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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

This section of this Annual Report on Form 10-K generally discusses fiscal 2021 and 2020 items including our results of operations and financial condition, and year-to-year comparisons between 2021 and 2020 with a particular emphasis on 2021. In each case, we discuss factors that we believe have affected our operating results and financial condition and may do so in the future. For a discussion of our financial condition and results of operations for 2020 compared to 2019, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 10, 2021.

Regarding properties and projects that are not in production, we provide some details of our plan of operation. This section provides information up to the date of filing this report.

The discussion contains financial performance measures that are not prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP” or “GAAP”). Each of the following is a non-GAAP measure: cash gross profit, cash costs, cash cost per ounce, all-in sustaining costs (“AISC”), all-in sustaining cost per ounce, average realized price per ounce, and liquid assets. These non-GAAP measures are used by management in running the business and we believe they provide useful information that can be used by investors to evaluate our performance and our ability to generate cash flows. These measures do not have standardized definitions and should not be relied upon in isolation or as a substitute for measures prepared in accordance with GAAP. Cash Costs equals Production Costs Applicable to Sales and is used interchangeably throughout the document. For a reconciliation of these non-GAAP measures to the amounts included in our Statements of Operations for the three months ended December 31, 2021, and 2020 and the years ended December 31, 2021, 2020 and 2019 and to our Balance Sheets as of December 31, 2021 and 2020 and certain limitations inherent in such measures, please see the discussion under “Non-GAAP Financial Performance Measures”, on page 63.

This discussion also includes references to “advanced-stage properties”, which are defined as properties for which advanced studies and reports have been completed indicating the presence of mineralized material or proven or probable reserves, or that have obtained or are in the process of obtaining the required permitting. Our designation of certain properties as “advanced-stage properties” should not suggest that we have or will have proven or probable reserves at those properties as defined by S-K 1300. This section provides information up to the date of the filing of this report.

The information in this section should be read in conjunction with our consolidated financial statements and the notes thereto included in this Annual Report on Form 10-K.

Throughout this Management’s Discussion and Analysis (“MDA”), the reporting periods for the three months ended March 31, 2021, June 30, 2021, September 30, 2021, December 31, 2021, and December 31, 2020 are abbreviated as Q1/21, Q2/21, Q3/21, Q4/21 and Q4/20, respectively, the reporting periods for the six months ended June 30, 2021 and December 31, 2021 are abbreviated as H1/21 and H2/21, respectively, and the reporting for the years ended December 31, 2021 and 2020 are abbreviated as the full year 2021 and the full year 2020 respectively. All financial quarterly and other interim results are unaudited.

In addition, in this report, gold equivalent ounces (“Au Eq. oz”) includes gold and silver ounces calculated based on a silver to gold ratio of 68:1 for the Q1/21, 68:1 for the Q2/21, 73:1 for the Q3/21, and 77:1 for the Q4/21. Beginning with

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the Q2/19, we adopted a variable silver to gold ratio for reporting that approximates the average price during each fiscal quarter.

Note: We ceased active mining and processing at the El Gallo mine in the second quarter of 2018. Where comparative results for mining operations are presented for prior periods, we continue to use the term “El Gallo Mine.” We use the term “El Gallo Project” to refer to the ongoing reclamation and residual heap-leaching that is taking place at the formerly producing mine.

COVID-19 Pandemic

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, during 2021 there were no mandated suspensions for the Company’s operations. In addition, vaccination rates in countries where the Company operates continue to increase.

The Company has implemented policies at its mines sites and office in Toronto and elsewhere designed to ensure the safety and well-being of all employees and the people associated with them. In that regard, to reduce risk, our employees have been encouraged to get fully vaccinated against COVID-19, have been asked to work remotely, avoid all non-essential business travel, adhere to good hygiene practices, and engage in physical distancing.

The Company’s results of operations, financial position, and cash flows were adversely affected in both 2020 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 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 overall economy and the Company are 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.

During 2021, the Company raised $12.7 million and $31.5 million through a Canadian Development Expenses (“CDE”) flow-through common share issuance and an equity financing, and a subsidiary of the Company secured an additional $40.0 million for its Los Azules project in Argentina. See Item 8. Financial Statements and Supplementary Data, Note 13 Shareholders’ Equity.

Continuation of COVID-19 in 2022 and beyond could impact employee health, workforce productivity, insurance premiums, ability to travel, 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 term and other factors that will depend on future developments that may be beyond our 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.

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Index to Management’s Discussion and Analysis:

Page

2021 and Q4/21 Operating and Financial Highlights 50

Selected Consolidated Financial and Operating Results 51

Consolidated Performance 52

Consolidated Financial Review 52

Liquidity and Capital Resources 53

Operations Review 54

U.S.A Segment 54

Gold Bar mine operating results 54

Exploration Activities - Nevada 55

Canada Segment 55

Fox Complex, Black Fox mine and Froome mine development 55

Froome Underground Mine Development 56

Exploration Activities and Expansion Study - Timmins 57

Mexico Segment 58

El Gallo Project operating results 58

Advanced-Stage Properties – Fenix Project 59

MSC Segment, Argentina 60

MSC operating results 60

McEwen Copper Inc 61

Los Azules Project 61

Commitments and Contingencies 62

Non-GAAP Financial Performance Measures 63

Critical Accounting Estimates 68

Forward Looking Statements 70

Risk Factors Impacting Forward-Looking Statements 71

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2021 AND Q4/21 OPERATING AND FINANCIAL HIGHLIGHTS

Highlights for the year and quarter ended December 31, 2021, are summarized below and discussed further in the Consolidated Financial Performance:

Corporate Developments

Cash Flow and Results of Operations

Exploration and Mineral Resources and Reserves

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(1) At our 49% attributable interest.

SELECTED CONSOLIDATED FINANCIAL AND OPERATING RESULTS

The following tables present selected financial and operating results of our company for the three months ended December 31, 2021 and 2020 and for the years ended December 31, 2021, 2020, and 2019:

Three months ended December 31, Year ended December 31,

(in thousands, except per share)

Three months ended December 31, Year ended December 31,

(in thousands, except per ounce)

Cash cost per ounce ($/Au Eq. oz sold):(2)

AISC per ounce ($/Au Eq. oz sold):(2)

(3) On sales from 100% owned operations only, excluding streaming arrangement.

(4) Average for the quarter or year as presented.

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CONSOLIDATED PERFORMANCE

For the year ended December 31, 2021, we reported a net loss of $56.7 million (or $0.12 per share) compared to a net loss of $152.3 million (or $0.38 per share) for the year ended December 31, 2020. The year over year improvement in net loss was primarily due to no impairment in 2021, unlike 2020 where a non-cash impairment charge of $83.8 million at Gold Bar was recorded. In addition, the improvement was a result of an increase in revenue of $31.8 million resulting from a 30% increase in gold equivalent ounces sold and average realized price of $1,803 that was $32 per gold equivalent ounce higher than 2020, partially offset by a $10.4 million increase in cost of sales due to higher mining costs, $6.7 million increase in exploration spending, $6.0 million increased loss from MSC, and higher corporate costs related to insurance premiums and other employee costs. MSC’s results declined in 2021 due to higher production costs attributable to COVID-19 and an overall increase in ounces sold.

