XML 34 R16.htm IDEA: XBRL DOCUMENT

Note 9 - Fair Value Measurement

9 Months Ended

Sep. 30, 2022

Note 9.

Fair Value Measurement

Fair value adjustments, net is comprised of the following:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
(Loss) gain on derivative contracts	$	873		$	12,148		$	(20)		$	(4,692	)
Unrealized loss on investments in equity securities		(5,110	)		(2,861	)		(14,749	)		(7,117	)
(Loss) gain on disposition or exchange of investments		(3	)		—			66			1,158

Total fair value adjustments, net	$	(4,240	)	$	9,287		$	(14,703	)	$	(10,651	)

Accounting guidance has established a hierarchy for inputs used to measure assets and liabilities at fair value on a recurring basis. The three levels included in the hierarchy are:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: significant other observable inputs; and

Level 3: significant unobservable inputs.

The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).


Description	Balance at September 30, 2022		Balance at December 31, 2021		Input Hierarchy Level
Assets:
Cash and cash equivalents:
Money market funds and other bank deposits	$	144,669	$	210,010		Level 1
Current and non-current investments
Equity securities		13,299		14,470		Level 1
Trade accounts receivable:
Receivables from provisional concentrate sales		12,477		36,437		Level 2
Restricted cash balances:
Certificates of deposit and other deposits		1,246		1,053		Level 1
Derivative contracts – current and non-current derivatives assets:
Foreign exchange contracts		591		5,207		Level 2
Metal forward and put option contracts		27,393		—		Level 2

Total assets	$	199,675	$	267,177

Liabilities:
Derivative contracts – current derivatives liabilities and other non-current liabilities:
Foreign exchange contracts	$	11,334	$	8		Level 2
Metal forward and put option contracts		—		37,873		Level 2

Total liabilities	$	11,334	$	37,881

Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value, and a small portion consists of municipal bonds having maturities of less than 90 days, which are recorded at fair value.

Current and

non-current

restricted cash balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits and are valued at cost, which approximates fair value.

Our

non-current

available for sale securities consist of marketable equity securities of companies in the mining industry which are valued using quoted market prices for each security.

Trade accounts receivable from provisional concentrate sales are subject to final pricing and valued using quoted prices based on forward curves for the particular metals. The embedded derivative contained in our concentrate sales is adjusted to fair market value through earnings each period prior to final settlement.

We use financially-settled forward contracts to manage exposure to changes in the exchange rate between USD and CAD, and the impact on

CAD-denominated

operating and capital costs incurred at our Casa Berardi unit and the Keno Hill mine (see

Note 8

for more information). The fair value of each contract represents the present value of the difference between the forward exchange rate for the contract settlement period as of the measurement date and the contract settlement exchange rate.

We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final settlement. We also use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our forecasted future sales (see

Note 8

for more information). The fair value of each forward contract represents the present value of the difference between the forward metal price for the contract settlement period as of the measurement date and the contract settlement metal price.

At September 30, 2022, our Senior Notes and IQ Notes were recorded at their carrying value of $470.1 million and $35.6 million, respectively, net of unamortized initial purchaser discount/premium and issuance costs. The estimated fair values of our Senior Notes and IQ Notes were $442.2 million and $32.7 million, respectively, at September 30, 2022. Quoted market prices, which we consider to be Level 1 inputs, are utilized to estimate fair values of the Senior Notes. Unobservable inputs which we consider to be Level 3, including an assumed current annual yield of 8.7%, are utilized to estimate the fair value of the IQ Notes. See

Note 7

for more information.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details