Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 05, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | McEwen Mining Inc. | |
Entity Central Index Key | 314,203 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
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 | 274,015,609 | |
Exchangeable Common Stock, Shares Outstanding | 26,514,565 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
REVENUE: | ||||
Gold and silver sales | $ 16,160 | $ 11,637 | $ 39,042 | $ 22,767 |
Total Revenue | 16,160 | 11,637 | 39,042 | 22,767 |
COSTS AND EXPENSES: | ||||
Production costs applicable to sales | 7,288 | 10,900 | 17,742 | 19,427 |
Mine construction costs | 217 | 1,156 | ||
Mine development costs | 163 | 155 | 337 | 1,723 |
Exploration costs | 3,080 | 2,637 | 5,422 | 5,317 |
Property holding costs | 496 | 734 | 1,988 | 2,188 |
General and administrative | 3,277 | 3,213 | 6,485 | 6,440 |
Depreciation | 208 | 229 | 480 | 454 |
Accretion of asset retirement obligation (note 4) | 131 | 108 | 232 | 209 |
Loss (income) on investment in Minera Santa Cruz S.A. net of amortization (note 5) | 2,652 | 2,438 | 2,323 | (4,591) |
Impairment of mineral property interests and property and equipment (note 4) | 28,542 | 120,398 | 28,542 | 120,398 |
Gain on sale of assets | (4) | (18) | (4) | (18) |
Total costs and expenses | 45,833 | 141,011 | 63,547 | 152,703 |
Operating loss | (29,673) | (129,374) | (24,505) | (129,936) |
OTHER INCOME (EXPENSE): | ||||
Net interest and other income | 3,228 | 34 | 3,130 | 109 |
Foreign currency gain (loss) | 8 | 284 | (204) | (299) |
Total other income (expense) | 3,236 | 318 | 2,926 | (190) |
Loss before income taxes | (26,437) | (129,056) | (21,579) | (130,126) |
Income tax recovery (note 9) | 12,321 | 25,034 | 13,484 | 43,991 |
Net loss | (14,116) | (104,022) | (8,095) | (86,135) |
OTHER COMPREHENSIVE (LOSS) INCOME: | ||||
Unrealized (loss) gain on available-for-sale securities, net of taxes | (482) | 2 | (647) | 3 |
Comprehensive loss | $ (14,598) | $ (104,020) | $ (8,742) | $ (86,132) |
Net loss per share (note 10): | ||||
Basic (in dollars per share) | $ (0.05) | $ (0.35) | $ (0.03) | $ (0.29) |
Weighted average common shares outstanding (thousands) (note 10): | ||||
Basic (in shares) | 300,530 | 297,164 | 300,364 | 297,162 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 22,371 | $ 12,380 |
Investments (note 2) | 1,334 | 1,082 |
IVA taxes receivable | 10,455 | 11,739 |
Inventories (note 3) | 13,771 | 12,404 |
Other current assets | 7,532 | 2,096 |
Total current assets | 55,463 | 39,701 |
Mineral property interests (note 4) | 258,625 | 287,812 |
Investment in Minera Santa Cruz S.A. (note 5) | 174,147 | 177,018 |
Property and equipment, net | 17,849 | 17,896 |
Other assets (note 14) | 531 | 531 |
TOTAL ASSETS | 506,615 | 522,958 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 20,219 | 21,654 |
Short-term bank indebtedness (note 6) | 5,764 | |
Current portion of asset retirement obligation (note 4) | 2,485 | 2,427 |
Total current liabilities | 28,468 | 24,081 |
Asset retirement obligation, less current portion (note 4) | 5,572 | 5,044 |
Deferred income tax liability (note 9) | 38,201 | 51,899 |
Deferred lease inducement | 304 | 319 |
Other liabilities | 400 | 400 |
Total liabilities | 72,945 | 81,743 |
Shareholders' equity: | ||
Common stock, no par value, 500,000 shares authorized; Common: 273,381 as of June 30, 2015 and 271,579 shares as of December 31, 2014 issued and outstanding Exchangeable: 27,149 shares as of June 30, 2015 and 28,521 shares as of December 31, 2014 issued and outstanding (note 7) | 1,361,865 | 1,360,668 |
Accumulated deficit | (927,672) | (919,577) |
Accumulated other comprehensive (loss) income | (523) | 124 |
Total shareholders' equity | 433,670 | 441,215 |
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ 506,615 | $ 522,958 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 500,000 | 500,000 |
Common, shares issued | 273,381 | 271,579 |
Common, shares outstanding | 273,381 | 271,579 |
Exchangeable, shares issued | 27,149 | 28,521 |
Exchangeable, shares outstanding | 27,149 | 28,521 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | $ 1,354,696 | $ (295) | $ (607,634) | $ 746,767 |
Balance (in shares) at Dec. 31, 2013 | 297,159,000 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Stock-based compensation | $ 609 | 609 | ||
Exercise of stock options | $ 129 | 129 | ||
Exercise of stock options (in shares) | 61,000 | |||
Unrealized (loss) gain on available-for-sale securities, net of taxes | 3 | 3 | ||
Net loss | (86,135) | (86,135) | ||
Balance at Jun. 30, 2014 | $ 1,355,434 | (292) | (693,769) | 661,373 |
Balance (in shares) at Jun. 30, 2014 | 297,220,000 | |||
Balance at Dec. 31, 2014 | $ 1,360,668 | 124 | (919,577) | 441,215 |
Balance (in shares) at Dec. 31, 2014 | 300,100,000 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Shares issued for settlement of accounts payable | $ 443 | 443 | ||
Shares issued for settlement of accounts payable (in shares) | 430,295 | |||
Stock-based compensation | $ 754 | 754 | ||
Unrealized (loss) gain on available-for-sale securities, net of taxes | (647) | (647) | ||
Net loss | (8,095) | (8,095) | ||
Balance at Jun. 30, 2015 | $ 1,361,865 | $ (523) | $ (927,672) | $ 433,670 |
Balance (in shares) at Jun. 30, 2015 | 300,530,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Cash paid to suppliers and employees | $ (32,379) | $ (37,085) |
Cash received from gold and silver sales | 37,711 | 22,767 |
Dividends received from Minera Santa Cruz S.A. (note 5) | 548 | 7,113 |
Interest received | 87 | 109 |
Cash provided by (used in) operating activities | 5,967 | (7,096) |
Cash flows from investing activities: | ||
Investment in available-for-sale securities (note 2) | (1,114) | |
Additions to property and equipment | (433) | (2,297) |
Decrease to restricted time deposits for reclamation bonding | 367 | |
Proceeds from disposal of property and equipment | 31 | |
Cash used in investing activities | (1,547) | (1,899) |
Cash flows from financing activities: | ||
Short-term bank indebtedness (note 6) | 5,764 | |
Exercise of stock options | 129 | |
Cash provided by financing activities | 5,764 | 129 |
Effect of exchange rate change on cash and cash equivalents | (193) | (306) |
Increase (decrease) in cash and cash equivalents | 9,991 | (9,172) |
Cash and cash equivalents, beginning of period | 12,380 | 24,321 |