Cash gross profit of $17.3 million for 2021 increased by $21.3 million compared to a gross cash loss of $4.0 million in 2020, mainly as the result of an increase in production and revenue partially offset by the increased operating costs stemming from higher production levels. Improved operations at Gold Bar and the quicker than planned ramp up of production from Froome at the Fox Complex, contributed to the improved Cash gross profit. See “Non-GAAP Financial Performance Measures” for a reconciliation to gross (loss) profit, the nearest GAAP measure.

Production from our 100% owned mines of 77,553 gold equivalent ounces in 2021 increased by 17,210 gold equivalent ounces compared to 2020. The increase is attributed to a full year of normal operations, operational improvements at Gold Bar, the ramp up ahead of schedule to commercial production at Froome, offset by lower than planned residual leach production from the El Gallo Project, which produced approximately 4,500 fewer gold equivalent ounces in 2021 than 2020.

Our share of the San José mine production of 76,839 gold equivalent ounces in 2021 was 22,339 ounces higher than in 2020. This increase is attributable to operating at normal capacity in 2021 due to the government lifting restrictions from COVID-19.

CONSOLIDATED FINANCIAL REVIEW

Year ended December 31, 2021 compared to 2020

Revenue from gold and silver sales in 2021 of $136.5 million increased by 30% compared to 2020. The increase reflects 16,661 more gold equivalent ounces sold from our 100% owned mines in 2021 compared to 2020, and a higher average realized price of $1,803 per gold equivalent ounce or $32 per gold equivalent ounce increase year over year.

The increase in gold equivalent ounces sold for the full year 2021 includes 4,958 more gold equivalent ounces sold from the Black Fox mine, 16,098 more gold equivalent ounces sold from the Gold Bar mine, all partially offset by 4,395 fewer gold equivalent ounces sold from the El Gallo Project as these operations continue to wind down.

Production costs applicable to sales in 2021 increased by 9.6% to $119.2 million compared to 2020. The increase was primarily due to an increase in gold equivalent ounces sold during the year.

Advanced projects of $12.4 million for 2021 increased by $0.7 million compared to 2020. Advanced projects in 2021 included continued spending for the Preliminary Economic Assessment of the Fox Complex expansion, the engineering and permitting work at the Gold Bar South property in Nevada, the Fenix project in Mexico, and the Los Azules project in Argentina.

Exploration costs of $22.6 million for 2021 increased by $6.7 million compared to 2020. Exploration activities ramped up during 2021 following the funding received from our flow-through share sales completed in September and December 2020. The funds are being used to expand high potential target areas in the Timmins region of Ontario.

General and administrative expenses of $11.4 million for 2021 increased by $2.2 million, compared to 2020, due to higher insurance premiums, corporate fees and other employee costs during the period ending December 31, 2021.

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Loss from investment in MSC of $7.5 million in 2021, increased by $6.0 million compared to 2020. MSC’s results declined in 2021 due to higher production costs applicable to sales due to COVID-19 and an overall increase in production arising from increased production and higher taxes for the year.

Revision of estimates and accretion of reclamation and remediation obligations of $3.5 million in 2021, increased by $1.7 million from 2020. This year over year increase was due to reclamation adjustments reflecting updates to existing estimates.

Other income was $6.3 million for 2021 compared to $6.9 million for 2020. Other income in 2021 and 2020 includes proceeds received from COVID-19 relief funds and 2021 also includes the sale of property in Nevada to a third party.

Income and mining tax recovery of $7.3 million for 2021 increased by $5.9 million from 2020. The increase in the tax recovery is primarily due to the flow-through share premium amortization and by a change in the valuation allowance mainly caused by the fluctuating Argentine and Mexican pesos against the U.S. dollar, causing fluctuations to the Company’s deferred tax liabilities denominated in the respective foreign currency.

LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents balance on December 31, 2021 of $54.3 million increased by $33.5 million from the balance at December 31, 2020. The increase in cash and cash equivalents for the year ended December 31, 2021, was primarily driven by the cash received from financing activities of $81.0 million during 2021, of which $42.6 million related to funds raised for McEwen Copper. This was offset by additions to our mineral property, plant, and equipment of $34.9 million.

Cash used in operations of $20.2 million in 2021 decreased from $27.9 million in 2020. The $7.7 million variance is primarily driven by the $11.6 million reduction in net loss compared to 2020 after adjusting for the 2020 impairment charge.

Cash used in investing activities of $24.6 million in 2021 increased from $11.8 million from 2020. The change is attributed to the increased capital development costs incurred as commercial production was reached for the Froome mine deposit at the Fox Complex during 2021. This was partially offset by $9.8 million in dividends received from MSC during 2021 compared to $0.3M in 2020.

During 2021, we spent $34.9 million on mineral property interests and plant and equipment representing an increase of $21.5 million from the year 2020. The additions were primarily, related to capital development costs at the Froome Project as we reached commercial production during 2021.

Cash from financing activities provided $81.0 million in 2021 compared to $17.6 million in 2020. The significant increase arose from $12.0 million from the CDE flow-through share raise completed in January 2021, $29.9 million from the registered direct common stock offering in February 2021, and $42.6 million from proceeds received from the selling of 18.6% interest in McEwen Copper.

Cash from financing activities included net proceeds of $12.0 million (gross proceeds of $12.7 million) from the issuance of Canadian Development Expenditures (“CDE”) flow-through shares on January 29, 2021, and gross proceeds of $31.5 million (net proceeds of $29.9 million) from a registered direct equity offering on February 9, 2021. We are required to spend the flow-through share proceeds on CDE flow-through eligible expenditures as defined by subsection 66.2(5) of the Income Tax Act (Canada). For more details on our flow-through share financing, refer to Note 13 to the Consolidated Financial Statements, Shareholders’ Equity.

In addition, we received proceeds in the amount of $40.0 million relating to the first tranche of the series B private placement for McEwen Copper and $2.6 million received in advance from the ongoing second tranche financing. As of December 31, 2021, McEwen Mining controls 81.4% of the common shares outstanding of McEwen Copper. For more details refer to Note 20 to the Consolidated Financial Statements, Non-Controlling Interests. The proceeds received from

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the financing activities for McEwen Copper will be used to conduct economic studies on the Los Azules project in Argentina.

Working capital as at December 31, 2021 of $32.6 million increased by $24.7 million from December 31, 2020. The change is attributed to the increase in cash and cash equivalents arising from the financing activities related to flow-through shares and sale of shares of McEwen Copper discussed above.

The Company have sufficient liquidity along with funds generated from ongoing operations to fund anticipated cash requirements for operations, capital expenditures and working capital purposes for the next 12 months.

OPERATIONS REVIEW

U.S.A. Segment

The U.S.A. segment is comprised of the Gold Bar mine and certain exploration properties.

Gold Bar mine

The following table sets out operating results for the Gold Bar mine for the three months and year ended December 31, 2021, compared to 2020 and 2019:

Three months ended December 31, Year ended December 31,

Operating Results (in thousands, unless otherwise indicated)

Gold ounces:

Silver ounces:

Sold — — — 0.6 0.3

Gold equivalent ounces:

2021 compared to 2020

Gold Bar produced 9,965 and 43,894 gold equivalent ounces in Q4/21 and the full year 2021. This represents a 69% and 57% increase from the 5,900 and 27,923 gold equivalent ounces produced in Q4/20 and the full year 2020, respectively. The increase was largely due to improvements in contractor mining efficiencies, processing, and ore control realized in the full year 2021. The full year 2020 production results were negatively impacted by COVID-19 related suspensions and a decrease in the grade of ore mined and processed.

