Silver Standard Resources, Inc.
SILVER STANDARD RESOURCES INC (Form: 6-K, Received: 11/09/2016 06:02:47)


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
For November 8, 2016
Commission File Number: 000-26424
SILVER STANDARD RESOURCES INC.
(Translation of registrant's name into English)

#800 - 1055 Dunsmuir Street
PO Box 49088, Bentall Postal Station
Vancouver, British Columbia
Canada V7X 1G4
(Address of principal executive offices)

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   [x] Form 40-F

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): [             ]

INCORPORATION BY REFERENCE

Exhibits 99.1 and 99.2 hereto are each hereby incorporated by reference into the registration statements on Form S-8 (File No. 333-185498, 333-196116 and 333-198092) of Silver Standard Resources Inc.

DOCUMENTS FILED AS PART OF THIS FORM 6-K

See the Exhibit Index hereto.

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.

 
Silver Standard Resources Inc.
 
(Registrant)
 
 
 
Date: November 8, 2016
By:
Signed: “ Gregory Martin
 
 
Gregory Martin
 
Title:
Chief Financial Officer





SILVERSTANDARDLOGOA07.GIF

SUBMITTED HEREWITH

Exhibits

 
 
 
 
 
 
 
 







Silver Standard Resources Inc.
Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016 and 2015
(unaudited)








Silver Standard Resources Inc.
Condensed Consolidated Interim Financial Statements for the three and nine months ended
September 30, 2016

CONTENTS
 
Financial Statements
 
 
 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated Interim Financial Statements
 
 
 
 
 
 
 
 
Statements of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Shareholders’ Equity
 
 
 
 
Statements of Income
 
 
 
 
 
 
Additional Disclosures
 
 
 



 
 
2 | Page


Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Financial Position
(expressed in thousands of United States dollars)
 
Note
September 30

December 31

 
 
2016

2015

 
 

$

Current assets
 
 
 
Cash and cash equivalents
 
277,544

211,862

Trade and other receivables
4
69,726

36,733

Marketable securities
5
178,117

88,184

Inventory
6
152,447

135,976

Other
7
12,372

3,979

 
 
690,206

476,734

Non-current assets
 
 
 
Property, plant and equipment
8
686,290

348,712

Income tax receivable
9

18,243

Deferred income tax assets
 
836


Value added tax receivable
10
20,765

20,792

Goodwill
3
49,786


Other
7
6,735

7,196

Total assets
 
1,454,618

871,677

 
 
 
 
Current liabilities
 
 
 
Trade and other payables
11
57,079

53,352

Provisions
12
76,864

78,226

Debt
 

4,273

 
 
133,943

135,851

Non-current liabilities
 
 
 
Deferred income tax liabilities
 
121,824

29,026

Provisions
12
61,672

51,532

Debt
13
216,977

208,085

Total liabilities
 
534,416

424,494

 
 
 
 
Shareholders' equity
 
 
 
Share capital
 
1,043,076

707,607

Other reserves
 
29,920

(54,805
)
Equity component of convertible notes
 
68,347

68,347

Deficit
 
(221,141
)
(273,966
)
Total shareholders' equity attributable to our shareholders
 
920,202

447,183

Total liabilities and equity
 
1,454,618

871,677

 
 
 
 
Events after the reporting period (note 7)
 
 
 
The accompanying notes are an integral part of the condensed consolidated interim financial statements
Approved by the Board of Directors and authorized for issue on November 8, 2016
"Richard D. Paterson"
 
"Paul Benson"
Richard D. Paterson, Director
 
Paul Benson, Director

 
 
3 | Page


Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Income (Loss)
(expressed in thousands of United States dollars, except per share amounts)

 
Note
Three months ended September 30
 
 
Nine months ended September 30
 
 
 
2016

2015

 
2016

2015

 
 
$

$

 
$

$

 
 
 
 
 
 
 
Revenue
 
143,381

77,191

 
363,669

284,730

Cost of sales
15
(84,191
)
(84,587
)
 
(237,119
)
(245,405
)
Income (loss) from mine operations
 
59,190

(7,396
)
 
126,550

39,325

 
 
 
 
 
 
 
General and administrative expenses
 
(4,061
)
(5,700
)
 
(20,684
)
(18,067
)
Exploration, evaluation and reclamation expenses
 
(4,280
)
(3,147
)
 
(12,238
)
(11,012
)
Business acquisition costs
3
(601
)

 
(4,529
)

Impairment charges
 

(34,490
)
 

(34,490
)
Operating income (loss)
 
50,248

(50,733
)
 
89,099

(24,244
)
 
 
 
 
 
 
 
Interest earned and other finance income
 
508

194

 
1,247

1,069

Interest expense and other finance costs
 
(6,461
)
(6,361
)
 
(19,571
)
(19,060
)
Other income (expenses)
16
(48
)
(2,447
)
 
(1,861
)
(4,536
)
Foreign exchange (loss)
 
(3,248
)
(3,209
)
 
(6,535
)
(6,533
)
Income (loss) before income tax
 
40,999

(62,556
)
 
62,379

(53,304
)
 
 
 
 
 
 
 
Income tax (expense) recovery
 
(2,957
)
3,140

 
(9,554
)
(4,276
)
 
 
 
 
 
 
 
Net income (loss) and net income (loss) attributable to shareholders
 
38,042

(59,416
)
 
52,825

(57,580
)
 
 
 
 
 
 
 
Weighted average shares outstanding (thousands)
 
 
 
 
 
 
Basic
17
119,163

80,754

 
97,851

80,754

Diluted
17
134,336

80,754

 
99,145

80,754

 
 
 
 
 
 
