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OPERATING SEGMENT REPORTING | 6 Months Ended
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Jun. 30, 2020
OPERATING SEGMENT REPORTING |
OPERATING SEGMENT REPORTING | NOTE 3 OPERATING SEGMENT REPORTING McEwen Mining Inc. is engaged in the exploration, development, production and sale of gold and silver and exploration for copper, with operations located in the United States, Canada, Mexico, and Argentina. 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 are included in General and Administrative and other and are provided in this note for reconciliation purposes. The CODM reviews segment income (loss), defined as gold and silver sales less production costs applicable to sales, depreciation and depletion, advanced projects and exploration 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. Production costs applicable to sales for the El Gallo project of $7.3 million for the six months ended June 30, 2020 (same period in 2019 - $10.7 million) include $3.1 million of residual leaching spending in the period, net of $2.0 million capitalized in inventory (same period in 2019 - $3.8 million, net of $1.8 million capitalized in inventory) with the remainder representing costs recorded in the leach pad inventory balances in prior periods. Capital expenditures include costs capitalized in mineral property interests and plant and equipment in the respective periods. ​ Significant information relating to the Company’s reportable operating segments is summarized in the tables below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Three months ended June 30, 2020 |  | USA |  | Canada |  | Mexico |  | MSC |  | Los Azules |  | Total
Revenue from gold and silver sales | ​ | $ | 10,770 | ​ | $ | 4,166 | ​ | $ | 3,355 | ​ | $ | — | ​ | $ | — | ​ | $ | 18,291
Production costs applicable to sales | ​ | ​ | (11,039) | ​ | ​ | (8,150) | ​ | ​ | (3,165) | ​ | ​ | — | ​ | ​ | — | ​ |  | (22,354)
Depreciation and depletion | ​ | ​ | (2,565) | ​ | ​ | (2,184) | ​ | ​ | (63) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (4,812)
Gross (loss) profit | ​ | ​ | (2,834) | ​ | ​ | (6,168) | ​ | ​ | 127 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (8,875)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Advanced projects | ​ | ​ | (183) | ​ | ​ | (1,760) | ​ | ​ | (944) | ​ | ​ | — | ​ | ​ | — | ​ |  | (2,887)
Exploration | ​ | ​ | (2,031) | ​ | ​ | (840) | ​ | ​ | (36) | ​ | ​ | — | ​ | ​ | (641) | ​ | ​ | (3,548)
Loss from investment in Minera Santa Cruz S.A. | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,045) | ​ | ​ | — | ​ |  | (1,045)
Other operating | ​ | ​ | (1,390) | ​ | ​ | (578) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,968)
Segment loss | ​ | $ | (6,438) | ​ | $ | (9,346) | ​ | $ | (853) | ​ | $ | (1,045) | ​ | $ | (641) | ​ | $ | (18,323)
General and Administrative and other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (1,521)
Loss before income and mining taxes | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | (19,844)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | $ | 2,799 | ​ | ​ | 211 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | $ | 3,010
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Six months ended June 30, 2020 |  | USA |  | ​ | Canada | ​ | Mexico | ​ | MSC |  | Los Azules |  | Total
Revenue from gold and silver sales | ​ | $ | 25,088 | ​ | $ | 16,905 | ​ | $ | 7,698 | ​ | $ | — | ​ | $ | — | ​ | $ | 49,691
Production costs applicable to sales | ​ | ​ | (28,071) | ​ | ​ | (15,357) | ​ | ​ | (7,313) | ​ | ​ | — | ​ | ​ | — | ​ |  | (50,741)
Depreciation and depletion | ​ | ​ | (6,428) | ​ | ​ | (4,932) | ​ | ​ | (150) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (11,510)
Gross (loss) profit | ​ | ​ | (9,411) | ​ | ​ | (3,384) | ​ | ​ | 235 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (12,560)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Advanced projects | ​ | ​ | (548) | ​ | ​ | (2,826) | ​ | ​ | (2,063) | ​ | ​ | — | ​ | ​ | — | ​ |  | (5,437)
Exploration | ​ | ​ | (2,840) | ​ | ​ | (3,245) | ​ | ​ | (36) | ​ | ​ | — | ​ | ​ | (1,217) | ​ |  | (7,338)
Impairment of mineral property interests and plant and equipment (note 9) | ​ | ​ | (83,805) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (83,805)
Loss from investment in Minera Santa Cruz S.A. | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (3,721) | ​ | ​ | — | ​ |  | (3,721)
Other operating | ​ | ​ | (1,390) | ​ | ​ | (578) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,968)
Segment loss | ​ | $ | (97,994) | ​ | $ | (10,033) | ​ | $ | (1,864) | ​ | $ | (3,721) | ​ | $ | (1,217) | ​ | $ | (114,829)
General and Administrative and other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (5,300)
