INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Income tax recovery

(in thousands)	2020			2019
Deferred income tax:
Origination of temporary differences	$	710		$	4,940
Tax benefit-previously unrecognized tax assets		1,255			1,326
Prior year over (under) provision		(1,105	)		(890	)
		860			5,376
Income tax recovery	$	860		$	5,376

Reconciliation of the effective rate of income tax

(in thousands)	2020			2019
Loss before taxes	$	(17,143	)	$	(23,517	)
Combined Canadian tax rate		26.50	%		26.50	%
Income tax recovery at combined rate		4,543			6,232
Difference in tax rates		1,746			2,048
Non-deductible amounts		(2,579	)		(2,675	)
Non-taxable amounts		2,535			2,362
Previously unrecognized deferred tax assets (1)		1,255			1,326
Renunciation of tax attributes-flow through shares		(417	)		(403	)
Change in deferred tax assets not recognized		(5,960	)		(2,476	)
Change in tax rates, legislation		(55	)		(81	)
Prior year over (under) provision		(1,105	)		(890	)
Other		897			(67	)
Income tax recovery	$	860		$	5,376

(1) The Company has recognized certain previously unrecognized Canadian tax assets in 2020 and 2019 as a result of the renunciation of certain tax benefits to subscribers pursuant to its December 2019 $4,715,460 and November 2018 $5,000,000 flow-through share offerings.

Deferred income tax assets (liabilities)

	At December 31			At December 31
(in thousands)	2020			2019
Deferred income tax assets:
Property, plant and equipment, net	$	387		$	387
Post-employment benefits		355			590
Reclamation obligations		11,709			9,561
Tax loss carry forwards		16,943			15,827
Other		7,747			8,537
Deferred income tax assets-gross		37,141			34,902
Set-off against deferred income tax liabilities		(37,141	)		(34,902	)
Deferred income tax assets-per balance sheet	$	—		$	—
Deferred income tax liabilities:
Inventory	$	(757	)	$	(742	)
Property, plant and equipment, net		(44,436	)		(41,949	)
Other		(1,140	)		(1,135	)
Deferred income tax liabilities-gross		(46,333	)		(43,826	)
Set-off of deferred income tax assets		37,141			34,902
Deferred income tax liabilities-per balance sheet	$	(9,192	)	$	(8,924	)

Deferred income tax liability continuity

(in thousands)	2020			2019
Balance-January 1	$	(8,924	)	$	(12,963	)
Recognized in income (loss)		860			5,376
Recognized in other liabilities (flow-through shares)		(902	)		(1,337	)
Recognized in other comprehensive income		(226	)		—
Balance-December 31	$	(9,192	)	$	(8,924	)

Deferred income tax assets not recognized

	At December 31		At December 31
(in thousands)	2020		2019
Deferred income tax assets not recognized
Property, plant and equipment	$	4,744	$	7,344
Tax losses – capital		66,873		66,783
Tax losses – operating		42,635		35,904
Tax credits		1,126		1,126
Other deductible temporary differences		1,441		1,571
Deferred income tax assets not recognized	$	116,819	$	112,728

Canadian tax losses and tax credits not recognized

	Expiry		At December 31			At December 31
(in thousands)	Date		2020			2019
Tax losses - gross		2025-2040	$	220,039		$	192,197
Tax benefit at tax rate of 26% - 27%				59,578			51,731
Set-off against deferred tax liabilities				(16,943	)		(15,827	)
Total tax loss assets not recognized				42,635			35,904
Tax credits		2025-2035		1,126			1,126
Total tax credit assets not recognized			$	1,126		$	1,126