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Revenue from gold and silver sales was $18.3 million in Q4/21 compared to $10.8 million in Q4/20. The increase in revenues in was due to an increase in ounces sold during Q4/21 bolstered by higher average realized gold prices relative to Q4/20 ($1,910 per GEO in Q4/21; $1,888 per GEO in Q4/20). Revenue from gold and silver sales was $79.2 million for the full year 2021 compared to $48.9 million for the full year 2020, the increase was primarily due to improved heap leach operating efficiencies realized in 2021. During the year 2021, there was no material adverse COVID-19 impact on the operations of Gold Bar compared to suspension of operations related to COVID-19 in 2020.

Production costs applicable to sales were $20.6 million in Q4/21 compared to $19.6 million in Q4/20. The increase is primarily due to higher cost of precious metal inventories sold during the Q4/21 that were historically carried at higher costs at Gold Bar. Production costs applicable to sales were $74.0 million for the full year 2021, compared to $58.5 million for the full year 2020, attributable to primarily a 26% year over year increase in gold equivalent ounces sold that were historically carried at higher costs.

Cash cost and AISC per gold equivalent ounce sold were $2,038 and $2,104 in Q4/21 respectively compared to $3,439 and $3,726 in Q4/20 respectively. The decrease was primarily due to lower mining cost as a result of mined waste materials decreased by 47% compared to Q4/20.

Cash cost and AISC per gold equivalent ounce sold were $1,687 and $1,753 for the full year 2021 respectively compared to $2,106 and $2,459 for the full year 2020 respectively. The year-over-year decrease was primarily due higher gold equivalent ounces produced and sold from the stacked heap leach pad.

Exploration Activities – Nevada

In Q4/21 and full year 20/21, we incurred $1.5 million and $4.2 million, respectively compared to $1.0 million and $5.1 million in Q4/20 and full year 2020, respectively in exploration expenditures in the Gold Bar mine area. In Q4/21, core drilling resumed in the North Ridge, SW Pick, and Cabin North areas. The permitting process to access ore at Gold Bar South is ongoing and we are anticipating receiving the permit in Q1/22. The initiation of gold production of Gold Bar South is planned in H2/22.

The exploration activities in 2021 included metallurgical, geotechnical and drilling programs for a cumulative 8,620 feet (2,627m) at Ridge and Tonkin Rooster. Delineation drilling programs were conducted at Atlas Pit, SW Pick Extension, and Cabin North with cumulative 8,629 feet (2,632m) completed. Delineation drilling at Cabin North and Pick SW Extension is ongoing.

Canada Segment

The Canada segment is comprised of the Fox Complex, which includes the Black Fox gold mine, the Froome mine, the Stock mill, the Grey Fox and Stock West advanced-stage projects, and other gold exploration properties located in Timmins, Ontario, Canada.

Fox Complex, Black Fox mine and Froome mine development

Black Fox mine production wound down during 2021 as production shifted to the Froome Mine. We realized a milestone on September 19, 2021 when commercial production was reached at the Froome mine, three months ahead of schedule.

On January 26, 2022, we announced the results of our PEA of the Fox Complex. The PEA presents estimates for a positive business case for the Fox Complex expansion project, with potential average gold production of 80,800 oz per year over nine years, after the depletion of Froome. Economic analysis estimate an IRR of 21% at a gold price of $1,650/oz, and average cash costs and AISC of $769/oz and $1,246/oz, respectively. Additional exploration work on the Fox Complex properties will be conducted through 2022 to support ongoing studies necessary for approval of the expansion project. No decision has been made to pursue development of any of these additional projects.

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The following table sets out operating results for the Black Fox and Froome mine for the three months ended December 31, 2021, and 2020, and the years ended December 31, 2021, 2020, and 2019:

Three months ended December 31, Year ended December 31,

Operating Results (in thousands, unless otherwise indicated)

Gold equivalent ounces:

2021 compared to 2020

Production in Q4/21 and for the full year 2021 from the Black Fox and Froome mines was 9,458 and 30,016 gold equivalent ounces, respectively compared to 8,049 and 24,353 gold equivalent ounces in Q4/20 and the full year 2020, respectively. The increase in production is attributable to the better than expected production from Froome mine. The Froome mine produced 9,458 and 24,289 gold equivalent ounces in Q4/21 and the full year 2021, respectively. The increase in gold equivalent ounces produced was primarily due to higher ore mined and milled. During the Q4/2021, Black Fox and Froome mined 122,195 tonnes of ore compared with 61,604 tonnes of ore mined at the Black Fox mine during Q4/20.

Revenue from gold and silver sales increased in Q4/21 and the full year 2021 by $1.5 million, or 11% and $9.3 million or 22%, respectively, compared to Q4/20 and the full year 2020. Increase was primarily due to higher gold equivalent ounces produced and sold and average realized gold price per ounce that increased from $1,888 and $1,771 in Q4/20 and the full year 2020, respectively to $1,806 and $1,803 in Q4/21 and the full year 2021, respectively.

Production costs applicable to sales were $10.3 million and $33.0 million in Q4/21 and the full year ended December 31, 2021, respectively compared to $10.4 million and $34.6 million in Q4/20 and the full year ended December 31, 2020, respectively. The decrease in production costs are primarily due to higher ounces produced and lower costs of consumables supplies as production ramped up at the Froome mine.

Cash cost and AISC per gold equivalent ounce sold were $1,122 and $1,760 in Q4/21, respectively, compared to $1,307 and $1,439 in Q4/20, respectively. The decrease in cash costs per gold equivalent ounce sold for Q4/21 was driven by the decrease in the mining costs. Mining costs per tonne decreased from $90 per tonne in Q4/20 to $71 per tonne in Q4/21. The increase in AISC per gold equivalent ounce sold over Q4/20 was primarily due to higher gold equivalent ounce sold and $5.3 million in sustaining capital costs incurred relating to the Froome mine development coming into commercial production three months ahead schedule.

For the full year 2021, Cash cost and AISC per gold equivalent ounce sold were $1,108 and $1,461 , respectively compared to $1,397 and $1,650 for the full year 2020. The decrease in cash cost per gold equivalent ounces was primarily due to lower mining costs and higher ounces. During the full year 2021, mining costs were $77 per tonne compared to $102 per tonne in the full year 2020. The decrease in costs per tonne was primarily due to 54% greater tonnes mined with Froome mine coming into commercial production and lower maintenance costs. The decrease in AISC per gold equivalent ounce

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sold was primarily due to higher ounces sold and less sustaining capital spending during 2021 due to winding down of the Black Fox mine.

Froome Underground Mine Development

The Froome mine, which is part of the overall Fox Complex, is accessed from two declines at the bottom of the Black Fox pit and situated approximately one-half mile west of the ceased Black Fox mine. As was the case with the Black Fox deposit, the mineralized material from Froome is hauled approximately 20 miles to the Stock mill for processing.

On September 19, 2021, we successfully reached commercial production Froome, three months ahead of schedule. To date, ore extracted from the Froome mine produced grades that are consistent with the resources model and mine plan. Encouraging drill results from near-mine exploration activities were also obtained. Exploration initiatives near the Froome mine are designed to extend the mine life and resource.

We are targeting higher production and lower cost profiles at the Fox Complex. The intention is to leverage the potential for operational synergies through shared resources and infrastructure, longer life of mine and expanded production scale for the combined projects.

