Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 20, 2019 | Jun. 29, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | McEwen Mining Inc. | ||
Entity Central Index Key | 314,203 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 538,621,522 | ||
Entity Common Stock, Shares Outstanding | 344,929,723 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
REVENUE: | |||
Revenue | $ 128,822 | $ 67,724 | $ 60,388 |
COSTS AND EXPENSES: | |||
Gross profit | 35,493 | 22,544 | 32,255 |
OTHER OPERATING EXPENSES: | |||
Property holding | 3,896 | 3,879 | 3,536 |
General and administrative | 23,163 | 18,872 | 12,734 |
Loss (income) from investment in Minera Santa Cruz S.A. (note 7) | 11,865 | 44 | (12,951) |
Depreciation | 1,178 | 1,453 | 1,169 |
Revision of estimates and accretion of asset reclamation obligations (note 8) | 3,464 | 2,061 | 595 |
Impairment of property and equipment (note 6) | 711 | ||
Total other operating expenses | 82,035 | 48,571 | 16,908 |
Operating (loss) income | (46,542) | (26,027) | 15,347 |
OTHER (EXPENSE) INCOME: | |||
Interest and other (expense) income | (1,619) | (938) | 835 |
(Loss) gain on sale of assets | (77) | 11 | 24 |
(Loss) gain on investments (note 3) | (3,324) | 257 | 519 |
Foreign currency gain | 3,922 | 694 | 581 |
Total other (expense) income | (1,098) | 24 | 1,959 |
(Loss) income before income and mining taxes | (47,640) | (26,003) | 17,306 |
Income and mining tax recovery (note 9) | 2,770 | 15,369 | 3,749 |
Net (loss) income | (44,870) | (10,634) | 21,055 |
OTHER COMPREHENSIVE (LOSS) INCOME: | |||
Reclassification of unrealized gain on marketable equity securities disposed of during the period, net of taxes (note 3) | (840) | ||
Other-than-temporary impairment on marketable equity securities (note 3) | (356) | (882) | |
Unrealized gain on marketable equity securities, net of taxes | 1,818 | 1,609 | |
Comprehensive (loss) income | $ (44,870) | $ (9,300) | $ 23,546 |
Net (loss) income per share (note 12): | |||
Basic and Diluted (in dollars per share) | $ / shares | $ (0.13) | $ (0.03) | $ 0.07 |
Weighted average common shares outstanding (thousands) (note 12): | |||
Basic (in shares) | shares | 337,297,000 | 313,887,000 | 298,772,000 |
Diluted (in shares) | shares | 337,297,000 | 313,887,000 | 300,474,000 |
Shareholders' distribution declared per common share (note 10) | $ / shares | 0.010 | 0.010 | 0.005 |
Gold and silver sales | |||
REVENUE: | |||
Revenue | $ 128,175 | $ 67,465 | $ 60,388 |
Other revenue | |||
REVENUE: | |||
Revenue | 647 | 259 | |
Production costs applicable to sales | |||
COSTS AND EXPENSES: | |||
Cost of goods and services sold | 93,329 | 45,180 | 28,133 |
Mine development | |||
COSTS AND EXPENSES: | |||
Cost of goods and services sold | 3,667 | 3,837 | 3,866 |
Exploration | |||
COSTS AND EXPENSES: | |||
Cost of goods and services sold | $ 34,802 | $ 17,714 | $ 7,959 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents (note 21) | $ 15,756 | $ 27,153 |
Investments (note 3) | 3,131 | 7,971 |
Value added taxes receivable | 1,058 | 5,250 |
Inventories (note 4) | 22,039 | 31,951 |
Restricted cash (note 10 and 21) | 14,685 | 10,000 |
Other current assets | 2,707 | 4,539 |
Total current assets | 59,376 | 86,864 |
Mineral property interests, net (note 5) | 309,145 | 293,437 |
Plant and equipment and construction in progress, net (note 6) | 114,734 | 51,046 |
Investment in Minera Santa Cruz S.A. (note 7) | 127,814 | 150,064 |
Other assets (note 4 and note 13) | 5,872 | 10,718 |
TOTAL ASSETS | 616,941 | 592,129 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 30,817 | 34,880 |
Flow-through share premium (note 10) | 2,950 | 1,643 |
Current portion of capital lease liabilities (note 20) | 1,511 | 470 |
Current portion of asset retirement obligation (note 8) | 734 | 646 |
Total current liabilities | 36,012 | 37,639 |
Asset retirement obligation, less current portion (note 8) | 28,668 | 24,076 |
Deferred income and mining tax liability (note 9) | 6,426 | 8,430 |
Capital lease liabilities, less current portion (note 20) | 4,918 | 81 |
Long-term debt (note 22) | 24,603 | |
Long-term debt from related party (note 14 and note 22) | 24,603 | |
Other liabilities | 5,765 | 630 |
Total liabilities | 130,995 | 70,856 |
Shareholders’ equity: | ||
Common stock and additional paid-in capital, no par value, 500,000 shares authorized (in thousands); Common: 344,560 as of December 31, 2018 and 337,051 as of December 31, 2017 issued and outstanding (in thousands) (note 10) | 1,457,422 | 1,447,879 |
Accumulated deficit | (971,476) | (929,606) |
Accumulated other comprehensive income | 3,000 | |
Total shareholders' equity | 485,946 | 521,273 |
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | $ 616,941 | $ 592,129 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 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 | 344,560 | 337,051 |
Common, shares outstanding | 344,560 | 337,051 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common StockLexam VG Gold | Common Stock | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Flow Through Common Shares | Lexam VG Gold | Total |
Balance at Dec. 31, 2015 | $ 1,359,144 | $ (825) | $ (940,027) | $ 418,292 | |||
Balance (in shares) at Dec. 31, 2015 | 298,634 | ||||||
Increase (Decrease) in Shareholders' Equity | |||||||
Stock-based compensation (note 11) | $ 1,039 | 1,039 | |||||
Exercise of stock options (note 11) | $ 3,730 | $ 3,730 | |||||
Exercise of stock options (note 11) (in shares) | 1,494 | 1,457 | |||||
Other-than-temporary impairment on marketable equity securities (note 3) | 882 | $ 882 | |||||
Share repurchase (note 10) | $ (582) | (582) | |||||
Share repurchase (note 10) (in shares) | (558) | ||||||
Shareholder distributions (note 10) | $ (2,986) | (2,986) | |||||
Unrealized gain (loss) on available-for-sale securities (note 3) | 1,609 | 1,609 | |||||
Net (loss) income | 21,055 | 21,055 | |||||
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 11) | $ 1,311 | 1,311 | |||||
Shares issued for cash (note 10 and note 19) | $ 39,397 | $ 7,799 | 39,397 | ||||
Shares issued for cash (note 10 and note 19) (in shares) | 20,700 | 4,000 | |||||
Shares issued in connection with acquisitions (note 10) | $ 38,141 | $ 38,141 | |||||
Shares issued in connection with acquisitions (note 10) (in shares) | 12,687 | ||||||
Exercise of stock options (note 11) | $ 122 | $ 122 | |||||
Exercise of stock options (note 11) (in shares) | 94 | 94 | |||||
Other-than-temporary impairment on marketable equity securities (note 3) | 356 | $ 356 | |||||
Shareholder distributions (note 10) | $ (3,059) | (3,059) | |||||
Reclassification of unrealized gain on marketable securities disposed of during the period, net of taxes (note 3) | (840) | (840) | |||||
Unrealized gain (loss) on available-for-sale securities (note 3) | 1,818 | 1,818 | |||||
Net (loss) income | (10,634) | (10,634) | |||||
Balance at Dec. 31, 2017 | $ 1,447,879 | 3,000 | (929,606) | 521,273 | |||
Balance (in shares) at Dec. 31, 2017 | 337,051 | ||||||
Increase (Decrease) in Shareholders' Equity | |||||||
Warrants issued in connection with the equity issuance (note 10) | $ 3,823 | 3,823 | |||||
Balance at Dec. 31, 2017 | 1,447,879 | (926,606) | 521,273 | ||||
Increase (Decrease) in Shareholders' Equity | |||||||
Stock-based compensation (note 11) | 269 | 269 | |||||
Shares issued for cash (note 10 and note 19) | $ 918 | $ 11,145 | 918 | ||||
Shares issued for cash (note 10 and note 19) (in shares) | 515 | 6,634 | |||||
Shares issued in connection with acquisitions (note 10) | $ 391 | 391 | |||||
Shares issued in connection with acquisitions (note 10) (in shares) | 178 | ||||||
Exercise of stock options (note 11) | $ 192 | $ 192 | |||||
Exercise of stock options (note 11) (in shares) | 182 | 171 | |||||
Share repurchase (note 10) (in shares) | 0 | ||||||
Shareholder distributions (note 10) | $ (3,372) | $ (3,372) | |||||
Net (loss) income | (44,870) | (44,870) | |||||
Balance at Dec. 31, 2018 | $ 1,457,422 | (971,476) | $ 485,946 | ||||
Balance (in shares) at Dec. 31, 2018 | 344,560 | ||||||
Increase (Decrease) in Shareholders' Equity | |||||||
Adoption of ASU 2016-01 (note 2 and note 3) | Accounting Standards Update 2016-01 | $ (3,000) | $ 3,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Cash paid to suppliers and employees | $ (126,784) | $ (95,871) | $ (52,340) |
Cash flow from revenues | 128,822 | 67,724 | 59,517 |
Interest paid | (1,923) | (5) | |
Interest received | 372 | 501 | 276 |
Cash provided by (used in) operating activities | 487 | (27,646) | 7,448 |
Cash flows from investing activities: | |||
Additions to mineral property interests | (18,983) | (3,492) | (5,985) |
Additions to property and equipment (including construction in progress) | (62,338) | (5,077) | (1,174) |
Proceeds from disposal of property and equipment | 84 | 33 | 994 |
Additions to investments (note 3) | (1,384) | (4,419) | |
Proceeds from sale of investments (note 3) | 2,895 | 2,155 | 470 |
Return of investment received from Minera Santa Cruz S.A. (note 2 and note 7) | 10,385 | 12,212 | 17,738 |
Cash (used in) provided by investing activities | (69,341) | (22,260) | 7,624 |
Cash flows from financing activities: | |||
Shareholders' distribution (note 10) | (3,372) | (3,059) | (2,986) |
Proceeds of exercise of stock options (note 10) | 192 | 121 | 3,730 |
Proceeds of loan from related party (note 14 and note 22) | 25,000 | ||
Proceeds of loan (note 22) | 25,000 | ||
Debt issuance costs and lender fees (note 22) | (908) | ||
Proceeds of at-the-market common share issuance (note 10) | 918 | ||
Principal repayments on capital leases (note 20) | (485) | ||
Proceeds from equity sale (note 10) | 42,453 | ||
Proceeds from warrants sale (note 10) | 4,122 | ||
Share and warrant issuance costs (note 10) | (3,353) | ||
Sale of flow-through common shares (note 10) | 14,846 | 9,994 | |
Flow-through common share issuance costs (note 10) | (751) | (551) | |
Repayment of short-term bank indebtedness | (3,395) | ||
Share repurchase (note 10) | (582) | ||
Cash provided by (used in) financing activities | 60,440 | 49,727 | (3,233) |
Effect of exchange rate change on cash and cash equivalents | 1,750 | (108) | (273) |
(Decrease) increase in cash, cash equivalents and restricted cash | (6,664) | (287) | 11,566 |
Cash, cash equivalents and restricted cash, beginning of period | 37,153 | 37,440 | 25,874 |
Cash, cash equivalents and restricted cash, end of period (note 21) | 30,489 | 37,153 | 37,440 |
Reconciliation of net (loss) income to cash provided by (used in) operating activities: | |||
Net (loss) income | (44,870) | (10,634) | 21,055 |
Adjustments to reconcile net (loss) income from operating activities: | |||
Loss (income) from investment in Minera Santa Cruz S.A., net of amortization (note 7) | 11,865 | 44 | (12,951) |
Impairment of property and equipment (note 6) | 711 | ||
Loss (gain) on investments (note 3) | 3,324 | (257) | (519) |
Loss (gain) on disposal of fixed assets | 77 | (11) | 517 |
Income and mining tax recovery (note 9) | (2,770) | (15,675) | (3,749) |
Stock-based compensation (note 11) | 269 | 1,309 | 1,039 |
Depreciation | 9,169 | 3,378 | 1,169 |
Revision of estimates and accretion of asset reclamation obligations (note 8) | 3,464 | 2,061 | 595 |
Adjustment to the asset retirement obligation estimate (note 8) | (1,903) | 1,008 | 1,530 |
Amortization of mineral property interests and asset retirement obligations | 7,256 | 3,198 | 2,413 |
Foreign exchange (loss) gain | (1,750) | 108 | 273 |
Change in non-cash working capital items: | |||
(Increase) decrease in VAT taxes receivable, net of collection of $8,274 (2017 - $5,864) | 4,192 | (945) | 5,813 |
(Increase) decrease in other assets related to operations | 16,704 | (12,756) | (11,156) |
Increase (decrease) in liabilities related to operations | (4,540) | 815 | 1,419 |
Cash provided by (used in) operating activities | $ 487 | (27,646) | $ 7,448 |
Lexam VG Gold | |||
Cash flows from investing activities: | |||
Acquisition costs, net of cash and cash equivalents acquired | (840) | ||
Black Fox | |||
Cash flows from investing activities: | |||
Acquisition costs, net of cash and cash equivalents acquired | $ (27,251) |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Collection of VAT taxes receivable | $ 8,274 | $ 5,864 |
THE COMPANY
THE COMPANY | 12 Months Ended |
Dec. 31, 2018 | |
THE COMPANY | |
THE COMPANY | NOTE 1 THE COMPAN 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, development, production and sale of gold and silver and exploration for 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. The Company also owns a 100% interest in the Black Fox gold mine in Ontario, Canada, the El Gallo Project in Sinaloa, Mexico, the Gold Bar gold project in Nevada, the Los Azules copper deposit in San Juan, Argentina, the Fenix silver-gold project in Sinaloa, Mexico, and a portfolio of exploration properties in Argentina, Mexico, Nevada, and Canada. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates: The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the Company’s consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to environmental reclamation and closure obligations; asset useful lives utilized for depletion, depreciation, amortization and accretion calculations; estimates of fair value of equity investment and asset groups used in impairment testing; estimates of recoverable gold in leach pad inventory; estimates regarding mine development capitalization costs; estimates regarding the collectability of value added taxes receivable; estimates of fair values of assets and liabilities acquired in business combinations; estimates of reserves; valuation allowances for deferred tax assets; estimates of income and mining tax provisions and reserves for contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates. Basis of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated. Investments over which the Company exerts significant influence but does not control through majority ownership are accounted for using the equity method, as described in Investments, below. Cash and Cash Equivalents: The Company considers cash in banks, deposits in transit, and highly liquid term deposits with original maturities of three months or less to be cash and cash equivalents. Because of the short maturity of these instruments, the carrying amounts approximate their fair value. Restricted cash is excluded from cash and cash equivalents and is included in long-term assets, except for flow-through share proceeds which appear as a separate line in current assets. Investments: The Company accounts for investments over which the Company exerts significant influence but does not control through majority ownership using the equity method of accounting pursuant to ASC Topic 323, Investments – Equity Method and Joint Ventures . Under this method, the Company’s share of income and losses is included in the Consolidated Statements of Operations and Comprehensive (Loss) Income and the balance of the investment is adjusted by the same amount. Under the equity method, dividends received from an investee are recorded as decreases in the investment account, not as income. If and when there has been a loss in value that is other than a temporary decline, the carrying value is reduced to its fair value. The Company’s investments in marketable equity securities and warrants are measured at fair value with changes in fair value recognized in net (loss) income of the Consolidated Statements of Operations and Comprehensive (Loss) Income in accordance with ASC guidance on accounting for certain investments in debt and equity securities. Value Added Taxes Receivable: In Mexico and Canada, value added taxes (“VAT” and “HST”, respectively) are assessed on purchases of materials and services and sales of products. Businesses are generally entitled to recover the taxes they have paid related to purchases of materials and services, either as a refund or as a credit against future taxes payable. In Argentina, except at the San José mine, the Company expenses all VAT as their recoverability is uncertain. Stockpiles, Material on Leach Pads, In‑process Inventory, Precious Metals Inventory and Materials and Supplies: Stockpiles, material on leach pads, in-process inventory, precious metals inventory and materials and supplies (collectively, “Inventories”) are accounted for using the weighted average cost method and are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated costs to complete production and bring the product to sale. Write-downs of Inventories resulting from net realizable value impairments are reported as a component of production costs applicable to sales. The current portion of Inventories is determined based on the expected amounts to be processed within the next 12 months. Inventories not expected to be processed within the next 12 months, if any, are classified as long‑term. Stockpiles represent mineralized material extracted from the mine and available for processing. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, an estimate of the contained metals (based on assay data) and the estimated metallurgical recovery rates. Costs are allocated to stockpiles based on current mining costs incurred including applicable overhead relating to mining operations. Material is removed from the stockpile at an average cost per tonne. Mineralized material on leach pads is the material that is placed on pads where it is treated with a chemical solution that dissolves the gold contained in the mineralized material over a period of months. Costs are attributed to the mineralized material on leach pads based on current mining costs incurred up to the point of placing the ore on the pad. Costs are removed from the leach pad inventory based on the average cost per estimated recoverable ounce of gold on the leach pad as the gold is recovered. The estimates of recoverable gold on the leach pads are calculated from the quantities of mineralized material placed on the leach pads (measured tonnes added to the leach pads), the grade of mineralized material placed on the leach pads (based on assay data) and a recovery percentage. In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching is complete. The cumulative metallurgical recovery rate for gold production at the El Gallo Project from September 2012 (start of production) to December 31, 2018 was approximately 61% (2017 – 57%). Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on the pads to the quantities of gold actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and the engineering estimates are refined based on actual results over time. The current portion of mineralized material on leach pads inventory is determined based on the expected amounts to be processed within the next twelve months. Mineralized material on leach pads inventory not expected to be processed or used within the next twelve months is classified as non-current. In-process inventories represent materials that are currently in the process of being converted to a saleable product. In-process material is measured based on assays of the material from the various stages of processing. Costs are allocated to in-process inventories based on the costs of the material fed into the process attributable to the source material coming from the mines, stockpiles and/or leach pads plus the in-process conversion costs incurred to that point in the process. Precious metal inventories include gold and silver doré and bullion that is unsold and held at the Company’s or the refinery’s facilities. Costs are allocated to precious metal inventories based on costs of the respective in-process inventories incurred prior to the refining process plus applicable refining costs. Materials and supplies inventories are comprised of chemicals, reagents, spare parts and consumable parts used in drilling and other operating activities. Cost includes applicable taxes and freight. Proven and Probable Reserves: The definition of proven and probable reserves is set forth in SEC Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geological character is so well defined that size, shape, depth and mineral content of the reserves are well‑established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observations. Mineral Property Interests, Plant and Equipment and Mine Development Costs: Mineral property interests: Mineral property interests include acquired interests in production, advanced-stage properties and exploration-stage properties, which are considered tangible assets. The amount capitalized relating to a mineral property interest represents its fair value at the time of acquisition, either as an individual asset purchase or as a part of a business combination provided that a reasonable expectation exists that the property includes mineral resources. The value of mineral property interests is primarily driven by the nature and amount of mineralized material believed to be contained in the properties. When proven and probable reserves as defined by SEC Industry Guide 7 exist, the relevant capitalized costs are to be charged to expense based on the units of production method upon commencement of production. However, when a property does not contain mineralized material that satisfies the definition of proven and probable reserves, the amortization of the capitalized costs are charged to expense based on the most appropriate method, which includes straight-line method and units-of-production method over the estimated useful life of the mine, as determined by internal mine plans. Mine Development Costs: Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, and the removal of overburden to initially expose an ore body at open pit surface mines and building of access paths and other infrastructure to gain access to the ore body at underground mines. Capitalization of mine development costs that meet the definition of an asset begins once proven and probable reserves as defined by SEC Industry Guide 7 have been defined. These costs would be capitalized to mineral property interests. Absent of proven and probable reserves, as defined by SEC Industry Guide 7, these costs are charged to expense as incurred. Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information, providing greater definition of the ore body or converting non-reserve mineralization to proven and probable reserves and the benefit is expected to be realized over a period beyond one year. All other drilling and related costs are expensed as incurred. However, drilling costs specifically incurred during the production stage for the purpose of operational ore control rather than obtaining additional information on the ore body are expensed and allocated to inventory costs and then included as a component of production costs applicable to sales as the revenue from the sale of inventory occurs. Pre-stripping costs incurred to access the ore body at an open pit mine prior to the production stage are capitalized during the development phase of the mine provided that the proven and probable reserves have been defined. Where multiple open pits exist at a mine, pre-stripping costs are capitalized separately to each pit. The production stage commences when saleable minerals, beyond a de minimis amount, are produced. Stripping costs incurred during the production stage of a mine are included as part of inventory costs and then included as a component of Production costs applicable to sales as the revenue from the sale of inventory occurs. All capitalized mine development costs are amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves. However, costs incurred to access specific areas that only provide benefit over the life of that area are amortized over the estimated life of that specific area. Plant and Equipment: For properties where the Company established proven and probable reserves as defined by SEC Industry Guide 7, expenditures for plant and equipment and expenditures that extend the useful lives of existing plant and equipment are capitalized and recorded at cost. Plant and equipment are depreciated using the straight-line method over the estimated productive life of the asset. For properties where the Company did not establish proven and probable reserves as defined by SEC Industry Guide 7, substantially all costs, including design, engineering, construction, and installation of equipment are expensed as incurred. Only certain types of equipment which have alternative uses or significant salvage value, may be capitalized without proven and probable reserves. Construction-in-progress (CIP) costs: Assets under construction are capitalized as construction-in-progress until the asset is available for its intended use, at which point costs are transferred to the appropriate category of plant and equipment or mineral property interest and amortized. The cost of construction-in-progress comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. Impairment of Long-lived Assets: The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Once it is determined that impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. For the purpose of recognition and measurement of impairment, the Company groups its long-lived assets by specific mine or project, as this represents the lowest level for which there are identifiable cash flows. For asset groups where an impairment loss is determined using the undiscounted future net cash flows method or discounted future net cash flows method, future cash flows are estimated based on quantities of recoverable mineralized material, expected gold and silver prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term “recoverable mineralized material” refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during processing and treatment. The Company’s estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, silver and other commodity prices, production levels and costs of capital are each subject to significant risks and uncertainties. For asset groups where the Company is unable to determine a reliable estimate of undiscounted future net cash flows, the Company adopts a market approach to estimate fair value by using a combination of observed market value per square mile and observed market value per ounce or pound of mineral material based on comparable transactions. Asset Retirement Obligation, reclamation and remediation costs: The Company records the fair value of a liability for an asset retirement obligation (“ARO”) in the period that it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset when proven or probable reserves exist, or if they relate to an acquired mineral property interest. Periodic accretion is recorded to ARO and charged to operations. Subsequent upward ARO cost revisions are capitalized only with respect to properties with proven or probable reserves, these being San Jose, Black Fox and Gold Bar. Upward adjustments to the fair value of the ARO on properties that do not contain proven or probable reserves are charged to expense. The fair value of ARO is measured by discounting the expected cash flows adjusted for inflation, using a credit-adjusted risk free rate of interest. The Company prepares estimates of the timing and amounts of expected cash flows when an ARO is incurred, which are updated to reflect changes in facts and circumstances. Estimation of the fair value of AROs requires significant judgment, including amount of cash flows, timing of reclamation, inflation rate and credit risk. Ongoing environmental and reclamation expenditures are debited against the ARO liability as incurred to the extent they relate to the ARO liability and to expense to the extent they do not. Revenue Recognition: Revenue consists of proceeds 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. 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. 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. Other Revenue : Other revenue is comprised of revenue earned from a toll milling arrangement at the Black Fox Complex and from rental income. Revenue from the milling arrangement is recognized when title to the product passes to the customer. In the fourth quarter of 2018, the Company purchased a 50 unit townhome complex in Eureka, Nevada. The townhomes will be rented to employees and contractors. Rental revenue from the townhomes is recorded on a gross basis and is recognized when rental services are rendered to the tenant and when collectability is reasonably assured. Property Holding Costs: Holding costs to maintain a property are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs. Exploration Costs: Exploration costs include costs incurred to identify new mineral resources, evaluate potential resources, and convert mineral resources into proven and probable reserves. Exploration costs are expensed as incurred. Foreign Currency: The functional currency for the Company’s operations is the U.S. dollar. All monetary assets and liabilities denominated in a currency which is not the U.S. dollar are translated at current exchange rates at each balance sheet date and the resulting adjustments are included in a separate line item under other income (expense). Revenue and expense in foreign currencies are translated at the average exchange rates for the period. Stock‑Based Compensation: The Company accounts for stock options at fair value as prescribed in ASC 718. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. The company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee stock option exercise behavior and estimates of forfeitures. Flow-through Shares: Current Canadian tax legislation permits mining entities to issue flow-through shares to investors by which the deductions for tax purposes related to resource exploration and evaluation expenditures may be claimed by investors instead of the entity, subject to a renouncement process. Under ASC 740, proceeds from the issuance of flow-through shares are allocated first to the common stock based on the underlying quoted price of shares and the residual amount is allocated to the sale of tax benefits, classified as a liability. As the Company incurs qualifying exploration and evaluation expenditures to fulfill its obligation, the liability is drawn down and the sale of tax benefits is recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income as a reduction of deferred tax expense. Income and Mining Taxes: The Company accounts for income and mining taxes under ASC 740 using the liability method, recognizing certain temporary differences between the financial reporting basis of liabilities and assets and the related tax basis for such liabilities and assets. This method generates either a net deferred income and mining tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives the deferred income and mining tax charge or benefit by recording the change in either the net deferred income and mining tax liability or asset balance for the year. The Company records a valuation allowance against any portion of those deferred income and mining tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income and mining tax asset will not be realized. Comprehensive (Loss) Income: In addition to net income or loss, comprehensive income or loss includes all changes in equity during a period. Per Share Amounts: Basic income or loss per share includes no dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income or loss per share reflects the potential dilution of securities that could share in the earnings of the Company and are computed in accordance with the treasury stock method based on the average number of common shares and dilutive common share equivalents outstanding. Only those instruments that result in a reduction in income per share are included in the calculation of diluted (loss) income per share. Loans and borrowings: Borrowings are recognized initially at fair value, net of financing costs incurred, and subsequently measured at amortized cost. Any difference between the amounts originally received and the redemption value of the debt is recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income over the period to maturity using the effective interest method. Fair Value of Financial Instruments: Fair value accounting, as prescribed in ASC Section 820, utilizes 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: Loans and borrowings: Borrowings are recognized initially at fair value, net of financing costs incurred, and subsequently measured at amortized cost. Any difference between the amounts originally received and the redemption value of the debt is recognized in the Consolidated Statement of Operations and Comprehensive (Loss) Income over the period to maturity using the effective interest method. Fair Value of Financial Instruments: Fair value accounting, as prescribed in ASC Section 820, utilizes 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). 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 Consolidated Statements of Cash Flows . Additionally, an entity is required to reconcile the cash and cash equivalents on its Consolidated Balance Sheets to the cash and cash equivalent balances presented in its statement of cash flows. ASU 2016-18 was 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 Consolidated Statements of Cash Flows , as these balances are included in the beginning and ending cash balances in the Consolidated Statements of Cash Flows ; and (2) included within Note 21 Restricted Cash is a reconciliation between cash balances presented on our Consolidated Balance Sheets with the amounts presented in the Consolidated Statements of Cash Flows . The Company did not have any material restricted cash or restricted cash equivalent items in any interim period during the year ended December 31, 2017. Restricted cash for 2018 was presented based on the new guidance. 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 Consolidated Statements of Cash Flows and amends certain disclosure requirements of ASC 230. The guidance was generally applied retrospectively and was 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. Based on the Cumulative Earnings Approach, if the inception-to-date distributions are greater than the inception to date earnings, the cash flows from the equity method investee would be recognized as a return of investment within cash inflows from investing activities. In respect of the Company’s analysis of its investment in Minera Santa Cruz, the inception-to-date distributions are greater than the inception-to-date earnings for 2017 (including all interim periods) and for the year ended December 31, 2018. Therefore, distributions from Minera Santa Cruz have been recognized as a return of investment within cash flows from investing activities for the years ended December 31, 2018, 2017 and 2016. 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. The new guidance permits two methods of adoption: (i) the full retrospective method, under which comparative periods would be restated, and the cumulative impact of applying the standard would be recognized as at January 1, 2017, the earliest period presented; and (ii) the modified retrospective method, under which comparative periods would not be restated and the cumulative impact of applying the standard would be recognized at the date of initial adoption, January 1, 2018. 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. Business Combinations: Definition of a business: In January 2017 the FASB issued ASU No. 2017-01 which changed the definition of a business to assist entities in evaluating when a set of transferred assets and activities is a business. The update to the standard was effective for the Company for annual periods beginning after December 15, 2017, with early application permitted. The Company adopted the update as of January 1, 2018 and the adoption 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 the recognition, measurement, presentation and disclosure of financial instruments. The update to the standard was adopted by the Company beginning January 1, 2018 using the modified retrospective transition method. The new guida |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENTS | |
INVESTMENTS | NOTE 3 INVESTMENTS The Company’s investment portfolio consists of marketable equity securities and warrants of certain publicly-traded companies. The Company adopted ASU 2016-01 as of January 1, 2018 and as a result has reclassified the Accumulated Other Comprehensive (Loss) Income (“OCI”) balance of $3.0 million related to marketable equity securities to beginning Accumulated Deficit (see Consolidated Statements 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 Consolidated Statements of Operations and Comprehensive (Loss) Income. 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 OCI. The gains and losses for available-for-sale securities were not reported in (loss) income in the Consolidated Statements of Operations and Comprehensive (Loss) Income until the securities were sold or if there was an other-than-temporary decline in fair value below cost. During the year ended December 31, 2018, the Company sold marketable equity securities for proceeds of $2.9 million. The Company recognized a net loss on securities sold of $0.8 million, which is included in the Consolidated Statements of Operations and Comprehensive (Loss) Income . During the comparable periods ended December 31, 2017 and 2016, the Company sold $2.2 million and $0.5 million, respectively, of marketable equity securities resulting in a realized gain of $0.8 million and $0.1 million, respectively. For the year ended December 31, 2018, the Company recognized an unrealized loss on equity securities still held at the reporting date of $1.9 million. For the years ended December 31, 2017 and 2016 the unrealized gains, recorded net of tax, of $1.8 million and $1.6 million respectively, were recorded in accumulated other comprehensive income and were reported as a separate line item in the shareholders' equity section of the Consolidated Balance Sheets. The Company maintains a portfolio of warrants on equity interests in publicly-traded companies for investment purposes which are not used in any hedging activities. The Company records warrants at fair value using the Black-Scholes option pricing model. As the warrants meet the definition of derivative instruments, gains or losses arising from their revaluation are recorded in the Consolidated Statements of Operations and Comprehensive (Loss) Income . During the year ended December 31, 2018, the Company recognized an unrealized loss of $0.7 million (December 31, 2017 – $0.2 million loss and December 31, 2016 – $1.4 million gain, respectively). ASU 2016-01 specifies that an impairment assessment is only required of equity investments without readily determinable fair values. Since the Company’s investments are carried at fair value, during the year ended December 31, 2018 no impairment existed. For the comparable periods ending December 31, 2017 and 2016 the Company concluded that the fair value of certain marketable equity securities exhibited a prolonged decline in share price due to deterioration of the issuer’s results; therefore, the decline in these marketable equity securities was considered other-than-temporarily impaired (“OTTI”). In these comparable periods ending December 31, 2017 and 2016, the Company recorded an impairment loss of $0.4 million and $0.9 million, respectively. During the year ended December 31, 2018, the Company participated in a private placement financing of a TSX.V listed company, Great Bear Resources Ltd. (“Great Bear”). The Company purchased 786,186 units at C$1.45 per unit for total investment of C$1.1 million or US$0.9 million. Each unit consists of one common share and one-half of one common share purchase warrant. The investment in Great Bear was classified as an equity investment with changes in fair value measured through (loss) income within the Consolidated Statements of Operations and Comprehensive (Loss) Income . The initial cost basis allocated to common shares and warrants was allocated on a pro-rata fair value basis. The fair value of the warrants was derived using the Black-Scholes option pricing model. The following is a summary of the balances as of December 31, 2018 and 2017: Other Opening Additions Net gains Disposals comprehensive Unrealized Fair value balance during (loss) on during (loss) income gains (loss) on end of the As of December 31, 2018 (January 1) year securities sold year (pre-tax) securities held year Marketable equity securities $ 6,404 $ 1,882 $ (767) $ (2,895) $ — $ (1,906) $ 2,718 Warrants 1,567 201 — (704) — (651) 413 Investments $ 7,971 $ 2,083 $ (767) $ (3,599) $ — $ (2,557) $ 3,131 Other Opening Additions Realized Disposals comprehensive Unrealized Fair value balance during (loss) during (loss) income (loss) gain end of the As of December 31, 2017 (January 1) year gain year (pre-tax) & OTTI year Marketable equity securities $ 6,749 $ — $ 840 $ (2,163) $ 1,334 $ (356) $ 6,404 Warrants 1,794 — — — — (227) 1,567 Investments $ 8,543 $ — $ 840 $ (2,163) $ 1,334 $ (583) $ 7,971 As of December 31, 2018, the cost of the marketable equity securities and warrants was approximately $2.9 million (December 31, 2017 - $3.3 million). |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORIES | |
INVENTORIES | NOTE 4 INVENTORIES Inventories at December 31, 2018 and 2017 consist of the following: December 31, 2018 December 31, 2017 Material on leach pads $ 10,370 $ 9,188 In-process inventory 3,446 5,486 Stockpiles 1,272 1,168 Precious metals 3,421 12,902 Materials and supplies 3,530 3,207 Current Inventories $ 22,039 $ 31,951 During the year ended December 31, 2018 and 2017, no write-downs of inventory were recorded by the Company. A portion of leach pad inventories in the amount of $4.6 million (December 31, 2017 – $10.4 million) is expected to be recovered beyond twelve months and thus has been included in Other assets. |
MINERAL PROPERTY INTERESTS
MINERAL PROPERTY INTERESTS | 12 Months Ended |
Dec. 31, 2018 | |
MINERAL PROPERTY INTERESTS | |
MINERAL PROPERTY INTERESTS | NOTE 5 MINERAL PROPERTY INTERESTS During the year ended December 31, 2018, the Company capitalized $19.4 million (2017 – $3.3 million) of expenditures relating to mine development. During the year ended December 31, 2017, the Company acquired additional mineral property interests in connection with acquisitions of Lexam VG Gold Inc. (“Lexam”) and the Black Fox Complex, refer to Note 19 Acquisitions . On April 19, 2016, the Company completed the acquisition of the sliding scale net smelter return royalty (the “Royalty”) on the El Gallo 1 mine and the El Gallo Project. The total purchase price was $6.3 million and consisted of a $5.3 million payment at closing and a conditional deferred payment of $1.0 million on June 30, 2018, conditional that the El Gallo Project was in operation at that time. Since mining operations have ceased, the final payment was not made. The total cost of the Royalty was accounted for as an addition to mineral property interests. The cost was allocated to the El Gallo 1 mine and the El Gallo Project based on the relative fair value of the estimated future royalty payments for each project. The allocation resulted in approximately $5.1 million allocated to the El Gallo 1 mine and $1.2 million allocated to the El Gallo Silver Project. The carrying values for all of the mineral properties held by the Company as at December 31, 2018 and 2017 are noted below: Name of Property/Complex State/Province Country 2018 2017 Black Fox Complex Ontario Canada $ 16,365 $ 11,364 Lexam Ontario Canada 41,595 41,595 Los Azules Copper Project San Juan Argentina 191,490 191,490 Tonkin Properties Nevada United States 4,833 4,833 Gold Bar Project Nevada United States 44,131 31,317 Battle Mountain Complex Nevada United States 785 785 El Gallo Project Sinaloa Mexico 4,139 6,246 Fenix Project Properties Sinaloa Mexico 5,807 5,807 Total mineral property interests $ 309,145 $ 293,437 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. Of the Company’s mineral property interests listed above, the Black Fox and Gold Bar properties have proven and probable reserves compliant with SEC Industry Guide 7. For the year ended December 31, 2018, the Company recorded $5.1 million (2017 – $0.9 million and 2016 – $nil) of amortization expenses related to the Black Fox mine, which is included in production costs applicable to sales in the Consolidated Statements of Operations and Comprehensive (Loss) Income. While the El Gallo Project 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 method over the stated mine life. For the year ended December 31, 2018, the Company recorded $2.1 million (2017 – $2.3 million and 2016 – $2.4 million) of amortization expense related to the El Gallo Project, which is included in production costs applicable to sales in the Consolidated Statements of Operations and Comprehensive (Loss) Income. The Company conducts a review of potential triggering events for impairment for all its mineral projects on a quarterly basis. When events or changes in circumstances indicate that the related carrying amounts may not be recoverable, the Company carries out a review and evaluation of its long-lived assets. In the years ended December 31, 2018, 2017 and 2016, no such triggering events were identified at any of the Company’s properties. |
PLANT AND EQUIPMENT AND CONSTRU
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS | 12 Months Ended |
Dec. 31, 2018 | |
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS | |
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS | NOTE 6 PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS As of December 31, 2018 and 2017, property and equipment consisted of the following: December 31, 2018 December 31, 2017 Land $ 8,699 $ 8,699 Plant and equipment 49,578 43,257 Construction-in-progress 74,643 8,178 Subtotal $ 132,920 $ 60,134 Less: accumulated depreciation (18,186) (9,088) $ 114,734 $ 51,046 Construction-in-progress included the following costs: December 31, 2018 December 31, 2017 Gold Bar project $ 72,425 $ 6,011 Black Fox mine 118 67 Fenix project 2,100 2,100 $ 74,643 $ 8,178 The Gold Bar project construction-in-progress includes development expenditures incurred for the construction of the mine to date. These include expenditures for the construction of the heap leach, ADR, and crusher and expenditures for mobilization, design and engineering, and earthwork, among others. Construction-in-progress includes $0.8 million of interest costs incurred on a term loan that were capitalized for the year ended December 31, 2018. The Fenix Project construction-in-progress includes certain equipment which has not been delivered to site. In 2017, an impairment charge of $0.7 million was recorded against this equipment to reflect the decline in fair value. It is uncertain if and when this equipment can be utilized in current operations. In the second quarter of 2016, the Company reached an agreement with an equipment supplier, whereby the Company was refunded its deposit less costs incurred. The total amount of the deposit was $1.5 million, of which $1.0 million was refunded. The remaining $0.5 million was recorded under development costs in the Consolidated Statements of Operations and Comprehensive (Loss) Income for 2016. |
INVESTMENT IN MINERA SANTA CRUZ
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | 12 Months Ended |
