Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | McEwen Mining Inc. | |
Entity Central Index Key | 314,203 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 337,086,060 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | |
REVENUE: | ||
Total Revenue | $ 41,285 | $ 14,833 |
COSTS AND EXPENSES: | ||
Property holding costs | 1,411 | 1,188 |
General and administrative costs | 5,187 | 4,293 |
Loss (income) from investment in Minera Santa Cruz S.A., net of amortization (note 5) | 212 | (190) |
Depreciation | 360 | 327 |
Accretion of asset reclamation obligations (note 6) | 294 | 105 |
Total costs and expenses | 45,692 | 22,266 |
Operating loss | (4,407) | (7,433) |
OTHER (EXPENSE) INCOME: | ||
Interest and other expense | (134) | (68) |
Gain on sale of assets | 11 | |
Loss on sale of marketable equity securities (note 2) | (734) | |
Unrealized fair value loss on marketable equity securities (note 2) | (1,137) | |
Unrealized (loss) gain on derivatives (note 2) | (864) | 1,791 |
Foreign currency gain | 927 | 25 |
Total other (expense) income | (1,942) | 1,759 |
Loss before income and mining taxes | (6,349) | (5,674) |
Income and mining tax recovery (note 7) | 1,138 | 2,656 |
Net loss | (5,211) | (3,018) |
OTHER COMPREHENSIVE (LOSS) INCOME: | ||
Unrealized gain on marketable equity securities, net of taxes | 3,875 | |
Comprehensive (loss) income | $ (5,211) | $ 857 |
Net loss per share (note 10): | ||
Basic (in dollars per share) | $ / shares | $ (0.02) | $ (0.01) |
Diluted (in dollars per share) | $ / shares | $ (0.02) | $ (0.01) |
Weighted average common shares outstanding (thousands) (note 10): | ||
Basic (in shares) | shares | 337,062 | 299,575 |
Diluted (in shares) | shares | 337,062 | 299,575 |
Shareholders' distribution declared per common share (note 8) | $ / shares | 0.005 | 0.005 |
Gold and silver sales | ||
REVENUE: | ||
Total Revenue | $ 41,041 | $ 14,833 |
Other revenue | ||
REVENUE: | ||
Total Revenue | 244 | |
Production costs applicable to sales | ||
COSTS AND EXPENSES: | ||
Cost of goods and services sold | 26,394 | 6,984 |
Mine development costs | ||
COSTS AND EXPENSES: | ||
Cost of goods and services sold | 380 | 1,115 |
Exploration costs | ||
COSTS AND EXPENSES: | ||
Cost of goods and services sold | $ 11,454 | $ 8,444 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 29,904 | $ 27,153 |
Investments (note 2) | 2,573 | 7,971 |
Value added taxes receivable | 5,099 | 5,250 |
Inventories (note 3) | 29,051 | 31,951 |
Restricted cash (note 16) | 8,837 | 10,000 |
Other current assets | 4,161 | 4,539 |
Total current assets | 79,625 | 86,864 |
Mineral property interests, net (note 4) | 296,034 | 293,437 |
Plant and equipment, mine development and construction in progress, net | 57,828 | 51,046 |
Investment in Minera Santa Cruz S.A. (note 5) | 145,001 | 150,064 |
Other assets (note 3 and note 14) | 9,659 | 10,718 |
TOTAL ASSETS | 588,147 | 592,129 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 38,268 | 34,880 |
Flow-through share premium (note 8) | 1,000 | 1,643 |
Current portion of capital lease liabilities (note 15) | 321 | 470 |
Current portion of asset retirement obligation (note 6) | 743 | 646 |
Total current liabilities | 40,332 | 37,639 |
Asset retirement obligation, less current portion (note 6) | 24,399 | 24,076 |
Deferred income and mining tax liability (note 7) | 8,176 | 8,430 |
Capital lease liabilities, less current portion (note 15) | 40 | 81 |
Other liabilities | 581 | 630 |
Total liabilities | 73,528 | 70,856 |
Shareholders’ equity: | ||
Common stock, no par value, 500,000 shares authorized (in thousands); Common: 337,086 as of March 31, 2018 and 337,051 as of December 31, 2017 issued and outstanding (in thousands) (note 8) | 1,442,613 | 1,444,056 |
Warrants (note 8) | 3,823 | 3,823 |
Accumulated deficit | (931,817) | (929,606) |
Accumulated other comprehensive income | 3,000 | |
Total shareholders' equity | 514,619 | 521,273 |
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | $ 588,147 | $ 592,129 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 500,000 | 500,000 |
Common, shares issued | 337,086 | 337,051 |
Common, shares outstanding | 337,086 | 337,051 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Warrants | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2016 | $ 1,360,345 | $ 1,666 | $ (918,972) | $ 443,039 | |
Balance (in shares) at Dec. 31, 2016 | 299,570 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Stock-based compensation (note 9) | $ 330 | 330 | |||
Shareholders' distribution (note 8) | (1,498) | (1,498) | |||
Exercise of stock options (note 8) | $ (47) | (47) | |||
Exercise of stock options (note 8) (in shares) | 20 | ||||
Unrealized gain on available-for-sale securities, net of taxes (note 2) | 3,875 | 3,875 | |||
Net loss | (3,018) | (3,018) | |||
Balance at Mar. 31, 2017 | $ 1,359,224 | 5,541 | (921,990) | 442,775 | |
Balance (in shares) at Mar. 31, 2017 | 299,590 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Adoption of ASU 2016-01 (note 2) | Accounting Standards Update 2016-01 | (3,000) | 3,000 | |||
Balance at Dec. 31, 2017 | $ 1,444,056 | $ 3,823 | $ 3,000 | (929,606) | 521,273 |
Balance (in shares) at Dec. 31, 2017 | 337,051 | ||||
Balance at Dec. 31, 2017 | $ 1,444,056 | 3,823 | (926,606) | 521,273 | |
Increase (Decrease) in Shareholders' Equity | |||||
Stock-based compensation (note 9) | 203 | 203 | |||
Shareholders' distribution (note 8) | (1,686) | (1,686) | |||
Exercise of stock options (note 8) | $ 40 | 40 | |||
Exercise of stock options (note 8) (in shares) | 35 | ||||
Net loss | (5,211) | (5,211) | |||
Balance at Mar. 31, 2018 | $ 1,442,613 | $ 3,823 | $ (931,817) | $ 514,619 | |
Balance (in shares) at Mar. 31, 2018 | 337,086 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Cash paid to suppliers and employees | $ (35,098) | $ (24,242) |
Cash received from revenue | 41,285 | 14,833 |
Dividends received from Minera Santa Cruz S.A. (note 5) | 4,851 | 2,525 |
Interest received | 50 | 34 |
Cash provided by (used in) operating activities | 11,088 | (6,850) |
Cash flows from investing activities: | ||
Additions to mineral property interests | (4,084) | |
Additions to property and equipment | (6,748) | (350) |
Proceeds from sale of investments (note 2) | 2,663 | |
Proceeds from disposal of property and equipment | 36 | |
Cash used in investing activities | (8,169) | (314) |
Cash flows from financing activities: | ||
Shareholders' distribution (note 8) | (1,685) | (1,498) |
Proceeds from the exercise of stock options (note 8) | 40 | 47 |
Cash (used) in financing activities | (1,645) | (1,451) |
Effect of exchange rate change on cash and cash equivalents | 314 | 65 |
Increase (decrease) in cash, cash equivalents and restricted cash | 1,588 | (8,550) |
Cash, cash equivalents and restricted cash, beginning of period | 37,153 | 37,440 |
Cash, cash equivalents and restricted cash, end of period (note 16) | 38,741 | 28,890 |
Reconciliation of net (loss) to cash provided by (used in) operating activities: | ||
Net loss | (5,211) | (3,018) |
Adjustments to reconcile net (loss) from operating activities: | ||
Loss (income) from investment in Minera Santa Cruz S.A., net of amortization (note 5) | 212 | (190) |
Gain on disposal of fixed assets | (11) | |
Recovery of deferred income taxes (note 7) | (1,137) | (2,656) |
Loss on sale of marketable securities (note 2) | 1,871 | |
Stock-based compensation (note 9) | 203 | 330 |
Depreciation | 2,327 | 327 |
Revision of estimates and accretion of asset reclamation obligations (note 6) | 294 | 105 |
Adjustment to the asset retirement obligation estimate (note 6) | (359) | |
Amortization of mineral property interests and asset retirement obligations | 1,800 | 533 |
Foreign exchange gain | (314) | (65) |
Unrealized loss (gain) on derivative investments (note 2) | 864 | (1,791) |
Change in non-cash working capital items: | ||
Decrease (increase) in VAT taxes receivable, net of collection of $1,968 (2017 - $448) | 151 | (2,040) |
Decrease (increase) in other assets related to operations | 4,337 | (3,655) |
Increase in liabilities related to operations | 1,199 | 2,756 |
Dividends received from Minera Santa Cruz S.A. (note 5) | 4,851 | 2,525 |
Cash provided by (used in) operating activities | $ 11,088 | $ (6,850) |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Collection of VAT taxes receivable | $ 1,968 | $ 448 |
NATURE OF OPERATIONS AND RECENT
NATURE OF OPERATIONS AND RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2018 | |
NATURE OF OPERATIONS AND RECENT ACCOUNTING PRONOUNCEMENTS | |
NATURE OF OPERATIONS AND RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 1 NATURE OF OPERATIONS Nature of Operations and Basis of Presentation McEwen Mining Inc. (the “Company”) was organized under the laws of the State of Colorado on July 24, 1979. The Company is engaged in the exploration for, development of, production and sale of gold, silver, and copper. The Company operates in Argentina, Mexico, Canada 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 joint venture majority owner, Hochschild Mining plc. It also owns and operates the El Gallo 1 mine in Sinaloa, Mexico and the Black Fox Complex in Timmins, Ontario, Canada. Finally, the Company owns the Los Azules copper deposit in San Juan, Argentina, the El Gallo 2 project in Sinaloa, Mexico, the Gold Bar project in Nevada in the United States, and a portfolio of exploration properties in Argentina, Mexico, Nevada, and Timmins, Ontario in Canada. 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”) have 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) Income (“Statement of Operations”) for the three months ended March 31, 2018 and 2017, the unaudited Consolidated Balance Sheets as at March 31, 2018 and December 31, 2017, the unaudited Consolidated Statement of Changes in Shareholders’ Equity for the three months ended March 31, 2018 and 2017, and the unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017, 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, 2017. 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, 2017. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Inter-company accounts and transactions have been eliminated. Recently Adopted Accounting Pronouncements Statement of Cash Flows – Restricted Cash: In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flow - Restricted Cash (ASU 2016-18). ASU 2016-18 requires that an entity's statement of cash flows explain the change during the period in that entity's total cash and cash equivalents, including amounts generally described as restricted cash or restricted cash equivalents. Therefore, changes in restricted cash and restricted cash equivalents will no longer be shown as specific line items within the statement of cash flows. Additionally, an entity is required to reconcile the cash and cash equivalents on its balance sheet to the cash and cash equivalent balances presented in its statement of cash flows. ASU 2016-18 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 with early adoption permitted. The Company early adopted the guidance within ASU 2016-18 as of December 31, 2017. The impact of ASU 2016-18 on its financial statements was as follows: (1) changes in restricted cash balances are no longer shown in the statements of cash flows, as these balances are included in the beginning and ending cash balances in the statements of cash flows; and (2) included within Note 16 is a reconciliation between cash balances presented on the balance sheets with the amounts presented in the statements of cash flows. The Company continued to hold material restricted cash during the three months ended March 31, 2018. Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments: In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments in the statement of cash flows and amends certain disclosure requirements of ASC 230. The guidance will generally be applied retrospectively and is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company has elected to utilize the Cumulative Earnings Approach to classify distributions from equity method investees, this approach is defined in ASU 2016-15 as an acceptable approach. Based on the Cumulative Earnings Approach, if the inception-to-date distributions are greater than the inception to date earnings then, the cash flows from the equity method investee would be recognized as a return of investment within cash inflows from investing activities. Based on the Company’s analysis the inception-to-date distributions are not greater than the inception-to-date earnings for any of the prior year periods nor the three months ended March 31, 2018. Therefore, the adoption of ASU 2016-15 did not result in any change to the classification or presentation of the distributions received from equity method investees in any current or prior period. Revenue from Contracts with Customers: In 2016, the FASB issued four separate accounting standard updates regarding Topic 606: ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2017-13. These ASUs outline amendments to Topic 606, including reporting revenue gross versus net, identifying performance obligations and licensing and narrow-scope improvements and practical expedients. Adoption of this update by the Company, effective January 1, 2018 was completed using the modified retrospective approach. The modified retrospective method contemplates that comparative periods should not be restated and the cumulative impact of applying the standard should be recognized at the date of initial adoption, January 1, 2018. The Company has elected to apply the method only to new contracts and contracts that were not completed as of January 1, 2018. As expected, the Company did not have any cumulative effect of initially applying the standard for contracts not complete as of January 1, 2018. As a result, the Company has presented comparative periods under legacy GAAP and there has been no change to any line item as a result of adoption of the new standard. There was no material impact to revenue recognition. Revenue Recognition Accounting Policy: Revenue consists of sales value received for the Company’s principal products, gold and silver. Revenue is recognized when title to gold and silver passes to the buyer and when collectability is reasonably assured. Title passes to the buyer based on terms of the sales contract, usually upon delivery of the product. Product pricing is determined under the sales agreements which are referenced against active and freely traded commodity markets, for example, the London Bullion Market for both gold and silver, in an identical form to the product sold. Gold and silver doré produced from the San José mine is sold at the prevailing spot market price based on the London A.M. fix, while concentrates are sold at the prevailing spot market price based on either the London P.M. fix or average of the London A.M. and London P.M. fix depending on the sales contract. Concentrates are provisionally priced, whereby the selling price is subject to final adjustments at the end of a period ranging from 30 to 90 days after delivery to the customer. The final price is based on the market price of the precious metal content at the relevant quotation point stipulated in the contract. Due to the time elapsed between shipment and the final settlement with the buyer, MSC must estimate the prices at which sales of metals will be settled. At the end of each financial reporting period, previously recorded provisional sales are adjusted to estimated settlement metals prices based on relevant forward market prices until final settlement with the buyer. Any material differences to these differences will be separately disclosed. The Company entered into a doré sales agreement with a Canadian financial institution in July 2012. Under that agreement, the Company has the option to sell to the institution approximately 90% of the gold and silver contained in doré bars prior to the completion of refining by the third party refiner, which normally takes approximately 10 business days. Revenue is recognized when the Company has provided irrevocable instructions to the refiner to transfer to the purchaser the refined ounces sold upon final processing outturn, and when payment of the purchase price for the purchased doré or bullion has been made in full by the purchaser. There is no judgement involved in revenue recognition as revenue is recognized when payment has been made by the purchaser and the product has been delivered. The Company also has a contract under which revenue is earned from a toll milling arrangement at the Black Fox Complex. Revenue is recognized when title to the product passes to the customer. This revenue is separately disclosed as Other revenue in the financial statements. There is no judgement involved in revenue recognition from the toll milling agreement as revenue is recognized when the customer takes delivery of the product. Revenue by operating segments is separately disclosed within Note 12 to the financial statements. Compensation – Stock Compensation – Scope of Modification Accounting: In May 2017, the FASB issued ASU No. 2017-09 which provides clarity and reduces diversity in practice with respect to the modification of terms or conditions of a share-based payment award. The update to the standard is effective for the Company for fiscal years beginning after December 15, 2017, with early application permitted. The Company has adopted the update as of January 1, 2018 and adoption did not have any impact on the consolidated financial statements or disclosures. Business Combinations: Definition of a business: In January 2017, the FASB issued ASU No. 2017-01 which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The update to the standard is effective for the Company beginning after December 15, 2017, with early application permitted. The Company has adopted the update as of January 1, 2018 and the adoption did not have any impact on the consolidated financial statements or disclosures. Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory: In October 2016, the FASB issued ASU No. 2016-16 to modify the current exception to income tax accounting that required companies to defer the income tax effect of certain intercompany transactions. ASU No. 2016-16 only allows companies to defer the income tax effect of intercompany inventory transactions under an exception to the guidance on income taxes that currently applies to intercompany sales and transfers of all assets. The update to the standard was adopted by the Company beginning January 1, 2018 and adoption of the update did not have any impact on the consolidated financial statements or disclosures. Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities: In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The update to the standard was adopted by the Company beginning January 1, 2018. The new guidance requires entities to measure equity investments (except those accounted for under the equity method, those that result in consolidation of the investee and certain other investments) at fair value and recognize any changes in fair value in net income. Transitional guidance provided that entities with unrealized gains or losses on available for sale (“AFS”) equity securities were required to reclassify those amounts to beginning retained earnings in the year of adoption. As a result, the Company has reclassified the beginning amount of accumulated other comprehensive income related to AFS securities to accumulated deficit and all changes in fair-values of these securities is now reflected in the Statement of Operations in the Company’s net loss for the period. Recently Issued Accounting Pronouncements Leases – Amendments: In February 2016, the FASB issued ASU 2016-02 “leases (ASC 842)” which provides that a lessee should recognize the assets and the liabilities that arise from leases, including operating leases. Under the new requirements, a lessee will recognize in the statement of financial position a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from the previous GAAP. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal year, with early adoption permitted. The ASU requires a modified retrospective transition method with the option to elect a package of practical expedients. There are three practical expedients for which an election must be made to apply and the election must be applied to all leases, as follows: 1. Package of practical expedients – to permit an entity to a) not reassess whether expired or existing contracts contain leases, b) not reassess lease classification for existing or expired leases and c) not consider whether previously capitalized initial direct costs would be appropriate under the new standard. 2. Hindsight practical expedient – to permit an entity to use hindsight in determining the lease term. 3. Easements practical expedient – to permit an entity to continue applying its current policy for accounting for land easements that existed as of, or expired before, the effective date of ASC 842 (ASU 2018-01). The Company expects to elect to apply all of the practical expedients available. During the first quarter the Company has begun preliminary analysis of the effect of the standard on its financial statements as well as review of major contracts. Based on the Company’s preliminary analysis, it is not expected that the adoption of ASC 842 will result in significant changes to the financial statements. However, the analysis remains ongoing. A quantitative estimate of the effect is not reasonably estimable as of the date of this report. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2018 | |
INVESTMENTS | |