Loss before income and mining taxes | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | (120,129)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | $ | 4,606 | ​ | $ | 3,940 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 8,546
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Three months ended June 30, 2019 |  | USA |  | Canada |  | Mexico |  | MSC |  | Los Azules |  | Total
Revenue from gold and silver sales | ​ | $ | 11,522 | ​ | $ | 16,049 | ​ | $ | 8,812 | ​ | $ | — | ​ | $ | — | ​ | $ | 36,383
Production costs applicable to sales | ​ | ​ | (7,835) | ​ | ​ | (10,639) | ​ | ​ | (6,225) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (24,699)
Depreciation and depletion | ​ | ​ | (2,568) | ​ | ​ | (4,221) | ​ | ​ | (218) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (7,007)
Gross profit | ​ | ​ | 1,119 | ​ | ​ | 1,189 | ​ | ​ | 2,369 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,677
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Advanced projects | ​ | ​ | (390) | ​ | ​ | — | ​ | ​ | (1,705) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (2,095)
Exploration | ​ | ​ | (1,292) | ​ | ​ | (4,062) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (518) | ​ | ​ | (5,872)
Loss from investment in Minera Santa Cruz S.A. | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (4,137) | ​ | ​ | — | ​ | ​ | (4,137)
Segment (loss) income | ​ | $ | (563) | ​ | $ | (2,873) | ​ | $ | 664 | ​ | $ | (4,137) | ​ | $ | (518) | ​ | $ | (7,427)
General and Administrative and other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (6,088)
Loss before income and mining taxes | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | (13,515)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | $ | 3,606 | ​ | $ | 4,518 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 8,124
​ ​ ​ ​ ​ ​ ​ ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Six months ended June 30, 2019 |  | USA |  | Canada |  | Mexico |  | MSC |  | Los Azules |  | Total
Revenue from gold and silver sales | ​ | $ | 12,364 | ​ | $ | 24,992 | ​ | $ | 14,610 | ​ | $ | — | ​ | $ | — | ​ | $ | 51,966
Production costs applicable to sales | ​ | ​ | (8,643) | ​ | ​ | (16,475) | ​ | ​ | (10,730) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (35,848)
Depreciation and depletion | ​ | ​ | (2,720) | ​ | ​ | (6,931) | ​ | ​ | (362) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (10,013)
Gross profit | ​ | ​ | 1,001 | ​ | ​ | 1,586 | ​ | ​ | 3,518 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,105
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Advanced projects | ​ | ​ | (586) | ​ | ​ | — | ​ | ​ | (4,155) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (4,741)
Exploration | ​ | ​ | (1,902) | ​ | ​ | (6,483) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,637) | ​ | ​ | (10,022)
Loss from investment in Minera Santa Cruz S.A. | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (6,447) | ​ | ​ | — | ​ | ​ | (6,447)
Segment loss | ​ | $ | (1,487) | ​ | $ | (4,897) | ​ | $ | (637) | ​ | $ | (6,447) | ​ | $ | (1,637) | ​ | $ | (15,105)
General and Administrative and other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (8,428)
Loss before income and mining taxes | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | (23,533)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | $ | 16,614 | ​ | $ | 7,875 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 24,489
​ ​ Geographic information Geographic information includes the long-lived assets balance and revenues presented for the Company’s operating segments, as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Long-lived Assets | ​ | Revenue (1)
​ | ​ | June 30, | ​ | December 31, | ​ | Three months ended June 30, | ​ | Six months ended June 30,
​ |  | 2020 |  | 2019 |  | 2020 |  | 2019 |  | 2020 | ​ | 2019
USA | ​ | $ | 50,906 | ​ | $ | 135,854 | ​ | $ | 10,770 | ​ | $ | 11,522 | ​ | $ | 25,088 | ​ | $ | 12,364
Canada | ​ | ​ | 76,697 | ​ | ​ | 77,147 | ​ | ​ | 4,166 | ​ | ​ | 16,049 | ​ | ​ | 16,905 | ​ | ​ | 24,992
Mexico | ​ | ​ | 20,139 | ​ | ​ | 23,551 | ​ | ​ | 3,355 | ​ | ​ | 8,812 | ​ | ​ | 7,698 | ​ | ​ | 14,610
Argentina (2) | ​ | ​ | 297,670 | ​ | ​ | 302,598 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total consolidated (3) | ​ | $ | 445,412 | ​ | $ | 539,150 | ​ | $ | 18,291 | ​ | $ | 36,383 | ​ | $ | 49,691 | ​ | $ | 51,966
(1) | Presented based on the location from which the product originated.
(2) | Includes Investment in MSC of $106.2 million as of June 30, 2020 (December 31, 2019 – $110.2 million).
(3) | Total excludes $1.1 million related to the Company's office lease asset as the business activities related to corporate are not considered to be a part of the operating segments.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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