EX-99.1 2 a2015q2fs.htm EXHIBIT 99.1 2015 Q2 FS



Silver Standard Resources Inc.
Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015 and 2014
(unaudited)







Silver Standard Resources Inc.
Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2015
 

CONTENTS
 
Financial Statements
 
 
 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated Financial Statements
 
 
 
 
 
 
 
 
Statements of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Shareholders’ Equity
 
 
 
 
Statements of (Loss)
 
 
 
 
 
 
Additional Disclosures
 
 
 
 



 
 
2 | Page

Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Financial Position
(expressed in thousands of United States dollars)
 
Note
June 30

December 31

 
 
2015

2014

 
 
$ 

$

Current assets
 
 
 
Cash and cash equivalents
 
217,228

184,643

Trade and other receivables
4
49,347

49,824

Marketable securities
5
97,867

104,785

Other current financial assets
6
—

19,443

Inventory
7
135,367

129,228

Assets held for sale
 
3,904

3,895

 
 
503,713

491,818

Non-current assets
 
 
 
Property, plant and equipment
8
427,877

439,074

Income tax receivable
9
19,371

—

Value added tax receivable
10
31,176

29,473

Non-current inventory
7
3,057

4,326

Other non-current financial assets
6
11,355

21,558

Total assets
 
996,549

986,249

 
 
 
 
Current liabilities
 
 
 
Trade and other payables
11
55,092

56,645

Provisions
12
65,003

60,303

Current debt
 
3,851

5,922

 
 
123,946

122,870

Non-current liabilities
 
 
 
Deferred income tax liabilities
 
32,879

29,050

Non-current provisions
12
60,376

57,945

Convertible notes
13
202,517

197,134

Total liabilities
 
419,718

406,999

 
 
 
 
Shareholders' equity
 
 
 
Share capital
 
707,034

707,034

Other reserves
 
(50,722
)
(12,723
)
Equity component of convertible notes
 
68,347

68,347

Retained deficit
 
(147,828
)
(183,408
)
Total shareholders' equity attributable to our shareholders
 
576,831

579,250

Total liabilities and equity
 
996,549

986,249

 
 
 
 
Events after the reporting period (note 21)
 
 
 
The accompanying notes are an integral part of the condensed consolidated financial statements
Approved by the Board of Directors and authorized for issue on August 6, 2015
"Richard D. Paterson"
 
"Paul Benson"
Richard D. Paterson, Director
 
Paul Benson, Director

 
 
3 | Page

Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of (Loss) Income
(expressed in thousands of United States dollars, except per share amounts)

 
Note
Three months ended June 30
 
 
Six months ended June 30
 
 
 
2015

2014

 
2015

2014

 
 
 
(restated note 2(b))

 
 
(restated note 2(b))

 
 
$

$

 
$

$

 
 
 
 
 
 
 
Revenue
 
95,818

64,287

 
207,539

98,023

Cost of sales
15
(79,499
)
(53,265
)
 
(160,818
)
(81,077
)
Income from mine operations
 
16,319

11,022

 
46,721

16,946

 
 
 
 
 
 
 
General and administrative expenses
14(e)
(7,203
)
(4,584
)
 
(12,367
)
(11,498
)
Exploration, evaluation and reclamation expenses
 
(3,902
)
(4,312
)
 
(7,865
)
(7,688
)
Business acquisition costs
 
—

(3,064
)
 
—

(5,036
)
Operating income (loss)
 
5,214

(938
)
 
26,489

(7,276
)
 
 
 
 
 
 
 
Gain on sale of mineral property
6
—

—

 
—

15,939

Interest earned and other finance income
 
294

624

 
875

2,189

Interest expense and other finance costs
 
(6,447
)
(5,325
)
 
(12,699
)
(10,479
)
Unrealized gain on derivatives
 
—

386

 
—

2,094

Other (expenses)
16
(1,814
)
(3,795
)
 
(2,089
)
(6,102
)
Foreign exchange (loss)
 
(563
)
(1,009
)
 
(3,324
)
(17,791
)
(Loss) income before income tax
 
(3,316
)
(10,057
)
 
9,252

(21,426
)
 
 
 
 
 
 
 
Income tax (expense)
 
(4,011
)
(100
)
 
(7,416
)
(1,169
)
 
 
 
 
 
 
 
Net (loss) income and net (loss) income attributable to shareholders
 
(7,327
)
(10,157
)
 
1,836

(22,595
)
 
 
 
 
 
 
 
Weighted average shares outstanding (thousands)
 
 
 
 
 
 
Basic
17
80,754

80,754

 
80,754

80,754

Diluted
17
80,754

80,754

 
80,923

80,754

 
 
 
 
 
 
 
(Loss) income per share
 
 
 
 
 
 
Basic
17
$(0.09)
$(0.13)
 
$0.02
$(0.28)
Diluted
17
$(0.09)
$(0.13)
 
$0.02
$(0.28)
The accompanying notes are an integral part of the condensed consolidated financial statements

 
 
4 | Page

Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Comprehensive (Loss) Income
(expressed in thousands of United States dollars)

 
Note
Three months ended June 30
 
 
Six months ended June 30
 
 
 
2015

2014

 
2015

2014

 
 
 
(restated note 2(b))

 
 
(restated note 2(b))

 
 
$

$

 
$

$

 
 
 
 
 
 
 
Net (loss) income for the period attributable to shareholders
 
(7,327
)
(10,157
)
 
1,836

(22,595
)
Other comprehensive income (loss)
 
 

 

 
 
 
Items that will not be reclassified to net income or loss:
 
 
 
 
 
 
Unrealized gain (loss) on marketable securities at FVTOCI, net of tax
 
5,809

39,287

 
(5,540
)
51,252

Items that will be reclassified to net income or loss:
 
 
 
 
 
 
Realized loss recycled to net income or loss
16
—

1,271

 
—

1,271

    Cumulative translation adjustment
 
—

—

 
—

35

Other comprehensive income (loss)
 
5,809

40,558

 
(5,540
)
52,558

Total comprehensive (loss) income attributable to shareholders
 
(1,518
)
30,401

 
(3,704
)
29,963

Total comprehensive (loss) income
 
(1,518
)
30,401

 
(3,704
)
29,963

The accompanying notes are an integral part of the condensed consolidated financial statements

 
 
5 | Page

Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(expressed in thousands of United States dollars)

 
Note
Common Shares
Other

Equity

Retained

Total

 
 
Shares

Amount

reserves

component of

deficit

equity

 
 
 
 
(restated note 2(b))

convertible notes

(restated note 2(b))

(restated note 2(b))

 
 
000's

$

$

$

$

$

Balance, January 1, 2014
 
80,754

707,034

(28,887
)
68,347

(57,015
)
689,479

   Equity-settled share-based compensation
14
—

—

1,008

—

—

1,008

Total comprehensive income (loss) for the period
 
—

—

52,558

—

(22,595
)
29,963

Balance, June 30, 2014
 
80,754

707,034

24,679

68,347

(79,610
)
720,450

 
 
 
 
 
 