INVESTMENTS | NOTE 2 INVESTMENTS The Company’s investment portfolio consists of marketable equity securities and warrants of certain publicly-traded companies. As at December 31, 2017, the Company classified the marketable equity securities as available-for-sale securities, which are recorded at fair value based upon quoted market prices with changes in fair value recorded in Other Comprehensive Income (“OCI”). The gains and losses for available-for-sale securities are not reported in Net (Loss) in the Statement of Operations until the securities are sold or if there is an other-than-temporary decline in fair value below cost. In the comparable period ending March 31, 2017, the Company recorded a gain, net of tax, in other comprehensive income, of $3.9 million. The Company adopted ASU 2016-01 as of January 1, 2018 and as a result has reclassified the accumulated OCI balance of $3.0 million related to marketable equity securities to beginning Accumulated Deficit (see Statement of Changes in Shareholders Equity). As a result of adoption of this guidance, the Company now recognizes changes in fair value of these securities in the Statement of Operations. During the three months ended March 31, 2018, the Company sold marketable equity securities for proceeds of $2.7 million. The Company realized a loss of $0.8 million on the sale, which is included in the Statement of Operations. During the comparable period ended March 31, 2017, the Company did not sell any marketable equity securities. During the three months ended, March 31, 2018, the Company had an unrealized loss on equity securities in the amount of $1.1 million, which is included in the Statement of Operations The Company maintains a portfolio of warrants on equity interests in publicly-traded securities for investment purposes which are not used in any hedging activities. The warrants are recorded at fair value using the Black-Scholes option pricing model. As the warrants meet the definition of derivative instruments, unrealized gains or losses arising from their revaluation are recorded in the Statement of Operations. During the three months ended March 31, 2018, the Company recorded an unrealized loss of $0.9 million (March 31, 2017 – $1.8 million gain). The following is a summary of the balances as of March 31, 2018 and December 31, 2017: Other Statement of Opening Additions Disposals Comprehensive Operations Fair Value balance during during Income (Loss) (Loss) end of the As of March 31, 2018 (January 1) period period (pre-tax) Income period Marketable equity securities $ 6,404 $ — $ (3,397) $ — $ (1,137) $ 1,870 Warrants 1,567 — — — (864) 703 Investments $ 7,971 $ — $ (3,397) $ — $ (2,001) $ 2,573 Other Statement of Opening Additions Disposals Comprehensive Operations Fair Value balance during during Income (Loss) (Loss) end of the As of December 31, 2017 (January 1) year year (pre-tax) Income year Marketable equity securities $ 6,749 $ — $ (2,163) $ 1,334 $ 484 $ 6,404 Warrants 1,794 — — — (227) 1,567 Investments $ 8,543 $ — $ (2,163) $ 1,334 $ 257 $ 7,971 As of March 31, 2018, the cost of the marketable equity securities and warrants was approximately $1.4 million (December 31, 2017 - $3.3 million). |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2018 | |
INVENTORIES | |
INVENTORIES | NOTE 3 INVENTORIES Inventories at March 31, 2018 and December 31, 2017 consist of the following: March 31, 2018 December 31, 2017 Material on leach pads $ 8,631 $ 9,188 In-process inventory 6,401 5,486 Stockpiles 2,386 1,168 Precious metals 8,301 12,902 Materials and supplies 3,332 3,207 Current Inventories $ 29,051 $ 31,951 A portion of leach pad inventories at March 31, 2018 in the amount of $9.3 million (December 31, 2017 - $10.4) is expected to be recovered beyond twelve months, and has been included in other assets. |
MINERAL PROPERTY INTERESTS
MINERAL PROPERTY INTERESTS | 3 Months Ended |
Mar. 31, 2018 | |
MINERAL PROPERTY INTERESTS | |
MINERAL PROPERTY INTERESTS | NOTE 4 MINERAL PROPERTY INTERESTS The Company’s Mineral Property Interests include the El Gallo 1 mine in Mexico, the Gold Bar project in Nevada, the Los Azules project in Argentina, the Black Fox mine and other properties in Timmins, Canada, and other properties located in Mexico and Nevada. The Company conducts a review of potential triggering events for impairment on 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 these assets for impairment, in accordance with its accounting policy. During the three months ended March 31, 2018, no such triggering events were identified with respect to the carrying values of the Company’s Nevada, Argentina, Mexico, or Timmins properties. 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 charged to expense based on the units of production method upon commencement of production. The Company’s Black Fox and Gold Bar properties have proven and probable reserves compliant with SEC Industry Guide 7. While El Gallo 1 does not have proven and probable reserves compliant with SEC Industry Guide 7, the Company capitalized costs associated with the acquisition of the mineral property interests. These costs are being amortized using either the straight line or units-of-production methods over the stated mine life. For the three months ended March 31, 2018, the Company recorded $0.8 million (March 31, 2017 - $0.5 million) of amortization expense related to the El Gallo 1 Mine, which is included in Production Costs Applicable to Sales in the Statement of Operations. For the three months ended March 31, 2018, the Company recorded $2.7 million (March 31, 2017 – $nil) of amortization expenses related to the Black Fox mine, which is included in Production Costs Applicable to Sales in the Statement of Operations. |
INVESTMENT IN MINERA SANTA CRUZ
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | 3 Months Ended |
Mar. 31, 2018 | |
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 accounts for investments over which it exerts significant influence but does not control through majority ownership using the equity method of accounting. In applying the equity method of accounting to the Company’s investment in MSC, MSC’s financial statements, which are originally prepared by MSC in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, are translated into U.S. GAAP by MSC’s management. As such, the summarized financial data under this heading is presented in accordance with U.S. GAAP. The Company’s 49% attributable share of results of operations from its investment in MSC was a loss of $0.2 million for the three months ended March 31, 2018 (March 31, 2017 – income of $0.2 million). These amounts include the amortization of the fair value increments arising from the purchase price allocation and related income tax recovery. Included in the income tax recovery is the impact of fluctuations in the exchange rate between the Argentina peso and the U.S. dollar on the peso-denominated mineral property interest fair value increment and deferred tax liability associated with the investment in MSC recorded as part of the acquisition of Minera Andes. During the period ended March 31, 2018, the Company did not identify any potential triggering events for impairment in relation to its investment in MSC, and consequently the Company did not record any impairment during the period. During the three months ended March 31, 2018, the Company received $4.9 million in dividends from MSC, compared to $2.5 million during the same period in 2017. Changes in the Company’s investment in MSC for the three months ended March 31, 2018 and year ended December 31, 2017 are as follows: March 31, 2018 December 31, 2017 Investment in MSC, beginning of the period $ 150,064 $ 162,320 Attributable net income (loss) from MSC 430 (2,328) Amortization of fair value increments (2,115) (9,632) Income tax recovery 1,473 11,916 Dividend distribution received (4,851) (12,212) Investment in MSC, end of the period $ 145,001 $ 150,064 A summary of the operating results from MSC for the three months ended March 31, 2018 and 2017 is as follows: Three months ended March 31, 2018 2017 Minera Santa Cruz S.A. (100%) Net Sales $ 50,662 $ 48,343 Production costs applicable to sales (43,468) (36,699) Net income 878 4,381 Portion attributable to McEwen Mining Inc. (49%) Net income $ 430 $ 2,147 Amortization of fair value increments (2,115) (2,069) Income tax recovery 1,473 112 (Loss) income from investment in MSC, net of amortization $ (212) $ 190 As of March 31, 2018, MSC had current assets of $89.7 million, total assets of $387.6 million, current liabilities of $38.4 million and total liabilities of $91.7 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. Excluding the fair value increments from the purchase price allocation, net of impairment charges, MSC had current assets of $89.1 million, total assets of $233.6 million, current liabilities of $38.4 million, and total liabilities of $66.6 million as at March 31, 2018. |
RECLAMATION OBLIGATIONS
RECLAMATION OBLIGATIONS | 3 Months Ended |
Mar. 31, 2018 | |
RECLAMATION OBLIGATIONS | |
RECLAMATION OBLIGATIONS | NOTE 6 RECLAMATION OBLIGATIONS The Company is responsible for reclamation of certain past and future disturbances at its properties. The most significant properties subject to these obligations are the Tonkin property in Nevada, the El Gallo 1 mine in Mexico, and the Timmins properties in Canada. A reconciliation of the Company’s asset retirement obligations for the three months ended March 31, 2018 and for the year ended December 31, 2017 are as follows: March 31, 2018 December 31, 2017 Asset retirement obligation liability, beginning of the period $ 24,722 $ 9,843 Settlements (19) (126) Accretion of liability 294 635 Acquisitions and divestitures — 11,803 Adjustment reflecting updated estimates 504 2,561 Foreign exchange revaluation (359) 6 Asset retirement obligation liability, ending balance $ 25,142 $ 24,722 Current portion (743) (646) Non-current portion $ 24,399 $ 24,076 The Company adjusted its estimated liability in relation to the Gold Bar project for disturbance caused up to March 31, 2018. |
INCOME AND MINING TAXES
INCOME AND MINING TAXES | 3 Months Ended |
Mar. 31, 2018 | |
INCOME AND MINING TAXES. | |
