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Published: 2022-08-10

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-33190

MCEWEN MINING INC.

(Exact name of registrant as specified in its charter)

Colorado 84-0796160

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

150 King Street West, Suite 2800, Toronto, Ontario Canada M5H 1J9

(Address of principal executive offices) (ZIP code)

(866) 441-0690

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, no par value

MUX

New York Stock Exchange (“NYSE”)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 47,427,325 shares outstanding as of August 10, 2022.

MCEWEN MINING INC.

FORM 10-Q

Index

Part I FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2022 and 2021 (unaudited)

Consolidated Balance Sheets at June 30, 2022 (unaudited) and December 31, 2021 (audited)

Consolidated Statements of Changes in Shareholders’ Equity for the three and six months endedJune 30, 2022 and 2021 (unaudited)

Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021(unaudited)

Notes to Consolidated Financial Statements (unaudited)

Item 1A.

Risk Factors

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosure about Market Risk

Item 4.

Controls and Procedures

Part II OTHER INFORMATION

Item 4.

Mine Safety Disclosures

Item 6.

Exhibits

SIGNATURES

	PART I – FINANCIAL INFORMATION

		Item 1. FINANCIAL STATEMENTS

			MCEWEN MINING INC.
		CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
	(in thousands of U.S. dollars, except per share)

																	Three months ended June 30,	Six months ended June 30,
					2022	2021	2022	2021
		Revenue from gold and silver sales		$ 30,647 $ 40,706 $ 56,189 $ 64,446
		Production costs applicable to sales		(22,943)					(31,132) (50,767)				(54,721)
		Depreciation and depletion			(3,469)					(5,515)		(7,181)	(10,652)
		Gross profit (loss)										4,235					4,059			(1,759)		(927)

		OTHER OPERATING EXPENSES:
		Advanced projects - Los Azules		(14,081)		—					(23,837)	—
		Advanced projects - Other			(841)						(823)				(2,220)			(2,622)
		Exploration			(4,293)					(6,916)		(7,503) (11,872)
		General and administrative			(2,456)					(2,834)		(4,437)			(4,917)
		Income (loss) from investment in Minera Santa Cruz S.A. (Note 9)										2,511	(1,853)	1,391	(2,427)
		Depreciation										(138)		(75)				(280)			(150)
		Reclamation and Remediation (Note 11)			(1,506)					(505)		(2,033)	(1,416)
				(20,804)					(13,006)		(38,919)			(23,404)
		Operating loss		(16,569)					(8,947) (40,678) (24,331)

		OTHER INCOME (EXPENSE):
		Interest and other finance expenses, net			(1,639)					(1,859)		(3,279)			(2,368)
		Other income (Note 4)										5,802	3,795	9,672	5,207
		Total other income										4,163				1,936			6,393				2,839
		Loss before income and mining taxes			(12,406)					(7,011)		(34,285)	(21,492)
		Income and mining tax recovery			—						1,022		815				3,037
		Net loss after income and mining taxes			(12,406)					(5,989)		(33,470)	(18,455)
		Net loss (gain) attributable to non-controlling interests (Note 18)			(46)		—		288		—
		Net loss and comprehensive loss attributable to McEwen shareholders		$ (12,452) $					(5,989) $ (33,182) $ (18,455)

		Net loss per share (Note 13):
		Basic and Diluted		$								(0.26) $	(0.13) $	(0.71) $	(0.41)
		Weighted average common shares outstanding (thousands) (Note 1, Note 13):

		Basic and Diluted			47,428					45,919					46,917			45,054

		The accompanying notes are an integral part of these consolidated financial statements.

3

	MCEWEN MINING INC.
		CONSOLIDATED BALANCE SHEETS (UNAUDITED)
	(in thousands of U.S. dollars)

													June 30,		December 31,
							2022				2021
			ASSETS
			Current assets:
			Cash and cash equivalents (Note 17)	$			44,021 $		54,287
			Restricted cash (Note 17)		—						2,550
			Investments (Note 5)							2,395	1,806
			Receivables, prepaids and other assets (Note 6)							7,136				10,591
			Inventories (Note 7)				18,761		15,792
			Total current assets				72,313					85,026
			Mineral property interests and plant and equipment, net (Note 8)				343,141		342,303
			Investment in Minera Santa Cruz S.A. (Note 9)				92,066					90,961
			Inventories (Note 7)							8,339	2,543
			Restricted cash (Note 17)							3,797				3,797
			Other assets		983	711
			TOTAL ASSETS	$			520,639	$				525,341

			LIABILITIES & SHAREHOLDERS’ EQUITY
			Current liabilities:
			Accounts payable and accrued liabilities	$			25,822	$				39,615
			Flow-through share premium (Note 12)							4,966	1,572
			Lease liabilities							2,171				2,901
			Reclamation and remediation liabilities (Note 11)				11,239		5,761
			Other liabilities (Note 18)		—						2,550
			Total current liabilities				44,198		52,399
			Lease liabilities		835						1,515
			Debt (Note 10)				63,693		48,866
			Reclamation and remediation liabilities (Note 11)				27,029					29,691
			Other liabilities							2,903	2,929
			Total liabilities	$			138,658	$				135,400

			Shareholders’ equity:
			Common shares: 47,428 as of June 30, 2022 and 45,919 as of December 31, 2021 issued and outstanding (in thousands) (Note 1, Note 12)
				$			1,633,513 $	1,615,596
			Non-controlling interests (Note 18)				22,082					14,777
			Accumulated deficit				(1,273,614)	(1,240,432)
			Total shareholders’ equity				381,981					389,941
			TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$			520,639 $		525,341
			The accompanying notes are an integral part of these consolidated financial statements. Commitments and contingencies: Note 16

4

	MCEWEN MINING INC.
		CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
			(UNAUDITED)
				(in thousands of U.S. dollars and shares)

																					Common	Stock
							and	Additional
						Paid-in	Capital			Accumulated Non-controlling
					Three months ended June 30, 2021 and 2022:			Shares								Amount		Deficit					Interests	Total
					Balance, March 31, 2021			45,919 $ 1,589,763 $ (1,196,014) $	— $		393,749
					Stock-based compensation		—		212		—	—		212
					Net loss		—		—				(5,989)	—		(5,989)
					Balance, June 30, 2021			45,919 $ 1,589,975 $ (1,202,003) $	— $		387,972

