Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 04, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'McEwen Mining Inc. | ' |
Entity Central Index Key | '0000314203 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 264,295,775 |
Exchangeable Common Stock, Shares Outstanding | ' | 32,863,584 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
REVENUE: | ' | ' | ' | ' |
Gold and silver sales | $11,778 | $456 | $35,735 | $456 |
Income on investment in Minera Santa Cruz S.A., net of amortization (note 6) | 2,040 | 11,240 | 252 | 14,968 |
Total Revenue | 13,818 | 11,696 | 35,987 | 15,424 |
COSTS AND EXPENSES: | ' | ' | ' | ' |
Production costs applicable to sales | 7,907 | 119 | 26,778 | 119 |
Mine operating costs | ' | 2,406 | ' | 8,622 |
Mine construction costs | ' | 4,671 | ' | 13,306 |
Mine development costs | 747 | ' | 1,316 | ' |
Exploration costs | 2,575 | 6,708 | 22,064 | 28,565 |
Property holding costs | 2,384 | 2,147 | 4,077 | 4,127 |
General and administrative | 2,496 | 4,119 | 10,905 | 12,935 |
Acquisition costs | ' | 8 | ' | 1,450 |
Accretion of asset retirement obligation (note 5) | 113 | 110 | 347 | 342 |
Depreciation | 204 | 266 | 731 | 750 |
Impairment of investment in Minera Santa Cruz S.A. (note 6) | ' | ' | 95,878 | ' |
Impairment of mineral property interests and property and equipment (note 5) | 6,287 | 2,902 | 34,016 | 3,081 |
(Gain) loss on sale of assets (note 5) | -50 | -1,135 | 6,741 | -1,265 |
Total costs and expenses | 22,663 | 22,321 | 202,853 | 72,032 |
Operating loss | -8,845 | -10,625 | -166,866 | -56,608 |
OTHER INCOME (EXPENSE): | ' | ' | ' | ' |
Interest income | 60 | 16 | 199 | 198 |
Gain on litigation settlement (notes 7 and 12) | ' | ' | 560 | ' |
Loss on sale of marketable equity securities | ' | -70 | ' | -70 |
Gain (loss) on sale of gold and silver bullion (note 4) | 51 | 1,233 | -223 | 3,075 |
Unrealized loss on gold and silver bullion (note 4) | ' | ' | ' | -359 |
Other-than-temporary impairment on marketable equity securities | ' | ' | ' | -1,993 |
Foreign currency (loss) gain | -159 | 423 | -1,094 | 469 |
Total other income (expense) | -48 | 1,602 | -558 | 1,320 |
Loss before income taxes | -8,893 | -9,023 | -167,424 | -55,288 |
Recovery of income taxes | 12,157 | 6,369 | 31,025 | 14,919 |
Net income (loss) | 3,264 | -2,654 | -136,399 | -40,369 |
OTHER COMPREHENSIVE INCOME (LOSS): | ' | ' | ' | ' |
Reclassification of unrealized gain on marketable securities disposed of during the period, net of taxes | ' | ' | ' | 1,000 |
Unrealized (loss) gain on available-for-sale securities, net of taxes | ' | -1 | 3 | -2 |
Comprehensive income (loss) | $3,264 | ($2,655) | ($136,396) | ($39,371) |
Net income (loss) per share (note 9): | ' | ' | ' | ' |
Basic (in dollars per share) | $0.01 | ($0.01) | ($0.46) | ($0.16) |
Diluted (in dollars per share) | $0.01 | ($0.01) | ($0.46) | ($0.16) |
Weighted average common shares outstanding (thousands) (note 9): | ' | ' | ' | ' |
Basic (in shares) | 297,125 | 268,373 | 297,001 | 256,834 |
Diluted (in shares) | 297,899 | 268,373 | 297,001 | 256,834 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $31,062 | $70,921 |
Investment in gold and silver bullion (market value - 2013 - nil; 2012 - $2,062) (note 4) | ' | 1,690 |
IVA taxes receivable | 10,129 | 9,150 |
Inventories (note 3) | 7,807 | 7,262 |
Other current assets | 1,922 | 2,895 |
Total current assets | 50,920 | 91,918 |
Mineral property interests (note 5) | 724,841 | 767,067 |
Restrictive time deposits for reclamation bonding (note 5) | 5,183 | 5,183 |
Investment in Minera Santa Cruz S.A. (note 6) | 177,080 | 273,948 |
Property and equipment, net | 15,143 | 12,767 |
Other assets | 84 | 54 |
TOTAL ASSETS | 973,251 | 1,150,937 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 10,041 | 21,235 |
Litigation settlement liability (notes 7 and 12) | ' | 3,830 |
Current portion of asset retirement obligation (note 5) | 1,351 | 130 |
Total current liabilities | 11,392 | 25,195 |
Asset retirement obligation, less current portion (note 5) | 5,265 | 6,229 |
Deferred income tax liability (notes 2 and 5) | 198,497 | 229,522 |
Other liabilities | 400 | 400 |
Total liabilities | 215,554 | 261,346 |
Shareholders' equity: | ' | ' |
Common stock, no par value, 500,000 shares authorized; Common: 263,626 shares as of September 30, 2013 and 212,646 shares as of December 31, 2012 issued and outstanding exchangeable: 33,533 shares as of September 30, 2013 and 83,379 shares as of December 31, 2012 issued and outstanding | 1,354,279 | 1,349,777 |
Accumulated deficit | -596,291 | -459,892 |
Accumulated other comprehensive loss | -291 | -294 |
Total shareholders' equity | 757,697 | 889,591 |
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $973,251 | $1,150,937 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Gold and silver bullion, market value (in dollars) | ' | $2,062 |
Common stock, par value | ' | ' |
Common stock, shares authorized | 500,000 | 500,000 |
Common, shares issued | 263,626 | 212,646 |
Common, shares outstanding | 263,626 | 212,646 |
Exchangeable, shares issued | 33,533 | 83,379 |
Exchangeable, shares outstanding | 33,533 | 83,379 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Common Stock | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit |
In Thousands, except Share data, unless otherwise specified | ||||
Balance at Dec. 31, 2011 | $219,304 | $613,831 | ($1,289) | ($393,238) |
Balance (in shares) at Dec. 31, 2011 | ' | 139,753,000 | ' | ' |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' |
Stock-based compensation | 2,845 | 2,845 | ' | ' |
Issuance of exchangeable shares to acquire Minera Andes Inc. | 664,671 | 664,671 | ' | ' |
Issuance of exchangeable shares to acquire Minera Andes Inc. (in shares) | ' | 127,331,000 | ' | ' |
Assumption of stock options in connection with the acquisition of Minera Andes Inc. | 3,175 | 3,175 | ' | ' |
Exercise of stock options | 721 | 721 | ' | ' |
Exercise of stock options (in shares) | ' | 387,000 | ' | ' |
Exercise of stock options assumed from Minera Andes Inc. acquisition | 2,844 | 2,844 | ' | ' |
Exercise of stock options assumed from Minera Andes Inc. acquisition (in shares) | ' | 942,000 | ' | ' |
Shares issued for Mexico mining concessions | 391 | 391 | ' | ' |
Shares issued for Mexico mining concessions (in shares) | ' | 83,000 | ' | ' |
Unrealized (loss) gain on available-for-sale securities, net of taxes | -2 | ' | -2 | ' |
Reclassification of unrealized loss on marketable equity securities disposed of during the period, net of tax | -993 | ' | -993 | ' |
Other-than-temporary impairment on marketable equity securities | 1,993 | ' | 1,993 | ' |
Net loss (adjusted - note 6) | -40,369 | ' | ' | -40,369 |
Balance at Sep. 30, 2012 | 854,580 | 1,288,478 | -291 | -433,607 |
Balance (in shares) at Sep. 30, 2012 | ' | 268,496,000 | ' | ' |
Balance at Dec. 31, 2012 | 889,591 | 1,349,777 | -294 | -459,892 |
Balance (in shares) at Dec. 31, 2012 | ' | 296,025,000 | ' | ' |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' |
Stock-based compensation | 965 | 965 | ' | ' |
Exercise of stock options | 95 | 95 | ' | ' |
Exercise of stock options (in shares) | 48,000 | 48,000 | ' | ' |
Exercise of stock options assumed from Minera Andes Inc. acquisition | 76 | 76 | ' | ' |
Exercise of stock options assumed from Minera Andes Inc. acquisition (in shares) | ' | 45,000 | ' | ' |
Shares issued for litigation settlement | 3,270 | 3,270 | ' | ' |
Shares issued for litigation settlement (in shares) | ' | 1,000,000 | ' | ' |
Shares issued for Mexico mining concessions | 96 | 96 | ' | ' |
Shares issued for Mexico mining concessions (in shares) | 41,500 | 41,000 | ' | ' |
Unrealized (loss) gain on available-for-sale securities, net of taxes | 3 | ' | 3 | ' |
Net loss (adjusted - note 6) | -136,399 | ' | ' | -136,399 |
Balance at Sep. 30, 2013 | $757,697 | $1,354,279 | ($291) | ($596,291) |
Balance (in shares) at Sep. 30, 2013 | ' | 297,159,000 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows (used in) from operating activities: | ' | ' |
Cash paid to suppliers and employees | ($74,359) | ($65,760) |
Cash received from gold and silver sales | 34,711 | ' |
Proceeds from sale of gold and silver bullion | 1,467 | 23,836 |
Dividend received from Minera Santa Cruz S.A. | 1,242 | 2,154 |
Interest received | 139 | 125 |
Cash used in operating activities | -36,800 | -39,645 |
Cash flows (used in) provided by investing activities: | ' | ' |
Cash and short-term investments received from acquisition of Minera Andes Inc. | ' | 36,337 |
Short-term investments (net) | ' | 3,933 |
Acquisition of mineral property interests | -150 | -712 |
Additions to property and equipment | -3,710 | -1,769 |
Proceeds from disposal of mineral property interests and property and equipment | 1,449 | 3,143 |
Proceeds from sale of marketable securities | ' | 409 |
Cash provided by investing activities | -2,411 | 41,341 |
Cash flows from financing activities: | ' | ' |
Exercise of stock options | 171 | 3,564 |
Cash provided by financing activities | 171 | 3,564 |
Effect of exchange rate change on cash and cash equivalents | -819 | -156 |
(Decrease) increase in cash and cash equivalents | -39,859 | 5,104 |
Cash and cash equivalents, beginning of period | 70,921 | 13,416 |
Cash and cash equivalents, end of period | 31,062 | 18,520 |
Reconciliation of net loss to cash used in operating activities: | ' | ' |
Net loss | -136,399 | -40,369 |
Adjustments to reconcile net loss from operating activities: | ' | ' |
Impairment of investment in Minera Santa Cruz S.A. | 95,878 | ' |
Impairment of mineral property interests and property and equipment | 34,016 | 3,081 |
Loss (gain) on sale of assets | 6,741 | -1,265 |
Loss on sale of marketable securities | ' | 70 |
Income on investment in Minera Santa Cruz S.A., net of amortization | -252 | -14,968 |
Recovery of income taxes | -31,025 | -14,919 |
Gain on litigation settlement | -560 | ' |
Loss (gain) on sale of gold and silver bullion | 223 | -3,075 |
Proceeds on sale of gold and silver bullion | 1,467 | 23,836 |
Unrealized loss on silver bullion | ' | 359 |
Other-than-temporary impairment on marketable equity securities | ' | 1,993 |
Stock-based compensation | 965 | 2,845 |
Accretion of asset retirement obligation | 347 | 342 |
Depreciation | 731 | 750 |
Amortization of mineral property interests and asset retirement obligations | 1,244 | ' |
Foreign exchange loss | 819 | 156 |
Change in non-cash working capital items: | ' | ' |
Increase in other assets related to operations | 1,143 | -6,680 |
Dividend receivable obtained from acquisition of Minera Andes Inc. | ' | 9,363 |
Dividend receivable from Minera Santa Cruz S.A | ' | 2,611 |
Decrease in liabilities related to operations | -12,138 | -3,775 |
Cash used in operating activities | ($36,800) | ($39,645) |
NATURE_OF_OPERATIONS_AND_SUMMA
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2013 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations and Basis of Presentation | |