Dec. 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 7 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, have been adjusted to conform with U.S. GAAP. As such, the summarized financial data presented under this heading is in accordance with U.S. GAAP. The Company’s 49% attributable share of operations from its investment in MSC was a loss of $11.9 million for the year ended December 31, 2018, compared to a loss of $0.1 million for the year ended December 31, 2017 and income of $13.0 million for the year ended December 31, 2016. These amounts are net of the amortization of the fair value increments arising from the Company’s purchase price allocation, net of impairment charges, and related income tax recovery. Included in the income tax recovery is the impact of fluctuations in the exchange rate between the Argentine peso and the U.S. dollar on the peso-denominated deferred tax liability associated with the investment in MSC recorded as part of the acquisition of Minera Andes in 2012. As a devaluation of the Argentine peso relative to the U.S. dollar results in a recovery of deferred income taxes, the impact has been a decrease to the Company’s loss from its investment in MSC. Furthermore, on December 29, 2017, the Senate of Argentina passed a significant tax reform to the Country’s tax system. The law changes the corporate tax rate from 35% to 25% by 2020. As a result of the tax reform in 2017, the Company recorded a $5.6 million deferred tax recovery in 2017 corresponding to the deferred tax liability on the fair value increments arising from the Company’s purchase price allocation. During the year ended December 31, 2018, the Company received $10.4 million in dividends from MSC, compared to $12.2 million in 2017. Changes in the Company’s investment in MSC for the year ended December 31, 2018 and 2017 are as follows: December 31, 2018 December 31, 2017 Investment in MSC, beginning of the period $ 150,064 $ 162,320 Attributable net (loss) from MSC (10,065) (2,328) Amortization of fair value increments (9,730) (9,632) Income tax recovery 7,930 11,916 Dividend distribution received (10,385) (12,212) Investment in MSC, end of the period $ 127,814 $ 150,064 A summary of the operating results from MSC for the year ended December 31, 2018, 2017, and 2016 is as follows: Year ended December 31, 2018 2017 2016 Minera Santa Cruz S.A. (100%) Net sales $ 205,366 $ 227,093 $ 235,961 Production costs applicable to sales (178,089) (177,180) (173,679) Other operating expenses (21,083) (20,956) (21,770) Other (expenses) income (15,801) (15,657) 10,425 Net (loss) income before tax $ (9,607) $ 13,300 $ 50,937 Current and deferred taxes (10,934) (18,050) (18,363) Net (loss) income $ (20,541) $ (4,750) $ 32,574 Portion attributable to McEwen Mining Inc. (49%) Net (loss) income $ (10,065) $ (2,328) $ 15,961 Amortization of fair value increments (9,730) (9,632) (12,274) Income tax recovery 7,930 11,916 9,264 (Loss) income from investment in MSC, net of amortization $ (11,865) $ (44) $ 12,951 As at December 31, 2018, MSC had current assets of $67.6 million, total assets of $336.3 million, current liabilities of $37.5 million and total liabilities of $75.5 million. These balances include the increase in fair value and amortization of the fair value increments arising from the Company’s purchase price allocation and are net of the impairment charges. Excluding the fair value increments from the purchase price allocation and impairment charges, MSC had current assets of $67.5 million, total assets of $197.4 million, current liabilities of $42.0 million, and total liabilities of $68.1 million as at December 31, 2018. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2018 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | NOTE 8 ASSET RETIREMENT 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 and Gold Bar properties in Nevada, the El Gallo Project in Mexico, and the Timmins properties in Canada. The Company assumed a reclamation obligation of $11.2 million related to the Black Fox Complex as a part of the acquisition of the Black Fox Complex in 2017 (see Note 19 Acquisitions for additional details). The amount of the reclamation obligation is based on the 2017 Closure Cost Update approved by the Ministry of Northern Development and Mines (“MNDM”) which is based on the 2010 Closure Plan Amendment also approved by the MNDM. The Company filed an amended Closure Plan with the MNDM in 2018, approval of which is anticipated in 2019. Under the amended closure plan, obligations are not expected to increase. The Company adjusted its estimated liability in relation to the disturbances at the Gold Bar project in 2018 to $3.7 million. This reflects the disturbances that have taken place during the construction period. As operations commence, the liability will continue to increase reflecting new disturbances. Under current Mexican regulations, financial assurance for projected reclamation costs is not required. The Company’s reclamation expenses consisted of the following: Year ended December 31, 2018 2017 2016 Reclamation Adjustment reflecting updated estimates $ 2,259 $ 1,426 $ 89 Reclamation Accretion 1,205 Total $ $ $ The Company’s asset retirement obligations for years ended December 31, 2018 and 2017 are as follows: 2018 2017 Asset retirement obligation liability, beginning of the period $ 24,722 $ 9,843 Settlements (392) (126) Accretion of liability 1,205 635 Acquisitions and divestitures — 11,803 Adjustment reflecting updated estimates 5,024 2,561 Foreign exchange revaluation (1,157) 6 Asset retirement obligation liability, ending balance $ 29,402 $ 24,722 Current portion (734) (646) Non-current portion $ 28,668 $ 24,076 |
INCOME AND MINING TAXES
INCOME AND MINING TAXES | 12 Months Ended |
Dec. 31, 2018 | |
INCOME AND MINING TAXES. | |
INCOME AND MINING TAXES | NOTE 9 INCOME AND MINING TAXES The US Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduced the US federal corporate tax rate from 35% to 21%, required 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. In 2017, the Company re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The amount recorded in 2017 relating to the re-measurement of the deferred tax balance was a reduction of $4.2 million to deferred tax liabilities, and a reduction of $23.7 million to the deferred tax assets, which have a valuation allowance provided against them. As at December 31, 2018, the Company completed the accounting for the transition tax corresponding to the 2017 tax year. Proposed regulations under Section 965 of the Internal Revenue Code, issued during the third quarter of 2018, limited the use of certain foreign tax credits which would have redeemed the one-time transition tax. The Company’s foreign tax credits originating from MSC are captured under the proposed regulation changes. As a result of the proposed changes, the Company reported in its 2017 US tax return, $13.6 million of taxable income. The taxable income was offset by the use of net-operating losses. Effective January 1, 2018, the Act also 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. The Company has elected to account for GILTI as a tax expense in the year the tax is incurred, as a period expense only. On December 29, 2017 the Senate of Argentina passed a significant tax reform to the country’s tax system. The law changes the corporate tax rate from 35% to 25% by 2020. As a result of the tax reform, the Company recorded a $3.9 million reduction to deferred tax liabilities on certain Argentine assets acquired in the 2012 Minera Andes acquisition and a reduction of $12.4 million to our deferred tax assets, which have a full valuation allowance provided against them. The Company’s deferred income and mining tax benefit consisted of: 2018 2017 2016 United States $ 2,185 $ 10,349 $ 515 Foreign 585 5,020 3,234 Deferred tax benefit $ 2,770 $ 15,369 $ 3,749 The Company’s net (loss) income before income and mining tax consisted of: 2018 2017 2016 United States $ (27,001) $ (19,913) $ (13,959) Foreign (20,639) (6,090) 31,265 Net (loss) income before tax $ (47,640) $ (26,003) $ 17,306 A reconciliation of the tax provision for 2018, 2017 and 2016 at statutory U.S. Federal and State income tax rates to the actual tax provision recorded in the financial statements is computed as follows: Expected tax recovery at 2018 2017 2016 (Loss) income before income and mining taxes $ (47,640) $ (26,003) $ 17,306 Statutory tax rate US Federal and State tax (recovery) expense at statutory rate (10,004) (9,101) 5,884 Reconciling items: Equity pickup in MSC 2,966 (16) (4,533) Deferred foreign income inclusion 5,963 21,002 — Realized flow-through expenditures 2,100 — — Realized flow-through premium (1,675) — — Foreign tax credits — (16,628) — Tax rate changes — 28,048 — Adjustment for foreign tax rates 40 115 (501) Other permanent differences 4,419 (1,761) 818 Unrealized foreign exchange rate (loss)/gain (6,935) 2,469 5,972 NOL expires and revisions (120) (2,806) (242) Valuation allowance 476 (36,691) (11,147) Tax benefit $ (2,770) $ (15,369) $ (3,749) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as at December 31, 2018 and 2017 respectively are presented below: 2018 2017 Deferred tax assets: Net operating loss carryforward $ 55,515 $ 72,078 Mineral Properties 62,345 59,905 Other temporary differences 15,198 862 Total gross deferred tax assets 133,058 132,845 Less: valuation allowance (124,153) (123,648) Net deferred tax assets $ 8,905 $ 9,197 Deferred tax liabilities: Acquired mineral property interests (15,331) (17,627) Total deferred tax liabilities $ (15,331) $ (17,627) Total net deferred tax liability $ (6,426) $ (8,430) The Company reviews the measurement of its deferred tax assets at each balance sheet date. On the basis of available information at December 31, 2018, the Company has provided a valuation allowance for certain of its deferred assets where the Company believes it is more likely than not that some portion or all of such assets will not be realized. The change in valuation allowance of approximately $0.5 million primarily reflects an increase in valuation allowance on certain mineral properties in Mexico associated with the cessation of mining activities. As at December 31, 2017 the Company recognized a deferred tax asset to the extent of the deferred tax liability recognized on the acquired mineral property interests associated with the Gold Bar project, in the amount of $6.4 million. As a result of Gold Bar being in construction, the Company is now able to reasonably estimate when the temporary difference associated with the deferred tax liability will reverse. The reversal is expected to occur over the same time period as existing tax assets, which have previously been provided for by the valuation allowance. The table below summarizes changes to the valuation allowance: For the year ended December 31, Balance at Additions(a) Deductions(b) Balance at 2018 $ 123,648 $ 12,232 $ (11,727) $ 124,153 2017 111,621 51,220 (39,193) 123,648 2016 122,768 1,430 (12,577) 111,621 (a) The additions to valuation allowance mainly results from the Company and its subsidiaries incurring losses and exploration expenses for tax purposes which do not meet the more-likely-than-not criterion for recognition of deferred tax assets. (b) The reductions to valuation allowance mainly results from release of valuation allowance, expiration of the Company’s tax attributes and foreign exchange reductions of tax attributes in Canada, Mexico and Argentina. As at December 31, 2018 and 2017, the Company did not have any income-tax related accrued interest and tax penalties. The following table summarizes the Company’s losses that can be applied against future taxable profit: Country Type of Loss Amount Expiry Period United States (a) Net-operating losses $ 135,348 2019-2038 Mexico Net-operating losses 29,749 2019-2024 Canada (a) Net-operating losses 38,728 2019-2038 Argentina (a) Net-operating losses 34,001 2019-2023 (a) The losses in the United States, Canada, and Argentina are part of multiple consolidating groups, and therefore, may be restricted in use to specific projects. The Company or its subsidiaries file income tax returns in Canada, the United States, Mexico, and Argentina. These tax returns are subject to examination by local taxation authorities provided the tax years remain open to audit under the relevant statute of limitations. The following summarizes the open tax years by major jurisdiction: United States: 2015 to 2018 Canada: 2011 to 2018 Mexico: 2014 to 2018 Argentina: 2014 to 2018 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 10 SHAREHOLDERS’ EQUITY Shareholder distributions During the year ended December 31, 2018, the Company paid two semi-annual distributions to shareholders on February 14, 2018 and September 4, 2018 totaling $0.01 (for the year ended December 31, 2017, distributions totaling $0.01 on February 3, 2017 and August 14, 2017) per share of common stock, for a total distribution of $3.4 million (December 31, 2017 – $3.1 million). These distributions were treated as dividends for tax purposes. Pursuant to a term loan facility dated August 10, 2018, there exists limitations on the distributions the Company is authorized to declare and pay. The Company may declare and pay distributions in any fiscal year that do not exceed the amount of dividends per share made in the fiscal year ended December 31, 2017. Equity offerings On June 11, 2018, the Company issued 178,321 shares of common stock in exchange for the acquisition of mineral property interests adjacent to the Black Fox Complex. The Company issued 12,687,035 shares of common stock as part of the Lexam acquisition completed on April 26, 2017. See Note 19 Acquisitions . On September 22, 2017, the Company issued 20,700,000 common shares 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 half a warrant, and each whole warrant entitled the holder to purchase one share of common stock at a price of $2.70. The warrants had an expiration date of September 28, 2018, all warrants expired unexercised. The Company concluded that both common stock and warrants are equity-linked financial instruments and should be accounted for permanently in the shareholders’ equity section in the Consolidated Balance Sheets , with no requirement to subsequently revalue any of the instruments. Based on the relative fair values, the Company allocated $39.4 million to common shares 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 Flow-through shares On December 20, 2018, the Company issued 6,634,000 flow-through common shares (within the meaning of subsection 66(15) of the Income Tax Act (Canada) ) priced at $2.24 per share for total proceeds of $14.9 million (C $20.0 million). On December 19, 2017, the Company issued 4,000,000 flow-through common shares priced at $2.50 per share for total proceeds of $10.0 million. The purpose of both offerings 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. The proceeds of the flow-through shares offering are shown as restricted cash on the Consolidated Balance Sheets as at December 31, 2018 and 2017. No proceeds from the 2018 sale of flow-through common shares had been spent as of December 31, 2018. The Company expects to meet this commitment in 2019. The entire proceeds of $10.0 million from the 2017 sale of flow-through common shares was spent as of December 31, 2018. At-the-market (“ATM”) Pursuant to an equity distribution agreement dated November 8, 2018, the Company may offer and sell from time to time shares of its common stock having an aggregate offering price of up to $90.0 million, with the net proceeds to fund working capital and general corporate purposes. During the year ended December 31, 2018, the Company utilized this stock offering program to issue an aggregate of 514,897 shares of common stock for gross and net proceeds of approximately $0.9 million. As of December 31, 2018, approximately $89.1 million remained available for issuance under this ATM stock offering program. Share repurchase During the twelve months ended December 31, 2016 the Company repurchased 557,991 shares of common stock, all of which have been cancelled, at a total cost of $0.6 million. The share repurchase program expired on September 30, 2016. No further repurchase programs were initiated during the years ended December 31, 2018 and 2017. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
STOCK BASED COMPENSATION | |
STOCK BASED COMPENSATION | NOTE 11 STOCK BASED COMPENSATION Stock Options The Company’s Amended and Restated Equity Incentive Plan (“Plan”) allows for equity awards to be granted to employees, consultants, advisors, and directors. The Plan is administered by the Compensation Committee of the Board of Directors (“Committee”), which determines the terms pursuant to which any award is granted. The Committee may delegate to certain officers the authority to grant awards to certain employees (other than such officers), consultants and advisors. The number of shares of common stock reserved for issuance thereunder is 17.5 million shares, including shares issued under the Plan before it was amended, with no more than 1 million shares subject to grants of options to an individual in a calendar year. The Plan also provides for the grant of incentive options under Section 422 of the Internal Revenue Code (the “Code”), which provide potential tax benefits to the recipients compared to non-qualified options. At December 31, 2018, 5,776,483 awards were authorized and available for issuance under the Plan (December 31, 2017 – 5,283,137 awards). During the year ended December 31, 2018, 171,000 shares of common stock (December 31, 2017 – 94,000) were issued upon exercise of stock options under the Plan, at a weighted average exercise price of $1.02 (2017 – $1.30) per share for proceeds of $0.2 million (2017 – $0.1 million). The following table summarizes information about stock options under the Plan outstanding at December 31, 2018: Weighted Weighted Average Average Remaining Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value (in thousands, except per share and year data) Balance at December 31, 2015 6,954 $ 2.49 4.1 $ 98 Granted 645 3.99 — — Exercised (1,457) 2.48 — 1,601 Forfeited (1,422) 3.45 — — Expired — — — — Balance at December 31, 2016 4,720 $ 2.41 3.4 $ 4,388 Granted 338 2.99 — — Exercised (94) 1.30 — 87 Forfeited (37) 4.28 — — Expired (21) 5.00 — — Balance at December 31, 2017 4,906 $ 2.45 2.6 $ 2,564 Granted 375 1.90 — — Exercised (171) 1.02 — 195 Forfeited (405) 3.99 — — Expired (462) 2.27 — — Balance at December 31, 2018 4,243 $ 2.33 2.0 $ 1,475 Exercisable at December 31, 2018 3,552 $ 2.28 1.6 $ 1,475 Stock options have been granted to key employees, directors and consultants under the Plan. Options to purchase shares under the Plan were granted at or above market value as of the date of the grant. During the year ended December 31, 2018, the Company granted stock options to certain employees and directors for an aggregate of 0.4 million shares of common stock (2017 – 0.3 million, 2016 – 0.6 million) at a weighted average exercise price of $1.90 per share (2017 – $2.99, 2016 – $3.99). The options vest equally over a three-year period if the individuals remain affiliated with the Company (subject to acceleration of vesting in certain events) and are exercisable for a period of 5 years from the date of grant. The fair value of the options granted under the Plan was estimated at the date of grant, using the Black-Scholes option-pricing model, with the following weighted-average assumptions: 2018 2017 2016 Risk-free interest rate 2.67% to 2.89% 1.46% to 1.60% 1.13% to 1.21% Dividend yield 0.36% to 0.53% 0.31% to 0.36% 0.24% to 0.27% Volatility factor of the expected market price of common stock 63% to 64% 72% to 74% 74% Weighted-average expected life of option 3.5 years 3.5 years 5.0 years Weighted-average grant date fair value $ 1.90 $ 2.99 $ 2.36 During the year ended December 31, 2018, the Company recorded stock option expense of $0.3 million (2017 -$1.3 million, 2016 – $1.0 million) while the corresponding fair value of awards vesting in the period was $0.7 million (2017 – $1.3 million and 2016 – $1.3 million). At December 31, 2018, there was $0.4 million (2017 – $0.7 million, 2016 - $1.4 million) of unrecognized compensation expense related to 0.7 million (2017 – 1.5 million, 2016 – 2.5 million) unvested stock options outstanding. This cost is expected to be recognized over a weighted-average period of approximately 1.4 years (2017 – 1.3 years, 2016 – 1.6 years). The following table summarizes the status and activity of non-vested stock options for the year ended December 31, 2018, for the Company’s Plan and the replacement options from the acquisition of Lexam (see Note 19 Acquisitions ): Weighted Average Number of Grant Date Shares Fair Value (in thousands, except per share amounts) Non-vested, beginning of year $ 1.24 Granted 375 $ 0.88 Cancelled/Forfeited (248) $ 2.25 Vested (915) $ 0.80 Non-vested, end of year $ 1.28 |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
NET (LOSS) INCOME PER SHARE | |
NET (LOSS) INCOME PER SHARE | NOTE 12 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 (loss) income per share is computed similarly except that the weighted average number of common shares is increased to reflect all dilutive instruments. Diluted net (loss) income per share is calculated using the treasury stock method. In applying the treasury stock method, employee stock options with an exercise price greater than the average quoted market price of the common shares for the period outstanding are not included in the calculation of diluted net (loss) income per share as the impact is anti-dilutive. Potentially dilutive instruments are not considered in calculating the diluted loss per share, as their effect would be anti-dilutive. Below is a reconciliation of the basic and diluted weighted average number of common shares and the computations for basic net (loss) income per share and diluted net (loss) income for the years ended December 31, 2018, 2017 and 2016: Year ended December 31, 2018 2017 2016 (in thousands, except per share amounts) Net (loss) income $ (44,870) $ (10,634) $ 21,055 Weighted average common shares outstanding: 337,297 313,887 298,772 Effect of employee stock-based awards — — 1,702 Diluted shares outstanding: 337,297 313,887 300,474 Net (loss) income per share: Basic and diluted $ (0.13) $ 0.07 For the years ended December 31, 2018 and 2017, all outstanding options to purchase shares of common stock were excluded from the computation of diluted loss per share, 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. For the year ended December 31, 2016 options to purchase 2.0 million shares of common stock at an average exercise price of $3.91 were not included in the computation of diluted weighted average shares outstanding because their exercise price exceeded the average price of the Company’s common stock for the year ended December 31, 2016 and their effect would have been anti-dilutive. In 2017, w arrants to purchase 10.35 million shares of common stock at a price of $2.70 were excluded from the computation of diluted weighted average shares outstanding because their effect would have been anti-dilutive. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 COMMITMENTS AND CONTINGENCIES Commitments At December 31, 2018, the Company’s commitments include long-term operating leases covering office space, land and equipment purchase commitments, exploration expenditures, option payments on properties, reclamation costs and the repayment of long-term debt for the following minimum amounts: Payments due by period 2019 2020 2021 2022 2023 Thereafter Total Operating lease obligations (office rent) $ 374 $ 322 $ 263 $ 252 $ 256 $ 143 $ 1,610 Operating lease obligations (mining and surface rights) 2,524 453 460 460 454 — 4,351 Exploration (including $14.9 million flow-through shares) 15,115 — — — — — 15,115 Construction 6,044 — — — — — 6,044 Reclamation costs (1) 726 1,561 2,890 5,860 141 33,211 44,389 Long-term debt 4,875 14,725 41,993 — — — 61,593 Total $ 29,658 $ 17,061 $ 45,606 $ 6,572 $ 851 $ 33,354 $ 133,102 (1) Amounts presented represent the undiscounted uninflated future payments. Reclamation Bonds As part of its ongoing business and operations, the Company is required to provide bonding for its environmental reclamation obligations in the United States and Canada. Pursuant to the requirements imposed by the United States Bureau of Land Management (“BLM”), the Company has Nevada obligations of $19.9 million which primarily pertains to the Tonkin property and the Gold Bar property. Under Canadian regulations, the Company has bonding obligations of $15.9 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; the $0.1 million is recorded as restricted cash in Other assets . 