0000771992-19-000055.txt : 20190808 0000771992-19-000055.hdr.sgml : 20190808 20190807180357 ACCESSION NUMBER: 0000771992-19-000055 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190808 DATE AS OF CHANGE: 20190807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAN AMERICAN SILVER CORP CENTRAL INDEX KEY: 0000771992 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13727 FILM NUMBER: 191006803 BUSINESS ADDRESS: STREET 1: 1500-625 HOWE STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 2T6 BUSINESS PHONE: 604-684-1175 MAIL ADDRESS: STREET 1: 1500 625 HOWE ST CITY: VANCOUVER STATE: A1 ZIP: V6C 2T6 FORMER COMPANY: FORMER CONFORMED NAME: PAN AMERICAN MINERALS CORP DATE OF NAME CHANGE: 19950608 6-K 1 form6knr2019-08x07.htm 6-K Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
__________________
 
FORM 6-K 
_____________________
 
REPORT OF FOREIGN PRIVATE ISSUER
 
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT of 1934
 
August 7, 2019
_____________________
 
Pan American Silver Corp.
(Exact name of registrant as specified in its charter)
 
 1500-625 HOWE STREET
VANCOUVER BC CANADA V6C 2T6
(Address of principal executive offices)
 
 000-13727
(Commission File Number)
_____________________
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 Form 20-F  Form 40-F   X 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1). _____
 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____






Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Pan American Silver Corp.
(Registrant)
   
Date: August 7, 2019By:  
/s/ DELANEY FISHER
Delaney Fisher
Vice President, Legal Affairs and Corporate Secretary



EXHIBIT LIST
 
 
 
Exhibits 99.1 and 99.2 of this report on Form 6-K is incorporated by reference into the Registrant’s registration statement on Form F-10 (No. 333-212468) and registration statements on Form S-8 (Nos. 333-180494, 333-180495, 333-206162 and 333-229795) that have been filed with the Securities and Exchange Commission.
 


EX-99.1 2 paas06-30x2019financia.htm EX-99.1 Document

Exhibit 99.1

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Unaudited Condensed Interim Consolidated Financial Statements and Notes
 
FOR THE THREE AND SIX MONTHS ENDING JUNE 30, 2019




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Condensed Interim Consolidated Statements of Financial Position
(unaudited, in thousands of U.S. dollars)

 June 30,
2019
December 31,
2018
Assets  
Current assets  
Cash and cash equivalents (Note 21)$92,221 $138,510 
Short-term investments (Note 6)46,594 74,004 
Trade and other receivables173,856 96,091 
Income taxes receivable33,751 13,108 
Inventories (Note 7)283,320 214,465 
Derivative financial instruments (Note 5a)1,356 640 
Assets held for sale(1)
406,780 — 
Prepaid expenses and other current assets12,307 11,556 
 1,050,185 548,374 
Non-current assets 
Mineral properties, plant and equipment (Note 8)2,240,212 1,301,002 
Inventories (Note 7)23,982 — 
Long-term refundable tax21,833 70 
Deferred tax assets11,939 12,244 
Investment in associates (Note 10)69,877 70,566 
Goodwill and other assets (Note 11)4,067 5,220 
Total Assets$3,422,095 $1,937,476 
Liabilities  
Current liabilities  
Accounts payable and accrued liabilities (Note 12)$182,374 $131,743 
Derivative financial instruments (Note 5a)— 51 
Current portion of provisions (Note 13)5,711 5,072 
Current portion of lease obligations (Note 14)13,525 5,356 
Liabilities relating to assets held for sale(1)
30,934 — 
Income tax payable24,551 8,306 
 257,095 150,528 
Non-current liabilities  
Long-term portion of provisions (Note 13)142,660 70,083 
Deferred tax liabilities183,121 148,819 
Long-term portion of lease obligations (Note 14)30,233 1,320 
Debt (Note 15)335,000 — 
Deferred revenue (Note 10)12,731 13,288 
Other long-term liabilities (Note 16)27,476 25,425 
Share purchase warrants (Note 10)14,850 14,664 
Total Liabilities1,003,166 424,127 
Equity  
Capital and reserves (Note 17)  
Issued capital3,117,651 2,321,498 
Reserves94,818 22,573 
Investment revaluation reserve208 
Deficit(799,082)(836,067)
Total Equity attributable to equity holders of the Company2,413,388 1,508,212 
Non-controlling interests5,541 5,137 
Total Equity2,418,929 1,513,349 
Total Liabilities and Equity$3,422,095 $1,937,476 
(1)The Company determined that this meets the definition of an asset held for sale upon acquisition (Note 4).
See accompanying notes to the condensed interim consolidated financial statements
APPROVED BY THE BOARD ON AUGUST 7, 2019
"signed"Ross Beaty, Director"signed"Michael Steinmann, Director
PAN AMERICAN SILVER CORP.
2

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Condensed Interim Consolidated Income Statements
(unaudited, in thousands of U.S. dollars except per share amounts)