McEwen Mining Inc. (the “Company” or “McEwen Mining”) was organized under the laws of the State of Colorado on July 24, 1979. Since inception, the Company has been engaged in the exploration for, development of, production and sale of gold and silver. On January 24, 2012, the Company changed its name from US Gold Corporation to McEwen Mining Inc. after the completion of the acquisition of Minera Andes Inc. (“Minera Andes”) by way of a statutory plan of arrangement under the laws of the Province of Alberta, Canada. | |
The Company operates in Argentina, Mexico, and the United States. It owns a 49% interest in Minera Santa Cruz S.A. (“MSC”), owner of the producing San José silver-gold mine in Santa Cruz, Argentina, which is operated by the majority owner of the joint venture, Hochschild Mining plc (‘‘Hochschild’’). It also owns the El Gallo 1 mine in Sinaloa, Mexico, where production began in September 2012, with a total of 30,319 gold equivalent ounces produced between commencement of production and September 30, 2013. Finally, the Company also own the Los Azules Copper Deposit in San Juan, Argentina, development projects including the El Gallo 2 project in Mexico and the Gold Bar project in Nevada, USA, and a large portfolio of exploration properties in Argentina, Nevada and Mexico. | |
The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) has been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading. | |
In management’s opinion, the unaudited consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2013 and 2012, the consolidated balance sheets as at September 30, 2013 (unaudited) and December 31, 2012, the unaudited consolidated statement of changes in shareholders’ equity for the nine months ended September 30, 2013 and 2012, and the unaudited consolidated statements of cash flows for the nine months ended September 30, 2013 and 2012, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited consolidated financial statements. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Therefore these financial statements should be read in conjunction with the audited financial statements and notes thereto and summary of significant accounting policies included in the Company’s Form 10-K for the year ended December 31, 2012. Except as noted below, there have been no material changes in the footnotes from those accompanying the audited consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2012. | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. | |
Recently Adopted Accounting Pronouncements | |
Comprehensive Income: In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The updated guidance requires expanded disclosures for amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The guidance is to be applied prospectively for reporting periods beginning after December 15, 2012. The update is effective for the Company’s fiscal year beginning January 1, 2013. The new guidance affects disclosures only and the adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows. |
BUSINESS_ACQUISITION
BUSINESS ACQUISITION | 9 Months Ended |
Sep. 30, 2013 | |
BUSINESS ACQUISITION | ' |
BUSINESS ACQUISITION | ' |
NOTE 2 BUSINESS ACQUISITION | |
On January 24, 2012, the Company completed the acquisition of Minera Andes (“the Arrangement”) through a court-approved plan of arrangement under Alberta, Canada law pursuant to which Minera Andes, an Alberta (Canada) company, became an indirect wholly-owned subsidiary of the Company. | |
On the closing date of the Arrangement, holders of Minera Andes’ common stock received a number of exchangeable shares of McEwen Mining - Minera Andes Acquisition Corporation, an indirect wholly-owned Canadian subsidiary of the Company, equal to the number of Minera Andes shares owned by the holder, multiplied by the exchange ratio of 0.45. The 127,331,498 exchangeable shares issued are exchangeable for the Company’s common stock on a one-for-one basis. | |
The acquisition has been accounted for using the acquisition method in accordance with ASC Topic 805, Business Combinations, with the Company being identified as the acquirer. The measurement of the purchase consideration was based on the market price of the Company’s common stock on January 24, 2012, which was $5.22 per share. The total purchase price, including the fair value of the options, amounted to $667.8 million. | |
The fair value of mineral property interests exceeded the carrying value of the underlying assets for tax purposes by approximately $508.5 million. The resulting estimated deferred income tax liability originally associated with this temporary difference was approximately $178.0 million, which was included in the allocation of the purchase price above. At the end of 2012, the Company reduced the deferred income tax liability from $178.0 million to $156.9 million, as a result of further fluctuations in the foreign exchange rates between the Argentine pesos and U.S. dollar from January 24, 2012 to December 31, 2012. For the nine months ended September 30, 2013, the Company recorded an additional income tax recovery of $23.6 million as a result of the fluctuations in foreign exchange rates since December 31, 2012. Furthermore, in the second quarter of 2013, the Company also recorded an impairment of $27.7 million on certain of its Santa Cruz mineral property interests, as discussed in Note 5, along with an associated $2.3 million of income tax recovery. These resulted in a deferred income tax liability on these assets of $131.0 million, which is included in the deferred income tax liability balance of $198.5 million on the unaudited consolidated balance sheet as at September 30, 2013. |
INVENTORIES
INVENTORIES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
INVENTORIES | ' | |||||||
INVENTORIES | ' | |||||||
NOTE 3 INVENTORIES | ||||||||
Inventories at September 30, 2013 and December 31, 2012 consist of the following (in thousands): | ||||||||
As at September 30, 2013 | As at December 31, 2012 | |||||||
Ore on leach pads | $ | 2,795 | $ | 685 | ||||
In-process inventory | 1,572 | 3,604 | ||||||
Stockpiles | 462 | 308 | ||||||
Precious metals | 1,501 | 1,322 | ||||||
Materials and supplies | 1,477 | 1,343 | ||||||
Inventories | $ | 7,807 | $ | 7,262 |
GOLD_AND_SILVER_BULLION
GOLD AND SILVER BULLION | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
GOLD AND SILVER BULLION | ' | |||||||||||||||||||
GOLD AND SILVER BULLION | ' | |||||||||||||||||||
NOTE 4 GOLD AND SILVER BULLION | ||||||||||||||||||||
From time to time, the Company invests a portion of its cash in physical gold and silver bullion. Below is the balance of its holdings of gold and silver as at September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
As at September 30, 2013 | As at December 31, 2012 | |||||||||||||||||||
Gold | Silver | Gold | Silver | |||||||||||||||||
(dollars in thousands, except ounces and per ounce) | ||||||||||||||||||||
Number of ounces | — | — | 793 | 24,969 | ||||||||||||||||
Average cost per ounce | n/a | n/a | $ | 1,278.63 | $ | 27.08 | ||||||||||||||
Total cost | $ | — | $ | — | $ | 1,014 | $ | 676 | ||||||||||||
Fair value per ounce | n/a | n/a | $ | 1,657.50 | $ | 29.95 | ||||||||||||||
Total fair value | $ | — | $ | — | $ | 1,314 | $ | 748 | ||||||||||||
The fair value of gold and silver was based on the daily London P.M. fix as at the reporting date. Since ASC Topic 815, Derivatives and Hedging, does not consider gold and silver to be readily convertible to cash, the Company carries these assets at the lower of cost or market. | ||||||||||||||||||||
During the nine months ended September 30, 2013, the Company recorded a realized loss of $0.2 million on its gold and silver bullion, as a result of its average cost of $1,278.63 and $27.08 per ounce, respectively, being lower than its selling price of $1,245.70 per ounce of gold and $19.18 per ounce of silver in the third quarter of 2013. | ||||||||||||||||||||
Changes in the Company’s holdings of gold and silver for the nine months ended September 30, 2013 and year ended December 31, 2012 are as follows: | ||||||||||||||||||||
Nine months ended September 30, 2013 | Year ended December 31, 2012 | |||||||||||||||||||
Gold | Silver | Total | Gold | Silver | Total | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Opening Balance | $ | 1,014 | $ | 676 | $ | 1,690 | $ | 7,232 | $ | 15,578 | $ | 22,810 | ||||||||
Proceeds from sale | (988 | ) | (479 | ) | (1,467 | ) | (7,982 | ) | (15,854 | ) | (23,836 | ) | ||||||||
(Loss) gain on sale | (26 | ) | (197 | ) | (223 | ) | 1,764 | 1,311 | 3,075 | |||||||||||
Unrealized loss | — | — | — | — | (359 | ) | (359 | ) | ||||||||||||
Ending Balance | $ | — | $ | — | $ | — | $ | 1,014 | $ | 676 | $ | 1,690 |
MINERAL_PROPERTY_INTERESTS_AND
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | ' | |||||||||||||||
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | ' | |||||||||||||||
NOTE 5 MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | ||||||||||||||||
Mineral Property Interests | ||||||||||||||||
At September 30, 2013, the Company held mineral rights in Argentina, mineral concession rights in Mexico, including the El Gallo Complex, and mineral interests in Nevada. The El Gallo 1 mine recommenced gold and silver production in September 2012. For accounting purposes, the mine achieved commercial production in September 2012. For operational purposes, commercial production was effective as of January 1, 2013. For the year ended December 31, 2012, a total of 6,949 gold equivalent ounces were produced at El Gallo. For the three and nine months ended September 30, 2013, a total of 8,027 and 23,370 gold equivalent ounces were produced at El Gallo, respectively. | ||||||||||||||||
In May 2013, the Company entered into a sale agreement for certain mining claims in the Limo Complex, Nevada, for a sale price of $0.8 million. The claims had a carrying value of $7.2 million. As the carrying value exceeded the proceeds from the sales agreement, the Company recorded a loss on disposal of $6.4 million, along with a resulting reduction in deferred tax liability and recovery of deferred income taxes of $2.5 million. This resulted in a net loss on disposal of $3.9 million which is included in the net loss for the nine months ended September 30, 2013. The Limo Complex is part of the “Nevada” segment, as shown in Note 11. | ||||||||||||||||
During the second quarter of 2013, the Province of Santa Cruz, Argentina, passed amendments to the Provincial Tax Code and Provincial Tax Law, which imposes a new tax on mining real estate property in the Province. The tax will amount to 1% of the value of the economically viable reserves of mining projects, less certain deductions. Based on this development, along with a significant decline in gold and silver market prices during the year and continued inflationary pressures resulting in a depressed market for exploration companies in Argentina, the Company concluded that there were indicators that the carrying value of the mineral property interests in the Santa Cruz Province may not be recoverable. The Company engaged a third party valuator to test the recoverability and determine the fair value of these properties. The valuator used a market approach to estimate the fair value of the properties by using the observed market value per acre in the region. As a result, the Company recorded an impairment of $27.7 million in the second quarter of 2013, along with a resulting reduction in deferred tax liability and recovery of future income taxes of $2.3 million, for a net impairment charge of $25.4 million for the nine months ended September 30, 2013. The Santa Cruz Province mineral property interests are part of the “Argentina” segment, as shown in Note 11. | ||||||||||||||||
