Note 10 - Derivative Instruments

12 Months Ended

Dec. 31, 2025

Disclosure Text Block [Abstract]

Derivative Instruments

Note 10: Derivative Instruments

General

Our current risk management policy provides that up to 75% of five years of our foreign currency, lead and zinc metals price and silver and gold 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.

Foreign Currency

Our wholly-owned subsidiaries owning our Casa Berardi and Keno Hill operations 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 December 31, 2025, we have a total of 216 forward contracts outstanding to buy a total of CAD $140.8 million having a notional amount of USD$103.1 million with CAD-to-USD exchange rates ranging between 1.3148 and 1.4202, with the following exposures for 2026:

•Forecasted cash operating costs at Casa Berardi of CAD $35.7 million at an average CAD-to-USD exchange rate of 1.323.

•Forecasted cash operating costs at Keno Hill of CAD $59.5 million at an average CAD to USD exchange rate of 1.377.

•Forecasted capital expenditures at Casa Berardi of CAD$3.5 million at an average CAD-to-USD exchange rate of 1.336.

•Forecasted capital expenditures at Keno Hill of CAD$37.5 million at an average CAD-to-USD exchange rate of 1.390.

•Forecasted exploration expenditures at Keno Hill of CAD$3.3 million at an average CAD-to-USD exchange rate of 1.383.

•Forecasted Corporate costs of CAD$1.3 million at an average CAD-to-USD exchange rate of 1.354.

As of December 31, 2025 and 2024, we recorded the following balances for the fair value of the contracts (in millions):

	December 31,
Balance sheet line item:	2025			2024
Other current assets	$	1.1		$	—
Other non-current assets		—			—
Current derivative liabilities		(0.8	)		(8.2	)
Non-current derivative liabilities		—			(2.0	)

Net unrealized losses of approximately $0.9 million related to the effective portion of the hedges were included in accumulated other comprehensive income (loss) as of December 31, 2025. Unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying operating expenses are recognized. We estimate approximately $0.9 million in net unrealized losses included in accumulated other comprehensive income (loss) as of December 31, 2025 will be reclassified to current earnings in the next twelve months.

For the year ended December 31, 2025, net realized losses of approximately $4.1 million (2024 and 2023: net realized losses of $3.8 million and $3.6 million, respectively), on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive loss and included in cost of sales and other direct production costs. For the year ended December 31, 2025, net realized gains of approximately $4.8 million (2024: net unrealized losses of $5.7 million; 2023: net unrealized gains of $1.2 million) related to contracts not designated as hedges and no net unrealized gains or losses related to ineffectiveness of the hedges were included in fair value adjustments, net on our consolidated statements of operations and comprehensive income (loss).

Metals Prices

We currently use some combination of financially-settled forward contracts, Collars or put options to manage the exposure to:

•changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement; and

•changes in prices of zinc, lead, silver and gold contained in our forecasted future concentrate shipments.

The following tables summarize the quantities of metals committed under forward sales contracts at December 31, 2025 and 2024:

December 31, 2025	Pounds under contract (in 000's)				Average price per pound
	Zinc		Lead		Zinc		Lead
	(pounds)		(pounds)		(pounds)		(pounds)
Contracts on provisional sales
2025 settlements		18,850		13,117	$	1.37	$	1.05
Contracts on forecasted sales
2025 settlements		53,407		42,108	$	1.33	$	1.02
2026 settlements		23,810		—	$	1.36	N/A

December 31, 2024	Ounces/pounds under contract (in 000's)								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		1,535		2		20,834		14,661	$	31.46	$	2,673	$	1.40	$	0.97
Contracts on forecasted sales
2024 settlements		—		—		59,194		47,840	N/A		N/A		$	1.39	$	0.99
2025 settlements		—		—		6,283		52,911	N/A		N/A		$	1.41	$	1.03

We designate the contracts for lead and zinc contained in our forecasted future shipments as hedges for accounting purposes, with gains and losses deferred to accumulated other comprehensive loss until the hedged product ships. The forward contracts for silver and gold contained in our concentrate shipments have not been designated as hedges and are marked-to-market through earnings each period.