 
 
Balance, December 31, 2014
 
80,754

707,034

(12,723
)
68,347

(183,408
)
579,250

Impact of adopting IFRS 9
2(b)(ii)
—

—

(33,744
)
—

33,744

—

Balance, January 1, 2015 (restated)
 
80,754

707,034

(46,467
)
68,347

(149,664
)
579,250

   Equity-settled share-based compensation
14
—

—

1,285

—

—

1,285

Total comprehensive (loss) income for the period
 
—

—

(5,540
)
—

1,836

(3,704
)
Balance, June 30, 2015
 
80,754

707,034

(50,722
)
68,347

(147,828
)
576,831

The accompanying notes are an integral part of the condensed consolidated financial statements

 
 
6 | Page

Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Cash Flows
(expressed in thousands of United States dollars)

 
Note
Three months ended June 30
 
 
Six months ended June 30
 
 
 
2015

2014

 
2015

2014

 
 
 
(restated 2(b))

 
 
(restated 2(b))

 
 
$

$

 
$

$

Cash flows from operating activities
 
 

 

 
 
 
Net (loss) income for the period
 
(7,327
)
(10,157
)
 
1,836

(22,595
)
Adjustments for:
 
 

 

 
 
 
Depreciation, depletion and amortization
 
20,809

7,032

 
37,346

12,397

Share-based payments
 
619

656

 
1,285

1,008

Net finance expense
 
5,247

4,701

 
10,918

8,290

(Gain) on sale of mineral property
 
—

—

 
—

(15,939
)
(Gain) on derivative instrument
 
—

(386
)
 
—

(2,094
)
Other expense
 
2,032

3,300

 
2,197

5,530

Income tax expense
 
4,011

100

 
7,416

1,169

Non-cash foreign exchange loss (gain)
 
197

(222
)
 
2,616

13,067

Net changes in non-cash working capital items
20
(2,864
)
(7,709
)
 
(3,874
)
760

Cash generated (used) by operating activities before value added taxes, interest and income taxes (paid) recovered
 
22,724

(2,685
)
 
59,740

1,593

Value added taxes (paid)
 
(2,602
)
(4,446
)
 
(6,451
)
(7,554
)
Value added taxes recovered
 
4,585

3,348

 
7,785

6,351

Interest (paid)
 
(426
)
—

 
(4,755
)
(3,809
)
Income taxes (paid)
 
(2,384
)
(1,258
)
 
(3,757
)
(2,733
)
Cash generated (used) by operating activities
 
21,897

(5,041
)
 
52,562

(6,152
)
Cash flows from investing activities
 
 

 

 
 
 
Purchase of Marigold mine
 
—

(275,000
)
 
—

(275,000
)
Purchase of property, plant and equipment
 
(8,540
)
(4,983
)
 
(14,688
)
(6,935
)
Production stripping capitalized costs
 
—

(10,468
)
 
(12,540
)
(14,696
)
Expenditures on exploration properties
 
(221
)
(3,674
)
 
(538
)
(4,599
)
Proceeds from sale of mineral property
6
20,000

10,000

 
20,000

17,500

Proceeds from sale of marketable securities
 
—

10,240

 
—

10,240

Taxes paid on sale of mineral properties
 
—

—

 
—

(15,853
)
Decrease (increase) in restricted cash
 
10,201

(15,750
)
 
10,201

(15,750
)
Interest received
 
154

221

 
318

1,403

Tax deposit (paid)
9
—

—

 
(19,231
)
—

Dividends received
 
—

166

 
—

166

Cash generated (used) by investing activities
 
21,594

(289,248
)
 
(16,478
)
(303,524
)
Cash flows from financing activities
 
 

 

 
 
 
Repayment of bank loan
 
(1,649
)
—

 
(1,649
)
—

Cash (used) by financing activities
 
(1,649
)
—

 
(1,649
)
—

Effect of foreign exchange rate changes on cash and cash equivalents
 
(209
)
38

 
(1,850
)
(3,819
)
Increase (decrease) in cash and cash equivalents
 
41,633

(294,251
)
 
32,585

(313,495
)
Cash and cash equivalents, beginning of period
 
175,595

396,413

 
184,643

415,657

Cash and cash equivalents, end of period
 
217,228

102,162

 
217,228

102,162


Supplemental cash flow information (note 20)
The accompanying notes are an integral part of the condensed consolidated financial statements

 
 
7 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


1.
NATURE OF OPERATIONS

Silver Standard Resources Inc. ("we", "us" or "our") is a company incorporated under the laws of the Province of British Columbia, Canada and our shares are publicly listed on the Toronto Stock Exchange in Canada and the NASDAQ Global Market in the United States. Together with our subsidiaries, we (the “Group”) are principally engaged in the operation, acquisition, exploration, and development of precious metal resource properties located in the Americas. With the acquisition of the Marigold mine on April 4, 2014, we have two producing mines and a portfolio of silver resource dominant projects located throughout the Americas. Silver Standard Resources Inc. is the ultimate parent of the Group.

Our address is Suite 800, 1055 Dunsmuir Street, PO Box 49088, Vancouver, British Columbia, V7X 1G4.

Our strategic focus is to optimize the production of silver and gold from our Pirquitas mine in Argentina and Marigold mine in Nevada, U.S., respectively, and to advance, as market and project conditions permit, other principal development projects including the Pitarrilla project in Mexico and the San Luis project in Peru and our other projects within our project pipeline towards development and commercial production.


2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are set out below.

a)
Basis of preparation
These condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2014.
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The comparative information has also been prepared on this basis.
The accounting policies applied in the preparation of these condensed interim consolidated financial statements are consistent with those applied and disclosed in our audited consolidated financial statements for the year ended December 31, 2014, except for the application of the amendments to existing IFRSs (note 2(d)) which were effective January 1, 2015 and the voluntary adoption of IFRS 9, Financial Instruments: Classification and Measurement ("IFRS 9"), which had an initial application date of April 1, 2015. The impact of this adoption is discussed in note 2(b)(ii) below.

These statements were authorized for issue by the Board of Directors on August 6, 2015.

b)
Change in accounting policies
(i)Exploration and evaluation expenditures
During the year ended December 31, 2014, we elected to change our accounting policy with respect to exploration and evaluation expenditures, consistent with IFRS 6, Exploration for and Evaluation of Mineral Resources and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, in order to enhance the relevance and reliability to the decision-making needs of the users of our financial statements. Prior to this change, our policy was to capitalize exploration and evaluation expenditures on properties that we have the legal rights to explore, until commercially viable. We have elected to expense all exploration and evaluation expenses until such time that we believe that further expenditures will provide probable future economic benefit. Our policy is disclosed in note 2(i) of our audited consolidated financial statements for the year ended December 31, 2014.