INCOME AND MINING TAXES | NOTE 7 INCOME AND MINING 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 21% and 35%, for the three months ended March 31, 2018 and 2017, respectively, to income before taxes primarily as a result of valuation allowances being applied to losses, changes in the deferred taxes associated with marketable securities and changes in deferred tax liabilities associated with mineral property interests. The deferred tax liability is impacted by fluctuations in the foreign exchange rate between the Argentina peso and U.S. dollar. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. We are applying the guidance in SAB 118 when accounting for the enactment date effects of the Act. At March 31, 2018, the Company has not completed the accounting for the tax effects of enactment of the Act; however, in certain cases, the Company has made a reasonable estimate of the effects on the existing deferred tax balances and the one-time transition tax. During the three months ended March 31, 2018, the Company has not made any adjustments to the provisional amounts recorded as of December 31, 2017. The Company will continue to refine its calculations as additional analysis is completed. Estimates may also be affected as a more thorough understanding of the tax law is developed. These changes could be material to income tax expense. The Act subjects a US shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, the Company is still evaluating the effects of the GILTI provisions and have not yet determined which accounting policy will be adopted. At March 31, 2018, because the Company is still evaluating the GILTI provisions and analysis of future taxable income subject to GILTI, the Company has performed the GILTI calculation for the current year only, and has not provided additional GILTI on deferred items. For the three months ended March 31, 2018, the Company reduced the deferred income tax liability by $1.2 million (March 31, 2017 - $1.6 million) as a result of the increased exploration spending in Los Azules, giving rise to a deferred tax benefit partially offset by the appreciation of the Argentina Peso. This reduction was partially offset by the recognition of a deferred mining tax liability in relation to the Black Fox mine. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 8 SHAREHOLDERS’ EQUITY Stock options During the three months ended March 31, 2018, 35,199 shares of common stock were issued upon exercise of stock options under the Equity Incentive Plan, at the weighted average exercise price of $1.15 per share for proceeds of $0.1 million. This compares to 20,000 shares of common stock issued upon exercise of stock options (at the weighted average exercise price of $2.34 per share for proceeds of $0.1 million) during the same period of 2017 under the Equity Incentive Plan. Shareholders’ distributions During the three months ended March 31, 2018, the Company paid a semi-annual shareholders’ distribution of $0.005 (March 31, 2017 - $0.005) per share of common stock, for a total of $1.7 million (March 31, 2017 - $1.5 million). Equity Issuances On April 26, 2017, the Company issued 12,687,035 shares of common stock in consideration for the acquisition of 100% of the issued and outstanding common shares of Lexam VG Gold (“Lexam”) by way of an Arrangement Agreement dated February 13, 2017 and related Plan of Arrangement (the “Arrangement”). Pursuant to the Arrangement, each common share of Lexam was exchanged for 0.056 of a common share of the Company and each option to purchase a common share of Lexam was exchanged for a replacement option entitling the holder to acquire 0.056 share of the Company’s common stock. Separately, on September 22, 2017, the Company issued 20,700,000 shares of common stock and 10,350,000 warrants in a public offering for net proceeds of $43.2 million, after deducting issuance costs of $3.4 million. Each share of common stock sold entitled the holder to receive one-half of a warrant, and each whole warrant entitles the holder to purchase one share of common stock at a price of $2.70. Warrants are exercisable at any time prior to September 28, 2018, after which the warrants will expire and be of no value. The Company concluded that both common stock and warrants are equity-linked financial instruments and should be accounted for permanently in the Shareholder’s Equity section in the Consolidated Balance Sheet, with no requirement to subsequently revalue any of the instruments. Based on the relative fair values, the Company allocated $39.4 million to common stock and $3.8 million to warrants, net of issuance costs. The Company used the Black-Scholes pricing model to determine the fair value of warrants using the following assumptions: Risk-free interest rate % Dividend yield % Volatility factor of the expected market price of common stock % Weighted-average expected life 53 weeks Weighted-average grant date fair value $ 0.40 All 10,350,000 warrants remain outstanding and unexercised as of March 31, 2018. Flow-through shares On December 19, 2017, the Company issued 4,000,000 flow-through common shares (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) priced at $2.50 per share for total proceeds of $10 million. The purpose of the offering was to fund exploration activities on the Company’s properties in the Timmins region of Canada. The total proceeds were allocated between the sale of tax benefits and the sale of common shares. Upon issuance, the Company recorded a liability for the flow-through premium received in the amount of $1.6 million, which was accounted for as a reduction to the proceeds of sale. The obligation is fulfilled when eligible expenditures are incurred. As at March 31, 2018, the Company reduced the flow-through premium by $0.6 million to $1 million to reflect the effect of the cost incurred to date. The reduction of the flow-through premium was recognized in income and mining tax recovery on the statement of operations. The proceeds of the flow-through shares offering are shown as Restricted cash on the Consolidated Balance Sheet. During the three months ended March 31, 2018, $1.2 million of the restricted cash was spent for Timmins exploration activities as intended, reducing the restricted cash to $8.8 million. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 9 STOCK-BASED COMPENSATION During the three months ended March 31, 2018, the Company recorded stock option expense of $0.2 million. This compares to $0.3 million for the three months ended March 31, 2017. |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
NET (LOSS) INCOME PER SHARE | |
NET (LOSS) INCOME PER SHARE | NOTE 10 NET (LOSS) INCOME PER SHARE Basic net (loss) income per share is computed by dividing the net (loss) income 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 and diluted weighted average number of common shares outstanding and the computations for basic and diluted net loss per share for the three months ended March 31, 2018 and 2017: Three months ended, March 31 2018 2017 Net loss $ (5,211) $ (3,018) Weighted average common shares outstanding: 337,062 299,575 Diluted shares outstanding: 337,062 299,575 Net loss per share: Basic $ (0.02) $ (0.01) Diluted $ (0.02) $ (0.01) For the three month periods ended March 31, 2018 and 2017, as the Company was in a loss position, all potentially dilutive instruments were anti-dilutive and therefore not included in the calculation of diluted net loss per share. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS The Company recorded the following expense (income) in respect to the related parties outlined below: Three months ended March 31, 2018 2017 Lexam L.P. $ 27 $ 62 Lexam VG Gold — (33) Noblegen Inc. 20 — REVlaw 17 49 Inventus 116 — The Company has the following outstanding accounts payable (receivable) balance in respect to the related parties outlined below: March 31, December 31, 2018 2017 Lexam L.P. $ 15 $ 152 Lexam VG Gold — (33) Noblegen Inc. 22 40 REVlaw 34 330 Inventus — (36) An aircraft owned by Lexam L.P. (which is controlled by Robert R. McEwen, limited partner and beneficiary of Lexam L.P. and the Company’s Chairman and Chief Executive Officer) 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. Mr. McEwen is able to charter the aircraft from Lexam L.P. at a preferential rate approved by the Company’s independent board members under a policy whereby only the variable expenses of operating this aircraft for business related travel are eligible for reimbursement by the Company. On April 26, 2017, the Company completed the acquisition of 100% of the issued and outstanding securities of Lexam and Lexam became a wholly-owned subsidiary of the Company. See Note 17 Acquisitions. Prior to the acquisition, Mr. McEwen was the Non-Executive Chairman of Lexam and held a 27% ownership interest in Lexam and the Company shared services with Lexam including rent, personnel, office expenses and other administrative services. Historically, these transactions were in the normal course of business. Mr. McEwen is also a shareholder of Noblegen Inc., a company that develops processes to commercially cultivate microorganisms with applications in different industries. The metallurgical services provided by Noblegen Inc. are in the normal course of business and have been recorded at their exchange amount. REVlaw is a company owned by Carmen Diges, General Counsel of the Company. The legal services of Ms. Diges as General Counsel and one other member of the legal department are provided by REVlaw in the normal course of business and have been recorded at their exchange amount. Mr. McEwen is also a significant shareholder of Inventus Mining Corp. (“Inventus”). Stefan Spears, provides consulting services to the Company on Special Projects, is the CEO and Chairman of Inventus. In his capacity of providing consulting services on Special Projects, he provides consulting services to the Company in areas unrelated to Inventus. The Company provides custom milling services to Inventus which is in the normal course of business and has been recorded at their exchange amount. |
OPERATING SEGMENT REPORTING
OPERATING SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2018 | |
OPERATING SEGMENT REPORTING | |