During the third quarter of 2013, the Company rationalized its mineral property interests in Nevada in order to focus its exploration program on more prospective areas. As a result, the Company allowed certain claims from one of its Nevada properties in the West Battle Mountain Complex to lapse. These mineral property interests in question were acquired in 2007 and had a carrying value of $6.3 million, which was written off during the third quarter of 2013, along with a resulting reduction in deferred tax liability and recovery of future income taxes of $2.2 million. This resulted in a net write-off for the Company of $4.1 million which is included in the net income (loss) for the three and nine months ended September 30, 2013. The West Battle Mountain Complex is part of the “Nevada” segment, as shown in Note 11. | ||||||||||||||||
Based on the above, impairment charges were recorded on the following mineral property interests for the three and nine months ended September 30, 2013: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Name of Property/Complex | Segment | 2013 | 2012 | 2013 | 2012 | |||||||||||
Telken Tenements | Argentina | $ | — | $ | — | $ | 13,792 | $ | — | |||||||
Este Tenements | Argentina | — | — | 2,784 | — | |||||||||||
Piramides Tenements | Argentina | — | — | 5,079 | — | |||||||||||
Tobias Tenements | Argentina | — | — | 6,074 | — | |||||||||||
West Battle Mountain Complex | Nevada | 6,287 | — | 6,287 | — | |||||||||||
Other United States Properties | Nevada | — | 2,902 | — | 2,902 | |||||||||||
Property, plant and equipment | Argentina | — | — | — | 179 | |||||||||||
Total impairment | $ | 6,287 | $ | 2,902 | $ | 34,016 | $ | 3,081 | ||||||||
In October 2013, the Company and Hochschild entered into a vend-in agreement with MSC pursuant to which the Company and Hochschild agreed to contribute to MSC the mining rights of certain of Santa Cruz exploration properties. Refer to Note 6, Investment in Minera Santa Cruz S.A. (“MSC”) — San José Mine, for details. | ||||||||||||||||
Asset Retirement Obligation | ||||||||||||||||
The Company is responsible for reclamation of certain past and future disturbances at its properties. The two most significant properties subject to these obligations are the historic Tonkin property in Nevada and the El Gallo 1 mine in Mexico. Reclamation expenditures are expected to be incurred between 2013 and 2040. | ||||||||||||||||
Changes in the Company’s asset retirement obligations for the nine months ended September 30, 2013 and year ended December 31, 2012 are as follows (in thousands): | ||||||||||||||||
Nine Months Ended | Year Ended | |||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
Asset retirement obligation liability - opening balance | $ | 6,359 | $ | 6,253 | ||||||||||||
Settlements | (56 | ) | (47 | ) | ||||||||||||
Accretion of liability | 342 | 447 | ||||||||||||||
Adjustment reflecting updated estimates | (29 | ) | (294 | ) | ||||||||||||
Asset retirement obligation liability - ending balance | $ | 6,616 | $ | 6,359 | ||||||||||||
As at September 30, 2013, the current portion of the asset retirement obligation was $1.4 million (December 31, 2012 - $0.1 million). | ||||||||||||||||
The current undiscounted estimate of the reclamation costs for existing disturbances on the Tonkin property as required by the U.S. Bureau of Land Management (“BLM”) and the Nevada Department of Environmental Protection (“NDEP”) is $3.8 million. The Company submitted a mine closure plan to the NDEP and BLM for the Tonkin property during the fourth quarter of 2010. Based on the Company’s estimate, the change in its bonding requirements was insignificant. As at September 30, 2013, the closure plan has already been approved by the NDEP but is still under review by the BLM. It is possible that reclamation plan cost estimates and bonding requirements may increase as a result of its review. The Company, however, is unable to meaningfully estimate possible increases at this time. For mineral properties in the United States, the Company maintains required reclamation bonding with various governmental agencies, and at September 30, 2013 and December 31, 2012, had cash bonding in place of $5.2 million. | ||||||||||||||||
The costs of undiscounted projected reclamation of El Gallo 1 are currently estimated at $4.6 million. Under Mexican regulations, surety bonding of projected reclamation costs is not required. | ||||||||||||||||
When proven and probable reserves exist at the Company’s properties, the relevant capitalized asset retirement costs and mineral property interests are to be charged to expense based on the units of production method and upon commencement of production. As previously discussed, El Gallo 1 began production in September 2012. However, since El Gallo 1 does not contain mineralized material that satisfies the definition of proven and probable reserves under the SEC Industry Guide 7, the amortization of the capitalized asset retirement costs and mineral property interests are charged to expense based on the straight-line method over the estimated useful life of the mine. For the three and nine months ended September 30, 2013, the Company recorded $0.3 million and $1.2 million of amortization expense related to El Gallo 1, respectively, which was reported in production cost applicable to sales on the unaudited statement of operations and comprehensive income (loss). |
INVESTMENT_IN_MINERA_SANTA_CRU
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | |||||||||||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | |||||||||||||
NOTE 6 INVESTMENT IN MINERA SANTA CRUZ S.A. (“MSC”) — SAN JOSÉ MINE | ||||||||||||||
As discussed in Note 1, the Company acquired a 49% interest in MSC, owner and operator of the San José Silver-Gold Mine in Santa Cruz, Argentina, in January 2012. The Company’s share of earnings and losses from its investment in MSC is included in the consolidated statement of operations and comprehensive income (loss), and amounted to $3.9 million for the nine months ended September 30, 2013, or 49% of MSC’s reported net income of $8.0 million. For the nine months ended September 30, 2012, MSC reported to the Company only its net income from January 25, 2012 to September 30, 2012 since the acquisition closed on January 24, 2012. | ||||||||||||||
As at September 30, 2012, the investment in MSC was allocated an estimated fair value of $261.2 million. During the fourth quarter of 2012, the purchase price allocation was finalized and the estimated fair value of the investment in MSC was increased to $262.9 million. The adjustment affected the composition of the fair value allocation to MSC’s assets, resulting in a reduction in the amortization previously reported for the third quarter of 2012. Below is a reconciliation of the adjustment for the third quarter of 2012. | ||||||||||||||
For three months ended | For nine months ended | |||||||||||||
September 30, 2012 | September 30, 2012 | |||||||||||||
(in thousands) | ||||||||||||||
Amortization of fair value increments, as reported | $ | 1,597 | $ | 3,746 | ||||||||||
Adjustment | 71 | (209 | ) | |||||||||||
Amortization of fair value increments, as adjusted | $ | 1,668 | $ | 3,537 | ||||||||||
Net loss, as reported | $ | (2,583 | ) | $ | (40,578 | ) | ||||||||
Adjustment | (71 | ) | 209 | |||||||||||
Net loss, as adjusted | $ | (2,654 | ) | $ | (40,369 | ) | ||||||||
During the first quarter of 2013, it was determined that the cost of sales reported by MSC under U.S. GAAP for the year and quarter ended December 31, 2012 was understated, resulting in an overstatement of MSC’s after-tax net income of $3.9 million. As a result, the prior year income from the Company’s equity investment of 49% in MSC was overstated by $1.9 million. As the error is not material to the current or previously reported consolidated financial statements, the correction was recorded in the quarter ended March 31, 2013. | ||||||||||||||
During the second quarter of 2013, the Province of Santa Cruz passed amendments to the Provincial Tax Code and Provincial Tax Law, which imposes a new tax on mining real estate property in the Province. The tax will amount to 1% of the value of the economically viable reserves of mining projects, less certain deductions, and MSC has estimated that this would result in a tax payable amount ranging between $2.0 million and $3.0 million for the year 2013. Based on this development, along with a significant decline in gold and silver market prices and continued inflationary pressures, the Company concluded that there were indicators that there was a loss in value in its investment in MSC that was other than temporary. The Company engaged a third party valuator to test the recoverability and determine the fair value of its investment in MSC. The valuator used a discounted cash flow approach and determined that the carrying value of the Company’s investment in MSC exceeded its estimated fair value. As the loss in value of the investment was considered other than temporary, an impairment of $95.9 million was recorded in the second quarter of 2013. The investment in MSC is part of the “Argentina” segment as shown in Note 11. | ||||||||||||||
Changes in the Company’s investment in MSC for the nine months ended September 30, 2013 and year ended December 31, 2012 are as follows: | ||||||||||||||
Nine Months Ended | Year Ended | |||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
(in thousands) | ||||||||||||||
Investment in MSC, beginning of period | $ | 273,948 | $ | — | ||||||||||
Fair value of investment in MSC from acquisition of Minera Andes | — | 262,883 | ||||||||||||
Income from equity investment | 3,914 | 25,301 | ||||||||||||
Amortization of fair value increments | (3,662 | ) | (4,466 | ) | ||||||||||
Dividend distribution | (1,242 | ) | (9,770 | ) | ||||||||||
Impairment of investment in MSC | (95,878 | ) | — | |||||||||||
Investment in MSC, end of period | $ | 177,080 | $ | 273,948 | ||||||||||
A summary of the operating results from MSC for the three and nine months ended September 30, 2013 and the period from January 25, 2012 (after the closing of the acquisition of Minera Andes) to September 30, 2012 is as follows: | ||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | Period ended | |||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||
(in thousands) | ||||||||||||||
Sales - MSC 100% | $ | 69,662 | $ | 116,299 | $ | 182,031 | $ | 212,902 | ||||||
Net income - MSC 100% | 5,424 | 26,343 | 7,988 | 37,765 | ||||||||||