 
Earnings (loss) per share
 
 
 
 
 
 
Basic
17
$0.32
$(0.74)
 
$0.54
$(0.71)
Diluted
17
$0.31
$(0.74)
 
$0.53
$(0.71)
The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
4 | Page


Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(expressed in thousands of United States dollars)

 
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
 
2016

2015

 
2016

2015

 
 
$

$

 
$

$

 
 
 
 
 
 
 
Net income (loss) for the period attributable to shareholders
 
38,042

(59,416
)
 
52,825

(57,580
)
 
 
 

 

 
 
 
Items that will not be reclassified to net income or loss:
 
 
 
 
 
 
Gain (loss) on marketable securities at FVTOCI, net of tax $1,969, ($1,251), ($12,233) and ($484)
 
(13,132
)
8,431

 
82,232

2,824

Items that will be reclassified to net income or loss:
 
 
 
 
 
 
Unrealized gain (loss) on effective portion of derivative, net of tax $47, $nil, ($207) and $nil
 
108

(329
)
 
578

(329
)
Realized gain on effective portion of derivative, net of tax $nil, $nil, $nil and $nil
 

108

 

108

Other comprehensive (loss) income
 
(13,024
)
8,210

 
82,810

2,603

Total comprehensive income (loss) attributable to shareholders
 
25,018

(51,206
)
 
135,635

(54,977
)
Total comprehensive income (loss)
 
25,018

(51,206
)
 
135,635

(54,977
)
The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
5 | Page


Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(expressed in thousands of United States dollars)

 
 
 
 
Equity

 
 
 
 
Common Shares
Other

component of

 
Total

 
 
Shares

Amount

reserves

convertible notes

Deficit

equity

 
Note
000's

$

$

$

$

$

Balance, January 1, 2015 (restated)
2(a)
80,754

707,034

(46,467
)
68,347

(149,664
)
579,250

   Equity-settled share-based compensation
14


1,996



1,996

Total comprehensive income (loss) for the period
 


2,603


(57,580
)
(54,977
)
Balance, September 30, 2015
 
80,754

707,034

(41,868
)
68,347

(207,244
)
526,269

 
 
 
 
 
 
 
 
Balance, January 1, 2016
 
80,826

707,607

(54,805
)
68,347

(273,966
)
447,183

Shares and options issued pursuant to the acquisition of Claude Resources, net of share issuance costs
3
37,394

324,990

4,045



329,035

   Exercise of stock options
14
1,129

10,479

(4,115
)


6,364

   Equity-settled share-based compensation
14


1,985



1,985

Total comprehensive income for the period
 


82,810


52,825

135,635

Balance, September 30, 2016
 
119,349

1,043,076

29,920

68,347

(221,141
)
920,202

The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
6 | Page


Silver Standard Resources Inc.
Condensed Consolidated Interim Statements of Cash Flows
(expressed in thousands of United States dollars)

 
Note
Three months ended September 30
 
 
Nine months ended September 30
 
 
 
2016

2015

 
2016

2015

 
 
$

$

 
$

$

Cash flows from operating activities
 
 

 

 
 
 
Net income (loss) for the period
 
38,042

(59,416
)
 
52,825

(57,580
)
Adjustments for:
 
 

 

 
 
 
Depreciation, depletion and amortization
 
19,103

19,957

 
51,777

57,303

Share-based payments
 
690

711

 
1,985

1,996

Net non-cash finance expense
 
4,863

5,897

 
16,685

16,815

Impairment charges and inventory write-downs
 

42,206

 

42,206

Other expense
 
994

1,300

 
3,625

3,497

Income tax (recovery) expense
 
2,957

(3,140
)
 
9,554

4,276

Non-cash foreign exchange loss (gain)
 
1,993

2,367

 
733

4,983

Net changes in non-cash working capital items
20
(5,829
)
(2,458
)
 
(19,718
)
(6,332
)
Cash generated by operating activities before value added taxes, interest and income taxes (paid) recovered
 
62,813

7,424

 
117,466

67,164

Value added taxes (paid)
 
(2,901
)
(3,647
)
 
(7,752
)
(10,098
)
Value added taxes recovered
 
1,710

2,945

 
5,476

10,730

Interest (paid)
 
(3,901
)
(3,994
)
 
(8,179
)
(8,749
)
Income taxes (paid)
 
(4,655
)
(1,730
)
 
(10,457
)
(5,487
)
Cash generated by operating activities
 
53,066

998

 
96,554

53,560

Cash flows from investing activities
 
 

 

 
 
 
Purchase of property, plant and equipment
 
(12,068
)
(13,023
)
 
(31,237
)
(27,711
)
Production stripping capitalized costs
 
(13,787
)

 
(22,453
)
(12,540
)
Underground mine development costs
 
(2,141
)

 
(2,944
)

Capitalized exploration costs
 
(1,564
)
(11,846
)
 
(4,392
)
(12,384
)
Proceeds from sale of property, plant and equipment
 


 
1,002


Proceeds from sale of mineral property
 
261


 
261

20,000

Proceeds from sale of marketable securities
 


 
4,422


Cash received on Claude Resources acquisition
3


 
16,908


Share exchange cash payment on Claude Resources acquisition
3


 
(155
)

(Increase) decrease in restricted cash
 
(453
)
7,500

 
(453
)
17,701

Interest received
 
928

81

 
1,576

399

Tax deposit received (paid)
9
18,243


 
18,243

(19,231
)
Cash (used) by investing activities
 
(10,581
)
(17,288
)
 
(19,222
)
(33,766
)
Cash flows from financing activities
 
 

 

 
 