Three months ended
June 30,
Six months ended
June 30,
 2019 2018 2019 2018 
Revenue (Note 22)$282,948 $216,460 $515,591 $423,421 
Cost of sales (Note 22)  
Production costs (Note 18)(184,004)(116,413)(343,857)(228,862)
Depreciation and amortization(57,613)(37,626)(106,947)(72,164)
Royalties(5,191)(7,570)(11,453)(12,420)
 (246,808)(161,609)(462,257)(313,446)
Mine operating earnings (Note 22)36,140 54,851 53,334 109,975 
General and administrative(7,571)(5,566)(13,506)(11,524)
Exploration and project development(4,625)(1,877)(6,079)(4,621)
Mine care and maintenance(5,842)— (9,289)— 
Foreign exchange gains (losses)697 (4,917)(2,148)(6,592)
Gains on commodity and foreign currency contracts (Note 5d)1,240 906 1,581 2,639 
Gains (losses) on sale of mineral properties, plant and equipment3,447 (182)3,487 7,804 
Share of income from associate and dilution gain (Note 10)309 14,113 920 14,272 
Transaction and integration costs (Note 4)(3,446)— (4,849)— 
Bargain purchase gain (Note 4)— — 30,492 — 
Other expense(350)(1,135)(243)(591)
Earnings from operations19,999 56,193 53,700 111,362 
Loss on derivatives (Note 5d)(1,785)(737)(14)(780)
Investment income (loss)2,533 (1,071)14,816 827 
Interest and finance expense (Note 19)(7,945)(1,175)(12,669)(3,533)
Earnings before income taxes12,802 53,210 55,833 107,876 
Income tax expense (Note 23)(8,937)(16,514)(16,227)(23,024)
Net earnings from continuing operations3,865 36,696 39,606 84,852 
Net earnings from discontinued operations (Note 4)14,634 — 12,705 — 
Net earnings for the period$18,499 $36,696 $52,311 $84,852 
Attributable to:  
Equity holders of the Company$18,371 $36,187 $51,646 $83,563 
Non-controlling interests128 509 665 1,289 
 $18,499 $36,696 $52,311 $84,852 
Earnings per share attributable to common shareholders (Note 20)  
Basic earnings per share$0.09 $0.24 $0.27 $0.55 
Diluted earnings per share$0.09 $0.24 $0.27 $0.54 
Weighted average shares outstanding (in 000’s) Basic209,461 153,295 193,055 153,303 
Weighted average shares outstanding (in 000’s) Diluted209,568 153,545 193,178 153,543 
See accompanying notes to the condensed interim consolidated financial statements.

PAN AMERICAN SILVER CORP.
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Condensed Interim Consolidated Statements of Comprehensive Income
(unaudited, in thousands of U.S. dollars)

Three months ended
June 30,
Six months ended
June 30,
 2019 2018 2019 2018 
Net earnings for the period$18,499 $36,696 $52,311 $84,852 
Items that may be reclassified subsequently to net earnings:  
Unrealized net gains on short-term investments (Note 5c)— 533 343 
Reclassification adjustment for realized gains on short-term investments to earnings (Note 5c)— (461)(208)(330)
Total comprehensive earnings for the period$18,499 $36,768 $52,104 $84,865 
Total comprehensive earnings attributable to:  
Equity holders of the Company$18,371 $36,259 $51,439 $83,576 
Non-controlling interests128 509 665 1,289 
 $18,499 $36,768 $52,104 $84,865 
See accompanying notes to the condensed interim consolidated financial statements.
PAN AMERICAN SILVER CORP.
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Condensed Interim Consolidated Statements of Cash Flows
(unaudited, in thousands of U.S. dollars)

Three months ended
June 30,
Six months ended
June 30,
 2019 2018 2019 2018 
Cash flow from operating activities  
Net earnings for the period$18,499 $36,696 $52,311 $84,852 
Current income tax expense (Note 23)18,092 17,607 32,387 35,742 
Deferred income tax recovery (Note 23)(9,155)(1,093)(16,160)(12,718)
Interest expense (recovery) (Note 19)4,891 (1,048)6,938 (913)
Depreciation and amortization57,613 37,626 106,947 72,164 
Accretion on closure and decommissioning provision (Note 13)2,560 1,623 4,602 3,262 
Unrealized (gains) losses on foreign exchange(931)4,170 1,564 6,147 
(Gain) loss on sale of mineral properties, plant and equipment(3,447)182 (3,487)(7,804)
Project development write-down1,882 — 1,882 — 
Bargain purchase gain (Note 4)— — (30,492)— 
Other operating activities (Note 21)(3,852)(18,409)(8,923)(25,665)
Changes in non-cash operating working capital (Note 21)20,140 7,772 (17,796)(3,548)
Operating cash flows before interest and income taxes$106,292 $85,126 $129,773 $151,519 
Interest paid(4,804)(330)(7,955)(843)
Interest received21 182 605 946 
Income taxes paid(17,991)(18,029)(51,816)(50,273)
Net cash generated from operating activities$83,518 $66,949 $70,607 $101,349 
Cash flow from investing activities  
Payments for mineral properties, plant and equipment$(64,719)$(35,926)$(105,597)$(68,491)
Tahoe Resources Inc. ("Tahoe") acquisition (Note 4)— — (247,479)— 
Acquisition of mineral interests(1,545)(7,500)(1,545)(7,500)
Net (purchase of) proceeds from short-term investments(12,528)(6,851)41,578 (12,014)
Proceeds from sale of mineral properties, plant and equipment9,091 10,374 9,138 15,479 
Net proceeds (payments) from commodity, diesel fuel swaps, and foreign currency contracts363 — 799 (318)
Net cash used in investing activities$(69,338)$(39,903)$(303,106)$(72,844)
Cash flow from financing activities  
Proceeds from issue of equity shares$194 $499 $194 $626 
Distributions to non-controlling interests(261)(254)(261)(556)
Dividends paid(7,331)(5,185)(14,661)(10,551)
Proceeds from credit facility (Note 15)— — 335,000 — 
Repayment of credit facility (Note 4)— — (125,000)— 
Repayment of short-term loans— — — (3,000)
Payment of equipment leases(4,880)(1,977)(8,870)(3,517)
Net cash (used in) generated from financing activities$(12,278)$(6,917)$186,402 $(16,998)
Effects of exchange rate changes on cash and cash equivalents(229)(8)(192)(57)
Net increase (decrease) in cash and cash equivalents1,673 20,121 (46,289)11,450 
Cash and cash equivalents at the beginning of the period90,548 167,282 138,510 175,953 
Cash and cash equivalents at the end of the period$92,221 $187,403 $92,221 $187,403 
Supplemental cash flow information (Note 21).
See accompanying notes to the condensed interim consolidated financial statements.
PAN AMERICAN SILVER CORP.
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Condensed Interim Consolidated Statements of Changes in Equity
(unaudited, in thousands of U.S. dollars, except for number of shares)

