McEwen Mining Files Q3 2024 10-Q

TL;DR

McEwen Mining's Q3 2024 10-Q is out. Focus on flow-through share issuances for Canadian projects.

AI Summary

McEwen Mining Inc. filed its 10-Q for the period ending September 30, 2024. The company, primarily involved in gold and silver ores, reported financial results for the third quarter. 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 the latest financial performance and operational updates for McEwen Mining, crucial for understanding the company's current standing and future prospects in the precious metals market.

Risk Assessment

Risk Level: medium — As a mining company, McEwen Mining is subject to inherent risks related to commodity prices, exploration success, and operational challenges.

Key Numbers

• 20240930 — Reporting Period End Date (Indicates the end of the fiscal quarter for which financial data is reported.)
• 20241105 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• McEwen Mining Inc. (company) — Filer of the 10-Q
• September 30, 2024 (date) — End of reporting period
• June 14, 2024 (date) — Date of flow-through share issuance
• December 14, 2023 (date) — Date of flow-through share issuance

FAQ

Filing Documents

• mux-20240930x10q.htm (10-Q) — 2563KB
• mux-20240930xex31d1.htm (EX-31.1) — 15KB
• mux-20240930xex31d2.htm (EX-31.2) — 15KB
• mux-20240930xex32.htm (EX-32) — 9KB
• mux-20240930xex95.htm (EX-95) — 24KB
• 0001558370-24-014459.txt ( ) — 10117KB
• mux-20240930.xsd (EX-101.SCH) — 62KB
• mux-20240930_cal.xml (EX-101.CAL) — 68KB
• mux-20240930_def.xml (EX-101.DEF) — 259KB
• mux-20240930_lab.xml (EX-101.LAB) — 465KB
• mux-20240930_pre.xml (EX-101.PRE) — 363KB
• mux-20240930x10q_htm.xml (XML) — 2090KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024, and 2023 (unaudited) 3 Consolidated Balance Sheets at September 30, 2024 (unaudited) and December 31, 2023 4 Consolidated Statements of Changes in Shareholders' Equity for the three and nine months ended September 30, 2024, and 2023 (unaudited) 5 Consolidated Statements of Cash Flows for the nine months ended September 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 20 Item 3. Quantitative and Qualitative Disclosure about Market Risk 40 Item 4.

Controls and Procedures

Controls and Procedures 42

OTHER INFORMATION

PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43 Item 3. Defaults upon Senior Securities 43 Item 4. Mine Safety Disclosures 43 Item 5. Other Information 43 Item 6. Exhibits 45

SIGNATURES

SIGNATURES 46 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 September 30, Nine months ended September 30, 2024 2023 2024 2023 Revenue from gold and silver sales $ 52,250 $ 38,404 $ 140,954 $ 107,551 Production costs applicable to sales ( 29,682 ) ( 26,468 ) ( 86,858 ) ( 80,043 ) Depreciation and depletion ( 8,765 ) ( 8,181 ) ( 23,524 ) ( 23,370 ) Gross profit 13,803 3,755 30,572 4,138 OTHER OPERATING EXPENSES: Advanced projects - Los Azules — ( 18,478 ) — ( 78,883 ) Advanced projects - Other ( 2,468 ) ( 1,966 ) ( 7,912 ) ( 4,308 ) Exploration ( 5,329 ) ( 4,674 ) ( 14,184 ) ( 16,426 ) General and administrative ( 2,138 ) ( 3,720 ) ( 10,672 ) ( 9,211 ) Loss from investment in McEwen Copper Inc. (Note 9) ( 1,852 ) — ( 36,680 ) — Income (loss) from investment in Minera Santa Cruz S.A. (Note 9) ( 1,228 ) ( 2,672 ) 4,751 ( 7,047 ) Depreciation ( 156 ) ( 325 ) ( 485 ) ( 916 ) Reclamation and remediation (Note 11) ( 729 ) ( 760 ) ( 1,416 ) ( 2,030 ) ( 13,900 ) ( 32,595 ) ( 66,598 ) ( 118,821 ) Operating loss ( 97 ) ( 28,840 ) ( 36,026 ) ( 114,683 ) OTHER INCOME (EXPENSE): Interest and other finance income (expense), net ( 1,084 ) 10,331 ( 3,688 ) 38,372 Other income (expense) (Note 3) ( 86 ) ( 10,108 ) 136 ( 34,562 ) Total other income (expense) ( 1,170 ) 223 ( 3,552 ) 3,810 Loss before income and mining taxes ( 1,267 ) ( 28,617 ) ( 39,578 ) ( 110,873 ) Income and mining tax recovery (expense) ( 814 ) 244 4,119 2,829 Net loss after income and mining taxes ( 2,081 ) ( 28,373 ) ( 35,459 ) ( 108,044 ) Net loss attributable to non-controlling interests — 9,922 — 24,890 Net loss and comprehensive loss attributable to McEwen shareholders $ ( 2,081 ) $ ( 18,451 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) September 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 September 30, 2024 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 33,251 $ 18,999 $ — $ — $ — $ 52,250 Production costs applicable to sales ( 17,078 ) ( 12,604 ) — — — ( 29,682 ) Depreciation and depletion ( 4,235 ) ( 4,530 ) — — — ( 8,765 ) Gross profit 11,938 1,865 — — — 13,803 Advanced projects — — ( 2,468 ) — — ( 2,468 ) Exploration ( 3,474 ) ( 1,855 ) — — — ( 5,329 ) Loss from equity method investments — — — ( 1,228 ) ( 1,852 ) ( 3,080 ) Segment profit (loss) $ 8,464 $ 10 $ ( 2,468 ) $ ( 1,228 ) $ ( 1,852 ) $ 2,926 General and administrative ( 2,138 ) Other expense ( 2,055 ) Loss before income and mining taxes $ ( 1,267 ) Capital expenditures $ 11,307 $ 7,343 $ 490 $ — $ — $ 19,140 Nine months ended September 30, 2024 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 88,215 $ 51,539 $ 1,200 $ — $ — $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) September 30 , 2024 (tabular amounts are in thousands of U.S. dollars, unless otherwise noted) Three months ended September 30, 2023 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 17,967 $ 20,259 $ 178 $ — $ — $ 38,404 Production costs applicable to sales ( 14,399 ) ( 12,069 ) — — — ( 26,468 ) Depreciation and depletion ( 2,647 ) ( 5,534 ) — — — ( 8,181 ) Gross profit 921 2,656 178 — — 3,755 Advanced projects — — ( 1,966 ) — ( 18,478 ) ( 20,444 ) Exploration ( 1,813 ) ( 2,861 ) — — — ( 4,674 ) Loss from equity method investments — — — ( 2,672 ) — ( 2,672 ) Segment loss $ ( 892 ) $ ( 205 ) $ ( 1,788 ) $ ( 2,672 ) $ ( 18,478 ) $ ( 24,035 ) General and administrative ( 3,720 ) Other expense ( 862 ) Loss before income and mining taxes $ ( 28,617 ) Capital expenditures $ 5,211 $ 2,574 $ 705 $ — $ 1,573 $ 10,063 Nine months ended September 30, 2023 USA Canada Mexico MSC McEwen Copper Total Revenue from gold and silver sales $ 45,526 $ 61,847 $ 178 $ — $ — $ 107,551 Production costs applicable to sales ( 41,446 ) ( 38,597 ) — — — ( 80,043 ) Depreciation and depletion ( 7,170 ) ( 16,200 ) — — — ( 23,370 ) Gross profit (loss) ( 3,090 ) 7,050 178 — — 4,138 Advanced projects — — ( 4,308 ) — ( 78,883 ) ( 83,191 ) Exploration ( 4,133 ) ( 11,907 ) — — ( 386 ) ( 16,426 ) Loss from equity method investments — — — ( 7,047 ) — ( 7,047 ) Segment loss $ ( 7,223 ) $ ( 4,857 ) $ ( 4,130 ) $ ( 7,047 ) $ ( 79,269 ) $ ( 102,526 ) General and administrative ( 9,211 ) Other income 864 Loss before income and mining taxes $ ( 110,873 ) Capital expenditures $ 11,437 $ 6,757 $ 705 $ — $ 3,088 $ 21,987 Geographic information Geographic information includes the long-lived asset balances

