Note 3 - Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Text Block]

Note

Income Taxes

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

three

months ended

March 31, 2019

and

2018

are as follows (in thousands):

	Three Months Ended
	March 31,
	2019			2018
Current:
Domestic	$	—		$	—
Foreign		(1,077	)		(1,206	)
Total current income tax benefit (provision)		(1,077	)		(1,206	)

Deferred:
Domestic		2,477			—
Foreign		5,816			438
Total deferred income tax benefit (provision)		8,293			438
Total income tax benefit (provision)	$	7,216		$	(768	)

The current income tax benefit (provision) for the

three

months ended

March

31,

2019

and

2018

varies from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income due primarily to the impact of taxation in foreign jurisdictions and a valuation allowance on the majority of U.S. deferred tax assets.

As of

March

31,

2019,

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

$51.6

million, a net deferred tax liability in Canada of

$107.8

million and a net deferred tax asset in Mexico of

$3.1

million, for a consolidated worldwide net deferred tax liability of

$156.3

million.

With the acquisition of Klondex Mines Ltd. ("Klondex") on

July 20, 2018 (

see

Note

), we acquired a U.S. consolidated tax group (the "Nevada U.S. Group") that did

not

join the existing consolidated U.S. tax group of Hecla Mining Company and subsidiaries (“Hecla U.S.”). Under acquisition accounting, we recorded a net deferred tax liability of

$60.2

million. For the

three

months ended

March

31,

2019,

we recorded a tax benefit of

$2.5

million in the Nevada U.S. Group. Net operating losses acquired as of the acquisition date are subject to limitation under Internal Revenue Code Section

382.

However, the annual limitation is

not

expected to have a material impact on our ability to utilize the losses.

For Hecla U.S., we recorded a full valuation allowance in the U.S. in

December 2017

as a result of U.S. tax reform. Our circumstances at

March

31,

2019

continued to support a full valuation allowance in the U.S. for Hecla U.S.