 Attributable to equity holders of the Company  
 Issued
shares
Issued
capital
Reserves(1)
Investment
revaluation
reserve
DeficitTotalNon-
controlling
interests
Total
equity
Balance, December 31, 2017153,302,976 $2,318,252 $22,463 $1,605 $(825,470)$1,516,850 $4,201 $1,521,051 
Impact of adopting IFRS 9
— — — (1,602)1,602 — — — 
Balance, January 1, 2018 (restated)153,302,976 $2,318,252 $22,463 $$(823,868)$1,516,850 $4,201 $1,521,051 
Total comprehensive earnings  
Net earnings for the year— — — — 10,294 10,294 1,747 12,041 
Other comprehensive income— — — 205 — 205 — 205 
 — — — 205 10,294 10,499 1,747 12,246 
Cancellation of expired shares(120,339)— — — 178 178 — 178 
Shares issued on the exercise of stock options125,762 1,367 (286)— — 1,081 — 1,081 
Shares issued as compensation139,957 1,879 — — — 1,879 — 1,879 
Share-based compensation on option grants— — 396 — — 396 — 396 
Distributions by subsidiaries to non-controlling interests— — — — (1,209)(1,209)(811)(2,020)
Dividends paid— — — — (21,462)(21,462)— (21,462)
Balance, December 31, 2018153,448,356 $2,321,498 $22,573 $208 $(836,067)$1,508,212 $5,137 $1,513,349 
Total comprehensive earnings        
Net earnings for the period— — — — 51,646 51,646 665 52,311 
Other comprehensive loss— — — (207)— (207)— (207)
 — — — (207)51,646 51,439 665 52,104 
Shares issued on the exercise of stock options20,642 284 (90)— — 194 — 194 
Shares issued as compensation 22,335 243 — — — 243 — 243 
Share-based compensation on option grants— — 295 — — 295 — 295 
Tahoe acquisition consideration (Note 4)55,990,512 795,626 72,040 — — 867,666 — 867,666 
Distributions by subsidiaries to non-controlling interests— — — — — — (261)(261)
Dividends paid— — — — (14,661)(14,661)— (14,661)
Balance, June 30, 2019209,481,845 $3,117,651 $94,818 $$(799,082)$2,413,388 $5,541 $2,418,929 
(1)Includes reserves for share options and contingent value rights ("CVRs") (Note 4).
See accompanying notes to the condensed interim consolidated financial statements.
PAN AMERICAN SILVER CORP.
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Condensed Interim Consolidated Statements of Changes in Equity
(unaudited, in thousands of U.S. dollars, except for number of shares)

 Attributable to equity holders of the Company  
 Issued
shares
Issued
capital
Share
option
reserve
Investment
revaluation
reserve
DeficitTotalNon-
controlling
interests
Total
equity
Balance, December 31, 2017153,302,976 $2,318,252 $22,463 $1,605 $(825,470)$1,516,850 $4,201 $1,521,051 
Impact of adopting IFRS 9
— — — (1,602)1,602 — — — 
Balance, January 1, 2018 (restated)153,302,976 $2,318,252 $22,463 $$(823,868)$1,516,850 $4,201 $1,521,051 
Total comprehensive earnings  
Net earnings for the period— — — — 83,563 83,563 1,289 84,852 
Other comprehensive income— — — 13 — 13 — 13 
 — — — 13 83,563 83,576 1,289 84,865 
Cancellation of expired shares(121,439)— — — 178 178 — 178 
Shares issued on exercise of stock options72,096 792 (166)— — 626 — 626 
Shares issued as compensation10,338 182 — — — 182 — 182 
Share-based compensation on option grants— — 188 — — 188 — 188 
Distributions by subsidiaries to non-controlling interests— — — — — — (556)(556)
Dividends paid— — — — (10,729)(10,729)— (10,729)
Balance, June 30, 2018153,263,971 $2,319,226 $22,485 $16 $(750,856)$1,590,871 $4,934 $1,595,805 
See accompanying notes to the condensed interim consolidated financial statements.

PAN AMERICAN SILVER CORP.
7

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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
1. NATURE OF OPERATIONS 
Pan American Silver Corp. is the ultimate parent company of its subsidiary group (collectively, the “Company”, or “Pan American”). Pan American is a British Columbia corporation domiciled in Canada, and its office is at Suite 1500 – 625 Howe Street, Vancouver, British Columbia, V6C 2T6.
The Company is engaged in the production and sale of silver, gold, zinc, lead and copper as well as other related activities, including exploration, extraction, processing, refining and reclamation. The Company’s major products are produced from mines in Canada, Peru, Mexico, Argentina and Bolivia. Additionally, the Company has project development activities in Canada, Peru, Mexico and Argentina, and exploration activities throughout South America, Canada and Mexico. As at June 30, 2019 the Company's Escobal mine in Guatemala continues to be on care and maintenance pending satisfactory completion of a consultation process with the Ministry of Energy and Mines in Guatemala.
Principal subsidiaries:
The principal subsidiaries, including those from the Tahoe Acquisition (Note 4), of the Company and their geographic locations at June 30, 2019 were as follows:
SubsidiaryLocationOwnership
Interest
AccountingOperations and Development
Projects Owned
Lake Shore Gold Corp.Canada100 %ConsolidatedBell Creek and Timmins mines
Plata Panamericana S.A. de C.V.Mexico100 %ConsolidatedLa Colorada mine
Compañía Minera Dolores S.A. de C.V.Mexico100 %ConsolidatedDolores mine
Pan American Silver Huaron S.A.Peru100 %ConsolidatedHuaron mine
Compañía Minera Argentum S.A.Peru92 %ConsolidatedMorococha mine
Shahuindo S.A.C.Peru100 %ConsolidatedShahuindo mine
La Arena S.A.Peru100 %ConsolidatedLa Arena mine
Pan American Silver (Bolivia) S.A.Bolivia95 %ConsolidatedSan Vicente mine
Minera San Rafael S.A.Guatemala100 %ConsolidatedEscobal mine
Minera Tritón Argentina S.A.Argentina100 %ConsolidatedManantial Espejo mine & Cap-Oeste Sur Este ("COSE") project
Minera Joaquin S.R.L.Argentina100 %ConsolidatedJoaquin project
Minera Argenta S.A.Argentina100 %ConsolidatedNavidad project
2. BASIS OF PREPARATION 
These condensed interim consolidated financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”). As a result, these unaudited condensed interim consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB have been condensed with certain disclosures from the Annual Financial Statements omitted. Accordingly, these unaudited condensed interim consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2018.