 
Proceeds from exercise of stock options
 
2,599


 
6,364


Repayment of bank loan
 


 
(3,845
)
(1,649
)
Repayment of Claude Resources credit facility
13


 
(13,707
)

Share issuance fees on Claude Resources acquisition
 


 
(212
)

Cash generated (used) by financing activities
 
2,599


 
(11,400
)
(1,649
)
Effect of foreign exchange rate changes on cash and cash equivalents
 
(159
)
(921
)
 
(250
)
(2,771
)
Increase (decrease) in cash and cash equivalents
 
44,925

(17,211
)
 
65,682

15,374

Cash and cash equivalents, beginning of period
 
232,619

217,228

 
211,862

184,643

Cash and cash equivalents, end of period
 
277,544

200,017

 
277,544

200,017

Supplemental cash flow information (note 20)
The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
7 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


1.
NATURE OF OPERATIONS

Silver Standard Resources Inc. ("we", "us", "our" or "Silver Standard") is a company incorporated under the laws of the Province of British Columbia, Canada and our shares are publicly listed on the Toronto Stock Exchange in Canada and the NASDAQ Global Market in the United States. Together with our subsidiaries, we (the “Group”) are principally engaged in the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. With the acquisition of Claude Resources Inc. ("Claude Resources") on May 31, 2016 (note 3), we have three producing mines and a portfolio of precious metal dominant projects located throughout the Americas. Silver Standard Resources Inc. is the ultimate parent of the Group.

Our address is Suite 800, 1055 Dunsmuir Street, PO Box 49088, Vancouver, British Columbia, V7X 1G4.

Our strategic focus is on safe, profitable gold and silver production from our Marigold mine in Nevada, U.S., Seabee Gold Operation in Saskatchewan, Canada and Pirquitas mine in Jujuy, Argentina, and to advance, as market and project conditions permit, our other principal development projects towards development and commercial production.


2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are set out below.

a)
Basis of preparation
These condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2015 .
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting . The comparative information has also been prepared on this basis.
On April 1, 2015, we adopted all of the requirements of IFRS 9, Financial Instruments: Recognition and Measurement . The 2015 balances shown in the condensed consolidated interim statements of changes in shareholders' equity reflect this change.

These statements were authorized for issue by our Board of Directors on November 8, 2016 .

Following our acquisition of Claude Resources on May 31, 2016, we have applied the following accounting policies that were not previously applicable to our business. All other accounting policies applied in the preparation of these condensed interim consolidated financial statements are consistent with those applied and disclosed in our audited consolidated financial statements for the year ended December 31, 2015 .

(i)
Underground mineral properties
At our underground mining operation, we incur development costs to build new shafts, drifts and ramps that enable us to access ore underground. The time over which we will continue to incur these costs depends on the mine life. These underground development costs are capitalized as incurred.

Capitalized underground development costs incurred to enable access to specific areas of the underground mine, and which only provide an economic benefit over the period of mining that area, are depreciated on a units-of-production basis, whereby the denominator is estimated recoverable ounces of gold in Proven and Probable Mineral Reserves in the related areas.

 
 
8 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

(ii)
Property, plant and equipment
The valuation attributed to estimated Mineral Resources conversion from the acquisition of Claude Resources is considered to be a mineral property not yet subject to depreciation. As these Mineral Resources are converted into Mineral Reserves, the asset is subject to depreciation over the recoverable ounces corresponding to the specific area of the mine plan. Exploration potential is recognized as an exploration and evaluation asset.

(iii)
Goodwill
Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the acquisition amount over such fair value being recorded as goodwill and allocated to cash generating units ("CGUs"). CGUs are the smallest identifiable group of assets, liabilities and associated goodwill that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Each individual mining interest that is an operating mine is typically a CGU.

Goodwill arises principally because of the following factors: (1) the going concern value of our capacity to sustain and grow by replacing and augmenting Mineral Reserves through new discoveries; (2) the ability to capture buyer-specific synergies arising upon a transaction; and (3) the requirement to record a deferred tax liability for the difference between the assigned values and the tax bases of the assets acquired and liabilities assumed in a business combination.

Goodwill is not amortized; instead it is tested annually for impairment. In addition, at each reporting period we assess whether there is an indication that goodwill is impaired and, if there is such an indication, we would test for goodwill impairment at that time.

b)
Significant accounting judgments and estimates
The preparation of financial statements in conformity with IFRS requires the use of judgments and/or estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the financial statements. The critical judgments and estimates applied in the preparation of the unaudited condensed consolidated interim financial statements for the nine months ended September 30, 2016 are consistent with those applied and disclosed in note 2(u) to our audited consolidated financial statements for the year ended December 31, 2015 other than those which related to the acquisition of Claude Resources, as discussed below.

(i)
Business combination: Acquisition of Claude Resources
Judgment is required to determine whether we acquired a business under the definition of IFRS 3, Business combinations ("IFRS 3"), and also the acquisition date when we obtained control over the acquiree, which was the date that consideration is transferred and when we assumed the assets and liabilities of the acquiree.

Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at their fair values at the date of acquisition. The valuation of certain assets and liabilities requires significant management estimates and judgment. Property, plant and equipment requires judgment over the appropriate fair value methodology to appraise the assets and various assumptions around estimated useful lives and current replacement costs. The mineral property assets valuations are based upon estimates of Mineral Reserves and Mineral Resources used in the life of mine plan, as well as estimates of future metal prices, production, costs, and economic assumptions around inflation rates and discount rates. The exploration and evaluation assets valuations are based upon estimates of future Mineral Resource discovery. The inventory valuation requires estimates of costs to convert inventory into saleable form. The reclamation provision requires an estimate of the timing of future reclamation cash flows and economic assumptions around inflation and discount rates.