Cash and cash equivalents, end of period | 22,371 | 15,149 |
Reconciliation of net loss to cash used in operating activities: | ||
Net loss | (8,095) | (86,135) |
Adjustments to reconcile net income (loss) to from operating activities: | ||
Loss (income) on investment in Minera Santa Cruz S.A. net of amortization | 2,323 | (4,591) |
Impairment of mineral property interests and property and equipment (note 4) | 28,542 | 120,398 |
Gain on sale of assets | (4) | (18) |
Recovery of income taxes | (13,484) | (43,991) |
Stock-based compensation | 754 | 609 |
Depreciation | 480 | 454 |
Accretion of asset retirement obligation | 591 | 209 |
Amortization of mineral property interests and asset retirement obligations | 644 | 626 |
Foreign exchange loss | 193 | 306 |
Change in non-cash working capital items: | ||
Decrease (increase) in IVA taxes receivable, including collections of $4,026 (2014 - $nil) | 1,284 | (2,892) |
Increase in other assets related to operations | (6,802) | (1,624) |
(Decrease) increase in liabilities related to operations | (1,007) | 2,440 |
Dividend received from Minera Santa Cruz S.A. | 548 | 7,113 |
Cash provided by (used in) operating activities | $ 5,967 | $ (7,096) |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
Collection of IVA taxes receivable | $ 4,026 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
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. The Company operates in Argentina, Mexico, and the United States. It owns a 49% interest in Minera Santa Cruz S.A. (“MSC”), owner and operator of the producing San José mine in Santa Cruz, Argentina, which is controlled by the majority owner of the joint venture, Hochschild Mining plc (‘‘Hochschild’’). It also owns the El Gallo 1 Mine in Sinaloa, Mexico. In addition to its operating properties, the Company also holds interests in numerous exploration stage properties and projects in Argentina, Mexico and the United States. 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 Loss for the three and six months ended June 30, 2015 and 2014, the Consolidated Balance Sheets as at June 30, 2015 (unaudited) and December 31, 2014, the unaudited Consolidated Statement of Changes in Shareholders’ Equity for the six months ended June 30, 2015 and 2014, and the unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014, 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 annual report on Form 10-K for the year ended December 31, 2014. 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 Presentation of Financial Statements and Property, Plant and Equipment — Reporting Discontinued Operations and Disclosures of Components of an Entity: In April 2014, Accounting Standards Codification (“ASC”) 205 and ASC 360 guidance were amended to change the requirements for reporting discontinued operations in ASC 205-20. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria in ASC 205-20-45-1E to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; or (3) the component of an entity or group of components of an entity is disposed of other than by sale. The update is effective for the Company’s fiscal year beginning January 1, 2015. The new guidance did not have an impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Presentation of Financial Statements — Going Concern — Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern: In August 2014, ASC 205-40 guidance was amended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this update shall be effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016, with early application permitted. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements. Revenue from Contracts with Customers: In May 2014, ASC 606 was issued related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The standard will be effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that year. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2015 | |
INVESTMENTS | |
INVESTMENTS | NOTE 2 INVESTMENTS During the quarter ended June 30, 2015 , the Company invested $1.1 million of cash in marketable equity securities. As of June 30, 2015, total cost of all marketable equity securities was $1.9 million (December 31, 2014 - $0.7 million). These securities are classified as available-for-sale securities and are recorded at fair value. As at June 30, 2015 , the fair value of these securities was $1.3 million, and as a result the Company recorded a loss, net of tax, of $0.5 million in other comprehensive income. The loss is recorded to an unrealized income and loss account (accumulated other comprehensive income (loss)) that is reported as a separate line item in the shareholders’ equity section of the balance sheet. The gains and losses for available-for-sale securities are not reported on the statement of operations until the securities are sold or if there is an other than temporary decline in fair value below cost, for the three months ended June 30, 2015. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES | |
INVENTORIES | NOTE 3 INVENTORIES Inventories at June 30, 2015 and December 31, 2014 consist of the following: June 30, 2015 December 31, 2014 (in thousands) Ore on leach pads $ $ In-process inventory Stockpiles — Precious metals Materials and supplies Inventories $ $ |
MINERAL PROPERTY INTERESTS AND
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2015 | |
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | |
MINERAL PROPERTY INTEREST AND ASSET RETIREMENT OBLIGATIONS | NOTE 4 MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS Mineral Property Interests The Company conducts a review of potential triggering events for all its mineral projects on a quarterly basis. When events or changes in circumstances indicate that the related carrying amounts may not be recoverable, the Company carries out a review and evaluation of its long-lived assets for impairment, in accordance with its accounting policy. During the quarter ended June 30, 2015, the Company performed a strategic review of its mineral property interests in Nevada. A decision was made to allow certain non-essential claims and portions of claims, included within the Gold Bar Complex and Tonkin Complex, to lapse on the September 1, 2015 renewal date and therefore reduce property holding costs that otherwise would have been incurred in the third quarter of 2015. This resulted in a pre-tax impairment charge of $19.7 million for the Gold Bar project and $8.9 million for the Tonkin Project, and an income tax recovery