 ) ( 2,437 ) — — — ( 4,984 ) Income (loss) from equity method investments — — — 4,701 ( 16,816 ) ( 12,115 ) Segment profit (loss) $ 7,535 $ ( 1,761 ) $ ( 2,990 ) $ 4,701 $ ( 16,816 ) $ ( 9,331 ) General and administrative ( 4,461 ) Other expense ( 1,579 ) Loss before income and mining taxes $ ( 15,371 ) Capital expenditures $ 520 $ 5,424 $ 740 $ — $ — $ 6,684 Six months ended June 30, 2024 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 54,964 $ 32,540 $ 1,200 $ — $ — $ 88,704

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30 , 2024 (tabular amounts are in thousands of U.S. dollars, unless otherwise noted) Three months ended June 30, 2023 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 15,971 $ 18,424 $ — $ — $ — $ 34,395 Production costs applicable to sales ( 17,115 ) ( 12,455 ) — — — ( 29,570 ) Depreciation and depletion ( 3,263 ) ( 5,030 ) — — — ( 8,293 ) Gross (loss) profit ( 4,407 ) 939 — — — ( 3,468 ) Advanced projects ( 303 ) — ( 972 ) — ( 28,524 ) ( 29,799 ) Exploration ( 1,545 ) ( 4,307 ) — — — ( 5,852 ) Loss from equity method investments — — — ( 914 ) — ( 914 ) Segment loss $ ( 6,255 ) $ ( 3,368 ) $ ( 972 ) $ ( 914 ) $ ( 28,524 ) $ ( 40,033 ) General and administrative ( 2,050 ) Other expense ( 3,227 ) Loss before income and mining taxes $ ( 45,310 ) Capital expenditures $ 3,235 $ 1,410 $ — $ — $ 561 $ 5,206 Six months ended June 30, 2023 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 27,559 $ 41,588 $ — $ — $ — $ 69,147 Production costs applicable to sales ( 26,455 ) ( 26,528 ) — — — ( 52,983 ) Depreciation and depletion ( 4,523 ) ( 10,666 ) — — — ( 15,189 ) Gross profit (loss) ( 3,419 ) 4,394 — — — 975 Advanced projects ( 592 ) — ( 2,362 ) — ( 60,405 ) ( 63,359 ) Exploration ( 2,320 ) ( 9,046 ) — — ( 386 ) ( 11,752 ) Loss from equity method investments — — — ( 4,375 ) — ( 4,375 ) Segment loss $ ( 6,331 ) $ ( 4,652 ) $ ( 2,362 ) $ ( 4,375 ) $ ( 60,791 ) $ ( 78,511 ) General and administrative ( 5,491 ) Other income 1,746 Loss before income and mining taxes $ ( 82,256 ) Capital expenditures $ 6,226 $ 4,183 $ — $ — $ 1,515 $ 11,924 Geographic information Geographic information includes the long-lived asset balances and revenues present

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30 , 2024 (tabular amounts are in thousands of U.S. dollars, unless otherwise noted) NOTE 3 OTHER EXPENSE The following is a summary of other expense for the three and six months ended June 30, 2024 and 2023: Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Unrealized and realized gain on investments $ 461 $ 2,586 $ 259 $ 2,882 Foreign currency gain on Blue Chip Swaps — — — 7,993 Foreign currency loss ( 485 ) ( 24,472 ) ( 394 ) ( 35,113 ) Other income (loss), net 334 11 357 ( 216 ) Total other income (expense) $ 310 $ ( 21,875 ) $ 222 $ ( 24,454 ) During the six months ended June 30, 2023, the Company completed two Blue Chip Swap transactions to transfer funds from its Canadian bank account to Argentina. The Company realized a net gain of $ 7.6 million comprised of a foreign currency gain of $ 8.0 million and a realized loss on investments of $ 0.4 million, including the impact of fees and commissions on these Blue Chip Swap transactions. NOTE 4 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheets : June 30, 2024 December 31, 2023 Cash and cash equivalents and restricted cash held in CAD $ 26,577 $ 16,288 Cash and cash equivalents and restricted cash held in USD 16,461 10,578 Cash and cash equivalents held in other currencies 171 644 Total cash and cash equivalents and restricted cash $ 43,209 $ 27,510 As at June 30, 2024, of $ 40.7 million of cash and cash equivalents, $ 29.7 million was committed to the Company's Canadian Exploration Expenditures and Canadian Development Expenditures (December 31, 2023 – of $ 23.0 million of cash and cash equivalents, $ 16.1 million committed to CEE and CDE expenditures. NOTE 5 MARKETABLE SECURITIES The follo

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30 , 2024 (tabular amounts are in thousands of U.S. dollars, unless otherwise noted) NOTE 6 RECEIVABLES, PREPAIDS AND OTHER CURRENT ASSETS The following is a breakdown of balances in receivables, prepaids and other current assets as at June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Government sales tax receivable $ 2,333 $ 2,511 Prepaids and other assets 4,052 3,067 Receivables, prepaids and other current assets $ 6,385 $ 5,578 NOTE 7 INVENTORIES Inventories as at June 30, 2024 and December 31, 2023 consisted of the following: June 30, 2024 December 31, 2023 Material on leach pads $ 16,694 $ 11,963 In-process inventory 5,363 4,067 Stockpiles 971 5,939 Precious metals 1,672 1,955 Materials and supplies 7,122 6,120 $ 31,822 $ 30,044 Less: long-term portion ( 11,831 ) ( 10,100 ) Current portion $ 19,991 $ 19,944 During three months ended June 30, 2024, inventories at Fox Complex and Gold Bar operations were written down by $ nil (three months ended June 30, 2023 – $ 1.0 million and $ 2.8 million, respectively) to their estimated net realizable values. During six months ended June 30, 2024, inventories at Fox Complex and Gold Bar operations were written down by $ 0.8 million and $ nil , respectively (six months ended June 30, 2023 – $ 1.0 million and $ 2.8 million, respectively) to their estimated net realizable values. Of these write-downs, $ 0.6 million (six months ended June 30, 2023 – $ 3.0 million) was included in production costs applicable to sales and $ 0.2 million (six months ended June 30, 2023 – $ 0.8 million) was included in depreciation and depletion in the Statement of Operations. NOTE 8 MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT The applicable definition of proven and probable reserves is set forth in the Regulation S-K 1300 requirements of the SEC. If proven and probable reser

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30 , 2024 (tabular amounts are in thousands of U.S. dollars, unless otherwise noted) NOTE 9 EQUITY METHOD INVESTMENTS The Company accounts for investments over which it exerts significant influence but does not control through majority ownership using the equity method of accounting. In applying the equity method of accounting to the Company's investments in McEwen Copper and MSC, MSC's financial statements, which are origi

View Full Filing

View this 10-Q filing on SEC EDGAR