 
 
9 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

(ii)
Functional currency
The determination of a subsidiary’s functional currency often requires significant judgment where the primary economic environment in which the subsidiary operates may not be clear. We have determined that the functional currency of Claude Resources is the U.S. dollar, as it is the currency in which Claude Resources primarily generates cash.

c)
Future accounting changes
The following new standards have been issued but are not yet effective:

Revenue from contracts with customers
The IASB has replaced IAS 18, Revenue in its entirety with IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) which is intended to establish a new control-based revenue recognition model and change the basis for deciding whether revenue is to be recognized over time or at a point in time. IFRS 15 is effective for annual periods commencing on or after January 1, 2018. We are currently evaluating the impact the standard is expected to have on our consolidated financial statements.

Leases
The IASB has replaced IAS 17, Leases in its entirety with IFRS 16, Leases (“IFRS 16”), which will require lessees to recognize nearly all leases on the balance sheet to reflect their right to use an asset for a period of time and the associated liability to pay rentals. IFRS 16 is effective for annual periods commencing on or after January 1, 2019. We are currently evaluating the impact the standard is expected to have on our consolidated financial statements.

There are no other IFRS or International Financial Reporting Interpretations Committee interpretations that are not yet effective that would be expected to have a material impact on our consolidated financial statements.


3.
PURCHASE OF CLAUDE RESOURCES

On May 31, 2016, we completed the acquisition of a 100% interest in Claude Resources and its Seabee Gold Operation, an underground operating gold mine in Saskatchewan, Canada for a total purchase price of $329,402,000. The acquisition of Claude Resources accomplishes our strategic goal of adding another operating mine in a well-established, low risk mining jurisdiction. The purchase price for the acquisition of all of the issued and outstanding shares of Claude Resources consisted of 0.185 of a Silver Standard common share plus C$0.001 in cash for each common share of Claude Resources.

The acquisition is a business combination and has been accounted for in accordance with the measurement and recognition provisions of IFRS 3. IFRS 3 requires that the purchase consideration be allocated to the assets acquired and liabilities assumed in a business combination based upon their estimated fair values at the date of acquisition.

The purchase price has been preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. Fair values are determined based on third party appraisals, discounted cash flow models, and quoted market prices, as deemed appropriate. This allocation is preliminary in nature as we are in the process of finalizing certain fair value assumptions, and this allocation may require adjustment in future periods. Acquisition costs, in the form of advisory, legal and other professional fees, associated with the transaction to acquire Claude Resources of $601,000 and $4,529,000 were expensed as incurred during the three and nine months ended September 30, 2016 respectively.


 
 
10 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

3.
PURCHASE OF CLAUDE RESOURCES (Cont'd)

Upon the acquisition of Claude Resources, we identified goodwill of $49,786,000 . This goodwill was calculated as the difference between the fair value of the consideration issued for the acquisition of Claude Resources and the fair value of all other assets and liabilities acquired. The goodwill arose primarily as a result of the increase in our share price from the date of announcing the acquisition of Claude Resources (C$7.89) to the completion of the acquisition (C$11.35). Goodwill relates to tax synergies of $30,170,000 and also $19,616,000 which arose due to the recognition of deferred income tax liabilities on the transaction. We are required to record a deferred tax liability for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed. None of the goodwill is deductible for tax purposes.

The following table shows the preliminary allocation of the purchase price to assets acquired and liabilities assumed, based on estimates of fair value, including a summary of the identifiable classes of consideration transferred, and amounts by category of assets acquired and liabilities assumed at the acquisition date:
 
$

37,394,000 common shares issued  (1)
325,202

809,000 stock options issued  (2)
4,045

Share exchange cash payment of C$0.001 per Claude Resources share
155

Consideration
329,402

 
 
Cash and cash equivalents
16,908

Trade and other receivables
814

Marketable securities
351

Inventory
34,801

Property, plant and equipment
 
Plant and equipment
52,318

Mineral properties subject to depreciation
62,229

Mineral properties not yet subject to depreciation
128,100

Exploration and evaluation assets
88,734

Goodwill
49,786

Trade and other payables
(4,657
)
Debt
(13,707
)
Close-down and restoration provisions
(5,464
)
Deferred income tax liabilities
(80,811
)
Net identifiable assets acquired
329,402


(1)  
The common shares were valued at the closing price of our shares on the Toronto Stock Exchange on May 30, 2016 (C$11.35), converted to U.S. dollars at the rate of CAD/USD 0.7662.
(2)  
The fair value of options issued were calculated using a Black-Scholes option pricing model. The weighted average option valuations were based on an expected option life of 1.6 years, a risk free interest rate of 0.6%, a dividend yield of nil, volatility of 60.6% and share price of C$11.35, converted to the U.S. dollars at the rate of 0.7662.

If the Seabee Gold Operation had been consolidated into our operations from January 1, 2016, our consolidated revenue for the nine months ended September 30, 2016 would have been approximately $395,135,000 and our consolidated net income for the nine months ended September 30, 2016 would have been $54,165,000.


 
 
11 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

4.
TRADE AND OTHER RECEIVABLES
 
September 30, 2016

December 31, 2015

 
$

$

Trade receivables
57,277

20,907

Value added tax receivables (note 10)
5,319

6,003

Prepayments and deposits
5,019

6,224

Income tax receivable
1,170

2,847

Other receivables
941

752

 
69,726

36,733


We expect full recovery of the trade receivables amounts outstanding and, therefore, no allowance has been recorded against these receivables. No trade receivables are past due and all are expected to be settled within twelve months.

We do not hold any collateral for any receivable amounts outstanding at September 30, 2016 or December 31, 2015 .


