FAIR VALUE MEASUREMENTS

The following table presents the components of Fair value adjustments, net:



	Year ended December 31,
In thousands	2015		2014			2013
Palmarejo royalty obligation embedded derivative	$	3,101	$	(2,001	)	$	76,200
Rochester net smelter royalty (NSR) royalty obligation	818		3,653			416
Silver and gold options	1,283		1,058			7,119
Foreign exchange contracts	—		908			(967		)
Fair value adjustments, net	$	5,202	$	3,618		$	82,768

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), secondary priority to quoted prices in inactive markets or observable inputs (Level 2), and the lowest priority to unobservable inputs (Level 3).

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:



	Fair Value at December 31, 2015
In thousands	Total		Level 1		Level 2		Level 3
Assets:
Equity securities	$	2,766	$	2,756	$	—	$	10
Liabilities:
Palmarejo royalty obligation embedded derivative	$	4,957	$	—	$	—	$	4,957
Rochester NSR royalty obligation	9,593		—		—		9,593
Other derivative instruments, net	508		—		508		—
	$	15,058	$	—	$	508	$	14,550



	Fair Value at December 31, 2014
In thousands	Total		Level 1		Level 2		Level 3
Assets:
Equity securities	$	5,982	$	4,603	$	—	$	1,379
Silver and gold options	3,882		—		3,882		—
	$	9,864	$	4,603	$	3,882	$	1,379
Liabilities:
Palmarejo royalty obligation embedded derivative	$	21,912	$	—	$	—	$	21,912
Rochester NSR royalty obligation	15,370		—		—		15,370
Silver and gold options	1,039		—		1,039		—
Other derivative instruments, net	805		—		805		—
	$	39,126	$	—	$	1,844	$	37,282

The Company’s investments in equity securities are recorded at fair market value in the financial statements based primarily on quoted market prices. Such instruments are classified within Level 1 of the fair value hierarchy. Quoted market prices are not available for certain equity securities; these securities are valued using pricing models, which require the use of observable and unobservable inputs, and are classified within Level 3 of the fair value hierarchy.

The Company’s silver and gold options and other derivative instruments, net, which relate to concentrate and certain doré 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, credit spreads, and other unobservable inputs. 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 fair values of the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation were estimated based on observable market data including contractual terms, forward silver and gold prices, yield curves, and credit spreads, as well as the Company’s current mine plan which is considered a significant unobservable input. Therefore, the Company has classified these obligations as Level 3 financial liabilities. Based on current mine plans, expected royalty durations of 0.7 years and 2.5 years were used to estimate the fair value of the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation, respectively, at December 31, 2015.

No assets or liabilities were transferred between fair value levels in the year ended December 31, 2015.

The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities for the years ended December 31, 2015 and 2014:



	Year ended December 31, 2015
In thousands	Balance at the beginning of the period		Revaluation			Settlements			Balance at the end of the period
Assets:
Equity securities	$	1,379	$	(983	)	$	(386	)	$	10
Liabilities:
Palmarejo royalty obligation embedded derivative	$	21,912	$	(3,101	)	$	(13,854	)	$	4,957
Rochester NSR royalty obligation	$	15,370	(818		)	(4,959		)	$	9,593



	Year ended December 31, 2014
In thousands	Balance at the beginning of the period		Additions		Revaluation			Settlements			Transfers from Level 1		Balance at the end of the period
Palmarejo royalty obligation embedded derivative	$	40,338	$	—	$	2,001		$	(20,427	)	$	—	$	21,912
Rochester NSR royalty obligation	21,630		—		(3,653		)	(2,607		)	—		15,370
Equity securities	—		69		(55		)	—			1,365		1,379

During 2015, Coeur recorded write-downs related to Property, plant, and equipment and Mining properties totaling $313.3 million ($276.5 million net of tax). 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 and Mining properties	Discounted cash flow	Discount rate	7.50% - 11.00%
		Long-term silver price	$17.50
		Long-term gold price	$1,200

During 2014, Coeur recorded write-downs related to Property, plant, and equipment and Mining properties totaling $1,472.7 million ($1,021.8 million net of tax). 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 and Mining properties	Discounted cash flow	Discount rate	8.00% - 10.75%
		Long-term silver price	$19.00
		Long-term gold price	$1,275

During 2013, Coeur recorded write-downs related to Property, plant, and equipment and Mining properties totaling $773.0 million ($593.2 million net of tax). 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 and Mining properties	Discounted cash flow	Discount rate	8.50% - 10.50%
		Long-term silver price	$25.00
		Long-term gold price	$1,450

The fair value of financial assets and liabilities carried at book value in the financial statements at December 31, 2015 and December 31, 2014 is presented in the following table:



	December 31, 2015
In thousands	Book Value		Fair Value		Level 1		Level 2		Level 3
Liabilities:
3.25% Convertible Senior Notes due 2028	$	712	$	693	$	—	$	693	$	—
7.875% Senior Notes due 2021⁽¹⁾	373,433		227,487		—		227,487		—
Term Loan due 2020⁽²⁾	94,489		99,500		—		99,500		—
San Bartolomé Lines of Credit	4,571		4,571		—		4,571		—
Palmarejo gold production royalty obligation	15,207		15,580		—		—		15,580


(1)	Net of unamortized debt issuance costs and premium received of $5.3 million.


(2)	Net of unamortized debt issuance costs of $5.0 million.



	December 31, 2014
In thousands	Book Value		Fair Value		Level 1		Level 2		Level 3
Liabilities:
3.25% Convertible Senior Notes due 2028	$	5,334	$	4,979	$	—	$	4,979	$	—
7.875% Senior Notes due 2021⁽¹⁾	427,603		343,305		—		343,305		—
San Bartolomé Lines of Credit	14,785		14,785		—		14,785		—
Palmarejo gold production royalty obligation	34,047		38,290		—		—		38,290


(1)	Net of unamortized debt issuance costs and premium received of $7.3 million.

The fair values of the 3.25% Convertible Senior Notes due 2028 (the "Convertible Notes") and 7.875% Senior Notes due 2021 (the "Senior Notes") outstanding were estimated using quoted market prices. The fair value of the Term Loan due 2020 (the "Term Loan") approximates book value (excluding unamortized debt issuance costs) as the liability is secured, has a variable interest rate, and lacks significant credit concerns. The fair value of the San Bartolomé line of credit approximates book value due to the short-term nature of the liability and absence of significant interest rate or credit concerns. 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, as well as the Company’s current mine plan which is considered a significant unobservable input.