McEwen Mining’s portion - 49% | 2,658 | 12,908 | 3,914 | 18,505 | ||||||||||
Net income on investment in MSC | $ | 2,658 | $ | 12,908 | $ | 3,914 | $ | 18,505 | ||||||
Amortization of fair value increments | (618 | ) | (1,668 | ) | (3,662 | ) | (3,537 | ) | ||||||
Income on investment in MSC, net of amortization | $ | 2,040 | $ | 11,240 | $ | 252 | $ | 14,968 | ||||||
As at September 30, 2013, MSC had current assets of $120.2 million, total assets of $522.4 million, current liabilities of $56.4 million and total liabilities of $166.8 million on an unaudited basis. These balances include the increase in fair value and amortization of the fair value increments arising from the purchase price allocation and the impairment charge of $95.9 million recorded in the second quarter of 2013. | ||||||||||||||
In October 2013, the Company and Hochschild entered into a vend-in agreement with MSC pursuant to which the Company agreed to contribute to MSC the mining rights of certain Santa Cruz exploration properties. The properties proposed to be transferred, totaling approximately 48,900 hectares, include amongst others the Telken, Piramides, Tobias, and Este tenements, and are in close proximity to or abutting the properties comprising the San José Mine. Hochschild will also contribute to MSC certain of their mineral properties located in the same region, totaling approximately 82,700 hectares. The agreement contains a 2% net smelter return royalty payable to the Company or Hochschild based on any of MSC’s production from the respective mineral properties contributed by each party. The vend-in agreement requires registration of title changes with the Argentinean government, which is expected to occur in the fourth quarter of 2013. The carrying value of these properties of $53.2 million, as well as the related deferred tax liability of $17.3 million, will be transferred to the Company’s investment in MSC, with no gain or loss expected to be recognized upon transfer in the fourth quarter of 2013. The mineral property interests are currently part of the “Argentina” segment in Note 11. |
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2013 | |
SHAREHOLDERS' EQUITY | ' |
SHAREHOLDERS' EQUITY | ' |
NOTE 7 SHAREHOLDERS’ EQUITY | |
During the nine months ended September 30, 2013, 49.9 million exchangeable shares were converted into common stock. At September 30, 2013, total outstanding exchangeable shares not exchanged and not owned by the Company or its subsidiaries totaled 33.5 million. | |
During the nine months ended September 30, 2013, the Company issued 48,000 shares of common stock upon exercise of stock options under the Equity Incentive Plan at a weighted average exercise price of $1.97 per share for proceeds of $94,720. The Company also issued 45,000 shares of common stock upon exercise of certain stock options the Company assumed as part of the Minera Andes Inc. acquisition, at a weighted average exercise price of C$1.80 per share for proceeds of $76,926. During the same period, the Company issued the final installment of 41,500 shares of common stock as payment for mining concessions in Mexico. In addition, the Company issued 1 million shares of common stock in January 2013, which was previously recorded as a liability of $3.8 million as at December 31, 2012, as part of the litigation settlement agreement with TNR Gold Corp. effective November 2012 with respect to the Los Azules Copper Project. The issuance of the shares resulted in the elimination of the liability in the first quarter of 2013. | |
During the third quarter of 2013, the Company entered into an agreement with one of its mining contractors to settle parts of its expected future account payable with shares of common stock of the Company, up to a maximum of 2,500,000 common shares. The term of the agreement is six (6) months; provided, however, that the term may be extended by the parties. The number of shares to be issued will be determined monthly, based on the amount payable by the Company for services rendered above a certain production threshold, using the closing price quoted on active markets at the end of every month. As at September 30, 2013, the Company has agreed to issue approximately 15,800 common shares under this agreement. The fair value of this liability is included in accounts payable and accrued liabilities on the consolidated balance sheet as at September 30, 2013. The shares will be issued in the fourth quarter of 2013. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||
STOCK-BASED COMPENSATION | ' | |||||||||
NOTE 8 STOCK-BASED COMPENSATION | ||||||||||
During the nine months ended September 30, 2013, the Company granted stock options to certain employees and directors for an aggregate of 1.7 million shares of common stock at a weighted average exercise price of $2.26 per share. The options vest equally over a three-year period if the individual remains affiliated with the Company (subject to acceleration of vesting in certain events) and are exercisable for a period of 5 years from the date of issue. During the same period in 2012, the Company granted 0.3 million of stock options to the Company’s Chief Operating Officer, as part of his employment contract, at an exercise price of $5.80 per share. The options vest equally over a three-year period if the individual remains affiliated with the Company (subject to acceleration of vesting in certain events) and are exercisable for a period of 10 years from the date of issue. | ||||||||||
The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model. During the three and nine months ended September 30, 2013, the Company recorded stock option expense of $0.3 million and $1.0 million, respectively. During the three and nine months ended September 30, 2012, the Company recorded stock option expense of $0.7 million and $2.8 million, respectively. | ||||||||||
The principal assumptions used in applying the Black-Scholes option pricing model for the awards for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Risk-free interest rate | 0.50% to 0.86% | — | 0.50% | 0.97% | ||||||
Dividend yield | n/a | — | n/a | n/a | ||||||
Volatility factor of the expected market price of common stock | 66% to 69% | — | 66% | 75% | ||||||
Weighted-average expected life of option | 3.5 years | — | 3.5 years | 6.0 years | ||||||
Weighted-average grant date fair value | $1.02 | — | $1.01 | $3.80 |
INCOME_LOSS_PER_COMMON_SHARE
INCOME (LOSS) PER COMMON SHARE | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
INCOME (LOSS) PER COMMON SHARE | ' | |||||||||||||
INCOME (LOSS) PER COMMON SHARE | ' | |||||||||||||
NOTE 9 INCOME (LOSS) PER COMMON SHARE | ||||||||||||||
Basic net income (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed similarly except that the weighted average number of common shares is increased to reflect all dilutive instruments. Below is a reconciliation of the basic and diluted weighted average number of common shares. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net income (loss) | $ | 3,264 | $ | (2,654 | ) | $ | (136,399 | ) | $ | (40,369 | ) | |||
Weighted average common shares (thousands): | ||||||||||||||
Basic | 297,125 | 268,373 | 297,001 | 256,834 | ||||||||||
Effect of employee stock-based awards | 774 | — | — | — | ||||||||||
Diluted | 297,899 | 268,373 | 297,001 | 256,834 | ||||||||||
Net income (loss) per common share: | ||||||||||||||
Basic | $ | 0.01 | $ | (0.01 | ) | $ | (0.46 | ) | $ | (0.16 | ) | |||
Diluted | $ | 0.01 | $ | (0.01 | ) | $ | (0.46 | ) | $ | (0.16 | ) | |||
Outstanding options to purchase 2 million shares of common stock with a weighted average exercise prices of $5.06 were outstanding at September 30, 2013 but were not included in the computation of diluted weighted average common shares for the three months ended September 30, 2013 because their exercise prices exceeded the average price of the Company’s common stock for the period presented. | ||||||||||||||
Other outstanding options to purchase 4 million shares of common stock were not included in the computation of diluted weighted average shares in the nine months ended September 30, 2013 because their effect would have been anti-dilutive. For the three and nine months ended September 30, 2012, other outstanding options excluded from the computation of diluted weighted average shares because of their anti-dilutive effect were of 3 million shares. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2013 | |
RELATED PARTY TRANSACTIONS | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 10 RELATED PARTY TRANSACTIONS | |
Since the second quarter of 2010, an aircraft owned and operated by Lexam L.P. (of which Robert R. McEwen is a limited partner and beneficiary) has been made available to the Company in order to expedite business travel. In his role as Chairman and Chief Executive Officer of the Company, Mr. McEwen must travel extensively and frequently on short notice. | |
The Company is able to charter the aircraft from Lexam L.P. at a preferential rate. The Company’s independent board members have approved a policy whereby only the variable expenses of operating this aircraft for business related travel are eligible for reimbursement by the Company. The hourly amount that the Company has agreed to reimburse Lexam L.P. is under half the full cost per hour of operating the aircraft or equivalent hourly charter cost and in any event less than even Mr. McEwen’s preferential charter rate. Where possible, trips also include other company personnel, both executives and non-executives, to maximize efficiency. | |
The above agreement was approved by the independent members of the Company’s Board of Directors. | |
For the three months ended September 30, 2013, the Company incurred and paid $9,100 (2012 - $14,809) to Lexam L.P. for the use of this aircraft. For the nine months ended September 30, 2013, the Company incurred and paid $79,625 (2012 - $218,528) for the use of this aircraft. |
SEGMENTED_INFORMATION
SEGMENTED INFORMATION | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
SEGMENTED INFORMATION | ' | ||||||||||||||||
SEGMENTED INFORMATION | ' | ||||||||||||||||
NOTE 11 SEGMENTED INFORMATION | |||||||||||||||||
McEwen Mining is a mining and minerals exploration, development and production company focused on precious metals in Argentina, Mexico and the United States. The Company identifies its reportable segments as those consolidated operations that are currently engaged in the exploration for and production of precious metals. Operations not actively engaged in the exploration for, or production of precious metals, are aggregated at the corporate level for segment reporting purposes. | |||||||||||||||||
The financial information relating to the Company’s segments is as follows: | |||||||||||||||||
Corporate | |||||||||||||||||
Argentina | Mexico | U.S. | & Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
For the three months ended September 30, 2013 | |||||||||||||||||