OPERATING SEGMENT REPORTING | NOTE 12 OPERATING SEGMENT REPORTING McEwen Mining is a mining and minerals exploration company focused on precious metals in Argentina, Mexico, Canada, and the United States. The Company’s chief operating decisions maker (“CODM”) reviews the operating results, assesses performance and makes decisions about allocation of resources to these segments at the geographic region level or major mine/project where the economic characteristics of the individual mines or projects are not alike. As a result, these operating segments also represent the Company’s reportable segments. The Company’s business activities that are not considered operating segments and not provided to the CODM for review are included in Corporate and other and are provided in this note for reconciliation purposes. The CODM reviews segment (loss) income, defined as gold and silver sales less production costs applicable to sales, mine development costs, exploration costs, property holding costs and general and administrative expenses for all segments except for the MSC segment which is evaluated based on the attributable equity income. Gold and silver sales and production costs applicable to sales for the reportable segments are reported net of intercompany transactions. Significant information relating to the Company’s reportable operating segments is summarized in the tables below: Three months ended March 31, 2018 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 25,417 $ — $ — $ — $ 15,624 $ 41,041 Other revenue — — — — 244 244 Production costs applicable to sales (13,608) — — — (12,786) (26,394) Mine development costs (380) — — — — (380) Exploration costs (971) — (3,207) (2,000) (5,276) (11,454) Property holding costs (1,149) — (40) (179) (43) (1,411) General and administrative costs (829) — (278) (863) (88) (2,058) Income (loss) from investment in Minera Santa Cruz S.A. (net of amortization) — (212) — — — (212) Segment income (loss) $ 8,480 $ (212) $ (3,525) $ (3,042) $ (2,325) $ (624) Corporate and other General and administrative costs $ (3,129) Revision of estimates and accretion of reclamation obligations (294) Depreciation (360) Interest and other expense (134) Loss on sale of marketable equity securities (734) Unrealized fair value loss on marketable equity securities (1,137) Unrealized loss on derivatives (864) Foreign currency gain 927 Net loss before income and mining taxes $ (6,349) Three months ended March 31, 2017 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 14,833 $ — $ — $ — $ — $ 14,833 Production costs applicable to sales (6,984) — — — — (6,984) Mine development costs (155) — — (960) — (1,115) Exploration costs (1,539) — (6,301) (484) — (8,324) Property holding costs (982) — (1) (205) — (1,188) General and administrative costs (839) — (208) (426) — (1,473) Income (loss) from investment in Minera Santa Cruz S.A. (net of amortization) — 190 — — — 190 Segment income (loss) $ 4,334 $ 190 $ (6,510) $ (2,075) $ — $ (4,061) Corporate and other Other exploration costs $ (120) General and administrative costs (2,820) Depreciation (327) Revision of estimates and accretion of reclamation obligations (105) Interest and other income (68) Gain on sale of assets 11 Unrealized gain on derivatives 1,791 Foreign currency gain 25 Net loss before income and mining taxes $ (5,674) Geographic information Long-lived Assets as at Revenue (1) March 31, December 31, Three months ended March 31, 2018 2017 2018 2017 Canada $ 86,187 $ 85,179 $ 15,868 $ — Mexico 33,377 35,446 25,417 14,833 USA (2) 52,467 43,086 — — Argentina (3) 336,491 341,554 — — Total consolidated $ 508,522 $ 505,265 $ 41,285 $ 14,833 (1) Presented based on the location from which the product originated. (2) The USA segment includes construction in progress of $14.8 million related to the Gold Bar mine construction. Of the $14.8 million, $8.8 million was incurred in the three months ended March 31, 2018. The balance of the construction in progress is expected to increase throughout the year 2018, until the Gold Bar mine is placed into operation. (3) Includes Investment in MSC of $145 million as of March 31, 2018 (December 31, 2017 - $151.0 million). |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and December 31, 2017 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 March 31, 2018 Total Level 1 Level 2 Level 3 Assets: Investments $ 2,573 $ 1,870 $ 703 $ — Total $ 2,573 $ 1,870 $ 703 $ — Fair Value as at December 31 2017 Total Level 1 Level 2 Level 3 Assets: Investments $ 7,971 $ 6,404 $ 1,567 $ — Total $ 7,971 $ 6,404 $ 1,567 $ — The Company's investments include 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. Furthermore, as noted in Note 2, Investments , the Company’s investments also include warrants to purchase common stock of certain extractive industry companies. Since these warrants are not traded on an active market, they are valued using the Black-Scholes option pricing model, and classified within Level 2 of the fair value hierarchy. The main inputs used in the valuation of the warrants are volatility, interest rate, dividend yield and exercise price of the instruments. The fair value of other financial assets and liabilities were assumed to approximate their carrying values due to their short-term nature and historically negligible credit losses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 COMMITMENTS AND CONTINGENCIES Reclamation Obligations As part of its ongoing business and operations, the Company is required to provide bonding for its environmental reclamation obligations in the United States and Canada. Pursuant to the requirements imposed by United States Bureau of Land Management (“BLM”), the Company has Nevada bonding obligations of $19.9 million which primarily pertains to the Tonkin property and the Gold Bar property reclamation requirements. Under Canadian regulations, the Company has bonding obligations of $16.5 million (C$20.6 million) with respect to the Black Fox Complex. Furthermore, under Canadian regulations, the Company was required to deposit approximately $0.1 million with respect to its Timmins properties acquired from Lexam. Under current Mexican regulations, bonding of projected reclamation costs is not required. Surety Bonds The Company satisfies its reclamation bonding obligations in the United States and Canada through the use of surety bonds. These surety bonds are available for draw down by the beneficiary in the event the Company does not perform its reclamation obligations. If the specific reclamation requirements are met, the beneficiary of the surety bonds will release the instrument to the issuing entity. The Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements, through existing or alternative means, as they arise. On June 23, 2017, the Company replaced its previous surety facility by entering into a new $20.0 million surety facility, carrying an annual financing fee of 2%, with no requirement for an initial deposit and the financing fee payable only on draw down amounts. Effective July 1, 2017 the Company drew down $3.6 million for the Tonkin project and $1.3 million for other exploration projects in Nevada. On August 25, 2017, the BLM accepted the Company’s bond in the amount of $15.0 million to provide reclamation coverage for operations on the Gold Bar property. On August 25, 2017, the Company drew down $15.0 million on the existing surety to satisfy the bonding requirements for the Gold Bar project. In connection with the Black Fox acquisition in 2017, as described in Note 17 Acquisitions, the Company extended its existing $20.0 million surety facility to include the necessary bonding to satisfy the Black Fox closure plan. The terms of the credit facility remain the same, with no requirement for an initial deposit and an annual financing fee of 2%. Black Fox has bonding requirements of $16.5 million (C$20.6 million). Flow-Through Common Shares The Company raised $10.0 million (C$12.9 million) during 2017 on a Canadian flow-through tax basis. The Company is required to spend this amount on Canadian Exploration Expenditures and renounce the associated tax benefit before December 31, 2018. The Company expects to meet this commitment. As at March 31, 2018, $1.2 million has been spent, with a total of $3.8 million incurred. Streaming Agreement As part of the acquisition of the Black Fox Complex in 2017, the Company assumed a gold purchase agreement (streaming contract) related to production, if any, from certain claims. The Company is obligated to sell 8% of gold production from the Black Fox mine and 6.3% from the adjoining Pike River property (Black Fox Extension) to Sandstorm Gold Ltd. at the lesser of market price or $539 per ounce (with inflation adjustments of up to 2% per year) until 2090. The Company records revenue on these shipments based on the contract price at the time of delivery to the customer. During the three months ended March 31, 2018, the company recorded revenue of $0.6 million (March 31, 2017 - $nil). Short-term Bank Indebtedness As of March 31, 2018, the Company has no bank indebtedness (December 31, 2017 - $nil). On November 30, 2017, Compañia Minera Pangea, S.A. de C.V. (“CMP”), a wholly-owned subsidiary of the Company, executed a line of credit agreement with Banco Nacional de Comercio Exterior, S.N.C., a Mexican federal development banking institution (“Bancomext”). The line of credit allows CMP to borrow up to $120,000,000 Mexican pesos (approximately $6.4 million based on a market exchange rate of 19.64 Mexican pesos to 1 US dollar, as published by Bloomberg on November 30, 2017). Borrowing under the Line of Credit will be available for one (1) year from November 30, 2017. Additional details regarding the line of credit were disclosed within the Company’s Form 10-K filed on February 21, 2018. As of March 31, 2018, no funds had been drawn on the line of credit. |
CAPITAL LEASES
CAPITAL LEASES | 3 Months Ended |
Mar. 31, 2018 | |
CAPITAL LEASES | |
CAPITAL LEASES | NOTE 15 CAPITAL LEASES As a part of the Black Fox acquisition in 2017, the Company acquired certain capital lease obligations related to the use of mining equipment at the Black Fox mine. This equipment continues to be reported as a part of the Company’s property, plant and equipment with amortization booked on a straight-line basis over the estimated useful life of the asset. March 31, December 31, Interest Rates Maturities 2018 2017 Capital Lease Obligations 4.74 -10.09% 2018 - 2019 $ 361 $ 551 Less current portion 321 470 Long-term capital lease obligations $ 40 $ 81 |
RESTRICTED CASH
RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2018 | |
RESTRICTED CASH | |
RESTRICTED CASH | NOTE 16 RESTRICTED CASH The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. March 31, December 31, 2018 2017 Cash and cash equivalents $ 29,904 $ 27,153 Restricted cash 8,837 10,000 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 38,741 $ 37,153 Amounts included in restricted cash represent the remaining proceeds from the sale of flow-through common shares (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) as described in Note 8 Shareholders’ Equity. The proceeds are required by the Income Tax Act (Canada) to be used as payment for generative exploration activities at the Company’s Canadian properties. The entire proceeds are to be utilized to fund exploration activities during 2018, at which point the restriction will lapse. As of March 31, 2018, $1.2 million of the proceeds had been spent. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2018 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 17 ACQUISITIONS Acquisition of Black Fox Complex On August 25, 2017, the Company entered into an Asset Purchase Agreement (the “APA”) with Primero Mining Corp. (“Primero”) for the Black Fox Complex, whereby the Company, through its wholly-owned subsidiary, purchased and assumed the Purchased Assets and Assumed Liabilities as defined within the APA for total cash consideration of $27.5 million, which is the purchase price of $35.0 million less closing adjustments. The Black Fox Complex includes the Black Fox mine site, mill, property, plant and equipment and adjacent exploration properties located in Township of Black River Matheson, Ontario, Canada. The Company concluded that the acquired assets and assumed liabilities constitute a “business” under U.S. GAAP and accordingly, the acquisition was accounted for as a business combination rather than an asset acquisition. The transaction was completed on October 6, 2017. Fair value measurements of assets acquired and liabilities assumed were made during the fourth quarter of 2017. The Company continues to evaluate the available information, and the purchase price allocation is subject to finalization of the Company’s analysis of the fair value of the assets and liabilities as of closing date of the transaction. There were no changes to the fair value measurements disclosed in the fourth quarter of 2017. The following table summarizes the amounts assigned to the assets acquired and liabilities assumed as of the acquisition date: Total purchase price: Purchase price $ Adjustments to purchase price $ Fair value of assets acquired and liabilities assumed: Cash $ Accounts Receivable Prepaids Inventory Mineral Property Interests Plant and Equipment Accounts Payable Accrued Liabilities Short term capital lease liability Asset retirement obligation Long term capital lease liability Deferred tax liability Net assets acquired in acquisition $ |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