Exploration Activities and Expansion Study – Timmins

We remain focused on our principal exploration goal of cost-effectively discovering and extending gold deposits adjacent to our existing operations to contribute to near-term gold production. For exploration initiatives at the Fox Complex, we incurred $2.5 million and $15.0 million in Q4/21 and the full year 2021 respectively, compared to $2.0 million and $6.5 million in Q4/20 and the full year 2020.

Exploration activities ramped up as a result of proceeds received from the flow-through share programs in 2020. We focused the proceeds on exploration work around the Grey Fox, Stock West, and Stock Main (historical mine) targets. Specifically, we conducted surface gold exploration activities throughout Q4 2021, and drilling shallow targets close to the Stock Mill.

Black Fox mine

Before Black Fox ceased operations in September 2021, it continued to deliver high grade assay results from underground drilling completed between Q1 and Q3 of 2021. The focus of 2021 underground drilling was to add resources in areas that could extend the life of mine. There is potential to extend mineralization to greater depths as well as towards the western margin of the ore body.

Froome mine

Diamond drilling from underground at Froome continued in Q4/21. Three drilling rigs combined to generate 13,051 meters of core over the 3-month period. Our total underground definition, delineation, and exploration drilling generated 65,310 meters of core for the year.

Stock & Grey Fox property

The Stock exploration area sits adjacent to our Stock mill, which currently processes ore from our Black Fox and Froome mines. This facility processed ore from the historical underground Stock mine, which operated intermittently by a third party from the early 1980s until 2004, generating a total of 137,000 ounces of gold.

The Company focused its surface gold exploration activities throughout Q4/2021 on drilling shallow targets situated close to the Stock Mill, old stock mine workings and proximal to the new Stock decline proposed in the Fox Complex PEA. Three contracted drilling rigs combined to generate 9,239 meters of core over the 3-month period with assays pending.

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This brought our annual total to 77,670 meters from the 185 surface holes drilled within the Fox Complex exploration properties.

Initial gold resources that will contribute to our growth plans have been outlined.

Additional highlights include:

Mexico Segment

The Mexico segment includes the El Gallo Project (formerly “El Gallo 1” or “El Gallo Mine”) and the advanced-stage Fenix Project, located in Sinaloa.

El Gallo Project

Current activities at the El Gallo Project are limited to residual leaching as part of closure and reclamation plans.

The following table summarizes certain operating results at the El Gallo Project for the three months ended December 31, 2021, and 2020, and for the years ended December 31, 2021, 2020, and 2019:

Three months ended December 31, Year ended December 31,

Operating Results (in thousands, unless otherwise indicated)

Gold ounces:

Silver ounces:

Gold equivalent ounces:

Cash costs and All-in-sustaining costs and Cash costs and AISC per gold equivalent ounce

As the El Gallo Project’s gold and silver production and sales result from residual leaching activities, we have ceased relying on, and disclosing, cash cost and AISC per gold equivalent ounce as key metrics for the operation.

Incremental residual leaching costs, that included production costs less inventory movements, for Q4/21 and the full year 2021 were $0.8 million and $3.5 million or $2,557 and $1,738 per gold equivalent ounce, respectively. This resulted in a $3.3 million write-down of the heap leach and in-circuit inventory balances during the full year 2021.

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2021 compared to 2020

Production and revenue decreased, as expected, in Q4/21 and for the full year 2021 compared to Q4/20 and the full year 2020, as the heap leach operation continues to wind down. This was partially offset by higher average realized gold prices during Q4/21 and the full year 2021 compared to Q4/20 and the full year 2020.

Advanced-Stage Properties – Fenix Project

In December 2020, we announced the positive results of a feasibility study for the development of our 100%-owned Fenix Project, which includes the El Gallo Gold and El Gallo Silver deposits.

The study envisions a 9.5-year mine life with an attractive after-tax IRR of 28% using $1,500/oz gold and $17/oz silver, with an estimated initial capital expenditure of $42.0 million for Phase 1 and $24.0 million for Phase 2. The project implementation is envisioned in two distinct phases: Phase 1 (years 1 to 6) - gold production from heap leach reprocessing, and Phase 2 (years 7 to 10) - silver production from open pit mining. No development decision has been made with regard to this project.

The Fenix Project feasibility study was published on February 16, 2021 and is available for review on our website and SEDAR (www.sedar.com).

The key environmental permits for Phase 1 were received in 2019, including the approval for an in-pit tailings storage facility and process plant construction.

We incurred $0.2 million and $1.8 million in Q4/21 and the full year 2021, respectively, ($0.9 million and $2.5 million in Q4/20 and full year 2020, respectively) on activities required to advance the Fenix Project. Multiple strategic alternatives are being evaluated, including assessing lower capital cost alternatives for Fenix, developing a plan to define the base metal potential for the district, and possible divestiture of our Mexican business unit.

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MSC Segment, Argentina

The MSC segment is comprised of a 49% interest in the San José mine, located in Santa Cruz, Argentina.

MSC – Operating Results

The following table sets out operating results for the San José mine for the three months ended December 31, 2021 and 2020, and for the years ended December 31, 2021, 2020, and 2019.

Three months ended December 31, Year ended December 31,

Operating Results (in thousands, except otherwise indicated)

San José Mine—100% basis

Average grade mined (gpt)

Average grade processed (gpt)

Average recovery (%):

Gold ounces:

Silver ounces:

Gold equivalent ounces:

Average realized price:

The comparative analysis below compares the operating and financial results of MSC on a 100% basis.

2021 compared to 2020

Gold and silver production increased in Q4/21 by 30% and 28% respectively, compared to Q4/20. The increase arose from an increase in mined and processed mineralized material in addition to higher processed grades. Operations in Q4/20 were limited due to a decrease in available staff and restrictions in travel mandated by provincial and federal authorities to limit the spread of COVID-19. As of Q4/21, some of these restrictions have been lifted, allowing staff to mobilize to and from the site.

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Gold and silver production increased for the full year 2021 by 29% and 28%, respectively, compared to the full year 2020 as a result of a 34% increase in processed mineralized material, offset by a 4% decrease in silver grade and a 2% decrease in gold grade of the mineralized material processed in 2021. As previously discussed, mining and mill throughput was limited for the full year 2020 due to COVID-19 restrictions.

Revenue from gold and silver sales increased by 18% and 24% in Q4/21 and for the full year 2021 compared to Q4/20 and the full year 2020. This increase arose primarily from an increase in gold equivalent ounces sold for the full year 2021. Revenues on concentrate sales include provisional sales adjustments which contributed to the decreased per ounce average realized price per GEO Q4/21.

Cash costs in Q4/21 and the full year 2021 increased by $32.9 million and $57.9 million, or 87% and 42% respectively compared to Q4/20 and the full year 2020. The change is attributable to the increase in mineralized material processed arising from increased production and sales during 2021. In addition, MSC expended a significant amount in extra costs for COVID-19 risk mitigation activities during Q4/21 including alternative housing, testing, and travel arrangements.

All-in sustaining cost per gold equivalent ounce increased in Q4/21 compared to Q4/20 as a result of the above discussion and remained consistent for the full year 2021 compared to the full year 2020.

Investment in MSC

We recognized losses of $2.5 million and $7.5 million during Q4/21 and for the full year 2021 respectively attributable to our 49% share of operations from our investment in MSC. A loss of $0.4 million was recognized in Q4/20 while a loss of $1.5 million was recognized for the full year 2020. The change in Q4/21 compared to Q4/20 arose from a $15.1 million decrease in gross profits largely attributed to the COVID-19 expenditures during Q4/21.