of $10.0 million recognized in the Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2015. During the second quarter of 2014, the Company recorded an impairment charge of $120.4 million relating to its Los Azules copper exploration project (“Los Azules Project”). The triggering event identified was a recently announced acquisition of a copper project located in Argentina, which shared similarities with the Los Azules Project due to its scale, location, and stage of development. Based on the announcement day value of the similar project, the estimated market value per pound of copper equivalent mineralized material from this transaction was below the carrying value per pound of copper equivalent mineralized material of the Los Azules Project, indicating a potential significant decrease in the market price of the Company’s Los Azules Project, and therefore a requirement to test the Los Azules Project for recoverability. To assist in performing a recoverability test, the Company engaged a third-party valuation firm which determined that the carrying value of the property exceeded its estimated fair value, resulting in an impairment charge of $120.4 million, along with a resulting deferred income tax recovery of $22.5 million, being recorded in the Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2014. Based on the above, impairment changes were recorded on the following mineral property interests for the three and six months ended June 30, 2015 and 2014: Three months ended June 30, Six months ended June 30, Name of Property/Complex Segment 2015 2014 2015 2014 (in thousands) Gold Bar Project Nevada $ $ — $ $ — Tonkin Project Nevada — — Los Azules Copper Project Argentina — — Total impairments $ $ $ $ Asset Retirement Obligations 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. A reconciliation of the Company’s asset retirement obligations for the six months ended June 30, 2015 and for the year ended December 31, 2014 are as follows: Six months ended Year ended June 30, 2015 December 31, 2014 (in thousands) Asset retirement obligation liability, beginning balance $ $ Settlements — ) Accretion of liability Adjustment reflecting updated estimates ) Asset retirement obligation liability, ending balance $ $ As at June 30, 2015, the current portion of the asset retirement obligation was $2.5 million (December 31, 2014 - $2.4 million). Amortization of Mineral Property Interests and Asset Retirement Costs The definition of proven and probable reserves is set forth in the SEC Industry Guide 7. If proven and probable reserves exist at the Company’s properties, the relevant capitalized mineral property interests and asset retirement costs are to be charged to expense based on the units of production method and upon commencement of production. Since the Company has not completed feasibility or other studies sufficient to characterize the mineralized material at El Gallo 1 as proven or probable reserves, the amortization of the capitalized mineral property interests and asset retirement costs are charged to expense based on the straight-line method over the estimated useful life of the mine. For the three and six months ended June 30, 2015, the Company recorded $0.3 million and $0.6 million, respectively (June 30, 2014 $0.3 million and $0.6 million respectively), of amortization expense related to El Gallo 1, which is included in Production Costs Applicable to Sales in the Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2015, of which $0.1 million and $0.1 million, respectively, related to the amortization of capitalized asset retirement costs (June 30, 2014 $0.1 and $0.1 respectively) . |
INVESTMENT IN MINERA SANTA CRUZ
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | 6 Months Ended |
Jun. 30, 2015 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | NOTE 5 INVESTMENT IN MINERA SANTA CRUZ S.A. (“MSC”) — SAN JOSÉ MINE The Company’s 49% attributable share of operations from its investment in MSC was a loss of $2.7 million and $2.3 million for the three and six months ended June 30, 2015, respectively. This compares to a loss of $2.4 million and income of $4.6 million for the three and six months ended June 30, 2014, respectively. These amounts are net of the amortization of the fair value increments arising from the purchase price allocation and related income tax expense. Included in the income tax recovery is the impact of fluctuations in the exchange rate between the Argentine peso and the U.S. dollar on the peso-denominated deferred tax liability associated with the investment in MSC recorded as part of the acquisition of Minera Andes. As a devaluation of the Argentine peso relative to the U.S. dollar results in a recovery of deferred income taxes, the impact has been a reduction in the loss from its investment in MSC for the three and six months ended June 30, 2015. During the three and six months ended June 30, 2015, the Company received $0.5 million in dividends from MSC, compared to $3.2 million and $7.1 million during the same period in 2014. The Company received an additional dividend payment of 8.1 million Argentine pesos in July 2014, equivalent to approximately $1.0 million based on foreign exchange rates at the date of the dividend receipt. Changes in the Company’s investment in MSC for the six months ended June 30, 2015 and year ended December 31, 2014 are as follows: Six months ended Year ended June 30, 2015 December 31, 2014 (in thousands) Investment in MSC, beginning balance $ $ Attributable net (loss) income from MSC ) ) Amortization of fair value increments ) ) Income tax recovery Dividends received ) ) Impairment of investment in MSC — ) Investment in MSC, ending balance $ $ A summary of the operating results from MSC for the three and six months ended June 30, 2015 and 2014 is as follows: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) (in thousands) Minera Santa Cruz S.A. (100%) Net sales $ $ $ $ Production costs applicable to sales ) ) ) ) Net (loss) income ) ) ) Portion attributable to McEwen Mining Inc. (49%) Net (loss) income $ ) $ ) $ ) $ Amortization of fair value increments ) ) ) ) Income tax recovery (Loss) income on investment in MSC, net of amortization $ ) $ ) $ ) $ As at June 30, 2015, MSC had current assets of $97.9 million, total assets of $509.5 million, current liabilities of $46.0 million and total liabilities of $154.0 million on an unaudited basis. These balances include the adjustments to fair value and amortization of the fair value increments arising from the purchase price allocation, net of impairment charges recorded in the second quarter of 2013 and fourth quarter of 2014. Excluding the fair value increments from the purchase price allocation, net of impairment charges, MSC had current assets of $96.5 million, total assets of $292.7 million, current liabilities of $48.4 million, and total liabilities of $85.7 million as at June 30, 2015. |