INVESTMENTS | |
Summary of investment portfolio | Other Statement of Opening Additions Disposals Comprehensive Operations Fair Value balance during during Income (Loss) (Loss) end of the As of March 31, 2018 (January 1) period period (pre-tax) Income period Marketable equity securities $ 6,404 $ — $ (3,397) $ — $ (1,137) $ 1,870 Warrants 1,567 — — — (864) 703 Investments $ 7,971 $ — $ (3,397) $ — $ (2,001) $ 2,573 Other Statement of Opening Additions Disposals Comprehensive Operations Fair Value balance during during Income (Loss) (Loss) end of the As of December 31, 2017 (January 1) year year (pre-tax) Income year Marketable equity securities $ 6,749 $ — $ (2,163) $ 1,334 $ 484 $ 6,404 Warrants 1,794 — — — (227) 1,567 Investments $ 8,543 $ — $ (2,163) $ 1,334 $ 257 $ 7,971 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
INVENTORIES | |
Schedule of inventories | March 31, 2018 December 31, 2017 Material on leach pads $ 8,631 $ 9,188 In-process inventory 6,401 5,486 Stockpiles 2,386 1,168 Precious metals 8,301 12,902 Materials and supplies 3,332 3,207 Current Inventories $ 29,051 $ 31,951 |
INVESTMENT IN MINERA SANTA CR27
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. (“MSC”) - SAN JOSE MINE | |
Schedule of change in the entity's investment in MSC | March 31, 2018 December 31, 2017 Investment in MSC, beginning of the period $ 150,064 $ 162,320 Attributable net income (loss) from MSC 430 (2,328) Amortization of fair value increments (2,115) (9,632) Income tax recovery 1,473 11,916 Dividend distribution received (4,851) (12,212) Investment in MSC, end of the period $ 145,001 $ 150,064 |
Summary of MSC's financial information from operations | Three months ended March 31, 2018 2017 Minera Santa Cruz S.A. (100%) Net Sales $ 50,662 $ 48,343 Production costs applicable to sales (43,468) (36,699) Net income 878 4,381 Portion attributable to McEwen Mining Inc. (49%) Net income $ 430 $ 2,147 Amortization of fair value increments (2,115) (2,069) Income tax recovery 1,473 112 (Loss) income from investment in MSC, net of amortization $ (212) $ 190 |
RECLAMATION OBLIGATIONS (Tables
RECLAMATION OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
RECLAMATION OBLIGATIONS | |
Schedule of reconciliation of asset retirement obligations | March 31, 2018 December 31, 2017 Asset retirement obligation liability, beginning of the period $ 24,722 $ 9,843 Settlements (19) (126) Accretion of liability 294 635 Acquisitions and divestitures — 11,803 Adjustment reflecting updated estimates 504 2,561 Foreign exchange revaluation (359) 6 Asset retirement obligation liability, ending balance $ 25,142 $ 24,722 Current portion (743) (646) Non-current portion $ 24,399 $ 24,076 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
SHAREHOLDERS' EQUITY | |
Schedule of Black-Scholes pricing model to determine the fair value of warrants | Risk-free interest rate % Dividend yield % Volatility factor of the expected market price of common stock % Weighted-average expected life 53 weeks Weighted-average grant date fair value $ 0.40 |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
NET (LOSS) INCOME 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, March 31 2018 2017 Net loss $ (5,211) $ (3,018) Weighted average common shares outstanding: 337,062 299,575 Diluted shares outstanding: 337,062 299,575 Net loss per share: Basic $ (0.02) $ (0.01) Diluted $ (0.02) $ (0.01) |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party expense (income) and outstanding accounts payable (receivable) | The Company recorded the following expense (income) in respect to the related parties outlined below: Three months ended March 31, 2018 2017 Lexam L.P. $ 27 $ 62 Lexam VG Gold — (33) Noblegen Inc. 20 — REVlaw 17 49 Inventus 116 — The Company has the following outstanding accounts payable (receivable) balance in respect to the related parties outlined below: March 31, December 31, 2018 2017 Lexam L.P. $ 15 $ 152 Lexam VG Gold — (33) Noblegen Inc. 22 40 REVlaw 34 330 Inventus — (36) |
OPERATING SEGMENT REPORTING (Ta
OPERATING SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
OPERATING SEGMENT REPORTING | |
Schedule of the financial information relating to the Company's segments | Three months ended March 31, 2018 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 25,417 $ — $ — $ — $ 15,624 $ 41,041 Other revenue — — — — 244 244 Production costs applicable to sales (13,608) — — — (12,786) (26,394) Mine development costs (380) — — — — (380) Exploration costs (971) — (3,207) (2,000) (5,276) (11,454) Property holding costs (1,149) — (40) (179) (43) (1,411) General and administrative costs (829) — (278) (863) (88) (2,058) Income (loss) from investment in Minera Santa Cruz S.A. (net of amortization) — (212) — — — (212) Segment income (loss) $ 8,480 $ (212) $ (3,525) $ (3,042) $ (2,325) $ (624) Corporate and other General and administrative costs $ (3,129) Revision of estimates and accretion of reclamation obligations (294) Depreciation (360) Interest and other expense (134) Loss on sale of marketable equity securities (734) Unrealized fair value loss on marketable equity securities (1,137) Unrealized loss on derivatives (864) Foreign currency gain 927 Net loss before income and mining taxes $ (6,349) Three months ended March 31, 2017 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 14,833 $ — $ — $ — $ — $ 14,833 Production costs applicable to sales (6,984) — — — — (6,984) Mine development costs (155) — — (960) — (1,115) Exploration costs (1,539) — (6,301) (484) — (8,324) Property holding costs (982) — (1) (205) — (1,188) General and administrative costs (839) — (208) (426) — (1,473) Income (loss) from investment in Minera Santa Cruz S.A. (net of amortization) — 190 — — — 190 Segment income (loss) $ 4,334 $ 190 $ (6,510) $ (2,075) $ — $ (4,061) Corporate and other Other exploration costs $ (120) General and administrative costs (2,820) Depreciation (327) Revision of estimates and accretion of reclamation obligations (105) Interest and other income (68) Gain on sale of assets 11 Unrealized gain on derivatives 1,791 Foreign currency gain 25 Net loss before income and mining taxes $ (5,674) |
Schedule Of Geographic Information | Geographic information Long-lived Assets as at Revenue (1) March 31, December 31, Three months ended March 31, 2018 2017 2018 2017 Canada $ 86,187 $ 85,179 $ 15,868 $ — Mexico 33,377 35,446 25,417 14,833 USA (2) 52,467 43,086 — — Argentina (3) 336,491 341,554 — — Total consolidated $ 508,522 $ 505,265 $ 41,285 $ 14,833 (1) Presented based on the location from which the product originated. (2) The USA segment includes construction in progress of $14.8 million related to the Gold Bar mine construction. Of the $14.8 million, $8.8 million was incurred in the three months ended March 31, 2018. The balance of the construction in progress is expected to increase throughout the year 2018, until the Gold Bar mine is placed into operation. Includes Investment in MSC of $145 million as of March 31, 2018 (December 31, 2017 - $151.0 million). |
FAIR VALUE ACCOUNTING (Tables)
FAIR VALUE ACCOUNTING (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 Total Level 1 Level 2 Level 3 Assets: Investments $ 2,573 $ 1,870 $ 703 $ — Total $ 2,573 $ 1,870 $ 703 $ — Fair Value as at December 31 2017 Total Level 1 Level 2 Level 3 Assets: Investments $ 7,971 $ 6,404 $ 1,567 $ — Total $ 7,971 $ 6,404 $ 1,567 $ — |
CAPITAL LEASES (Tables)
CAPITAL LEASES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
CAPITAL LEASES | |
Schedule of capital lease obligations | March 31, December 31, Interest Rates Maturities 2018 2017 Capital Lease Obligations 4.74 -10.09% 2018 - 2019 $ 361 $ 551 Less current portion 321 470 Long-term capital lease obligations $ 40 $ 81 |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
RESTRICTED CASH | |
Reconciliation of cash, cash equivalents, and restricted cash | March 31, December 31, 2018 2017 Cash and cash equivalents $ 29,904 $ 27,153 Restricted cash 8,837 10,000 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 38,741 $ 37,153 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
ACQUISITIONS | |
Schedule of assets acquired and liabilities assumed | Total purchase price: Purchase price $ Adjustments to purchase price $ Fair value of assets acquired and liabilities assumed: Cash $ Accounts Receivable Prepaids Inventory Mineral Property Interests Plant and Equipment Accounts Payable Accrued Liabilities Short term capital lease liability Asset retirement obligation Long term capital lease liability Deferred tax liability Net assets acquired in acquisition $ |
NATURE OF OPERATIONS AND RECE37
NATURE OF OPERATIONS AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
MSC | ||
Ownership interest (as a percent) | 49.00% | 49.00% |
El Gallo 1 mine | ||
Option to sell prior to the completion of refining (as a percent) | 90.00% | |
Period of completion of refining | 10 days | |
Minimum | ||
Period over which concentrates are provisionally priced at the end of a period after delivery to the customer | 30 days | |
Maximum | ||
Period over which concentrates are provisionally priced at the end of a period after delivery to the customer | 90 days |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Investments rollforward | ||||
Opening balance | $ 7,971 | $ 8,543 | $ 8,543 | |
Disposals during the period | (3,397) | (2,163) | ||
Other Comprehensive Income (Loss) (pre -tax) | 1,334 | |||
Statement of Operations (Loss) Income | (2,001) | 257 | ||
Fair Value end of the year | $ 2,573 | 2,573 | 7,971 | |
Fair value of warrants | ||||
Unrealized gain on available-for-sale securities, net of taxes (note 2) | (1,137) | |||
Cost of purchase of marketable equity securities | 1,400 | 3,300 | ||
Unrealized (loss) gain on derivatives (note 2) | (864) | 1,791 | ||
Proceeds from sale of investments | 2,663 | |||
