OPERATING SEGMENTS

We are a resource company focused on the operation, acquisition, exploration and development of precious metal resource properties located in the Americas.

An operating segment is defined as a component:


▪	that engages in business activities from which it may earn revenues and incur expenses;


▪	whose operating results are reviewed regularly by the entity’s chief operating decision maker; and


▪	for which discrete financial information is available.

We have identified operating segments based on the information used by our President and Chief Executive Officer (who is considered to be the chief operating decision maker) to manage the business. We primarily manage our business by looking at individual resource projects and typically segregate these projects between production, development and exploration.

For reporting purposes, exploration and evaluation projects have been aggregated into a single reportable segment as they all have similar characteristics and do not exceed the quantitative thresholds for individual disclosure. We have assessed that all exploration and evaluation segments have similar characteristics as they are engaged in similar activities (mineral exploration) and none of the segments are income-producing.

Our three operating properties, the Marigold mine, the Seabee Gold Operation and the Puna Operations, are considered as individual operating segments which derive their revenues from the sale of precious and other metals. The corporate division earns income that is considered incidental to our activities and therefore does not meet the definition of an operating segment. Consequently, the following reporting segments have been identified:

▪Marigold mine;

▪Seabee Gold Operation;

▪Puna Operations; and

▪Exloration, evaluation and development properties.

22. OPERATING SEGMENTS (Continued)

The following is a summary of the reported amounts of income or loss, and the carrying amounts of assets and liabilities by operating segment:



Year ended and at December 31, 2018	Marigold mine		Seabee Gold Operation		Puna Operations ⁽¹⁾		Exploration, evaluation and development properties		Other reconciling items ⁽²⁾		Total
	$		$		$		$		$		$
Revenue	250,341		115,655		54,679		—		—		420,675
Cost of inventory	(143,380	)	(46,054	)	(55,677	)	—		—		(245,111	)
Depletion, depreciation and amortization	(56,748	)	(38,818	)	(3,153	)	—		—		(98,719	)
Cost of sales	(200,128	)	(84,872	)	(58,830	)	—		—		(343,830	)
Income from mine operations	50,213		30,783		(4,151	)	—		—		76,845

Exploration, evaluation and reclamation expenses	(769	)	(7,703	)	919		(2,857	)	(3,599	)	(14,009	)
Operating income (loss)	43,399		20,657		(8,457	)	(2,801	)	(22,903	)	29,895
Income (loss) before income tax	26,239		20,204		(9,066	)	(2,751	)	(26,536	)	8,090

Total assets	478,187		448,891		185,298		71,830		336,932		1,521,138
Non-current assets	235,242		321,802		121,890		69,263		26,498		774,695
Total liabilities	(79,210	)	(93,017	)	(62,243	)	(6,330	)	(274,362	)	(515,162	)



Year ended and at December 31, 2017	Marigold mine		Seabee Gold Operation		Puna Operations ⁽¹⁾		Exploration, evaluation and development properties		Other reconciling items ⁽²⁾		Total
	$		$		$		$		$		$
Revenue	250,825		108,334		89,614		—		—		448,773
Cost of inventory	(129,176	)	(51,683	)	(62,139	)	—		—		(242,998	)
Depletion, depreciation and amortization	(54,983	)	(40,375	)	(7,058	)	—		—		(102,416	)
Export duties reversal (note 13)	—		—		4,303		—		—		4,303
Restructuring costs (note 18)	—		—		(109	)	—		—		(109	)
Inventory (provision) reversal (note 7)	—		(632	)	6,342		—		—		5,710
Cost of sales	(184,159	)	(92,690	)	(58,661	)	—		—		(335,510	)
Income from mine operations	66,666		15,644		30,953		—		—		113,263

Exploration, evaluation and reclamation expenses	(1,875	)	(5,050	)	(324	)	(8,357	)	(375	)	(15,981	)
Impairment reversal (note 9)	—		—		24,357		—		—		24,357
Operating income (loss)	64,935		10,594		52,788		(8,360	)	(18,625	)	101,332
Income (loss) before income tax	63,959		10,126		46,379		(14,840	)	(31,037	)	74,587

Total assets	436,815		418,210		200,590		72,825		409,014		1,537,454
Non-current assets	222,800		346,647		77,112		71,782		798		719,139
Total liabilities	(73,526	)	(92,050	)	(77,850	)	(6,496	)	(263,604	)	(513,526	)

⁽¹⁾

Following the formation of the Puna Operations joint venture in 2017, the Pirquitas property was combined with the Chinchillas project into the Puna Operations operating segment and the segment has been amended accordingly. We consolidate Puna Operations which includes non-controlling interest portion of revenues, and income (loss) from mine operations for the year ended December 31, 2018 of $13,077,000 and $(1,243,000), respectively, (2017: $12,361,000 and $4,039,000)


⁽²⁾	Other reconciling items refer to items that are not reported as part of segment performance as they are managed on a corporate basis.


22.	OPERATING SEGMENTS (Continued)

Revenue by product

Our Marigold mine and Seabee Gold Operation produce gold in doré form. This is unrefined gold bullion bars usually consisting of in excess of 90% gold that is refined to pure gold bullion prior to sale to our customers, which are typically bullion banks.

Puna Operations produces silver, zinc and lead concentrates, which are sold to smelters or traders for further refining. During 2018, one customer accounted for 51% (2017 - 7%) of our concentrate revenue.



Years ended December 31	2018	2017
	%	%
Gold	87	80
Silver	12	20
Zinc	1	—
Lead	—	—

Non-current assets by location



	December 31, 2018	December 31, 2017
	$	$
Canada	357,783	348,455
United States	236,054	224,612
Argentina	113,534	79,250
Mexico	66,749	66,131
Other	575	691
Total	774,695	719,139