5.
MARKETABLE SECURITIES

The movement of marketable securities during the nine months ended September 30, 2016 and the year ended December 31, 2015 is comprised of the following:
 
September 30, 2016

December 31, 2015

 
$

$

Balance, beginning of period
88,184

104,785

Additions

1,062

Additions from the acquisition of Claude Resources (note 3)
351


Disposals
(4,517
)
(2,113
)
Fair value adjustments
91,644

2,595

Foreign exchange adjustments
2,455

(18,145
)
Balance, end of period
178,117

88,184



 
 
12 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

6.
INVENTORY
 
September 30, 2016

December 31, 2015

 

$

Current:
 
 
Finished goods
10,217

22,432

Stockpiled ore
29,013

17,150

Leach pad inventory
84,073

79,016

Materials and supplies
29,144

17,378

 
152,447

135,976

Non-current:
 


Materials and supplies (note 7)
1,656

2,990

 
154,103

138,966


The cost of inventory held at its net realizable value at September 30, 2016 was $nil ( December 31, 2015 - $8,819,000).


7.
OTHER ASSETS
 
September 30, 2016
December 31, 2015
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Financial assets:
 
 
 
 
Restricted cash  (1)

3,097


2,832

Deferred consideration

1,982


1,374

Non-financial assets:
 
 
 
 
Assets held for sale (2,3)
12,372


3,979


Non-current inventory (note 6)

1,656


2,990

 
12,372

6,735

3,979

7,196


(1)  
We have cash and security deposits related to our close down and restoration provisions of $1,868,000 ( December 31, 2015 - $1,899,000).

(2)  
On September 13, 2016 we entered into a definitive agreement with Endeavour Silver Corp. ("Endeavour Silver") to sell our Parral properties in Chihuahua, Mexico, including the Veta Colorada, La Palmilla, and San Patricio properties for consideration of;
- 1,198,083 shares of Endeavour Silver;
- The right to receive $200,000 of Endeavour Silver shares for each one million silver ounces included in an estimate of Measured and Indicated Mineral Resources in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects to be prepared by Endeavour Silver in respect of the San Patricio and La Palmilla properties; and
- 1.0% net smelter returns royalty on all mineral products from the San Patricio and La Palmilla properties.

The transaction closed on October 31, 2016.

(3)  
On August 23, 2016 we entered into a definitive agreement to sell our Diablillos and M-18 properties in Argentina to Huayra Minerals Corporation (Huayra) for consideration of;
 


 
 
13 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


- A 19.9% equity stake in Huayra, with free carried interest until the completion of a public offering of $5.0 million or more;
- Cash payments of approximately $1.5 million over the first two years and $12.5 million over the following three to five years; and
- 1.0% net smelter returns royalty on production from each of the projects.

The transaction closed on November 1, 2016.



 
 
14 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

8.
PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprise the following:
 
September 30, 2016
 
Plant and equipment

Mineral properties subject to depreciation

Mineral properties not yet subject to depreciation (1)

Exploration and evaluation assets

Total

 
$

$

$

$

$

Cost
 
 
 
 
 
Balance, January 1, 2016
421,345

142,397

3,812

78,182

645,736

Acquisition of Claude Resources (note 3)
52,318

62,229

128,100

88,734

331,381

Additions
1,112

34,141

34,270

533

70,056

Disposals
(8,151
)

(285
)

(8,436
)
Change in estimate of close down and restoration provision

2,798



2,798

Transfers (3)
29,457

144

(29,601
)
(8,635
)
(8,635
)
Balance, end of period
496,081

241,709

136,296

158,814

1,032,900

 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
Balance, January 1, 2016
(233,023
)
(64,001
)


(297,024
)
Charge for the period
(29,510
)
(23,400
)


(52,910
)
Disposals
3,324




3,324

Balance, end of period
(259,209
)
(87,401
)


(346,610
)
 
 
 
 
 
 
Net book value at September 30, 2016
236,872

154,308

136,296

158,814

686,290

 
December 31, 2015
 
Plant and equipment

Mineral properties subject to depreciation

Mineral properties not yet subject to depreciation (1)

Exploration and evaluation assets  (2)

Total

 
$

$

$

$

$

Cost
 
 
 
 
 
Balance, January 1, 2015
439,415

118,277

19,988

64,241

641,921

Additions
367

20,034

30,502

13,086

63,989

Disposals and reclassifications
(7,247
)



(7,247
)
Change in estimate of close down and restoration provision
(8,592
)
4,086



(4,506
)
Impairment charges
(48,421
)



(48,421
)
Transfers
45,823


(46,678
)
855


Balance, end of period
421,345

142,397

3,812

78,182

645,736

 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
Balance, January 1, 2015
(164,246
)
(38,601
)


(202,847
)
Charge for the year
(70,774
)
(25,400
)


(96,174
)
Disposals
1,997




1,997

Balance, end of period
(233,023
)
(64,001
)


(297,024
)
 
 
 
 
 
 
Net book value at December 31, 2015
188,322

78,396

3,812

78,182

348,712


(1)  
Includes assets under construction of $7,664,000 at September 30, 2016 ( December 31, 2015 - $3,812,000).

(2)  
On September 24, 2015, we completed the acquisition of the Valmy property, which is contiguous with our Marigold mine in Nevada, U.S., for $11,685,000 (inclusive of transaction costs) in cash from Newmont Mining Corporation.

 
 
15 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

(3)  
During the three months ended September 30, 2016 we reclassified $8,635,000 of exploration and evaluation assets associated with the Diablillos project and Parral properties to being held for sale (note 7), due to their divestiture in the fourth quarter of 2016.