Gold and silver sales | $ | — | $ | 11,778 | $ | — | $ | — | $ | 11,778 | |||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) | 2,040 | — | — | — | 2,040 | ||||||||||||
Production costs applicable to sales | — | 7,907 | — | — | 7,907 | ||||||||||||
Mine development costs | — | 747 | — | — | 747 | ||||||||||||
Exploration costs | 631 | 1,148 | 634 | 162 | 2,575 | ||||||||||||
Impairment of mineral property interests and property and equipment | — | — | 6,287 | — | 6,287 | ||||||||||||
Gain on sale of assets | (10 | ) | — | (40 | ) | — | (50 | ) | |||||||||
Operating income (loss) | 1,131 | 393 | (8,499 | ) | (1,870 | ) | (8,845 | ) | |||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||
Gold and silver sales | $ | — | $ | 35,735 | $ | — | $ | — | $ | 35,735 | |||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) | 252 | — | — | — | 252 | ||||||||||||
Production costs applicable to sales | — | 26,778 | — | — | 26,778 | ||||||||||||
Mine development costs | — | 1,316 | — | — | 1,316 | ||||||||||||
Exploration costs | 14,110 | 5,582 | 2,084 | 288 | 22,064 | ||||||||||||
Impairment of investment in MSC | 95,878 | — | — | — | 95,878 | ||||||||||||
Impairment of mineral property interests and property and equipment | 27,729 | — | 6,287 | — | 34,016 | ||||||||||||
Loss (gain) on sale of assets | 316 | — | 6,428 | (3 | ) | 6,741 | |||||||||||
Operating income (loss) | (139,297 | ) | (2,627 | ) | (17,102 | ) | (7,840 | ) | (166,866 | ) | |||||||
As at September 30, 2013 | |||||||||||||||||
Investment in Minera Santa Cruz S.A. | 177,080 | — | — | — | 177,080 | ||||||||||||
Mineral property interests | 511,363 | 12,093 | 201,385 | — | 724,841 | ||||||||||||
Total assets | 691,579 | 51,272 | 205,457 | 24,943 | 973,251 | ||||||||||||
Corporate | |||||||||||||||||
Argentina | Mexico | U.S. | & Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
For the three months ended September 2012 | |||||||||||||||||
Gold and silver sales | — | 456 | — | — | 456 | ||||||||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) (adjusted - note 6) | $ | 11,240 | $ | — | $ | — | $ | — | $ | 11,240 | |||||||
Production costs applicable to sales | — | 119 | — | — | 119 | ||||||||||||
Mine development and operating costs | — | 2,406 | — | — | 2,406 | ||||||||||||
Mine construction costs | — | 4,671 | — | — | 4,671 | ||||||||||||
Exploration costs | 1,539 | 3,847 | 999 | 323 | 6,708 | ||||||||||||
Operating income (loss) (adjusted - note 6) | 9,129 | (12,650 | ) | (4,234 | ) | (2,870 | ) | (10,625 | ) | ||||||||
For the nine months ended September 30, 2012 | |||||||||||||||||
Gold and silver sales | — | 456 | — | — | 456 | ||||||||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) (adjusted - note 6) | $ | 14,968 | $ | — | $ | — | $ | — | $ | 14,968 | |||||||
Production costs applicable to sales | — | 119 | — | — | 119 | ||||||||||||
Mine development and operating costs | — | 8,622 | — | — | 8,622 | ||||||||||||
Mine construction costs | — | 13,306 | — | — | 13,306 | ||||||||||||
Exploration costs | 11,369 | 12,394 | 3,905 | 897 | 28,565 | ||||||||||||
Operating income (loss) (adjusted - note 6) | 1,440 | (38,733 | ) | (7,864 | ) | (11,451 | ) | (56,608 | ) | ||||||||
As at December 31, 2012 | |||||||||||||||||
Investment in Minera Santa Cruz S.A. | 273,948 | — | — | — | 273,948 | ||||||||||||
Mineral property interests | 539,092 | 12,707 | 215,268 | — | 767,067 | ||||||||||||
Total assets | 825,047 | 47,359 | 220,148 | 58,383 | 1,150,937 |
FAIR_VALUE_ACCOUNTING
FAIR VALUE ACCOUNTING | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
FAIR VALUE ACCOUNTING | ' | |||||||||||||
FAIR VALUE ACCOUNTING | ' | |||||||||||||
NOTE 12 FAIR VALUE ACCOUNTING | ||||||||||||||
Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: | ||||||||||||||
Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; | ||||||||||||||
Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and | ||||||||||||||
Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | ||||||||||||||
The following table identifies the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy. 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. | ||||||||||||||
Fair Value as a September 30, 2013 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 31,062 | $ | 31,062 | $ | — | $ | — | ||||||
IVA taxes receivable | 10,129 | — | 10,129 | — | ||||||||||
$ | 41,191 | $ | 31,062 | $ | 10,129 | $ | — | |||||||
Liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 10,041 | $ | 38 | $ | 10,003 | $ | — | ||||||
$ | 10,041 | $ | 38 | $ | 10,003 | $ | — | |||||||
Fair Value as at December 31, 2012 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 70,921 | $ | 70,921 | $ | — | $ | — | ||||||
IVA taxes receivable | 9,150 | — | 9,150 | — | ||||||||||
$ | 80,071 | $ | 70,921 | $ | 9,150 | $ | — | |||||||
Liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 21,235 | $ | — | $ | 21,235 | $ | — | ||||||
Litigation settlement liability | 3,830 | 3,830 | — | — | ||||||||||
$ | 25,065 | $ | 3,830 | $ | 21,235 | $ | — | |||||||
The Company’s cash and cash equivalents is classified within Level 1 of the fair value hierarchy because it is valued using quoted market prices. The carrying value of this balance approximates its fair value due to its short-term nature and historically negligible credit losses. The cash equivalent instruments that are valued based on quoted market prices in active markets are primarily money market securities. | ||||||||||||||
The fair value of the IVA receivable, accounts payable and accrued liabilities approximates their carrying value due to their short-term nature. | ||||||||||||||
As at September 30, 2013, accounts payable included an accrual for the fair value of approximately 15,800 shares of common stock that are required to be issued as part of the settlement of certain amounts due by the Company to one of its vendors, as discussed in Note 7, Shareholders’ Equity. As the Company’s stock is quoted on an active market, this liability is classified within Level 1 of the fair value hierarchy. | ||||||||||||||
The litigation settlement liability at December 31, 2012 represented the fair value of the 1,000,000 shares of the Company’s common stock that were required to be issued as part of the settlement with TNR Gold Corp. Since the Company’s common stock is quoted on an active market, the liability was classified within Level 1 of the fair value hierarchy. | ||||||||||||||
In the second quarter of 2013, the Company recorded impairment charges related to its mineral property interests in the Santa Cruz Province, Argentina and its investment in MSC, as discussed in Notes 5 and 6, respectively. The estimated fair values of the Santa Cruz mineral property interests were determined using observed market value per acre in the region. The estimated fair value of the Company’s investment in MSC was determined using a discounted cash flow approach. The discounted cash flow model used significant unobservable inputs and is, therefore, considered within Level 3 of the fair value hierarchy. | ||||||||||||||
The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company’s non-recurring Level 3 fair value measurements. | ||||||||||||||
Valuation | Unobservable | Range / | ||||||||||||
Technique | Input | Weighted Average | ||||||||||||
Investment in MSC | Discounted cash flow | Discount Rate | 10.00% | |||||||||||
Long Term Gold Price | $1,300 per ounce | |||||||||||||
Long Term Silver Price | $22.75 per ounce | |||||||||||||
Argentina Inflation Index | 10.00% | |||||||||||||
United States Inflation Index | 1.70% |
COMPARATIVE_FIGURES
COMPARATIVE FIGURES | 9 Months Ended |
Sep. 30, 2013 | |
COMPARATIVE FIGURES | ' |
COMPARATIVE FIGURES | ' |
NOTE 13 COMPARATIVE FIGURES | |
Certain prior year information was reclassified to conform to the current year’s presentation. |
INVENTORIES_Tables
INVENTORIES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
INVENTORIES | ' | |||||||
Schedule of inventories | ' | |||||||
Inventories at September 30, 2013 and December 31, 2012 consist of the following (in thousands): | ||||||||
As at September 30, 2013 | As at December 31, 2012 | |||||||
Ore on leach pads | $ | 2,795 | $ | 685 | ||||
In-process inventory | 1,572 | 3,604 | ||||||
Stockpiles | 462 | 308 | ||||||
Precious metals | 1,501 | 1,322 | ||||||
Materials and supplies | 1,477 | 1,343 | ||||||
Inventories | $ | 7,807 | $ | 7,262 |
GOLD_AND_SILVER_BULLION_Tables
GOLD AND SILVER BULLION (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
GOLD AND SILVER BULLION | ' | |||||||||||||||||||
Schedule of gold and silver holdings | ' | |||||||||||||||||||
As at September 30, 2013 | As at December 31, 2012 | |||||||||||||||||||
Gold | Silver | Gold | Silver | |||||||||||||||||
(dollars in thousands, except ounces and per ounce) | ||||||||||||||||||||
Number of ounces | — | — | 793 | 24,969 | ||||||||||||||||
Average cost per ounce | n/a | n/a | $ | 1,278.63 | $ | 27.08 | ||||||||||||||
Total cost | $ | — | $ | — | $ | 1,014 | $ | 676 | ||||||||||||
Fair value per ounce | n/a | n/a | $ | 1,657.50 | $ | 29.95 | ||||||||||||||
Total fair value | $ | — | $ | — | $ | 1,314 | $ | 748 | ||||||||||||
Schedule of changes of gold and silver holdings | ' | |||||||||||||||||||
Nine months ended September 30, 2013 | Year ended December 31, 2012 | |||||||||||||||||||
Gold | Silver | Total | Gold | Silver | Total | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Opening Balance | $ | 1,014 | $ | 676 | $ | 1,690 | $ | 7,232 | $ | 15,578 | $ | 22,810 | ||||||||
Proceeds from sale | (988 | ) | (479 | ) | (1,467 | ) | (7,982 | ) | (15,854 | ) | (23,836 | ) | ||||||||
(Loss) gain on sale | (26 | ) | (197 | ) | (223 | ) | 1,764 | 1,311 | 3,075 | |||||||||||
Unrealized loss | — | — | — | — | (359 | ) | (359 | ) | ||||||||||||
Ending Balance | $ | — | $ | — | $ | — | $ | 1,014 | $ | 676 | $ | 1,690 |
MINERAL_PROPERTY_INTERESTS_AND1
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | ' | |||||||||||||||
Summary of mineral property interests | ' | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Name of Property/Complex | Segment | 2013 | 2012 | 2013 | 2012 | |||||||||||
Telken Tenements | Argentina | $ | — | $ | — | $ | 13,792 | $ | — | |||||||
Este Tenements | Argentina | — | — | 2,784 | — | |||||||||||
Piramides Tenements | Argentina | — | — | 5,079 | — | |||||||||||
Tobias Tenements | Argentina | — | — | 6,074 | — | |||||||||||
West Battle Mountain Complex | Nevada | 6,287 | — | 6,287 | — | |||||||||||
Other United States Properties | Nevada | — | 2,902 | — | 2,902 | |||||||||||
Property, plant and equipment | Argentina | — | — | — | 179 | |||||||||||
Total impairment | $ | 6,287 | $ | 2,902 | $ | 34,016 | $ | 3,081 | ||||||||
Schedule of changes in asset retirement obligations | ' | |||||||||||||||
Changes in the Company’s asset retirement obligations for the nine months ended September 30, 2013 and year ended December 31, 2012 are as follows (in thousands): | ||||||||||||||||
Nine Months Ended | Year Ended | |||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
Asset retirement obligation liability - opening balance | $ | 6,359 | $ | 6,253 | ||||||||||||