SHORT-TERM BANK INDEBTEDNESS
SHORT-TERM BANK INDEBTEDNESS | 6 Months Ended |
Jun. 30, 2015 | |
SHORT-TERM BANK INDEBTEDNESS | |
SHORT-TERM BANK INDEBTEDNESS | NOTE 6 SHORT-TERM BANK INDEBTEDNESS On May 29, 2015, Compañía Minera Pangea, a wholly-owned subsidiary of the Company (“CMP”), finalized a line of credit agreement with Banco Nacional de Comercio Exterior (“Banco Nacional”), for an amount up to 90,000,000 Mexican pesos (approximately $5.9 million as of May 29, 2015), which is secured by CMP’s IVA receivable balance. The line of credit was available for six (6) months starting April 17, 2015. The applicable interest rate is equal to: (i) two and one-half percent (2.5%) per annum plus (ii) the 91 day TIIE (Interbank Equilibrium Interest Rate) rate, as published by the Bank of Mexico, payable quarterly. As of June 30, 2015, the 91 day TIIE rate was 3.31%. Upon signing the agreement, CMP paid a 1% commission on the total value of the simple credit agreement to Banco Nacional. During the period ended June 30, 2015 CMP drew down the entire 90,000,000 Mexican pesos, equivalent to $5.8 million as of June 30, 2015 from the line of credit, and realized a foreign exchange gain of approximately $0.1 million during the period. The Company has guaranteed CMP’s obligations under the line of credit. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2015 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 7 SHAREHOLDERS’ EQUITY During the six months ended June 30, 2015, 1.4 million exchangeable shares were converted into common stock (2014 – 1.2 million). At June 30, 2015, total outstanding exchangeable shares not exchanged and not owned by the Company or its subsidiaries totaled 27.1 million (December 31, 2014 – 28.5 million). During the six months ended June 30, 2015, there were no shares of common stock issued upon exercise of stock options under the Equity Incentive Plan. This compares to approximately 60,300 shares of common stock issued upon exercise of stock options during the same period of 2014, at a weighted average exercise price of $2.14 per share for proceeds of $0.1 million. During the six months ended June 30, 2015, the Company issued 430,295 shares of common stock under an agreement with one of its mining contractors to settle parts of its accounts payable for services rendered above a defined tonnage threshold. The fair value of the common stock at the time of issuance was $0.4 million. The agreement with this mining contractor expired and was renegotiated during the period. Under the revised agreement, the Company can no longer make share payments and instead is required to pay in cash. On June 18, 2015, the Board of Directors declared an annual return of capital of $0.01 per share of common stock, payable semi-annually. The first semi-annual return of capital payment of $0.005 is payable on August 17, 2015 to shareholders of record as of the close of business on July 31, 2015. Return of capital will be paid to shareholders of the Company’s shares of common stock and to holders of exchangeable shares. The second installment will occur in February 2016. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 8 STOCK-BASED COMPENSATION During the six months ended June 30, 2015, the Company granted stock options to certain employees for an aggregate of 0.1 million shares of common stock at a weighted average exercise price of $1.07 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 comparable period in 2014, no stock options were granted to employees or directors. The principal assumptions used in applying the Black-Scholes option pricing model for these awards were as follows: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Risk-free interest rate % — % — Dividend yield % — % — Volatility factor of the expected market price of common stock % — % — Weighted-average expected life of option — — Weighted-average grant date fair value $ — $ — During the three and six months ended June 30, 2015, the Company recorded stock option expense of $0.2 million and $0.8 million respectively. This compares to $0.2 million and $0.6 million for the three and six months ended June 30, 2014. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2015 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9 INCOME TAXES The Company’s income tax expense differs from the amount computed by applying the U.S. federal and state statutory corporate income tax rate of 35% to losses before taxes primarily as a result of valuation allowances being applied to losses, changes in the deferred tax liability associated with mineral property interests acquired in the Minera Andes acquisition and changes due to impairment of mineral property interests. The deferred tax liability is impacted by fluctuations in the foreign exchange rate between the Argentine peso and U.S. dollar. For the three and six months ended June 30, 2015, the Company recorded an income tax recovery of $0.8 million and $2.0 million, respectively, as a result of the Argentine peso devaluation, compared to $2.5 million and $21.4 million for the three and six months ended June 30, 2014, respectively. For the three and six months ended June 30, 2015, the Company recorded an income tax recovery of $10.0 million as a result of impairment of mineral property interests, described in Note 4, Mineral Property Interests and Asset Retirement Obligations. |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2015 | |
LOSS PER SHARE | |
