Our current risk management policy provides that up to 75% of five years of our foreign currency, and all metals price exposure may be covered under a derivatives program, with certain other limitations. Our program also utilizes derivatives to manage price risk exposure created from when revenue is recognized from a shipment of concentrate until final settlement.

These instruments expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of the hedged commodity or foreign currency and (ii) price risk to the extent that the spot price or currency exchange rate exceeds the contract price for quantities of our production and/or forecasted costs covered under contract positions.

Our wholly-owned subsidiaries owning the Casa Berardi operation and Keno Hill operation are USD-functional entities which routinely incur expenses denominated in CAD. Such expenses expose us to exchange rate fluctuations between the USD and CAD. We have a program to manage our exposure to fluctuations in the USD exchange rate for these subsidiaries' future operating and capital costs denominated in CAD. The program related to forecasted cash operating costs at Casa Berardi and Keno Hill utilizes forward contracts to buy CAD, some of which are designated as cash flow hedges. As of June 30, 2024, we have a total of 420 forward contracts outstanding to buy a total of CAD $302.4 million having a notional amount of USD $227.3 million to hedge the following exposures for 2024 through 2026.

Net unrealized losses of $4.7 million related to the effective portion of the foreign currency forward contracts designated as hedges are included in accumulated other comprehensive income (loss) as of June 30, 2024. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current earnings as the underlying operating expenses are recognized. We estimate $3.5 million in net unrealized losses included in accumulated other comprehensive income (loss) as of June 30, 2024 will be reclassified to current earnings in the next twelve months. Net realized losses of $1.1 million and $1.5 million for the three and six months ended June 30, 2024, respectively, and $1.1 million and $2.0 million for the three and six months ended June 30, 2023, respectively, on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive income (loss) and included in cost of sales and other direct production costs. Net losses of $0.5 million and $2.4 million for the three and six months ended June 30, 2024, respectively, and net gains of $2.4 million and $3.1 million for the three and six months ended June 30, 2023, respectively, were related to contracts not designated as hedges. No net unrealized gains or losses related to ineffectiveness of the hedges are included in fair value adjustments, net on our consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023, respectively.

We are currently using financially-settled forward contracts to manage the exposure to:

The following tables summarize the quantities of metals committed under forward metals contracts at June 30, 2024 and December 31, 2023:


June 30, 2024	Ounces/pounds under contract (in 000's except gold)							Average price per ounce/pound
	Silver		Gold	Zinc		Lead		Silver		Gold	Zinc		Lead
	(ounces)		(ounces)	(pounds)		(pounds)		(ounces)		(ounces)	(pounds)		(pounds)
Contracts on provisional sales
2024 settlements		2,250	-		8,488		15,322	$	29.83	N/A	$	1.29	$	0.99
Contracts on forecasted sales
2024 settlements	-		-		13,173		19,842	N/A		N/A	$	1.34	$	0.96
2025 settlements	-		-		9,700		63,824	N/A		N/A		1.40	$	0.98


December 31, 2023	Ounces/pounds under contract (in 000's except gold)								Average price per ounce/pound
	Silver		Gold		Zinc		Lead		Silver		Gold		Zinc		Lead
	(ounces)		(ounces)		(pounds)		(pounds)		(ounces)		(ounces)		(pounds)		(pounds)
Contracts on provisional sales
2023 settlements		735		3		441		15,542	$	24.40	$	2,045	$	1.51	$	1.00
Contracts on forecasted sales
2024 settlements		—		—		—		56,713	N/A		N/A		N/A		$	0.98
2025 settlements		—		—		—		49,273	N/A		N/A		N/A		$	0.98

Net realized and unrealized gains of $4.4 million related to the effective portion of the forward metals contracts designated as hedges were included in accumulated other comprehensive income (loss) as of June 30, 2024. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current earnings as the underlying forecasted sales are recognized. We estimate $4.8 million in net realized and unrealized gains included in accumulated other comprehensive income (loss) as of June 30, 2024 would be reclassified to current earnings in the next twelve months. The realized gains arose due to cash settlement of zinc contracts prior to maturity in 2022 and zinc and lead contracts during 2023 for net proceeds of $17.4 million and $8.5 million, respectively. We recognized a net loss of $12.5 million, including a $3.0 million gain transferred from accumulated other comprehensive income (loss), and a net gain of $8.2 million, including a $3.3 million gain transferred from accumulated other comprehensive income (loss) during the three months ended June 30, 2024 and 2023, respectively. We recognized a net loss of $9.4 million, including a $4.9 million gain transferred from accumulated other comprehensive income (loss), and a net gain of $9.1 million, including a $6.3 million gain transferred from accumulated other comprehensive income (loss) during the six months ended June 30, 2024 and 2023, respectively. These gains and losses were recognized on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which are included in sales. The net losses and gains recognized on the contracts offset gains and losses related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

During June 2024, the Company purchased 26,900 ounces of gold put options priced at $2,100 per ounce, which are not designated as hedges, to provide price protection for Casa Berardi's underground production for the remainder of 2024 at a total cost of $0.1 million. At June 30, 2024, the fair value of these gold put options was negative $0.1 million.

Certain of our derivative contracts contain cross default provisions which provide that a default under our Credit Agreement would cause a default under the derivative contract. As of June 30, 2024, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these agreements was $9.7 million as of June 30, 2024, which includes accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at June 30, 2024, we could have been required to settle our obligations under the agreements at their termination value of $9.7 million.