Unrealized loss on available-for-sale securities | 900 | |||
Unrealized gain on available-for-sale securities | 1,800 | |||
Marketable equity securities | ||||
Investments rollforward | ||||
Opening balance | 6,404 | 6,749 | 6,749 | |
Disposals during the period | (3,397) | (2,163) | ||
Other Comprehensive Income (Loss) (pre -tax) | 1,334 | |||
Statement of Operations (Loss) Income | (1,137) | 484 | ||
Fair Value end of the year | 1,870 | 1,870 | 6,404 | |
Warrants | ||||
Investments rollforward | ||||
Opening balance | 1,567 | $ 1,794 | 1,794 | |
Statement of Operations (Loss) Income | (864) | (227) | ||
Fair Value end of the year | $ 703 | $ 703 | $ 1,567 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Inventories | ||
Material on leach pads | $ 8,631 | $ 9,188 |
In-process inventory | 6,401 | 5,486 |
Stockpiles | 2,386 | 1,168 |
Precious metals | 8,301 | 12,902 |
Materials and supplies | 3,332 | 3,207 |
Current Inventories | 29,051 | 31,951 |
Other assets | ||
Inventories | ||
Non-current portion of ore on leach pads | $ 9,300 | $ 10,400 |
MINERAL PROPERTY INTERESTS - Mi
MINERAL PROPERTY INTERESTS - Mineral Property Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Aug. 25, 2017 | |
Mineral Property Interests | ||||
Mineral property interests | $ 296,034 | $ 293,437 | ||
Payments to Acquire Mining Assets | 4,084 | |||
Amortization of mineral property interests and asset retirement obligations | 1,800 | $ 533 | ||
El Gallo 1 mine | ||||
Mineral Property Interests | ||||
Amortization of mineral property interests and asset retirement obligations | 800 | $ (500) | ||
Black Fox | ||||
Mineral Property Interests | ||||
Mineral property interests | $ 8,954 | |||
Amortization of mineral property interests and asset retirement obligations | $ 2,700 | $ 0 |
INVESTMENT IN MINERA SANTA CR41
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Proceeds from Dividends Received | $ 4,851 | $ 2,525 | |
Corporate Venture | |||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Ownership interest (as a percent) | 100.00% | 100.00% | |
MSC | |||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Ownership interest (as a percent) | 49.00% | 49.00% | |
Results of operations | $ 200 | $ 200 | |
Proceeds from Dividends Received | 4,900 | $ 2,500 | |
Dividend distribution received | $ 4,851 | $ 12,212 |
INVESTMENT IN MINERA SANTA CR42
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Argentinian Tax Reform (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2018 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. (“MSC”) - SAN JOSE MINE | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 21.00% |
INVESTMENT IN MINERA SANTA CR43
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Changes in Company's Investment in MSC (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Change in the investment in MSC | |||
Investment in MSC, beginning balance | $ 150,064 | ||
Income tax recovery | (1,138) | $ (2,656) | |
Investment in MSC, ending balance | 145,001 | $ 150,064 | |
MSC | |||
Change in the investment in MSC | |||
Investment in MSC, beginning balance | 150,064 | 162,320 | 162,320 |
Attributable net income from MSC | 430 | 2,147 | (2,328) |
Amortization of fair value increments | (2,115) | (2,069) | (9,632) |
Income tax recovery | 1,473 | $ 112 | 11,916 |
Dividends received | (4,851) | (12,212) | |
Investment in MSC, ending balance | $ 145,001 | $ 150,064 |
INVESTMENT IN MINERA SANTA CR44
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Summary of Operating Results from MSC (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Income tax recovery | $ (1,138) | $ (2,656) | |
(Loss) income from investment in MSC, net of amortization | $ (212) | $ 190 | |
Corporate Venture | |||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Ownership interest (as a percent) | 100.00% | 100.00% | |
MSC | |||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Net sales | $ 50,662 | $ 48,343 | |
Production costs applicable to sales | (43,468) | (36,699) | |
Net (loss) income | $ 878 | $ 4,381 | |
Ownership interest (as a percent) | 49.00% | 49.00% | |
Net income (loss) | $ 430 | $ 2,147 | $ (2,328) |
Amortization of fair value increments | 2,115 | 2,069 | 9,632 |
Income tax recovery | 1,473 | 112 | $ 11,916 |
(Loss) income from investment in MSC, net of amortization | $ (212) | $ 190 |
INVESTMENT IN MINERA SANTA CR45
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Assets and Liabilities Associated with MSC (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | $ 79,625 | $ 86,864 |
Total assets | 588,147 | 592,129 |
Current liabilities | 40,332 | 37,639 |
Total liabilities | 73,528 | $ 70,856 |
MSC | ||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | 89,700 | |
Total assets | 387,600 | |
Current liabilities | 38,400 | |
Total liabilities | 91,700 | |
MSC | Current Period Values Excluding Fair Value Increments And Impairment Charge | ||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | 89,100 | |
Total assets | 233,600 | |
Current liabilities | 38,400 | |
Total liabilities | $ 66,600 |
RECLAMATION OBLIGATIONS (Detail
RECLAMATION OBLIGATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Mineral Property Interests | ||
Restricted Cash | $ 8,837 | $ 10,000 |
Changes in the asset retirement obligations | ||
Asset retirement obligation liability, beginning balance | 24,722 | 9,843 |
Settlements | (19) | (126) |
Accretion of liability | 294 | 635 |
Acquisitions and divestitures | 11,803 | |
Adjustment reflecting updated estimates | 504 | 2,561 |
Foreign exchange revaluation | (359) | 6 |
Asset retirement obligation liability, ending balance | 25,142 | 24,722 |
Current portion | (743) | (646) |
Non-current portion | 24,399 | $ 24,076 |
Timmins | ||
Mineral Property Interests | ||
Surety bonds upfront deposit amount | $ 100 |
INCOME AND MINING TAXES (Detail
INCOME AND MINING TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | |
INCOME AND MINING TAXES. | |||
Statutory tax rate (as a percent) | 35.00% | 21.00% | |
Deferred income tax recovery due to increased explorations | $ 1.2 | $ 1.6 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands, $ in Millions | Dec. 19, 2017USD ($)$ / sharesshares | Sep. 22, 2017USD ($)item$ / sharesshares | Apr. 26, 2017shares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($)shares |
Shareholders’ distributions | $ 1,686 | $ 1,498 | |||||
Common stock issued | shares | 337,086,000 | 337,051,000 | |||||
Weighted average exercise price of stock options (in dollars per share) | $ / shares | $ 1.15 | $ 2.34 | |||||
Exercise of stock options | $ 40 | $ (47) | |||||
Flow-through share premium | 1,000 | $ 1,643 | |||||
Restricted cash for exploration activities | 1,200 | ||||||
Decrease in flow through premium | 600 | ||||||
Number of units issued | shares | 20,700,000 | ||||||
Number of warrants issued | item | 10,350,000 | ||||||
Price per unit | $ / shares | $ 2.50 | ||||||
Net proceeds | $ 43,200 | 39,400 | |||||
Issuance costs | $ 3,400 | $ 3,800 | |||||
Number of warrants remained outstanding and unexercised | shares | 10,350,000 | ||||||
Share price | $ / shares | $ 2.50 | ||||||
Equity Incentive Plan | |||||||
Shares of common stock issued upon exercise of stock options | shares | 20,000 | ||||||
Common Stock | |||||||
Shareholders’ distributions | $ 1,686 | $ 1,498 | |||||
Shares of common stock issued upon exercise of stock options | shares | 35,000 | 20,000 | |||||
Exercise of stock options | $ 40 | $ (47) | |||||
Warrants | |||||||
Number of common share per warrant | shares | 1 | ||||||
Price per common share for each warrant | $ / shares | $ 2.70 | ||||||
Flow Through Common Shares | |||||||
Flow-through share premium | $ 1,600 | ||||||
Number of units issued | shares | 4,000,000 | ||||||
Net proceeds | $ 10,000 | $ 1,200 | $ 12.9 | $ 10,000 | |||
Lexam | |||||||
Ratio of Company's share for acquired company's share | 0.056% | ||||||
Lexam | Warrants | |||||||
Number of units issued | shares | 12,687,035 | ||||||
Equity Method Investment, Ownership Percentage | 100.00% |
SHAREHOLDERS' EQUITY - Black-Sc
SHAREHOLDERS' EQUITY - Black-Scholes pricing model (Details) - Warrants | 3 Months Ended |
Mar. 31, 2018$ / shares | |
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | |
Risk-free interest rate (as a percent) | 1.56% |
Dividend yield (as a percent) | 0.36% |
Volatility factor of the expected market price of common stock (as a percent) | 71.00% |
Weighted-average expected life of option | 371 days |
Weighted-average grant date fair value (in dollars per share) | $ 0.40 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
STOCK-BASED COMPENSATION | ||
Stock option expense | $ 0.2 | $ 0.3 |
NET (LOSS) INCOME PER SHARE (De
NET (LOSS) INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
NET (LOSS) INCOME PER SHARE | ||
Net loss | $ (5,211) | $ (3,018) |
Weighted average number of common shares | 337,062 | 299,575 |
Diluted shares outstanding | 337,062 | 299,575 |
Net income (loss) per share: | ||
Basic (in dollars per share) | $ (0.02) | $ (0.01) |
Diluted (in dollars per share) | $ (0.02) | $ (0.01) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Apr. 26, 2017 | |
RELATED PARTY TRANSACTIONS | ||||
Accounts payable | $ 38,268 | $ 34,880 | ||
Entity Affiliated With Related Party | Lexam L.P. | ||||
RELATED PARTY TRANSACTIONS | ||||
Expense (income) | 27 | $ 62 | ||
Ownership percentage of individual | 27.00% | |||
Entity Affiliated With Related Party | Lexam L.P. | Accounts payable | ||||
RELATED PARTY TRANSACTIONS | ||||
Outstanding accounts payable (receivable) | 15 | 152 | ||
Entity Affiliated With Related Party | Lexam VG Gold | ||||
RELATED PARTY TRANSACTIONS | ||||
Expense (income) | (33) | |||
Entity Affiliated With Related Party | Lexam VG Gold | Accounts payable | ||||
RELATED PARTY TRANSACTIONS | ||||
Outstanding accounts payable (receivable) | (33) | |||
Entity Affiliated With Related Party | Noblegen Inc. | ||||
RELATED PARTY TRANSACTIONS | ||||
Expense (income) | 20 | |||
Entity Affiliated With Related Party | Noblegen Inc. | Accounts payable | ||||
RELATED PARTY TRANSACTIONS | ||||
Outstanding accounts payable (receivable) | 22 | 40 | ||
Entity Affiliated With Related Party | REVlaw | ||||
RELATED PARTY TRANSACTIONS | ||||
Expense (income) | 17 | $ 49 | ||
Entity Affiliated With Related Party | REVlaw | Accounts payable | ||||
RELATED PARTY TRANSACTIONS | ||||
Outstanding accounts payable (receivable) | 34 | 330 | ||
Entity Affiliated With Related Party | Inventus | ||||
RELATED PARTY TRANSACTIONS | ||||
Expense (income) | $ 116 | |||
Entity Affiliated With Related Party | Inventus | Accounts payable | ||||
RELATED PARTY TRANSACTIONS | ||||
Outstanding accounts payable (receivable) | $ (36) | |||
Lexam | ||||
RELATED PARTY TRANSACTIONS | ||||
Interest acquired (as a percent) | 100.00% |
OPERATING SEGMENT REPORTING (De
OPERATING SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Operating Segment Reporting | |||
