FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2021
Disclosure of detailed information about financial instruments [abstract]  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Text Block]

24. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

(a) Financial assets and liabilities

As at December 31, 2021, the carrying and fair values of the Company's financial instruments by category are as follows:

    Fair value                    
    through profit or     Amortized     Carrying        
    loss     cost     value     Fair value  
    $     $     $     $  
Financial assets:                        
Cash and cash equivalents   -     103,303     103,303     103,303  
Other Investments   11,200     -     11,200     11,200  
Trade and other receivables   4,751     9,711     14,462     14,462  
Total financial assets   15,951     113,014     128,965     128,965  
                         
Financial liabilities:                        
Accounts payable and accrued liabilities   5,795     26,196     31,991     31,991  
Loans payable   -     10,494     10,494     10,494  
Total financial liabilities   5,795     36,690     42,485     42,485  

Fair value measurements

Fair value hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

Level 1:

Other investments are comprised of marketable securities. When there is an active market are determined based on a market approach reflecting the closing price of each particular security at the reporting date. The closing price is a quoted market price obtained from the exchange that is the principal active market for the particular security. As a result, $11,151 of these financial assets have been included in Level 1 of the fair value hierarchy.

Cash settled deferred share units are determined based on a market approach reflecting the Company's closing share price.

Level 2:

The Company determines the fair value of the embedded derivatives related to its trade receivables based on the quoted closing price obtained from the silver and gold metal exchanges and the fair value of the SARs liability is determined by using an option pricing model.

Level 3:
Included in other investments are share purchase warrants. Fair value of the warrants at each period end has been estimated using the Black-Scholes Option Pricing Model. As a result, $49 of these financial assets have been included in Level 3 of the fair value hierarchy.

During the year ended December 31, 2021, marketable securities included in Level 2 at December 31, 2020 with a fair market value of $497 were transferred to Level 1, as these securities began trading on an active market.

Assets and liabilities as at December 31, 2021 measured at fair value on a recurring basis include:

    Total     Level 1     Level 2     Level 3  
    $     $     $     $  
                         
Financial assets:                        
Investments   11,200     11,151     -     49  
Trade receivables   14,462     9,711     4,751     -  
Total financial assets   25,662     20,862     4,751     49  
                         
Financial liabilities:                        
Deferred share units   5,682     5,682     -     -  
Share appreciation rights   113     -     113     -  
Total financial liabilities   5,795     5,682     113     -  

(b)   Financial Instrument Risk Exposure and Risk Management

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management process. The types of risk exposure and the manner in which such exposures are managed is outlined as follows:

Credit Risk

The Company is exposed to credit risk on its bank accounts and accounts receivable. Credit risk exposure on bank accounts is limited through maintaining the Company's balances with high-credit quality financial institutions, maintaining investment policies, assessing institutional exposure and continual discussion with external advisors. Value added tax ("IVA") receivables are generated on the purchase of supplies and services to produce silver and gold, which are refundable from the Mexican government. Trade receivables are generated on the sale of concentrate inventory to reputable metal traders.

The carrying amount of financial assets represents the Company's maximum credit exposure.

Below is an aged analysis of the Company's receivables:

    Carrying     Gross     Carrying     Gross  
    amount     impairment     amount     impairment  
    December 31,     December 31,  
    2021     2020  
                         
Less than 1 month $ 7,531   $ -   $ 10,629   $ -  
1 to 3 months   5,372     -     7,491     -  
4 to 6 months   1,801     -     239     -  
Over 6 months   7,798     -     4,512     151  
Total accounts receivable $ 22,502   $ -   $ 22,871   $ 151  

At December 31, 2021, 67% of the receivables that were outstanding greater than one month were comprised of IVA and tax receivables in Mexico (December 31, 2020 - 75%) and 4% of the receivables outstanding greater than one month are pending finalizations of concentrate sales.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. We manage our liquidity risk by continually monitoring forecasted and actual cash flows. We have in place a planning and budgeting process to help determine the funds required to support our normal operating requirement and development plans. We aim to maintain sufficient liquidity to meet our short term business requirements, taking into account our anticipated cash flows from operations, our holdings of cash and cash equivalents, and our committed and anticipated liabilities.

The following table summarizes the remaining contractual maturities of the Company's financial liabilities and operating and capital commitments at December 31, 2021:

    Less than     1 to 3     4 to 5     Over 5        
    1 year     years     years     years     Total  
    $     $     $     $     $  
                               
Accounts payable and accrued liabilities   31,991     -     -     -     31,991  
Loans payable   4,081     5,313     1,100     -     10,494  
Lease liabilities   207     278     269     247     1,001  
Provision for reclamation and rehabilitation   -     163     3,237     3,997     7,397  
Capital expenditure commitments   8,524     -     -     -     8,524  
Operating leases   170     220     220     174     784  
                               
Total contractual obligations   44,973     5,974     4,826     4,418     60,191  

Market Risk

Significant market related risks to which the Company is exposed consist of foreign currency risk, commodity price risk and equity price risk.

Foreign Currency Risk - The Company's operations in Mexico and Canada make it subject to foreign currency fluctuations. Certain of the Company's operating expenses are incurred in Mexican pesos and Canadian dollars, therefore the fluctuation of the US dollar in relation to these currencies will consequently have an impact on the profitability of the Company and may also affect the value of the Company's assets and the amount of shareholders' equity. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.

The US dollar equivalents of financial assets and liabilities denominated in currencies other than the US dollar as at December 31, 2021 are as follows:

    December 31,     December 31,  
    2021     2020  
    Canadian Dollar     Mexican Peso     Canadian Dollar     Mexican Peso  
                         
Financial assets $ 14,471   $ 22,710   $ 9,383   $ 18,920  
Financial liabilities   (8,846 )   (13,910 )   (8,512 )   (14,036 )
Net financial assets (liabilities) $ 5,625   $ 8,800   $ 871   $ 4,884  

Of the financial assets listed above, $2,315 (2020 - $3,192) represents cash and cash equivalents held in Canadian dollars and $5,208 (2020 - $4,590) represents cash held in Mexican Pesos. The remaining cash balance is held in US dollars.

As at December 31, 2021, with other variables unchanged, a 5% strengthening of the US dollar against the Canadian dollar would reduce net earnings by $267 due to these financial assets and liabilities.

As at December 31, 2021, with other variables unchanged, a 5% strengthening of the US dollar against the Mexican peso would decrease net earnings by $466 due to these financial assets and liabilities.

Commodity Price Risk - Gold and silver prices have historically fluctuated significantly and are affected by numerous factors outside of the Company's control, including, but not limited to, industrial and retail demand, central bank lending, forward sales by producers and speculators, levels of worldwide production, short-term changes in supply and demand due to speculative hedging activities and certain other factors. The Company has not engaged in any hedging activities, other than short-term metal derivative transactions less than 90 days, to reduce its exposure to commodity price risk. Revenue from the sale of concentrates is based on prevailing market prices which is subject to adjustment upon final settlement. For each reporting period until final settlement, estimates of metal prices are used to record sales. At December 31, 2021 there are 51,250 ounces of silver and 1,935 ounces of gold which do not have a final settlement price and the estimated revenues have been recognized at current market prices. As at December 31, 2021, with other variables unchanged, a 10% decrease in the market value of silver and gold would result in a reduction of revenue of $470.