9.
INCOME TAX RECEIVABLE

On January 27, 2015, we received a Notice of Reassessment (“NOR”) from the Canada Revenue Agency (“CRA”) in the amount of approximately C$41,400,000 plus interest of C$6,580,000 related to the tax treatment of the 2010 sale of shares of our subsidiary that owned and operated the Snowfield and Brucejack projects. In order to appeal the NOR, we were required to make a minimum payment of 50% of the reassessed amount claimed by the CRA under the NOR plus interest accrued to the date of the NOR. On February 26, 2015, we paid the required C$24,090,000 ($19,231,000) (the “Deposit”) to the CRA and recorded this amount plus accrued interest as an income tax receivable. On April 20, 2015, we filed a Notice of Objection with the CRA and, on September 15, 2015, we filed a Notice of Appeal with the Tax Court of Canada to dispute the NOR.

In August 2016, we announced that we executed minutes of settlement (the “Settlement Agreement”) with the Department of Justice (“DOJ”) to resolve the NOR in our favor. Pursuant to the terms of the Settlement Agreement, the CRA has issued a new notice of reassessment for each of the 2010 and 2011 taxation years reversing the NOR, and refunded to us the Deposit, plus accrued interest from the date of payment of the Deposit.


10.
VALUE ADDED TAX RECEIVABLE
 
September 30, 2016

December 31, 2015

 

$

Current (note 4)
5,319

6,003

Non-current
20,765

20,792

 
26,084

26,795


Value added tax ("VAT") paid in Argentina in relation to the Pirquitas mine became recoverable under Argentina law once the mine reached the production stage and we apply to the Argentina government to recover the applicable VAT on an ongoing basis. There have, at times, been significant delays in obtaining final approvals and, therefore, the collection of VAT and the classification reflects best estimates of timing of recoveries. Despite the procedural delays, we believe that the remaining balance is fully recoverable and have not provided an allowance.

The VAT receivables balance in Argentina is denominated in Argentine pesos. Accordingly, foreign currency fluctuations could materially impact the value of the VAT receivables in U.S. dollars.

Certain VAT receivables in Argentina are only recoverable against local sales. We believe these are fully recoverable through potential sale of assets at the Pirquitas mine and have not provided an allowance.


 
 
16 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

11.
TRADE AND OTHER PAYABLES
 
September 30, 2016

December 31, 2015

 
$

$

Trade payables
15,845

17,697

Accrued liabilities
34,490

25,866

Accrued royalties
5,486

5,393

Derivative liabilities

901

Income taxes payable

338

Accrued interest on convertible notes (note 13)
1,258

3,157

 
57,079

53,352


Claude Resources royalty agreements
During 2006 and 2007, Claude Resources entered into separate royalty agreements (collectively, the “Agreements” and each an "Agreement") whereby it sold a basic royalty and a net profit interest ("NPI") on gold production at the Seabee Gold Operation. Claude Resources received cash consideration consisting of royalty income, indemnity fee income and interest income. As at September 30, 2016 , only the NPI remains outstanding on the 2006 Agreement but both the basic royalty and the NPI remains outstanding on the 2007 Agreement.

(a)
Basic royalty
Under the terms of the 2007 Agreement, Claude Resources is required to make royalty payments at fixed amounts per ounce of gold produced; these amounts vary over the term of the 2007 Agreement. A portion of the cash received at the inception of the 2007 Agreement was placed with a financial institution; in return, Claude Resources received a promissory note which is classified as restricted for accounting purposes. Claude Resources utilizes interest earned from the restricted promissory note and, if necessary, a portion of the principal to fund the basic royalty payments pursuant to the 2007 Agreement. Over the life of the 2007 Agreement, it is expected that interest earned and principal from the restricted promissory note will be sufficient to fund the expected basic royalty payments.

With respect to the 2007 Agreement, there is the legal right of offset and the intention to settle on a net basis. As such, these transactions are presented on a net basis on the condensed consolidated interim statements of financial position.
 
Note
2007 Agreement
Restricted promissory notes
 
 
 
Principal balance (1)
(b)(d)
$19,447
 
Interest receivable (1)
 
$848
 
Interest rate
 
7 percent
 
Maturity
(d)
February 15, 2017
 
 
 
Royalty payments
 
 
 
Royalty rate per ounce of gold produced (2)
 
C$65.20 to C$147.05
 
Royalty payable (1)
(b)(d)
$834
 
Royalty obligation payable (1)
(b)(d)
$19,476

(1)  
As at September 30, 2016 .
(2)  
Over the remaining life of the Agreement to December 31, 2017.



 
 
17 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

11.
TRADE AND OTHER PAYABLES (Cont'd)

(b) Claude Resources net royalty obligation
The following schedule outlines the different components of the transaction that are presented on a net basis on our condensed consolidated interim statements of financial position:
 
September 30, 2016

 
$

Current assets
 
Interest receivable on restricted promissory notes
848

Restricted promissory note
19,447

 
20,295

Current liabilities
 
Current portion of deferred revenue
118

Interest payable on royalty obligations
834

Royalty obligation
19,476

 
20,428

Current net royalty obligation in accrued royalties
133


The interest income and the indemnity fees received are being amortized into income over the prepayment period and the life of the respective agreements. The interest income and the indemnity fees are netted against interest expense and are reflected in “interest expense and other finance costs” on the condensed consolidated interim statement of income.

 
 
18 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

11.
TRADE AND OTHER PAYABLES (Cont'd)

(c) NPI payment
In addition to the royalty, Claude Resources granted an NPI of varying percentages under the Agreements, payable only if gold prices exceed a pre-determined threshold.
 