The Company’s interim results are not necessarily indicative of its results for a full year.

PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a)Changes in accounting policies
The accounting policies applied in the preparation of these unaudited condensed interim consolidated financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2018, except for the following:
IFRS 16, Leases
In January 2016, the IASB issued IFRS 16 which replaces IAS 17 - Leases and its associated interpretative guidance, including IFRIC 4 and SIC 15. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a non-lease component on the basis of whether the customer controls the specific asset. For those contracts that are or contain a lease, IFRS 16 introduces significant changes for lessees to the accounting for contracts that are or contain a lease, introducing a single, on-balance sheet accounting model that is similar to current finance lease accounting, with limited exceptions for short-term leases less than 12 months in duration or leases of low value assets. Lessor accounting remains similar to current accounting practice. The standard is effective for annual periods beginning on or after January 1, 2019, with early application permitted for entities that apply IFRS 15.
The Company has applied IFRS 16 using the modified retrospective approach from January 1, 2019 and has elected to record the transition date right-of-use assets at amounts equal to the present value of the minimum lease payments, on a lease by lease basis. Short-term and low-value recognition exemptions were applied, as well as certain practical expedients allowing for the use of hindsight to assess the lease term for contracts with extension options, the exclusion of initial direct costs from measurement of the Right-of-Use-Assets ("ROU Assets") and the exclusion of leases with a term of less than one year remaining at the transition date.
Policy applicable from January 1, 2019
Lease Definition
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. An identified asset may be implicitly or explicitly specified in a contract, but must be physically distinct, and must not have the ability for substitution by a lessor. The Company has the right to control an identified asset if it obtains substantially all of its economic benefits and either pre-determines, or directs how and for what purpose the asset is used.
Measurement of ROU Assets and Lease Obligations
At lease commencement, the Company recognizes a ROU Asset and a lease obligation. The ROU Asset is initially measured at cost, which comprises the initial amount of the lease obligation adjusted for any lease payments made at, or before, the commencement date, plus any initial direct costs incurred, less any lease incentives received.
The ROU Asset is subsequently amortized on a straight-line basis over the shorter of the term of the lease, or the useful life of the asset determined on the same basis as the Company’s property, plant and equipment. The ROU Asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease obligation.
The lease obligation is initially measured at the present value of lease payments remaining at the lease commencement date, discounted using the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease obligation, when applicable, may comprise fixed payments, variable payments that depend on an index or rate, amounts expected to be payable under a residual value guarantee and the exercise price under a purchase, extension or termination option that the Company is reasonably certain to exercise.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
The lease obligation is subsequently measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease obligation is remeasured, a corresponding adjustment is made to the carrying amount of the ROU Asset.
Recognition Exemptions
The Company has elected not to recognize ROU Assets and lease obligations for short-term leases that have a lease term of twelve months or less or for leases of low-value assets. Payments associated with these leases are recognized as an operating expense on a straight-line basis over the lease term within costs and expenses on the consolidated income statement.
Leases
The Company’s leased assets include land, buildings, vehicles, and machinery and equipment with a carrying value of $47.3 million at June 30, 2019. Effective January 1, 2019, the Company adopted IFRS 16 as outlined in Note 14, recognizing $21.4 million of ROU assets, $18.9 million of lease obligations and deferred tax assets/liabilities of $nil.
b)Changes in accounting policies not yet effective
The Company has not early adopted any amendment, standard or interpretation that has been issued by the IASB but is not yet effective.

