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Note 10 - Derivative Instruments | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Note 10: Derivative Instruments Foreign Currency Our wholly-owned subsidiaries owning the Casa Berardi and San Sebastian mines are USD-functional entities which routinely incur expenses denominated in CAD and MXN, and such expenses expose us to exchange rate fluctuations between the USD and CAD and MXN. In April 2016, we initiated a program to manage our exposure to fluctuations in the exchange rate between the USD and CAD and the impact on our future operating costs denominated in CAD. In October 2016, we also initiated a program to manage our exposure to the impact of fluctuations in the exchange rate between the USD and MXN on our future operating costs denominated in MXN. The programs utilize forward contracts to buy CAD and MXN, and each contract is designated as a cash flow hedge. As of December 31, 2017, we had 96 forward contracts outstanding to buy CAD$213.1 million having a notional amount of US$164.5 million, and 25 forward contracts outstanding to buy MXN$278.2 million having a notional amount of US$14.1 million. The CAD contracts are related to forecasted cash operating costs at Casa Berardi to be incurred from 2018 through 2020 and have CAD-to-USD exchange rates ranging between 1.2787 and 1.3380. The MXN contracts are related to forecasted cash operating costs at San Sebastian for 2018 and 2019 and have MXN-to-USD exchange rates ranging between 18.8317 and 20.8550. Our risk management policy allows for up to 75% of our planned cost exposure for five years into the future to be hedged under such programs, and for potential additional programs to manage other foreign currency-related exposure areas. As of December 31, 2017, we recorded the following balances for the fair value of the contracts:
| • | a current asset of $2.3 million, which is included in other current assets and is net of $0.4 million for contracts in a current liability position; and
| • | a non-current asset of $2.7 million, which is included in other non-current assets and is net of $0.3 million for contracts in a non-current liability position.
Net unrealized gains of approximately $5.0 million related to the effective portion of the hedges were included in accumulated other comprehensive income as of December 31, 2017, and are net of related deferred taxes. Unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying operating expenses are recognized. We estimate approximately $2.1 million in net unrealized gains included in accumulated other comprehensive income as of December 31, 2017 would be reclassified to current earnings in the next twelve months. Net realized gains of approximately $1.1 million on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive loss and included in cost of sales and other direct production costs in 2017. Net unrealized gains of approximately $5 thousand related to ineffectiveness of the hedges were included in gain (loss) on derivatives contracts on our consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2017. Metals Prices At times, we may use commodity forward sales commitments, commodity swap contracts and commodity put and call option contracts to manage our exposure to fluctuation in the prices of certain metals we produce. Contract positions are designed to ensure that we will receive a defined minimum price for certain quantities of our production, thereby partially offsetting our exposure to fluctuations in the market. Our risk management policy allows for up to 75% of our planned metals price exposure for five years into the future, with certain other limitations, to be hedged under such programs. These instruments do, however, expose us to (i) credit risk in the event of non-performance by counterparties for contracts in which the contract price exceeds the spot price of a commodity and (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production covered under contract positions. We are currently using financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement. In addition, we currently use financially-settled forward contracts to manage the exposure to changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments. These contracts are not designated as hedges and are marked-to-market through earnings each period. At December 31, 2017, we recorded a current liability of $10.3 million, which is included in other current liabilities and is net of $0.2 million for contracts in a fair value current asset position. In addition, we recorded a non-current liability of $5.2 million at December 31, 2017 which is included in other non-current liabilities. We recognized a $6.0 million net loss during 2017 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales of products. The net loss recognized on the contracts offsets gains related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement. We recognized a $21.3 million net loss during 2017 on the contracts utilized to manage exposure to prices for forecasted future concentrate shipments. The net loss on these contracts is included as a separate line item under other income (expense), as they relate to forecasted future shipments, as opposed to sales that have already taken place but are subject to final pricing as discussed in the preceding paragraph. The net loss for 2017 is the result of increasing zinc and lead prices. This program, when utilized, is designed to mitigate the impact of potential future declines in zinc and lead prices from the price levels established in the contracts (see average price information below). When those prices increase compared to the contract prices, we recognize losses. The following tables summarize the quantities of metals committed under forward sales contracts at December 31, 2017 and 2016:
December 31, 2017 |  | Ounces/pounds under contract (in 000's) |  |  | Average price per ounce/pound |
|  | Silver |  |  | Gold |  |  | Zinc |  |  | Lead |  |  | Silver |  |  | Gold |  |  | Zinc |  |  | Lead |
|  | (ounces) |  |  | (ounces) |  |  | (pounds) |  |  | (pounds) |  |  | (ounces) |  |  | (ounces) |  |  | (pounds) |  |  | (pounds) |
Contracts on provisional sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2018 settlements |  |  | 1,447 |  |  |  | 5 |  |  |  | 21,550 |  |  |  | 4,740 |  |  | $ | 16.64 |  |  | $ | 1,279 |  |  | $ | 1.45 |  |  | $ | 1.11 |
Contracts on forecasted sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2018 settlements |  |  | — |  |  |  | — |  |  |  | 32,187 |  |  |  | 16,645 |  |  |  | N/A |  |  |  | N/A |  |  | $ | 1.29 |  |  | $ | 1.06 |
2019 settlements |  |  | — |  |  |  | — |  |  |  | 23,589 |  |  |  | 18,078 |  |  |  | N/A |  |  |  | N/A |  |  | $ | 1.33 |  |  | $ | 1.09 |
2020 settlements |  |  | — |  |  |  | — |  |  |  | 3,307 |  |  |  | 2,866 |  |  |  | N/A |  |  |  | N/A |  |  | $ | 1.27 |  |  | $ | 1.08 |
December 31, 2016 |  | Ounces/pounds under contract (in 000's) |  |  | Average price per ounce/pound |
|  | Silver |  |  | Gold |  |  | Zinc |  |  | Lead |  |  | Silver |  |  | Gold |  |  | Zinc |  |  | Lead |
|  | (ounces) |  |  | (ounces) |  |  | (pounds) |  |  | (pounds) |  |  | (ounces) |  |  | (ounces) |  |  | (pounds) |  |  | (pounds) |
Contracts on provisional sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2017 settlements |  |  | 1,295 |  |  |  | 4 |  |  |  | 19,070 |  |  |  | 7,441 |  |  | $ | 16.29 |  |  | $ | 1,172 |  |  | $ | 1.18 |  |  | $ | 0.97 |
Contracts on forecasted sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2017 settlements |  |  | N/A |  |  |  | N/A |  |  |  | 35,384 |  |  |  | 17,637 |  |  |  | N/A |  |  |  | N/A |  |  | $ | 1.19 |  |  | $ | 1.03 |
2018 settlements |  |  | N/A |  |  |  | N/A |  |  |  | 13,779 |  |  |  | 5,732 |  |  |  | N/A |  |  |  | N/A |  |  | $ | 1.21 |  |  | $ | 1.05 |
Our concentrate sales are based on a provisional sales price containing an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the concentrates at the forward price at the time of the sale. The embedded derivative, which does not qualify for hedge accounting, is adjusted to market through earnings each period prior to final settlement. Credit-risk-related Contingent Features Certain of our derivative contracts contain cross default provisions which provide that a default under our revolving credit agreement would cause a default under the derivative contracts. As of December 31, 2017, we have not posted any collateral related to these agreements. The fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0.8 million as of December 31, 2017. If we were in breach of any of these provisions at December 31, 2017, we could have been required to settle our obligations under the agreements at their termination value of $0.8 million.

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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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