Note

Income Taxes

Major components of our income tax (benefit) provision for the

three

and

nine

months ended

September 30, 2017

and

2016

are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Current:
Domestic	$	—		$	4,123		$	(12,797	)	$	4,122
Foreign		(3,959	)		5,773			17,491			8,416
Total current income tax (benefit) provision		(3,959	)		9,896			4,694			12,538

Deferred:
Domestic		1,980			(5,723	)		(13,958	)		3,642
Foreign		(3,422	)		5,280			(9,113	)		6,423
Total deferred income tax (benefit) provision		(1,442	)		(443	)		(23,071	)		10,065
Total income tax (benefit) provision	$	(5,401	)	$	9,453		$	(18,377	)	$	22,603

As of

September

30,

2017,

we have a net deferred tax asset in the U.S. of

$44.7

million and a net deferred tax liability in Canada of

$122.7

million, for a consolidated worldwide net deferred tax liability of

$78.0

million. Our ability to utilize our deferred tax assets depends on future taxable income generated from operations. In the

first

quarter of

2017,

we received consent from the Internal Revenue Service to permit us to take a different income tax position relating to the timing of deductions for the

Shaft development costs at Lucky Friday. This tax accounting method change substantially revised the timing of deductions for these costs for regular tax and Alternative Minimum Tax ("AMT") relative to our projected life of mine and projected taxable income. These timing changes caused us to revise our assessment of the ability to generate sufficient future taxable income to realize our deferred tax assets, resulting in a valuation allowance release of approximately

$15

million. At

September

30,

2017

and

December

31,

2016,

the balances of the valuation allowances on our deferred tax assets were

$72

million and

$100

million, respectively, primarily for net operating losses and tax credit carryforwards. The amount of the deferred tax asset considered recoverable, however, could be reduced in the near term if estimates of future taxable income are reduced.

The current income tax provisions for the

three

and

nine

months ended

September

30,

2017

and

2016

vary from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income due primarily to the impact of the change in accounting method treatment of the

Shaft development costs described above, the impact of taxation in foreign jurisdictions, and the Company's status as an indefinite AMT taxpayer.

We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate ("AETR") for the full fiscal year to “ordinary” pretax income or loss (excluding unusual or infrequently occurring discrete items) for the reporting period. We have determined that since small changes in estimated annual “ordinary” pre-tax income would result in significant changes in the estimated AETR, the AETR method would

not

provide a reliable estimate for the fiscal

three

- and

nine

-month periods ended

September 30, 2017.

Therefore, we have used a discrete effective tax rate method to calculate taxes for the fiscal

three

- and

nine

-month periods ended

September 30, 2017.