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) September 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 nine months ended September 30, 2024 and 2023: Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Unrealized and realized gain (loss) on investments $ ( 362 ) $ 12,662 $ ( 103 ) $ 15,543 Foreign currency gain on Blue Chip Swaps — — — 7,993 Foreign currency gain (loss) 62 ( 23,705 ) ( 333 ) ( 58,818 ) Other income 214 935 572 720 Total other income (expense) $ ( 86 ) $ ( 10,108 ) $ 136 $ ( 34,562 ) During the nine months ended September 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 comprising 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 : September 30, 2024 December 31, 2023 Cash and cash equivalents and restricted cash held in CAD $ 6,772 $ 16,288 Cash and cash equivalents and restricted cash held in USD 24,996 10,578 Cash and cash equivalents held in other currencies 520 644 Total cash and cash equivalents and restricted cash $ 32,288 $ 27,510 As at September 30, 2024, of $ 32.3 million of cash and cash equivalents and restricted cash, $ 24.3 million was committed to the Company's Canadian Exploration Expenditures ("CEE") and Canadian Development Expenditures ("CDE") (December 31, 2023 – of $ 27.5 million of cash and cash equivalents and restricted cas

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) September 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 September 30, 2024 and December 31, 2023: September 30, 2024 December 31, 2023 Government sales tax receivable $ 2,099 $ 2,511 Prepaids and other assets 5,312 3,067 Receivables, prepaids and other current assets $ 7,411 $ 5,578 NOTE 7 INVENTORIES Inventories as at September 30, 2024 and December 31, 2023 consisted of the following: September 30, 2024 December 31, 2023 Material on leach pads $ 6,840 $ 11,963 In-process inventory 3,789 4,067 Stockpiles 5,687 5,939 Precious metals 1,830 1,955 Materials and supplies 6,517 6,120 $ 24,663 $ 30,044 Less: long-term portion ( 2,729 ) ( 10,100 ) Current portion $ 21,934 $ 19,944 During the three months ended September 30, 2024, inventories at Fox Complex and Gold Bar operations were written down by $ 0.6 and $ nil , respectively (three months ended September 30, 2023 – $ nil and $ nil , respectively) to their estimated net realizable values. During the nine months ended September 30, 2024, inventories at Fox Complex were written down by $ 1.3 million to their estimated net realizable values. During the nine months ended September 30, 2023, inventories at Fox Complex and Gold Bar were written down by $ 1.0 million and $ 2.8 million, respectively. Of these write-downs in 2024, $ 1.0 million (nine months ended September 30, 2023 – $ 3.0 million) was included in production costs applicable to sales and $ 0.3 million (nine months ended September 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 proba

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