					Balance, March 31, 2022				¹			47,369 $ 1,626,099 $ (1,261,162) $							14,443 $	379,380
					Stock-based compensation		—		7		—	—		7
					Shares issued for debt refinancing		59		500		—	—		500
					Issuance of equity by subsidiary (Note 18)		—							6,907		—			7,593	14,500
					Net loss		—		—				(12,452)	46		(12,406)
					Balance, June 30, 2022			47,428 $ 1,633,513 $ (1,273,614) $					22,082 $	381,981

																									Common	Stock
						and	Additional
						Paid-in	Capital			Accumulated Non-controlling
					Six months ended June 30, 2021 and 2022:			Shares								Amount	Deficit	Interests	Total
					Balance, December 31, 2020			41,659 $ 1,548,876 $ (1,183,548) $	— $ 365,328
					Stock-based compensation		—		439	—	—		439
					Sale of flow-through common stock			1,260				10,785	—	—		10,785
					Sale of shares for cash			3,000				29,875	—	—		29,875
					Net loss		—		—			(18,455)	—		(18,455)
					Balance, June 30, 2021			45,919 $ 1,589,975 $ (1,202,003) $	— $ 387,972

					Balance, December 31, 2021			45,919 $ 1,615,596 $ (1,240,432) $					14,777 $ 389,941
					Stock-based compensation		—		190	—	—		190
					Sale of flow-through common shares			1,450				10,320	—	—		10,320
					Shares issued for debt refinancing		59		500	—	—		500
					Issuance of equity by subsidiary (Note 18)		—							6,907	—			7,593	14,500
					Net loss		—		—			(33,182)			(288)	(33,470)
					Balance, June 30, 2022			47,428 $ 1,633,513 $ (1,273,614) $					22,082 $ 381,981
					The accompanying notes are an integral part of these consolidated financial statements.

					(1)						March 31, 2022 opening balance includes the reclassification adjustment of $1,403 from Accumulated Deficit to Non-controlling Interests.



5

	MCEWEN MINING INC.
		CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	(in thousands of U.S. dollars)

															Six months ended June 30,
								2022		2021
			Cash flows from operating activities:
			Net loss		$				(33,470) $		(18,455)
			Adjustments to reconcile net loss from operating activities:
			(Income) loss from investment in Minera Santa Cruz S.A. (Note 9)					(1,391)					2,427
			Depreciation and amortization					7,492				10,006
			Gain on investments (Note 5)			(589)				—
			Gain on sale of mineral property interests			—				(2,270)
			Unrealized foreign exchange loss (gain) and adjustment to estimate (Note 11)			(215)					334
			Income and mining tax recovery			(815)				(3,037)
			Stock-based compensation			190					439
			Reclamation and remediation (Note 11)					3,287				1,416
			Change in non-cash working capital items:
			Decrease (increase) in other assets related to operations					(5,250)				3,647
			Decrease in liabilities related to operations					(13,594)		(2,580)
			Cash used in operating activities		$				(44,355)	$			(8,073)

			Cash flows from investing activities:
			Net additions to mineral property interests and plant and equipment	$				(8,252) $		(20,372)
			Investment in marketable equity securities (Note 5)			—				492
			Dividends received from Minera Santa Cruz S.A. (Note 9)			286					7,561
			Cash used in investing activities	$				(7,966)	$			(12,319)

			Cash flows from financing activities:
			Proceeds from sale of shares, net of issuance costs (Note 18)		$				14,500	$				29,875
			Sale of flow-through common shares, net of issuance costs (Note 12)						14,376				11,966
			Proceeds from promissory note (Note 10 and Note 14)						15,000					—
			Subscription proceeds received in advance (Note 18)						(2,850)				—
			Payment of finance lease obligations						(1,521)		(30)
			Cash provided by financing activities	$				39,505	$			41,811
			(Decrease) increase in cash, cash equivalents and restricted cash						(12,816)					21,419
			Cash, cash equivalents and restricted cash, beginning of period						60,634				24,438
			Cash, cash equivalents and restricted cash, end of period (Note 17)		$				47,818	$				45,857

			Supplemental disclosure of cash flow information:
			Cash received (paid) during period for:
			Interest paid		$				(2,829) $		(2,449)
			Interest received				21				13
			The accompanying notes are an integral part of these consolidated financial statements.
6

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION
				McEwen Mining Inc. (the “Company”) was organized under the laws of the State of Colorado on July 24, 1979. The Company is engaged in the exploration, development, production and sale of gold and silver and exploration and development of copper.
				The Company operates in the United States, Canada, Mexico and Argentina. The Company owns a 100% interest in the Gold Bar gold mine in Nevada, the Black Fox gold mine in Ontario, Canada, the El Gallo gold project and the Fenix silver-gold project in Sinaloa, Mexico and a portfolio of exploration properties in Nevada, Canada, Mexico and Argentina. As of June 30, 2022, the Company owns a 76% interest in the Los Azules copper deposit in San Juan, Argentina through its 100% owned subsidiary, Minera Andes Inc. It also owns a 49% interest in Minera Santa Cruz S.A. (“MSC”), owner of the producing San José silver-gold mine in Santa Cruz, Argentina, which is operated by the joint venture majority owner Hochschild Mining plc.
				The interim consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and are unaudited. While information and note disclosures normally included in financial statements which are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, the Company believes that the information and disclosures included are adequate and not misleading.
				In management’s opinion, the unaudited Consolidated Statements of Operations and Comprehensive Loss (“Statement of Operations”) for the three and six months ended June 30, 2022 and 2021, the unaudited Consolidated Balance Sheet as at June 30, 2022 and audited Consolidated Balance Sheet as at December 31, 2021, the unaudited Consolidated Statement of Changes in Shareholders’ Equity for the three and six months ended June 30, 2022 and 2021, and the unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited consolidated financial statements. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto and the summary of significant accounting policies included in the Company’s annual report on Form 10-K/A for the year ended December 31, 2021. Except as noted below, there have been no material changes in the footnotes from those accompanying the audited consolidated financial statements contained in the Company’s Form 10-K/A for the year ended December 31, 2021. The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Intercompany accounts and transactions have been eliminated. Investments over which the Company exerts significant influence but does not control through majority ownership are accounted for using the equity method.
				Share consolidation and Articles of Amendment Effective after the close of trading on July 27, 2022, the Company filed Articles of Amendment to its Second Amended and Restated Articles of Incorporation with the Colorado Secretary of State to, among other items, effect a one-for-ten reverse split of its outstanding common stock. This reverse split, or consolidation, resulted in every 10 shares of common stock outstanding immediately prior to the effective date being converted into one share of common stock after the effective date. The consolidation was effected following approval by the shareholders in order for the Company to regain compliance with the NYSE listing requirements, specifically those requiring a minimum share trading price of $1 per share. The consolidation was effective for trading purposes on July 28, 2022. All share and per share amounts in the consolidated financial statements have been retroactively restated to reflect the consolidation. The Articles of Amendment also served to reduce the Company’s authorized capital from 675,000,002 shares to 200,000,002 shares, with 200,000,000 shares being common stock and 2 shares being a special preferred stock.
			7