Exploration activities were focused on the Telken Norte and Saavedra near-mine targets. Drilling is expected to continue through 2022.

MSC Dividend Distribution (49%)

We received $2.3 million and $9.8 million in dividends from MSC during Q4/21 and the full year 2021 respectively, compared to $0.3 million received during the comparative periods in 2020.

McEwen Copper Inc.

In 2021 we established McEwen Copper Inc. (“McEwen Copper”), originally a wholly-owned subsidiary of Minera Andes Inc. (“MAI”), a wholly-owned subsidiary of the Company. McEwen Copper holds a 100% interest in the Los Azules copper project in the province of San Juan, Argentina, and the Elder Creek exploration property in Nevada. On August 23, 2021, we successfully closed the first tranche of the private placement, a $40 million investment from an affiliate of our Chairman and CEO, Rob McEwen. MAI now owns 81.4% of McEwen Copper following the completion of the private placement.

McEwen Copper intends to pursue an initial public listing within 12 months of the completion of the private placement transaction.

Los Azules Project

The Los Azules project is one of the world’s largest undeveloped open-pit copper porphyry deposits and is located in San Juan, Argentina. The total indicated and inferred mineral resources are estimated at 10.2 and 19.3 billion lbs. of copper respectively. A PEA was completed on the Los Azules project in 2017.

Work has progressed rapidly following the closing of the first tranche of the private placement. Drill crews were mobilized to site in Q4/21 to begin a 174,000 ft (53,000m) phase one drill program that is expected to run through the end of Q2/22. In the future, the Company anticipates completing a road that will allow for year-round access to the project for drilling

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and other activity. The program’s focus will be to confirm the existing indicated mineral resource and upgrade areas currently classified as inferred to indicated. Drilling necessary to complete geo-metallurgical and geotechnical evaluations is also included in the program that will be conducted by an established and well-recognized drilling contractor employing the local workforce.

Historically, drilling has been conducted at Los Azules with vertical drill holes. Given there is structural and lithologic features (faults, contacts, hydrothermal breccia) that are sub-vertical to vertical in orientation, the phase one and subsequent drill programs will focus on drilling inclined holes typically dipping between -70 and -80 degrees. This will ensure many more of these features will be intersected, observed and captured in databases. This information will be useful in further fixing the location of geological and other domains necessary to strengthen the geologic and resource models.

In addition to the planned drill program, technical teams will also utilize borehole televiewer technologies to supplement the capture of geotechnical information. Two hyperspectral scanning units are also being deployed to capture data from the existing suite of core stored at Calingasta and new core drilled in the current program. In all, 100,000 meters of core will be analyzed to ensure greater consistency of core logging and to help resolve areas of lithologic or alteration-related uncertainty. Together, this work will support the creation of a significantly improved multi-element litho-structural model.

Construction has begun on the new access road that will provide year-round access to the project. To date, construction has advanced 11 miles from the east (72-mile planned length). As part of our ongoing involvement with local communities and entrepreneurs, local contractors are being sourced for the construction.

During the year ended December 31, 2021, we spent $5.0 million, mainly on advancing on the project. In the comparative period of 2020, the Company spent $2.1 million on activities to progress access and site preparation and detailed engineering plans.

Please refer to our website at www.mcewenmining.com for further details.

COMMITMENTS AND CONTINGENCIES

As of December 31, 2021, we have the following consolidated contractual obligations:

Payments due by period

(1) Amounts presented represent the undiscounted uninflated future payments.

Operating lease obligations include long term leases covering office space, exploration expenditures, option payments and option payments on properties.

We have surety bonds outstanding to provide bonding for our environmental reclamation obligations in the United States and Canada. These surety bonds are available for draw down in the event we do not perform our reclamation obligations. If the bond is drawn, we would be obligated to reimburse the surety. When the specific reclamation requirements are met, the beneficiary of the surety bonds will cancel and/or return the instrument to the issuing entity. As of December 31, 2021, no additional liability has been recognized for our surety bonds of $37.7 million.

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NON-GAAP FINANCIAL PERFORMANCE MEASURES

We have included in this report certain non-GAAP performance measures as detailed below. In the gold mining industry, these are common performance measures but do not have any standardized meaning and are considered non-GAAP measures. We believe that, in addition to conventional measures prepared in accordance with GAAP, certain investors use such non-GAAP measures to evaluate our performance and ability to generate cash flow. We also report these measures to provide investors and analysts with useful information about our underlying costs of operations and clarity over our ability to finance operations. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. There are limitations associated with the use of such non-GAAP measures. We compensate for these limitations by relying primarily on our U.S. GAAP results and using the non-GAAP measures supplementally.

The non-GAAP measures are presented for our wholly owned mines and our interest in the San José mine. The GAAP information used for the reconciliation to the non-GAAP measures for our minority interest in the San José mine may be found in Item 8. Financial Statements and Supplementary Data, Note 10, Investment in Minera Santa Cruz S.A. (“MSC”)– San José Mine. The amounts in the tables labeled “49% basis” were derived by applying to each financial statement line item the ownership percentage interest used to arrive at our share of net income or loss during the period when applying the equity method of accounting. We do not control the interest in or operations of MSC and the presentations of assets and liabilities and revenues and expenses of MSC do not represent our legal claim to such items. The amount of cash we receive is based upon specific provisions of the Option and Joint Venture Agreement (“OJVA”) and varies depending on factors including the profitability of the operations.

The presentation of these measures including the minority interest in the San José, has limitations as an analytical tool. Some of these limitations include:

Cash Gross Profit

Cash gross profit is a non-GAAP financial measure and does not have any standardized meaning. We use cash gross profit to evaluate our operating performance and ability to generate cash flow from mining operations; we disclose cash gross profit or loss as we believe this measure provides valuable assistance to investors and analysts in evaluating our ability to finance our ongoing business and capital activities. The most directly comparable measure prepared in accordance with GAAP is gross profit or loss. Cash gross profit or loss is calculated by adding depletion and depreciation to gross profit or loss.

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The following tables present a reconciliation of cash gross profit or loss to the most directly comparable GAAP measure, gross profit or loss:

Year ended December 31, 2021

Gold Bar Fox Complex El Gallo Total (100% owned)

(in thousands)

Add: Depreciation and depletion 8,502 15,296 — 23,798

Three months ended December 31, Year ended December 31,

(in thousands)

San José mine cash gross profit (100% basis)

Year ended December 31, 2020

Gold Bar Fox Complex El Gallo Total (100% owned)

(in thousands)

Year ended December 31, 2019

Gold Bar Fox Complex El Gallo Total (100% owned)

(in thousands)

Cash Costs and All-In Sustaining Costs

The terms cash costs, cash cost per ounce, all-in sustaining costs (“AISC”), and all-in sustaining cost per ounce used in this report are non-GAAP financial measures. We report these measures to provide additional information regarding operational efficiencies on an individual mine basis, and believe these measures provide investors and analysts with useful information about our underlying costs of operations.

Cash costs consist of mining, processing, on-site general and administrative expenses, community and permitting costs related to current operations, royalty costs, refining and treatment charges (for both doré and concentrate products), sales costs, export taxes and operational stripping costs, but exclude depreciation and amortization (non-cash items). The sum of these costs is divided by the corresponding gold equivalent ounces sold to determine a per ounce amount.