4. TAHOE ACQUISITION
On February 22, 2019, the Company completed the acquisition of 100% of the issued and outstanding shares of Tahoe (the "Acquisition"). Each Tahoe shareholder had the right to elect to receive either $3.40 in cash (the "Cash Election") or 0.2403 of a Common Share (the "Share Election") for each Tahoe share, subject in each case to pro-ration based on a maximum cash consideration of $275 million and a maximum number of Common Shares issued of 56.0 million. Tahoe shareholders who did not make an election by the election deadline were deemed to have made the Share Election. Holders of 23,661,084 Tahoe shares made the Cash Election and received all cash consideration in the amount of $3.40 per Tahoe share. The holders of 290,226,406 Tahoe shares that made or were deemed to have made, the Share Election were subject to pro-ration, and received consideration of approximately $0.67 in cash and 0.1929 of a Common Share per Tahoe share.
In addition, Tahoe shareholders received contingent consideration in the form of one CVR for each Tahoe share.  Each CVR will be exchanged for 0.0497 of a Common Share upon the first commercial shipment of concentrate following restart of operations at the Escobal mine (the "First Shipment"). The CVRs are transferable and have a term of 10 years. The First Shipment contingency is a discrete event upon which a fixed number of Common Shares will be issued. As there is no variability in the number of shares to be issued if the contingency is met the Company has concluded that the CVR consideration meets the ‘fixed-for-fixed’ requirement in IAS 32 - Financial Instruments: Presentation. As such the CVRs are classified as a component of equity, recognized initially at fair value with no remeasurement, and any subsequent settlement to be accounted for within equity.
As a result of the Acquisition, the Company paid $275 million in cash, issued 55,990,512 Common Shares, and issued 313,887,490 CVRs. After this share issuance, Pan American shareholders owned approximately 73%, while former Tahoe shareholders owned approximately 27%, of the shares of the combined company. The Company has determined that this transaction represents a business combination with Pan American identified as the acquirer. Based on the February 21, 2019 closing share price of Common Shares, the total consideration of the Acquisition is approximately $1.1 billion. The Company began consolidating the operating results, cash flows and net assets of Tahoe from February 22, 2019 onwards.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
Tahoe was a mid-tier publicly traded precious metals mining company with ownership interests in a diverse portfolio of mines and projects including the following principle mines: Timmins West and Bell Creek in Canada; La Arena and Shahuindo in Peru; and Escobal in Guatemala (the "Acquired Mines"). The Escobal mine's operations have been suspended since June 2017.
The following table summarizes the consideration paid as part of the purchase price:
Consideration:Shares IssuedConsideration
Fair value estimate of the Pan American Share consideration (1)
55,990,512 $795,626 
Fair value estimate of the CVRs (2)
15,600,208 71,916 
Cash (1)
— 275,008 
Fair value estimate of replacement options (3)
835,874 124 
Total Consideration72,426,594 $1,142,674 
2.The Pan American Share consideration value is based on an assumed value of $14.21 per share (based on the NASDAQ closing price on February 21, 2019).
3.Assumed fair value of the CVRs is based on the residual amount of the value of the Tahoe Shares acquired (based on the NYSE closing price closing of $3.64 on February 21, 2019) after deducting the cash consideration of $275 million and the fair value of the Company's share consideration paid (based on the February 21, 2019 Nasdaq closing price of $14.21).
4.Assumed fair value of 3.5 million Tahoe options that upon the Acquisition vested and converted into 835.8 thousand Pan American stock options (the "Replacement options"). The fair value of the Replacement options was determined using the Black-Scholes option pricing model, as at the Acquisition date, the assumptions of which are described in the Company's Q1 2019 Financial Statements.
Share price at February 21, 2019 (Canadian dollars, "CAD") $19.01 
Exercise price$11.67 - 97.26
Expected volatility0.4075 
Expected life (years)0.2 - 1.0
Expected dividend yield0.78 %
Risk-free interest rate0.93 %
Fair value (CAD)$163,273.36 
CAD to USD exchange rate at December 31, 2018$0.7578 
Fair value (USD)$123,729.43 

The following table summarizes the preliminary allocation of the purchase price to the identifiable assets and liabilities based on their estimated fair values at the date of the Acquisition:
Allocation of consideration:Consideration
Cash and cash equivalents$27,529 
Accounts receivable17,854 
VAT Receivable87,268 
Inventory152,534 
Other current assets4,135 
Mineral properties, plant and equipment1,298,037 
Other assets3,450 
Accounts payable and accrued liabilities(159,675)
Provision for closure and decommissioning liabilities(70,119)
Debt(125,000)
Net current and deferred income tax liabilities(62,847)
Bargain purchase gain(30,492)
$1,142,674 
As at June 30, 2019, the allocation of the purchase price has not been finalized. The Company is currently in the process of determining the fair values of identifiable assets acquired and liabilities assumed and measuring the associated deferred income tax assets and liabilities and will finalize the allocation of the purchase price no later than February 21, 2020.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
Held for Sale Assets
Concurrent with the Acquisition, the Company formally initiated an active program to locate a buyer of Lake Shore Gold Inc. ("Lake Shore"), a subsidiary acquired by the Company as part of the Acquisition. Lake Shore's principal assets are the Bell Creek and Timmins mines (collectively, "Timmins"). Based on management's assessment of the Company's sales process it was determined that Lake Shore meets the criteria, under IFRS 5 - Non-current assets held for sale and discontinued operations, to be a discontinued operation to be classified as held for sale upon acquisition. As such, upon the Acquisition and as at June 30, 2019, the assets and liabilities of Lake Shore were classified as assets and liabilities held for sale and are presented separately under current assets and current liabilities, respectively, and the post-tax profit or loss from the Lake Shore operations have been presented as a single and separate item on the Company's condensed interim consolidated income statements as discontinued operations.

5. FINANCIAL INSTRUMENTS
a)Financial assets and liabilities by categories
June 30, 2019Amortized costFVTPLFVTOCITotal
Financial Assets:    
Cash and cash equivalents$92,221 $— $— $92,221 
Trade receivables from provisional concentrates sales(1)
— 51,246 — 51,246 
Receivable not arising from sale of metal concentrates(1)
113,874 — — 113,874 
Short-term investments, equity securities— 46,080 — 46,080 
Short-term investments, other than equity securities— — 514 514 
Derivative financial assets— 1,356 — 1,356 
$206,095 $98,682 $514 $305,291 
(1)Included in Trade and other receivables.
December 31, 2018Amortized costFVTPLFVTOCITotal
Financial Assets:    
Cash and cash equivalents$138,510 $— $— $138,510 
Trade receivables from provisional concentrates sales(1)
— 40,803 — 40,803 
Receivable not arising from sale of metal concentrates(1)
40,918 — — 40,918 
Short-term investments, equity securities— 19,178 — 19,178 
Short-term investments, other than equity securities— — 54,826 54,826 
Derivative financial assets— 640 — 640 
$179,428 $60,621 $54,826 $294,875 
Financial Liabilities:
Derivative financial liabilities$— $51 $— $51 
 $— $51 $— $51 
(1)Included in Trade and other receivables.

PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
b)Short-term investments in equity securities recorded at fair value through profit or loss ("FVTPL")
The Company’s short-term investments in equity securities are recorded at FVTPL. The net gains (losses) from short-term investments in equity securities for the three and six months ended June 30, 2019 and 2018 were as follows:
 Three months ended
June 30,
Six months ended
June 30,
 2019 2018 2019 2018 
Unrealized net gains (losses) on short-term investments, equity securities$3,054 $(1,779)$14,374 $(723)
Realized net losses on short-term investments, equity securities— (31)— (49)
 $3,054 $(1,810)$14,374 $(772)
c)Financial assets recorded at fair value through other comprehensive income ("FVTOCI")
The Company’s short-term investments other than equity securities are recorded at fair value through other comprehensive income. The unrealized gains (losses) from short-term investments other than equity securities for the three and six months ended June 30, 2019 and 2018 were as follows:
 Three months ended
June 30,
Six months ended
June 30,
 2019 2018 2019 2018 
Unrealized net gains on short-term investments, other than equity securities$— $533 $$343 
Reclassification adjustment for realized gains on short-term investments, other than equity securities— (461)(208)(330)
 $— $72 $(207)$13 
d)Derivative instruments
The Company's derivative financial instruments are comprised of foreign currency and commodity contracts. The net gains (losses) on derivatives for the three and six months ended June 30, 2019 and 2018 were comprised of the following:
Three months ended
June 30,
Six months ended
June 30,
 2019 2018 2019 2018 
Gains on foreign currency and commodity contracts:  
Realized gains (losses) on foreign currency and commodity contracts$364 $— $799 $(318)
Unrealized gains on foreign currency and commodity contracts876 906 782 2,957 
 $1,240 $906 $1,581 $2,639 
Loss on derivatives:   
Loss on warrants$(1,785)$(737)$(14)$(780)
e)Fair value information
i) Fair Value Measurement
The categories of the fair value hierarchy that reflect the inputs to valuation techniques used to measure fair value are as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3: Inputs for the asset or liability based on unobservable market data.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
The levels in the fair value hierarchy into which the Company’s financial assets and liabilities that are measured and recognized on the Consolidated Statements of Financial Position at fair value on a recurring basis were categorized as follows:
 At June 30, 2019At December 31, 2018
 Level 1Level 2Level 1Level 2
Assets and Liabilities:    
Short-term investments$46,594 $— $74,004 $— 
Trade receivables from provisional concentrate sales— 51,246 — 40,803 
Derivative financial assets— 1,356 — 640 
Derivative financial liabilities— — — (51)
 $46,594 $52,602 $74,004 $41,392 
The methodology and assessment of inputs for determining the fair value of financial assets and liabilities as well as the levels of hierarchy for the Company’s financial assets and liabilities measured at fair value remains unchanged from that at December 31, 2018.
ii) Valuation Techniques
 Short-term investments and other investments
The Company’s short-term investments and other investments are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy and are primarily money market securities and U.S. Treasury securities. The fair value of the investment securities is calculated as the quoted market price of the investment and in the case of equity securities, the quoted market price multiplied by the quantity of shares held by the Company.
Derivative assets and liabilities
The Company’s derivative assets and liabilities were comprised of investments in warrants, commodity swaps and foreign currency contracts. The fair value of the warrants is calculated using an option pricing model which utilizes a combination of quoted prices and market-derived inputs. The Company's commodity swaps and foreign currency contracts are valued using observable market prices. Derivative instruments are classified within Level 2 of the fair value hierarchy.
Receivables from Provisional Concentrate Sales
A portion of the Company’s trade receivables arose from provisional concentrate sales and are valued using quoted market prices based on the forward London Metal Exchange for copper, zinc and lead and the London Bullion Market Association P.M. fix for gold and silver.
f)Financial Instruments and related risks
The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The principal financial risks to which the Company is exposed are:
i)Credit risk
ii)Liquidity risk
iii)Market risk
1. Currency risk
2. Interest rate risk
3. Price risk
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
i) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s trade receivables. The carrying value of trade receivables represents the maximum credit exposure. 
The Company has long-term concentrate contracts to sell the zinc, lead, copper and silver concentrates produced by the Huaron, Morococha, San Vicente and La Colorada mines. Concentrate contracts are a common business practice in the mining industry. The terms of the concentrate contracts may require the Company to deliver concentrate that has a value greater than the payment received at the time of delivery, thereby introducing the Company to credit risk of the buyers of concentrates. Should any of these counterparties not honour supply arrangements, or should any of them become insolvent, the Company may incur losses for products already shipped and be forced to sell its concentrates on the spot market or it may not have a market for its concentrates and therefore its future operating results may be materially adversely impacted. At June 30, 2019, the Company had receivable balances associated with buyers of its concentrates of $51.2 million (December 31, 2018 - $40.8 million). The vast majority of the Company’s concentrate is sold to five well-known concentrate buyers. 
Doré production from La Colorada, Dolores, Manantial Espejo, Shahuindo, La Arena, Bell Creek and Timmins is refined under long term agreements with fixed refining terms at four separate refineries worldwide. The Company generally retains the risk and title to the precious metals throughout the process of refining and therefore is exposed to the risk that the refineries will not be able to perform in accordance with the refining contract and that the Company may not be able to fully recover precious metals in such circumstances. At June 30, 2019, the Company had approximately $46.5 million (December 31, 2018 - $19.7 million) of value contained in precious metal inventory at refineries. The Company maintains insurance coverage against the loss of precious metals at the Company’s mine sites, in-transit to refineries and while at the refineries. 
The Company maintains trading facilities with several banks and bullion dealers for the purposes of transacting the Company’s metal sales. None of these facilities are subject to margin arrangements. The Company’s trading activities can expose the Company to the credit risk of its counterparties to the extent that the trading positions have a positive mark-to-market value. However, the Company minimizes this risk by ensuring there is no excessive concentration of credit risk with any single counterparty, by active credit management and monitoring.
Refined silver and gold is sold in the spot market to various bullion traders and banks. Credit risk may arise from these activities if the Company is not paid for metal at the time it is delivered, as required by spot sale contracts.
Management constantly monitors and assesses the credit risk resulting from its refining arrangements, concentrate sales and commodity contracts with its refiners, trading counterparties and customers. Furthermore, management carefully considers credit risk when allocating prospective sales and refining business to counterparties. In making allocation decisions, management attempts to avoid unacceptable concentration of credit risk to any single counterparty.
The Company invests its cash and cash equivalents, which also has credit risk, with the objective of maintaining safety of principal and providing adequate liquidity to meet all current payment obligations. 
ii) Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows. The Company has in place a rigorous planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansion plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations, its holdings of cash and short-term investments, and its committed loan facilities.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
There was no significant change to the Company’s exposure to liquidity risk during the three and six months ended June 30, 2019.
iii) Market Risk
1.Currency Risk
The Company reports its financial statements in USD; however, the Company operates in jurisdictions that utilize other currencies. As a consequence, the financial results of the Company’s operations as reported in USD are subject to changes in the value of the USD relative to local currencies. Since the Company’s sales are denominated in USD and a portion of the Company’s operating costs and capital spending are in local currencies, the Company is negatively impacted by strengthening local currencies relative to the USD and positively impacted by the inverse. 
At June 30, 2019, the Company had outstanding positions on its foreign currency exposure of Mexican peso ("MXN") purchases. The Company recorded gains of $0.4 million and $0.9 million, respectively, on MXN derivative contracts for the three and six months ended June 30, 2019 (2018 - gains of $nil and $0.1 million, respectively).
2.Interest Rate Risk
Interest rate risk is the risk that the fair values and future cash flows of the Company will fluctuate because of changes in market interest rates. The average interest rate earned by the Company during the three and six months ended June 30, 2019 on its cash and short-term investments was 0.65% and 1.11%, respectively (2018 - 0.77% and 0.80%, respectively).
At June 30, 2019, the Company had $335.0 million in amounts drawn on its secured revolving credit facility (the "Credit Facility"), which had an average interest rate of 4.4%. There were no amounts drawn on the Credit Facility in 2018.
At June 30, 2019, the Company had $43.8 million in lease obligations (December 31, 2018 - $6.7 million), that are subject to an annualized interest rate of 9.7% (2018 - 2.2%).
3.Price Risk
Metal price risk is the risk that changes in metal prices will affect the Company’s income or the value of its related financial instruments. The Company derives its revenue from the sale of silver, gold, lead, copper, and zinc. The Company’s sales are directly dependent on metal prices that have shown significant volatility and are beyond the Company’s control. Consistent with the Company’s mission to provide equity investors with exposure to changes in silver prices, the Company’s current policy is to not hedge the price of silver and gold.
The Company mitigates the price risk associated with its base metal production by committing some of its forecasted base metal production from time to time under forward sales and option contracts. The Board of Directors continually assesses the Company’s strategy towards its base metal exposure, depending on market conditions. At June 30, 2019, the Company had outstanding contracts to sell some of its base metals production.