Settlements | (56 | ) | (47 | ) | ||||||||||||
Accretion of liability | 342 | 447 | ||||||||||||||
Adjustment reflecting updated estimates | (29 | ) | (294 | ) | ||||||||||||
Asset retirement obligation liability - ending balance | $ | 6,616 | $ | 6,359 |
INVESTMENT_IN_MINERA_SANTA_CRU1
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | |||||||||||||
Schedule of reconciliation of fair value allocation | ' | |||||||||||||
For three months ended | For nine months ended | |||||||||||||
September 30, 2012 | September 30, 2012 | |||||||||||||
(in thousands) | ||||||||||||||
Amortization of fair value increments, as reported | $ | 1,597 | $ | 3,746 | ||||||||||
Adjustment | 71 | (209 | ) | |||||||||||
Amortization of fair value increments, as adjusted | $ | 1,668 | $ | 3,537 | ||||||||||
Net loss, as reported | $ | (2,583 | ) | $ | (40,578 | ) | ||||||||
Adjustment | (71 | ) | 209 | |||||||||||
Net loss, as adjusted | $ | (2,654 | ) | $ | (40,369 | ) | ||||||||
Schedule of change in the entity's investment in MSC | ' | |||||||||||||
Nine Months Ended | Year Ended | |||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
(in thousands) | ||||||||||||||
Investment in MSC, beginning of period | $ | 273,948 | $ | — | ||||||||||
Fair value of investment in MSC from acquisition of Minera Andes | — | 262,883 | ||||||||||||
Income from equity investment | 3,914 | 25,301 | ||||||||||||
Amortization of fair value increments | (3,662 | ) | (4,466 | ) | ||||||||||
Dividend distribution | (1,242 | ) | (9,770 | ) | ||||||||||
Impairment of investment in MSC | (95,878 | ) | — | |||||||||||
Investment in MSC, end of period | $ | 177,080 | $ | 273,948 | ||||||||||
Summary of MSC's financial information from operations | ' | |||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | Period ended | |||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||
(in thousands) | ||||||||||||||
Sales - MSC 100% | $ | 69,662 | $ | 116,299 | $ | 182,031 | $ | 212,902 | ||||||
Net income - MSC 100% | 5,424 | 26,343 | 7,988 | 37,765 | ||||||||||
McEwen Mining’s portion - 49% | 2,658 | 12,908 | 3,914 | 18,505 | ||||||||||
Net income on investment in MSC | $ | 2,658 | $ | 12,908 | $ | 3,914 | $ | 18,505 | ||||||
Amortization of fair value increments | (618 | ) | (1,668 | ) | (3,662 | ) | (3,537 | ) | ||||||
Income on investment in MSC, net of amortization | $ | 2,040 | $ | 11,240 | $ | 252 | $ | 14,968 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||
Schedule of principal assumptions used in applying the Black-Scholes option pricing model for the awards | ' | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Risk-free interest rate | 0.50% to 0.86% | — | 0.50% | 0.97% | ||||||
Dividend yield | n/a | — | n/a | n/a | ||||||
Volatility factor of the expected market price of common stock | 66% to 69% | — | 66% | 75% | ||||||
Weighted-average expected life of option | 3.5 years | — | 3.5 years | 6.0 years | ||||||
Weighted-average grant date fair value | $1.02 | — | $1.01 | $3.80 |
INCOME_LOSS_PER_COMMON_SHARE_T
INCOME (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
INCOME (LOSS) PER COMMON SHARE | ' | |||||||||||||
Schedule of computation of basic and diluted net income (loss) per common share and reconciliation weighted average number of common shares | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net income (loss) | $ | 3,264 | $ | (2,654 | ) | $ | (136,399 | ) | $ | (40,369 | ) | |||
Weighted average common shares (thousands): | ||||||||||||||
Basic | 297,125 | 268,373 | 297,001 | 256,834 | ||||||||||
Effect of employee stock-based awards | 774 | — | — | — | ||||||||||
Diluted | 297,899 | 268,373 | 297,001 | 256,834 | ||||||||||
Net income (loss) per common share: | ||||||||||||||
Basic | $ | 0.01 | $ | (0.01 | ) | $ | (0.46 | ) | $ | (0.16 | ) | |||
Diluted | $ | 0.01 | $ | (0.01 | ) | $ | (0.46 | ) | $ | (0.16 | ) |
SEGMENTED_INFORMATION_Tables
SEGMENTED INFORMATION (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
SEGMENTED INFORMATION | ' | ||||||||||||||||
Schedule of the financial information relating to the Company's segments | ' | ||||||||||||||||
Corporate | |||||||||||||||||
Argentina | Mexico | U.S. | & Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
For the three months ended September 30, 2013 | |||||||||||||||||
Gold and silver sales | $ | — | $ | 11,778 | $ | — | $ | — | $ | 11,778 | |||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) | 2,040 | — | — | — | 2,040 | ||||||||||||
Production costs applicable to sales | — | 7,907 | — | — | 7,907 | ||||||||||||
Mine development costs | — | 747 | — | — | 747 | ||||||||||||
Exploration costs | 631 | 1,148 | 634 | 162 | 2,575 | ||||||||||||
Impairment of mineral property interests and property and equipment | — | — | 6,287 | — | 6,287 | ||||||||||||
Gain on sale of assets | (10 | ) | — | (40 | ) | — | (50 | ) | |||||||||
Operating income (loss) | 1,131 | 393 | (8,499 | ) | (1,870 | ) | (8,845 | ) | |||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||
Gold and silver sales | $ | — | $ | 35,735 | $ | — | $ | — | $ | 35,735 | |||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) | 252 | — | — | — | 252 | ||||||||||||
Production costs applicable to sales | — | 26,778 | — | — | 26,778 | ||||||||||||
Mine development costs | — | 1,316 | — | — | 1,316 | ||||||||||||
Exploration costs | 14,110 | 5,582 | 2,084 | 288 | 22,064 | ||||||||||||
Impairment of investment in MSC | 95,878 | — | — | — | 95,878 | ||||||||||||
Impairment of mineral property interests and property and equipment | 27,729 | — | 6,287 | — | 34,016 | ||||||||||||
Loss (gain) on sale of assets | 316 | — | 6,428 | (3 | ) | 6,741 | |||||||||||
Operating income (loss) | (139,297 | ) | (2,627 | ) | (17,102 | ) | (7,840 | ) | (166,866 | ) | |||||||
As at September 30, 2013 | |||||||||||||||||
Investment in Minera Santa Cruz S.A. | 177,080 | — | — | — | 177,080 | ||||||||||||
Mineral property interests | 511,363 | 12,093 | 201,385 | — | 724,841 | ||||||||||||
Total assets | 691,579 | 51,272 | 205,457 | 24,943 | 973,251 | ||||||||||||
Corporate | |||||||||||||||||
Argentina | Mexico | U.S. | & Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
For the three months ended September 2012 | |||||||||||||||||
Gold and silver sales | — | 456 | — | — | 456 | ||||||||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) (adjusted - note 6) | $ | 11,240 | $ | — | $ | — | $ | — | $ | 11,240 | |||||||
Production costs applicable to sales | — | 119 | — | — | 119 | ||||||||||||
Mine development and operating costs | — | 2,406 | — | — | 2,406 | ||||||||||||
Mine construction costs | — | 4,671 | — | — | 4,671 | ||||||||||||
Exploration costs | 1,539 | 3,847 | 999 | 323 | 6,708 | ||||||||||||
Operating income (loss) (adjusted - note 6) | 9,129 | (12,650 | ) | (4,234 | ) | (2,870 | ) | (10,625 | ) | ||||||||
For the nine months ended September 30, 2012 | |||||||||||||||||
Gold and silver sales | — | 456 | — | — | 456 | ||||||||||||
Income on investment in Minera Santa Cruz S.A. (net of amortization) (adjusted - note 6) | $ | 14,968 | $ | — | $ | — | $ | — | $ | 14,968 | |||||||
Production costs applicable to sales | — | 119 | — | — | 119 | ||||||||||||
Mine development and operating costs | — | 8,622 | — | — | 8,622 | ||||||||||||
Mine construction costs | — | 13,306 | — | — | 13,306 | ||||||||||||
Exploration costs | 11,369 | 12,394 | 3,905 | 897 | 28,565 | ||||||||||||
Operating income (loss) (adjusted - note 6) | 1,440 | (38,733 | ) | (7,864 | ) | (11,451 | ) | (56,608 | ) | ||||||||
As at December 31, 2012 | |||||||||||||||||
Investment in Minera Santa Cruz S.A. | 273,948 | — | — | — | 273,948 | ||||||||||||
Mineral property interests | 539,092 | 12,707 | 215,268 | — | 767,067 | ||||||||||||
Total assets | 825,047 | 47,359 | 220,148 | 58,383 | 1,150,937 |
FAIR_VALUE_ACCOUNTING_Tables
FAIR VALUE ACCOUNTING (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
FAIR VALUE ACCOUNTING | ' | |||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy | ' | |||||||||||||
Fair Value as a September 30, 2013 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 31,062 | $ | 31,062 | $ | — | $ | — | ||||||
IVA taxes receivable | 10,129 | — | 10,129 | — | ||||||||||
$ | 41,191 | $ | 31,062 | $ | 10,129 | $ | — | |||||||
Liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 10,041 | $ | 38 | $ | 10,003 | $ | — | ||||||
$ | 10,041 | $ | 38 | $ | 10,003 | $ | — | |||||||
Fair Value as at December 31, 2012 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 70,921 | $ | 70,921 | $ | — | $ | — | ||||||
IVA taxes receivable | 9,150 | — | 9,150 | — | ||||||||||
$ | 80,071 | $ | 70,921 | $ | 9,150 | $ | — | |||||||
Liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 21,235 | $ | — | $ | 21,235 | $ | — | ||||||
Litigation settlement liability | 3,830 | 3,830 | — | — | ||||||||||
$ | 25,065 | $ | 3,830 | $ | 21,235 | $ | — | |||||||
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 | ' | |||||||||||||
Valuation | Unobservable | Range / | ||||||||||||
Technique | Input | Weighted Average | ||||||||||||
Investment in MSC | Discounted cash flow | Discount Rate | 10.00% | |||||||||||
Long Term Gold Price | $1,300 per ounce | |||||||||||||
Long Term Silver Price | $22.75 per ounce | |||||||||||||
Argentina Inflation Index | 10.00% | |||||||||||||
United States Inflation Index | 1.70% |
NATURE_OF_OPERATIONS_AND_SUMMA1
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (MSC) | Sep. 30, 2013 | Jan. 24, 2012 |
MSC | ' | ' |
Nature of Operations and Basis of Presentation | ' | ' |
Ownership interest (as a percent) | 49.00% | 49.00% |
NATURE_OF_OPERATIONS_AND_SUMMA2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (Gold equivalents, El Gallo mine) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 13 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
oz | oz | oz | oz | |
Gold equivalents | El Gallo mine | ' | ' | ' | ' |
Nature of Operations and Basis of Presentation | ' | ' | ' | ' |
Quantity produced (in ounces) | 8,027 | 23,370 | 6,949 | 30,319 |
BUSINESS_ACQUISITION_Details
BUSINESS ACQUISITION (Details) (Minera Andes) | 0 Months Ended | 9 Months Ended |
Jan. 24, 2012 | Sep. 30, 2013 | |
Minera Andes | ' | ' |
BUSINESS ACQUISITION | ' | ' |
Exchange ratio | 0.45 | ' |
Exchangeable shares issued | 127,331,498 | ' |
Ratio for exchange of exchangeable shares | ' | 1 |
BUSINESS_ACQUISITION_Details_2
BUSINESS ACQUISITION (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 9 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jan. 24, 2012 | Jun. 30, 2013 | Jan. 24, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Santa Cruz mineral property interests | Minera Andes | Minera Andes | Minera Andes | |||||||
BUSINESS ACQUISITION | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Market price of common stock (in dollars per share) | ' | ' | ' | ' | ' | $5.22 | ' | ' | ' | ' |
Net assets acquired: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price | ' | ' | ' | ' | ' | ' | ' | $667,800,000 | ' | ' |
Excess of fair value over carrying value of the underlying assets for tax purposes | ' | ' | ' | ' | ' | ' | ' | 508,500,000 | ' | ' |