All-in sustaining costs consist of cash costs (as described above), plus accretion of retirement obligations and amortization of the asset retirement costs related to operating sites, environmental rehabilitation costs for mines with no reserves, sustaining exploration and development costs, sustaining capital expenditures and sustaining lease payments. Our all-in sustaining costs exclude the allocation of corporate general and administrative costs. The following is additional information regarding our all-in sustaining costs:

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The sum of all-in sustaining costs is divided by the corresponding gold equivalent ounces sold to determine a per ounce amount.

Costs excluded from cash costs and all-in sustaining costs, in addition to depreciation and depletion, are income and mining tax expense, all corporate financing charges, costs related to business combinations, asset acquisitions and asset disposal, and any items that are deducted for the purpose of normalizing items.

The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measure, production costs applicable to sales; the El Gallo Project results are excluded from this reconciliation for 2021 and 2020 as the economics of residual leaching operations are measured by incremental revenue exceeding incremental costs. Cash costs and AISC include, in addition to current period residual leaching costs, prior-year leach pad inventory costs expensed in the current period, with the latter not relevant on the evaluation of the residual leaching operations. Residual leaching costs for the year ended December 31, 2021 were $9.3 million or $2,543 per gold equivalent ounce. For this reason, we have ceased relying on, and disclosing, cash cost and all-in sustaining cost per gold equivalent ounce as key metrics for the El Gallo Project:

Three months ended December 31, 2021 Year ended December 31, 2021

Gold Bar Fox Complex Total Gold Bar Fox Complex Total

(in thousands, except per ounce) (in thousands, except per ounce)

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Three months ended December 31, 2020 Year ended December 31, 2020

Gold Bar Fox Complex Total Gold Bar Fox Complex Total

(in thousands, except per ounce) (in thousands, except per ounce)

Year ended December 31, 2019

Gold Bar Fox Complex El Gallo Total

(in thousands, except ounces and per ounce)

In‐mine exploration — 3,726 — 3,726

Ounces sold, including stream (Au Eq. oz) 30.5 37.7 16.9 85.1

Cash cost per ounce ($/Au Eq. oz sold) $ 1,101 $ 825 $ 1,097 $ 978

Three months ended December 31, Year ended December 31,

San José mine cash costs (100% basis) (in thousands, except per ounce)

Average realized prices

The term average realized price per ounce used in this report is also a non-GAAP financial measure. We prepare this measure to evaluate our performance against market (London P.M. Fix). Average realized price is calculated as gross sales of gold and silver, less streaming revenue, divided by the number of net ounces sold in the period, less ounces sold under the streaming agreement.

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The following table reconciles this non-GAAP measure to the most directly comparable U.S. GAAP measure, revenue from gold and silver sales. Ounces of gold and silver sold for the San José mine are provided to us by MSC.

Three months ended December 31, Year ended December 31,

Average realized price - 100% owned (in thousands, except per ounce)

Less: gold ounces sold, stream 0.7 0.6 2.3 2.1 2.8

Three months ended December 31, Year ended December 31,

Liquid assets

The term liquid assets used in this report is also a non-GAAP financial measure. We report this measure to better understand our liquidity in each reporting period.

Liquid assets are calculated as the sum of the Balance Sheet line items of cash and cash equivalents, restricted cash and investments, plus ounces of doré held in precious metals inventories valued at the London PM Fix spot price at the corresponding period. The following table summarizes the calculation of liquid assets as of December 31, 2021 and 2020:

December 31,

(in thousands)

Investments 1,806 —

Precious Metals valued at market value (1)(2) 1,018 1,412

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CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING DEVELOPMENTS

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in conformity with U.S. GAAP. The preparation of these statements requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We base these estimates on historical experience and on assumptions that we consider reasonable under the circumstances; however, reported results could differ from those based on the current estimates under different assumptions or conditions. The summary of our significant accounting policies is detailed in Note 2 of the Consolidated Financial Statements.

We believe that significant areas requiring the use of management estimates and assumptions relate to environmental reclamation and closure obligations; asset useful lives utilized for depletion, depreciation, amortization and accretion calculations; the fair value of equity investments and asset groups used in impairment testing; recoverable gold in leach pad inventory; current and long-term inventory and mine development capitalization costs; the collectability of value added taxes receivable; fair values of assets and liabilities acquired in business combinations; reserves; valuation allowances for deferred tax assets; income and mining tax provisions and reserves for contingencies and litigation. There are other items within our financial statements that require estimation but are not deemed to be critical. However, changes in estimates used in these and other items could have a material impact on our financial statements. In the section below we identify estimates critical to the understanding of our financial condition and results of operations and that require the application of significant management judgment.

Asset Retirement Obligation, Reclamation and Remediation Costs: The Company records the fair value of a liability for an asset retirement obligation (“ARO”) in the period that it is incurred if a reasonable estimate of fair value can be made. The Company prepares estimates of the timing and amounts of expected cash flows when an ARO is incurred, which are updated to reflect changes in facts and circumstances. Estimation of the fair value of AROs requires significant judgment, including amount of cash flows, timing of reclamation, inflation rate and credit risk. Accrued reclamation and closure costs can represent a significant and variable liability on our balance sheet. The company has estimated its liabilities under appropriate accounting guidance, and review its liabilities on at least an annual basis. However, the ranges of liability could exceed the liabilities recognized. If substantial damages were awarded, claims were settled, or remediation costs were incurred in excess of our accruals, our financial results or condition could be materially adversely affected.

Mineral Property Interests, Plant and Equipment and Mine Development Costs: The Company amortizes its mineral property interests, plant and equipment, and mine development costs using the most appropriate method, which includes the units-of-production method over the estimated life of the mine or ore body based on recoverable ounces to be mined from proven and probable reserves, or the straight-line method over the useful life. The accounting estimates related to amortization are critical accounting estimates because (1) the determination of reserves involves uncertainties with respect to the ultimate geology of its reserves and the assumptions used in determining the economic feasibility of mining those reserves and (2) changes in estimated proven and probable reserves and asset useful lives can have a material impact on net (loss) income.

Estimates regarding mine development capitalization costs involve the determination of proven and probable reserves.

Impairment of Long-lived Assets: The Company reviews and evaluates its long-lived assets for impairment 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 fair value.

For asset groups where an impairment loss is determined using the discounted future net cash flows method or discounted future net cash flows method, future cash flows are estimated based on quantities of recoverable mineralized material, expected gold and silver prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term “recoverable mineralized material” refers to the estimated amount of gold or other commodities that will be obtained after considering losses during processing and treatment. The Company’s estimates of future cash flows are based on numerous assumptions and uncertainties. It is possible that actual future cash flows will be significantly different than the estimates, as actual

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future quantities of recoverable minerals, gold, silver and other commodity prices, production levels and costs of capital are each subject to significant risks and uncertainties.

Stockpiles, Material on Leach Pads, In-process Inventory, Precious Metals Inventory and Materials and Supplies: Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, an estimate of the contained metals (based on assay data) and the estimated metallurgical recovery rates. Costs are allocated to stockpiles based on current mining costs incurred including applicable overhead relating to mining operations.

Costs are attributed to the mineralized material on leach pads based on current mining costs incurred up to the point of placing the ore on the pad. Costs are removed from the leach pad inventory based on the average cost per estimated recoverable ounce of gold on the leach pad as the gold is recovered. The estimates of recoverable gold on the leach pads are calculated from the quantities of mineralized material placed on the leach pads (measured tonnes added to the leach pads), the grade of mineralized material placed on the leach pads (based on assay data) and a recovery percentage.

Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on the pads to the quantities of gold recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored, and the engineering estimates are refined based on actual results over time.

In-process material is measured based on assays of the material from the various stages of processing. Costs are allocated to in-process inventories based on the costs of the material fed into the process attributable to the source material coming from the mines, stockpiles and/or leach pads plus the in-process conversion costs incurred to that point in the process.

Costs are allocated to precious metal inventories based on costs of the respective in-process inventories incurred prior to the refining process plus applicable refining costs.

The assumptions used by the Company to measure metal content during each stage of the inventory conversion process includes estimated recovery rates based on laboratory testing and assaying. The Company periodically reviews its estimates compared to actual experience and revises its estimates when appropriate. The ultimate recovery will not be known until leaching operations cease.

Proven and Probable Reserves: Critical estimates are inherent in the process of determining the Company’s reserves. The Company’s reserves are affected largely by our assessment of future metals prices, as well as by engineering and geological estimates of ore grade, accessibility and production cost. The Company’s assessment of reserves occurs at least annually, and periodically utilizes external audits.

Reserve estimates are used in determining appropriate rates of units-of-production depreciation, with net book value of many assets depreciated over remaining estimated reserves. Reserves are also a key component in forecasts, with which the Company compares future cash flows to current asset values to ensure that carrying values are reported appropriately. The Company’s forecasts are also used in determining the level of valuation allowances on the Company’s deferred tax assets. Reserves also play a key role in the valuation of certain assets in the determination of the purchase price allocations for acquisitions. Reserves involve many estimates and are not guarantees that the Company will recover the indicated quantities of metals. Changes in reserve estimates could result in material adjustments to the Company’s reserve estimates.

Income and Mining Taxes: The Company accounts for income and mining taxes under ASC 740 using the liability method, recognizing certain temporary differences between the financial reporting basis of liabilities and assets and the related tax basis for such liabilities and assets. This method generates either a net deferred income and mining tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives the deferred income and mining tax charge or benefit by recording the change in either the net deferred income and mining tax liability or asset balance for the year. The Company records a valuation allowance against any portion of those deferred income and mining tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all the deferred income and mining tax asset will not be realized.

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FORWARD-LOOKING STATEMENTS

This report contains or incorporates by reference “forward-looking statements”, as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:

These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. Many of these statements can be found by looking for words such as “believes”, “expects”, “anticipates”, “estimates” or similar expressions used in this report or incorporated by reference in this report.

Forward-looking statements and information are based upon several estimates and assumptions that, while considered reasonable by management, they are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information.

Included among the forward-looking statements and information that we may provide is production guidance. From time to time the Company provides guidance on operations, based on stand-alone budgets for each operating mine. In developing the mine production portion of the budget, we evaluate several factors and assumptions, which include, but are not limited to:

● gold and silver price forecasts.

● average gold and silver grade mined, using a resource model.

● expected tonnes moved and strip ratios.

● available stockpile material (grades, tonnes, and accessibility).

● estimated mill recovery rates (San José mine and Black Fox mine).

● dilution of material processed.

● internal and contractor equipment and labor availability.

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● seasonal weather patterns.

Actual production results are sensitive to variances in any of the key factors and assumptions noted above. As a result, we frequently evaluate and reconcile actual results to budgeted results to determine if key assumptions and estimates require modification. Any changes will, in turn, influence production guidance.

We caution you not to put undue reliance on these forward-looking statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, and may change at any time and without notice, based on changes in such facts or assumptions. Readers should not place undue reliance on forward-looking statements.

RISK FACTORS IMPACTING FORWARD-LOOKING STATEMENTS

The important factors that could prevent us from achieving our stated goals and objectives include, but are not limited to, those set forth in other “Risk Factors” section in this report and the following:

● decisions of foreign countries, banks and courts within those countries.

● unexpected changes in business, economic, and political conditions.

● operating results of MSC.

● timing and amount of mine production.

● our ability to retain and attract key personnel.

● technological changes in the mining industry.

● changes in operating, exploration or overhead costs.

● results of current and future exploration activities.

● changes in our business strategy.

● the uncertainty of reserve estimates and timing of development expenditures.

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● litigation or regulatory investigations and procedures affecting us.

● accidents, public health issues, and labor disputes.

● our continued listing on a public exchange.

● uncertainty relating to title to mineral properties.

We undertake no responsibility or obligation to update publicly these forward-looking statements, except as required by law and we may update these statements in the future in written or oral statements. Investors should take note of any future statements made by or on our behalf.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Our exposure to market risks includes, but is not limited to, the following risks: changes in foreign currency exchange rates, equity price risks, commodity price fluctuations, credit risk and inflationary risk. We do not use derivative financial instruments as part of an overall strategy to manage market risk.

Further, our participation in the joint venture with Hochschild for the 49% interest held at MSC creates additional risks because, among other things, we do not exercise decision-making power over the day-to-day activities at MSC; however, implications from our partner’s decisions may result in us having to provide additional funding to MSC or in a decrease in our percentage of ownership.

Foreign Currency Risk

In general, the devaluation of non-U.S. dollar currencies with respect to the U.S. dollar has a positive effect on our costs and liabilities which are incurred outside the U.S. while it has a negative effect on our assets denominated in non-U.S. dollar currency. Although we transact most of our business in U.S. dollars, some expenses, labor, operating supplies and property and equipment are denominated in Canadian dollars, Mexican pesos or Argentine pesos.

Since 2008, the Argentine peso has been steadily devaluing against the U.S. dollar by 10% to 53% on an annual basis. As noted in the graph below, during 2021 the Argentine peso devalued 18% compared to devaluations of 29% and 37% in 2020 and 2019 respectively. During 2021, the Mexican peso devalued 3% against the US dollar, compared to a devaluation of 5% in 2020 and an increase in value of 5% in 2019.

During 2021, the Canadian dollar increased in value by 0.4% against the U.S. dollar, compared to the increase in value of 2% in 2020 and 2019.

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The following table illustrates changes in the value of these currencies compared to the U.S. dollar in the twelve months ended December 31, 2021:

The value of cash and cash equivalents denominated in foreign currencies also fluctuates with changes in currency exchange rates. Appreciation of non-U.S. dollar currencies results in a foreign currency gain on such investments and a depreciation in non-U.S. dollar currencies results in a loss. We have not utilized material market risk-sensitive instruments to manage our exposure to foreign currency exchange rates but may do so in the future. We hold minor portions of our cash reserves in non-U.S. dollar currencies.

Based on our Canadian cash balance of $1.05 million (C$1.34 million) at December 31, 2021, a 1% change in the Canadian dollar would result in a gain/loss of $0.01 million in the Consolidated Statements of Operations and Comprehensive (Loss) Income. We also hold negligible portions of our cash reserves in Mexican and Argentine pesos, with effect of a 1% change in these respective currencies resulting in gains/losses immaterial for disclosure purposes.

Further, we are also subject to foreign currency risk on the fluctuation of the Mexican peso on our VAT receivable balance. As of December 31, 2021, our VAT receivable balance was 19,949,674 Mexican pesos, equivalent to approximately $0.9 million, for which a 1% change in the Mexican peso would have resulted in a gain/loss of less than $0.01 million in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

MSC holds a portion of its local cash balances in Argentine pesos and is therefore exposed to the effects of this continued devaluation and also the risk that there may be a sudden severe devaluation of the Argentine peso. A severe devaluation could result in material foreign exchange losses as reported in U.S. dollars.