6. SHORT-TERM INVESTMENTS

 June 30, 2019December 31, 2018
Fair
Value
CostAccumulated
unrealized
holding gains
Fair ValueCostAccumulated
unrealized
holding gains
Short-term investments$46,594 $33,946 $12,648 $74,004 $73,796 $208 


PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
7. INVENTORIES
Inventories consist of: 
 June 30,
2019
December 31,
2018
Concentrate inventory$14,114 $19,286 
Stockpile ore (1)
33,285 3,945 
Heap leach inventory and in process (2)
132,081 113,199 
Doré and finished inventory (3)
46,858 30,736 
Materials and supplies80,964 47,299 
Total inventories$307,302 $214,465 
Less: current portion of inventories$(283,320)$(214,465)
Non-current portion of inventories(4)
$23,982 $— 
(1)Includes an impairment charge of $6.5 million to reduce the cost basis of inventory to NRV at Manantial Espejo and Dolores mines at June 30, 2019 (December 31, 2018 – $11.2 million at Manantial Espejo and Dolores mines).
(2)Includes an impairment charge of $39.0 million to reduce the cost basis of inventory to NRV at Manantial Espejo and Dolores mines at June 30, 2019 (December 31, 2018 - $28.9 million at Manantial Espejo and Dolores mines).
(3)Includes an impairment charge of $7.9 million to reduce the cost basis of inventory to NRV at Manantial Espejo and Dolores mines at June 30, 2019. (December 31, 2018 - $7.5 million at Manantial Espejo and Dolores mines).
(4)Inventories at the Escobal mine in Guatemala, which include $16.7 million in supplies inventories with the remainder attributable to metals inventories, have been classified as non-current pending the restart of operations.

8. MINERAL PROPERTIES, PLANT AND EQUIPMENT
Mineral properties, plant and equipment consist of:
 June 30, 2019December 31, 2018
 CostAccumulated
Depreciation 
and 
Impairment
Carrying
Value
CostAccumulated
Depreciation 
and 
Impairment
Carrying
 Value
Huaron mine, Peru$212,367 $(119,256)$93,111 $207,360 $(114,288)$93,072 
Morococha mine, Peru250,200 (156,484)93,716 243,603 (149,120)94,483 
Alamo Dorado mine, Mexico71,724 (71,724)— 126,960 (126,960)— 
La Colorada mine, Mexico306,093 (131,896)174,197 301,706 (121,940)179,766 
Dolores mine, Mexico1,564,684 (1,032,378)532,306 1,529,751 (981,948)547,803 
Manantial Espejo mine, Argentina368,027 (364,475)3,552 367,105 (362,293)4,812 
San Vicente mine, Bolivia138,831 (90,485)48,346 137,394 (86,663)50,731 
Tahoe mines744,869 (25,187)719,682 — — — 
Other26,550 (16,837)9,713 23,994 (16,265)7,729 
Total producing properties$3,683,345 $(2,008,722)$1,674,623 $2,937,873 $(1,959,477)$978,396 
Land and Non-Producing Properties:     
Land$34,709 $(1,096)$33,613 $4,677 $(1,096)$3,581 
Navidad project, Argentina566,577 (376,101)190,476 566,577 (376,101)190,476 
Minefinders projects, Mexico91,362 (36,975)54,387 91,362 (36,975)54,387 
Morococha, Peru9,674 — 9,674 9,674 — 9,674 
Argentine projects89,295 (25,296)63,999 69,774 (24,939)44,835 
Tahoe non-producing properties192,788 (851)191,937 — — — 
Other33,114 (11,611)21,503 30,908 (11,255)19,653 
Total non-producing properties$1,017,519 $(451,930)$565,589 $772,972 $(450,366)$322,606 
Total mineral properties, plant and equipment$4,700,864 $(2,460,652)$2,240,212 $3,710,845 $(2,409,843)$1,301,002 
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
  