2006 Agreement
2007 Agreement
Applicable years (1)
2016
2016 - 2017
Percent
3.75%, 4.00% or 4.25%
3.50%, 3.70% or 3.90%
Price of gold thresholds (CAD) (2)
$975, $1,175 or $1,375
$1,250, $1,500 or $1,675

(1)  
The NPI pursuant to the 2006 Agreement expires on December 31, 2016, and the 2007 Agreement expires on December 31, 2017.
(2) London PM Fix.

Prior to any NPI payment, we are entitled to first recover the NPI expenditures (including capital expenditures), working capital, operating losses, interest charges and asset retirement obligations relating to the production of ore at the Seabee Gold Operation. These expenditures are calculated on a cumulative basis from the commencement of each of the Agreements. At September 30, 2016 , the cumulative carry forward amounts remained in a deficiency position under each of the Agreements and no payments are expected during 2016.

(d) Call and put
Under certain circumstances, we have the right to purchase (“call”) the equity of the holder of the royalties or right to receive the royalties at an amount no greater than the fair market value thereof at the time of the call. The call price will be paid from the balance owing to us under the promissory notes. Under certain circumstances, the purchaser of the royalties will have the right to sell (“put”) their interest in the royalty to us at an amount no greater than the fair market value thereof at the time of the put. However, such right is subject to our pre-emptive right to exercise the call in advance of any put being exercised and completed.



 
 
19 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

12.
PROVISIONS
 
September 30, 2016
December 31, 2015
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Export duties on silver concentrate (1)
67,130


65,633


Restructuring provision  (2)
2,492


5,205

 
Close down and restoration provision  (3)
7,242

61,672

7,388

51,532

 
76,864

61,672

78,226

51,532


(1)  
We entered into a fiscal stability agreement (the “Fiscal Agreement”) with the Federal Government of Argentina in 1998 for production from the Pirquitas mine. In December 2007, the National Customs Authority of Argentina (Dirección Nacional de Aduanas) ("Customs") levied an export duty of approximately 10% from concentrate for projects with fiscal stability agreements pre-dating 2002 and Customs has asserted that the Pirquitas mine is subject to this duty. We have challenged the legality of the export duty applied to silver concentrate and the matter is currently under review by the Federal Court (Jujuy) in Argentina.

The Federal Court (Jujuy) granted an injunction in our favor effective September 29, 2010 that prohibited Customs from withholding the 10% export duty on silver concentrate (the “Injunction”), pending the decision of the courts with respect to our challenge of the legality of the application of the export duty. The Injunction was appealed by the Federal Tax Authority but upheld by each of the Federal Court of Appeal (Salta) on December 5, 2012 and the Federal Supreme Court of Argentina on September 17, 2013. The Federal Tax Authority also appealed the refund we claimed for the export duties paid before the Injunction, as well as matters of procedure related to the uncertainty of the amount reclaimed; however, on May 3, 2013, such appeal was dismissed by the Federal Court of Appeal (Salta). In September 2014, the Federal Tax Authority in Argentina filed an application with the Federal Court (Jujuy) to lift the Injunction and requiring payment of the export duty and payment of applied interest charges. We filed a response to such application on October 14, 2014.

On June 21, 2016 the Federal Court (Jujuy) ruled that the Injunction would remain in place subject to certain conditions, including the provision by August 5, 2016 of a guarantee by Silver Standard against liabilities arising from export duties and applicable interest as well as security from Mina Pirquitas LLC on certain assets at the Pirquitas mine. We have appealed the condition to provide the parent guarantee. The requirement for the guarantee and security is suspended pending the outcome of that appeal. We are also continuing discussions with the Federal Tax Authority and other government officials for potential resolution of the claim. We cannot predict the outcome of the court proceedings and those discussions. If we do not reach a successful resolution of the matter, the Federal Tax Authority may make further application to the court to have the Injunction lifted and, upon that initiate proceedings to collect the accrued export duties and its claimed interest. The lifting of the Injunction does not impact our underlying challenge of the legality of the application of export duties or remedies available under the Fiscal Agreement.

As of September 30, 2016 , we have paid $6,646,000 in export duties, for which we have filed for recovery. In accordance with the Injunction, we did not pay export duties on silver concentrate but continued to accrue export duties until February 12, 2016, when the Federal Government of Argentina announced the removal of export duties on mineral concentrates. At September 30, 2016 , we have accrued a liability totaling $67,130,000 ( December 31, 2015 - $65,633,000 ) for export duties with no accrual for interest charges, and have recorded a corresponding increase in cost of sales in the relevant period. The Federal Tax Authority has claimed that interest penalties at the proscribed rate applicable to general peso-based tax liabilities of 3% per month should be applied to the US dollar export duty from the dates that each duty was accrued. The application of this rate results in a material interest claim of an amount approximately equivalent to the underlying duties that we have not accrued due to its uncertainty. In addition to our challenges on the underlying application of the export duties, we are also challenging the Federal Tax Authority’s claim for interest and the rate upon which it claims interest.

 
 
20 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

12.
PROVISIONS (Cont'd)

The final amount of export duties and interest, if any, to be paid or refunded depends on a number of factors including the outcome of litigation. We continue to assess the implications of the February 12, 2016 elimination of export duties and the other recent developments on our financial reporting position related to the historical liability recorded. Changes in our assessment of this matter could result in material adjustments to our consolidated statements of income (loss).

(2)  
As at September 30, 2016 , we have provided for various employee termination benefits as a result of anticipated employee reductions at Pirquitas mine in 2016 and 2017.