 
 
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Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

For the six months ended June 30, 2014, the following adjustments were recorded to the consolidated statements of (loss) income:

 
 
Adjustments for change in accounting policy

 
Six months ended June 30, 2014
As previously reported

Exploration and evaluation

As currently reported

 
$

$

$

Exploration, evaluation and reclamation (expenses)
(1,909
)
(5,779
)
(7,688
)
Gain on sale of mineral property
9,240

6,699

15,939

Other (expense) income
(6,834
)
732

(6,102
)
Income tax (expense)
(1,042
)
(127
)
(1,169
)
Increase in net income
 
1,525

 
 
 
 
 
Weighted average shares outstanding (thousands)
 
 
 
Basic
80,754

80,754

80,754

Diluted
80,754

80,754

80,754

 
 
 
 
Decrease in (loss) per share
 
 
 
Basic

($0.30
)

$0.02


($0.28
)
Diluted

($0.30
)

$0.02


($0.28
)

For the three months ended June 30, 2014, the following adjustments were recorded to the consolidated statements of (loss) income:

 
 
Adjustments for change in accounting policy

 
Three months ended June 30, 2014
As previously reported

Exploration and evaluation

As currently reported

 
$

$

$

Exploration, evaluation and reclamation (expenses)
(1,195
)
(3,117
)
(4,312
)
Other (expense) income
(4,080
)
285

(3,795
)
Income tax (expense)
(37
)
(63
)
(100
)
(Decrease) in net income
 
(2,895
)
 
 
 
 
 
Weighted average shares outstanding (thousands)
 
 
 
Basic
80,754

80,754

80,754

Diluted
80,754

80,754

80,754

 
 
 
 
Increase in (loss) per share
 
 
 
Basic

($0.09
)

($0.04
)

($0.13
)
Diluted

($0.09
)

($0.04
)

($0.13
)



 
 
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Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(ii)Financial instruments under IFRS 9
We have early adopted all of the requirements of IFRS 9 as of April 1, 2015. IFRS 9 uses a single approach to determine whether a financial asset is classified and measured at amortized cost or fair value, replacing the multiple rules in IAS 39, Financial Instruments: Recognition and Measurement (“IAS 39”). The approach in IFRS 9 is based on how an entity manages its financial instruments and the contractual cash flow characteristics of the financial asset. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward in IFRS 9, so our accounting policy with respect to financial liabilities is unchanged.
As a result of the early adoption of IFRS 9, we have changed our accounting policy for financial assets retrospectively, for assets that were recognized at the date of application. The change did not impact the carrying value of any of our financial assets on transition date. The main area of change is the accounting for equity securities previously classified as available for sale.
The following is the new accounting policy for financial assets under IFRS 9. All other aspects of our accounting policy for financial instruments as disclosed in note 2(q) to the consolidated financial statements for the year ended December 31, 2014 are unaffected:
Financial assets
We classify our financial assets in the following categories: at fair value through profit and loss (“FVTPL”), fair value through other comprehensive income (“FVTOCI”) or at amortized cost. We determine the classification of financial assets at initial recognition. The classification of debt instruments is driven by our business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL, for other equity instruments, on the day of acquisition we can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI.
Our accounting policy for each of the categories is as follows:
Financial assets at FVTPL Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the consolidated statement of (loss) income. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in the consolidated statement of (loss) income in the period in which they arise.
Financial assets at FVTOCI Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive (loss) income.
Financial assets at amortized cost A financial asset is measured at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date, and are initially recognized at fair value and subsequently carried at amortized cost less any impairment.
Derivative financial instruments When we enter into derivative contracts, these are intended to reduce the exposures related to assets and liabilities, or forecast transactions.
The classification approach described above is applied to all financial assets, including those that contain embedded derivatives, without the need to separate the embedded derivative from the host contract. Commodity-based embedded derivatives resulting from provisional sales prices of metals in concentrate are classified as FVTPL with changes in value recognized in revenue.
Impairment of financial assets at amortized cost We recognize a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

 
 
10 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
At each reporting date, we measure the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, we measure the loss allowance for the financial asset at an amount equal to twelve month expected credit losses.
Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.
Derecognition of financial assets Financial assets are derecognized when the investments mature or are sold, and substantially all the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recognized within finance income or other income and finance costs, respectively. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive income.
We completed a detailed assessment of our financial assets as at April 1, 2015. The following table shows the original classification under IAS 39 and the new classification under IFRS 9:
 
Original classification
New classification
Financial assets
IAS 39
IFRS 9
Cash and cash equivalents
FVTPL
FVTPL
Marketable securities
Available-for-sale
FVTOCI
Marketable securities
FVTPL
FVTOCI
Trade receivable
Amortized cost
Amortized cost
Concentrate trade receivables
Embedded derivate separately identified as FVTPL
Whole contract FVTPL
Trade payable
Amortized cost
Amortized cost
We elected to classify our marketable securities as FVTOCI as they are not considered to be held for trading, and this presentation will prevent the consolidated statement of (loss) income from being impacted by value changes of these non-operating assets.
As we are not restating prior periods we have recognized the effects of retrospective application at the beginning of the annual reporting period that includes the date of initial application. Therefore, the adoption of IFRS 9 resulted in a decrease to opening retained deficit on January 1, 2015 of $33,744,000 with a corresponding adjustment to accumulated other comprehensive income.
(iii)IFRS 7 amendments
IFRS 7, Financial Instruments: Disclosure has been amended to require additional disclosures on transition from IAS 39 to IFRS 9. These amendments are effective upon adoption of IFRS 9. As such, we have adopted these amendments as at April 1, 2015.

 
 
11 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(iv)Hedge accounting
In addition to the early adoption of IFRS 9, we also applied hedge accounting during the three months ended June 30, 2015. The accounting policy for hedge accounting is as follows:
Derivative Instruments Derivative instruments are recorded at fair value on the consolidated statement of financial position, classified based on contractual maturity. Derivative instruments are classified as either hedges of the fair value of recognized assets or liabilities or of firm commitments (“fair value hedges”), hedges of highly probable forecast transactions (“cash flow hedges”) or non-hedge derivatives. Derivatives designated as either a fair value or cash flow hedge that are expected to be highly effective in achieving offsetting changes in fair value or cash flows are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated. Derivative assets and derivative liabilities are shown separately in the consolidated statement of financial position unless there is a legal right to offset and intent to settle on a net basis.
Fair Value Hedges Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the consolidated statement of (loss) income, together with any changes in the fair value of the hedged asset or liability or firm commitment that is attributable to the hedged risk.
Cash Flow Hedges The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in equity. The gain or loss relating to the ineffective portion is recognized in the consolidated statement of (loss) income. Amounts accumulated in equity are transferred to the consolidated statements of (loss) income in the period when the forecasted transaction impacts earnings. When the forecasted transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial carrying amount of the asset or liability.
When a derivative designated as a cash flow hedge expires or is sold and the forecasted transaction is still expected to occur, any cumulative gain or loss relating to the derivative that is recorded in equity at that time remains in equity and is recognized in the consolidated statements of (loss) income when the forecasted transaction occurs. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was recorded in equity is immediately transferred to the consolidated statement of (loss) income.
Non-Hedge Derivatives Derivative instruments that do not qualify as either fair value or cash flow hedges are recorded at their fair value at the balance sheet date, with changes in fair value recognized in the consolidated statement of (loss) income.
As at June 30, 2015 we had entered into certain contracts to hedge the cost of diesel, with the objective of reducing the volatility of reported income from mine operations. These contracts met the qualifying criteria for hedge accounting, but the financial effect as at June 30, 2015 was insignificant.

c)
Significant accounting judgments and estimates
The preparation of financial statements in conformity with IFRS requires the use of judgments and/or estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the financial statements. The critical judgments and estimates applied in the preparation of the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2015 are consistent with those applied and disclosed in note 2(u) to our audited consolidated financial statements for the year ended December 31, 2014.