LOSS PER SHARE | NOTE 10 LOSS PER SHARE Basic net loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per 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 weighted average number of common shares and the computations for basic loss per share for the three and six months ended June 30, 2015 and 2014: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands, except per share) Net loss $ ) $ ) $ ) $ ) Weighted average number of common shares Loss per common share $ ) $ ) $ ) $ ) For the three months ended June 30, 2015, options to purchase 4.4 million shares of common stock outstanding at June 30, 2015 at an average exercise price of $3.36 per share were not included in the computation of diluted weighted average shares because the exercise price exceeded the average price of the Company’s common stock for the three months ended June 30, 2015. Outstanding options to purchase 0.05 million (June 30, 2014 – 0.9 million) shares of common stock were not included in the computation of diluted weighed average shares in the three months ended June 30, 2015 and 2014, respectively, because their effect would have been anti-dilutive. For the six months ended June 30, 2015, options to purchase 4.4 million shares of common stock outstanding at June 30, 2015 at an average exercise price of $3.49 per share were not included in the computation of diluted weighted average shares because the exercise price exceeded the average price of the Company’s common stock for the six months ended June 30, 2015. Other outstanding options to purchase 0.08 million (June 30, 2014 – 1.1 million) shares of common stock were not included in the computation of diluted weighed average shares in the three months ended June 30, 2015 and 2014, respectively, because their effect would have been anti-dilutive. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2015 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS For the three and six months ended June 30, 2015, the Company incurred and paid $nil and $16,137, respectively, to an entity affiliated with the Company’s Chairman and Chief Executive Officer for the use of an aircraft, compared to $18,038 and $38,518 for the three and six months ended June 30, 2014, respectively. |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | 6 Months Ended |
Jun. 30, 2015 | |
SEGMENTED INFORMATION | |
SEGMENTED INFORMATION | NOTE 12 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 operating segments as of, and for the three and six months ended June 30, 2015 and 2014 is as follows: Corporate Argentina Mexico U.S. & Other Total (in thousands) For the three months ended June 30, 2015 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — — — — — Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment — — ) — ) Loss on investment in Minera Santa Cruz S.A. (net of amortization) ) — — — ) Operating (loss) income ) ) ) ) For the six months ended June 30, 2015 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — — — — — Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment — — ) — ) Income on investment in Minera Santa Cruz S.A. (net of amortization) ) — — — ) Operating (loss) income ) ) ) ) As at June 30, 2015 Investment in Minera Santa Cruz S.A. — — — Mineral property interests — Total assets Corporate Argentina Mexico U.S. & Other Total (in thousands) For the three months ended June 30, 2014 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — ) — — ) Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment ) — — — ) Loss on investment in Minera Santa Cruz S.A. (net of amortization) ) — — — ) Operating loss ) ) ) ) ) For the six months ended June 30, 2014 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — ) — — ) Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment ) — — — ) Income on investment in Minera Santa Cruz S.A. (net of amortization) — — — Operating loss ) ) ) ) ) As at June 30, 2014 Investment in Minera Santa Cruz S.A. — — — Mineral property interests — Total assets |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 6 Months Ended |
Jun. 30, 2015 | |
FAIR VALUE ACCOUNTING | |
FAIR VALUE ACCOUNTING | NOTE 13 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). Assets and liabilities measured at fair value on a recurring basis The following table identifies the fair value of the Company’s financial assets and liabilities as reported in the Consolidated Balance Sheets at June 30, 2015 and December 31, 2014 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 at June 30, 2015 Total Level 1 Level 2 Level 3 (in thousands) Assets: Investments $ $ $ — $ — $ $ $ — $ — Fair Value as at December 31, 2014 Total Level 1 Level 2 Level 3 (in thousands) Assets: Investments $ $ $ — $ — $ $ $ — $ — Liabilities: Accounts payable and accrued liabilities — — $ $ $ — $ — The Company’s investments are marketable equity securities which are exchange traded, and which are valued using quoted market prices in active markets and are classified within Level 1 of the fair value hierarchy. The fair value of the investments is calculated as the quoted market price of the marketable equity security multiplied by the number of shares held by the Company. As at December 31, 2014, accounts payable included an accrual of $0.4 million for the fair value of accounts payable that were required to be settled with approximately 319,640 shares of the Company’s common stock. The Company settled this payable during the six month period ended in June 30, 2015 as discussed in Note 7, Shareholders’ Equity . The fair value of other financial assets and liabilities approximate their carrying values due to their short-term nature and historically negligible credit losses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 COMMITMENTS AND CONTINGENCIES Surety Bonds As part of its ongoing business and operations, the Company is required to provide bonding for its environmental reclamation obligations in the United States, as discussed in Note 4, Mineral Properties and Asset Retirement Obligations . These surety bonds are available for draw down in the event the Company does not perform its reclamation obligations. When the specific reclamation requirements are met, the beneficiary of the surety bonds will cancel and/or return the instrument to the issuing entity. The Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements, through existing or alternative means, as they arise. As at June 30, 2015, there were $4.8 million of outstanding surety bonds (December 31, 2014 - $4.8 million). The annual financing fees are 1.5% of the value of the surety bonds, with a required initial deposit of 10% ($0.5 million), which is included in Other Assets in the Consolidated Balance Sheet. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2015 | |
SUBSEQUENT EVENT. | |