Deferred income tax recovery related to fluctuations in foreign exchange rates | ' | ' | ' | ' | ' | ' | ' | ' | 23,600,000 | ' |
Deferred income tax recovery | ' | ' | ' | ' | ' | ' | 2,300,000 | ' | ' | ' |
Impairment charges | 6,287,000 | 2,902,000 | 34,016,000 | 3,081,000 | ' | ' | 27,700,000 | ' | ' | ' |
Deferred income tax liability related to fluctuations in the foreign exchange rates | ' | ' | ' | ' | ' | ' | ' | 178,000,000 | 131,000,000 | 156,900,000 |
Deferred income tax liability | $198,497,000 | ' | $198,497,000 | ' | $229,522,000 | ' | ' | ' | ' | ' |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
INVENTORIES | ' | ' |
Ore on leach pads | $2,795 | $685 |
In-process inventory | 1,572 | 3,604 |
Stockpiles | 462 | 308 |
Precious metals | 1,501 | 1,322 |
Materials and supplies | 1,477 | 1,343 |
Inventories | $7,807 | $7,262 |
GOLD_AND_SILVER_BULLION_Detail
GOLD AND SILVER BULLION (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2013 |
Gold | Gold | Gold | Gold | Silver | Silver | Silver | Silver | ||||||
oz | oz | ||||||||||||
GOLD AND SILVER BULLION | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ounces | ' | ' | ' | ' | ' | ' | ' | 793 | ' | ' | ' | 24,969 | ' |
Average cost per ounce (in dollars per ounce) | ' | ' | ' | ' | ' | ' | ' | 1,278.63 | 1,278.63 | ' | ' | 27.08 | 27.08 |
Total cost | ' | ' | ' | ' | $1,690 | ' | ' | $1,014 | ' | ' | ' | $676 | ' |
Fair value per ounce (in dollars per ounce) | ' | ' | ' | ' | ' | ' | ' | 1,657.50 | ' | ' | ' | 29.95 | ' |
Total fair value | ' | ' | ' | ' | ' | ' | ' | 1,314 | ' | ' | ' | 748 | ' |
Changes in the Company's holdings of gold and silver | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Opening Balance | ' | ' | 1,690 | 22,810 | 22,810 | ' | 1,014 | 7,232 | ' | ' | 676 | 15,578 | ' |
Proceeds from sale | ' | ' | -1,467 | ' | -23,836 | ' | -988 | -7,982 | ' | ' | -479 | -15,854 | ' |
(Loss) gain on sale | 51 | 1,233 | -223 | 3,075 | 3,075 | ' | -26 | 1,764 | ' | ' | -197 | 1,311 | ' |
Unrealized loss | ' | ' | ' | -359 | -359 | ' | ' | ' | ' | ' | ' | -359 | ' |
Ending Balance | ' | ' | ' | ' | $1,690 | ' | ' | $1,014 | ' | ' | ' | $676 | ' |
Selling price per ounce (in dollars per ounce) | ' | ' | ' | ' | ' | 1,245.70 | ' | ' | ' | 19.18 | ' | ' | ' |
MINERAL_PROPERTY_INTERESTS_AND2
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 13 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | 31-May-13 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | |
Argentina | Telken Tenements | Este Tenements | Piramides Tenements | Tobias Tenements | Property, plant and equipment | Other United States Properties | Other United States Properties | Limo Complex | Limo Complex | El Gallo Complex | El Gallo Complex | El Gallo Complex | El Gallo Complex | El Gallo Complex | El Gallo Complex | Tonkin property and El Gallo 1 mine portion of the El Gallo Complex | West Battle Mountain Complex | West Battle Mountain Complex | West Battle Mountain Complex | West Battle Mountain Complex | Exploration properties in Santa Cruz, Argentina | Exploration properties in Santa Cruz, Argentina | Exploration properties in Santa Cruz, Argentina | Tonkin Complex | ||||||
Argentina | Nevada | Nevada | Gold equivalents | Gold equivalents | Gold equivalents | Gold equivalents | Item | Nevada | Nevada | MSC | ||||||||||||||||||||
oz | oz | oz | oz | |||||||||||||||||||||||||||
Mineral Property Interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quantity produced (in ounces) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,027 | 23,370 | 6,949 | 30,319 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of most significant properties subject to reclamation obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Undiscounted estimated reclamation costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,600,000 | $4,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,800,000 |
Cash bonding for mineral properties in the United States | 5,183,000 | ' | 5,183,000 | ' | 5,183,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of mineral property interests and asset retirement obligations | ' | ' | 1,244,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Price of mineral property interests under the sale agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying value of mining claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | 6,300,000 | 6,300,000 | ' | ' | ' | ' | ' | ' |
Loss on disposal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,400,000 | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax on mining real estate property (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | 1.00% | ' |
Impairment charges | 6,287,000 | 2,902,000 | 34,016,000 | 3,081,000 | ' | 27,729,000 | 13,792,000 | 2,784,000 | 5,079,000 | 6,074,000 | 179,000 | 2,902,000 | 2,902,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,287,000 | 6,287,000 | 27,700,000 | ' | ' | ' |
Deferred income tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' | ' | ' | 2,300,000 | ' | ' |
Net impairment charge | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000 | 4,100,000 | ' | ' | ' | 25,400,000 | ' | ' |
Changes in the asset retirement obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset retirement obligation liability - opening balance | ' | ' | 6,359,000 | 6,253,000 | 6,253,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlements | ' | ' | -56,000 | ' | -47,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accretion of liability | 113,000 | 110,000 | 347,000 | 342,000 | 447,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustment reflecting updated estimates | ' | ' | -29,000 | ' | -294,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset retirement obligation liability - ending balance | 6,616,000 | ' | 6,616,000 | ' | 6,359,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current portion of the asset retirement obligation | $1,351,000 | ' | $1,351,000 | ' | $130,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT_IN_MINERA_SANTA_CRU2
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Details) (USD $) | 3 Months Ended | 8 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jan. 24, 2012 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | $3,264,000 | ' | ' | ($2,654,000) | ' | ($136,399,000) | ($40,369,000) | ' | ' |
Impairment | ' | ' | ' | ' | ' | 95,878,000 | ' | ' | ' |
Exploration properties in Santa Cruz, Argentina | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax on mining real estate property (as a percent) | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' |
Reported | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | -2,583,000 | ' | ' | -40,578,000 | ' | ' |
Adjustment | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | -71,000 | ' | ' | 209,000 | ' | ' |
MSC | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest acquired (as a percent) | 49.00% | ' | ' | ' | ' | 49.00% | ' | ' | ' |
Entity's share in earnings and losses from its investment in MSC | 2,658,000 | ' | ' | 12,908,000 | 18,505,000 | 3,914,000 | ' | 25,301,000 | ' |
Net income | 5,424,000 | ' | ' | 26,343,000 | 37,765,000 | 7,988,000 | ' | ' | ' |
Interest held (as a percent) | 49.00% | ' | ' | ' | ' | 49.00% | ' | ' | 49.00% |
Fair value of investment in MSC from acquisition of Minera Andes | ' | ' | ' | 261,200,000 | 261,200,000 | ' | 261,200,000 | 262,883,000 | ' |
Amortization of fair value increments | 618,000 | ' | ' | 1,668,000 | 3,537,000 | 3,662,000 | 3,537,000 | 4,466,000 | ' |
Equity method investment, overstatement of income from prior year recorded in current period | ' | ' | 3,900,000 | ' | ' | ' | ' | ' | ' |
Entity's share of income in investee, overstatement of income from prior year recorded in current period | ' | ' | 1,900,000 | ' | ' | ' | ' | ' | ' |
Impairment | ' | 95,900,000 | ' | ' | ' | 95,878,000 | ' | ' | ' |
MSC | Exploration properties in Santa Cruz, Argentina | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax on mining real estate property (as a percent) | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' |
MSC | Minimum | Exploration properties in Santa Cruz, Argentina | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax payable | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' |
MSC | Maximum | Exploration properties in Santa Cruz, Argentina | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax payable | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' |
MSC | Reported | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of fair value increments | ' | ' | ' | 1,597,000 | ' | ' | 3,746,000 | ' | ' |
MSC | Adjustment | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of fair value increments | ' | ' | ' | 71,000 | ' | ' | -209,000 | ' | ' |
MSC | Purchase price allocation adjustment | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of investment in MSC from acquisition of Minera Andes | ' | ' | ' | ' | ' | ' | ' | $262,900,000 | ' |
INVESTMENT_IN_MINERA_SANTA_CRU3
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Details 2) (USD $) | 3 Months Ended | 8 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Change in the investment in MSC | ' | ' | ' | ' | ' | ' | ' |
Investment in MSC, beginning of period | ' | ' | ' | ' | $273,948 | ' | ' |
Impairment of investment in MSC | ' | ' | ' | ' | -95,878 | ' | ' |
Investment in MSC, end of period | 177,080 | ' | ' | ' | 177,080 | ' | ' |
MSC | ' | ' | ' | ' | ' | ' | ' |
Change in the investment in MSC | ' | ' | ' | ' | ' | ' | ' |
Investment in MSC, beginning of period | ' | ' | ' | ' | 273,948 | ' | ' |
Fair value of investment in MSC from acquisition of Minera Andes | ' | ' | 261,200 | 261,200 | ' | 261,200 | 262,883 |
Income from equity investment | 2,658 | ' | 12,908 | 18,505 | 3,914 | ' | 25,301 |
Amortization of fair value increments | -618 | ' | -1,668 | -3,537 | -3,662 | -3,537 | -4,466 |
Dividend distribution | ' | ' | ' | ' | -1,242 | ' | -9,770 |
Impairment of investment in MSC | ' | -95,900 | ' | ' | -95,878 | ' | ' |
Investment in MSC, end of period | $177,080 | ' | ' | ' | $177,080 | ' | $273,948 |
INVESTMENT_IN_MINERA_SANTA_CRU4
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jan. 24, 2012 | Oct. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2013 | |
MSC | MSC | MSC | MSC | MSC | MSC | MSC | MSC | MSC | MSC | MSC | ||||||
Vend-in agreement | Vend-in agreement | Hochschild | ||||||||||||||
Item | Subsequent event | Item | ||||||||||||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales percentage | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | $69,662,000 | ' | $116,299,000 | $212,902,000 | $182,031,000 | ' | ' | ' | ' | ' | ' |
Net income percentage | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | 5,424,000 | ' | 26,343,000 | 37,765,000 | 7,988,000 | ' | ' | ' | ' | ' | ' |
Ownership interest (as a percent) | ' | ' | ' | ' | ' | 49.00% | ' | ' | ' | 49.00% | ' | ' | 49.00% | ' | ' | ' |
Net income on investment in MSC | ' | ' | ' | ' | ' | 2,658,000 | ' | 12,908,000 | 18,505,000 | 3,914,000 | ' | 25,301,000 | ' | ' | ' | ' |
