Note 11 - Business Segments and Significant Customers

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 11: Business Segments and Significant Customers

We discover, acquire, develop, produce, and market concentrates and doré containing silver, gold, lead and zinc.  Our products consist of both metal concentrates, which we sell to custom smelters and brokers, and unrefined bullion bars (doré), which may be sold as doré or further refined before sale to precious metals traders.  We are currently organized and managed in three segments, which represent our operating units: the Greens Creek unit, the Lucky Friday unit and the Casa Berardi unit. As further discussed in Note 15, we completed the acquisition of Aurizon on June 1, 2013, giving us 100% ownership of the Casa Berardi mine in Quebec, Canada. As a result, we added a new reporting segment in 2013 for the Casa Berardi unit.

General corporate activities not associated with operating units and their various exploration activities, as well as discontinued operations and idle properties, are presented as “other.”  Interest expense, interest income and income taxes are considered general corporate items, and are not allocated to our segments.

Sales of metal concentrates and metal products are made principally to custom smelters, brokers and metals traders. The percentage of sales contributed by each segment is reflected in the following table:

	Year Ended December 31,
	2014			2013			2012
Greens Creek		49.0	%		68.8	%		100.0	%
Lucky Friday		17.9	%		11.6	%		—	%
Casa Berardi		33.1	%		19.6	%		—	%
		100	%		100	%		100	%

The tables below present information about reportable segments as of and for the years ended December 31, 2014, 2013 and 2012 (in thousands).

	2014			2013			2012
Net sales to unaffiliated customers:
Greens Creek	$	245,175		$	263,263		$	320,895
Lucky Friday		89,757			44,204			248
Casa Berardi		165,849			75,122			—
	$	500,781		$	382,589		$	321,143
Income (loss) from operations:
Greens Creek	$	39,758		$	62,178		$	138,245
Lucky Friday		21,502			(3,563	)		(25,179	)
Casa Berardi		11,828			(15,708	)		—
Other		(51,460	)		(75,301	)		(75,200	)
	$	21,628		$	(32,394	)	$	37,866
Capital additions (including non-cash additions):
Greens Creek	$	31,476		$	57,119		$	62,184
Lucky Friday		52,193			55,902			55,998
Casa Berardi		48,615			41,425			—
Other		18,801			8,162			11,760
	$	151,085		$	162,608		$	129,942
Depreciation, depletion and amortization:
Greens Creek	$	63,505		$	55,265		$	43,522
Lucky Friday		9,431			7,833			—
Casa Berardi		38,198			18,030			—
	$	111,134		$	81,128		$	43,522
Other significant non-cash items:
Greens Creek	$	2,807		$	1,961		$	4,037
Lucky Friday		72			96			92
Casa Berardi		847			474			—
Other		506			1,512			33,922
	$	4,232		$	4,043		$	38,051
Identifiable assets:
Greens Creek	$	704,121		$	744,027		$	741,666
Lucky Friday		356,482			313,793			226,196
Casa Berardi		800,961			821,058			—
Other		400,500			353,241			410,428
	$	2,262,064		$	2,232,119		$	1,378,290

The Lucky Friday segment had nominal sales during 2012 due to the halt of production most of the year. At the end of 2011, MSHA began a special impact inspection at the Lucky Friday mine which resulted in an order to remove built-up cementitious material from the Silver Shaft. In response, we submitted a plan to MSHA and received approval to remove the material, and this work commenced in the first quarter of 2012. The Silver Shaft work was completed in early 2013, and limited production at the Lucky Friday began in February. We experienced a ramp-up in mine output during the year, as additional production areas of the mine came on line, until we reached full production levels in September 2013. The smelter contracts related to treatment of Lucky Friday concentrates were suspended during the care-and-maintenance period based on force majeure. Once the Silver Shaft work was completed down to the 4900 foot level, we commenced work on a haulage way bypassing an area at the 5900 level impacted by a rock burst in December 2011, and the bypass was completed in early 2013.

The following is sales information by geographic area based on the location of smelters and brokers (for concentrate shipments) and the location of parent companies (for doré sales to metals traders) for the years ended December 31, 2014, 2013 and 2012 (in thousands):

	2014		2013		2012
United States	$	22,200	$	22,361	$	25,438
Canada		295,027		170,632		34,441
Japan		58,466		50,039		70,371
Korea		70,548		86,035		120,106
China		53,067		50,479		72,133
Total, excluding gains/losses on forward contracts	$	499,308	$	379,546	$	322,489

Sales of products for 2014 also include a net gain of $1.5 million on financially-settled forward contracts for silver, gold, lead and zinc contained in our concentrate sales.  2013 sales included a net gain of $3.0 million and 2012 sales included a net loss of $1.3 million on the contracts for lead and zinc. See Note 10 for more information.

The following are our long-lived assets by geographic area as of December 31, 2014 and 2013 (in thousands):

	2014		2013
United States	$	1,081,699	$	1,053,374
Canada		749,810		738,172
Mexico		55		55
	$	1,831,564	$	1,791,601

Sales from continuing operations to significant metals customers as a percentage of total sales were as follows for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
	2014			2013			2012
Teck Metals Ltd.		25.8	%		25.0	%		10.7	%
Korea Zinc		14.1	%		22.5	%		37.2	%
Trafigura AG		7.0	%		8.8	%		22.4	%
MS Zinc		5.9	%		7.5	%		12.3	%
CIBC		17.0	%		10.9	%		—	%
Mitsui		15.8	%		8.4	%		—	%