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				NOTE 2 SIGNIFICANT ACCOUNTING ISSUES
				Risks and Uncertainties
				COVID-19
				The Company continues to closely monitor and respond, as possible, to the ongoing COVID-19 pandemic. As the global situation continues to change rapidly, ensuring the health and safety of the Company’s employees and contractors is one of the Company’s top priorities. Many jurisdictions including the United States, Canada, Mexico, and Argentina have varied but continued restrictions to travel, public gatherings, and certain business operations. Unlike the year 2020, there were no mandated suspensions for the Company’s operations during 2021 or during the six months ended June 30, 2022 (although, as described in this report COVID-19 impacted the Company’s operations and results for the period). In addition, vaccination rates in countries where the Company operates continue to increase.
				The Company’s results of operations, financial position, and cash flows were adversely affected during the six months ended June 30, 2022 and 2021 due to COVID-19. The continuing impact of the COVID-19 pandemic on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak, variants of the COVID-19 virus, the availability, ongoing effectiveness, development and distribution and effectiveness of vaccinations and treatments and on government advisories, restrictions, and financial assistance offered. To ensure a safe working environment for the Company’s employees and contractors and to prevent the spread of COVID-19, the Company continues to reinforce safety measures at all sites and offices including contact tracing, restricting non-essential travel, and complying with public health orders. The impact of COVID-19 on the global financial markets, the greater labor market, supply chains, and the overall economy and the Company is highly uncertain and cannot be predicted. Maintaining normal operating capacity is also dependent on the continued availability of supplies and contractors, which are out of the Company’s control. If the financial markets and/or the overall economy continue to be impacted, the Company’s results of operations, financial position and cash flows may be further affected. As the situation continues to evolve, the Company will continue to monitor market conditions closely and respond accordingly.
				Continuation of COVID-19 through 2022 and beyond could impact employee health, workforce availability and productivity, insurance premiums, ability to travel, suppliers, labor costs, the availability of industry experts, personnel and equipment, restrictions or delays to field work, studies, and assay results, impeding access to capital markets when needed on acceptable terms and other factors that will depend on future developments that may be beyond the Company’s control. The Company has completed various scenario planning analyses to consider the potential impacts of COVID-19 on its business, including volatility in commodity prices, temporary disruptions and/or curtailments of operating activities (voluntary or involuntary). However, there is no assurance that these measures will prevent adverse effects from COVID-19 in the future.
				Flow-through Issuance and Equity Financing
				During the six months ended June 30, 2022, the Company completed a Canadian Exploration Expenditures (“CEE”) flow-through common share financing for gross proceeds of $15.1 million. In March 2022, the Company entered into a $15.0 million unsecured subordinated promissory note and amended the terms of its $50.0 million senior secured term loan facility (Note 10). In June 2022, a subsidiary of the Company secured an additional $15.0 million of equity financing for its Los Azules project in Argentina (Note 18).
				During 2021, the Company raised gross proceeds of $12.7 million through a Canadian Development Expenses (“CDE”) flow-through common share issuance and raised gross proceeds of $31.5 million through an equity financing (Note 12). In 2021 a subsidiary of the Company secured an additional $40.0 million of equity financing for its Los Azules project in Argentina (Note 18).

			8

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				NOTE 3 OPERATING SEGMENT REPORTING
				The Company is a mining and minerals production and exploration company focused on precious metals in the United States, Canada, Mexico, and Argentina. The Company’s chief operating decision maker (“CODM”) reviews the operating results, assesses performance and makes decisions about the 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 within a geographic region are not alike. As a result, these operating segments also represent the Company’s reportable segments for accounting purposes. 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 or 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.
				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 for the periods presented is summarized in the tables below:
																					Three months ended June 30, 2022	USA	Canada	Mexico	MSC Los Azules	Total
				Revenue from gold and silver sales	$ 9,996 $			20,246 $		405 $	— $	— $ 30,647
				Production costs applicable to sales		(8,305)			(11,260)						(3,378)	—	— (22,943)
				Depreciation and depletion			(943)						(2,526)	—	—	—		(3,469)
				Gross profit (loss)			748						6,460	(2,973)	—	—		4,235

				Advanced projects			(3)						(105)	(733)	— (14,081) (14,922)
				Exploration		(1,244)								(2,621)	—	—			(428)	(4,293)
				Income from investment in Minera Santa Cruz S.A.
		—			—	—				2,511	—				2,511
				Segment income (loss)	$		(499) $						3,734 $ (3,706) $ 2,511 $ (14,509) $ (12,469)
				General and administrative and other												63
				Loss before income and mining taxes								$ (12,406)

				Capital expenditures	$		219 $						4,008 $	— $	— $	150 $ 4,377

			9

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
																						Six months ended June 30, 2022	USA	Canada	Mexico	MSC	Los Azules	Total
				Revenue from gold and silver sales	$ 21,739 $								33,141 $ 1,309 $	— $	— $ 56,189
				Production costs applicable to sales	(22,477)			(19,907)		(8,383)	—	— (50,767)
				Depreciation and depletion		(1,760)								(5,421)	—	—	—		(7,181)
				Gross profit (loss)		(2,498)								7,813	(7,074)		—	—		(1,759)

				Advanced projects			(49)						(195)	(1,976)		— (23,837) (26,057)
				Exploration		(2,695)								(4,321)	—	—				(487) (7,503)
				Impairment of mineral property interests and plant and equipment (Note 8)
		—			—	—	—	—		—
				Income from investment in Minera Santa Cruz S.A.
		—			—	—					1,391	—		1,391
				Segment income (loss)	$		(5,242)	$					3,297	$ (9,050) $ 1,391 $ (24,324) $ (33,928)
				General and Administrative and other										(357)
				Loss before income and mining taxes								$ (34,285)

