EQUITY METHOD INVESTMENTS

3 Months Ended

Mar. 31, 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 US GAAP.

Equity Method Investment in McEwen Copper

A summary of the operating results for McEwen Copper for the three months ended March 31, 2025, and 2024 is as follows:


		Three months ended March 31,
		2025			2024
McEwen Copper (100%)
Advanced projects		$	(21,271)		$	(48,183)
Other expenses			(1,097)			(2,016)
Foreign exchange loss			(9)			(3,992)
Interest and other income⁽¹⁾			3,906			16,454
Loss before tax		$	(18,471)		$	(37,737)
Current and deferred taxes			—			—
Net loss		$	(18,471)		$	(37,737)

Portion attributable to McEwen Mining Inc.
Loss from investment in McEwen Copper		$	(8,578)		$	(18,012)

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

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


		Three months ended			Year ended
		March 31, 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			(8,578)			(46,977)
Investment, end of period		$	290,369		$	298,947

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


As at		March 31, 2025			December 31, 2024
Current assets		$	9,241		$	34,067
Total assets		$	204,261		$	226,329

Current liabilities		$	(11,085)		$	(14,656)
Total liabilities		$	(11,260)		$	(14,856)

As at March 31, 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 months ended March 31, 2025, and 2024 is as follows:


		Three months ended March 31,
		2025			2024
Minera Santa Cruz S.A. (100%)
Revenue from gold and silver sales		$	71,903		$	65,927
Production costs applicable to sales			(56,588)			(47,884)
Depreciation and depletion			(10,610)			(8,926)
Gross profit			4,705			9,117
Exploration			(2,300)			(2,104)
Other income ⁽¹⁾			826			1,501
Income before tax		$	3,231		$	8,514
Current and deferred tax expense			(1,039)			(4,847)
Net income		$	2,192		$	3,667

Portion attributable to McEwen Mining Inc.
Net income		$	1,073		$	1,796
Amortization of fair value increments			(568)			(709)
Income tax recovery			5			191
Income from investment in MSC, net of amortization		$	510		$	1,278

(1) Other income includes foreign exchange gains and losses, accretion of asset retirement obligations and other finance-related income.

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, 2025, and for the year ended December 31, 2024, are as follows:


		Three months ended			Year ended
		March 31, 2025			December 31, 2024
Investment, beginning of period		$	101,854		$	93,218
Attributable net income from MSC			1,073			12,072
Amortization of fair value increments			(568)			(3,088)
Income tax recovery			5			37
Dividend distribution received			(2,246)			(385)
Investment, end of period		$	100,118		$	101,854

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


As at		March 31, 2025			December 31, 2024
Current assets		$	132,312		$	144,327
Total assets		$	285,316		$	233,003

Current liabilities		$	(48,076)		$	(57,373)
Total liabilities		$	(81,060)		$	(89,594)

As at March 31, 2025, the Company's investment in MSC exceeded its proportionate share of the underlying net assets by $31.0 million. This basis difference is primarily attributable to mineral property interests and amortized on a unit of production basis.