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. The $0.5 million deposit associated with the previous facility and recorded in Other assets was released and received by the Company in July 2017. 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 in Nevada 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, as described in Note 19 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, Black Fox has bonding requirements of $15.9 million (C$20.6 million). 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% at the adjoining Pike River property (Black Fox Extension) to Sandstorm Gold Ltd. at the lesser of market price or $540 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 year ended December 31, 2018 the company recorded revenue of $2.2 million (2017 – $0.3 million). Short-term Bank Indebtedness 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 was available for one (1) year from November 30, 2017, under the original terms and has been extended under a first amendment of the agreement to December 1, 2019. Interest payments under the Line of Credit are due quarterly beginning with any borrowing and a final payment of all principal and accrued interest due twenty-four (24) months following the date of the first withdrawal. CMP is permitted to prepay any amounts owed without penalty. The interest rate for each advance is as agreed upon by the parties prior to each advance, and will be reviewed and adjusted on a quarterly basis. CMP is permitted to use the proceeds from the line of credit (i) to finance up to 90% of the value added tax (“VAT”) refunds related to the cost of the El Gallo Project, (ii) as working capital, and (iii) for other expenses related to CMP’s mining activity. Borrowings under the line of credit are secured by a lien on all VAT collections received by CMP. The line of credit will be immediately due and payable in the event of a failure to pay principal or interest when due, or for a breach of other covenants set forth in the line of credit. All amounts due under the line of credit have been irrevocably and unconditionally guaranteed by the Company. As of December 31, 2018 no funds had been drawn from the line of credit. Long-term debt During the year ended December 31, 2018, the Company closed on a $50.0 million term loan in order to finance Gold Bar construction and other general corporate purposes. The full amount of the term loan was drawn down in the year ended December 31, 2018, see Note 14 Related Party Transactions and Note 22 Debt for details. Other potential contingencies The Company’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment, and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. The Company and its predecessors have transferred their interest in several mining properties to third parties throughout its history. The Company could remain potentially liable for environmental enforcement actions related to its prior ownership of such properties. However, the Company has no reasonable belief that any violation of relevant environmental laws or regulations has occurred regarding these transferred properties. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 14 RELATED PARTY TRANSACTIONS The Company incurred the following expense (income) in respect to the related parties outlined below: Year ended December 31, 2018 2017 2016 Lexam L.P. $ 91 $ 152 $ 187 Lexam VG Gold — (33) 85 Noblegen Inc. 26 40 — REVlaw 266 330 124 Inventus — (36) — The Company has the following outstanding accounts payable (receivable) balance in respect to the related parties outlined below: Year ended December 31, 2018 2017 REVlaw 32 17 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 VG Gold and Lexam VG Gold became a wholly-owned subsidiary of the Company. See Note 19 Acquisitions . Prior to the acquisition, Robert R. McEwen was the Non-Executive Chairman of Lexam VG Gold and held a 27% ownership in Lexam and the Company shared services with Lexam VG Gold including rent, personnel, office expenses and other administrative services. Historically, these transactions were in the normal course of business. Robert R. McEwen is also a significant 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 Ms. 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. Robert R. McEwen is a significant shareholder of Inventus Mining Corp. (“Inventus”). Stefan Spears, Special Projects, is the CEO and Chairman of Inventus. In his role as being responsible for Special Projects for McEwen, 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. An affiliate of Mr. McEwen is also a lender in the $50.0 million senior secured 3-year term loan facility (“term loan”). That affiliate participated as a lender for $25.0 million of the total $50.0 million term loan. During the year ended December 31, 2018, the Company paid $1.0 million in interest to this affiliate. See Note 22 Debt . |
OPERATING SEGMENT REPORTING
OPERATING SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2018 | |
OPERATING SEGMENT REPORTING | |
OPERATING SEGMENT REPORTING | NOTE 15 OPERATING SEGMENT REPORTING McEwen Mining is a mining and minerals production and 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 costs, for all segments except for the MSC segment which is evaluated based on the attributable equity income or loss. Gold and silver sales and production costs applicable to sales for the reportable segments are reported net of intercompany transactions. In 2017, the Company completed the acquisition of Lexam, which included a portfolio of exploration projects, and certain assets and liabilities of the Black Fox Complex, all of which are located in Timmins, Ontario, Canada. These assets are managed together as a single operating segment by the CODM. Accordingly, the Company separately reported segment (loss) income attributable to Canada beginning in 2017. The updated composition of segments reflects the distinct economic characteristic of each mine/project. Significant information relating to the Company’s reportable operating segments is summarized in the tables below: Year ended December 31, 2018 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 66,151 $ — $ — $ — $ 62,024 $ 128,175 Other revenue — — — 30 617 647 Production costs applicable to sales (37,429) — — — (55,900) (93,329) Mine development costs (3,667) — — — — (3,667) Exploration costs (2,241) — (6,015) (5,174) (21,372) (34,802) Property holding costs (2,264) — (68) (1,397) (167) (3,896) General and administrative costs (3,770) — (1,046) (6,562) (665) (12,043) (Loss) from investment in Minera Santa Cruz S.A. (net of amortization) — (11,865) — — — (11,865) Segment (loss) income $ 16,780 $ (11,865) $ (7,129) $ (13,103) $ (15,463) $ (30,780) Corporate and other General and administrative costs $ (11,120) Depreciation (1,178) Revision of estimates and accretion of reclamation obligations (3,464) Interest and other expense (1,619) Gain on sale of assets (77) (Loss) gain on investments (3,324) Foreign currency gain 3,922 Net (loss) before income and mining taxes $ (47,640) Year ended December 31, 2017 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 55,845 $ — $ — $ — $ 11,620 $ 67,465 Other revenue — — — — 259 259 Production costs applicable to sales (35,292) — — — (9,888) (45,180) Mine development costs (745) — — (3,092) — (3,837) Exploration costs (5,610) — (7,923) (2,132) (1,544) (17,209) Property holding costs (2,131) — (56) (1,667) (25) (3,879) Impairment of mineral property interests and property and equipment (711) — — — — (711) General and administrative costs (3,772) — (1,242) (1,927) (92) (7,033) (Loss) from investment in Minera Santa Cruz S.A. (net of amortization) — (44) — — — (44) Segment income (loss) $ 7,584 $ (44) $ (9,221) $ (8,818) $ 330 $ (10,169) Corporate and other Other exploration costs $ (505) General and administrative costs (11,839) Depreciation (1,453) Revision of estimates and accretion of reclamation obligations (2,061) Interest and other income (938) Gain on sale of assets 11 (Loss) gain on investments 257 Foreign currency gain 694 Net (loss) before income and mining taxes $ (26,003) Year ended December 31, 2016 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 60,388 $ — $ — $ — $ — $ 60,388 Production costs applicable to sales (28,133) — — — — (28,133) Mine development costs (1,174) — — (2,692) — (3,866) Exploration costs (4,100) — (1,649) (1,973) — (7,722) Property holding costs (1,642) — (405) (1,489) — (3,536) General and administrative costs (2,688) — (646) (228) — (3,562) Income from investment in Minera Santa Cruz S.A. (net of amortization) — 12,951 — — — 12,951 Segment income (loss) $ 22,651 $ 12,951 $ (2,700) (6,382) $ — $ 26,520 Corporate and other Other exploration costs $ (237) General and administrative costs (9,172) Depreciation (1,169) Revision of estimates and accretion of reclamation obligations (595) Interest and other income 835 Gain on sale of assets 24 (Loss) gain on investments 519 Foreign currency gain 581 Net income before income and mining taxes $ 17,306 Geographic information Geographic information includes the long-lived assets balance and revenues presented for the Company’s operating segments. Long-lived Assets Revenue (1) Year ended December 31, Year ended December 31, 2018 2017 2018 2017 2016 Canada $ 84,119 $ 85,179 $ 62,641 $ 11,879 $ — Mexico 26,524 35,446 66,151 55,845 60,388 USA 127,617 43,086 30 — — Argentina (2) 319,305 341,554 — — — Total consolidated $ 557,565 $ 505,265 $ 128,822 $ 67,724 $ 60,388 (1) Presented based on the location from which the product originated. (2) Includes Investment in MSC of $127.8 million as of December 31, 2018 (December 31, 2017 - $151.0 million). As gold and silver can be sold through numerous gold and silver market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of its product. In 2018, 2017 and 2016, sales to Bank of Nova Scotia were $123.5 million (96%), $65.9 million (94%), and $58.1 million (96%), respectively, of total gold and silver sales. Capital expenditures information Capital expenditures includes acquisitions of property and equipment and mineral property interests, net of dispositions and amortization. The following table summarizes capital expenditures by the Company by segment. Capital Expenditures Year ended December 31, 2018 2017 2016 Mexico $ (3,107) $ 939 $ 5,401 Los Azules — — — Canada (1,110) 4,301 — USA 83,613 6,271 764 Consolidated total for capital expenditures $ 79,396 $ 11,511 $ 6,165 |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE ACCOUNTING | |
FAIR VALUE ACCOUNTING | NOTE 16 FAIR VALUE ACCOUNTING Assets and liabilities measured at fair value on a recurring basis. The following tables identify the Company’s assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy as at December 31, 2018 and 2017, as reported in the Consolidated Balance Sheets. 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 December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Investments $ 3,131 $ 2,718 $ 413 $ — Total $ 3,131 $ 2,718 $ 413 $ — 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 mainly consist of marketable equity securities which are exchange-traded and are valued using quoted market prices in active markets and as such 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 quantity of shares held by the Company. Furthermore, as noted in Note 3 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. Long-term debt is recorded at a carrying value of $49.2 million at December 31, 2018 and is assumed to approximate its fair value due to the Company recently having acquired the debt. |
UNAUDITED SUPPLEMENTARY QUARTER
UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION | |
UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION | NOTE 17 UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION The following table summarizes unaudited supplementary quarterly information for the years ended December 31, 2018, 2017, and 2016. Three months ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 (unaudited) (in thousands, except per share) Net (loss) $ (5,211) $ (5,380) $ (13,290) $ (20,989) Net (loss) per share: Basic and diluted $ (0.02) $ (0.02) $ (0.04) $ (0.06) Weighted average shares outstanding: Basic and diluted 337,062 337,087 337,100 337,936 Three months ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 (unaudited) (in thousands, except per share) Net (loss) income $ (3,018) $ (1,712) $ (8,072) $ 2,169 Net (loss) income per share: Basic and diluted $ (0.01) $ (0.01) $ (0.03) $ 0.01 Weighted average shares outstanding: Basic and diluted 299,575 308,523 314,077 313,002 Three months ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 (unaudited) (in thousands, except per share) Net income (loss) $ 12,985 $ 8,353 $ 4,208 $ (4,491) Net (loss) income per share: Basic and diluted $ 0.04 $ 0.03 $ 0.01 $ (0.01) Weighted average shares outstanding: Basic 298,242 298,237 298,510 299,518 Diluted 298,554 299,791 301,045 301,102 |
COMPARATIVE FIGURES
COMPARATIVE FIGURES | 12 Months Ended |
Dec. 31, 2018 | |
COMPARATIVE FIGURES | |
COMPARATIVE FIGURES | NOTE 18 COMPARATIVE FIGURES Certain prior year information has been reclassified to conform with the current year’s presentation. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 19 ACQUISITIONS Acquisition of Lexam VG. Gold Inc. On April 26, 2017, the Company completed the acquisition of 100% of the issued and outstanding common shares of 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. The Company’s total purchase price of $39.2 million was comprised of 12,687,035 common shares issued from treasury valued at $3.00 per share, share replacement awards of $0.1 million and transaction costs totaling $1.0 million. The Lexam acquisition was accounted for as an asset acquisition and transaction costs associated with the acquisition were capitalized to the mineral property interests acquired, consistent with the Company’s mineral property interests accounting policy. The following table sets out the allocation of the purchase price to assets acquired and liabilities assumed, based on management’s estimates of relative fair value: Total purchase price: Common shares issued for acquisition $ Transaction fees incurred $ Fair value of assets acquired and liabilities assumed: Mineral property interests $ Cash and cash equivalents Other current assets Other assets Accounts payable and accrued liabilities Reclamation obligations Deferred income tax liabilities $ The mineral property interests acquired include a 100% interest in the Buffalo Ankerite, Fuller and Davidson-Tisdale prospects and a 61% interest in the Paymaster prospect all located in Timmins, Ontario. The remaining 39% interest in the Paymaster property is held by Goldcorp Inc., a joint venture partner. Certain properties are also subject to a net profit interest (“NPI”) in the 10% to 20% range, payable to an unrelated third party. Acquisition of Black Fox Complex On August 25, 2017, the Company entered into an Asset Purchase Agreement (the “APA”) with Primero Mining Corp. (“Primero”), whereby the Company, through its wholly-owned subsidiary, purchased and assumed the Purchased Assets and Assumed Liabilities as defined within the APA related to the Black Fox Complex 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. There were no changes in the fair value measurements when the company finalized its fair value analysis in the third quarter of 2018. 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 $ The Company recognized $1.3 million of acquisition-related costs associated with the acquisition of the Black Fox Complex. These costs were expensed and were included in general and administrative costs in 2017. |
CAPITAL LEASES
CAPITAL LEASES | 12 Months Ended |
Dec. 31, 2018 | |
CAPITAL LEASES | |
CAPITAL LEASES | NOTE 20 CAPITAL LEASES The Company’s capital lease obligations primarily consist of equipment and vehicles. 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. The following table summarizes the Company’s capital lease obligations as of December 31, 2018 and 2017: Year ended December 31, Interest Rates Maturities 2018 2017 Capital lease obligations 4.45 -10.09% 2019 - 2024 $ 6,429 $ 551 Less current portion 1,511 470 Long-term capital lease obligations $ 4,918 $ 81 The Company has the following lease payment requirements under its capital leases, 2019 – $1.9 million, 2020 – $1.9 million, 2021 – $1.8 million and 2022 and beyond $1.7 million. |
CASH AND CASH EQUIVALENTS AND R
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2018 | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | NOTE 21 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows : December 31, 2018 2017 Cash and cash equivalents $ $ Restricted cash Restricted cash included in other assets 48 - Total cash, cash equivalents, and restricted cash $ 30,489 $ 37,153 Amounts included in restricted cash represent the proceeds of the sale of flow-through common shares as described in Note 10 Shareholders’ Equity . No proceeds from the 2018 sale of flow-through common shares has been spent as of December 31, 2018, and therefore, $14.7 million of proceeds remain restricted and will be utilized to fund exploration activities during 2019, at which point the restriction will lapse. 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 of $10.0 million from the 2017 sale of flow-through common shares has been spent and no restriction remains as of December 31, 2018. Restricted cash included in other assets relates to reclamation bonding obligations in relation to the Company’s Lexam properties in Timmins, Canada. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2018 | |
DEBT | |
DEBT | NOTE 22 DEBT On August 10, 2018, the Company closed a $50.0 million senior secured three year term loan facility with Royal Capital Management Corp. (“RoyCap”), an administrative agent, and the lenders party thereto (“Lenders”). An affiliate of Robert McEwen, Chairman and Chief Executive Officer and the beneficial owner of 23% of the Company’s common stock, contributed $25.0 million of the $50.0 million total term loan. The term loan was raised to finance construction of the Gold Bar Mine in Nevada and for general corporate purposes. The principal amount of the term loan bears interest at 9.75% per annum with interest due monthly. Principal repayments are scheduled to be made in twelve equal monthly installments of $2.0 million each commencing during the third year, with the remaining balance due on maturity on the three year anniversary date of the loan. The term loan can be retired in full or in part anytime during the first two years upon payment of the principal and accrued interest plus a fee linked to the remaining life of the term loan, and during the third year upon payment of the remaining principal and accrued interest plus a fee equal to 3% of the remaining principal. Repayment of the term loan is secured by a lien on certain of the Company’s and its subsidiaries’ assets. The Company incurred $0.3 million in lender fees and $0.6 million in debt issuance costs, which have been included in the carrying amount of the term loan. The term loan is valued at discounted present value and interest is recognized based on the effective interest method. The debt issuance costs and lender fees are also amortized based on the effective interest method, which results in an effective interest rate that is higher than the stated rate of 9.75%. Over the term of the loan, the book value will increase as a greater amount of debt issuance costs and lender fees are amortized. Scheduled minimum debt repayments are $nil in 2018, $nil in 2019, $10.0 million in 2020 and $40.0 million in 2021. The Company has paid $1.9 million in interest during the year ended December 31, 2018. The scheduled minimum interest payments are $4.9 million in 2019, $4. 7 million in 2020 and $2.0 million in 202 1. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2018 | |
SUBSEQUENT EVENT. | |
SUBSEQUENT EVENT | NOTE 23 SUBSEQUENT EVENT In conjunction with our capital allocation strategy, the Board of Directors has approved the evaluation of the potential sale of our Mexican business unit including all the fixed assets and mineral interests. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
Use of Estimates | Use of Estimates: The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the Company’s consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to environmental reclamation and closure obligations; asset useful lives utilized for depletion, depreciation, amortization and accretion calculations; estimates of fair value of equity investment and asset groups used in impairment testing; estimates of recoverable gold in leach pad inventory; estimates regarding mine development capitalization costs; estimates regarding the collectability of value added taxes receivable; estimates of fair values of assets and liabilities acquired in business combinations; estimates of reserves; valuation allowances for deferred tax assets; estimates of income and mining tax provisions and reserves for contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates. |
Basis of Consolidation | Basis of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated. Investments over which the Company exerts significant influence but does not control through majority ownership are accounted for using the equity method, as described in Investments, below. |
Cash and Cash Equivalents | Cash and Cash Equivalents: The Company considers cash in banks, deposits in transit, and highly liquid term deposits with original maturities of three months or less to be cash and cash equivalents. Because of the short maturity of these instruments, the carrying amounts approximate their fair value. Restricted cash is excluded from cash and cash equivalents and is included in long-term assets, except for flow-through share proceeds which appear as a separate line in current assets. |
Investments | Investments: The Company accounts for investments over which the Company exerts significant influence but does not control through majority ownership using the equity method of accounting pursuant to ASC Topic 323, Investments – Equity Method and Joint Ventures . Under this method, the Company’s share of income and losses is included in the Consolidated Statements of Operations and Comprehensive (Loss) Income and the balance of the investment is adjusted by the same amount. Under the equity method, dividends received from an investee are recorded as decreases in the investment account, not as income. If and when there has been a loss in value that is other than a temporary decline, the carrying value is reduced to its fair value. The Company’s investments in marketable equity securities and warrants are measured at fair value with changes in fair value recognized in net (loss) income of the Consolidated Statements of Operations and Comprehensive (Loss) Income in accordance with ASC guidance on accounting for certain investments in debt and equity securities. |
Value Added Taxes Receivable | Value Added Taxes Receivable: In Mexico and Canada, value added taxes (“VAT” and “HST”, respectively) are assessed on purchases of materials and services and sales of products. Businesses are generally entitled to recover the taxes they have paid related to purchases of materials and services, either as a refund or as a credit against future taxes payable. In Argentina, except at the San José mine, the Company expenses all VAT as their recoverability is uncertain. |
