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Derivatives | 9 Months Ended
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Sep. 30, 2022
Derivatives |
Derivatives | 14. Derivatives ​ Embedded Derivatives ​ Concentrate sales contracts contain embedded derivatives due to the provisional pricing terms for unsettled shipments. At the end of each reporting period, the Company records an adjustment to accounts receivable and revenue to reflect the mark-to-market adjustments for outstanding provisional invoices based on forward metal prices. Please see Note—20 Fair Value Measurement for additional information on the realized and unrealized gain (loss) recorded to adjust accounts receivable and revenue. ​ The following table summarizes the Company’s unsettled sales contracts at September 30, 2022 with the quantities of metals under contract subject to final pricing occurring through November 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Gold | ​ | Silver | ​ | Copper | ​ | Lead | ​ | Zinc | ​ | ​ | Total
​ | ​ | (ounces) | ​ | (ounces) | ​ | (tonnes) | ​ | (tonnes) | ​ | (tonnes) | ​ | ​ | ​
Under contract | ​ | ​ | 4,784 | ​ | ​ | 253,342 | ​ | ​ | 282 | ​ | ​ | 1,647 | ​ | ​ | 3,373 | ​ | ​ | ​
Average forward price (per ounce or tonne) | ​ | $ | 1,741 | ​ | $ | 19.52 | ​ | $ | 7,738 | ​ | $ | 2,011 | ​ | $ | 3,474 | ​ | ​ | ​
Unsettled sales contracts value (in thousands) | ​ | $ | 8,329 | ​ | $ | 4,945 | ​ | $ | 2,182 | ​ | $ | 3,312 | ​ | $ | 11,718 | ​ | $ | 30,486
​ Other Derivatives ​ Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact the Company’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled. The fair value does not reflect the realized or cash value of the instrument. ​ As of September 30, 2022, the Company’s derivatives not designated as hedges consist of zinc zero cost collars used to manage its near-term exposure to cash flow variability from zinc price risks. A zero cost collar is a combination of two options: a sold call option and a purchased put option. The Company sold call options to establish the ceiling price of $3,500 per tonne of zinc that the Company will receive for the contracted zinc volume of 1,950 tonnes for October through December 2022. The purchased put establishes the floor price of $3,200 per tonne of zinc that the Company will receive for the same contracted tonnes and period of time. ​ Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Otherwise, any fair value gains or losses are recognized in earnings in the current period. The London Metal Exchange (“LME”) average zinc price of $3,660 per tonne during the nine months ended September 30, 2022 exceeded the call option ceiling of $3,313 per tonne, resulting in a realized loss of $2.4 million. The zinc price forward curve as of September 30, 2022 is below the put option ceiling, resulting in a $0.4 million asset on the remaining 1,950 tonnes. The asset recognized resulted in an unrealized gain of $2.3 million for the nine months ended September 30, 2022. ​ The Company manages credit risk by selecting counterparties believed to be financially strong, by entering into netting arrangements with counterparties and by requiring other credit risk mitigants, as appropriate. The Company actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits, and monitors credit exposures against those assigned limits.

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- Definition The entire disclosure for hybrid instruments and embedded derivatives, including discussion of the process used in evaluating whether a hybrid instrument in the form of a share constitutes a debt or equity security, and on what basis an embedded derivative was deemed to be separable or inseparable from the host instrument. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 15 -URI http://asc.fasb.org/subtopic&trid=2229187 + Details
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