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DERIVATIVE INSTRUMENTS | 12 Months Ended
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Dec. 31, 2019
DERIVATIVE INSTRUMENTS |
DERIVATIVE INSTRUMENTS | 14. DERIVATIVE INSTRUMENTS
|  | As at |  | As at
|  | December 31 |  | December 31
(in millions of U.S. dollars) |  | 2019 |  | 2018
DERIVATIVE ASSETS |  |  |  |
Unsettled provisionally priced concentrate derivatives, and swap contracts(2) |  | 0.2 |  | —
Copper price option contracts |  | — |  | 0.7
Total derivative assets |  | 0.2 |  | 0.7
DERIVATIVE LIABILITIES |  |  |  |
Unsettled provisionally priced concentrate derivatives, and swap contracts(2) |  | — |  | 0.7
Gold price option contracts(1) |  | 26.4 |  | 4.8
Total derivative liabilities |  | 26.4 |  | 5.5
| 1. |  | As at December 31, 2019, gold price option contracts are included within trade and other payables in the statement of financial position. As at December 31, 2018, copper price option contracts are included within prepaids and other in the statement of financial position and gold price option contracts are included within trade and other payables in the statement of financial position.
| 2. |  | Unsettled provisionally priced concentrate derivatives are included within trade and other receivables in the statement of financial position.
(a) Provisionally priced contracts The Company had provisionally priced sales for which price finalization is outstanding at December 31, 2019. Realized and unrealized non-hedged derivative gains (losses) on the provisional pricing of concentrate sales are classified as revenue, with the unsettled provisionally priced concentrate derivatives included in trade and other receivables. The Company enters into gold and copper swap contracts to reduce exposure to gold and copper prices. Realized and unrealized gains (losses) are recorded in revenue, with the unsettled gold and copper swaps included in trade and other receivables. The following tables summarize the realized and unrealized gains (losses) on provisionally priced sales:
|  | Year ended December 31, 2019
(in millions of U.S. dollars) |  | Gold |  | Copper |  | Total
GAIN (LOSS) ON THE PROVISIONAL PRICING OF CONCENTRATE SALES |  |  |  |  |  |
Realized |  | 2.2 |  | (1.7) |  | 0.5
Unrealized |  | 0.5 |  | 1.0 |  | 1.5
Total gain (loss) |  | 2.7 |  | (0.7) |  | 2.0
|  | Year ended December 31, 2018
(in millions of U.S. dollars) |  | Gold |  | Copper |  | Total
GAIN (LOSS) ON THE PROVISIONAL PRICING OF CONCENTRATE SALES |  |  |  |  |  |
Realized |  | (1.2) |  | (7.7) |  | (8.9)
Unrealized |  | 1.1 |  | (2.7) |  | (1.6)
Total (loss) gain |  | (0.1) |  | (10.4) |  | (10.5)
The following tables summarize the realized and unrealized gains (losses) on gold and copper swap contracts:
|  | Year ended December 31, 2019
(in millions of U.S. dollars) |  | Gold |  | Copper |  | Total
(LOSS) GAIN ON SWAP CONTRACTS |  |  |  |  |  |
Realized |  | (3.2) |  | 0.2 |  | (3.0)
Unrealized |  | (0.4) |  | (0.9) |  | (1.3)
Total (loss) gain |  | (3.6) |  | (0.7) |  | (4.3)
|  | Year ended December 31, 2018
(in millions of U.S. dollars) |  | Gold |  | Copper |  | Total
(LOSS) GAIN ON SWAP CONTRACTS |  |  |  |  |  |
Realized |  | 1.3 |  | 11.3 |  | 12.6
Unrealized |  | (0.8) |  | 1.7 |  | 0.9
Total gain (loss) |  | 0.5 |  | 13.0 |  | 13.5
The following table summarizes the net exposure to the impact of movements in market commodity prices for provisionally priced sales:
|  | As at December 31 |  | As at December 31
|  | 2019 |  | 2018
VOLUMES SUBJECT TO FINAL PRICING NET OF OUTSTANDING SWAPS |  |  |  |
Gold ounces (000s) |  | 0.9 |  | 0.8
Copper pounds (millions) |  | 0.5 |  | 1.6
(b)  Copper price option contracts In December 2018, the Company entered into copper price option contracts by purchasing put options at an average strike price of $2.50 per pound and selling call options at an average strike price of $3.00 per pound for 21,600 tonnes (approximately 47.6 million pounds) of copper production during 2019. The Company entered into these contracts at no premium and therefore incurred no investment costs upon initiation. As at December 31, 2019, these copper price option contracts are expired. (c)  Gold price option contracts In December 2018, the Company entered into gold price option contracts by purchasing put options at an average strike price of $1,230 per ounce and selling call options at an average strike price of $1,300 per ounce for 192,000 ounces of gold production between January 2019 and December 2019. In the second quarter of 2019, the Company further entered into gold price option contracts by purchasing put options and selling call options at average strike prices outlined in the table below. The call options sold and put options purchased are treated as derivative financial instruments and marked to market at each reporting period on the consolidated statement of financial position with changes in fair value recognized in other gains and losses. Realized gains and losses as a result of the exercise of the Company’s call and put options up to an amount not exceeding the Company’s production of gold ounces for the reporting period are recorded as an adjustment to revenue. The exercise of options on gold ounces in excess of the Company’s gold production for the reporting period are recorded as other gains and losses.
|  | Quantity |  |  |  | Exercise price |  | Fair value - asset
|  | outstanding |  | Remaining term |  | ($/oz) |  | (liability) (1)
GOLD PRICE OPTION CONTRACTS OUTSTANDING |  |  |  |  |  |  |  |
Gold call contracts - sold |  | 72,000 | oz | January 2020 – June 2020 |  | 1,355 |  | (12.6)
Gold call contracts - sold |  | 96,000 | oz | July 2020 – December 2020 |  | 1,415 |  | (14.1)
Gold put contracts - purchased |  | 168,000 | oz | January 2020 – December 2020 |  | 1,300 |  | 0.3
| 1. |  | The Company presents the fair value of its put and call options on a net basis on the consolidated statements of financial position. The Company has a legally enforceable right to set off the amounts under its option contracts and intends to settle on a net basis.
(d) Foreign exchange forward contracts In 2019, the Company entered into foreign exchange forward contracts in order to hedge the Company's spending in Canadian dollars. The Company has hedged $20.0 million U.S. dollars per month at average Canadian dollar to U.S. dollar foreign exchange rate of 1.34. These contracts were treated as derivative financial instruments and marked-to-market at each reporting period on the consolidated statement of financial position with changes in fair value recognized in other gains and losses. The Company entered into these contracts at no premium and therefore incurred no investment costs upon initiation. As at December 31, 2019, these foreign exchange forward contracts are expired.

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