 
 
12 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

d)
Pronouncement affecting our financial statements presentation or disclosure
The following new and amended IFRS pronouncement was adopted during the six months ended June 30, 2015:

Operating segments
IFRS 8, Operating Segments was amended to require disclosure of the judgments made by management in aggregating operating segments, including a description of the segments which have been aggregated and the economic indicators which have been assessed in determining that the aggregated segments share similar economic characteristics. The amendment was effective for annual periods commencing on or after July 1, 2014 and does not have a material impact on our consolidated financial statements.

e)
Future accounting changes
The following new standard has been issued but is not yet effective:

Revenue from contracts with customers
The IASB has replaced IAS 18, Revenue in its entirety with IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) which is intended to establish a new control-based revenue recognition model and change the basis for deciding whether revenue is to be recognized over time or at a point in time. IFRS 15 is effective for annual periods commencing on or after January 1, 2018. We are currently evaluating the impact the standard is expected to have on our consolidated financial statements.

There are no other IFRS or International Financial Reporting Interpretations Committee ("IFRIC") interpretations that are not yet effective that would be expected to have a material impact on our consolidated financial statements.


3.
PURCHASE OF MARIGOLD MINE

On April 4, 2014, we completed the acquisition of a 100% interest in the Marigold mine, an open pit operating gold mine in Nevada, U.S., from subsidiaries of Goldcorp Inc. and Barrick Gold Corporation for a purchase price of $267,732,000 after post-closing adjustments. The purchase price was paid in cash from our existing cash on hand.

The acquisition is a business combination and has been accounted for in accordance with the measurement and recognition provisions of IFRS 3, Business Combinations ("IFRS 3"). IFRS 3 requires that the purchase consideration be allocated to the assets acquired and liabilities assumed in a business combination based upon their estimated fair values at the date of acquisition.

The purchase price has been allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. Fair values are determined based on third party appraisals, discounted cash flow models, and quoted market prices, as deemed appropriate. Acquisition costs, in the form of advisory, legal and other professional fees, which were associated with the transaction to acquire the Marigold mine were expensed as incurred and during the six months ended June 30, 2014 amounted to $5,036,000.


 
 
13 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

3.
PURCHASE OF MARIGOLD MINE (Cont'd)

The following table shows the allocation of the purchase price to assets acquired and liabilities assumed, based on estimates of fair value, including a summary of major classes of consideration transferred, and the recognized amounts of assets acquired and liabilities assumed at the acquisition date:

 
$

Purchase consideration
275,000

Working capital adjustment
(7,268
)
Consideration
267,732

 
 
Trade and other receivables
5,162

Inventory
76,104

Property, plant and equipment:
 
Mineral properties
50,823

Plant and equipment
157,880

Assets under construction
9,561

Trade and other payables
(17,067
)
Close-down and restoration provision
(14,731
)
Net identifiable assets acquired
267,732


Had the Marigold mine been consolidated from the start of January 1, 2014, our consolidated revenue for the six months ended June 30, 2014 would have been approximately $143,659,000 and our consolidated net loss for the six months ended June 30, 2014 would have been $22,326,000.


4.
TRADE AND OTHER RECEIVABLES

 
June 30, 2015

December 31, 2014

 
$

$

Trade receivables
32,394

26,529

Tax receivables
5,277

5,389

Value added tax receivables (note 10)
4,999

8,054

Prepayments and deposits
4,324

6,068

Other receivables
2,353

3,784

 
49,347

49,824


We expect full recovery of the trade receivables amounts outstanding and, therefore, no allowance has been recorded against these receivables. No trade receivables are past due and all are expected to be settled within twelve months.

We do not hold any collateral for any receivable amounts outstanding at June 30, 2015 or December 31, 2014.


 
 
14 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

5.
MARKETABLE SECURITIES

We have designated all of our marketable securities as FVTOCI to reduce the impact of fair value movements in the consolidated statement of (loss) income to appropriately represent the results of our core operating assets.

The movement in marketable securities during the six months ended June 30, 2015 and the year ended December 31, 2014 is comprised of the following:

 
June 30, 2015

December 31, 2014

 
$

$

Balance, beginning of period
104,785

129,267

Additions (1)
1,062

9,188

Disposals (1)
(1,315
)
(37,322
)
Fair value adjustments through profit and loss (2)
—

(10,060
)
Fair value adjustments through other comprehensive income
1,949

22,699

Foreign exchange adjustments
(8,614
)
(8,987
)
Balance, end of period
97,867

104,785


(1) 
We derecognized a portion of our investment in Pretium Resources Inc. ("Pretium") in exchange for shares of Golden Arrow Resources Corporation. The fair value at the date of disposition was C$7.66 per Pretium share, which resulted in a cumulative loss of $322,000 which remains in other comprehensive income.

(2) 
During 2014, we recorded unrealized losses on previously impaired marketable securities and marketable securities classified as FVTPL under IAS 39.


 
 
15 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

6.
OTHER FINANCIAL ASSETS

 
June 30, 2015
December 31, 2014
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Restricted cash (1)
—

9,401

—

19,604

Deferred consideration (2, 3)
—

1,954

19,443

1,954

 
—

11,355

19,443

21,558


(1) 
We have cash and security deposits in relation to our close down and restoration provisions of $1,901,000 (December 31, 2014 - $12,104,000) and Argentine peso-denominated loan facility of $7,500,000 (December 31, 2014 - $7,500,000).

(2) 
On May 5, 2015, we received $20,000,000 of deferred consideration from the sale of the San Agustin project located in Mexico, which closed in December 2013.

(3) 
On February 6, 2014, we completed the sale of our 100% interest in the Challacollo project located in Chile to Mandalay Resources Corporation ("Mandalay"). Under the terms of the agreement, the total aggregate consideration was comprised of $7,500,000 in cash, 12,000,000 common shares of Mandalay with a fair value of $9,188,000 at closing, deferred consideration of 5,000,000 common of shares of Mandalay issued at the end of the first quarter in which commercial production has commenced, and cash equivalent of 240,000 ounces of silver paid in eight quarterly installments (based on the average quarterly silver price) beginning the quarter immediately following the quarter in which commercial production has commenced. In addition, we received a 2% net smelter return royalty on silver sales in excess of 36 million ounces, up to a maximum of $5,000,000 from the project. The fair value of consideration received was $18,644,000 and we recorded a gain on the sale of this mineral property of $15,939,000 before tax expense of $1,351,000 during the six months ended June 30, 2014. The deferred consideration is secured against the Challacollo mineral claims and the shares of the entity holding the Challacollo project.