				Capital expenditures	$			496 $						7,554	$	—	$	—	$	384 $ 8,434

																						Three months ended June 30, 2021	USA	Canada	Mexico				MSC Los Azules	Total
				Revenue from gold and silver sales	$ 26,343 $								12,178 $ 2,185 $	— $	— $ 40,706
				Production costs applicable to sales	(21,067)								(6,331)	(3,734)		—	— (31,132)
				Depreciation and depletion		(2,326)								(3,189)	—	—	—		(5,515)
				Gross profit (loss)			2,950						2,658	(1,549)		—	—		4,059

				Advanced projects			116						(564)				(375)	—	—		(823)
				Exploration		(1,591)								(4,281)	(10)	—	(1,034)			(6,916)
				Loss from investment in Minera Santa Cruz S.A.	—			—	—	(1,853)	—		(1,853)
				Segment income (loss)	$ 1,475 $								(2,187) $ (1,934) $ (1,853) $ (1,034) $ (5,533)
				General and administrative and other										(1,478)
				Loss before income and mining taxes								$ (7,011)

				Capital expenditures	$		353 $						10,775 $	— $	— $	— $ 11,128

																						Six months ended June 30, 2021	USA	Canada	Mexico				MSC Los Azules	Total
				Revenue from gold and silver sales	$ 39,236 $								20,739 $ 4,471 $	— $	— $ 64,446
				Production costs applicable to sales	(34,623)			(12,987)		(7,111)	—	— (54,721)
				Depreciation and depletion		(4,068)								(6,584)	—	—	— (10,652)
				Gross profit (loss)			545						1,168	(2,640)		—	—		(927)

				Advanced projects			32						(1,188)	(1,466)		—	—		(2,622)
				Exploration		(2,455)								(7,716)	(17)	—	(1,684) (11,872)
				Loss from investment in Minera Santa Cruz S.A.	—			—	—	(2,427)	—		(2,427)
				Segment loss	$ (1,878) $								(7,736) $ (4,123) $ (2,427) $ (1,684) $ (17,848)
				General and Administrative and other										(3,644)
				Loss before income and mining taxes								$ (21,492)

				Capital expenditures	$ 1,110 $								20,342 $	— $	— $	— $ 21,452

			10

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				Geographic Information
				Geographic information includes the long-lived asset balances and revenues presented for the Company’s operating segments, as follows:
																								Long-lived Assets	Revenue (1)	Revenue	(1)
						June 30,	December 31,		Three months ended June 30,							Six months ended June 30,
						2022	2021			2022	2021	2022			2021
				USA	$	38,600 $	37,877 $									9,996 $	26,343 $	21,739 $	39,236
				Canada		99,185		93,294									20,246		12,178			33,141	20,739
				Mexico		26,558	26,561			405							2,185	1,309	4,471
				Argentina (2)		283,983		282,583					—			—		—				—
				Total consolidated (3)	$	448,326 $	440,315 $											30,647 $	40,706 $	56,189 $	64,446

				(1) Presented based on the location from which the precious metals originated. (2) Includes Investment in MSC and other subsidiaries of $92.1 million as of June 30, 2022 (December 31, 2021 – $90.9 million). (3) Total excludes $0.4 million related to the Company's Right of use office lease asset as the business activities related to corporate
				are not considered to be a part of the operating segments.
				NOTE 4 OTHER INCOME
				The following is a summary of other income for the three and six months ended June 30, 2022 and 2021:
																	Three months ended June 30,				Six months ended June 30,
											2022	2021	2022	2021
				COVID-19 Relief	$						— $	1,725 $	— $			2,836
				Unrealized and realized gain on investments							168	—				612	—
				Foreign currency gain (loss)							6,069	(194)	9,056	97
				Other income (loss), net							(435)								2,264		4		2,274
				Total other income	$						5,802 $	3,795 $	9,672 $	5,207
				During the three and six months ended June 30, 2022, the Company recognized $nil (three and six months ended June 30, 2021 - $1.7 million and $2.8 million, respectively) of other income through COVID-19 relief from the Canadian government via the Canadian Emergency Wage Subsidy and Canada Emergency Rent Subsidy programs. From time to time, the Company may acquire and transfer marketable securities (“Blue Chip Swap”) to facilitate intragroup funding transfers between the U.S. parent and its Argentine subsidiary. The Company does not acquire marketable securities or engage in these transactions for speculative purposes. Under this strategy, the Company generally uses marketable securities of large, well-established companies, with high trading volumes and low volatility. The Company does this to improve cash management for funding its Argentinean subsidiary. Nonetheless, as the process to acquire, transfer and ultimately sell the marketable securities occurs over several days, some fluctuations are unavoidable. As the marketable securities are acquired with the intention of a near term sale, generally less than seven days, they are considered financial instruments that are held for trading. Accordingly, all changes in the fair value of the instruments, between acquisition and disposition, are recognized through profit or loss in the Consolidated Statements of Operations. Upon receipt of the transferred equity instruments by the local investment broker, the Company realizes an immediate foreign exchange impact. This foreign exchange impact is incurred directly as a result of holding equity instruments with the intention of trading, and as such the foreign exchange impact is also recognized through profit and loss.
			11

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				For the six months ended June 30, 2022, the Company completed 6 blue chip swap transactions to transfer funds from its Canadian USD bank account to Argentina. These funds were used for the continued development of the Los Azules Copper project. For the three and six months ended June 30, 2022, the Company realized a net gain of $2.1 million and $6.1 million, respectively. The net gain for the three and six months ended June 30, 2022 was comprised of a foreign currency gain of $2.2 million and $4.4 million and a realized loss on investments of $0.1 million and $0.4 million, respectively, including the impact of fees and commissions. During the three and six months ended June 30, 2021, no marketable securities were transferred between the U.S. parent and its Argentine subsidiary for intragroup funding purposes. NOTE 5 INVESTMENTS The following is a summary of the activity in investments for the six months ended June 30, 2022:
																					As at	Additions/	Net gain	Disposals/	Unrealized	As at
					December 31, transfers during	(loss) on transfers during						gain on	June 30,
									2021	period securities sold								period securities held	2022
				Marketable equity securities – fair value

