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Note 11 - Derivative Instruments | 3 Months Ended
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Mar. 31, 2019
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Note 11. Derivative Instruments Foreign Currency Our wholly-owned subsidiaries owning the Casa Berardi and San Sebastian mines are U.S. dollar ("USD")-functional entities which routinely incur expenses denominated in Canadian dollar ("CAD") and Mexican peso ("MXN"), respectively, 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 March 31, 2019, we have 130 forward contracts outstanding to buy CAD$284.1 million having a notional amount of USD$219.6 million, and 19 forward contracts outstanding to buy MXN$99.5 million having a notional amount of USD$4.9 million. The CAD contracts are related to forecasted cash operating costs at Casa Berardi to be incurred from 2019 through 2022 and have CAD-to-USD exchange rates ranging between 1.2702 and 1.3306. The MXN contracts are related to forecasted cash operating costs at San Sebastian to be incurred from 2019 through 2020 and have MXN-to-USD exchange rates ranging between 19.9400 and 20.8550. Our risk management policy provides that up to 75% of our planned cost exposure for five years into the future may be hedged under such programs, and for potential additional programs to manage other foreign currency-related exposure areas. As of March 31, 2019, we recorded the following balances for the fair value of the contracts:
| • | a current asset of $0.2 million, which is included in other current assets;
| • | a current liability of $2.0 million, which is included in other current liabilities; and
| • | a non-current liability of $2.7 million, which is included in other non-current liabilities.
Net unrealized losses of approximately $4.5 million related to the effective portion of the hedges were included in accumulated other comprehensive loss as of March 31, 2019. 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 $1.7 million in net unrealized gains included in accumulated other comprehensive loss as of March 31, 2019 would be reclassified to current earnings in the next twelve months. Net realized losses of approximately $0.5 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 for the three months ended March 31, 2019. Metals Prices We may at times 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 market prices. 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 form 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. As of March 31, 2019, we recorded the following balances for the fair value of the contracts:
| • | a current asset of $0.2 million, which is included in other current assets and is net of $0.1 million for contracts in a fair value liability position;
| • | a non-current asset of $45 thousand, which is included in other non-current assets;
| • | a current liability of $4.0 million, which is included in other current liabilities and is net of $0.1 million for contracts in a fair value current asset position; and
| • | a non-current liability of $13 thousand, which is included in other non-current liabilities.
We recognized a $2.5 million net loss during the first quarter of 2019 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 $1.8 million net loss during the first quarter of 2019 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 the first quarter of 2019 is the result of an increase in zinc and lead prices. This program, when utilized, is designed to mitigate the impact of potential future declines in lead and zinc prices from the price levels established in the contracts (see average price information below). When those prices increase compared to the contract prices, we incur losses on the contracts. The following tables summarize the quantities of metals committed under forward sales contracts at March 31, 2019 and December 31, 2018:
March 31, 2019 |  | 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 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2019 settlements |  |  | 710 |  |  |  | 3 |  |  |  | 19,952 |  |  |  | 2,646 |  |  | $ | 15.46 |  |  | $ | 1,316 |  |  | $ | 1.22 |  |  | $ | 0.92 |
Contracts on forecasted sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2019 settlements |  |  | — |  |  |  | — |  |  |  | 26,180 |  |  |  | 1,653 |  |  |  | N/A |  |  |  | N/A |  |  | $ | 1.25 |  |  | $ | 0.96 |
2020 settlements |  |  | — |  |  |  | — |  |  |  | 276 |  |  |  | 551 |  |  |  | N/A |  |  |  | N/A |  |  | $ | 1.26 |  |  | $ | 0.96 |
December 31, 2018 |  | 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 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2019 settlements |  |  | 842 |  |  |  | 4 |  |  |  | 18,450 |  |  |  | 2,700 |  |  | $ | 14.69 |  |  | $ | 1,260 |  |  | $ | 1.15 |  |  | $ | 0.89 |
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 contract. As of March 31, 2019, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these agreements was $9.0 million as of March 31, 2019, which includes accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at March 31, 2019, we could have been required to settle our obligations under the agreements at their termination value of $9.0 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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