Stockpiles, Material on Leach Pads, In-process Inventory, Precious Metals Inventory and Materials and Supplies | Stockpiles, Material on Leach Pads, In‑process Inventory, Precious Metals Inventory and Materials and Supplies: Stockpiles, material on leach pads, in-process inventory, precious metals inventory and materials and supplies (collectively, “Inventories”) are accounted for using the weighted average cost method and are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated costs to complete production and bring the product to sale. Write-downs of Inventories resulting from net realizable value impairments are reported as a component of production costs applicable to sales. The current portion of Inventories is determined based on the expected amounts to be processed within the next 12 months. Inventories not expected to be processed within the next 12 months, if any, are classified as long‑term. Stockpiles represent mineralized material extracted from the mine and available for processing. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, an estimate of the contained metals (based on assay data) and the estimated metallurgical recovery rates. Costs are allocated to stockpiles based on current mining costs incurred including applicable overhead relating to mining operations. Material is removed from the stockpile at an average cost per tonne. Mineralized material on leach pads is the material that is placed on pads where it is treated with a chemical solution that dissolves the gold contained in the mineralized material over a period of months. Costs are attributed to the mineralized material on leach pads based on current mining costs incurred up to the point of placing the ore on the pad. Costs are removed from the leach pad inventory based on the average cost per estimated recoverable ounce of gold on the leach pad as the gold is recovered. The estimates of recoverable gold on the leach pads are calculated from the quantities of mineralized material placed on the leach pads (measured tonnes added to the leach pads), the grade of mineralized material placed on the leach pads (based on assay data) and a recovery percentage. In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching is complete. The cumulative metallurgical recovery rate for gold production at the El Gallo Project from September 2012 (start of production) to December 31, 2018 was approximately 61% (2017 – 57%). Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on the pads to the quantities of gold actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and the engineering estimates are refined based on actual results over time. The current portion of mineralized material on leach pads inventory is determined based on the expected amounts to be processed within the next twelve months. Mineralized material on leach pads inventory not expected to be processed or used within the next twelve months is classified as non-current. In-process inventories represent materials that are currently in the process of being converted to a saleable product. In-process material is measured based on assays of the material from the various stages of processing. Costs are allocated to in-process inventories based on the costs of the material fed into the process attributable to the source material coming from the mines, stockpiles and/or leach pads plus the in-process conversion costs incurred to that point in the process. Precious metal inventories include gold and silver doré and bullion that is unsold and held at the Company’s or the refinery’s facilities. Costs are allocated to precious metal inventories based on costs of the respective in-process inventories incurred prior to the refining process plus applicable refining costs. Materials and supplies inventories are comprised of chemicals, reagents, spare parts and consumable parts used in drilling and other operating activities. Cost includes applicable taxes and freight. |
Proven and Probable Reserves | Proven and Probable Reserves: The definition of proven and probable reserves is set forth in SEC Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geological character is so well defined that size, shape, depth and mineral content of the reserves are well‑established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observations. |
Mineral Property Interests, Plant and Equipment and Mine Development Costs | Mineral Property Interests, Plant and Equipment and Mine Development Costs: Mineral property interests: Mineral property interests include acquired interests in production, advanced-stage properties and exploration-stage properties, which are considered tangible assets. The amount capitalized relating to a mineral property interest represents its fair value at the time of acquisition, either as an individual asset purchase or as a part of a business combination provided that a reasonable expectation exists that the property includes mineral resources. The value of mineral property interests is primarily driven by the nature and amount of mineralized material believed to be contained in the properties. When proven and probable reserves as defined by SEC Industry Guide 7 exist, the relevant capitalized costs are to be charged to expense based on the units of production method upon commencement of production. However, when a property does not contain mineralized material that satisfies the definition of proven and probable reserves, the amortization of the capitalized costs are charged to expense based on the most appropriate method, which includes straight-line method and units-of-production method over the estimated useful life of the mine, as determined by internal mine plans. Mine Development Costs: Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, and the removal of overburden to initially expose an ore body at open pit surface mines and building of access paths and other infrastructure to gain access to the ore body at underground mines. Capitalization of mine development costs that meet the definition of an asset begins once proven and probable reserves as defined by SEC Industry Guide 7 have been defined. These costs would be capitalized to mineral property interests. Absent of proven and probable reserves, as defined by SEC Industry Guide 7, these costs are charged to expense as incurred. Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information, providing greater definition of the ore body or converting non-reserve mineralization to proven and probable reserves and the benefit is expected to be realized over a period beyond one year. All other drilling and related costs are expensed as incurred. However, drilling costs specifically incurred during the production stage for the purpose of operational ore control rather than obtaining additional information on the ore body are expensed and allocated to inventory costs and then included as a component of production costs applicable to sales as the revenue from the sale of inventory occurs. Pre-stripping costs incurred to access the ore body at an open pit mine prior to the production stage are capitalized during the development phase of the mine provided that the proven and probable reserves have been defined. Where multiple open pits exist at a mine, pre-stripping costs are capitalized separately to each pit. The production stage commences when saleable minerals, beyond a de minimis amount, are produced. Stripping costs incurred during the production stage of a mine are included as part of inventory costs and then included as a component of Production costs applicable to sales as the revenue from the sale of inventory occurs. All capitalized mine development costs are amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves. However, costs incurred to access specific areas that only provide benefit over the life of that area are amortized over the estimated life of that specific area. Plant and Equipment: For properties where the Company established proven and probable reserves as defined by SEC Industry Guide 7, expenditures for plant and equipment and expenditures that extend the useful lives of existing plant and equipment are capitalized and recorded at cost. Plant and equipment are depreciated using the straight-line method over the estimated productive life of the asset. For properties where the Company did not establish proven and probable reserves as defined by SEC Industry Guide 7, substantially all costs, including design, engineering, construction, and installation of equipment are expensed as incurred. Only certain types of equipment which have alternative uses or significant salvage value, may be capitalized without proven and probable reserves. Construction-in-progress (CIP) costs: Assets under construction are capitalized as construction-in-progress until the asset is available for its intended use, at which point costs are transferred to the appropriate category of plant and equipment or mineral property interest and amortized. The cost of construction-in-progress comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets: The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Once it is determined that impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. For the purpose of recognition and measurement of impairment, the Company groups its long-lived assets by specific mine or project, as this represents the lowest level for which there are identifiable cash flows. For asset groups where an impairment loss is determined using the undiscounted future net cash flows method or discounted future net cash flows method, future cash flows are estimated based on quantities of recoverable mineralized material, expected gold and silver prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term “recoverable mineralized material” refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during processing and treatment. The Company’s estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, silver and other commodity prices, production levels and costs of capital are each subject to significant risks and uncertainties. For asset groups where the Company is unable to determine a reliable estimate of undiscounted future net cash flows, the Company adopts a market approach to estimate fair value by using a combination of observed market value per square mile and observed market value per ounce or pound of mineral material based on comparable transactions. |
Asset Retirement Obligation, reclamation and remediation costs | Asset Retirement Obligation, reclamation and remediation costs: The Company records the fair value of a liability for an asset retirement obligation (“ARO”) in the period that it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset when proven or probable reserves exist, or if they relate to an acquired mineral property interest. Periodic accretion is recorded to ARO and charged to operations. Subsequent upward ARO cost revisions are capitalized only with respect to properties with proven or probable reserves, these being San Jose, Black Fox and Gold Bar. Upward adjustments to the fair value of the ARO on properties that do not contain proven or probable reserves are charged to expense. The fair value of ARO is measured by discounting the expected cash flows adjusted for inflation, using a credit-adjusted risk free rate of interest. The Company prepares estimates of the timing and amounts of expected cash flows when an ARO is incurred, which are updated to reflect changes in facts and circumstances. Estimation of the fair value of AROs requires significant judgment, including amount of cash flows, timing of reclamation, inflation rate and credit risk. Ongoing environmental and reclamation expenditures are debited against the ARO liability as incurred to the extent they relate to the ARO liability and to expense to the extent they do not. |
Revenue Recognition | Revenue Recognition: Revenue consists of proceeds 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. 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. 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. |
Other Revenue | Other Revenue : Other revenue is comprised of revenue earned from a toll milling arrangement at the Black Fox Complex and from rental income. Revenue from the milling arrangement is recognized when title to the product passes to the customer. In the fourth quarter of 2018, the Company purchased a 50 unit townhome complex in Eureka, Nevada. The townhomes will be rented to employees and contractors. Rental revenue from the townhomes is recorded on a gross basis and is recognized when rental services are rendered to the tenant and when collectability is reasonably assured. |
Property Holding Costs | Property Holding Costs: Holding costs to maintain a property are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs. |
Exploration Costs | Exploration Costs: Exploration costs include costs incurred to identify new mineral resources, evaluate potential resources, and convert mineral resources into proven and probable reserves. Exploration costs are expensed as incurred. |
Foreign Currency | Foreign Currency: The functional currency for the Company’s operations is the U.S. dollar. All monetary assets and liabilities denominated in a currency which is not the U.S. dollar are translated at current exchange rates at each balance sheet date and the resulting adjustments are included in a separate line item under other income (expense). Revenue and expense in foreign currencies are translated at the average exchange rates for the period. |
Stock-Based Compensation | Stock‑Based Compensation: The Company accounts for stock options at fair value as prescribed in ASC 718. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. The company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee stock option exercise behavior and estimates of forfeitures. |
Flow-through Shares | Flow-through Shares: Current Canadian tax legislation permits mining entities to issue flow-through shares to investors by which the deductions for tax purposes related to resource exploration and evaluation expenditures may be claimed by investors instead of the entity, subject to a renouncement process. Under ASC 740, proceeds from the issuance of flow-through shares are allocated first to the common stock based on the underlying quoted price of shares and the residual amount is allocated to the sale of tax benefits, classified as a liability. As the Company incurs qualifying exploration and evaluation expenditures to fulfill its obligation, the liability is drawn down and the sale of tax benefits is recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income as a reduction of deferred tax expense. |
Income and Mining Taxes | Income and Mining Taxes: The Company accounts for income and mining taxes under ASC 740 using the liability method, recognizing certain temporary differences between the financial reporting basis of liabilities and assets and the related tax basis for such liabilities and assets. This method generates either a net deferred income and mining tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives the deferred income and mining tax charge or benefit by recording the change in either the net deferred income and mining tax liability or asset balance for the year. The Company records a valuation allowance against any portion of those deferred income and mining tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income and mining tax asset will not be realized. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income: In addition to net income or loss, comprehensive income or loss includes all changes in equity during a period. |
Per Share Amounts | Per Share Amounts: Basic income or loss per share includes no dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income or loss per share reflects the potential dilution of securities that could share in the earnings of the Company and are computed in accordance with the treasury stock method based on the average number of common shares and dilutive common share equivalents outstanding. Only those instruments that result in a reduction in income per share are included in the calculation of diluted (loss) income per share. |
Loans and borrowings | Loans and borrowings: Borrowings are recognized initially at fair value, net of financing costs incurred, and subsequently measured at amortized cost. Any difference between the amounts originally received and the redemption value of the debt is recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income over the period to maturity using the effective interest method. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: Fair value accounting, as prescribed in ASC Section 820, utilizes 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: Loans and borrowings: Borrowings are recognized initially at fair value, net of financing costs incurred, and subsequently measured at amortized cost. Any difference between the amounts originally received and the redemption value of the debt is recognized in the Consolidated Statement of Operations and Comprehensive (Loss) Income over the period to maturity using the effective interest method. Fair Value of Financial Instruments: Fair value accounting, as prescribed in ASC Section 820, utilizes 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). |
Recently Adopted And Issued Accounting Pronouncements | 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 Consolidated Statements of Cash Flows . Additionally, an entity is required to reconcile the cash and cash equivalents on its Consolidated Balance Sheets to the cash and cash equivalent balances presented in its statement of cash flows. ASU 2016-18 was 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 Consolidated Statements of Cash Flows , as these balances are included in the beginning and ending cash balances in the Consolidated Statements of Cash Flows ; and (2) included within Note 21 Restricted Cash is a reconciliation between cash balances presented on our Consolidated Balance Sheets with the amounts presented in the Consolidated Statements of Cash Flows . The Company did not have any material restricted cash or restricted cash equivalent items in any interim period during the year ended December 31, 2017. Restricted cash for 2018 was presented based on the new guidance. 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 Consolidated Statements of Cash Flows and amends certain disclosure requirements of ASC 230. The guidance was generally applied retrospectively and was 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. Based on the Cumulative Earnings Approach, if the inception-to-date distributions are greater than the inception to date earnings, the cash flows from the equity method investee would be recognized as a return of investment within cash inflows from investing activities. In respect of the Company’s analysis of its investment in Minera Santa Cruz, the inception-to-date distributions are greater than the inception-to-date earnings for 2017 (including all interim periods) and for the year ended December 31, 2018. Therefore, distributions from Minera Santa Cruz have been recognized as a return of investment within cash flows from investing activities for the years ended December 31, 2018, 2017 and 2016. 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. The new guidance permits two methods of adoption: (i) the full retrospective method, under which comparative periods would be restated, and the cumulative impact of applying the standard would be recognized as at January 1, 2017, the earliest period presented; and (ii) the modified retrospective method, under which comparative periods would not be restated and the cumulative impact of applying the standard would be recognized at the date of initial adoption, January 1, 2018. 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. Business Combinations: Definition of a business: In January 2017 the FASB issued ASU No. 2017-01 which changed the definition of a business to assist entities in evaluating when a set of transferred assets and activities is a business. The update to the standard was effective for the Company for annual periods beginning after December 15, 2017, with early application permitted. The Company adopted the update as of January 1, 2018 and the adoption 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 the recognition, measurement, presentation and disclosure of financial instruments. The update to the standard was adopted by the Company beginning January 1, 2018 using the modified retrospective transition method. 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 operations. 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 Consolidated Statements of Operations and Comprehensive (Loss) Income in the Company’s net loss for the period. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the period. Recently Issued Accounting Pronouncements Codification Improvements: In July 2018, the FASB issued ASU 2018-09 “Codification Improvements” (“ASU 2018- 09”). ASU 2018-09 provides amendments to various topics in the FASB’s Accounting Standards Codification, which applies to all reporting entities within the scope of the affected accounting guidance. The transition and effective date guidance are based on the facts and circumstances of each amendment. Some of the amendments in ASU 2018-09 do not require transition guidance and were effective upon issuance of ASU 2018-09. However, many of the amendments do have transition guidance with effective dates for annual periods beginning after December 15, 2018. The Company is currently evaluating the potential impact of adopting the applicable guidance, however it does not believe that the adoption of ASU 2018-09 will have a material impact on the Company’s financial statements and related disclosures. 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 lessor has 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 and the election must be applied to all leases, as follows: a. 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. b. Hindsight practical expedient – to permit an entity to use hindsight in determining the lease term. c. 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. In January 2018, the FASB issued ASU 2018-01. This update permits an entity to elect an optional transitional practical expedient to not evaluate land easements that exist or expire before the Company’s adoption of ASC 842 that were not previously accounted for as leases under ASC 840. The Company intends to elect this transitional provision. In July 2018, the FASB issued ASU 2018-11, this update permits an entity to elect an optional transitional practical expedient to continue to apply ASC 840, Leases, including its disclosure requirements, in the comparative periods presented in the year of adoption of ASC 842. Under this optional practical expedient, the Company will apply the transition provisions on January 1, 2019 (the date of adoption) rather than January 1, 2017 (the beginning of the earliest comparative period presented). Upon adoption of ASC 842, the Company will be required to recognize a cumulative-effect adjustment to the opening accumulated deficit balance in the year of adoption. The Company intends to elect this transitional provision. During 2018 the Company commenced its analysis to determine the effect of the standard on its financial statements. Based on the Company’s analysis, it is not expected that the adoption of ASC 842 will result in significant changes to the financial statements. The Company anticipates that the adoption of the update for its leasing arrangements will (a) increase the Company’s recorded assets and liabilities, (b) increase related depreciation and amortization expense, (c) increase interest expense and (d) decrease lease/rental expenses. As of the release of these consolidated financial statements, the Company has developed a detailed implementation and transition plan including related internal controls, identified the population of contracts within the Company, reviewed the contracts and segregated the contracts that contain leases, and determined the discount rate applicable to its leases. Upon adoption of ASC 842, the Company will be required to recognize a cumulative-effect adjustment to the opening accumulated deficit balance. A continued analysis of the overall effect of the standard on its financial statements is in process. A quantitative estimate of the transitional impact the standard is expected to have is approximately a $1.2 million addition to assets and $1.2 addition to liabilities on the balance sheet; resulting in less than $0.1 million impact on the opening accumulated deficit balance as of the date of this report. Measurement of Credit Losses on Financial Instruments: In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to estimate lifetime expected credit losses and recognize an allowance against the related instruments. For available-for-sale debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. The adoption of this update will result in earlier recognition of losses and impairments. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” ASU 2016-13 introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets. ASU 2018-19 is the final version of Proposed Accounting Standards Update 2018-270, which has been deleted. Additionally, the amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These updates are effective for fiscal years beginning after December 15, 2019, and the Company is currently evaluating ASU 2016-13 and 2018-19 and the potential impact of adopting this guidance on its financial reporting. Changes to the Disclosure Requirements for Fair Value Measurement: In August 2018, the FASB issued ASU 2018- 13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the disclosure requirements for fair value measurements by removing, modifying or adding disclosures. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. Certain disclosures in the update are applied retrospectively, while others are applied prospectively. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements. |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENTS | |
