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Derivative Financial Instruments (Tables)
6 Months Ended
Jun. 30, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative instruments, future settlement
At June 30, 2014, the Company had the following derivative instruments that settle in each of the years indicated (in thousands except average prices and notional ounces):
 
 
2014
 
2015
 
2016
 
Thereafter
Palmarejo gold production royalty
$
27,334

 
$
46,078

 
$
27,741

 
$

Average gold price in excess of minimum contractual deduction
$
913

 
$
919

 
$
920

 
$

Notional ounces
29,920

 
50,153

 
30,168

 

 
 
 
 
 
 
 
 
Mexican peso put options purchased
$
23,000

 
$

 
$

 
$

Average rate (MXN/$)
14.97

 

 

 

Mexican peso notional amount
344,310

 

 

 

 
 
 
 
 
 
 
 
Mexican peso call options sold
$
23,000

 
$

 
$

 
$

Average rate (MXN/$)
12.60

 

 

 

Mexican peso notional amount
289,800

 

 

 

 
 
 
 
 
 
 
 
Silver concentrate sales contracts
$
3,253

 
$

 
$

 
$

Average silver price
$
19.99

 
$

 
$

 
$

Notional ounces
162,724

 

 

 

 
 
 
 
 
 
 
 
Gold concentrate sales contracts
$
14,865

 
$

 
$

 
$

Average gold price
$
1,286

 
$

 
$

 
$

Notional ounces
11,559

 

 

 

 
 
 
 
 
 
 
 
Gold put options purchased
$
60,000

 
$
28,800

 
$

 
$

Average gold strike price
$
1,200

 
$
1,200

 
$

 
$

Notional ounces
50,000

 
24,000

 

 

 
 
 
 
 
 
 
 
Silver put options purchased
$
45,000

 
$
22,500

 
$

 
$

Average silver strike price
$
18.00

 
$
18.00

 
$

 
$

Notional ounces
2,500,000

 
1,250,000

 

 

 
 
 
 
 
 
 
 
Gold put options sold
$
(52,500
)
 
$
(25,200
)
 
$

 
$

Average gold strike price
$
1,050

 
$
1,050

 
$

 
$

Notional ounces
50,000

 
24,000

 

 

 
 
 
 
 
 
 
 
Silver put options sold
$
(40,000
)
 
$
(20,000
)
 
$

 
$

Average silver strike price
$
16.00

 
$
16.00

 
$

 
$

Notional ounces
2,500,000

 
1,250,000

 

 

Fair value of the derivative instruments

The following summarizes the classification of the fair value of the derivative instruments (in thousands):
 
June 30, 2014
 
Prepaid
expenses and
other
 
Accrued
liabilities and
other
 
Current
portion of
royalty
obligation
 
Non-current
portion of
royalty
obligation
Foreign exchange contracts, peso
$
49

 
$

 
$

 
$

Palmarejo gold production royalty

 

 
22,393

 
21,567

Silver and gold options
1,298

 
291

 

 

Concentrate sales contracts
192

 
1

 

 

 
$
1,539

 
$
292

 
$
22,393

 
$
21,567


 
December 31, 2013
 
Prepaid
expenses and
other
 
Accrued
liabilities and
other
 
Current
portion of
royalty
obligation
 
Non-current
portion of
royalty
obligation
Foreign exchange contracts, peso
$
38

 
$
947

 
$

 
$

Palmarejo gold production royalty

 

 
17,650

 
22,688

Silver and gold options
135

 

 

 

Concentrate sales contracts
11

 
693

 

 

 
$
184

 
$
1,640

 
$
17,650

 
$
22,688

Gain losses on derivative instruments
The following represent mark-to-market gains (losses) on derivative instruments for the three and six months ended June 30, 2014, and 2013 (in thousands):
 
 
 
Three months ended June 30,
 
Six months ended June 30,
Financial statement line
Derivative
 
2014
 
2013
 
2014
 
2013
Sales of metal
Concentrate sales contracts
 
$
7

 
$
(667
)
 
$
872

 
$
(2,422
)
Costs applicable to sales
Foreign exchange contracts
 

 
203

 
(924
)
 
830

Fair value adjustments, net
Foreign exchange contracts (MXN)
 
(10
)
 
(2,260
)
 
957

 
(1,522
)
Fair value adjustments, net
Foreign exchange contracts (CDN)
 

 
1,598

 

 

Fair value adjustments, net
Palmarejo gold royalty
 
(5,061
)
 
61,066

 
(15,296
)
 
75,495

Fair value adjustments, net
Silver and gold options
 
(1,374
)
 
6,350

 
(2,868
)
 
10,577

 
 
 
$
(6,438
)
 
$
66,290

 
$
(17,259
)
 
$
82,958