XML 26 R15.htm IDEA: XBRL DOCUMENT

EQUITY METHOD INVESTMENTS

6 Months Ended

Jun. 30, 2025

EQUITY METHOD INVESTMENTS

EQUITY METHOD INVESTMENTS

NOTE 9 EQUITY METHOD INVESTMENTS

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 investments in McEwen Copper and MSC, MSC’s financial statements, which are originally prepared by MSC in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, have been adjusted to conform with U.S. GAAP.

Equity method investment in McEwen Copper

A summary of the operating results for McEwen Copper for the three and six months ended June 30, 2025, and 2024, is as follows:


		Three months ended June 30,						Six months ended June 30,
		2025			2024			2025			2024
McEwen Copper (100%)
Advanced projects		$	(12,236)		$	(37,547)		$	(33,507)		$	(85,730)
Other expenses			(1,548)			(1,835)			(2,645)			(3,851)
Foreign exchange gain (loss)			(861)			310			(870)			(3,682)
Interest and other income (expense)⁽¹⁾			(381)			3,841			3,525			20,295
Loss before tax		$	(15,026)		$	(35,231)		$	(33,497)		$	(72,968)
Current and deferred taxes			—			—			—			—
Net loss		$	(15,026)		$	(35,231)		$	(33,497)		$	(72,968)

Portion attributable to McEwen Inc.
Loss from investment in McEwen Copper		$	(6,978)		$	(16,816)		$	(15,556)		$	(34,828)

(1) Interest and other income (expense) include gains on marketable securities and other finance-related expenses.

Changes in the Company’s investment in McEwen Copper for the six months ended June 30, 2025, and for the year ended December 31, 2024, are as follows:


		Six months ended			Year ended
		June 30, 2025			December 31, 2024
Investment, beginning of period		$	298,947		$	326,147
Additional investment in McEwen Copper			—			14,000
Dilution gain			—			5,777
Attributable net loss from McEwen Copper			(15,556)			(46,977)
Investment, end of period		$	283,391		$	298,947

A summary of the key assets and liabilities of McEwen Copper as at June 30, 2025, and December 31, 2024, is as follows:


As at		June 30, 2025			December 31, 2024
Current assets		$	24,309		$	34,067
Total assets		$	218,348		$	226,329

Current liabilities		$	(38,667)		$	(14,656)
Total liabilities		$	(38,816)		$	(14,856)

As at June 30, 2025, the Company's investment in McEwen Copper exceeded its proportionate share of the underlying net assets by $199.7 million. This basis difference is attributable to equity method goodwill and not amortized.

Equity method investment in MSC

A summary of the operating results for MSC for the three and six months ended June 30, 2025, and 2024, is as follows:


		Three months ended June 30,						Six months ended June 30,
		2025			2024			2025			2024
Minera Santa Cruz S.A. (100%)
Revenue from gold and silver sales		$	94,886		$	74,348		$	166,789		$	140,274
Production costs applicable to sales			(63,603)			(48,220)			(120,191)			(96,105)
Depreciation and depletion			(10,612)			(14,723)			(21,222)			(23,649)
Gross profit			20,671			11,405			25,376			20,520
Exploration			(2,915)			(3,018)			(5,215)			(5,122)
Other expense⁽¹⁾			(4,521)			(2,451)			(3,695)			(950)
Income before tax		$	13,235		$	5,936		$	16,466		$	14,448
Current and deferred income tax recovery (expense)			(4,850)			4,514			(5,891)			(333)
Net income		$	8,385		$	10,450		$	10,575		$	14,115

Portion attributable to McEwen Inc.
Net income		$	4,109		$	5,120		$	5,182		$	6,918
Amortization of fair value increments			(523)			(667)			(1,091)			(1,377)
Income tax recovery			10			248			15			438
Income from investment in MSC, net of amortization		$	3,596		$	4,701		$	4,106		$	5,979

(1) Other expense includes foreign exchange gains and losses, 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 six months ended June 30, 2025, and for the year ended December 31, 2024, are as follows:


		Six months ended			Year ended
		June 30, 2025			December 31, 2024
Investment, beginning of period		$	101,854		$	93,218
Attributable net income from MSC			5,182			12,072
Amortization of fair value increments			(1,091)			(3,088)
Income tax recovery			15			37
Dividend distribution received			(2,246)			(385)
Investment, end of period		$	103,714		$	101,854

A summary of the key assets and liabilities of MSC as at June 30, 2025, and December 31, 2024, is as follows:


As at		June 30, 2025			December 31, 2024
Current assets		$	145,140		$	144,327
Total assets		$	238,634		$	233,003

Current liabilities		$	(54,346)		$	(57,373)
Total liabilities		$	(89,146)		$	(89,594)

As at June 30, 2025, the Company's investment in MSC exceeded its proportionate share of the underlying net assets by $30.5 million. This basis difference is primarily attributable to mineral property interests and amortized on a unit-of-production basis.