Summary of investment portfolio | Other Opening Additions Net gains Disposals comprehensive Unrealized Fair value balance during (loss) on during (loss) income gains (loss) on end of the As of December 31, 2018 (January 1) year securities sold year (pre-tax) securities held year Marketable equity securities $ 6,404 $ 1,882 $ (767) $ (2,895) $ — $ (1,906) $ 2,718 Warrants 1,567 201 — (704) — (651) 413 Investments $ 7,971 $ 2,083 $ (767) $ (3,599) $ — $ (2,557) $ 3,131 Other Opening Additions Realized Disposals comprehensive Unrealized Fair value balance during (loss) during (loss) income (loss) gain end of the As of December 31, 2017 (January 1) year gain year (pre-tax) & OTTI year Marketable equity securities $ 6,749 $ — $ 840 $ (2,163) $ 1,334 $ (356) $ 6,404 Warrants 1,794 — — — — (227) 1,567 Investments $ 8,543 $ — $ 840 $ (2,163) $ 1,334 $ (583) $ 7,971 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORIES | |
Schedule of inventories | December 31, 2018 December 31, 2017 Material on leach pads $ 10,370 $ 9,188 In-process inventory 3,446 5,486 Stockpiles 1,272 1,168 Precious metals 3,421 12,902 Materials and supplies 3,530 3,207 Current Inventories $ 22,039 $ 31,951 |
MINERAL PROPERTY INTERESTS (Tab
MINERAL PROPERTY INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | |
Summary of mineral property interests | Name of Property/Complex State/Province Country 2018 2017 Black Fox Complex Ontario Canada $ 16,365 $ 11,364 Lexam Ontario Canada 41,595 41,595 Los Azules Copper Project San Juan Argentina 191,490 191,490 Tonkin Properties Nevada United States 4,833 4,833 Gold Bar Project Nevada United States 44,131 31,317 Battle Mountain Complex Nevada United States 785 785 El Gallo Project Sinaloa Mexico 4,139 6,246 Fenix Project Properties Sinaloa Mexico 5,807 5,807 Total mineral property interests $ 309,145 $ 293,437 |
PLANT AND EQUIPMENT AND CONST_2
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS | |
Schedule of property and equipment | December 31, 2018 December 31, 2017 Land $ 8,699 $ 8,699 Plant and equipment 49,578 43,257 Construction-in-progress 74,643 8,178 Subtotal $ 132,920 $ 60,134 Less: accumulated depreciation (18,186) (9,088) $ 114,734 $ 51,046 |
Schedule of construction-in-progress costs | December 31, 2018 December 31, 2017 Gold Bar project $ 72,425 $ 6,011 Black Fox mine 118 67 Fenix project 2,100 2,100 $ 74,643 $ 8,178 |
INVESTMENT IN MINERA SANTA CR_2
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. (“MSC”) - SAN JOSE MINE | |
Schedule of change in the entity's investment in MSC | December 31, 2018 December 31, 2017 Investment in MSC, beginning of the period $ 150,064 $ 162,320 Attributable net (loss) from MSC (10,065) (2,328) Amortization of fair value increments (9,730) (9,632) Income tax recovery 7,930 11,916 Dividend distribution received (10,385) (12,212) Investment in MSC, end of the period $ 127,814 $ 150,064 |
Summary of MSC's financial information from operations | Year ended December 31, 2018 2017 2016 Minera Santa Cruz S.A. (100%) Net sales $ 205,366 $ 227,093 $ 235,961 Production costs applicable to sales (178,089) (177,180) (173,679) Other operating expenses (21,083) (20,956) (21,770) Other (expenses) income (15,801) (15,657) 10,425 Net (loss) income before tax $ (9,607) $ 13,300 $ 50,937 Current and deferred taxes (10,934) (18,050) (18,363) Net (loss) income $ (20,541) $ (4,750) $ 32,574 Portion attributable to McEwen Mining Inc. (49%) Net (loss) income $ (10,065) $ (2,328) $ 15,961 Amortization of fair value increments (9,730) (9,632) (12,274) Income tax recovery 7,930 11,916 9,264 (Loss) income from investment in MSC, net of amortization $ (11,865) $ (44) $ 12,951 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ASSET RETIREMENT OBLIGATIONS | |
Schedule of reclamation expense | Year ended December 31, 2018 2017 2016 Reclamation Adjustment reflecting updated estimates $ 2,259 $ 1,426 $ 89 Reclamation Accretion 1,205 Total $ $ $ |
Schedule of reconciliation of asset retirement obligations | 2018 2017 Asset retirement obligation liability, beginning of the period $ 24,722 $ 9,843 Settlements (392) (126) Accretion of liability 1,205 635 Acquisitions and divestitures — 11,803 Adjustment reflecting updated estimates 5,024 2,561 Foreign exchange revaluation (1,157) 6 Asset retirement obligation liability, ending balance $ 29,402 $ 24,722 Current portion (734) (646) Non-current portion $ 28,668 $ 24,076 |
INCOME AND MINING TAXES (Tables
INCOME AND MINING TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INCOME AND MINING TAXES. | |
Schedule of deferred income tax recovery (expense) | 2018 2017 2016 United States $ 2,185 $ 10,349 $ 515 Foreign 585 5,020 3,234 Deferred tax benefit $ 2,770 $ 15,369 $ 3,749 |
Schedule of net income (loss) before tax | 2018 2017 2016 United States $ (27,001) $ (19,913) $ (13,959) Foreign (20,639) (6,090) 31,265 Net (loss) income before tax $ (47,640) $ (26,003) $ 17,306 |
Schedule of reconciliation of the tax provision at statutory U.S. Federal and State income tax rates to the actual tax provision recorded in the financial statement | Expected tax recovery at 2018 2017 2016 (Loss) income before income and mining taxes $ (47,640) $ (26,003) $ 17,306 Statutory tax rate US Federal and State tax (recovery) expense at statutory rate (10,004) (9,101) 5,884 Reconciling items: Equity pickup in MSC 2,966 (16) (4,533) Deferred foreign income inclusion 5,963 21,002 — Realized flow-through expenditures 2,100 — — Realized flow-through premium (1,675) — — Foreign tax credits — (16,628) — Tax rate changes — 28,048 — Adjustment for foreign tax rates 40 115 (501) Other permanent differences 4,419 (1,761) 818 Unrealized foreign exchange rate (loss)/gain (6,935) 2,469 5,972 NOL expires and revisions (120) (2,806) (242) Valuation allowance 476 (36,691) (11,147) Tax benefit $ (2,770) $ (15,369) $ (3,749) |
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities | 2018 2017 Deferred tax assets: Net operating loss carryforward $ 55,515 $ 72,078 Mineral Properties 62,345 59,905 Other temporary differences 15,198 862 Total gross deferred tax assets 133,058 132,845 Less: valuation allowance (124,153) (123,648) Net deferred tax assets $ 8,905 $ 9,197 Deferred tax liabilities: Acquired mineral property interests (15,331) (17,627) Total deferred tax liabilities $ (15,331) $ (17,627) Total net deferred tax liability $ (6,426) $ (8,430) |
Summary of changes in valuation allowance | For the year ended December 31, Balance at Additions(a) Deductions(b) Balance at 2018 $ 123,648 $ 12,232 $ (11,727) $ 124,153 2017 111,621 51,220 (39,193) 123,648 2016 122,768 1,430 (12,577) 111,621 (a) The additions to valuation allowance mainly results from the Company and its subsidiaries incurring losses and exploration expenses for tax purposes which do not meet the more-likely-than-not criterion for recognition of deferred tax assets. (b) The reductions to valuation allowance mainly results from release of valuation allowance, expiration of the Company’s tax attributes and foreign exchange reductions of tax attributes in Canada, Mexico and Argentina. |
Summary of company’s non operating losses that can be applied against future taxable profit | Country Type of Loss Amount Expiry Period United States (a) Net-operating losses $ 135,348 2019-2038 Mexico Net-operating losses 29,749 2019-2024 Canada (a) Net-operating losses 38,728 2019-2038 Argentina (a) Net-operating losses 34,001 2019-2023 (a) The losses in the United States, Canada, and Argentina are part of multiple consolidating groups, and therefore, may be restricted in use to specific projects. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 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 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
STOCK BASED COMPENSATION | |
Summary of information about stock options under the Plan | Weighted Weighted Average Average Remaining Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value (in thousands, except per share and year data) Balance at December 31, 2015 6,954 $ 2.49 4.1 $ 98 Granted 645 3.99 — — Exercised (1,457) 2.48 — 1,601 Forfeited (1,422) 3.45 — — Expired — — — — Balance at December 31, 2016 4,720 $ 2.41 3.4 $ 4,388 Granted 338 2.99 — — Exercised (94) 1.30 — 87 Forfeited (37) 4.28 — — Expired (21) 5.00 — — Balance at December 31, 2017 4,906 $ 2.45 2.6 $ 2,564 Granted 375 1.90 — — Exercised (171) 1.02 — 195 Forfeited (405) 3.99 — — Expired (462) 2.27 — — Balance at December 31, 2018 4,243 $ 2.33 2.0 $ 1,475 Exercisable at December 31, 2018 3,552 $ 2.28 1.6 $ 1,475 |
Schedule of weighted-average assumptions used for estimation of the fair value of the options granted under the Plan at the date of grant, using the Black-Scholes Option Valuation Model | 2018 2017 2016 Risk-free interest rate 2.67% to 2.89% 1.46% to 1.60% 1.13% to 1.21% Dividend yield 0.36% to 0.53% 0.31% to 0.36% 0.24% to 0.27% Volatility factor of the expected market price of common stock 63% to 64% 72% to 74% 74% Weighted-average expected life of option 3.5 years 3.5 years 5.0 years Weighted-average grant date fair value $ 1.90 $ 2.99 $ 2.36 |
Summary of status and activity of non-vested stock options | Weighted Average Number of Grant Date Shares Fair Value (in thousands, except per share amounts) Non-vested, beginning of year $ 1.24 Granted 375 $ 0.88 Cancelled/Forfeited (248) $ 2.25 Vested (915) $ 0.80 Non-vested, end of year $ 1.28 |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 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 | Year ended December 31, 2018 2017 2016 (in thousands, except per share amounts) Net (loss) income $ (44,870) $ (10,634) $ 21,055 Weighted average common shares outstanding: 337,297 313,887 298,772 Effect of employee stock-based awards — — 1,702 Diluted shares outstanding: 337,297 313,887 300,474 Net (loss) income per share: Basic and diluted $ (0.13) $ 0.07 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RENTAL EXPENSE, COMMITMENTS AND CONTINGENCIES | |
Schedule of minimum amounts under purchase commitments, long term leases covering office space, exploration expenditures, option payments on properties | Payments due by period 2019 2020 2021 2022 2023 Thereafter Total Operating lease obligations (office rent) $ 374 $ 322 $ 263 $ 252 $ 256 $ 143 $ 1,610 Operating lease obligations (mining and surface rights) 2,524 453 460 460 454 — 4,351 Exploration (including $14.9 million flow-through shares) 15,115 — — — — — 15,115 Construction 6,044 — — — — — 6,044 Reclamation costs (1) 726 1,561 2,890 5,860 141 33,211 44,389 Long-term debt 4,875 14,725 41,993 — — — 61,593 Total $ 29,658 $ 17,061 $ 45,606 $ 6,572 $ 851 $ 33,354 $ 133,102 (1) Amounts presented represent the undiscounted uninflated future payments. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party expense (income) and outstanding accounts payable (receivable) | The Company incurred the following expense (income) in respect to the related parties outlined below: Year ended December 31, 2018 2017 2016 Lexam L.P. $ 91 $ 152 $ 187 Lexam VG Gold — (33) 85 Noblegen Inc. 26 40 — REVlaw 266 330 124 Inventus — (36) — The Company has the following outstanding accounts payable (receivable) balance in respect to the related parties outlined below: Year ended December 31, 2018 2017 REVlaw 32 17 Inventus — (36) |
OPERATING SEGMENT REPORTING (Ta
OPERATING SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OPERATING SEGMENT REPORTING | |
Schedule of the financial information relating to the Company's segments | Year ended December 31, 2018 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 66,151 $ — $ — $ — $ 62,024 $ 128,175 Other revenue — — — 30 617 647 Production costs applicable to sales (37,429) — — — (55,900) (93,329) Mine development costs (3,667) — — — — (3,667) Exploration costs (2,241) — (6,015) (5,174) (21,372) (34,802) Property holding costs (2,264) — (68) (1,397) (167) (3,896) General and administrative costs (3,770) — (1,046) (6,562) (665) (12,043) (Loss) from investment in Minera Santa Cruz S.A. (net of amortization) — (11,865) — — — (11,865) Segment (loss) income $ 16,780 $ (11,865) $ (7,129) $ (13,103) $ (15,463) $ (30,780) Corporate and other General and administrative costs $ (11,120) Depreciation (1,178) Revision of estimates and accretion of reclamation obligations (3,464) Interest and other expense (1,619) Gain on sale of assets (77) (Loss) gain on investments (3,324) Foreign currency gain 3,922 Net (loss) before income and mining taxes $ (47,640) |
Schedule Of Geographic Information | Year ended December 31, 2017 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 55,845 $ — $ — $ — $ 11,620 $ 67,465 Other revenue — — — — 259 259 Production costs applicable to sales (35,292) — — — (9,888) (45,180) Mine development costs (745) — — (3,092) — (3,837) Exploration costs (5,610) — (7,923) (2,132) (1,544) (17,209) Property holding costs (2,131) — (56) (1,667) (25) (3,879) Impairment of mineral property interests and property and equipment (711) — — — — (711) General and administrative costs (3,772) — (1,242) (1,927) (92) (7,033) (Loss) from investment in Minera Santa Cruz S.A. (net of amortization) — (44) — — — (44) Segment income (loss) $ 7,584 $ (44) $ (9,221) $ (8,818) $ 330 $ (10,169) Corporate and other Other exploration costs $ (505) General and administrative costs (11,839) Depreciation (1,453) Revision of estimates and accretion of reclamation obligations (2,061) Interest and other income (938) Gain on sale of assets 11 (Loss) gain on investments 257 Foreign currency gain 694 Net (loss) before income and mining taxes $ (26,003) Year ended December 31, 2016 Mexico MSC Los Azules USA Canada Total Gold and silver sales $ 60,388 $ — $ — $ — $ — $ 60,388 Production costs applicable to sales (28,133) — — — — (28,133) Mine development costs (1,174) — — (2,692) — (3,866) Exploration costs (4,100) — (1,649) (1,973) — (7,722) Property holding costs (1,642) — (405) (1,489) — (3,536) General and administrative costs (2,688) — (646) (228) — (3,562) Income from investment in Minera Santa Cruz S.A. (net of amortization) — 12,951 — — — 12,951 Segment income (loss) $ 22,651 $ 12,951 $ (2,700) (6,382) $ — $ 26,520 Corporate and other Other exploration costs $ (237) General and administrative costs (9,172) Depreciation (1,169) Revision of estimates and accretion of reclamation obligations (595) Interest and other income 835 Gain on sale of assets 24 (Loss) gain on investments 519 Foreign currency gain 581 Net income before income and mining taxes $ 17,306 Geographic information Geographic information includes the long-lived assets balance and revenues presented for the Company’s operating segments. Long-lived Assets Revenue (1) Year ended December 31, Year ended December 31, 2018 2017 2018 2017 2016 Canada $ 84,119 $ 85,179 $ 62,641 $ 11,879 $ — Mexico 26,524 35,446 66,151 55,845 60,388 USA 127,617 43,086 30 — — Argentina (2) 319,305 341,554 — — — Total consolidated $ 557,565 $ 505,265 $ 128,822 $ 67,724 $ 60,388 (1) Presented based on the location from which the product originated. (2) Includes Investment in MSC of $127.8 million as of December 31, 2018 (December 31, 2017 - $151.0 million). |
Schedule Of Property and Equipment and Mineral Property Interests, net of dispositions | Capital Expenditures Year ended December 31, 2018 2017 2016 Mexico $ (3,107) $ 939 $ 5,401 Los Azules — — — Canada (1,110) 4,301 — USA 83,613 6,271 764 Consolidated total for capital expenditures $ 79,396 $ 11,511 $ 6,165 |
FAIR VALUE ACCOUNTING (Tables)
FAIR VALUE ACCOUNTING (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Investments $ 3,131 $ 2,718 $ 413 $ — Total $ 3,131 $ 2,718 $ 413 $ — 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 $ — |
UNAUDITED SUPPLEMENTARY QUART_2
UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION | |
Summary of unaudited supplementary quarterly information | Three months ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 (unaudited) (in thousands, except per share) Net (loss) $ (5,211) $ (5,380) $ (13,290) $ (20,989) Net (loss) per share: Basic and diluted $ (0.02) $ (0.02) $ (0.04) $ (0.06) Weighted average shares outstanding: Basic and diluted 337,062 337,087 337,100 337,936 Three months ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 (unaudited) (in thousands, except per share) Net (loss) income $ (3,018) $ (1,712) $ (8,072) $ 2,169 Net (loss) income per share: Basic and diluted $ (0.01) $ (0.01) $ (0.03) $ 0.01 Weighted average shares outstanding: Basic and diluted 299,575 308,523 314,077 313,002 Three months ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 (unaudited) (in thousands, except per share) Net income (loss) $ 12,985 $ 8,353 $ 4,208 $ (4,491) Net (loss) income per share: Basic and diluted $ 0.04 $ 0.03 $ 0.01 $ (0.01) Weighted average shares outstanding: Basic 298,242 298,237 298,510 299,518 Diluted 298,554 299,791 301,045 301,102 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Lexam VG Gold | |
Schedule of assets acquired and liabilities assumed | Total purchase price: Common shares issued for acquisition $ Transaction fees incurred $ Fair value of assets acquired and liabilities assumed: Mineral property interests $ Cash and cash equivalents Other current assets Other assets Accounts payable and accrued liabilities Reclamation obligations Deferred income tax liabilities $ |
Black Fox | |
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 $ |
CAPITAL LEASES (Tables)
CAPITAL LEASES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CAPITAL LEASES | |
Schedule of capital lease obligations | Year ended December 31, Interest Rates Maturities 2018 2017 Capital lease obligations 4.45 -10.09% 2019 - 2024 $ 6,429 $ 551 Less current portion 1,511 470 Long-term capital lease obligations $ 4,918 $ 81 |
CASH AND CASH EQUIVALENTS AND_2
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |
Reconciliation of cash, cash equivalents, and restricted cash | December 31, 2018 2017 Cash and cash equivalents $ $ Restricted cash Restricted cash included in other assets 48 - Total cash, cash equivalents, and restricted cash $ 30,489 $ 37,153 |
THE COMPANY (Details)
THE COMPANY (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
MSC | |||
Ownership interest (as a percent) | 49.00% | 49.00% | 49.00% |
Black Fox | |||
Subsidiary (as a percent) | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stockpiles, Proven and Probable Reserves (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Stockpiles, Ore on Leach Pads, In-process Inventory, Precious Metals Inventory and Materials and Supplies: | |
Period for determining current portion of stockpiles, ore on leach pad, in-process inventory and materials and supplies | 12 months |
Period within which Stockpiles, ore on leach pads, in-process inventory and materials and supplies are not expected to be processed, classified as long-term | 12 months |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Ore Stockpile Inventory (Details) | 12 Months Ended | 64 Months Ended | 76 Months Ended |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
El Gallo 1 mine | |||
Stockpiles, Material on Leach Pads, In-process Inventory, Precious Metals Inventory and Materials and Supplies | |||
Cumulative metallurgical recovery rate for gold production (as a percent) | 57.00% | 61.00% | |
Minimum | |||
Stockpiles, Material on Leach Pads, In-process Inventory, Precious Metals Inventory and Materials and Supplies | |||
Recovery percentage of leach pads of the recoverable ounces in the first year of leaching | 50.00% | ||
Maximum | |||
Stockpiles, Material on Leach Pads, In-process Inventory, Precious Metals Inventory and Materials and Supplies | |||
Recovery percentage of leach pads of the recoverable ounces in the first year of leaching | 95.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Products, Properties and Production of Minerals (Details) - home | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Option to sell prior to the completion of refining (as a percent) | 90.00% | |
Number of townhomes purchased | 50 | |
Minimum | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Period over which concentrates are provisionally priced at the end of a period after delivery to the customer | 30 days | |
Maximum | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Period over which concentrates are provisionally priced at the end of a period after delivery to the customer | 90 days |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases - Amendments (Details) - Accounting Standards Update 2016-02 - USD ($) $ in Millions | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle | ||
Addition to assets on balance sheet | $ 1.2 | |
Addition to liabilities on balance sheet | $ 1.2 | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Cumulative effect of new accounting principle | $ 0.1 |
INVESTMENTS (Details)
INVESTMENTS (Details) $ / shares in Units, $ / shares in Units, $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2018CAD ($)item$ / shares | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 20, 2018$ / shares | Jan. 01, 2018USD ($) | Dec. 19, 2017$ / shares | Apr. 26, 2017$ / shares | |
Investments rollforward | ||||||||
Opening balance | $ 7,971,000 | $ 8,543,000 | ||||||
Additions during the year | 2,083,000 | |||||||
Net gains (loss) on securities sold | (767,000) | 840,000 | ||||||
Disposals during the year | (3,599,000) | (2,163,000) | ||||||
Other comprehensive (loss) income (pre -tax) | 1,334,000 | |||||||
Unrealized gains (loss) on securities held | (2,557,000) | (583,000) | ||||||
Fair Value end of the year | 3,131,000 | 7,971,000 | $ 8,543,000 | |||||
Unrealized (loss) gain on derivative instrument | (700,000) | (200,000) | 1,400,000 | |||||
Impairment on marketable securities | 0 | (400,000) | (900,000) | |||||
Unrealized gain on marketable equity securities, net of taxes | 1,818,000 | 1,609,000 | ||||||
Other-than-temporary impairment on marketable equity securities (note 3) | (356,000) | (882,000) | ||||||
Gain on available-for-sale securities | 100,000 | |||||||
Proceeds from sale of investments | 2,895,000 | 2,155,000 | 470,000 | |||||
Unrealized gain (loss) on available-for-sale securities (note 3) | 1,818,000 | 1,609,000 | ||||||
Other comprehensive income (loss) | 840,000 | |||||||
Cost of purchase of marketable equity securities | $ 2,900,000 | 3,300,000 | ||||||
Price per unit | $ / shares | $ 2.50 | |||||||
Common shares per unit | 1 | |||||||
Warrants per unit | 0.5 | |||||||
Great Bear | ||||||||
Investments rollforward | ||||||||
Number of units acquired | item | 786,186 | 786,186 | ||||||
Price per unit | $ / shares | $ 1.45 | |||||||