SUBSEQUENT EVENTS | NOTE 15 SUBSEQUENT EVENT On July 16, 2015, the Company received reimbursement for approximately 80% of the fair value of the loss due to the robbery of gold concentrate that occurred on April 7, 2015 at the El Gallo 1 Mine. The amount of insurance proceeds receivable has been accrued at June 30, 2015 under Other Current Assets and recorded in the Consolidated Statements of Operations and Comprehensive Loss as a credit to cost of sales for the cost incurred in producing the ounces stolen, and the excess of the insurance proceeds over the cost of production has been recorded in Net Interest and Other Income . |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES | |
Schedule of inventories | June 30, 2015 December 31, 2014 (in thousands) Ore on leach pads $ $ In-process inventory Stockpiles — Precious metals Materials and supplies Inventories $ $ |
MINERAL PROPERTY INTERESTS AN24
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | |
Schedule of impairment charges on mineral property | Three months ended June 30, Six months ended June 30, Name of Property/Complex Segment 2015 2014 2015 2014 (in thousands) Gold Bar Project Nevada $ $ — $ $ — Tonkin Project Nevada — — Los Azules Copper Project Argentina — — Total impairments $ $ $ $ |
Schedule of reconciliation of asset retirement obligations | Six months ended Year ended June 30, 2015 December 31, 2014 (in thousands) Asset retirement obligation liability, beginning balance $ $ Settlements — ) Accretion of liability Adjustment reflecting updated estimates ) Asset retirement obligation liability, ending balance $ $ |
INVESTMENT IN MINERA SANTA CR25
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |
Schedule of change in the entity's investment in MSC | Six months ended Year ended June 30, 2015 December 31, 2014 (in thousands) Investment in MSC, beginning balance $ $ Attributable net (loss) income from MSC ) ) Amortization of fair value increments ) ) Income tax recovery Dividends received ) ) Impairment of investment in MSC — ) Investment in MSC, ending balance $ $ |
Summary of MSC's financial information from operations | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands) (in thousands) Minera Santa Cruz S.A. (100%) Net sales $ $ $ $ Production costs applicable to sales ) ) ) ) Net (loss) income ) ) ) Portion attributable to McEwen Mining Inc. (49%) Net (loss) income $ ) $ ) $ ) $ Amortization of fair value increments ) ) ) ) Income tax recovery (Loss) income on investment in MSC, net of amortization $ ) $ ) $ ) $ |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION | |
Schedule of weighted-average assumptions used for estimation of the fair value of the options granted under the Plan at the date of grant, using the Black-Scholes Option Valuation Model | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Risk-free interest rate % — % — Dividend yield % — % — Volatility factor of the expected market price of common stock % — % — Weighted-average expected life of option — — Weighted-average grant date fair value $ — $ — |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
LOSS PER SHARE | |
Schedule of reconciliation of the basic weighted average number of common shares and the computations for basic loss per share | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 (in thousands, except per share) Net loss $ ) $ ) $ ) $ ) Weighted average number of common shares Loss per common share $ ) $ ) $ ) $ ) |
SEGMENTED INFORMATION (Tables)
SEGMENTED INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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 June 30, 2015 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — — — — — Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment — — ) — ) Loss on investment in Minera Santa Cruz S.A. (net of amortization) ) — — — ) Operating (loss) income ) ) ) ) For the six months ended June 30, 2015 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — — — — — Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment — — ) — ) Income on investment in Minera Santa Cruz S.A. (net of amortization) ) — — — ) Operating (loss) income ) ) ) ) As at June 30, 2015 Investment in Minera Santa Cruz S.A. — — — Mineral property interests — Total assets Corporate Argentina Mexico U.S. & Other Total (in thousands) For the three months ended June 30, 2014 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — ) — — ) Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment ) — — — ) Loss on investment in Minera Santa Cruz S.A. (net of amortization) ) — — — ) Operating loss ) ) ) ) ) For the six months ended June 30, 2014 Gold and silver sales $ — $ $ — $ — $ Production costs applicable to sales — ) — — ) Mine construction costs — ) — — ) Mine development costs — ) — — ) Exploration costs ) ) ) ) ) Impairment of mineral property interests and property and equipment ) — — — ) Income on investment in Minera Santa Cruz S.A. (net of amortization) — — — Operating loss ) ) ) ) ) As at June 30, 2014 Investment in Minera Santa Cruz S.A. — — — Mineral property interests — Total assets |
FAIR VALUE ACCOUNTING (Tables)
FAIR VALUE ACCOUNTING (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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 at June 30, 2015 Total Level 1 Level 2 Level 3 (in thousands) Assets: Investments $ $ $ — $ — $ $ $ — $ — Fair Value as at December 31, 2014 Total Level 1 Level 2 Level 3 (in thousands) Assets: Investments $ $ $ — $ — $ $ $ — $ — Liabilities: Accounts payable and accrued liabilities — — $ $ $ — $ — |
NATURE OF OPERATIONS AND SUMM30
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jun. 30, 2015 | Jun. 30, 2014 |
MSC | ||
THE COMPANY | ||
Ownership interest (as a percent) | 49.00% | 49.00% |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
INVESTMENTS | ||
Cash investments in marketable equity securities | $ 1,100 | |
Cost of purchase of marketable equity securities | 1,900 | $ 700 |
Market value of available-sale-securities | 1,334 | $ 1,082 |
Unrealized loss on available-for-sale securities | $ 500 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
INVENTORIES | ||
Ore on leach pads | $ 6,846 | $ 6,221 |
In-process inventory | 3,051 | 2,302 |
Stockpiles | 841 | |
Precious metals | 1,762 | 2,403 |
Materials and supplies | 1,271 | 1,478 |
Inventories | $ 13,771 | $ 12,404 |
MINERAL PROPERTY INTERESTS AN33
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015USD ($)item | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)item | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Mineral Property Interests | |||||
Impairment charges | $ 28,542 | $ 120,398 | $ 28,542 | $ 120,398 | |