Since the first quarter of 2025, we have and continue to utilize Collars to manage our exposure to changes in the price of precious metals in both our provisional concentrate sales, forecasted Keno Hill future concentrate shipments and forecasted Casa Berardi gold

sales. These Collars provide us a contractual right to receive at least the minimum price if market prices fall below the minimum price level specified in the contracts, while limiting our potential gains to the maximum price level specified in the contracts, even if market prices rise higher. This strategy helps protect us from significant price drops while still allowing for some upside potential within the minimum and maximum price range. For the year ending December 31, 2025, these collars had net losses of $51.5 million. For accounting purposes, they are not designated as hedges. The following tables summarize the quantities of metals hedged under Collars at December 31, 2025:

Settlement Period	Production Protected		Average strike price per silver ounce		Average strike price per gold ounce
	Silver (ounces)	Gold (ounces)	Minimum ($)	Maximum ($)	Minimum ($)	Maximum ($)
Contracts on provisional sales
2026 settlements	2,120	—	49.78	63.43	N/A	N/A
Contracts on forecasted sales
2026 settlements	800	4	34.29	55.70	3,000	4,840

In December 2025, we entered into financially-settled put option contracts to manage the exposure of future silver sales to potential declines in market prices of silver. These put options give us the option, but not the obligation, to realize established prices on quantities of silver to be sold in the future. Total premium paid for the put contracts was $25 million and we recorded a $10.4 million unrealized loss on the puts during the year ending December 31, 2025. The following table summarizes the quantities of metals for which we have entered into put contracts and the average exercise prices as of December 31, 2025:

Settlement Period	Production Protected	Strike price per ounce
	Silver (ounces)	($)
Contracts on forecasted sales
2026 settlements	9,672	50.00

At December 31, 2025 and 2024, we recorded the following balances for the fair value of derivative contracts held at that time (in millions):

	December 31, 2025								December 31, 2024
Balance sheet line item:	Contracts in an asset position		Contracts in a liability position			Net asset (liability)			Contracts in an asset position		Contracts in a liability position		Net asset (liability)
Other current assets	$	8.6	$	—		$	8.6		$	11.5	$	—	$	11.5
Other non-current assets		7.2		—			7.2			6.6		—		6.6
Current derivatives liability		—		(36.4	)		(36.4	)		—		—		—
Other non-current liability		—		(1.9	)		(1.9	)		—		—		—

Net realized and unrealized gains of approximately $0.2 million related to the effective portion of the contracts designated as hedges were included in accumulated other comprehensive loss as of December 31, 2025. Realized and unrealized gains and losses will be transferred from accumulated other comprehensive loss to current earnings as the underlying forecasted sales transaction is recognized. We estimate approximately $1.1 million in net realized and unrealized gains included in accumulated other comprehensive loss as of December 31, 2025 will be reclassified to current earnings in the next twelve months.

We recognized a net loss of $12.0 million, including a $13.1 million gain transferred from accumulated other comprehensive income (loss), during 2025 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales. The net gain recognized on the contracts offsets loss related to price adjustments on our provisional concentrate sales, both of which resulted from changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

We recognized a net gain of $1.3 million, including a $11.4 million gain transferred from accumulated other comprehensive income (loss), during 2024 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales. The net gain recognized on the contracts offsets loss related to price adjustments on our provisional concentrate sales, both of which resulted from changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

We recognized a net gain of $19.7 million during 2023 on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which is included in sales. The net gain recognized on the contracts offsets loss related to price adjustments on our provisional concentrate sales, both of which resulted from changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

Credit-risk-related Contingent Features

Certain of our derivative contracts contain cross default provisions which provide that a default under our revolving credit agreement would cause a default under the derivative contract. As of December 31, 2025, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these arrangements was $43.6 million as of December 31, 2025, and includes accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at December 31, 2025, we could have been required to settle our obligations under the agreements at their termination value of $43.6 million.