INCOME AND MINING TAXES	9 Months Ended
Sep. 30, 2018
INCOME AND MINING TAXES.
INCOME AND MINING TAXES	NOTE 7 INCOME AND MINING TAXES The Company’s income tax expense differs from the amount computed by applying the U.S. federal and state statutory corporate income tax rate of 21% and 35%, for the nine months ended September 30, 2018 and 2017, respectively, to income before taxes primarily as a result of valuation allowances being applied to losses, changes in the deferred taxes associated with marketable securities and changes in deferred tax liabilities associated with mineral property interests. The deferred tax liability is also impacted by fluctuations in the foreign exchange rate between the Argentina peso and U.S. dollar. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of September 30, 2018, the Company had completed the accounting for tax effects corresponding to the 2017 tax year. Proposed regulations under Section 965 of the Internal Revenue Code, issued during the third quarter of 2018, limit the use of certain foreign tax credits to reduce the one-time transition tax. The Company’s foreign tax credits originating from MSC are captured under the proposed regulation changes. As a result of the proposed changes, the Company will report, in its 2017 tax return, $18.7 million of taxable income. The taxable income will be offset by the use of $18.7 million of net-operating losses. This will leave the Company with $149.4 million of cumulative US net-operating losses as at December 31, 2017. The Company continues to apply the guidance in SAB 118 when accounting for the 2018 effects of the Act. At September 30, 2018, the Company has not completed the accounting for the tax effects of enactment of the Act; however, in certain cases, the Company has made a reasonable estimate of the effects on the existing deferred tax balances. The Act subjects a US shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, the Company is still evaluating the effects of the GILTI provisions and have not yet determined which accounting policy will be adopted. At September 30, 2018, because the Company is still evaluating the GILTI provisions and analysis of future taxable income subject to GILTI, the Company has performed the GILTI calculation for the current year only, and has not provided additional GILTI on deferred items. For the three and nine months ended September 30, 2018, the Company recorded an income tax recovery of $1.6 million and $4.9 million, respectively (September 30, 2017 – recovery of $0.6 million and $3.1 million, respectively) as a result of the devaluation of the Argentina pesos and the amortization of the flow-through premium. The recoveries were partially offset by the recognition of a mining tax liability in relation to the Black Fox mine. Mining and income tax recovery as at September 30, 2018 includes $0.3 million of current income tax expense.

NOTE 7 INCOME AND MINING TAXES

The Company’s income tax expense differs from the amount computed by applying the U.S. federal and state statutory corporate income tax rate of 21% and 35%, for the nine months ended September 30, 2018 and 2017, respectively, to income before taxes primarily as a result of valuation allowances being applied to losses, changes in the deferred taxes associated with marketable securities and changes in deferred tax liabilities associated with mineral property interests. The deferred tax liability is also impacted by fluctuations in the foreign exchange rate between the Argentina peso and U.S. dollar.

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of September 30, 2018, the Company had completed the accounting for tax effects corresponding to the 2017 tax year. Proposed regulations under Section 965 of the Internal Revenue Code, issued during the third quarter of 2018, limit the use of certain foreign tax credits to reduce the one-time transition tax. The Company’s foreign tax credits originating from MSC are captured under the proposed regulation changes. As a result of the proposed changes, the Company will report, in its 2017 tax return, $18.7 million of taxable income. The taxable income will be offset by the use of $18.7 million of net-operating losses. This will leave the Company with $149.4 million of cumulative US net-operating losses as at December 31, 2017.

The Company continues to apply the guidance in SAB 118 when accounting for the 2018 effects of the Act. At September 30, 2018, the Company has not completed the accounting for the tax effects of enactment of the Act; however, in certain cases, the Company has made a reasonable estimate of the effects on the existing deferred tax balances.

The Act subjects a US shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, the Company is still evaluating the effects of the GILTI provisions and have not yet determined which accounting policy will be adopted. At September 30, 2018, because the Company is still evaluating the GILTI provisions and analysis of future taxable income subject to GILTI, the Company has performed the GILTI calculation for the current year only, and has not provided additional GILTI on deferred items.

For the three and nine months ended September 30, 2018, the Company recorded an income tax recovery of $1.6 million and $4.9 million, respectively (September 30, 2017 – recovery of $0.6 million and $3.1 million, respectively) as a result of the devaluation of the Argentina pesos and the amortization of the flow-through premium. The recoveries were partially offset by the recognition of a mining tax liability in relation to the Black Fox mine. Mining and income tax recovery as at September 30, 2018 includes $0.3 million of current income tax expense.