Total cost of private placement transaction | $ 1.1 | $ 900,000 | ||||||
Flow Through Common Shares | ||||||||
Investments rollforward | ||||||||
Price per unit | $ / shares | $ 2.24 | |||||||
Marketable equity securities | ||||||||
Investments rollforward | ||||||||
Opening balance | 6,404,000 | 6,749,000 | ||||||
Additions during the year | 1,882,000 | |||||||
Net gains (loss) on securities sold | (767,000) | 840,000 | ||||||
Disposals during the year | (2,895,000) | (2,163,000) | ||||||
Other comprehensive (loss) income (pre -tax) | 1,334,000 | |||||||
Unrealized gains (loss) on securities held | (1,906,000) | (356,000) | ||||||
Fair Value end of the year | 2,718,000 | 6,404,000 | 6,749,000 | |||||
Warrants | ||||||||
Investments rollforward | ||||||||
Opening balance | 1,567,000 | 1,794,000 | ||||||
Additions during the year | 201,000 | |||||||
Disposals during the year | (704,000) | |||||||
Unrealized gains (loss) on securities held | (651,000) | (227,000) | ||||||
Fair Value end of the year | $ 413,000 | $ 1,567,000 | $ 1,794,000 | |||||
Lexam VG Gold | ||||||||
Investments rollforward | ||||||||
Price per unit | $ / shares | $ 3 | |||||||
Accounting Standards Update 2016-01 | Marketable equity securities | ||||||||
Investments rollforward | ||||||||
Cumulative effect of new accounting principle | $ 3,000,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Inventories | ||
Material on leach pads | $ 10,370 | $ 9,188 |
In-process inventory | 3,446 | 5,486 |
Stockpiles | 1,272 | 1,168 |
Precious metals | 3,421 | 12,902 |
Materials and supplies | 3,530 | 3,207 |
Current Inventories | 22,039 | 31,951 |
Inventory write-down | 0 | 0 |
Other assets | ||
Inventories | ||
Non-current portion of ore on leach pads | $ 4,600 | $ 10,400 |
MINERAL PROPERTY INTERESTS - Mi
MINERAL PROPERTY INTERESTS - Mineral Property Interests (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Apr. 19, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 25, 2017 |
Mineral Property Interests | ||||||
Payments to aquire mineral propety interests | $ 18,983 | $ 3,492 | $ 5,985 | |||
Additional to mineral properties | 19,400 | 3,300 | ||||
Impairment charges | 711 | |||||
Mineral property interests | 309,145 | 293,437 | ||||
Amortization of mineral property interests and asset retirement obligations | 7,256 | 3,198 | 2,413 | |||
Black Fox | ||||||
Mineral Property Interests | ||||||
Mineral property interests | 16,365 | 11,364 | ||||
Black Fox | Production costs applicable to sales | ||||||
Mineral Property Interests | ||||||
Amortization of mineral property interests and asset retirement obligations | 5,100 | 0 | ||||
Lexam VG Gold | ||||||
Mineral Property Interests | ||||||
Mineral property interests | 41,595 | 41,595 | ||||
Los Azules Copper Project | ||||||
Mineral Property Interests | ||||||
Mineral property interests | 191,490 | 191,490 | ||||
Tonkin Properties | ||||||
Mineral Property Interests | ||||||
Mineral property interests | 4,833 | 4,833 | ||||
El Gallo 1 mine | Production costs applicable to sales | ||||||
Mineral Property Interests | ||||||
Amortization of mineral property interests and asset retirement obligations | 2,100 | 2,300 | $ 2,400 | |||
El Gallo Project | ||||||
Mineral Property Interests | ||||||
Mineral property interests | 4,139 | 6,246 | ||||
Fenix Project Properties | ||||||
Mineral Property Interests | ||||||
Mineral property interests | 5,807 | 5,807 | ||||
El Gallo 2 project | ||||||
Mineral Property Interests | ||||||
Impairment charges | 700 | |||||
Battle Mountain Complex Located In Nevada United States | ||||||
Mineral Property Interests | ||||||
Mineral property interests | 785 | 785 | ||||
Gold Bar project | ||||||
Mineral Property Interests | ||||||
Mineral property interests | $ 44,131 | 31,317 | ||||
Royalty | ||||||
Mineral Property Interests | ||||||
Total purchase price at closing | $ 6,300 | |||||
Payments to aquire mineral propety interests | $ 1,000 | 5,300 | ||||
Royalty | El Gallo 1 mine | ||||||
Mineral Property Interests | ||||||
Additional to mineral properties | 5,100 | |||||
Royalty | El Gallo 2 project | ||||||
Mineral Property Interests | ||||||
Additional to mineral properties | $ 1,200 | |||||
Black Fox | ||||||
Mineral Property Interests | ||||||
Mineral property interests | $ 8,954 | |||||
Black Fox | Production costs applicable to sales | ||||||
Mineral Property Interests | ||||||
Amortization of mineral property interests and asset retirement obligations | 900 | |||||
Mexico | ||||||
Mineral Property Interests | ||||||
Impairment charges | $ 711 |
PLANT AND EQUIPMENT AND CONST_3
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS - By Type (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
PROPERTY AND EQUIPMENT | ||
Subtotal | $ 132,920 | $ 60,134 |
Less: accumulated depreciation | (18,186) | (9,088) |
Total | 114,734 | 51,046 |
Land | ||
PROPERTY AND EQUIPMENT | ||
Subtotal | 8,699 | 8,699 |
Plant and equipment | ||
PROPERTY AND EQUIPMENT | ||
Subtotal | 49,578 | 43,257 |
Construction in process | ||
PROPERTY AND EQUIPMENT | ||
Subtotal | $ 74,643 | $ 8,178 |
PLANT AND EQUIPMENT AND CONST_4
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS - Construction-in-progress (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Construction in progress | ||
Construction-in-progress | $ 74,643 | $ 8,178 |
Gold Bar project | ||
Construction in progress | ||
Construction-in-progress | 72,425 | 6,011 |
Black Fox | ||
Construction in progress | ||
Construction-in-progress | 118 | 67 |
Fenix Project Properties | ||
Construction in progress | ||
Construction-in-progress | $ 2,100 | $ 2,100 |
PLANT AND EQUIPMENT AND CONST_5
PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Mineral Property Interests | |||
Interest costs incurred | $ 800 | ||
Impairment charges | $ 711 | ||
El Gallo 2 project | |||
Mineral Property Interests | |||
Total cost of deposit | $ 1,500 | ||
Refund of deposits | 1,000 | ||
Impairment charges | $ 700 | ||
El Gallo 2 project | Mine development costs | |||
Mineral Property Interests | |||
Cost of goods and services sold | $ 500 |
INVESTMENT IN MINERA SANTA CR_3
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Equity Method Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Impairment charges | $ 711 | ||
Corporate Venture | |||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||
Ownership interest (as a percent) | 100.00% | 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% | 49.00% |
Results of operations | $ 11,900 | $ (100) | $ (13,000) |
INVESTMENT IN MINERA SANTA CR_4
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Argentinian Tax Reform (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||||
Statutory tax rate (as a percent) | 21.00% | 35.00% | 34.00% | |
Recovery of income taxes | $ (2,770) | $ (15,369) | $ (3,749) | |
Argentina | ||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||||
Statutory tax rate (as a percent) | 35.00% | 35.00% | ||
Recovery of income taxes | $ 5,600 | |||
Forecast | Argentina | ||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||||
Statutory tax rate (as a percent) | 25.00% |
INVESTMENT IN MINERA SANTA CR_5
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Changes in Company's Investment in MSC (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in the investment in MSC | |||
Investment in MSC, beginning balance | $ 150,064 | ||
Income tax recovery | (2,770) | $ (15,369) | $ (3,749) |
Distributions received | (10,385) | (12,212) | (17,738) |
Investment in MSC, ending balance | 127,814 | 150,064 | |
MSC | |||
Change in the investment in MSC | |||
Investment in MSC, beginning balance | 150,064 | 162,320 | |
Attributable net income (loss) from MSC | (10,065) | (2,328) | 15,961 |
Amortization of fair value increments | (9,730) | (9,632) | (12,274) |
Income tax recovery | 7,930 | 11,916 | 9,264 |
Distributions received | (10,385) | (12,212) | |
Investment in MSC, ending balance | $ 127,814 | $ 150,064 | $ 162,320 |
INVESTMENT IN MINERA SANTA CR_6
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 | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||||||||||||
Net Sales | $ 128,822 | $ 67,724 | $ 60,388 | ||||||||||||
Other operating expenses | (82,035) | (48,571) | (16,908) | ||||||||||||
(Loss) income before income and mining taxes | (47,640) | (26,003) | 17,306 | ||||||||||||
Net income | $ (20,989) | $ (13,290) | $ (5,380) | $ (5,211) | $ 2,169 | $ (8,072) | $ (1,712) | $ (3,018) | $ (4,491) | $ 4,208 | $ 8,353 | $ 12,985 | (44,870) | (10,634) | 21,055 |
Income tax recovery | (2,770) | (15,369) | (3,749) | ||||||||||||
(Loss) from investment in MSC, net of amortization | (11,865) | (44) | 12,951 | ||||||||||||
MSC | |||||||||||||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||||||||||||
Cost of goods and services sold | (178,089) | (177,180) | (173,679) | ||||||||||||
Other operating expenses | (21,083) | (20,956) | (21,770) | ||||||||||||
Other (expenses) income | (15,801) | (15,657) | 10,425 | ||||||||||||
(Loss) income before income and mining taxes | (9,607) | 13,300 | 50,937 | ||||||||||||
Current & deferred taxes | (10,934) | (18,050) | (18,363) | ||||||||||||
Net sales | 205,366 | 227,093 | 235,961 | ||||||||||||
Net (loss) income | $ (20,541) | $ (4,750) | $ 32,574 | ||||||||||||
MSC | |||||||||||||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||||||||||||
Ownership interest (as a percent) | 49.00% | 49.00% | 49.00% | 49.00% | 49.00% | 49.00% | |||||||||
Net income (loss) | $ (10,065) | $ (2,328) | $ 15,961 | ||||||||||||
Amortization of fair value increments | (9,730) | (9,632) | (12,274) | ||||||||||||
Income tax recovery | 7,930 | 11,916 | 9,264 | ||||||||||||
(Loss) from investment in MSC, net of amortization | $ (11,865) | $ (44) | $ 12,951 | ||||||||||||
Corporate Venture | |||||||||||||||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | |||||||||||||||
Ownership interest (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
INVESTMENT IN MINERA SANTA CR_7
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE - Assets and Liabilities Associated with MSC (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | $ 59,376 | $ 86,864 |
Total assets | 616,941 | 592,129 |
Current liabilities | 36,012 | 37,639 |
Total liabilities | 130,995 | $ 70,856 |
MSC | ||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | 67,600 | |
Total assets | 336,300 | |
Current liabilities | 37,500 | |
Total liabilities | 75,500 | |
MSC | Current Period Values Excluding Fair Value Increments And Impairment Charge | ||
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE | ||
Current assets | 67,500 | |
Total assets | 197,400 | |
Current liabilities | 42,000 | |
Total liabilities | $ 68,100 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) $ in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Reclamation obligations | ||||
Reclamation Adjustment | $ 2,259 | $ 1,426 | $ 89 | |
Remediation Accretion | 1,205 | 635 | 506 | |
Reclamation and remediation expense | 3,464 | 2,061 | 595 | |
Changes in the asset retirement obligations | ||||
Asset retirement obligation, beginning of the period | 24,722 | 9,843 | ||
Settlements | (392) | (126) | ||
Accretion of liability | 1,205 | 635 | ||
Acquisitions and divestitures | 11,803 | |||
Adjustment reflecting updated estimates | 5,024 | 2,561 | ||
Foreign exchange revaluation | (1,157) | 6 | ||
Asset retirement obligation, ending balance | 29,402 | 24,722 | $ 9,843 | |
Current portion | (734) | (646) | ||
Non-current portion | 28,668 | $ 24,076 | ||
Black Fox | ||||
Mineral Property Interests | ||||
Surety bonding obligation | $ 20.6 | 15,900 | ||
Changes in the asset retirement obligations | ||||
Asset retirement obligation, ending balance | 11,200 | |||
Gold Bar project | ||||
Changes in the asset retirement obligations | ||||
Adjustment reflecting updated estimates | $ 3,700 |
INCOME AND MINING TAXES - Tax C
INCOME AND MINING TAXES - Tax Cuts and Jobs Act (the "Act") and Tax Reform (Details) - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Taxes | |||||
Statutory tax rate (as a percent) | 21.00% | 35.00% | 34.00% | ||
Tax Cuts and Jobs Act reduction of deferred tax liability | $ 4.2 | ||||
Tax Cuts and Jobs Act reduction of deferred tax asset | $ 23.7 | ||||
Taxable income offset by non-operating losses | $ 13.6 | ||||
Argentina | |||||
Income Taxes | |||||
Statutory tax rate (as a percent) | 35.00% | 35.00% | |||
Argentinian Tax Cuts reduction of deferred tax liability | $ 3.9 | ||||
Argentinian Tax Cuts reduction of deferred tax assets | $ 12.4 | ||||
Forecast | Argentina | |||||
Income Taxes | |||||
Statutory tax rate (as a percent) | 25.00% |
INCOME AND MINING TAXES - Defer
INCOME AND MINING TAXES - Deferred Income Tax Recovery (Expense) and Net Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred income tax recovery (expense) | |||
United States | $ 2,185 | $ 10,349 | $ 515 |
Foreign | 585 | 5,020 | 3,234 |
Deferred tax recovery | 2,770 | 15,369 | 3,749 |
Net income (loss) before tax: | |||
United States | (27,001) | (19,913) | (13,959) |
Foreign | (20,639) | (6,090) | 31,265 |
(Loss) income before income and mining taxes | $ (47,640) | $ (26,003) | $ 17,306 |
INCOME AND MINING TAXES - Recon
INCOME AND MINING TAXES - Reconciliation of Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
INCOME AND MINING TAXES. | |||
(Loss) income before income and mining taxes | $ (47,640) | $ (26,003) | $ 17,306 |
Statutory tax rate (as a percent) | 21.00% | 35.00% | 34.00% |
US Federal and State tax (expense) recovery at statutory rate | $ (10,004) | $ (9,101) | $ 5,884 |
Reconciling items: | |||
Equity pickup in MSC | 2,966 | (16) | (4,533) |
Deferred foreign income inclusion | 5,963 | 21,002 | |
Foreign tax credits | (16,628) | ||
Tax rate changes | 28,048 | ||
Realized flow-through expenditures | 2,100 | ||
Realized flow-through premium | (1,675) | ||
Adjustment for foreign tax rates | 40 | 115 | (501) |
Other permanent differences | 4,419 | (1,761) | 818 |
Unrealized foreign exchange rate (loss)/gain | (6,935) | 2,469 | 5,972 |
NOL expires and revisions | (120) | (2,806) | (242) |
Valuation allowance | 476 | (36,691) | (11,147) |
Tax benefit | $ (2,770) | $ (15,369) | $ (3,749) |
INCOME AND MINING TAXES - Tax E
INCOME AND MINING TAXES - Tax Effects of Temporary Differences (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets: | ||||
Net operating loss carryforward | $ 55,515 | $ 72,078 | ||
Mineral properties | 62,345 | 59,905 | ||
Other temporary differences | 15,198 | 862 | ||
Total gross deferred tax assets | 133,058 | 132,845 | ||
Less: valuation allowance | (124,153) | (123,648) | $ (111,621) | $ (122,768) |
Valuation allowances | 500 | |||
Net deferred tax assets | 8,905 | 9,197 | ||
Deferred tax liabilities: | ||||
Acquisition mineral property interests | (15,331) | (17,627) | ||
Total deferred tax liabilities | (15,331) | (17,627) | ||
Total net deferred tax liability | $ (6,426) | (8,430) | ||
Gold Bar project | ||||
Deferred tax assets: | ||||
Net deferred tax assets | $ 6,400 |
INCOME AND MINING TAXES - Chang
INCOME AND MINING TAXES - Changes to Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation allowance | |||
Balance at Beginning of Period | $ 123,648 | $ 111,621 | $ 122,768 |
Additions | 12,232 | 51,220 | 1,430 |
Deductions | (11,727) | (39,193) | (12,577) |
Balance at End of Period | $ 124,153 | $ 123,648 | $ 111,621 |
INCOME AND MINING TAXES - Non O
INCOME AND MINING TAXES - Non Operating Losses (Details) $ in Thousands | Dec. 31, 2018USD ($) |
United States | |
Income Taxes | |
Net-operating losses | $ 135,348 |
Mexico | |
Income Taxes | |
Net-operating losses | 29,749 |
Canada | |
Income Taxes | |
Net-operating losses | 38,728 |
Argentina | |
Income Taxes | |
Net-operating losses | $ 34,001 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands, $ in Millions | Dec. 20, 2018CAD ($)shares | Dec. 20, 2018USD ($)$ / sharesshares | Nov. 08, 2018USD ($) | Jun. 11, 2018shares | Dec. 20, 2017USD ($) | Dec. 19, 2017USD ($)$ / sharesshares | Sep. 22, 2017USD ($)item$ / sharesshares | Apr. 26, 2017$ / sharesshares | Feb. 13, 2017 | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares |
Shareholders’ distributions | $ 3,372 | $ 3,059 | $ 2,986 | |||||||||
Semi-annual shareholders’ distribution | $ / shares | 0.010 | 0.010 | 0.005 | |||||||||
Share repurchase program (in shares) | shares | 0 | |||||||||||
Share repurchase program | $ 582 | |||||||||||
Common stock issued | shares | 344,560,000 | 337,051,000 | ||||||||||
Shares of common stock issued upon exercise of stock options | shares | 171 | 94 | 1,457 | |||||||||
Weighted average exercise price of stock options (in dollars per share) | $ / shares | $ 1.02 | $ 1.30 | $ 2.48 | |||||||||
Exercise of stock options | $ 192 | $ 122 | $ 3,730 | |||||||||
Restricted cash | $ 14,685 | 10,000 | ||||||||||
Number of units issued | shares | 20,700,000 | |||||||||||
Proceeds from equity sale (note 10) | 42,453 | |||||||||||
Number of common stock reserved for issuance | shares | 17,500,000 | |||||||||||
Number of warrants issued | item | 10,350,000 | |||||||||||
Share price | $ / shares | $ 2.50 | |||||||||||
Net proceeds | $ 43,200 | $ 918 | 39,397 | |||||||||
Issuance costs | $ 3,400 | 3,353 | ||||||||||
Flow-through share premium received | $ 2,950 | 1,643 | ||||||||||
Warrants issued in connection with the equity issuance (note 10) | $ 3,823 | |||||||||||
Equity Incentive Plan | ||||||||||||
Common stock issued | shares | 171,000 | 94,000 | ||||||||||
Weighted average exercise price of stock options (in dollars per share) | $ / shares | $ 1.02 | $ 1.30 | ||||||||||
Common Stock | ||||||||||||
Shareholders’ distributions | $ 3,372 | $ 3,059 | $ 2,986 | |||||||||
Share repurchase program (in shares) | shares | 558 | |||||||||||
Share repurchase program | $ 582 | |||||||||||
Shares of common stock issued upon exercise of stock options | shares | 182 | 94 | 1,494 | |||||||||
Exercise of stock options | $ 192 | $ 122 | $ 3,730 | |||||||||
Shares issued in connection with acquisitions (note 10) (in shares) | shares | 178 | |||||||||||
Annual return of capital declared (in dollars per share) | $ / shares | $ 0.01 | $ 0.010 | ||||||||||
Number of units issued | shares | 515 | 20,700 | ||||||||||
Net proceeds | $ 918 | $ 39,397 | ||||||||||
Warrants issued in connection with the equity issuance (note 10) | $ 3,823 | |||||||||||
Warrants | ||||||||||||
Number of common share per warrant | shares | 1 | |||||||||||
Price per common share for each warrant | $ / shares | $ 2.70 | |||||||||||
Flow Through Common Shares | ||||||||||||
Restricted cash | $ 10,000 | $ 0 | ||||||||||
Number of units issued | shares | 6,634,000 | 6,634,000 | 4,000,000 | 6,634 | 4,000 | |||||||
Share price | $ / shares | $ 2.24 | |||||||||||
Net proceeds | $ 20 | $ 14,900 | $ 14,900 | $ 11,145 | $ 7,799 | |||||||
Issuance costs | 800 | 500 | ||||||||||
Flow-through share premium received | $ 3,000 | $ 1,600 | ||||||||||
At-the-market (“ATM”) | ||||||||||||
Number of units issued | shares | 514,897 | |||||||||||
Proceeds from equity sale (note 10) | $ 900 | |||||||||||
Number of common stock reserved for issuance | shares | 89,100,000 | |||||||||||
Aggregate offering price | $ 90,000 | |||||||||||
Lexam VG Gold | ||||||||||||
Shares issued in connection with acquisitions (note 10) (in shares) | shares | 12,687,035 | |||||||||||
Ratio of Company's share for acquired company's share | 0.056% | |||||||||||
Number of units issued | shares | 12,687,035 | |||||||||||
Share price | $ / shares | $ 3 | |||||||||||
Lexam VG Gold | Common Stock | ||||||||||||
Shares issued in connection with acquisitions (note 10) (in shares) | shares | 12,687 | |||||||||||
Black Fox | ||||||||||||
Shares issued in connection with acquisitions (note 10) (in shares) | shares | 178,321 |
SHAREHOLDERS' EQUITY - Black-Sc
SHAREHOLDERS' EQUITY - Black-Scholes pricing model (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | |||
Weighted-average expected life of option | 3 years 6 months | 3 years 6 months | 5 years |
Weighted-average grant date fair value (in dollars per share) | $ 1.90 | $ 2.99 | $ 2.36 |
Warrants | |||
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 ($) $ / shares in Units, $ in Thousands | Apr. 26, 2017 | Feb. 13, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
STOCK BASED COMPENSATION | ||||||
Stock options granted (in shares) | 375 | 338 | 645 | |||
Exercise price of options granted (in dollars per share) | $ 1.90 | $ 2.99 | $ 3.99 | |||
Exercisable period of options | 1 year 7 months 6 days | |||||
Number of common stock reserved for issuance | 17,500,000 | |||||
Number of shares of common stock reserved for issuance | 5,776,483 | 5,283,137 | ||||
Common stock issued | 344,560,000 | 337,051,000 | ||||
Shares | ||||||
Balance at the beginning of the period (in shares) | 4,906 | 4,720 | 6,954 | |||
Granted (in shares) | 375 | 338 | 645 | |||
Exercised (in shares) | (171) | (94) | (1,457) | |||
Forfeited (in shares) | (405) | (37) | (1,422) | |||
Expired (in shares) | (462) | (21) | ||||
Balance at the end of the period (in shares) | 4,243 | 4,906 | 4,720 | 6,954 | ||
Exercisable at the end of the period (in shares) | 3,552 | |||||
Weighted Average Exercise Price | ||||||
Balance at the beginning of the period (in dollars per share) | $ 2.45 | $ 2.41 | $ 2.49 | |||
Granted (in dollars per share) | 1.90 | 2.99 | 3.99 | |||
Exercised (in dollars per share) | $ 1.02 | $ 1.30 | $ 2.48 | |||
Proceeds from exercise of stock options | $ 192 | $ 121 | $ 3,730 | |||
Forfeited (in dollars per share) | $ 3.99 | $ 4.28 | $ 3.45 | |||
Expired (in dollars per share) | 2.27 | 5 | ||||
Balance at the end of the period (in dollars per share) | 2.33 | $ 2.45 | $ 2.41 | $ 2.49 | ||
Exercisable (in dollars per share) | $ 2.28 | |||||
Weighted Average Remaining Contractual Life | ||||||
Outstanding at the end of the period | 2 years | 2 years 7 months 6 days | 3 years 4 months 24 days | 4 years 1 month 6 days | ||
Exercisable period of options | 1 year 7 months 6 days | |||||
Intrinsic Value | ||||||
Outstanding at the beginning of the period (in dollars) | $ 2,564 | $ 4,388 | $ 98 | |||
Exercised (in dollars) | 195 | 87 | 1,601 | |||
Outstanding at the end of the period (in dollars) | 1,475 | $ 2,564 | $ 4,388 | $ 98 | ||
Exercisable at the end of the period (in dollars) | $ 1,475 | |||||
Granted (in shares) | 375 | 338 | 645 | |||
Equity Incentive Plan | ||||||
STOCK BASED COMPENSATION | ||||||
Common stock issued | 171,000 | 94,000 | ||||
Weighted Average Exercise Price | ||||||
Exercised (in dollars per share) | $ 1.02 | $ 1.30 | ||||
Proceeds from exercise of stock options | $ 200 | $ 100 | ||||
Maximum | ||||||
STOCK BASED COMPENSATION | ||||||
Maximum number of shares that may be subject to grants of options to an individual in a calendar year | 1,000,000 | |||||
Lexam VG Gold | ||||||
STOCK BASED COMPENSATION | ||||||
Share replacement awards | $ 100 | |||||
Ratio of Company's share for acquired company's share | 0.056% | |||||
Certain employees and directors | ||||||
STOCK BASED COMPENSATION | ||||||
Stock options granted (in shares) | 400,000 | 300,000 | 600,000 | |||
Exercise price of options granted (in dollars per share) | $ 1.90 | $ 2.99 | $ 3.99 | |||
Shares | ||||||
Granted (in shares) | 400,000 | 300,000 | 600,000 | |||
Weighted Average Exercise Price | ||||||
Granted (in dollars per share) | $ 1.90 | $ 2.99 | $ 3.99 | |||
Intrinsic Value | ||||||
Granted (in shares) | 400,000 | 300,000 | 600,000 | |||
Vesting period of options | 3 years | |||||
Exercise period of options | 5 years |
STOCK BASED COMPENSATION - Summ
STOCK BASED COMPENSATION - Summary of Assumptions (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | |||
Weighted-average expected life of option | 3 years 6 months | 3 years 6 months | 5 years |
Weighted-average grant date fair value (in dollars per share) | $ 1.90 | $ 2.99 | $ 2.36 |
Risk-free interest rate, low end of range (as a percent) | 2.67% | 1.46% | 1.13% |
Risk-free interest rate, high end of range (as a percent) | 2.89% | 1.60% | 1.21% |
Volatility factor of the expected market price of common stock, low end of range (as a percent) | 63.00% | 74.00% | |