Revenues | $ 41,285 | $ 14,833 | |
Revision of estimates and accretion of reclamation obligations | (294) | (105) | |
Property holding costs | (1,411) | (1,188) | |
General and administrative expenses | (5,187) | (4,293) | |
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (212) | 190 | |
Depreciation | 2,327 | 327 | |
Interest and other expense | (134) | (68) | |
Reclamation and Remediation | 294 | $ 635 | |
Revision of estimates and accretion of reclamation obligations | (294) | (105) | |
Gain on sale of assets | 11 | ||
Loss on sale of marketable securities | 734 | ||
Unrealized (loss) gain on derivative instrument | (864) | 1,791 | |
(Gain) on disposal of fixed assets | 11 | ||
Foreign currency gain | 927 | 25 | |
Net loss before income and mining taxes | (6,349) | (5,674) | |
Long-Lived Assets | 508,522 | 505,265 | |
Investment in MSC | 145,001 | 150,064 | |
Canada | |||
Operating Segment Reporting | |||
Property holding costs | (43) | ||
General and administrative expenses | (88) | ||
Segment income (loss) | (2,325) | ||
Mexico | |||
Operating Segment Reporting | |||
Property holding costs | (1,149) | (982) | |
General and administrative expenses | (829) | (839) | |
Segment income (loss) | 8,480 | 4,334 | |
MSC | |||
Operating Segment Reporting | |||
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (212) | 190 | |
Segment income (loss) | (212) | 190 | |
Los Azules | |||
Operating Segment Reporting | |||
Property holding costs | (40) | (1) | |
General and administrative expenses | (278) | (208) | |
Segment income (loss) | (3,525) | (6,510) | |
U.S. | |||
Operating Segment Reporting | |||
Property holding costs | (179) | (205) | |
General and administrative expenses | (863) | (426) | |
Segment income (loss) | (3,042) | (2,075) | |
Total Segment | |||
Operating Segment Reporting | |||
Property holding costs | (1,411) | (1,188) | |
General and administrative expenses | (2,058) | (1,473) | |
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (212) | 190 | |
Segment income (loss) | (624) | (4,061) | |
Corporate & Other | |||
Operating Segment Reporting | |||
Revision of estimates and accretion of reclamation obligations | (294) | (105) | |
Other exploration costs | (120) | ||
General and administrative expenses | (3,129) | (2,820) | |
Depreciation | (360) | (327) | |
Interest and other expense | 134 | (68) | |
Revision of estimates and accretion of reclamation obligations | (294) | (105) | |
Gain on sale of assets | 11 | ||
Loss on sale of marketable securities | (734) | ||
Unrealized fair value loss on marketable equity securities | 1,137 | ||
Unrealized (loss) gain on derivative instrument | (864) | 1,791 | |
Foreign currency gain | 927 | 25 | |
Canada | |||
Operating Segment Reporting | |||
Revenues | 15,868 | ||
Long-Lived Assets | 86,187 | 85,179 | |
Mexico | |||
Operating Segment Reporting | |||
Revenues | 25,417 | 14,833 | |
Long-Lived Assets | 33,377 | 35,446 | |
United States | |||
Operating Segment Reporting | |||
Long-Lived Assets | 52,467 | 43,086 | |
United States | Gold Bar Complex | |||
Operating Segment Reporting | |||
Construction-in-progress | 8,800 | 14,800 | |
Argentina | |||
Operating Segment Reporting | |||
Long-Lived Assets | 336,491 | $ 341,554 | |
Gold and silver sales | |||
Operating Segment Reporting | |||
Revenues | 41,041 | 14,833 | |
Gold and silver sales | Canada | |||
Operating Segment Reporting | |||
Revenues | 15,624 | ||
Gold and silver sales | Mexico | |||
Operating Segment Reporting | |||
Revenues | 25,417 | 14,833 | |
Gold and silver sales | Total Segment | |||
Operating Segment Reporting | |||
Revenues | 41,041 | 14,833 | |
Other revenue | |||
Operating Segment Reporting | |||
Revenues | 244 | ||
Other revenue | Canada | |||
Operating Segment Reporting | |||
Revenues | 244 | ||
Other revenue | Total Segment | |||
Operating Segment Reporting | |||
Revenues | 244 | ||
Production costs applicable to sales | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 26,394 | 6,984 | |
Production costs applicable to sales | Canada | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 12,786 | ||
Production costs applicable to sales | Mexico | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 13,608 | 6,984 | |
Production costs applicable to sales | Total Segment | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 26,394 | 6,984 | |
Mine development costs | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 380 | 1,115 | |
Mine development costs | Mexico | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 380 | 155 | |
Mine development costs | U.S. | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 960 | ||
Mine development costs | Total Segment | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 380 | 1,115 | |
Exploration costs | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 11,454 | 8,444 | |
Exploration costs | Canada | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 5,276 | ||
Exploration costs | Mexico | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 971 | 1,539 | |
Exploration costs | Los Azules | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 3,207 | 6,301 | |
Exploration costs | U.S. | |||
Operating Segment Reporting | |||
Cost of goods and services sold | 2,000 | 484 | |
Exploration costs | Total Segment | |||
Operating Segment Reporting | |||
Cost of goods and services sold | $ 11,454 | $ 8,324 |
FAIR VALUE ACCOUNTING (Details)
FAIR VALUE ACCOUNTING (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Investments | $ 2,573 | $ 7,971 |
Assets | 2,573 | 7,971 |
Level 1 | ||
Assets: | ||
Investments | 1,870 | 6,404 |
Assets | 1,870 | 6,404 |
Level 2 | ||
Assets: | ||
Investments | 703 | 1,567 |
Assets | $ 703 | $ 1,567 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Surety, Reclamation Bonds and Flow-Through Common Shares (Details) $ in Thousands, $ in Millions | Dec. 19, 2017USD ($) | Sep. 22, 2017USD ($) | Aug. 25, 2017USD ($) | Jul. 01, 2017USD ($) | Jun. 23, 2017USD ($) | Mar. 31, 2018CAD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) |
Reclamation Bonds | |||||||||
Other assets | $ 9,659 | $ 10,718 | |||||||
Amount raised or spent in connection with the equity issuance | $ 43,200 | 39,400 | |||||||
Surety Bonds | |||||||||
Reclamation Bonds | |||||||||
Face amount | $ 20,000 | ||||||||
Percentage of annual fees on surety bonds | 2.00% | ||||||||
Percentage of upfront deposit on surety bonds | 0.00% | ||||||||
Surety bonds upfront deposit amount | $ 15,000 | ||||||||
Surety Bonds | Tonkin Project | |||||||||
Reclamation Bonds | |||||||||
Surety bond draw down | $ 3,600 | ||||||||
Surety Bonds | Nevada Exploration Properties | |||||||||
Reclamation Bonds | |||||||||
Surety bond draw down | $ 1,300 | ||||||||
Surety Bonds | Gold Bar project | |||||||||
Reclamation Bonds | |||||||||
Surety bond draw down | $ 15,000 | ||||||||
Reclamation Bonds | |||||||||
Reclamation Bonds | |||||||||
Reclamation bonding obligation | $ 19,900 | ||||||||
Black Fox | |||||||||
Reclamation Bonds | |||||||||
Percentage of upfront deposit on surety bonds | 2.00% | 2.00% | |||||||
Surety bonds upfront deposit amount | $ 0 | ||||||||
Surety bonding obligation | $ 20.6 | 16,500 | |||||||
Outstanding surety bonds | 20,000 | ||||||||
Timmins | |||||||||
Reclamation Bonds | |||||||||
Surety bonds upfront deposit amount | 100 | ||||||||
Flow Through Common Shares | |||||||||
Reclamation Bonds | |||||||||
Amount raised or spent in connection with the equity issuance | $ 10,000 | 1,200 | $ 12.9 | $ 10,000 | |||||
Total costs incurred for Canadian Exploration Expenditures | $ 3,800 |
COMMITMENTS AND CONTINGENCIES56
COMMITMENTS AND CONTINGENCIES - Streaming Agreement (Details) $ in Thousands | Aug. 25, 2017$ / oz | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) |
Other commitments | |||
Revenues | $ 41,285 | $ 14,833 | |
Black Fox | |||
Other commitments | |||
Obligation to sell (as a percent) | 8.00% | ||
Revenues | $ 600 | $ 0 | |
Pike River property | |||
Other commitments | |||
Obligation to sell (as a percent) | 6.30% | ||
Long Term Gold Price (in dollars per ounce) | $ / oz | 539 | ||
Pike River property | Maximum | |||
Other commitments | |||
Inflation adjustment (as a percent) | 2.00% |
COMMITMENTS AND CONTINGENCIES57
COMMITMENTS AND CONTINGENCIES - Short-term Bank Indebtedness (Details) $ in Thousands | Nov. 30, 2017MXN ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Nov. 30, 2017USD ($) |
Short-term Bank Indebtedness | ||||
Short-term Debt | $ 0 | $ 0 | ||
Line of Credit. | Secured Debt | ||||
Short-term Bank Indebtedness | ||||
Amount withdrawn from line of credit | $ 0 | |||
Line of Credit. | Secured Debt | Compania Minera Pangea, S.A. de C.V. (“CMP”) | ||||
Short-term Bank Indebtedness | ||||
Maximum borrowing capacity | $ 120,000,000 | $ 6,400 | ||
Market exchange rate | 19.64 | 19.64 | ||
Line of Credit availability | 1 year |
CAPITAL LEASES (Details)
CAPITAL LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Capital Lease Obligations | $ 361 | $ 551 | $ 361 |
Less current portion | 321 | 470 | 321 |
Long-term capital lease obligations | $ 40 | $ 81 | $ 40 |
Minimum | |||
Interest Rates | 4.74% | 4.74% | |
Maximum | |||
Interest Rates | (10.09%) |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
RESTRICTED CASH | ||||
Cash and cash equivalents | $ 29,904 | $ 27,153 | ||
Restricted cash | 8,837 | 10,000 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 38,741 | $ 37,153 | $ 28,890 | $ 37,440 |
Generative exploration expenses | $ 1,200 |
ACQUISITIONS - Assets acquired
ACQUISITIONS - Assets acquired and liabilities (Details) - USD ($) $ in Thousands | Aug. 25, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Fair value of assets acquired and liabilities assumed: | |||
Inventory | $ 29,051 | $ 31,951 | |
Mineral Property Interests | 296,034 | 293,437 | |
Property, Plant and Equipment | 57,828 | 51,046 | |
TOTAL ASSETS | 588,147 | 592,129 | |
Short term capital lease liability | (321) | (470) | |
Reclamation obligations | (743) | (646) | |
Long term capital lease liability | (40) | (81) | |
Deferred income tax liabilities | (8,176) | (8,430) | |
Liabilities | $ 73,528 | $ 70,856 | |
Black Fox | |||
ACQUISITIONS | |||
Purchase price | $ 35,000 | ||
Adjustments to purchase price | (7,500) | ||
Total fair value of assets acquired and liabilities assumed | 27,500 | ||
Fair value of assets acquired and liabilities assumed: | |||
Cash | 249 | ||
Accounts Receivable | 470 | ||
Prepaids | 63 | ||
Inventory | 4,704 | ||
Mineral Property Interests | 8,954 | ||
Property, Plant and Equipment | 33,683 | ||
Accounts Payable | (5,247) | ||
Accrued Liabilities | (3,213) | ||
Short term capital lease liability | (557) | ||
Reclamation obligations | (11,233) | ||
Long term capital lease liability | (172) | ||
Deferred income tax liabilities | (201) | ||
Total fair value of assets acquired and liabilities assumed | $ 27,500 |