Amortization of fair value increments | ' | ' | ' | ' | ' | -618,000 | ' | -1,668,000 | -3,537,000 | -3,662,000 | -3,537,000 | -4,466,000 | ' | ' | ' | ' |
Income on investment in MSC, net of amortization | 2,040,000 | 11,240,000 | 252,000 | 14,968,000 | ' | 2,040,000 | ' | 11,240,000 | 14,968,000 | 252,000 | ' | ' | ' | ' | ' | ' |
Current assets | 50,920,000 | ' | 50,920,000 | ' | 91,918,000 | 120,200,000 | ' | ' | ' | 120,200,000 | ' | ' | ' | ' | ' | ' |
Total assets | 973,251,000 | ' | 973,251,000 | ' | 1,150,937,000 | 522,400,000 | ' | ' | ' | 522,400,000 | ' | ' | ' | ' | ' | ' |
Current liabilities | 11,392,000 | ' | 11,392,000 | ' | 25,195,000 | 56,400,000 | ' | ' | ' | 56,400,000 | ' | ' | ' | ' | ' | ' |
Total liabilities | 215,554,000 | ' | 215,554,000 | ' | 261,346,000 | 166,800,000 | ' | ' | ' | 166,800,000 | ' | ' | ' | ' | ' | ' |
Impairment of investment in Minera Santa Cruz S.A. | ' | ' | 95,878,000 | ' | ' | ' | 95,900,000 | ' | ' | 95,878,000 | ' | ' | ' | ' | ' | ' |
Area of property transferred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 48,900 | ' | 82,700 |
Net smelter return royalty payable (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' |
Carrying value of mining claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,200,000 | ' |
Deferred tax liability related to mineral properties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,300,000 | ' |
Expected gain or loss to be recognized | $51,000 | $1,233,000 | ($223,000) | $3,075,000 | $3,075,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' |
SHAREHOLDERS_EQUITY_Details
SHAREHOLDERS' EQUITY (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | |||
Jan. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jan. 24, 2012 | Dec. 31, 2012 | |
Item | Item | Maximum | Minera Andes Inc. | Litigation settlement agreement with respect to the Los Azules Copper Project | ||||
TNR | ||||||||
Exchangeable shares converted into common stock | ' | ' | 49,900,000 | ' | ' | ' | ' | ' |
Outstanding Exchangeable Shares not exchanged | ' | 33,500,000 | 33,500,000 | ' | ' | ' | ' | ' |
Shares of common stock issued upon exercise of stock options | 1,000,000 | ' | 48,000 | ' | ' | ' | 45,000 | ' |
Weighted average exercise price of stock options (in dollars per share) | ' | ' | $1.97 | ' | ' | ' | $1.80 | ' |
Proceeds from exercise of stock options | ' | ' | $171,000 | $3,564,000 | ' | ' | $76,926 | ' |
Shares of common stock issued as payment for mining concessions in Mexico | ' | ' | 41,500 | ' | ' | ' | ' | ' |
Settlement agreement regarding outstanding litigation | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation settlement liability | ' | ' | ' | ' | $3,830,000 | ' | ' | $3,800,000 |
Number of mining contractors with which the entity has entered into an agreement | ' | 1 | 1 | ' | ' | ' | ' | ' |
Number of shares to be issued to settle parts of expected future account payable | ' | ' | ' | ' | ' | 2,500,000 | ' | ' |
Term of the agreement | ' | ' | '6 months | ' | ' | ' | ' | ' |
Number of shares agreed to be issued under the agreement | ' | ' | 15,800 | ' | ' | ' | ' | ' |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
STOCK-BASED COMPENSATION | ' | ' | ' | ' |
Stock option expense | $0.30 | $0.70 | $1 | $2.80 |
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 0.50% | 0.97% |
Volatility factor of the expected market price of common stock (as a percent) | ' | ' | 66.00% | 75.00% |
Weighted-average expected life of option | '3 years 6 months | ' | '3 years 6 months | '6 years |
Weighted-average grant date fair value (in dollars per share) | $1.02 | ' | $1.01 | $3.80 |
Minimum | ' | ' | ' | ' |
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | 0.50% | ' | ' | ' |
Volatility factor of the expected market price of common stock (as a percent) | 66.00% | ' | ' | ' |
Maximum | ' | ' | ' | ' |
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | 0.86% | ' | ' | ' |
Volatility factor of the expected market price of common stock (as a percent) | 69.00% | ' | ' | ' |
Certain employees and directors | ' | ' | ' | ' |
STOCK-BASED COMPENSATION | ' | ' | ' | ' |
Stock options granted (in shares) | ' | ' | 1.7 | ' |
Exercise price of options granted (in dollars per share) | ' | ' | $2.26 | ' |
Vesting period of options | ' | ' | '3 years | ' |
Exercise period of options | ' | ' | '5 years | ' |
Chief Operating Officer | ' | ' | ' | ' |
STOCK-BASED COMPENSATION | ' | ' | ' | ' |
Stock options granted (in shares) | ' | ' | ' | 0.3 |
Exercise price of options granted (in dollars per share) | ' | ' | ' | $5.80 |
Vesting period of options | ' | ' | ' | '3 years |
Exercise period of options | ' | ' | ' | '10 years |
INCOME_LOSS_PER_COMMON_SHARE_D
INCOME (LOSS) PER COMMON SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
INCOME (LOSS) PER COMMON SHARE | ' | ' | ' | ' |
Net income (loss) (in dollars) | $3,264 | ($2,654) | ($136,399) | ($40,369) |
Weighted average common shares: | ' | ' | ' | ' |
Basic (in shares) | 297,125,000 | 268,373,000 | 297,001,000 | 256,834,000 |
Effect of employee stock-based awards (in shares) | 774,000 | ' | ' | ' |
Diluted (in shares) | 297,899,000 | 268,373,000 | 297,001,000 | 256,834,000 |
Net income (loss) per common share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.01 | ($0.01) | ($0.46) | ($0.16) |
Diluted (in dollars per share) | $0.01 | ($0.01) | ($0.46) | ($0.16) |
Outstanding options (in shares) | 2,000,000 | ' | 2,000,000 | ' |
Weighted average exercise prices of options outstanding (in dollars per share) | $5.06 | ' | $5.06 | ' |
Other outstanding options not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | ' | 3,000,000 | 4,000,000 | 3,000,000 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (Lexam L.P., USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Lexam L.P. | ' | ' | ' | ' |
RELATED PARTY TRANSACTIONS | ' | ' | ' | ' |
Amount of expenses incurred and paid | $9,100 | $14,809 | $79,625 | $218,528 |
SEGMENTED_INFORMATION_Details
SEGMENTED INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
SEGMENTED INFORMATION | ' | ' | ' | ' | ' |
Gold and silver sales | $11,778 | $456 | $35,735 | $456 | ' |
Income on investment in Minera Santa Cruz S.A. (net of amortization) | 2,040 | 11,240 | 252 | 14,968 | ' |
Production costs applicable to sales | 7,907 | 119 | 26,778 | 119 | ' |
Mine development and operating costs | 747 | 2,406 | 1,316 | 8,622 | ' |
Mine construction costs | ' | 4,671 | ' | 13,306 | ' |
Exploration costs | 2,575 | 6,708 | 22,064 | 28,565 | ' |
Impairment of investment in Minera Santa Cruz S.A. | ' | ' | 95,878 | ' | ' |
Impairment of mineral property interests and property and equipment | 6,287 | 2,902 | 34,016 | 3,081 | ' |
Loss (gain) on sale of assets | -50 | -1,135 | 6,741 | -1,265 | ' |
Operating income (loss) | -8,845 | -10,625 | -166,866 | -56,608 | ' |
Investment in Minera Santa Cruz S.A. | 177,080 | ' | 177,080 | ' | 273,948 |
Mineral property interests | 724,841 | ' | 724,841 | ' | 767,067 |
Total assets | 973,251 | ' | 973,251 | ' | 1,150,937 |
Argentina | ' | ' | ' | ' | ' |
SEGMENTED INFORMATION | ' | ' | ' | ' | ' |
Income on investment in Minera Santa Cruz S.A. (net of amortization) | 2,040 | 11,240 | 252 | 14,968 | ' |
Exploration costs | 631 | 1,539 | 14,110 | 11,369 | ' |
Impairment of investment in Minera Santa Cruz S.A. | ' | ' | 95,878 | ' | ' |
Impairment of mineral property interests and property and equipment | ' | ' | 27,729 | ' | ' |
Loss (gain) on sale of assets | -10 | ' | 316 | ' | ' |
Operating income (loss) | 1,131 | 9,129 | -139,297 | 1,440 | ' |
Investment in Minera Santa Cruz S.A. | 177,080 | ' | 177,080 | ' | 273,948 |
Mineral property interests | 511,363 | ' | 511,363 | ' | 539,092 |
Total assets | 691,579 | ' | 691,579 | ' | 825,047 |
Mexico | ' | ' | ' | ' | ' |
SEGMENTED INFORMATION | ' | ' | ' | ' | ' |
Gold and silver sales | 11,778 | 456 | 35,735 | 456 | ' |
Production costs applicable to sales | 7,907 | 119 | 26,778 | 119 | ' |
Mine development and operating costs | 747 | 2,406 | 1,316 | 8,622 | ' |
Mine construction costs | ' | 4,671 | ' | 13,306 | ' |
Exploration costs | 1,148 | 3,847 | 5,582 | 12,394 | ' |
Operating income (loss) | 393 | -12,650 | -2,627 | -38,733 | ' |
Mineral property interests | 12,093 | ' | 12,093 | ' | 12,707 |
Total assets | 51,272 | ' | 51,272 | ' | 47,359 |
United States | ' | ' | ' | ' | ' |
SEGMENTED INFORMATION | ' | ' | ' | ' | ' |
Exploration costs | 634 | 999 | 2,084 | 3,905 | ' |
Impairment of mineral property interests and property and equipment | 6,287 | ' | 6,287 | ' | ' |
Loss (gain) on sale of assets | -40 | ' | 6,428 | ' | ' |
Operating income (loss) | -8,499 | -4,234 | -17,102 | -7,864 | ' |
Mineral property interests | 201,385 | ' | 201,385 | ' | 215,268 |
Total assets | 205,457 | ' | 205,457 | ' | 220,148 |
Corporate & Other | ' | ' | ' | ' | ' |
SEGMENTED INFORMATION | ' | ' | ' | ' | ' |
Exploration costs | 162 | 323 | 288 | 897 | ' |
Loss (gain) on sale of assets | ' | ' | -3 | ' | ' |
Operating income (loss) | -1,870 | -2,870 | -7,840 | -11,451 | ' |
Total assets | $24,943 | ' | $24,943 | ' | $58,383 |
FAIR_VALUE_ACCOUNTING_Details
FAIR VALUE ACCOUNTING (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Item | Item | Litigation settlement agreement with respect to the Los Azules Copper Project | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Nonrecurring | Nonrecurring | Nonrecurring | ||
TNR | Total | Total | Level 1 | Level 1 | Level 2 | Level 2 | Level 3 | Level 3 | Level 3 | ||||
MSC | MSC | MSC | |||||||||||
Discounted cash flow | Discounted cash flow | Discounted cash flow | |||||||||||
Weighted Average | Weighted Average | Weighted Average | |||||||||||
Argentina | United States | ||||||||||||
Assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | $31,062 | $70,921 | $31,062 | $70,921 | ' | ' | ' | ' | ' |
IVA taxes receivable | 10,129 | 10,129 | 9,150 | ' | 10,129 | 9,150 | ' | ' | 10,129 | 9,150 | ' | ' | ' |
Assets | ' | ' | ' | ' | 41,191 | 80,071 | 31,062 | 70,921 | 10,129 | 9,150 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable and accrued liabilities | ' | ' | ' | ' | 10,041 | 21,235 | 38 | ' | 10,003 | 21,235 | ' | ' | ' |
Litigation settlement liabilities | ' | ' | ' | ' | ' | 3,830 | ' | 3,830 | ' | ' | ' | ' | ' |
Liabilities | ' | ' | ' | ' | $10,041 | $25,065 | $38 | $3,830 | $10,003 | $21,235 | ' | ' | ' |
Shares of common stock required to be issued as part of settlement | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock required to be issued as a part of settlement | ' | 15,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of vendors to which shares of common stock are required to be issued as a part of settlement | 1 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount Rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' |
Long Term Gold Price (in dollars per ounce) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300 | ' | ' |
Long Term Silver Price (in dollars per ounce) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22.75 | ' | ' |
Inflation index (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 1.70% |