9. IMPAIRMENT OF MINERAL PROPERTIES, PLANT AND EQUIPMENT
Non-current assets are tested for impairment, or reversal of previous impairment charges, when events or changes in circumstance indicate that the carrying amount may not be recoverable, or previous impairment charges against assets are recoverable. The Company performs an impairment test for goodwill at each financial year end and when events or changes in circumstances indicate that the related carrying value may not be recoverable.
Based on the Company’s assessment with respect to possible indicators of either impairment or reversal of previous impairments to its mineral properties, the Company concluded that as of June 30, 2019 no such indicators were noted, and no impairment charges or impairment charge reversals were required.
10. INVESTMENT IN ASSOCIATES
June 30,
2019
December 31,
2018
Investment in Maverix Metals Inc. ("Maverix")(2)
$69,877 $69,116 
Investment in other(1)
— 1,450 
$69,877 $70,566 
(1)The Company sold its interest in an equity investee for $5 million in May 2019 resulting in a gain of $3.6 million recorded in gains (losses) on sale of mineral, properties, plant and equipment on the Condensed Interim Consolidated Income Statements.
(2)The following table shows a continuity of the Company's investment in Maverix:
20192018
Balance of investment in Maverix, January 1,$69,116 $53,567 
Dilution gain(41)13,449 
Adjustment for change in ownership interest(159)1,919 
Income from associate961 823 
Balance of investment in Maverix, June 30,$69,877 $69,758 
Investment in Maverix:
The Company's warrant liability representing in substance ownership interest in Maverix was $14.9 million as at June 30, 2019 (December 31, 2018 - $14.7 million). The Company's share of Maverix income or loss was recorded, based on its 28% interest for the six months ended June 30, 2019 (2018 - 40%) representing the Company’s fully diluted ownership.
Deferred Revenue:
Deferred revenue relates to precious metal streams whereby the Company will sell 100% of the future gold production from La Colorada and 5% of the future gold production from La Bolsa, which is in the exploration stage, to Maverix for $650 and $450 per ounce, respectively (the "Streams"). The deferred revenue liability recognized by the Company is the portion of the deferred revenue to be paid to Maverix owners other than Pan American through its ownership in Maverix.
The deferred revenue related to the Streams will be recognized as revenue by Pan American as the gold ounces are delivered to Maverix. As at June 30, 2019, the deferred revenue liability was $12.7 million (December 31, 2018 - $13.3 million).
The Company recognized $0.2 million and $0.4 million (2018 - $0.2 million and $0.3 million, respectively), respectively, during the three and six months ended June 30, 2019 for the delivery of 668 and 1,589 ounces (2018 - 1,116 and 1,635 ounces, respectively), respectively, from La Colorada to Maverix. All transactions with Maverix were in the normal course and measured at exchange amounts, which were the amounts of consideration established and agreed to by the Company and Maverix.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
Income Statement Impacts:
The Company recognized nominal dilution losses during both the three and six months ended June 30, 2019 (2018 - gains of $13.4 million, and $13.4 million, respectively, were recognized). Dilution gains and losses are recorded in share of income from associate and dilution gain.
For the three and six months ended June 30, 2019 the Company also recognized its share of income from associate of $0.4 million and $1.0 million, respectively, (2018 - income of $0.6 million and $0.8 million, respectively) which represents the Company's proportionate share of Maverix's income during the period.

11. GOODWILL AND OTHER ASSETS
Other assets consist of: 
June 30,
2019
December 31,
2018
Goodwill$3,057 $3,057 
Other assets1,010 2,163 
$4,067 $5,220 

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of: 
June 30,
2019
December 31,
2018
Trade accounts payable(1)
$82,142 $52,201 
Royalties payable18,768 2,004 
Other accounts payable and trade related accruals28,340 32,896 
Payroll and related benefits35,906 26,817 
Severance accruals1,559 1,791 
Other taxes payable6,317 4,044 
Other9,342 11,990 
$182,374 $131,743 
(1)No interest is charged on the trade accounts payable ranging from 30 to 60 days from the invoice date. The Company has policies in place to ensure that all payables are paid within the credit terms.

PAN AMERICAN SILVER CORP.
19

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Notes to the Condensed Interim Consolidated Financial Statements
As at June 30, 2019 and December 31, 2018, and for the
three and six month period ended June 30, 2019 and 2018
(Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted)
13. PROVISIONS

Closure and
Decommissioning
LitigationTotal
December 31, 2018$70,587 $4,568 $75,155 
Revisions in estimates and obligations incurred9,133 — 9,133 
Acquired from Tahoe (Note 4)60,209 261 60,470 
Charged (credited) to earnings: 
-new provisions— 977 977 
-change in estimate— (140)(140)
-exchange gains on provisions— — — 
Charged in the year— (225)(225)
Reclamation expenditures(1,540)— (1,540)
Accretion expense (Note 19)4,541 — 4,541 
June 30, 2019$142,930 $5,441 $148,371 
 
Maturity analysis of total provisions:June 30,
2019
December 31,
2018
Current$5,711 $5,072 
Non-Current142,660 70,083 
$148,371 $