7.
INVENTORY

 
June 30, 2015

December 31, 2014

 
$ 

$

Current:
 
 
Finished goods
19,327

25,221

Stockpiled ore
23,808

17,896

Leach pad inventory
61,313

56,250

Materials and supplies
30,919

29,861

 
135,367

129,228

Non-current:
 


Materials and supplies
3,057

4,326

 
138,424

133,554


The cost of inventory held at net realizable value ("NRV") at June 30, 2015 was $Nil (December 31, 2014 - $Nil).


 
 
16 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

8.
PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprise the following:
 
June 30, 2015
 
Plant and equipment

Assets under construction

Mineral properties

Exploration and evaluation assets

Total

Cost
 
 
 
 
 
Balance, January 1, 2015
439,415

19,988

118,277

64,241

641,921

Additions
574

13,887

17,595

777

32,833

Disposals
(2,452
)
—

(238
)
—

(2,690
)
Change in estimate of close down and restoration provision
—

—

1,460

—

1,460

Transfers
22,854

(23,750
)
—

896

—

Balance, end of period
460,391

10,125

137,094

65,914

673,524

 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
Balance, January 1, 2015
(164,246
)
—

(38,601
)
—

(202,847
)
Charge for the year
(34,129
)
—

(9,113
)
—

(43,242
)
Disposals
442

—

—

—

442

Balance, end of period
(197,933
)
—

(47,714
)
—

(245,647
)
 
 
 
 
 
 
Net book value at June 30, 2015
262,458

10,125

89,380

65,914

427,877

 
December 31, 2014
 
Plant and equipment

Assets under construction

Mineral
properties

Exploration and evaluation assets

Total

Cost
 
 
 
 
 
Balance, January 1, 2014
288,701

10,337

34,160

60,076

393,274

Additions
3,126

20,493

43,487

4,283

71,389

Acquisition of Marigold (note 3)
157,880

9,561

50,823

—

218,264

Disposals and reclassifications
(7,860
)
—

—

—

(7,860
)
Costs written off
—

—

—

(145
)
(145
)
Change in estimate of close down and restoration provision
—

—

7,222

27

7,249

Impairment charges
(22,835
)
—

(17,415
)
—

(40,250
)
Transfers
20,403

(20,403
)
—

—

—

Balance, end of period
439,415

19,988

118,277

64,241

641,921

 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
Balance, January 1, 2014
(119,553
)
—

(25,084
)
—

(144,637
)
Charge for the year
(48,828
)
—

(13,517
)
—

(62,345
)
Disposals
4,135

—

—

—

4,135

Balance, end of period
(164,246
)
—

(38,601
)
—

(202,847
)
 
 
 
 
 
 
Net book value at December 31, 2014
275,169

19,988

79,676

64,241

439,074


As of June 30, 2015, no items of property, plant and equipment have been pledged as security for liabilities.


 
 
17 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

9.
INCOME TAX RECEIVABLE

On January 27, 2015, we received a Notice of Reassessment (“NOR”) from the Canada Revenue Agency (“CRA”) in the amount of approximately C$41,400,000 plus interest of C$6,580,000 related to the tax treatment of the 2010 sale of shares of our subsidiary that owned and operated the Snowfield and Brucejack projects. The CRA has asserted that the sale was on account of income and not capital, as we recorded it. Our management strongly disagrees with the CRA’s position in the reassessment. In order to appeal the reassessment, we were required to make a minimum payment of 50% of the reassessed amount claimed by the CRA under the NOR plus interest accrued to the date of the NOR. On February 26, 2015, we paid the required C$24,090,000 ($19,286,000 as at June 30, 2015) to the CRA and have recorded this amount plus accrued interest as a non-current income tax receivable. On April 20, 2015, we filed a Notice of Objection with the CRA and plan on filing, if necessary, a Notice of Appeal with the Tax Court of Canada.

Although the outcome of this matter cannot be predicted with certainty, we intend to contest the matter vigorously, and believe we will ultimately prevail based on the merits of our position. At this time we have not recognized an income tax provision for this amount. However, we will continue to evaluate our tax provisions as the matter progresses through appeals and, if necessary, the litigation process. If the CRA's position is ultimately sustained, it would have a material impact on earnings and financial resources in the period that the matter is ultimately resolved.


10.
VALUE ADDED TAX RECEIVABLE

 
June 30, 2015

December 31, 2014

 
$ 

$

Current
4,999

8,054

Non-current
31,176

29,473

 
36,175

37,527


Value added tax ("VAT") paid in Argentina in relation to the Pirquitas mine became recoverable under Argentina law once the mine reached the production stage and we apply to the Argentina government to recover the applicable VAT on an ongoing basis. There have, at times, been significant delays in obtaining final approvals and, therefore, the collection of VAT and the classification reflects best estimates of timing of recoveries. Despite the procedural delays, we believe that the remaining balance is fully recoverable and have not provided an allowance.

The VAT receivables balance in Argentina is denominated in Argentine pesos. Accordingly, foreign currency fluctuations could materially impact the value of the VAT receivables in U.S. dollars.


11.
TRADE AND OTHER PAYABLES

 
June 30, 2015

December 31, 2014

 
$

$

Trade payables
16,099

23,552

Accrued liabilities
34,044

28,909

Income taxes payable
1,823

1,028

Accrued interest on convertible notes (note 13)
3,126

3,156

 
55,092

56,645



 
 
18 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

12.
PROVISIONS

 
June 30, 2015
December 31, 2014
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Export duties on silver concentrate (1)
60,868

—

56,058

—

Close down and restoration provision (2)
4,135

60,376

4,245

57,945

 
65,003

60,376

60,303

57,945


(1) 
We entered into a fiscal stability agreement (the “Fiscal Agreement”) with the Federal Government of Argentina in 1998 for production from the Pirquitas mine. In December 2007, the National Customs Authority of Argentina (Dirección Nacional de Aduanas) levied an export duty of approximately 10% from concentrates for projects with fiscal stability agreements pre-dating 2002 and the Federal Government has asserted that the Pirquitas mine is subject to this export duty. We have challenged the legality of the export duty applied to silver concentrates and the matter is currently under review by the Federal Court (Jujuy) in Argentina.

The Federal Court (Jujuy) granted an injunction in our favor effective September 29, 2010 that prohibited the Federal Government from withholding the 10% export duty on silver concentrates (the “Injunction”), pending the decision of the courts with respect to our challenge of the legality of the application of the export duty. The Injunction was appealed by the Federal Government but upheld by each of the Federal Court of Appeal (Salta) on December 5, 2012 and the Federal Supreme Court of Argentina on September 17, 2013. The Federal Government also appealed the refund we claimed for the export duties paid before the Injunction, as well as matters of procedure related to the uncertainty of the amount reclaimed; however, on May 3, 2013, such appeal was dismissed by the Federal Court of Appeal (Salta). In September 2014, the Federal Tax Authority in Argentina filed an application with the Federal Court (Jujuy) to lift the Injunction and require payment of the export duty and payment of applied interest charges. We filed a response to such application on October 14, 2014 and a decision is pending.

