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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2017
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS
| Year ended December 31,
In thousands | 2017 |  | 2016 |  | 2015
Rochester royalty obligation | $ | (864 | ) |  | $ | (4,133 | ) |  | $ | 818 |
Palmarejo royalty obligation embedded derivative | — |  |  | (5,866 | ) |  | 3,101 |
Silver and gold options | — |  |  | (1,582 | ) |  | 1,283 |
Fair value adjustments, net | $ | (864 | ) |  | $ | (11,581 | ) |  | $ | 5,202 |
Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), secondary priority to quoted prices in inactive markets or observable inputs (Level 2), and the lowest priority to unobservable inputs (Level 3). The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
| Fair Value at December 31, 2017
In thousands | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Equity and debt securities | $ | 34,837 |  |  | $ | 27,946 |  |  | $ | — |  |  | $ | 6,891 |
Other derivative instruments, net | 251 |  |  | — |  |  | 251 |  |  | — |
| $ | 35,088 |  |  | $ | 27,946 |  |  | $ | 251 |  |  | $ | 6,891 |
Liabilities: |  |  |  |  |  |  |
Silvertip contingent consideration | $ | 47,965 |  |  | $ | — |  |  | $ | — |  |  | $ | 47,965 |
Other derivative instruments, net | 222 |  |  | — |  |  | 222 |  |  | — |
| $ | 48,187 |  |  | $ | — |  |  | $ | 222 |  |  | $ | 47,965 |
| Fair Value at December 31, 2016
In thousands | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Equity securities | $ | 4,488 |  |  | $ | 4,209 |  |  | $ | — |  |  | $ | 279 |
| $ | 4,488 |  |  | $ | 4,209 |  |  | $ | — |  |  | $ | 279 |
Liabilities: |  |  |  |  |  |  |
Rochester royalty obligation | $ | 9,287 |  |  | $ | — |  |  | $ | — |  |  | $ | 9,287 |
Other derivative instruments, net | 762 |  |  | — |  |  | 762 |  |  | — |
| $ | 10,049 |  |  | $ | — |  |  | $ | 762 |  |  | $ | 9,287 |
The Company’s investments in equity securities are recorded at fair market value in the financial statements based primarily on quoted market prices. Such instruments are classified within Level 1 of the fair value hierarchy. Quoted market prices are not available for certain debt and equity securities; these securities are valued using pricing models, which require the use of observable and unobservable inputs, and are classified within Level 3 of the fair value hierarchy. The Company’s other derivative instruments, net, relate to concentrate and certain doré sales contracts valued using pricing models, which require inputs that are derived from observable market data, including contractual terms, forward market prices, yield curves, credit spreads, and other unobservable inputs. The model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy. In May 2017, the Company repurchased the Rochester royalty obligation for $5.0 million, resulting in a pre-tax gain of $2.3 million, which is included in Other, net. The fair value of the Rochester royalty obligation was estimated based on observable market data including contractual terms, forward silver and gold prices, yield curves, and credit spreads, as well as the Company’s current mine plan which is considered a significant unobservable input. Therefore, the Company historically classified this obligation as a Level 3 financial liability. In July 2017, the Company sold the Endeavor Silver Stream and remaining non-core royalties to Metalla Royalty & Streaming Ltd. (“Metalla”) for total consideration of $13.0 million, including a $6.7 million convertible debenture. The convertible debenture matures June 30, 2027, bears interest at a rate of 5% payable semi-annually, and is convertible into Metalla shares in connection with future equity financings or asset acquisitions by Metalla at the then-current price to maintain the Company’s approximate 19.9% ownership. The fair value of the convertible debenture is estimated based on observable market data including yield curves and credit spreads. Therefore, the Company classifies the convertible debenture in Level 3 of the fair value hierarchy. In October 2017 the Company acquired the Silvertip mine from JDS Silver. The consideration for the Silvertip mine includes two $25.0 million contingent payments, which are payable in cash and common stock upon reaching a future resource declaration milestone in 2019 and a future permitting milestone, respectively. The fair value of the Silvertip contingent consideration is estimated based on an estimated discount rate of 2.5% for the contingent permitting payment and 2.9% for the contingent resource declaration payment and is classified within Level 3 of the fair value hierarchy. No assets or liabilities were transferred between fair value levels in the year ended December 31, 2017. The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities for the years ended December 31, 2017 and 2016:
| Year Ended December 31, 2017
In thousands | Balance at the beginning of the period |  | Additions |  | Revaluation |  | Settlements |  | Gain on settlement |  | Balance at the end of the period
Assets: |  |  |  |  |  |  |  |  |  |  |
Equity and debt securities | $ | 279 |  |  | $ | 6,677 |  |  | $ | (65 | ) |  | $ | — |  |  | $ | — |  |  | $ | 6,891 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Rochester royalty obligation | $ | 9,287 |  |  | $ | — |  |  | $ | 864 |  |  | $ | (7,819 | ) |  | $ | (2,332 | ) |  | $ | — |
Silvertip contingent consideration | $ | — |  |  | $ | 47,705 |  |  | $ | 260 |  |  | $ | — |  |  | $ | — |  |  | $ | 47,965 |
| Year Ended December 31, 2016
In thousands | Balance at the beginning of the period |  | Additions |  | Revaluation |  | Settlements |  | Gain on settlement |  | Balance at the end of the period
Assets: |  |  |  |  |  |  |  |  |  |  |
Equity and debt securities | $ | 10 |  |  | $ | — |  |  | $ | 272 |  |  | $ | (3 | ) |  | $ | — |  |  | $ | 279 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Palmarejo royalty obligation embedded derivative | $ | 4,957 |  |  | $ | — |  |  | $ | 5,866 |  |  | $ | (10,823 | ) |  | $ | — |  |  | $ | — |
Rochester royalty obligation | $ | 9,593 |  |  | $ | — |  |  | $ | 4,133 |  |  | $ | (4,439 | ) |  | $ | — |  |  | $ | 9,287 |
The fair value of financial assets and liabilities carried at book value in the financial statements at December 31, 2017 and December 31, 2016 is presented in the following table:
| December 31, 2017
In thousands | Book Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Liabilities: |  |  |  |  |  |  |  |  |
5.875% Senior Notes due 2024(1) | $ | 245,088 |  |  | $ | 243,913 |  |  | $ | — |  |  | $ | 243,913 |  |  | $ | — |
Revolving Credit Facility(2) | $ | 100,000 |  |  | $ | 100,000 |  |  | $ | — |  |  | $ | 100,000 |  |  | $ | — |
(1) | Net of unamortized debt issuance costs of $4.9 million.
(2) | Unamortized debt issuance costs of $1.9 million at December 31, 2017 included in Other Non-Current Assets.
| December 31, 2016
In thousands | Book Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Liabilities: |  |  |  |  |  |  |  |  |
7.875% Senior Notes due 2021(1) | $ | 175,991 |  |  | $ | 184,373 |  |  | $ | — |  |  | $ | 184,373 |  |  | $ | — |
(1) | Net of unamortized debt issuance costs and premium received of $2.0 million.
The fair value of the 5.875% Senior Notes due 2024 (the “2024 Senior Notes”) and the 7.875% Senior Notes due 2021 (the “2021 Senior Notes”) were estimated using quoted market prices. The fair value of the Revolving Credit Facility approximates book value as the liability is secured, has a variable interest rate, and lacks significant credit concerns.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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