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Fair Value Measurements | 3 Months Ended
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Mar. 31, 2018
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS
| Three months ended March 31,
In thousands | 2018 |  | 2017
Rochester royalty obligation | $ | — |  |  | $ | (1,200 | )
Unrealized gain (loss) on equity securities | 4,842 |  |  | — |
Zinc options | 145 |  |  | — |
Fair value adjustments, net | $ | 4,987 |  |  | $ | (1,200 | )
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 March 31, 2018
In thousands | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Equity and debt securities | $ | 37,317 |  |  | $ | 31,003 |  |  | $ | — |  |  | $ | 6,314 |
Other derivative instruments, net | 552 |  |  | — |  |  | 552 |  |  | — |
| $ | 37,869 |  |  | $ | 31,003 |  |  | $ | 552 |  |  | $ | 6,314 |
Liabilities: |  |  |  |  |  |  |
Silvertip contingent consideration | $ | 48,289 |  |  | $ | — |  |  | $ | — |  |  | $ | 48,289 |
Other derivative instruments, net | 125 |  |  | — |  |  | 125 |  |  | — |
| $ | 48,414 |  |  | $ | — |  |  | $ | 125 |  |  | $ | 48,289 |
| 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 |
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 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, include concentrate and certain doré sales contracts, as well as zinc hedges, which are valued using pricing models with inputs 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 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 shareholders of JDS Silver Holdings Ltd.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 permitting milestone in 2018 and resource declaration milestone in 2019, 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 three months ended March 31, 2018. The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities for the three months ended March 31, 2018:
| Three Months Ended March 31, 2018
In thousands | Balance at the beginning of the period |  | Revaluation |  | Settlements |  | Accretion |  | Balance at the end of the period
Assets: |  |  |  |  |  |  |  |  |
Equity and debt securities | $ | 6,891 |  |  | $ | (278 | ) |  | $ | (299 | ) |  | $ | — |  |  | $ | 6,314 |
Liabilities: |  |  |  |  |  |  |  |  |
Silvertip contingent consideration | $ | 47,965 |  |  | $ | — |  |  | $ | — |  |  | $ | 324 |  |  | $ | 48,289 |
The fair value of financial assets and liabilities carried at book value in the financial statements at March 31, 2018 and December 31, 2017 is presented in the following table:
| March 31, 2018
In thousands | Book Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |
Manquiri Notes Receivable | $ | 39,887 |  |  | $ | 39,887 |  |  | $ | — |  |  | $ | — |  |  | $ | 39,887 |
Liabilities: |  |  |  |  |  |  |  |  |
5.875% Senior Notes due 2024(1) | $ | 245,280 |  |  | $ | 244,520 |  |  | $ | — |  |  | $ | 244,520 |  |  | $ | — |
Revolving Credit Facility(2) | $ | 115,000 |  |  | $ | 115,000 |  |  | $ | — |  |  | $ | 115,000 |  |  | $ | — |
(1) Net of unamortized debt issuance costs of $4.7 million. (2) Unamortized debt issuance costs of $1.8 million included in Other Non-Current Assets.
| 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 included in Other Non-Current Assets. The fair value of the Manquiri Notes Receivable approximates book value due to no significant change in interest rates since the sale of Manquiri; see Note 21 -- Discontinued Operations for additional detail. The fair value of the 5.875% Senior Notes due 2024 (the “2024 Senior Notes”) was 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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