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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended
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Jun. 30, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. |
Risks and Uncertainties | Risks and Uncertainties COVID-19 On March 11, the World Health Organization (“WHO”) declared the COVID-19 virus a global pandemic. As a result of the pandemic, many jurisdictions, including the United States, Canada, Mexico and Argentina, instituted restrictions on travel, public gatherings, and certain business operations. Even absent government-mandated shut-downs, we were required to suspend operations at our mines to protect the health and safety of our employees and contractors. This resulted in temporary shutdowns of all or a portion of our operations at all our mine sites at the start of Q2. Since that date, all operations at all of our operating mines and at El Gallo in Mexico have recommenced following a ramp-up period, with operations at the San Jose mine in Argentina still compromised due to travel restrictions which affect mobilization of personnel. The temporary shutdowns adversely impacted the Company’s operations, cash flow, and liquidity in the second quarter of 2020. In addition to the adverse effect on revenue, we have incurred costs in connection with the shutdowns and subsequent ramp-up. However, the long-term impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. Achieving normal operating capacity is also dependant on the continued availability of supplies, which is out of the Company’s control. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be further affected. The Company is not able to estimate the duration of the pandemic and potential impact on its business if disruptions or delays in business developments and shipments of product occur. In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly.The Company has completed various scenario planning analyses to consider potential impacts of COVID-19 on its business, including volatility in commodity prices, temporary disruptions and/or curtailments of operating activities (voluntary or involuntary). As of the date of the issuance of these unaudited Condensed Consolidated Financial Statements, there have been no other significant impacts, including impairments, to the Company’s operations and financial statements. Going Concern In the preparation of the interim financial statements, management is required to identify when events or conditions indicate that substantial doubt may exist about the Company’s ability to continue as a going concern. Substantial doubt about the Company’s ability to continue as a going concern would exist when relevant conditions and events, considered in aggregate, indicate that the Company will not be able to meet its obligations as they become due for a period of at least, but not limited to, 12 months from the balance sheet date. When the Company identifies conditions or events that raise potential for substantial doubt about its ability to continue as a going concern, the Company considers whether its plans that are intended to mitigate those relevant conditions or events will alleviate the potential substantial doubt. ​ In June 2020, the Company refinanced its senior secured term loan facility (see note 11) and was in full compliance with financial covenants as at June 30, 2020. However, as a result of the significant expected resource reduction at the Gold Bar mine, resulting in an initial revised mine plan which yields less cash flow coupled with, operational challenges at Black Fox, and the disruptions to the Company’s operations caused by the COVID-19 pandemic, there is uncertainty about the Company’s ability to generate sufficient operating cash flow to both conduct further operation, exploration and development of its mineral properties and to remain in compliance with certain of its financial covenants, over the next 12 months. Non-compliance with these covenants would result in a breach under the Company’s debt agreement. ​ In response to this uncertainty, the Company is evaluating options to raise additional equity, and curtail expenditures. The Company’s ability to continue as a going concern is dependent on the successful completion of one or both of these initiatives to ensure that the Company has sufficient liquidity in order to fund its operations and remain in compliance with its debt covenants. After considering its plans, management has concluded that there are no material uncertainties relating to events or conditions that may cast substantial doubt upon the Company’s ability to continue as a going concern for a period of 12 months from the consolidated balance sheet date. The estimates used by management in reaching this conclusion are based on information available as at the date these financial statements were authorized for issuance and include internally generated cash flow forecasts. Accordingly, actual results could differ from these estimates and resulting variances may be material to management’s assessment.
Recently Adopted And Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Accounting for Government Assistance: In June 2020, the Company analogized guidance to account for the COVID relief funds received from the Small Business Administration (SBA) and the Canada Revenue Agency (“CRA”). The ability to analogize standards from other GAAP sources is provisioned under ASC 105-05-2 when guidance is not provided for certain transactions under US GAAP. The adoption of the standard had a material impact on the financial statements as of June 30, 2020. Under this policy, the Company has recognized a deferred government assistance liability in the consolidated balance sheets with regards to the funds received and will recognize the income from the funds in the Statement of Operations as the criteria for recognition of the relief funds are met. Changes to the Disclosure Requirements for Fair Value Measurement: In August 2018, the FASB issued ASU 2018- 13, “Fair Value Measurement (ASC 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the disclosure requirements for fair value measurements by removing, modifying, or adding disclosures. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The adoption of ASU 2018-13 did not have a material impact on the Company’s financial statements and related disclosures. Recently Issued Accounting Pronouncements Income Taxes: In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740).” ASU 2019-12 simplifies the accounting for income taxes by reducing existing complexity in accounting standards. The update to the accounting standards is effective for the Company for the fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the effect of this amendment and the impact it may have on the Company’s consolidated financial statements.

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