13 unchanged sentences
To mitigate the risks associated with gold, silver, zinc and lead price fluctuations, the Company may enter into option contracts to hedge future production.
−Removed: The Company had outstanding Asian put and call option contracts in net-zero-cost collar contracts on 96,000 ounces of gold at December 31, 2019 that settle monthly through August 2020.
+Added: The Company had outstanding Asian put and call option contracts in net-zero-cost collar contracts on 284,700 ounces of gold at December 31, 2020 that settle monthly through December 2022.
+Added: The Company is targeting to hedge up to 50% of expected gold production through 2021 and 2022 and may in the future layer on additional hedges as circumstances warrant.
The weighted average strike prices on the put and call contracts are $1,612 and $1,943 per ounce of gold, respectively.
The contracts are generally net cash settled and, if the price of gold at the time of the expiration is between the put and call prices, would expire at no cost to the Company.
−Removed: At December 31, 2019, the value of the put and call zero cost collars contracts was a net liability of $0.1 million.
−Removed: For the year ended December 31, 2019, the Company had not recognized any amount of gain or loss related to outstanding options in Revenue and the entire amount was included in accumulated other comprehensive income (loss) .
−Removed: A 10% decrease in the price of gold at December 31, 2019 would result in a gain of $4.2 million.
−Removed: The Company had outstanding Asian put and call option contracts in net-zero-cost collar contracts on zinc at December 31, 2018 that settled in January 2019.
+Added: These Asian put and call option contracts expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of a commodity, (ii) price risk to the extent that the spot price exceeds the contract price for quantities of our production covered under contract positions;
+Added: and (iii) liquidity risk to the extent counterparties exercise rights to cash collateral for out-of-money hedges under applicable instruments.
+Added: To reduce counter-party credit exposure, the Company enters into contracts with institutions management deems credit-worthy and limits credit exposure to each institution.
+Added: The Company does not anticipate non-performance by any of its counterparties.
+Added: For additional information, please see the section titled “Risk Factors” in Item 1A of this report.
+Added: At December 31, 2020, the fair value of the put and call zero cost collars contracts was a liability of $24.9 million.
+Added: For the year ended December 31, 2020 the Company recognized a loss of $7.6 million related to expired options in Revenue and the remaining outstanding options were included in accumulated other comprehensive income (loss) .
+Added: A 10% increase in the price of gold at December 31, 2020 would result in a realized loss of $39.4 million a nd 10% decrease would result in no realized gain or loss.
+Added: As of December 31, 2020, the closing price of gold was $1,888 per ounce.
+Added: As of February 15, 2021, the closing price of gold was $1,817 per ounce.
Provisional Gold, Silver, Zinc and Lead Sales
2 unchanged sentences
Depending on the difference between the price at the time of sale and the final settlement price, embedded derivatives are recorded as either a derivative asset or liability.
−Removed: The embedded derivatives do not qualify for hedge accounting and, as a result, are marked to the market gold and silver price at the end of each period from the provisional sale date to the date of final settlement.
+Added: The embedded derivatives do not qualify for hedge accounting and, as a result, are marked to the market gold, silver, zinc and lead price at the end of each period from the provisional sale date to the date of final settlement.
The mark-to-market gains and losses are recorded in earnings.
−Removed: Changes in gold, silver, zinc and lead prices resulted in provisional pricing mark-to-market gain of $0.3 million as of December 31, 2019.
−Removed: At December 31, 2019 , the Company had outstanding provisionally priced sales of 11,054 ounces of gold at an average price of $1,471 , 0.5 million ounces of silver at an average price of $17.89 , 10.4 million pounds of zinc at an average price of $1.03 and 6.2 million pounds of lead at an average price of $0.88 .
−Removed: A 10% change in realized gold, silver, zinc and lead prices would cause revenue to vary by $4.0 million.
+Added: At December 31, 2020, the Company had outstanding provisionally priced sales of 15,248 ounces of gold at an average price of $1,852.
+Added: Changes in gold prices resulted in provisional pricing mark-to-market gain of $1.0 million during the year ended December 31, 2020.
+Added: A 10% change in realized gold prices would cause revenue to vary by $2.8 million.
Foreign Currency
5 unchanged sentences
Foreign Exchange Hedging
−Removed: To manage foreign currency risk, the Company may enter into foreign exchange forward and/or option contracts when the Company believes such contracts would be beneficial.
−Removed: The Company had no outstanding foreign exchange contracts at December 31, 2019 .
+Added: To manage foreign currency risk, the Company may enter into foreign currency forward exchange contracts.
+Added: At December 31, 2020, the Company entered into foreign currency forward contracts to manage this risk and designated these instruments as cash flow hedges of forecasted foreign denominated transactions.
+Added: The Company had outstanding foreign currency forward exchange contracts to receive $1.5 billion Mexican Pesos at December 31, 2020 with an average exchange rate of 24.99 that settle monthly through December 2021.
+Added: At December 31, 2020, the fair value of the foreign currency forward exchange contracts was a net asset of $13.7 million.
+Added: For the year ended December 31, 2020 the Company has recognized a gain of $6.2 million related to expired options in Cost Applicable to Sales and Pre-development, Reclamation and Othe r, respectively, and an unrealized gain of $13.7 million related to outstanding options in AOCI.
+Added: A 10% increase or decrease in the exchange rates at December 31, 2020 would result in a realized gain of $7.3 million or $16.9 million, respectively.
Interest Rates
2 unchanged sentences
Credit risk is the failure of the counterparty to perform under the terms of the derivative contract.
−Removed: fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us.
+Added: When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us.
When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not pose credit risk.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.