									1,644	—				—	—	589		2,233
				Warrants						162	—				—	—	—			162
				Total Investments	$				1,806 $	— $				— $	— $	589 $		2,395
				On June 23, 2021, the Company closed the sale of two projects in Nevada, Limousine Butte and Cedar Wash, with Nevgold Corp. (“Nevgold”). In addition to $0.5 million cash received as part of the consideration, the Company received 4,963,455 common shares and 2,481,727 warrants of Nevgold. Upon issuance, the common shares received by the Company represented 10% of the issued and outstanding shares of Nevgold. The warrants have an exercise price of $0.60 per share and are exercisable until June 23, 2023. The common shares trade on the TSX Venture Exchange.
				NOTE 6 RECEIVABLES, PREPAIDS AND OTHER CURRENT ASSETS
				The following is a breakdown of balances in receivables, prepaids and other assets as at June 30, 2022, and December 31, 2021:
																			June 30, 2022	December 31, 2021
				Government sales tax receivable			$	2,098 $			3,708
				Prepaids and other assets				5,038						6,883
				Receivables, prepaid and other current assets			$	7,136 $			10,591
				Included in government sales tax receivable for the six months ended June 30, 2022 is $0.1 million HST receivable from the Company’s operations in Black Fox (December 31, 2021 - $2.2 million).
				Government sales tax receivable includes $1.1 million of Mexican value-added tax (“VAT”) at June 30, 2022 (December 31, 2021 – $0.9 million). The Company collected $0.5 million of VAT during the six months ended June 30, 2022 (June 30 2021 – $1.0 million).
			12

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				NOTE 7 INVENTORIES
				Inventories at June 30, 2022 and December 31, 2021 consisted of the following:
										June 30, 2022	December 31, 2021
				Material on leach pads	$		7,990	$		4,660
				In-process inventory			3,116				3,049
				Stockpiles			8,123			5,105
				Precious metals			1,624				1,819
				Materials and supplies			6,247			3,702
					$		27,100	$			18,335
				Less long-term portion		(8,339)			(2,543)
				Current portion	$		18,761	$			15,792
				During the six months ended June, 2022, inventory at the Black Fox, El Gallo and Gold bar operation were written down to their net realizable value by $1.6 million, $4.3 million and $nil respectively. During the six months ended June 30, 2021, inventory at the Black Fox, El Gallo and Gold bar operation were written down to their net realizable value by $nil, $0.8 million and $2.2 million respectively. Of these write-downs, a total of $5.6 million (six months ended June 30, 2021 – $2.9 million) were included in production costs applicable to sales and $0.3 million was included in depreciation and depletion (six months ended June 30, 2021 - $0.1 million) in the Statement of Operations. NOTE 8 MINERAL PROPERTY INTERESTS AND PLANT AND EQUIPMENT
				The applicable definition of proven and probable reserves is set forth in the new Regulation S-K 1300 requirements of the SEC. If proven and probable reserves exist at the Company’s properties, the relevant capitalized mineral property interests and asset retirement costs are charged to expense based on the units of production method upon commencement of production. The Company’s Gold Bar and Black Fox properties have proven and probable reserves estimated in accordance with Regulation S-K 1300. The El Gallo Project is depleted and depreciated using the straight line method, as the project does not have proven and probable reserves as defined in Regulation S-K 1300.
				The Company reviews and evaluates its long-lived assets for impairment on a quarterly basis or when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Once it is determined that impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its estimated fair value.
				During the six months ended June 30, 2022, no indicators of impairment have been noted for any of the Company’s mineral property interests. 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. In applying the equity method of accounting to the Company’s investment in MSC, 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.
			13

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				A summary of the operating results for MSC for the three and six months ended June 30, 2022 and 2021 is as follows:
																							Three months ended June 30,	Six months ended June 30,
							2022 2021				2022	2021
				Minera Santa Cruz S.A. (100%)
				Revenue from gold and silver sales	$		70,827 $								70,396	$			111,530	$		123,699
				Production costs applicable to sales		(45,959)								(40,888)	(81,302)		(77,256)
				Depreciation and depletion		(5,357)								(9,779)				(12,253)		(16,732)
				Gross profit		19,511								19,729				17,975		29,711
				Exploration		(3,093)								(2,941)				(4,828)		(5,177)
				Other expenses(1)		(8,529)								(14,684)	(10,351)		(20,220)
				Net income before tax	$		7,889 $							2,104	$			2,796	$		4,314
				Current and deferred tax expense			(877)							(1,937)	2,929		(3,566)
				Net income	$		7,012 $				167	$			5,725	$	748

				Portion attributable to McEwen Mining Inc. (49%)

				Net income	$	3,436 $				81	$			2,805 $	366
				Amortization of fair value increments		(1,088)								(2,019)	(1,700)		(3,090)
				Income tax recovery			163			85		286	297
				Income (loss) from investment in MSC, net of amortization
$			2,511		$				(1,853) $	1,391	$				(2,427)
				(1) Other expenses include foreign exchange, accretion of asset retirement obligations, other finance-related expenses. The income 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, 2022 and year ended December 31, 2021 are as follows:
														Six months ended June					Year ended
								30, 2022	December 31, 2021
				Investment in MSC, beginning of period					$	90,961	$				108,326
				Attributable net income from MSC						2,805			132
				Amortization of fair value increments						(1,700)		(8,331)
				Income tax recovery						286			666
				Dividend distribution received						(286)		(9,832)
				Investment in MSC, end of period					$	92,066	$		90,961
				During the three and six months ended June 30, 2022, the Company received $0.3 million in dividends from MSC, respectively (three and six months ended June 30, 2021 – $2.6 million and $7.6 million, respectively).
			14

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				A summary of the key assets and liabilities of MSC on a 100% basis as at June 30, 2022, before and after adjustments to fair value on acquisition and amortization of the fair value increments arising from the purchase price allocation, are as follows:
												Balance excluding		Balance including
				As at June 30, 2022		FV increments	Adjustments	FV increments
				Current assets	$				86,562	$	887	$				87,449
				Total assets	$				192,423	$		86,915	$		279,338

				Current liabilities	$				(53,324)	$	—	$		(53,324)
				Total liabilities	$				(89,467)	$		(1,993)	$		(91,460)