Equity Price Risk

We have in the past sought and will likely in the future seek to acquire additional funding by sale of common stock or other equity securities. Movements in the price of our common stock have been volatile in the past and may also be volatile in the future. As a result, there is a risk that we may not be able to sell equity securities at an acceptable price to meet future funding requirements.

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We have invested and may continue to invest in shares of common stock of other entities in the mining sector. Some of our investments may be highly volatile and lack liquidity caused by lower trading volumes. As a result, we are inherently exposed to fluctuations in the fair value of our investments, which may result in gains or losses upon their valuation.

Commodity Price Risk

We produce and sell gold and silver, therefore changes in the market price of gold and silver could significantly affect our results of operations and cash flows in the future. Change in the price of gold and silver could materially affect our revenues. Based on our revenues from gold and silver sales of $136.5 million for the year ended December 31, 2021, with all other variables held constant, a 10% change in the price of gold and silver would have had resulted in an additional income or loss before income and mining taxes of approximately $13.7 million. Changes in the price of gold and silver can also affect the provisionally-priced sales that we make under agreements with refiners and other purchasers of our products. At December 31, 2021, we had no gold or silver sales subject to final pricing. Decreases in the market price of gold or silver can also significantly affect the value of our product inventory, stockpiles and leach pads, and it may be necessary to record a write-down to net realizable value.

We have in the past and may in the future hold a portion of our treasury in gold and silver bullion, where the value is recorded at the lower of cost or market. Gold and silver prices may affect the value of any bullion that we hold in treasury.

We do not hedge any of our sales and are therefore subject to all changes in commodity prices.

Credit Risk

We may be exposed to credit loss through our precious metals and doré sales agreements with Canadian financial institutions and refineries if these customers are unable to make payment in accordance with the terms of the agreements. However, based on the history and financial condition of our counterparties, we do not anticipate any of the financial institutions or refineries to default on their obligation. As of December 31, 2021, we do not believe we have any significant credit exposure associated with precious metals and our doré sales agreements.

In Mexico, we are exposed to credit loss regarding our VAT taxes receivable if the Mexican tax authorities are unable or unwilling to make payments in accordance with our monthly filings. Timing of collection on VAT receivables is uncertain as VAT refund procedures require a significant amount of information and follow-up. The risk is mitigated to the extent that the VAT receivable balance can be applied against future income taxes payable. However, at this time we are uncertain when, if ever, our Mexican operations will generate sufficient taxable operating profits to offset this receivable against taxes payable. We continue to face risk on the collection of our VAT receivables, which amount to $0.9 million as at December 31, 2021.

In Nevada and Ontario, Canada we are required to provide security to cover our projected reclamation costs. As at December 31, 2021, we have surety bonds of $37.7 million in place to satisfy bonding requirements for this purpose. The bonds have an annual fee of 2.3% of their value. Although we do not believe we have any significant credit exposure associated with these bonds, we are exposed to the risk that the surety bonds may no longer be accepted by the governmental agencies as satisfactory reclamation coverage, in which case we would be required to replace the surety bonding with cash.

Interest rate risk

Our outstanding debt consists of various equipment leases and the senior secured credit facility. As the debt is at fixed rates, we consider our interest rate risk exposure to be insignificant at this time.

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Inflationary Risk

Argentina has experienced a significant amount of inflation over the last ten years and has now been classified as a highly inflationary economy. ASC 830 defines a hyperinflationary economy as one where the cumulative inflation rate exceeds 100% over the last three years which precede the reporting period. In this scenario, ASC 830 requires companies to change the functional currency of its foreign subsidiaries operating in a highly inflationary economy, to match the company’s reporting currency. In our case, the functional currency of all our Argentine subsidiaries has always been our reporting currency, the U.S. dollar. As such, we do not expect the classification of Argentina’s economy as a highly inflationary economy, to change our financial reporting methodology.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements:

Management’s Report on Internal Control Over Financial Reporting 77

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 1263) 78

Consolidated Balance Sheets as of December 31, 2021 and 2020 82

Notes to Consolidated Financial Statements 85

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Securities Exchange Act of 1934 defines internal control over financial reporting in Rule 13a-15(f) and 15d-15(f) as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based upon its assessment, management concluded that, as of December 31, 2021, the Company’s internal control over financial reporting was effective based upon those criteria.

Ernst & Young LLP, an independent registered public accounting firm, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of McEwen Mining Inc.

Opinion on the consolidated financial statements

We have audited the accompanying consolidated balance sheets of McEwen Mining Inc. [the "Company"] as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive (loss), changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes [collectively referred to as the "consolidated financial statements"]. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its consolidated cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

Report on internal control over financial reporting

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [the "PCAOB"], the Company's internal control over financial reporting as of December 31, 2021, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 4, 2022 expressed an unqualified opinion thereon.

Basis for opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: 1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the

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consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Inventory at the Gold Bar mine

We have served as the Company's auditor since 2016.

Toronto, Canada /s/ Ernst & Young LLP

March 4, 2022 Chartered Professional Accountants

Licensed Public Accountants

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of McEwen Mining Inc.

Opinion on internal control over financial reporting

We have audited McEwen Mining lnc.'s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) [the "COSO criteria"]. In our opinion, McEwen Mining Inc. [the "Company"] maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [the "PCAOB"], the consolidated balance sheets of the Company as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive (loss) , changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated March 4, 2022 expressed an unqualified opinion thereon.

Basis for opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition , use, or disposition of the company's assets that could have a material effect on the financial statements.

Toronto, Canada /s/ Ernst & Young LLP

March 4, 2022 Chartered Professional Accountants

Licensed Public Accountants

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MCEWEN MINING INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)

FOR THE YEARS ENDED DECEMBER 31,

(in thousands of U.S. dollars, except per share amounts)

OTHER OPERATING EXPENSES:

Other operating — (1,968) —

OTHER INCOME (EXPENSE):

Interest and other finance expenses, net (6,200) (7,434) (6,817)

Total other income (expense) 81 (541) 323

Net loss per share (Note 14):

Basic and Diluted $ (0.12) $ (0.38) $ (0.17)

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

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MCEWEN MINING INC.

CONSOLIDATED BALANCE SHEETS

AS AT DECEMBER 31,

(in thousands of U.S. dollars)

December 31, December 31,

ASSETS

Current assets:

Restricted cash (Note 18) 2,550 —

Investments (Note 5) 1,806 —

Receivables, prepaids and other assets (Note 6) 10,591 5,690

Investment in Minera Santa Cruz S.A. (Note 9) 90,961 108,326

LIABILITIES & SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities $ 39,615 $ 36,055

Flow-through share premium (Note 13) 1,572 3,827

Reclamation and remediation liabilities (Note 12) 5,761 3,232

Other liabilities 2,550 —

Reclamation and remediation liabilities (Note 12) 29,691 30,768

Deferred income and mining tax liability — 3,813

Shareholders’ equity:

Non-controlling interests (Note 20) 14,777 —

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY $ 525,341 $ 499,936

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

Commitments and contingencies: Note 17

Subsequent event: Note 23

MUX US Equity

MUX · 10-K · period ended 2021-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MUX US Equity☆

MUX · 10-K · period ended 2021-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MUX US Equity