As of June 30, 2015, we have paid $6,646,000 in export duties, against which we have filed for recovery. In accordance with the Injunction, we have not been paying export duties on silver concentrates but continue to accrue export duties, with no accrual for interest charges, and have recorded a corresponding increase in cost of sales in the relevant period. The application of interest charges is uncertain, but if applied from the date each duty was levied and based on current U.S. dollar rates, such charges are estimated to be in the range of $4.8 million to $8.0 million. The final amount of export duties and interest, if any, to be paid or refunded depends on a number of factors including the outcome of litigation. Changes in our assessment of this matter could result in material adjustments to our consolidated statement of (loss) income.

 
 
19 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

12.
PROVISIONS (Cont'd)

(2) 
The changes in the close down and restoration provision during the six months ended June 30, 2015 and the year ended December 31, 2014 were as follows:
 
June 30, 2015

December 31, 2014

 
$ 

$

Balance, January 1
62,190

37,201

 
 
 
Provision from acquisition of Marigold mine (note 3)
—

14,731

Liabilities settled during the period
(945
)
(1,839
)
Accretion expense
1,842

3,640

Foreign exchange gain
(36
)
(113
)
Revisions and new estimated cash flows
1,460

8,570

 
 
 
Balance, end of period
64,511

62,190

 
 
 
Less: current portion of close down and restoration provision in trade and other payables
(4,135
)
(4,245
)
Non-current close down and restoration provision
60,376

57,945


The revision in the estimated cash flows during the six months ended June 30, 2015 was due to additional disturbance at Marigold mine from waste dump expansion.


13.
CONVERTIBLE NOTES

The movement in the debt portion of the convertible notes during the six months ended June 30, 2015 and the year ended December 31, 2014 is comprised of the following:
 
June 30, 2015

December 31, 2014

 
$

$

Balance, beginning of period
200,290

190,287

Accretion of discount
5,384

10,003

Interest accrued in period
3,778

7,619

Interest paid
(3,809
)
(7,619
)
Balance, end of period
205,643

200,290

Accrued interest outstanding
(3,126
)
(3,156
)
Non-current portion of convertible notes outstanding
202,517

197,134



 
 
20 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

14.
SHARE CAPITAL AND SHARE-BASED PAYMENTS

(a)Stock options
The changes in stock options issued during the six months ended June 30, 2015 and the year ended December 31, 2014 are as follows:
 
June 30, 2015
December 31, 2014
 
Number of stock options

Weighted average exercise price (C$/option)

Number of stock options

Weighted average exercise price (C$/option)

 
 
 
 
 
Outstanding, beginning of period
2,377,065

12.68

1,754,944

16.05

     Granted
1,019,656

5.87

1,016,578

8.07

     Expired
—

—

(74,246
)
(14.14
)
     Forfeited
—

—

(320,211
)
(16.19
)
Outstanding, end of period
3,396,721

10.64

2,377,065

12.68


For options granted during the six months ended June 30, 2015, the weighted average option valuations were based on an expected option life of 4.2 years, a risk free interest rate of 1.1%, a dividend yield of nil, and volatility of 56.5%.
During the six months ended June 30, 2015, options granted had a weighted average fair value of C$2.71 per option.
(b)Deferred Share Units (“DSUs”)
During the six months ended June 30, 2015 and the year ended December 31, 2014, the following DSUs were outstanding to non-executive directors:
 
June 30, 2015

December 31, 2014

 
Number of DSUs

Number of DSUs

Outstanding, beginning of period
335,680

251,019

     Granted
80,008

106,486

     Redeemed
(32,933
)
(21,825
)
Outstanding, end of period
382,755

335,680


The DSUs granted in the six months ended June 30, 2015 had a weighted average fair value of C$5.83 per unit. DSUs settled in the six months ended June 30, 2015 were settled at a fair value of C$6.01 per unit. The DSUs are cash-settled instruments and, therefore, the fair value of the outstanding DSUs at the end of each reporting period is recognized as an accrued liability with the associated compensation cost recorded in general and administrative expenses. As at June 30, 2015, the fair value of outstanding DSUs was C$7.85 per unit.

 
 
21 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

14.
SHARE CAPITAL AND SHARE-BASED PAYMENTS (Cont'd)

(c)Restricted Share Units (“RSUs”)
During the six months ended June 30, 2015 and the year ended December 31, 2014, the following RSUs were outstanding to employees:
 
June 30, 2015

December 31, 2014

 
Number of RSUs

Number of RSUs

Outstanding, beginning of period
330,414

129,498

     Granted
473,815

297,480

     Settled
(120,131
)
(53,905
)
     Forfeited
(33,516
)
(42,659
)
Outstanding, end of period
650,582

330,414


The RSUs granted in the six months ended June 30, 2015 had a weighted average fair value of C$6.18 per unit. RSUs settled in the six months ended June 30, 2015 were settled at a weighted average fair value of C$6.62 per unit. As at June 30, 2015, the fair value of outstanding RSUs was C$7.85 per unit.

(d)Performance Share Units (“PSUs”)
During the six months ended June 30, 2015 and the year ended December 31, 2014, the following PSUs were outstanding to senior executives:
 
June 30, 2015

December 31, 2014

 
Number of PSUs

Number of PSUs

Outstanding, beginning of period
323,000

177,729

     Granted
390,850

253,600

     Settled
—

(24,903
)
     Forfeited
—

(83,426
)
Outstanding, end of period
713,850

323,000


The PSUs granted in the six months ended June 30, 2015 had a weighted average fair value of C$5.57 per unit. As at June 30, 2015, the weighted average fair value of outstanding PSUs was C$13.43 per unit.

 
 
22 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

14.
SHARE CAPITAL AND SHARE-BASED PAYMENTS (Cont'd)

(e)Share-based compensation
Total share-based compensation, including all equity and cash-settled arrangements, for the six months ended June 30, 2015 and 2014 has been recognized in the condensed consolidated interim financial statements as follows:
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2015

2014

 
2015

2014

 
$

$

 
$

$

Equity-settled
 
 
 
 
 
Cost of inventory
29

4

 
39

4

General and administrative expense
582

629

 
1,232

1,078

Exploration, evaluation and reclamation expenses
8

23

 
14

(74
)
Cash-settled
 
 
 
 
 
Cost of inventory
446

142

 
559

189

General and administrative expense
2,531

(205
)
 
2,815

1,832

Exploration, evaluation and reclamation expenses
25

(67
)
 
32

121

Total
3,621

526

 
4,691

3,150



15.
COST OF SALES

 
Three months ended June 30
 
 
Six months ended June 30
 
 
2015

2014

 
2015

2014

 
$ 

$

 
$ 

$

Cost of inventory
56,931

44,234

 
118,522

64,139

Depletion, depreciation and amortization
20,672

6,741

 
37,031

11,821

Export duties (note 12)
1,896

2,290

 
5,265

5,117

 
79,499

53,265

 
160,818

81,077



 
 
