Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 Quoted market prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):

	Fair Value at December 31, 2013
	Total		Level 1		Level 2		Level 3
Assets:
Marketable equity securities	$	14,521	$	14,521	$	—	$	—
Gold and silver put options	135		—		135		—
	$	14,656	$	14,521	$	135	$	—
Liabilities:
Palmarejo royalty obligation embedded derivative	$	40,338	$	—	$	—	$	40,338
Rochester NSR royalty obligation	21,630		—		—		21,630
Other derivative instruments, net	1,590		—		1,590		—
	$	63,558	$	—	$	1,590	$	61,968

	Fair Value at December 31, 2012
	Total		Level 1		Level 2		Level 3
Assets:
Short-term investments	$	999	$	999	$	—	$	—
Marketable equity securities	27,065		27,065		—		—
Put and call options	943		—		943		—
	$	29,007	$	28,064	$	943	$	—
Liabilities:
Palmarejo royalty obligation embedded derivative	$	145,098	$	—	$	145,098	$	—
Put and call options	9,299		—		9,299		—
	$	154,397	$	—	$	154,397	$	—

The Company’s short-term investments are readily convertible to cash and, therefore, these investments are classified within Level 1 of the fair value hierarchy.

The Company’s marketable equity securities are recorded at fair market value in the financial statements based on quoted market prices, which are accessible at the measurement date for identical assets. Such instruments are classified within Level 1 of the fair value hierarchy. Please see Note 13 -- Investments for additional details on marketable equity securities.

The Company’s gold put and call options and other derivative instruments, net, which relate to the concentrate sales contracts and foreign exchange contracts, are valued using pricing models, which require inputs that are derived from observable market data, including contractual terms, forward market prices, yield curves and credit spreads. The model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.

The estimated fair value of the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation was estimated based on observable market data including contractual terms, forward silver and gold prices, yield curves and credit spreads.  The Company’s current mine plans are a significant input used in the estimated fair value of the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation and is considered company specific and unobservable.  Therefore, the Company has classified the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation as Level 3 financial liabilities. Based on the current mine plans, an expected royalty duration of 2.5 years and 5.1 years were used to estimate the fair value of the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation, respectively, as of December 31, 2013. The Company had no Level 3 financial assets or liabilities as of December 31, 2012.

The following table presents the changes in the fair value of the Company's Level 3 financial liabilities for the twelve months ended December 31, 2013.

	Balance at the beginning of the period		Additions		Revaluation			Transfers from Level 2		Balance at the end of the period		Unrealized gains (losses) recognized in income statement
Palmarejo royalty obligation embedded derivative	$	—	$	—	$	(104,760	)	$	145,098	$	40,338	$	104,760
Rochester NSR royalty obligation	—		22,046		(416		)	—		21,630		416

During 2013, Coeur recorded write-downs related to Property, Plant, and Equipment and Mining Properties totaling $773.0 million. The fair values of Property, Plant, and Equipment and Mining Properties were estimated using a discounted cash flow approach. The discounted cash flow model used significant unobservable inputs and is therefore classified within Level 3 for the fair value hierarchy. The following table sets forth the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company's non-recurring Level 3 fair value measurements:

Description	Valuation technique	Unobservable input	Range / Weighted Average
Property, plant, and equipment	Discounted cash flow	Discount rate	8.5% - 10.5%
		Long-term silver price	$25.00
		Long-term gold price	$1,450
Mining properties	Discounted cash flow	Discount rate	8.5% - 10.5%
		Long-term silver price	$25.00
		Long-term gold price	$1,450

The fair value of financial assets and liabilities that are measured at book value in the financial statements at December 31, 2013 and December 31, 2012 are presented in the following table (in thousands):

	Fair Value at December 31, 2013
	Total		Level 1		Level 2		Level 3
Liabilities:
3.25% Convertible Senior Notes due 2028	$	5,067	$	5,067	$	—	$	—
7.875% Senior Notes due 2021	307,314		307,314		—		—
Palmarejo Gold Production Royalty Obligation	65,212		—		—		65,212

	Fair Value at December 31, 2012
	Total		Level 1		Level 2		Level 3
Liabilities:
3.25% Convertible Senior Notes due 2028	$	48,220	$	48,220	$	—	$	—
Palmarejo Gold Production Royalty Obligation	90,617		—		90,617		—

The fair value at December 31, 2013 and December 31, 2012 of the 3.25% Convertible Senior Notes and 7.875% Senior Notes outstanding were determined by active market transactions. As such, the notes are classified as Level 1 in the fair value hierarchy.

The fair value of the Palmarejo Gold Production Royalty Obligation is estimated based on observable market data including contractual terms, forward silver and gold prices, yield curves and credit spreads.  The Company’s current mine plan is a significant input used in the estimated fair value of the Palmarejo Gold Production Royalty Obligation and is considered company specific and unobservable.  Therefore, the Company has classified the Palmarejo Gold Production Royalty Obligation as Level 3 financial liabilities. Based on the current mine plan, an expected royalty duration of 2.5 years was used to estimate the fair value of the Palmarejo Gold Production Royalty Obligation as of December 31, 2013.

The fair value of the Company's cash equivalents, receivables, restricted assets, accounts payable, accrued liabilities, and capital leases approximate book value due to the nature of these assets and liabilities and are classified as Level 1 in the fair value hierarchy, except for capital leases which are classified as Level 2.

The fair value of the Company's non-current portion of the refundable value added tax is not practicable to estimate due to the uncertainty of the timing of the expected future cash flows to be received.