				NOTE 10 DEBT
				$50 Million Term Loan Facility
				On August 10, 2018, the Company finalized a $50.0 million senior secured three-year term loan facility with Royal Capital Management Corp., as administrative agent, and the lenders party thereto. Interest on the loan accrued at the rate of 9.75% per annum with interest due monthly and was secured by a lien on certain of the Company’s and its subsidiaries’ assets.
				On June 25, 2020, the Company entered into an Amended and Restated Credit Agreement (“ARCA”) which refinanced the outstanding $50.0 million loan and included the following revisions:
				• Scheduled repayments were extended by two years; monthly repayments of principal in the amount of $2.0
									million are due beginning on August 31, 2022, and continuing for 11 months, followed by a final principal payment of $26.0 million, and any accrued interest on August 31, 2023 (but, later extended, as described below).
				• Additionally, the minimum working capital maintenance requirement was reduced from $10.0 million under the
									original term loan to $nil between June 30, 2020, through December 31, 2020, and from $10.0 million to $2.5 million from March 31, 2021, until the end of 2021. The working capital requirement increases to $5.0 million at March 31, 2022, $7.0 million at June 30, 2022, and $10 million at September 30, 2022, and each fiscal quarter thereafter (further amended, see below).
				• The Company issued 2,091,700 shares of common stock valued at $1,875,000 to the lenders as consideration for
									the maintenance, continuation, and extension of the maturity date of the loan. The value of the shares plus the unamortized costs of the original term loan are being amortized over the modified term of the loan.
				• Sprott Private Resource Lending II (Collector), LP replaced Royal Capital Management Corp. as the
									administrative agent and certain lenders. An affiliate of Robert R. McEwen remained as a lender. The remaining principal terms of the original agreement remained unchanged.
				On March 31, 2022, further amendments were made to the “ARCA” which refinanced the outstanding $50.0 million loan and which terms differed in material respects from the previous amendment as follows:
				• Scheduled repayments of the principal were extended by 18 months; monthly repayments of principal in the
									amount of $2.0 million are due beginning on August 31, 2023, and continuing for 18 months, followed by a final principal payment of $12.0 million, and any accrued interest on March 31, 2025.
				• The minimum working capital maintenance requirement was reduced from $10.0 million under the amended term
									loan to $5.0 million at March 31, 2022 to March 31, 2023. The working capital requirement increases to $7.0 million at June 30, 2023, and $10 million at September 30, 2023, and each fiscal quarter thereafter.
			15

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				• The Company issued shares of common stock valued at $0.5 million to one lender as consideration for the
				maintenance, continuation, and extension of the maturity date of the loan. The value of the shares plus the unamortized costs of the original term loan are being amortized over the modified term of the loan.
				The remaining principal terms of the original agreement remained unchanged. The Company is currently in full compliance with all covenants under the ARCA.
				$15 Million Subordinated Promissory Note
				On March 31, 2022, the Company issued a $15.0 million unsecured subordinated promissory note to a company controlled by Robert R. McEwen, the Chairman and Chief Executive Officer of McEwen Mining Inc (“Promissory Note”). The Promissory Note is payable in full on or before September 25, 2025, interest is payable monthly at a rate of 8% per annum and is subordinated to the ARCA loan facility.
				A reconciliation of the Company’s long-term debt for the six months ended June 30, 2022 and for the year ended December 31, 2021 is as follows:
											Six months ended June			Year ended
							30, 2022		December 31, 2021
				Balance, beginning of year	$		48,866 $	48,160
				Promissory note- initial recognition			15,000						—
				Interest expense			2,745	5,581
				Interest payments			(2,418)				(4,875)
				Bonus Interest - Equity based financing fee			(500)			—
				Balance, end of period	$		63,693	$			48,866
				NOTE 11 ASSET RETIREMENT OBLIGATIONS The Company is responsible for the reclamation of certain past and future disturbances at its properties. The most significant properties subject to these obligations are the Gold Bar and Tonkin properties in Nevada, the Timmins properties in Canada and the El Gallo Project in Mexico.
				A reconciliation of the Company’s asset retirement obligations for the six months ended June 30, 2022 and for the year ended December 31, 2021 are as follows:
																	Six months	Year ended
						ended June 30,		December 31,

											2022				2021
				Asset retirement obligation liability, beginning balance							$	35,452 $		34,000
				Settlements							(256)		(2,225)
				Accretion of liability								1,047		2,405
				Revisions to estimates and discount rate								2,240		1,257
				Foreign exchange revaluation								(215)				15
				Asset retirement obligation liability, ending balance							$	38,268		$	35,452
				Less current portion								11,239		5,761
				Long-term portion							$	27,029		$	29,691

			16

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				The Company’s reclamation expenses for the periods presented consisted of the following:
														Three months ended June 30,	Six months ended June 30,
							2022	2021	2022 2021
				Reclamation adjustment reflecting updated estimates	$		986 $	— $	986 $		425
				Reclamation accretion			520		505			1,047	991
				Total	$	1,506 $		505 $		2,033	1,416
				NOTE 12 SHAREHOLDERS’ EQUITY
				Equity Issuances
				Flow-Through Shares Issuance – Canadian Exploration Expenditures (“CEE”)
				On March 2, 2022, the Company issued 14,500,000 flow-through common shares priced at $1.04 per share for gross proceeds of $15.1 million. The proceeds of this offering will be used for the continued development of the Company’s properties in the Timmins region of Canada. The total proceeds were allocated between the sale of tax benefits and the sale of common shares. The total issuance costs related to the issuance of the flow-through shares were $0.8 million, which were accounted for as a reduction to the common shares. The net proceeds of $14.4 million were allocated between the sale of tax benefits in the amount of $4.1 million and the sale of common shares in the amount of $10.3 million.
				On December 31, 2020, the Company issued 7,669,900 flow-through common shares priced at $1.28 per share for gross proceeds of $9.8 million. The purpose of this offering was to fund exploration activities on the Company’s properties in the Timmins region of Canada. No issuance costs were incurred as part of this issuance. Proceeds of $9.8 million were allocated between the sale of tax benefits in the amount of $2.1 million and the sale of common shares in the amount of $7.7 million.
				On September 10, 2020, the Company issued 6,298,166 flow-through common shares priced at $1.65 per share for gross proceeds of $10.4 million. The purpose of this offering was to fund exploration activities on the Company’s properties in the Timmins region of Canada. The total issuance costs related to the issuance of the flow-through shares were $0.6 million, which were accounted for as a reduction to the common shares. The net proceeds of $9.8 million were allocated between the sale of tax benefits in the amount of $2.0 million and the sale of common shares in the amount of $7.8 million.
				The Company is required to spend these flow-through share proceeds on flow-through eligible CEE as defined by subsection 66.1(6) of the Income Tax Act (Canada). As of June 30, 2022, the Company had incurred a total of $16.5 million in eligible CEE ($12.7 million as of December 31, 2021 and $3.8 million as of June 30, 2022). The Company expects to fulfill its remaining CEE commitments by the end of 2022 from its most recent common share flow through offering of $15.1 million by the end of 2023.
				Flow-Through Shares Issuance – Canadian Development Expenses (“CDE”)
				On January 29, 2021, the Company issued 12,600,600 flow-through common shares priced at $1.01 per share for gross proceeds of $12.7 million. The purpose of this offering was to fund the continued development of the Froome deposit. The total proceeds were allocated between the sale of tax benefits and the sale of common shares. The total issuance costs related to the issuance of the flow-through shares were $0.7 million, which were accounted for as a reduction to the common shares. The net proceeds of $12.0 million were allocated between the sale of tax benefits in the amount of $1.2 million and the sale of common shares in the amount of $10.8 million.
				The Company is required to spend these flow-through share proceeds on flow-through eligible CDE as defined by subsection 66.2(5) of the Income Tax Act (Canada). The Company had to reach the total of $12.7 million CDE spend requirement during 2021.
			17