23 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

16.
OTHER (EXPENSES)

 
Three months ended June 30
 
 
Six months ended June 30
 
 
2015

2014

 
2015

2014

 
 
(restated note 2(b))

 
 
(restated note 2(b))

 
$

$

 
$

$

(Loss) on disposal of fixed assets
(1,152
)
—

 
(1,986
)
—

(Loss) on sale of marketable securities (1)
—

(1,489
)
 
—

(1,489
)
Unrealized (loss) on marketable securities (1)
—

(1,930
)
 
—

(4,240
)
Dividend income
—

166

 
—

166

Other income (loss)
(662
)
(542
)
 
(103
)
(539
)
 
(1,814
)
(3,795
)
 
(2,089
)
(6,102
)

(1)  
As discussed in note 2(b)(ii), effective April 1, 2015 we adopted IFRS 9, which resulted in a change in our accounting policy for marketable securities, but comparatives have not been restated to illustrate the change in accounting policy. Under IFRS 9, no realized or unrealized gains or losses are recorded in the consolidated statement of (loss) income for marketable securities designated as FVTOCI. As a result, had other expenses been restated for items still recognized at January 1, 2015, total other loss would have been $1,865,000 in the three months ended June 30, 2014 and a loss of $1,863,000 in the six months ended June 30, 2014.


17.
(LOSS) INCOME PER SHARE

The calculations of basic and diluted (loss) income per share for the three and six months ended June 30, 2015 and 2014 are based on the following:
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2015

2014

 
2015

2014

 
 
(restated note 2(b))

 
 
(restated note 2(b))

 
 
 
 
 
 
Basic net (loss) income

($7,327
)

($10,157
)
 

$1,836


($22,595
)
(Loss) income used in the calculation of diluted (loss) income per share
(7,327
)
(10,157
)
 
1,836

(22,595
)
 
 
 
 
 
 
Weighted average number of common shares issued (thousands)
80,754

80,754

 
80,754

80,754

Adjustments for dilutive instruments:
 
 
 
 
 
Stock options (thousands)
—

—

 
169

—

Weighted average number of common shares for diluted (loss) income per share (thousands)
80,754

80,754

 
80,923

80,754

 
 
 
 
 
 
Basic (loss) income per share

($0.09
)

($0.13
)
 

$0.02


($0.28
)
Diluted (loss) income per share

($0.09
)

($0.13
)
 

$0.02


($0.28
)


 
 
24 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

18.
OPERATING SEGMENTS

The following is a summary of the reported amounts of income or loss, and the carrying amounts of assets and liabilities by operating segment:
Three months ended June 30, 2015
Pirquitas mine

Marigold mine

Exploration and evaluation properties

Other reconciling items (i)

Total

 
$ 

$

$

$

$

Revenue
37,860

57,958

—

—

95,818

Cost of inventory
(22,470
)
(34,461
)
—

—

(56,931
)
Depletion, depreciation and amortization
(12,570
)
(8,102
)
—

—

(20,672
)
Export duties
(1,896
)
—

—

—

(1,896
)
Cost of sales
(36,936
)
(42,563
)
—

—

(79,499
)
Income from mine operations
924

15,395

—

—

16,319

 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(1,912
)
(568
)
(1,319
)
(103
)
(3,902
)
Operating (loss) income
(1,443
)
14,951

(1,304
)
(6,990
)
5,214

(Loss) income before income tax
(4,620
)
14,331

(734
)
(12,293
)
(3,316
)
 
 
 
 
 
 
Interest income and other finance income
10

12

—

272

294

Interest expense and other finance costs
(1,342
)
(91
)
(20
)
(4,994
)
(6,447
)
Income tax (expense)
(200
)
(3,510
)
(111
)
(190
)
(4,011
)
 
 
 
 
 
 
As at June 30, 2015
 
 
 
 
 
Total assets
202,485

360,519

104,575

328,970

996,549

Non-current assets
123,150

245,389

92,042

32,255

492,836

Total liabilities
(125,916
)
(60,384
)
(8,340
)
(225,078
)
(419,718
)

Three months ended June 30, 2014
    Pirquitas mine

Marigold mine

Exploration and evaluation properties (restated note 2(b))

Other reconciling items (i)

Total (restated note 2(b))

 
$

$

$

$

$

Revenue
36,261

28,026

—

—

64,287

Cost of inventory
(20,176
)
(24,058
)
—

—

(44,234
)
Depletion, depreciation and amortization
(6,037
)
(704
)
—

—

(6,741
)
Export duties
(2,290
)
—

—

—

(2,290
)
Cost of sales
(28,503
)
(24,762
)
—

—

(53,265
)
Income from mine operations
7,758

3,264

—

—

11,022

 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(54
)
—

(3,722
)
(536
)
(4,312
)
Operating income (loss)
7,450

2,866

(3,664
)
(7,590
)
(938
)
Income (loss) before income tax
4,217

2,605

(2,774
)
(14,105
)
(10,057
)
 
 
 
 
 
 
Interest income and other finance income
289

1

—

334

624

Interest expense and other finance costs
(983
)
(157
)
(27
)
(4,158
)
(5,325
)
Income tax recovery (expense)
—

74

(87
)
(87
)
(100
)
 
 
 
 
 
 
As at December 31, 2014
 
 
 
 
 
Total assets
245,819

343,411

101,798

295,221

986,249

Non-current assets
140,856

240,893

90,980

21,702

494,431

Total liabilities
(121,191
)
(45,401
)
(13,723
)
(226,684
)
(406,999
)

 
 
25 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

18.
OPERATING SEGMENTS (Cont'd)

Six months ended June 30, 2015
Pirquitas mine

Marigold mine

Exploration and evaluation properties

Other reconciling items (i)

Total

 
$ 

$

$

$

$

Revenue
82,015

125,524

—

—

207,539

Cost of inventory
(49,896
)
(68,626
)
—

—

(118,522
)
Depletion, depreciation and amortization
(22,482
)
(14,549
)
—

—

(37,031
)
Export duties
(5,265
)
—

—

—

(5,265
)
Cost of sales
(77,643
)
(83,175
)
—

—

(160,818
)
Income from mine operations
4,372

42,349

—

—

46,721

 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(3,116
)
(1,654
)
(2,849
)
(246
)
(7,865
)
Operating income (loss)
785

40,819

(2,930
)
(12,185
)
26,489

(Loss) income before income tax
(5,219
)
39,946

(1,974
)
(23,501
)
9,252

 
 
 
 
 
 
Interest income and other finance income
25

20

—

830

875

Interest expense and other finance costs
(2,774
)
(219
)
(38
)
(9,668
)
(12,699
)
Income tax recovery (expense)
(200
)
(13,488
)
3,643

2,629

(7,416
)
Six months ended June 30, 2014
    Pirquitas mine

Marigold mine

Exploration and evaluation properties (restated note 2(b))

Other reconciling items (i)

Total (restated note 2(b))

