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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Provisional Silver and Gold Sales The Company enters into sales contracts with third-party smelters and refiners which, in some cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable recorded at the forward price at the time of sale. The embedded derivatives do not qualify for hedge accounting and are marked to market through earnings each period until final settlement. Changes in silver and gold prices resulted in provisional pricing mark-to-market gains of $0.3 million and $1.2 million in the three months ended March 31, 2018 and 2017, respectively. Zinc Options At March 31, 2018, the Company has outstanding Asian (or average value) put and call option contracts in net-zero-cost collar arrangements on a volume of 300 metric tons of zinc per month commencing in April 2018 and ending in December 2018. The weighted average strike prices on the put and call contracts are $3,000 and $4,050 per metric ton, respectively. The contracts are generally net cash settled and, if the price of zinc at the time of the expiration is between the put and call prices, would expire at no cost to the Company. At March 31, 2018, the fair market value of the put and call zero cost collar contracts was a net asset of $0.1 million. During the three months ended March 31, 2018, the Company had recorded unrealized gains of $0.1 million related to outstanding options which were included in Fair value adjustments, net. At March 31, 2017, the Company had no outstanding options contracts. At March 31, 2018, the Company had the following derivative instruments that settle as follows:
In thousands except average prices and notional ounces | 2018 |  | Thereafter
Provisional silver sales contracts | $ | 831 |  |  | $ | — |
Average silver price per ounce | $ | 16.66 |  |  | $ | — |
Notional ounces | 49,853 |  |  | — |
Provisional gold sales contracts | $ | 59,332 |  |  | $ | — |
Average gold price per ounce | $ | 1,317 |  |  | $ | — |
Notional ounces | 45,051 |  |  | — |
Zinc put options purchased | $ | 8,100 |  |  | $ | — |
Average zinc strike price per metric ton | $ | 3,000 |  |  | $ | — |
Notional metric tons | 2,700 |  |  | — |
Zinc call options sold | $ | (10,935 | ) |  | $ | — |
Average zinc strike price per metric ton | $ | 4,050 |  |  | $ | — |
Notional metric tons | 2,700 |  |  | — |
The following summarizes the classification of the fair value of the derivative instruments:
| March 31, 2018
In thousands | Prepaid expenses and other |  | Accrued liabilities and other |  | Current portion of royalty obligation |  | Non-current portion of royalty obligation
Provisional silver and gold sales contracts | $ | 407 |  |  | $ | 125 |  |  | $ | — |  |  | $ | — |
Zinc options | 145 |  |  | — |  |  | — |  |  | — |
| $ | 552 |  |  | $ | 125 |  |  | $ | — |  |  | $ | — |
| December 31, 2017
In thousands | Prepaid expenses and other |  | Accrued liabilities and other |  | Current portion of royalty obligation |  | Non-current portion of royalty obligation
Provisional silver and gold sales contracts | $ | 251 |  |  | $ | 222 |  |  | $ | — |  |  | $ | — |
The following represent mark-to-market gains (losses) on derivative instruments for the three months ended March 31, 2018 and 2017, respectively (in thousands):
|  | Three months ended March 31,
Financial statement line | Derivative | 2018 |  | 2017
Revenue | Provisional silver and gold sales contracts | $ | 253 |  |  | $ | 1,212 |
Fair value adjustments, net | Zinc options | 145 |  |  | — |
|  | $ | 398 |  |  | $ | 1,212 |
Credit Risk The credit risk exposure related to any derivative instrument is limited to the unrealized gains, if any, on outstanding contracts based on current market prices. To reduce counter-party credit exposure, the Company enters into contracts with institutions management deems credit-worthy and limits credit exposure to each institution. The Company does not anticipate non-performance by any of its counterparties.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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