Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

The Company’s gold stream agreement with a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) provided for a $22.0 million deposit from Franco-Nevada for the right and obligation, commencing in 2016, to purchase 50% of Palmarejo’s gold production (excluding production from certain properties acquired in 2015) at the lesser of $800 or market price per ounce. Because there is no minimum obligation associated with the deposit, it is not considered financing, and each shipment is considered to be a separate performance obligation. The streaming agreement represents a contract liability under ASC 606, which requires the Company to ratably recognize a portion of the deposit as revenue for each gold ounce delivered to Franco-Nevada. The remaining unamortized balance is included in Accrued liabilities and other and Other long-term liabilities on the Condensed Consolidated Balance Sheet. See Note 16 -- Commitments and Contingencies for additional detail.

The following table presents a roll forward of the Franco-Nevada contract liability balance:


	Three Months Ended March 31,
In thousands		2023		2022
Opening Balance		$	7,411	$	8,150
Revenue Recognized		(115)		(315)
Closing Balance		$	7,296	$	7,835

In December 2022, the Company received a $25.0 million prepayment (the “December 2022 Prepayment”) under the Amended Sales Contract (as defined below). The December 2022 Prepayment represents a contract liability under ASC 606, which requires the Company to recognize ratably a portion of the deposit as revenue for each gold ounce delivered to the customer. The remaining contract liability is included in Accrued liabilities and other on the Condensed Consolidated Balance Sheet. See Note 2 -- Summary of Significant Accounting Policies contained in the 2022 10-K and Note 16 -- Commitments and Contingencies in this Report for additional detail.

The following table presents a roll forward of the Amended Sales Contract liability balance:


	Three Months Ended March 31,
In thousands		2023		2022
Opening Balance		$	25,016	$	15,016
Additions		111		10,139
Revenue Recognized		(10,000)		—
Closing Balance		$	15,127	$	25,155