 
$

$

$

$

$

Revenue
69,997

28,026

—

—

98,023

Cost of inventory
(40,081
)
(24,058
)
—

—

(64,139
)
Depletion, depreciation and amortization
(11,117
)
(704
)
—

—

(11,821
)
Export duties
(5,117
)
—

—

—

(5,117
)
Cost of sales
(56,315
)
(24,762
)
—

—

(81,077
)
Income from mine operations
13,682

3,264

—

—

16,946

 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(208
)
—

(6,714
)
(766
)
(7,688
)
Operating income (loss)
13,318

2,866

(6,741
)
(16,719
)
(7,276
)
(Loss) income before income tax
(5,721
)
2,605

887

(19,197
)
(21,426
)
 
 
 
 
 
 
Interest income and other finance income
1,234

1

—

954

2,189

Interest expense and other finance costs
(1,753
)
(157
)
(65
)
(8,504
)
(10,479
)
Income tax (expense) recovery
(75
)
74

(189
)
(979
)
(1,169
)

(i) Other reconciling items refer to items that are not reported as part of segment performance as they are managed on a corporate basis.

Segment revenue by product
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2015

2014

 
2015

2014

 
%

%

 
%

%

Silver
35

50

 
37

60

Gold
60

43

 
60

29

Zinc
3

6

 
2

10

Other
2

1

 
1

1


 
 
26 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

18.
OPERATING SEGMENTS (Cont'd)

Segment revenue by location and major customers
Our Pirquitas mine sales are made to external customers located in various geographical areas. For the Pirquitas mine segment, we had no customer individually account for more than 10% of total revenue during the six months ended June 30, 2015, and four customers which individually accounted for between 10% and 17% of total revenue during the six months ended June 30, 2014. Marigold mine's principal product is gold doré with the refined gold bullion sold to one customer, which accounted for 60% of total revenue during the six months ended June 30, 2015 and 29% of total revenue during the six months ended June 30, 2014.

Non-current assets by location
 
June 30, 2015

December 31, 2014

 
$

$

United States
248,450

242,013

Argentina
127,792

145,273

Mexico
71,789

72,967

Canada
33,154

22,277

Peru
11,651

11,901

Total
492,836

494,431



19.
FAIR VALUE MEASUREMENTS

Assets and liabilities that are held at fair value are categorized based on a valuation hierarchy which is determined by the following valuation methodology utilized:
 
Fair value at June 30, 2015
Fair value at December 31, 2014
 
Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

 
$ 

$

$

$

$ 

$

$

$

Recurring measurements
 
 
 
 
 
 
 
 
Trade receivables
—

32,394

—

32,394

—

26,529

—

26,529

Marketable securities
97,867

—

—

97,867

104,785

—

—

104,785

Other financial assets
—

—

1,954

1,954

—

—

1,954

1,954

Trade and other payables
—

4,234

—

4,234

—

3,281

—

3,281

Current debt
3,851

—

—

3,851

—

5,922

—

5,922

 
101,718

36,628

1,954

140,300

104,785

35,732

1,954

142,471

 
 
 
 
 
 
 
 
 
Non-recurring measurements
 
 
 
 
 
 
 
 
Property, plant and equipment
—

—

—

—

—

—

107,414

107,414

 
—

—

—

—

—

—

107,414

107,414

 
 
 
 
 
 
 
 
 
Fair values disclosed
 
 
 
 
 
 
 
 
Convertible notes (note 13)
207,164

—

—

207,164

185,831

—

—

185,831

 
207,164

—

—

207,164

185,831

—

—

185,831


 
 
27 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

19.
FAIR VALUE MEASUREMENTS (Cont'd)

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities

Marketable securities, consisting of FVTOCI investments with no trading restrictions are valued using a market approach based upon unadjusted quoted prices in an active market obtained from securities exchanges. The Argentine peso-denominated loan facility is valued using the official foreign exchange rate on the cash value at the end of the period. The fair value disclosed for our convertible notes is also included in Level 1, as the basis of valuation uses a quoted price in an active market.

Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)

Trade receivables from provisional invoices for concentrate sales are included in Level 2, as the basis of valuation uses quoted commodity prices.

Accrued liabilities relating to DSUs, RSUs, and PSUs are included in Level 2, as the basis of valuation uses quoted prices in active markets.

Other trade receivables (excluding receivables from provisional invoices) and accrued liabilities are carried at amortized cost, which approximates fair value due to their short-term nature.

Level 3 – inputs for an asset or liability that are not based on observable market data (unobservable inputs)

The deferred consideration from the sale of the Challacollo project (note 6) is included in Level 3, as certain assumptions used in the calculation of the fair value are not based on observable market data.

During the year ended December 31, 2014 the Pirquitas mine cash-generating unit was written down to its recoverable amount. The recoverable amount became the carrying value and will not be revalued, but certain assumptions used in the calculation of the recoverable amount are categorized as Level 3 in the fair value hierarchy.

There were no transfers into or out of Level 3 during the six months ended June 30, 2015 or during 2014.


20.
SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital items during the six months ended June 30, 2015 and 2014 are as follows:

 
Three months ended June 30
 
 
Six months ended June 30
 
 
2015

2014

 
2015

2014

 
$ 

$

 
 
 
Trade and other receivables
1,733

7,089

 
(2,386
)
20,024

Inventory
(9,103
)
(9,848
)
 
(1,599
)
(12,114
)
Trade and other payables
1,326

(6,127
)
 
(3,468
)
(10,109
)
Current provisions
3,180

1,177

 
3,579

2,959

 
(2,864
)
(7,709
)
 
(3,874
)
760


 
 
28 | Page
Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2015
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

20.
SUPPLEMENTAL CASH FLOW INFORMATION (Cont'd)
During the six months ended June 30, 2015 and 2014 we conducted the following non-cash investing transactions:
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2015

2014

 
2015

2014

 
$

$

 
$

$

Shares received in exchange of marketable securities (note 5)
1,062

—

 
1,062

—

Shares disposed in exchange of marketable securities (note 5)
(1,315
)
—

 
(1,315
)
—

Shares received for sale of mineral property (note 6)
—

—

 
—

9,188

Deferred consideration received for sale of mineral property (note 6)
—

—

 
—

1,954



21.
EVENTS AFTER THE REPORTING PERIOD

Subsequent to the quarter end, on August 4, 2015, we entered into a new $75 million senior secured revolving credit facility (the "Credit Facility") with a syndicate of banks. Amounts that are borrowed under the Credit Facility will incur variable interest at London Interbank Offered Rate plus an applicable margin ranging from 2.75% to 3.75% determined based on our net leverage ratio. The Credit Facility also provides for financial letters of credit at 66% of the applicable margin and undrawn fees are 25% of the applicable margin. The term of the Credit Facility is three years. All debts, liabilities and obligations under the Credit Facility are guaranteed by our material subsidiaries and secured by our assets, certain of our material subsidiaries, and the pledges of material subsidiaries. The Credit Facility may be used for reclamation bonding, working capital and other general corporate purposes.


 
 
29 | Page