Derivative instruments

9 Months Ended

Sep. 30, 2014

Derivative instruments [Text Block]

9. Derivative instruments

Concentrate Sales Contracts

The Company enters into concentrate sales contracts with buyers which provides for a provisional payment based upon provisional assays and quoted metal prices. The provisionally priced sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates at the forward price at the time of sale. The embedded derivative, which is the final settlement based on a future price, does not qualify for hedge accounting. These embedded derivatives are recorded in Concentrate settlement and other receivables on the consolidated balance sheet and are adjusted to fair value through earnings each period until the date of final settlement.

Fixed Forward Contracts

At September 30, 2014, the Company did not have any fixed forward contracts to sell silver or copper.