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				Shareholders’ Distributions
				Pursuant to the ARCA (Note 10), the Company is prevented from paying any dividends on its common stock, so long as the loan is outstanding. NOTE 13 NET LOSS PER SHARE
				Basic net loss per share is computed by dividing the net loss attributable to McEwen Mining Inc. common shareholders by the weighted average number of common shares outstanding during the period. Potentially dilutive instruments are not included in the calculation of diluted net loss per share for the three and six months ended June 30, 2022 and 2021, as they would be anti-dilutive.
				For the six months ended June 30, 2022, all the outstanding stock options (525,043) and all of the outstanding warrants (2,977,077) were excluded from the computation of diluted loss per share. Similarly, for the six months ended June 30, 2021, the outstanding stock options (571,615) and the outstanding warrants (2,977,077) were excluded.

				NOTE 14 RELATED PARTY TRANSACTIONS
				The Company recorded the following expense in respect to the related parties outlined below during the periods presented:
														Three months ended June 30,			Six months ended June 30,
						2022	2021			2022	2021
				Lexam L.P.	$	— $	— $	— $			11
				Execaire, a division of IMP Group		26		—	$	79			—
				REVlaw		39	107	$	254			142
				The Company has the following outstanding accounts payable balances in respect to the related parties outlined below:
															June 30, 2022	December 31, 2021

				Execaire, a division of IMP Group			$		— $		—
				REVlaw		$	17				137
				An aircraft owned by Lexam L.P. (controlled by Robert R. McEwen, limited partner and beneficiary of Lexam L.P. and the Company’s Chairman and Chief Executive Officer) has been made available to the Company to expedite business travel. As Chairman and Chief Executive Officer of the Company, Mr. McEwen must travel extensively and frequently on short notice. Mr. McEwen is able to charter the aircraft from Lexam L.P. at a preferential rate approved by the Company’s independent board members under a policy whereby only the variable expenses of operating this aircraft for business related travel are eligible for reimbursement by the Company. REVlaw is a company owned by Carmen Diges, General Counsel & Secretary of the Company. The legal services of Ms. Diges as General Counsel & Secretary and other support staff, as needed, are provided by REVlaw in the normal course of business and have been recorded at their exchange amount.
				An affiliate of Mr. McEwen participated as a lender in the $50.0 million term loan by providing $25.0 million of the total $50.0 million funding and continued as such under the ARCA. During the three and six months ended June 30, 2022, the Company paid $0.6 million and $1.2 million, respectively (three and six months ended June 30, 2021 – $0.6 million and $1.2 million, respectively) in interest to this affiliate. The payments to the affiliate of Mr. McEwen are on the same terms as the non-affiliated lender (Note 10).
			18

MCEWEN MINING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2022

(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)

On March 31, 2022, the Company issued a $15.0 million unsecured subordinated promissory note to a company controlled by Mr. McEwen, the Company’s Chairman and Chief Executive Officer. The Promissory Note is payable in full on or before September 25, 2025, interest is payable monthly at a rate of 8% per annum and is subordinated to the ARCA loan facility (Note 10).

On August 23, 2021, an affiliate of Mr. McEwen participated in the Series B private placement offering conducted by McEwen Copper Inc. (“McEwen Copper”) (Note 18).

NOTE 15 FAIR VALUE ACCOUNTING

As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Warrants

Upon initial recognition, the warrants received as part of the asset sale to Nevgold (Note 5) were valued using the Black-Scholes valuation model as they are not quoted in an active market. The warrants have been accounted for as equity investment at cost. Average volatility of 94.6% was determined based on a selection of similar junior mining companies. The warrants are exercisable upon receipt and have an exercise price of $0.60 per share and expire June 23, 2023. As of June 30, 2022, no warrants related to the Nevgold transaction have been exercised.

Assets and liabilities measured at fair value on a recurring basis.

The following table identifies certain of the Company’s assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as at June 30, 2022 and December 31, 2021, as reported in the Consolidated Balance Sheets:

Fair value as at June 30, 2022

Fair value as at December 31, 2021

Level 1

Level 2

Total

Level 1

Level 2

Total

Marketable equity securities

2,233 $

— $

2,233 $

1,644 $

— $

1,644

Total investments

2,233 $

— $

2,233 $

1,644 $

— $

1,644

Marketable equity securities that the Company holds are exchange-traded and are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the investment is calculated as the quoted market price of the marketable equity security multiplied by the number of shares held by the Company.

The fair value of financial assets and liabilities held at June 30, 2022 were assumed to approximate their carrying values due to their historically negligible credit losses.

Debt is recorded at a carrying value of $63.7 million (December 31, 2021 – $48.9 million). The debt is not traded on quoted markets and approximates its fair value based on recent refinancing.

Impairment of Mineral Property

During the six months ended June 30, 2022, there were no indicators of impairment for the Company’s long-lived assets and the Company did not record any impairments.