Recovery of deferred income tax | 10,000 | 10,000 | |||
Income tax recovery | (12,321) | (25,034) | (13,484) | (43,991) | |
Changes in the asset retirement obligations | |||||
Amortization of mineral property interests and asset retirement obligations | 644 | 626 | |||
Asset retirement obligation liability, beginning balance | 7,471 | 7,247 | $ 7,247 | ||
Settlements | (52) | ||||
Accretion of liability | 131 | 108 | 232 | 209 | 407 |
Adjustment reflecting updated estimates | 354 | (131) | |||
Asset retirement obligation liability, ending balance | 8,057 | 8,057 | 7,471 | ||
Current portion of the asset retirement obligation | 2,485 | 2,485 | 2,427 | ||
MSC | |||||
Mineral Property Interests | |||||
Income tax recovery | 2,240 | 1,182 | 4,652 | 7,883 | $ 10,503 |
Gold Bar Project | Nevada | |||||
Mineral Property Interests | |||||
Impairment charges | 19,686 | 19,686 | |||
Tonkin Project | Nevada | |||||
Mineral Property Interests | |||||
Impairment charges | 8,856 | 8,856 | |||
Los Azules Copper Project | |||||
Mineral Property Interests | |||||
Impairment charges | 120,400 | 120,400 | |||
Recovery of deferred income tax | 22,500 | 22,500 | |||
Income tax recovery | $ 10,000 | $ 10,000 | |||
Los Azules Copper Project | Argentina | |||||
Mineral Property Interests | |||||
Impairment charges | 120,398 | 120,398 | |||
Tonkin property and El Gallo 1 mine portion of the El Gallo Complex | |||||
Changes in the asset retirement obligations | |||||
Number of most significant properties subject to reclamation obligations | item | 2 | 2 | |||
El Gallo mine | |||||
Changes in the asset retirement obligations | |||||
Amortization of mineral property interests and asset retirement obligations | $ 300 | 300 | $ 600 | 600 | |
Amortization of capitalized asset retirement costs | $ 100 | $ 100 | $ 100 | $ 100 |
INVESTMENT IN MINERA SANTA CR34
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Details) $ in Thousands, ARS in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2014ARS | Jul. 31, 2014USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Dividends received | $ 548 | $ 7,113 | |||
MSC | |||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Ownership interest (as a percent) | 49.00% | 49.00% | 49.00% | ||
Dividends received | ARS 8.1 | $ 1,000 | $ 3,200 | $ 500 | $ 7,100 |
INVESTMENT IN MINERA SANTA CR35
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Change in the investment in MSC | |||||
Investment in MSC, beginning balance | $ 177,018 | ||||
Income tax recovery | $ (12,321) | $ (25,034) | (13,484) | $ (43,991) | |
Investment in MSC, ending balance | 174,147 | 210,425 | 174,147 | 210,425 | $ 177,018 |
MSC | |||||
Change in the investment in MSC | |||||
Investment in MSC, beginning balance | 177,018 | 212,947 | 212,947 | ||
Attributable net (loss) income from MSC | (1,491) | (191) | (887) | 2,838 | (2,597) |
Amortization of fair value increments | (3,401) | (3,429) | (6,088) | (6,130) | (13,190) |
Income tax recovery | 2,240 | $ 1,182 | 4,652 | $ 7,883 | 10,503 |
Dividends received | (548) | (9,483) | |||
Impairment of investment in MSC | (21,162) | ||||
Investment in MSC, ending balance | $ 174,147 | $ 174,147 | $ 177,018 |
INVESTMENT IN MINERA SANTA CR36
INVESTMENT IN MINERA SANTA CRUZ S.A. (''MSC'') - SAN JOSE MINE (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Income tax recovery | $ (12,321) | $ (25,034) | $ (13,484) | $ (43,991) | |
(Loss) income on investment in MSC, net of amortization | $ (2,652) | $ (2,438) | $ (2,323) | $ 4,591 | |
MSC | |||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||
Net sales percentage | 100.00% | 100.00% | 100.00% | 100.00% | |
Net sales | $ 49,858 | $ 53,234 | $ 95,749 | $ 110,123 | |
Production costs applicable to sales | (41,310) | (41,847) | (78,173) | (81,484) | |
Net (loss) income | $ (3,042) | $ (390) | $ (1,810) | $ 5,792 | |
Ownership interest (as a percent) | 49.00% | 49.00% | 49.00% | 49.00% | |
Net (loss) income | $ (1,491) | $ (191) | $ (887) | $ 2,838 | $ (2,597) |
Amortization of fair value increments | (3,401) | (3,429) | (6,088) | (6,130) | (13,190) |
Income tax recovery | 2,240 | 1,182 | 4,652 | 7,883 | $ 10,503 |
(Loss) income on investment in MSC, net of amortization | $ (2,652) | $ (2,438) | $ (2,323) | $ 4,591 |
INVESTMENT IN MINERA SANTA CR37
INVESTMENT IN MINERA SANTA CRUZ S.A. (''MSC'') - SAN JOSE MINE (Details 4) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Current assets | $ 55,463 | $ 39,701 | |
Total assets | 506,615 | 522,958 | $ 796,270 |
Current liabilities | 28,468 | 24,081 | |
Total liabilities | 72,945 | $ 81,743 | |
MSC | |||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Current assets | 97,900 | ||
Total assets | 509,500 | ||
Current liabilities | 46,000 | ||
Total liabilities | 154,000 | ||
MSC | Current Period Values Excluding Fair Value Increments And Impairment Charge | |||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Current assets | 96,500 | ||
Total assets | 292,700 | ||
Current liabilities | 48,400 | ||
Total liabilities | $ 85,700 |
SHORT-TERM BANK INDEBTEDNESS (D
SHORT-TERM BANK INDEBTEDNESS (Details) - Line of Credit. - Secured Debt $ in Millions | May. 29, 2015MXN | Jun. 30, 2015USD ($) | Jun. 30, 2015MXN | Jun. 30, 2015USD ($) | May. 29, 2015USD ($) |
SHORT TERM BANK INDEBTEDNESS | |||||
Maximum borrowing amount | MXN 90,000,000 | MXN 90,000,000 | $ 5.8 | $ 5.9 | |
Foreign exchange gain | $ 0.1 | ||||
Term of line of credit | 6 months | ||||
Applicable interest rate (as a percent) | 2.50% | ||||
Commission fee (as a percent) | 1.00% | ||||
TIIE (Interbank Equilibrium Interest Rate) | |||||
SHORT TERM BANK INDEBTEDNESS | |||||
Interest rate basis | 91 day TIIE (Interbank Equilibrium Interest Rate) | 91 day TIIE rate | |||
Stated interest rate (as a percent) | 3.31% | 3.31% |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | Jun. 18, 2015$ / shares | Jun. 30, 2015USD ($)item$ / sharesshares | Jun. 30, 2014USD ($)shares | Jul. 31, 2015$ / shares | Dec. 31, 2014shares |
Exchangeable shares converted into common stock | 1,400,000 | 1,200,000 | |||
Exchangeable, shares outstanding | 27,100,000 | 28,500,000 | |||
Common stock issued | 273,381,000 | 271,579,000 | |||
Proceed from exercised stock options | $ | $ 129 | ||||
Number of mining contractors with which the entity has entered into an agreement | item | 1 | ||||
Fair Value of common stock at issuance | $ | $ 443 | ||||
Common Stock | |||||
Common stock issued | 0 | ||||
