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INVESTMENT IN MSC - SAN JOSE MINE | 3 Months Ended
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Mar. 31, 2023
INVESTMENT IN MSC - SAN JOSE MINE |
INVESTMENT IN MSC - SAN JOSE MINE | NOTE 9 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. MSC is operated by the Company’s joint venture partner, Hochschild Mining PLC. In applying the equity method of accounting, 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 presented in accordance with U.S. GAAP. A summary of the operating results for MSC for the three months ended March 31, 2023 and 2022 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended March 31,
​ |  | 2023 | ​ | 2022
Minera Santa Cruz S.A. (100%) | ​ | ​ | ​ | ​ | ​ | ​
Revenue from gold and silver sales | ​ | $ | 45,740 | ​ | $ | 39,207
Production costs applicable to sales | ​ | ​ | (41,124) | ​ | ​ | (31,789)
Depreciation and depletion | ​ | ​ | (8,230) | ​ | ​ | (6,896)
Gross (loss) profit | ​ | ​ | (3,614) | ​ | ​ | 522
Exploration | ​ | ​ | (1,952) | ​ | ​ | (1,735)
Other expenses(1) | ​ | ​ | (3,234) | ​ | ​ | (3,880)
Net loss before tax | ​ | $ | (8,800) | ​ | $ | (5,093)
Current and deferred tax expense | ​ | ​ | 3,315 | ​ | ​ | 3,807
Net loss | ​ | $ | (5,485) | ​ | $ | (1,286)
​ | ​ | ​ | ​ | ​ | ​ | ​
Portion attributable to McEwen Mining Inc. (49%) | ​ | ​ | ​ | ​ | ​ | ​
Net loss | ​ | $ | (2,687) | ​ | $ | (630)
Amortization of fair value increments | ​ |  | (884) | ​ |  | (613)
Income tax recovery | ​ | ​ | 110 | ​ | ​ | 123
Loss from investment in MSC, net of amortization | ​ | $ | (3,461) | ​ | $ | (1,120)
​ (1) Other expenses include foreign exchange, accretion of asset retirement obligations and other finance-related expenses. ​ The income or loss from the investment in MSC attributable to the Company includes amortization of the fair value increments arising from the initial purchase price allocation and related income tax recovery. The income tax recovery reflects the impact of the devaluation of the Argentine peso against the U.S. dollar on the peso-denominated deferred tax liability recognized at the time of acquisition, as well as income tax rate changes over the periods. ​ Changes in the Company’s investment in MSC for the three months ended March 31, 2023 and year ended December 31, 2022 are as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | Three months ended March 31, 2023 |  | Year ended December 31, 2022
Investment in MSC, beginning of period | $ | 93,451 | ​ | $ | 90,961
Attributable net (loss) income from MSC | ​ | (2,687) | ​ | ​ | 6,303
Amortization of fair value increments |  | (884) | ​ |  | (4,155)
Income tax recovery | ​ | 110 | ​ | ​ | 628
Dividend distribution received |  | — | ​ |  | (286)
Investment in MSC, end of period | $ | 89,990 | ​ | $ | 93,451
​ A summary of the key assets and liabilities of MSC as at March 31, 2023, before and after adjustments for fair value increments arising from the purchase price allocation, are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As at March 31, 2023 | ​ | Balance excluding FV increments | ​ | Adjustments | ​ | Balance including FV increments
Current assets | ​ | $ | 81,676 | ​ | $ | 705 | ​ | $ | 82,381
Total assets | ​ | $ | 188,078 | ​ | $ | 79,484 | ​ | $ | 267,562
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current liabilities | ​ | $ | (52,936) | ​ | $ | — | ​ | $ | (52,936)
Total liabilities | ​ | $ | (82,855) | ​ | $ | (1,071) | ​ | $ | (83,926)
​

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- References No definition available. + Details
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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
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