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				NOTE 16 COMMITMENTS AND CONTINGENCIES
				In addition to the commitments for payments on operating and finance leases and the repayment of long-term debt (Note 10), as at June 30, 2022, the Company has the following commitments and contingencies:
				Reclamation Obligations
				As part of its ongoing business and operations, the Company is required to provide surety bonding for its environmental reclamation obligations of $25.3 million in Nevada pertaining primarily to the Tonkin and the Gold Bar properties and $12.1 million (C$15.6 million) in Canada with respect to the Black Fox Complex. In addition, under Canadian regulations, the Company was required to deposit approximately $0.1 million with respect to its Lexam properties in Timmins, which is recorded as non-current restricted cash (Note 17).
				Surety Bonds
				As at June 30, 2022, the Company had a surety facility in place to cover all its bonding obligations, which include $25.3 million of bonding in Nevada and $12.1 million (C$15.6 million) of bonding in Canada. The terms of the facility carry an average annual financing fee of 2.3% and require a deposit of 10%. The surety bonds are available for draw-down by the beneficiary in the event the Company does not perform its reclamation obligations. If the specific reclamation requirements are met, the beneficiary of the surety bonds will release the instrument to the issuing entity. The Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements, through existing or alternative means, as they arise. As at June 30, 2022, the Company recorded $3.8 million in restricted cash as a deposit against the surety facility.
				Streaming Agreement
				As part of the acquisition of the Black Fox Complex in 2017, the Company assumed a gold purchase agreement (streaming contract) related to production from certain land claims. The Company is obligated to sell 8% of gold production from the Black Fox mine and 6.3% from the adjoining Pike River property (Black Fox extension) to Sandstorm Gold Ltd. at the lesser of market price or $561 per ounce (with inflation adjustments of up to 2% per year) until 2090.
				The Company records the revenue from these shipments based on the contract price at the time of delivery to the customer. During the three and six months ended June 30, 2022, the Company recorded revenue of $0.4 million and $0.8 million, respectively (for the three and six months ended June 30, 2021 – $0.3 million and $0.6 million, respectively) related to the gold stream sales. Flow-through Eligible Expenses
				On March 2, 2022, the Company completed a flow-through share issuance for gross proceeds of $15.1 million. The proceeds of this offering will be used for the continued development of the Company’s properties in the Timmins region of Canada. As at June 30, 2022, the Company has not started to incur the required CEE spend.
				In January 2021, the Company closed a flow-through share issuance to fund the development at the Froome deposit. The Company incurred the full required spend of $12.7 million in CDE during 2021.
				In 2020, the Company completed two flow-through share issuances. The total proceeds of $18.3 million will be used to incur qualifying CEE in the Timmins region of Ontario by December 31, 2022. As of June 30, 2022, the Company has incurred $16.5 million of the required CEE spend ($12.7 million as of December 2021).
			20

MCEWEN MINING INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
		JUNE 30, 2022
	(tabular amounts are in thousands of U.S. dollars, unless otherwise noted)
				NOTE 17 CASH, CASH EQUIVALENTS AND RESTRICTED CASH
				The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheets to the amounts disclosed in the Consolidated Statements of Cash Flows:
												June 30, 2022	December 31, 2021
				Cash and cash equivalents	$		44,021	$			54,287
				Restricted cash - current		-				2,550
				Restricted cash - non-current					3,797			3,797
				Total cash, cash equivalents, and restricted cash	$				47,818	$			60,634
				As of June 30, 2022, cash and cash equivalents include bankers’ notes with maturity dates between 34 to 81 days. The non-current portion of restricted cash includes deposits related to the Company’s reclamation obligations and surety facility (Note 16).
				NOTE 18 NON-CONTROLLING INTERESTS On August 23, 2021, the Company announced that its subsidiary, McEwen Copper, closed the first tranche of Series B private placement offering where McEwen Copper issued 4,000,000 common shares at a price of $10.00 per share for gross proceeds of $40.0 million. An affiliate of Mr. McEwen purchased all the shares pursuant to this first tranche. As of August 23, 2021 and December 31, 2021, the affiliate held 18.6% ownership of McEwen Copper. As of June 30, 2022, this ownership was decreased to 17.39% due to the closing of the second tranche of Series B private placement offering. As a result of the common shares issued, the Company’s 100% ownership in McEwen Copper was reduced by 18.6%. The Company assessed 18.6% as non-redeemable non-controlling interests. Consequently, the Company recorded $14.9 million as non-controlling interests and $25.1 million as additional paid-in-capital on the Consolidated Balance Sheets in 2021. On June 21, 2022, the Company announced that its subsidiary, McEwen Copper, closed the second tranche of Series B private placement offering where McEwen Copper issued 1,500,000 additional common shares at a price of $10.00 per share for gross proceeds of $15.0 million to a related party and non-related investors. Out of the $15.0 million proceeds received, $2.55 million and $0.3 million were received in advance of the closing of the second tranche during periods ended December 31, 2021 and March 31, 2022, respectively, which were recorded in other liabilities. As a result of the common shares issued, the Company’s 81.4% ownership in McEwen Copper was reduced by 5.31%. The Company assessed 23.91% as non-redeemable non-controlling interests. Consequently, the Company recorded $7.6 million as non-controlling interests and $7.4 million as additional paid-in-capital in 2022. On June 30, 2022, the Company recorded $0.3 million net loss attributed to non-controlling interests of 23.91%. NOTE 19 SUBSEQUENT EVENTS Prepayment Agreement
				On July 27, 2022 the company entered into an agreement with Auramet International LLC (“Auramet”) whereby Auramet would prepay for future production up to the lesser of $10 million, or 5,000 oz of gold. Repayment of principal and accrued interest will be made in gold bullion. The interest rate is the Secured Overnight Financing Rate (SOFR) + 5%. As at July 27, 2022, the interest rate was 7.3% The agreement is a revolving facility set to expire February 28, 2023, however at the option of the Company, it can be renewed at the end of the term for an additional 12 months.
			21

	SIGNATURES
		Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MCEWEN MINING INC.

			/s/ Robert R. McEwen
		Date: August 10, 2022	By: Robert R. McEwen,
			Chairman and Chief Executive Officer

		/s/	Perry	Ing
		Date: August 10, 2022	By: Perry Ing,
			Chief Financial Officer

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