Shares of common stock issued upon exercise of stock options | 61,000 | ||||
Weighted average exercise price of stock options (in dollars per share) | $ / shares | $ 2.14 | ||||
Shares issued for settlement of accounts payable (in shares) | 430,295 | ||||
Annual return of capital declared (in dollars per share) | $ / shares | $ 0.01 | ||||
First semi-annual return of capital payable (in dollars per share) | $ / shares | $ 0.005 | ||||
Fair Value of common stock at issuance | $ | $ 443 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
STOCK BASED COMPENSATION | ||||
Stock option expense | $ 0.2 | $ 0.2 | $ 0.8 | $ 0.6 |
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | ||||
Risk-free interest rate (as a percent) | 1.12% | 1.10% | ||
Dividend yield (as a percent) | 0.00% | 0.00% | ||
Volatility factor of the expected market price of common stock (as a percent) | 72.90% | 74.08% | ||
Weighted-average expected life of option | 3 years 6 months | 3 years 6 months | ||
Weighted-average grant date fair value (in dollars per share) | $ 0.58 | $ 0.56 | ||
Certain employees and directors | ||||
STOCK BASED COMPENSATION | ||||
Stock options granted (in shares) | 0.1 | 0 | 0.1 | 0 |
Exercise price of options granted (in dollars per share) | $ 1.07 | $ 1.07 | ||
Vesting period of options | 3 years | 3 years | ||
Exercisable period of options | 5 years | 5 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
INCOME TAXES | ||||
U.S. federal and state statutory corporate income tax rate (as a percent) | 35.00% | |||
Recovery of income taxes related to Argentine peso devaluation | $ 0.8 | $ 2.5 | $ 2 | $ 21.4 |
Deferred Income Tax on Impairment of Mineral Properties | $ 10 | $ 10 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
LOSS PER SHARE | ||||
Net income (loss) | $ (14,116) | $ (104,022) | $ (8,095) | $ (86,135) |
Weighted average number of common shares | 300,530 | 297,164 | 300,364 | 297,162 |
Loss per common share | $ (0.05) | $ (0.35) | $ (0.03) | $ (0.29) |
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Options outstanding not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | 4,400 | 4,400 | ||
Average exercise price of options outstanding (in dollars per share) | $ 3.36 | $ 3.49 | ||
Other options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Options outstanding not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | 50 | 900 | 80 | 1,100 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Entity Affiliated With Related Party | Chairman and Chief Executive Officer | |||
RELATED PARTY TRANSACTIONS | |||
Amount of expenses incurred and paid | $ 18,038 | $ 16,137 | $ 38,518 |
SEGMENTED INFORMATION (Details)
SEGMENTED INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Operating Segment Reporting | |||||
Gold and silver sales | $ 16,160 | $ 11,637 | $ 39,042 | $ 22,767 | |
Production costs applicable to sales | (7,288) | (10,900) | (17,742) | (19,427) | |
Mine construction costs | (217) | (1,156) | |||
Mine development costs | (163) | (155) | (337) | (1,723) | |
Exploration costs | (3,080) | (2,637) | (5,422) | (5,317) | |
Impairment of mineral property interests and property and equipment | (28,542) | (120,398) | (28,542) | (120,398) | |
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (2,652) | (2,438) | (2,323) | 4,591 | |
Operating (loss) income | (29,673) | (129,374) | (24,505) | (129,936) | |
Investment in Minera Santa Cruz S.A. | 174,147 | 210,425 | 174,147 | 210,425 | $ 177,018 |
Mineral property interests | 258,625 | 521,884 | 258,625 | 521,884 | 287,812 |
Total assets | 506,615 | 796,270 | 506,615 | 796,270 | $ 522,958 |
Argentina | |||||
Operating Segment Reporting | |||||
Exploration costs | (659) | (249) | (922) | (750) | |
Impairment of mineral property interests and property and equipment | (120,398) | (120,398) | |||
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (2,652) | (2,438) | (2,323) | 4,591 | |
Operating (loss) income | (3,634) | (123,817) | (3,853) | (117,559) | |
Investment in Minera Santa Cruz S.A. | 174,147 | 210,425 | 174,147 | 210,425 | |
Mineral property interests | 202,889 | 337,805 | 202,889 | 337,805 | |
Total assets | 379,987 | 551,324 | 379,987 | 551,324 | |
Mexico | |||||
Operating Segment Reporting | |||||
Gold and silver sales | 16,160 | 11,637 | 39,042 | 22,767 | |
Production costs applicable to sales | (7,288) | (10,900) | (17,742) | (19,427) | |
Mine construction costs | (217) | (1,156) | |||
Mine development costs | (163) | (155) | (337) | (1,723) | |
Exploration costs | (1,275) | (1,488) | (2,874) | (2,876) | |
Operating (loss) income | 5,863 | (2,150) | 14,210 | (5,198) | |
Mineral property interests | 10,051 | 11,341 | 10,051 | 11,341 | |
Total assets | 67,946 | 59,649 | 67,946 | 59,649 | |
United States | |||||
Operating Segment Reporting | |||||
Exploration costs | (1,065) | (831) | (1,454) | (1,517) | |
Impairment of mineral property interests and property and equipment | (28,542) | (28,542) | |||
Operating (loss) income | (29,846) | (1,025) | (30,527) | (2,454) | |
Mineral property interests | 45,685 | 172,738 | 45,685 | 172,738 | |
Total assets | 46,435 | 176,415 | 46,435 | 176,415 | |
Corporate & Other | |||||
Operating Segment Reporting | |||||
Exploration costs | (81) | (69) | (172) | (174) | |
Operating (loss) income | (2,056) | (2,382) | (4,335) | (4,725) | |
Total assets | $ 12,247 | $ 8,882 | $ 12,247 | $ 8,882 |
FAIR VALUE ACCOUNTING (Details)
FAIR VALUE ACCOUNTING (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Jun. 30, 2015 | |
Liabilities: | ||
Shares of common stock required to be issued as part of settlement | 319,640 | |
Recurring | Total | ||
Assets: | ||
Investments | $ 1,082 | $ 1,334 |
Assets | 1,082 | 1,334 |
Liabilities: | ||
Accounts payable and accrued liabilities | 355 | |
Liabilities | 355 | |
Recurring | Level 1 | ||
Assets: | ||
Investments | 1,082 | 1,334 |
Assets | 1,082 | $ 1,334 |
Liabilities: | ||
Accounts payable and accrued liabilities | 355 | |
Liabilities | $ 355 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES. | ||
Outstanding surety bonds | $ 4.8 | $ 4.8 |
Percentage of annual fees on surety bonds | 1.50% | |
Percentage of upfront deposit on surety bonds | 10.00% | |
Surety bonds upfront deposit amount | $ 0.5 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | Jul. 16, 2015 |
Subsequent Event | |
Subsequent Event | |
Percentage of fair value of loss due to robbery of gold concentrate reimbursed | 80.00% |