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INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE
 6 Months Ended
Jun. 30, 2012
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE  
INVESTMENT IN MINERA SANTA CRUZ S.A. ("MSC") - SAN JOSE MINE

NOTE 6   INVESTMENT IN MINERA SANTA CRUZ S.A. (“MSC”) — SAN JOSÉ MINE

 

As discussed above in Note 2, the Company acquired a 49% interest in MSC, owner and operator of the San José Silver-Gold Mine in Santa Cruz, Argentina.  The Company’s share of earnings and losses from its investment in MSC is included in the consolidated statement of operations and comprehensive loss and includes 49% of MSC’s net income of $5.6 million for the period ended June 30, 2012.  Since the acquisition closed on January 24, 2012, MSC reported to the Company only its net income from January 25, 2012 to June 30, 2012.

 

The change in the Company’s investment in MSC is summarized as follows:

 

 

 

As at

 

 

 

June 30, 2012

 

 

 

(in thousands)

 

Investment in MSC, beginning of period

 

$

—

 

Fair value of investment in MSC from acquisition of Minera Andes

 

224,999

 

Income from equity investment

 

5,597

 

Amortization of fair value increments

 

(4,607

)

Investment in MSC, end of period

 

$

225,989

 

 

 

 

Three Months Ended

 

Period Ended

 

 

 

June 30, 2012

 

June 30, 2012

 

 

 

(in thousands)

 

(in thousands)

 

Summary of MSC’s financial information from operations

 

 

 

 

 

Sales - MSC 100%

 

$

56,375

 

$

96,603

 

Net income - MSC 100%

 

3,255

 

11,422

 

McEwen Mining’s portion - 49%

 

1,595

 

5,597

 

Net income on investment in MSC

 

$

1,595

 

$

5,597

 

 

As at June 30, 2012, MSC had current assets of $131.2 million, total assets of $714.7 million, current liabilities of $94.1 million and total liabilities of $279.8 million.

 

On July 27, 2012, MSC declared a dividend of $20.0 million Argentine pesos ($4.4 million), of which $9.8 million Argentine pesos ($2.2 million) was payable to the Company, and was subsequently received on July 30, 2012.