Volatility factor of the expected market price of common stock, high end of range (as a percent) | 64.00% | ||
Additional disclosures | |||
Fair value of awards vesting in the period | $ 0.7 | $ 1.3 | $ 1.3 |
Unrecognized compensation expense on non-vested stock options (in dollars) | $ 0.4 | $ 0.7 | $ 1.4 |
Non-vested stock options outstanding (in shares) | 0.7 | 1.5 | 2.5 |
Weighted-average period of recognition | 1 year 4 months 24 days | 1 year 3 months 18 days | 1 year 7 months 6 days |
Stock option expense | $ 0.3 | $ 1.3 | $ 1 |
Minimum | |||
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | |||
Dividend yield (as a percent) | 0.36% | 0.31% | 0.24% |
Maximum | |||
Principal assumptions used in applying the Black-Scholes option pricing model for the awards | |||
Dividend yield (as a percent) | 0.53% | 0.36% | 0.27% |
STOCK BASED COMPENSATION - Non-
STOCK BASED COMPENSATION - Non-vested Options Outstanding and Exercisable (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | |||
Stock options granted (in shares) | 375 | 338 | 645 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Stock options granted (in dollars per share) | $ 1.90 | $ 2.99 | $ 2.36 |
Amended and Restated Equity Incentive Plan and Non-related Plan Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | |||
Balance at the beginning of the period (in shares) | 1,479,000 | ||
Stock options granted (in shares) | 375,000 | ||
Stock options cancelled/forfeited (in shares) | (248,000) | ||
Stock options vested (in shares) | (915,000) | ||
Balance at the end of the period (in shares) | 691,000 | 1,479,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 1.24 | ||
Stock options granted (in dollars per share) | 0.88 | ||
Stock options cancelled/forfeited (in dollars per share) | 2.25 | ||
Stock options vested (in dollars per share) | 0.80 | ||
Balance at the end of the period (in dollars per share) | $ 1.28 | $ 1.24 |
NET (LOSS) INCOME PER SHARE (De
NET (LOSS) INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||||||||||||||
Net (loss) income | $ (20,989) | $ (13,290) | $ (5,380) | $ (5,211) | $ 2,169 | $ (8,072) | $ (1,712) | $ (3,018) | $ (4,491) | $ 4,208 | $ 8,353 | $ 12,985 | $ (44,870) | $ (10,634) | $ 21,055 |
Weighted average number of common shares | 299,518 | 298,510 | 298,237 | 298,242 | 337,297 | 313,887 | 298,772 | ||||||||
Effect of employee stock-based awards | 1,702 | ||||||||||||||
Diluted shares outstanding | 301,102 | 301,045 | 299,791 | 298,554 | 337,297 | 313,887 | 300,474 | ||||||||
Net (loss) income per share: | |||||||||||||||
Basic and Diluted (in dollars per share) | $ (0.06) | $ (0.04) | $ (0.02) | $ (0.02) | $ 0.01 | $ (0.03) | $ (0.01) | $ (0.01) | $ (0.01) | $ 0.01 | $ 0.03 | $ 0.04 | $ (0.13) | $ (0.03) | $ 0.07 |
Options | |||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||||||||||||||
Options outstanding not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | 2,000 | ||||||||||||||
Average exercise price of options outstanding (in dollars per share) | $ 3.91 | ||||||||||||||
Warrants | |||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||||||||||||||
Options outstanding not included in the computation of diluted weighted average shares because their effect would have been anti-dilutive (in shares) | 10,350 | ||||||||||||||
Price per common share for each warrant | $ 2.70 | $ 2.70 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Lease Obligations and Purchase Commitments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating lease obligations (office rent) | |
2,019 | $ 374 |
2,020 | 322 |
2,021 | 263 |
2,022 | 252 |
2,023 | 256 |
Thereafter | 143 |
Total | 1,610 |
Operating lease obligations (mining and surface rights) | |
2,019 | 2,524 |
2,020 | 453 |
2,021 | 460 |
2,022 | 460 |
2,023 | 454 |
Total | 4,351 |
Exploration | |
2,019 | 15,115 |
Total | 15,115 |
Construction | |
2,019 | 6,044 |
Total | 6,044 |
Reclamation costs | |
2,019 | 726 |
2,020 | 1,561 |
2,021 | 2,890 |
2,022 | 5,860 |
2,023 | 141 |
Thereafter | 33,211 |
Total | 44,389 |
Total | |
2,019 | 29,658 |
2,020 | 17,061 |
2,021 | 45,606 |
2,022 | 6,572 |
2,023 | 851 |
Thereafter | 33,354 |
Total | 133,102 |
Long-term debt | |
2,019 | 4,875 |
2,020 | 14,725 |
2,021 | 41,993 |
Total | $ 61,593 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Surety, Reclamation Bonds and Flow-Through Common Shares (Details) $ in Thousands, $ in Millions | Dec. 20, 2018CAD ($) | Dec. 20, 2018USD ($) | Dec. 20, 2017USD ($) | Sep. 22, 2017USD ($) | Aug. 25, 2017USD ($) | Jul. 01, 2017USD ($) | Jun. 23, 2017USD ($) | Jul. 31, 2017USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Reclamation Bonds | |||||||||||
Other assets | $ 5,872 | $ 10,718 | |||||||||
Amount raised or spent in connection with the equity issuance | $ 43,200 | 918 | 39,397 | ||||||||
Surety Bonds | |||||||||||
Reclamation Bonds | |||||||||||
Face amount | $ 20,000 | ||||||||||
Percentage of annual fees on surety bonds | 2.00% | ||||||||||
Surety bonds upfront deposit amount | $ 15,000 | $ 0 | $ 500 | ||||||||
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 | |||||||||||
Surety bonding obligation | $ 20.6 | 15,900 | |||||||||
Outstanding surety bonds | 20,000 | ||||||||||
Timmins | |||||||||||
Reclamation Bonds | |||||||||||
Surety bonds upfront deposit amount | 100 | ||||||||||
Other assets | |||||||||||
Reclamation Bonds | |||||||||||
Other assets | 100 | ||||||||||
Flow Through Common Shares | |||||||||||
Reclamation Bonds | |||||||||||
Amount raised or spent in connection with the equity issuance | $ 20 | $ 14,900 | $ 14,900 | $ 11,145 | $ 7,799 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Streaming Agreement (Details) $ in Millions | Aug. 25, 2017$ / oz | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Black Fox | |||
Other commitments | |||
Obligation to sell (as a percent) | 8.00% | ||
Long term gold price (in dollars per ounce) | $ / oz | 540 | ||
Revenue of acquiree since acquisition date and implementation of streaming agreement | $ | $ 2.2 | $ 0.3 | |
Black Fox | Maximum | |||
Other commitments | |||
Inflation adjustment (as a percent) | 2.00% | ||
Pike River property | |||
Other commitments | |||
Obligation to sell (as a percent) | 6.30% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Short-term Bank Indebtedness (Details) $ in Thousands | Nov. 30, 2017MXN ($) | Dec. 31, 2018USD ($) | Nov. 30, 2017USD ($) |
Short-term Bank Indebtedness | |||
Long-term debt | $ 24,603 | ||
Term Loan | |||
Short-term Bank Indebtedness | |||
Long-term debt | 50,000 | ||
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 | ||
Period final payment of all principal and accrued interest due | 24 months | ||
Amount withdrawn from line of credit | $ 0 | ||
Line of Credit. | Secured Debt | El Gallo 1 mine | Compania Minera Pangea, S.A. de C.V. (“CMP”) | Maximum | |||
Short-term Bank Indebtedness | |||
Financing of value added tax (“VAT”) refunds (as a percent) | 90.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Aug. 10, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 26, 2017 |
RELATED PARTY TRANSACTIONS | |||||
Accounts payable | $ 30,817 | $ 34,880 | |||
Long-term debt from related party (note 18) | 24,603 | ||||
Debt interest expense | 1,900 | ||||
Term Loan | |||||
RELATED PARTY TRANSACTIONS | |||||
Face amount | $ 50,000 | ||||
Debt Instrument Term | 3 years | ||||
Affiliate of Robert McEwen | |||||
RELATED PARTY TRANSACTIONS | |||||
Repayment of debt | 1,000 | ||||
Affiliate of Robert McEwen | Term Loan | |||||
RELATED PARTY TRANSACTIONS | |||||
Long-term debt from related party (note 18) | $ 25,000 | ||||
Entity Affiliated With Related Party | Lexam L.P. | |||||
RELATED PARTY TRANSACTIONS | |||||
Expense (income) | 91 | 152 | $ 187 | ||
Ownership percentage of individual | 27.00% | ||||
Entity Affiliated With Related Party | Lexam VG Gold | |||||
RELATED PARTY TRANSACTIONS | |||||
Expense (income) | (33) | 85 | |||
Entity Affiliated With Related Party | Noblegen Inc. | |||||
RELATED PARTY TRANSACTIONS | |||||
Expense (income) | 26 | 40 | |||
Entity Affiliated With Related Party | REVlaw | |||||
RELATED PARTY TRANSACTIONS | |||||
Expense (income) | 266 | 330 | $ 124 | ||
Entity Affiliated With Related Party | REVlaw | Accounts payable | |||||
RELATED PARTY TRANSACTIONS | |||||
Outstanding accounts payable (receivable) | $ 32 | 17 | |||
Entity Affiliated With Related Party | Inventus | |||||
RELATED PARTY TRANSACTIONS | |||||
Expense (income) | (36) | ||||
Entity Affiliated With Related Party | Inventus | Accounts payable | |||||
RELATED PARTY TRANSACTIONS | |||||
Outstanding accounts payable (receivable) | $ (36) | ||||
Lexam VG Gold | |||||
RELATED PARTY TRANSACTIONS | |||||
Accounts payable | $ 288 | ||||
Interest acquired (as a percent) | 100.00% |
OPERATING SEGMENT REPORTING - R
OPERATING SEGMENT REPORTING - Reportable Operating Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Segment Reporting | |||
Revenue | $ 128,822 | $ 67,724 | $ 60,388 |
Revision of estimates and accretion of reclamation obligations | (3,464) | (2,061) | (595) |
Property holding costs | (3,896) | (3,879) | (3,536) |
Impairment of mineral property interests and property and equipment | (711) | ||
General and administrative expenses | (23,163) | (18,872) | (12,734) |
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (11,865) | (44) | 12,951 |
Depreciation | 9,169 | 3,378 | 1,169 |
Interest and other expense | (1,619) | (938) | 835 |
Revision of estimates and accretion of reclamation obligations | (3,464) | (2,061) | (595) |
Impairment of mineral property interests and property and equipment | (711) | ||
Gain on sale of assets | (77) | 11 | 24 |
Unrealized (loss) gain on derivative instrument | (700) | (200) | 1,400 |
Foreign currency gain | 3,922 | 694 | 581 |
Net loss before income and mining taxes | (47,640) | (26,003) | 17,306 |
Mexico | |||
Operating Segment Reporting | |||
Property holding costs | (2,264) | (2,131) | (1,642) |
Impairment of mineral property interests and property and equipment | (711) | ||
General and administrative expenses | (3,770) | (3,772) | (2,688) |
Segment income (loss) | 16,780 | 7,584 | 22,651 |
Impairment of mineral property interests and property and equipment | (711) | ||
MSC | |||
Operating Segment Reporting | |||
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (11,865) | (44) | 12,951 |
Segment income (loss) | (11,865) | (44) | 12,951 |
Los Azules | |||
Operating Segment Reporting | |||
Property holding costs | (68) | (56) | (405) |
General and administrative expenses | (1,046) | (1,242) | (646) |
Segment income (loss) | (7,129) | (9,221) | (2,700) |
U.S. | |||
Operating Segment Reporting | |||
Property holding costs | (1,397) | (1,667) | (1,489) |
General and administrative expenses | (6,562) | (1,927) | (228) |
Segment income (loss) | (13,103) | (8,818) | (6,382) |
Canada | |||
Operating Segment Reporting | |||
Property holding costs | (167) | (25) | |
General and administrative expenses | (665) | (92) | |
Segment income (loss) | (15,463) | 330 | |
Total Segment | |||
Operating Segment Reporting | |||
Property holding costs | (3,896) | (3,879) | (3,536) |
Impairment of mineral property interests and property and equipment | (711) | ||
General and administrative expenses | (12,043) | (7,033) | (3,562) |
Income (loss) on investment in Minera Santa Cruz S.A. (net of amortization) | (11,865) | (44) | 12,951 |
Segment income (loss) | (30,780) | (10,169) | 26,520 |
Impairment of mineral property interests and property and equipment | (711) | ||
Corporate & Other | |||
Operating Segment Reporting | |||
Revision of estimates and accretion of reclamation obligations | (3,464) | (2,061) | (595) |
General and administrative expenses | (11,120) | (11,839) | (9,172) |
Depreciation | (1,178) | (1,453) | (1,169) |
Interest and other expense | (1,619) | (938) | |
Revision of estimates and accretion of reclamation obligations | (3,464) | (2,061) | (595) |
Interest income and other income | 835 | ||
Gain on sale of assets | (77) | 11 | 24 |
Loss on sale of marketable securities | (3,324) | 257 | 519 |
Foreign currency gain | 3,922 | 694 | 581 |
Net loss before income and mining taxes | (47,640) | ||
Gold and silver sales | |||
Operating Segment Reporting | |||
Revenue | 128,175 | 67,465 | 60,388 |
Gold and silver sales | Mexico | |||
Operating Segment Reporting | |||
Revenue | 66,151 | 55,845 | 60,388 |
Gold and silver sales | Canada | |||
Operating Segment Reporting | |||
Revenue | 62,024 | 11,620 | |
Gold and silver sales | Total Segment | |||
Operating Segment Reporting | |||
Revenue | 128,175 | 67,465 | 60,388 |
Other revenue | |||
Operating Segment Reporting | |||
Revenue | 647 | 259 | |
Other revenue | U.S. | |||
Operating Segment Reporting | |||
Revenue | 30 | ||
Other revenue | Canada | |||
Operating Segment Reporting | |||
Revenue | 617 | 259 | |
Other revenue | Total Segment | |||
Operating Segment Reporting | |||
Revenue | 647 | 259 | |
Production costs applicable to sales | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (93,329) | (45,180) | (28,133) |
Production costs applicable to sales | Mexico | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (37,429) | (35,292) | (28,133) |
Production costs applicable to sales | Canada | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (55,900) | (9,888) | |
Production costs applicable to sales | Total Segment | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (93,329) | (45,180) | (28,133) |
Mine development | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (3,667) | (3,837) | (3,866) |
Mine development | Mexico | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (3,667) | (745) | (1,174) |
Mine development | U.S. | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (3,092) | (2,692) | |
Mine development | Total Segment | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (3,667) | (3,837) | (3,866) |
Exploration | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (34,802) | (17,714) | (7,959) |
Exploration | Mexico | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (2,241) | (5,610) | (4,100) |
Exploration | Los Azules | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (6,015) | (7,923) | (1,649) |
Exploration | U.S. | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (5,174) | (2,132) | (1,973) |
Exploration | Canada | |||
Operating Segment Reporting | |||
Cost of goods and services sold | (21,372) | (1,544) | |
Exploration | Total Segment | |||
Operating Segment Reporting | |||
Cost of goods and services sold | $ (34,802) | (17,209) | (7,722) |
Other exploration costs | Corporate & Other | |||
Operating Segment Reporting | |||
Cost of goods and services sold | $ (505) | $ (237) |
OPERATING SEGMENT REPORTING - G
OPERATING SEGMENT REPORTING - Geographic information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Segment Reporting | |||
Revenue | $ 128,822 | $ 67,724 | $ 60,388 |
Long-lived Assets | 557,565 | 505,265 | |
Investment in MSC | 127,814 | 150,064 | |
Capital Expenditures | 79,396 | 11,511 | 6,165 |
Bank of Nova Scotia | Sales | Customer | |||
Operating Segment Reporting | |||
Revenue | $ 123,500 | $ 65,900 | $ 58,100 |
Gold and silver sales, percentage | 96.00% | 94.00% | 96.00% |
Canada | |||
Operating Segment Reporting | |||
Revenue | $ 62,641 | $ 11,879 | |
Long-lived Assets | 84,119 | 85,179 | |
Mexico | |||
Operating Segment Reporting | |||
Revenue | 66,151 | 55,845 | $ 60,388 |
Long-lived Assets | 26,524 | 35,446 | |
United States | |||
Operating Segment Reporting | |||
Revenue | 30 | ||
Long-lived Assets | 127,617 | 43,086 | |
Argentina | |||
Operating Segment Reporting | |||
Long-lived Assets | $ 319,305 | $ 341,554 |
OPERATING SEGMENT REPORTING - C
OPERATING SEGMENT REPORTING - Capital Expenditures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Segment Reporting | |||
Capital Expenditures | $ 79,396 | $ 11,511 | $ 6,165 |
Mexico | |||
Operating Segment Reporting | |||
Capital Expenditures | (3,107) | 939 | 5,401 |
Canada | |||
Operating Segment Reporting | |||
Capital Expenditures | (1,110) | 4,301 | |
U.S. | |||
Operating Segment Reporting | |||
Capital Expenditures | $ 83,613 | $ 6,271 | $ 764 |
FAIR VALUE ACCOUNTING (Details)
FAIR VALUE ACCOUNTING (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Long term debt | $ 49,200 | |
Recurring | ||
Assets: | ||
Investments | 3,131 | $ 7,971 |
Assets | 3,131 | 7,971 |
Recurring | Level 1 | ||
Assets: | ||
Investments | 2,718 | 6,404 |
Assets | 2,718 | 6,404 |
Recurring | Level 2 | ||
Assets: | ||
Investments | 413 | 1,567 |
Assets | $ 413 | $ 1,567 |
UNAUDITED SUPPLEMENTARY QUART_3
UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
UNAUDITED SUPPLEMENTARY QUARTERLY INFORMATION | |||||||||||||||
Net (loss) income | $ (20,989) | $ (13,290) | $ (5,380) | $ (5,211) | $ 2,169 | $ (8,072) | $ (1,712) | $ (3,018) | $ (4,491) | $ 4,208 | $ 8,353 | $ 12,985 | $ (44,870) | $ (10,634) | $ 21,055 |
Net (loss) income per share: | |||||||||||||||
Basic and Diluted (in dollars per share) | $ (0.06) | $ (0.04) | $ (0.02) | $ (0.02) | $ 0.01 | $ (0.03) | $ (0.01) | $ (0.01) | $ (0.01) | $ 0.01 | $ 0.03 | $ 0.04 | $ (0.13) | $ (0.03) | $ 0.07 |
Weighted average common shares outstanding (thousands) (note 12): | |||||||||||||||
Basic (in shares) | 299,518,000 | 298,510,000 | 298,237,000 | 298,242,000 | 337,297,000 | 313,887,000 | 298,772,000 | ||||||||
Diluted (in shares) | 301,102,000 | 301,045,000 | 299,791,000 | 298,554,000 | 337,297,000 | 313,887,000 | 300,474,000 | ||||||||
Basic and diluted (in dollars per share) | 337,936 | 337,100 | 337,087 | 337,062 | 313,002,000 | 314,077,000 | 308,523,000 | 299,575,000 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 11, 2018 | Aug. 25, 2017 | Apr. 26, 2017 | Feb. 13, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 19, 2017 |
ACQUISITIONS | |||||||
Share price | $ 2.50 | ||||||
Fair value of assets acquired and liabilities assumed: | |||||||
Mineral property interests | $ 309,145 | $ 293,437 | |||||
Other current assets | 2,707 | 4,539 | |||||
Other non-current assets | 5,872 | 10,718 | |||||
Accounts payable and accrued liabilities | (30,817) | (34,880) | |||||
Asset retirement obligation | (734) | (646) | |||||
Deferred tax liability | $ (6,426) | $ (8,430) | |||||
Lexam VG Gold | |||||||
ACQUISITIONS | |||||||
Common shares issued (in shares) | 12,687,035 | ||||||
Share price | $ 3 | ||||||
Share replacement awards | $ 100 | ||||||
Acquisition Purchase Price Stock Issued During Period Value | 38,141 | ||||||
Adjustments to purchase price | 1,017 | ||||||
Total fair value of assets acquired and liabilities assumed | 39,158 | ||||||
Fair value of assets acquired and liabilities assumed: | |||||||
Mineral property interests | 41,595 | ||||||
Cash and cash equivalents | 177 | ||||||
Other current assets | 86 | ||||||
Other non-current assets | 312 | ||||||
Accounts payable and accrued liabilities | (288) | ||||||
Asset retirement obligation | (570) | ||||||
Deferred tax liability | (2,154) | ||||||
Total fair value of assets acquired and liabilities assumed | $ 39,158 | ||||||
Ratio of Company's share for acquired company's share | 0.056% | ||||||
Lexam VG Gold | Maximum | |||||||
Fair value of assets acquired and liabilities assumed: | |||||||
Percentage of interest in the deposit | 20.00% | ||||||
Lexam VG Gold | Minimum | |||||||
Fair value of assets acquired and liabilities assumed: | |||||||
Percentage of interest in the deposit | 10.00% | ||||||
Black Fox | |||||||
ACQUISITIONS | |||||||
Payments to Acquire Businesses, Gross | $ 35,000 | ||||||
Common shares issued (in shares) | 178,321 | ||||||
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: | |||||||
Mineral property interests | 8,954 | ||||||
Cash and cash equivalents | 249 | ||||||
Asset retirement obligation | (11,233) | ||||||
Deferred tax liability | (201) | ||||||
Total fair value of assets acquired and liabilities assumed | $ 27,500 | ||||||
Buffalo Ankerite, Fuller and Davidson Tisdale | |||||||
Fair value of assets acquired and liabilities assumed: | |||||||
Percentage of interest in the deposit | 100.00% | ||||||
Paymaster | Lexam VG Gold | |||||||
Fair value of assets acquired and liabilities assumed: | |||||||
Percentage of interest in the deposit | 61.00% | ||||||
Goldcorp Inc | Lexam VG Gold | |||||||
Fair value of assets acquired and liabilities assumed: | |||||||
Percentage of interest in the deposit | 39.00% |
ACQUISITIONS - Assets acquired
ACQUISITIONS - Assets acquired and liabilities (Details) - USD ($) $ in Thousands | Aug. 25, 2017 | Dec. 31, 2017 | Dec. 31, 2018 |
Fair value of assets acquired and liabilities assumed: | |||
Inventory | $ 31,951 | $ 22,039 | |
Mineral Property Interests | 293,437 | 309,145 | |
Property, Plant and Equipment | 51,046 | 114,734 | |
Short term capital lease liability | (470) | (1,511) | |
Asset retirement obligation | (646) | (734) | |
Long term capital lease liability | (81) | (4,918) | |
Deferred tax liability | (8,430) | $ (6,426) | |
General and administrative expenses | |||
ACQUISITIONS | |||
Adjustments to purchase price | $ 1,300 | ||
Black Fox | |||
ACQUISITIONS | |||
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) | ||
Asset retirement obligation | (11,233) | ||
Long term capital lease liability | (172) | ||
Deferred tax liability | (201) | ||
Total fair value of assets acquired and liabilities assumed | $ 27,500 |
ACQUISITIONS - Revenue and inco
ACQUISITIONS - Revenue and income from operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
ACQUISITIONS | |||||||||||||||
Net (loss) income | $ (20,989) | $ (13,290) | $ (5,380) | $ (5,211) | $ 2,169 | $ (8,072) | $ (1,712) | $ (3,018) | $ (4,491) | $ 4,208 | $ 8,353 | $ 12,985 | $ (44,870) | $ (10,634) | $ 21,055 |
CAPITAL LEASES (Details)
CAPITAL LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Capital Lease Obligations | $ 6,429 | $ 551 |
Less current portion | 1,511 | 470 |
Long-term capital lease obligations | 4,918 | $ 81 |
Capital leases, future minimum payment | ||
2,019 | 1,900 | |
2,020 | 1,900 | |
2,021 | 1,800 | |
2022 and beyond | $ 1,700 | |
Minimum | ||
Interest Rates | 4.45% | |
Maximum | ||
Interest Rates | 10.09% |
CASH AND CASH EQUIVALENTS AND_3
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (Details) $ in Thousands, $ in Millions | Dec. 20, 2018CAD ($) | Dec. 20, 2018USD ($) | Dec. 20, 2017USD ($) | Sep. 22, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 19, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Cash and cash equivalents (note 21) | $ 15,756 | $ 27,153 | |||||||
Restricted cash | 14,685 | 10,000 | |||||||
Restricted cash included in other long-term assets | 48 | ||||||||
Total cash, cash equivalents, and restricted cash | 30,489 | 37,153 | $ 37,440 | $ 25,874 | |||||
Net proceeds | $ 43,200 | 918 | 39,397 | ||||||
Generative exploration activities | 14,700 | 0 | |||||||
Common Stock | |||||||||
Net proceeds | 918 | 39,397 | |||||||
Flow Through Common Shares | |||||||||
Restricted cash | 0 | $ 10,000 | |||||||
Net proceeds | $ 20 | $ 14,900 | $ 14,900 | $ 11,145 | $ 7,799 |
DEBT (Details)
DEBT (Details) $ in Thousands | Aug. 10, 2018USD ($)installment | Dec. 31, 2018USD ($) |
Debt | ||
Long-term debt from related party | $ 24,603 | |
Payment of debt issuance costs | 908 | |
Debt interest expense | 1,900 | |
Scheduled minimum interest payments | ||
2,019 | 4,900 | |
2,020 | 4,700 | |
2,021 | $ 2,000 | |
Term Loan | ||
Debt | ||
Face amount | $ 50,000 | |
Term of debt instrument | 3 years | |
Term Loan | Gold Bar Complex | ||
Debt | ||
Stated interest rate (as a percent) | 9.75% | |
Number of installments | installment | 12 | |
Payment of debt instrument | 3.00% | |
Principal repayments | $ 2,000 | |
Term loan retirement period | 2 years | |
Payment of lender fees | $ 300 | |
Payment of debt issuance costs | 600 | |
Scheduled minimum debt repayments | ||
2,018 | 0 | |
2,019 | 0 | |
2,020 | 10,000 | |
2,021 | $ 40,000 | |
Term Loan | Affiliate of Robert McEwen | ||
Debt | ||
Long-term debt from related party | $ 25,000 | |
Percentage of ownership of the Company's common stock | 23.00% |