(3)  
The changes in the close down and restoration provision during the nine months ended September 30, 2016 and the year ended December 31, 2015 were as follows :
 
September 30, 2016

December 31, 2015

 

$

Balance, January 1
58,920

62,190

 
 
 
Provisions on acquisition of Claude Resources (note 3)
5,464


Liabilities settled during the period
(946
)
(2,414
)
Accretion expense
2,705

3,733

Foreign exchange (gain)
(27
)
(83
)
Revisions and new estimated cash flows
2,798

(4,506
)
 
 
 
Balance, end of period
68,914

58,920

 
 
 
Less: current portion of close down and restoration provision
(7,242
)
(7,388
)
Non-current close down and restoration provision
61,672

51,532



 
 
21 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

13.
NON-CURRENT DEBT AND CREDIT FACILITY

(a) Non-current debt
The movement in the debt portion of the convertible notes during the nine months ended September 30, 2016 and the year ended December 31, 2015 is comprised of the following:
 
September 30, 2016

December 31, 2015

 
$

$

Balance, beginning of period
211,242

200,291

Accretion of discount
8,893

10,951

Interest accrued in period
5,719

7,619

Interest paid
(7,619
)
(7,619
)
Balance, end of period
218,235

211,242

Accrued interest outstanding (note 11)
(1,258
)
(3,157
)
Non-current portion of convertible notes outstanding
216,977

208,085


(b) Credit facility
On August 4, 2015, we entered into a $75,000,000 senior secured revolving credit facility (the "Credit Facility") with a syndicate of banks. The Credit Facility may be used for reclamation bonding, working capital and other general corporate purposes.

The term of the Credit Facility is three years, maturing on August 4, 2018. Amounts that are borrowed under the Credit Facility will incur variable interest at London Interbank Offered Rate plus an applicable margin ranging from 2.75% to 3.75% determined based on our net leverage ratio. The Credit Facility also provides for financial letters of credit at 66% of the applicable margin and undrawn fees are 25% of the applicable margin.

All debts, liabilities and obligations under the Credit Facility are guaranteed by our material subsidiaries and secured by certain of our assets, certain of our material subsidiaries, and pledges of the securities of our material subsidiaries. In connection with the Credit Facility, we must also maintain certain net tangible worth and ratios for interest coverage and net leverage. As at September 30, 2016 we were in compliance with these covenants.

As at September 30, 2016 , we had utilized $7,600,000 ( December 31, 2015 - $7,500,000) of the Credit Facility to support letters of credit.

(c) Claude Resources debt
Upon our acquisition of Claude Resources (note 3) on May 31, 2016, we immediately fully repaid amounts outstanding on its credit facility of $13,707,000 . Claude Resources' credit facility was immediately terminated upon repayment.


 
 
22 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

14.
SHARE-BASED COMPENSATION

(a) Stock options
The changes in stock options issued during the nine months ended September 30, 2016 and the year ended December 31, 2015 are as follows:
 
September 30, 2016
December 31, 2015
 
Number of stock options

Weighted average exercise price (C$/option)

Number of stock options

Weighted average exercise price (C$/option)

 
 
 
 
 
Outstanding, beginning of period
3,193,106

8.97

2,377,065

12.68

     Granted
798,020

7.19

1,519,656

6.70

Issued in connection with the acquisition of Claude Resources (note 3)
809,286

6.35



     Exercised
(1,128,521
)
(7.23
)
(72,050
)
(7.37
)
     Forfeited
(201,784
)
(9.04
)
(631,565
)
(17.64
)
Outstanding, end of period
3,470,107

8.53

3,193,106

8.97


For options granted during the nine months ended September 30, 2016 , the weighted average option valuations were based on an expected option life of 4.2 years, a risk free interest rate of 0.6%, a dividend yield of nil, and volatility of 59.4%.
During the nine months ended September 30, 2016 , options granted had a weighted average fair value of C$3.34 per option.

(b) Deferred Share Units (“DSUs”)
During the nine months ended September 30, 2016 and the year ended December 31, 2015 , the following DSUs were outstanding to non-executive directors:
 
September 30, 2016

December 31, 2015

 
Number of DSUs

Number of DSUs

Outstanding, beginning of period
439,261

335,680

     Granted
80,789

136,514

     Redeemed

(32,933
)
Outstanding, end of period
520,050

439,261


The DSUs granted in the nine months ended September 30, 2016 had a weighted average fair value of C$8.97 per unit. The DSUs are cash-settled instruments and, therefore, the fair value of the outstanding DSUs at the end of each reporting period is recognized as an accrued liability. As at September 30, 2016 , the fair value of outstanding DSUs was C$15.81 per unit.

 
 
23 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

14.
SHARE-BASED COMPENSATION (Cont'd)

(c) Restricted Share Units (“RSUs”)
During the nine months ended September 30, 2016 and the year ended December 31, 2015 , the following RSUs were outstanding to employees:
 
September 30, 2016

December 31, 2015

 
Number of RSUs

Number of RSUs

Outstanding, beginning of period
640,077

330,414

     Granted
409,279

473,815

     Settled
(244,982
)
(124,548
)
     Forfeited
(81,411
)
(39,604
)
Outstanding, end of period
722,963

640,077


The RSUs granted in the nine months ended September 30, 2016 had a weighted average fair value of C$7.27 per unit. RSUs settled in the nine months ended September 30, 2016 were settled at a weighted average fair value of C$8.08 per unit. The RSUs are cash-settled instruments and, therefore, the fair value of the outstanding RSUs at the end of each reporting period is recognized as an accrued liability. As at September 30, 2016 , the fair value of outstanding RSUs was C$15.81 per unit.

(d) Performance Share Units (“PSUs”)
During the nine months ended September 30, 2016 and the year ended December 31, 2015 , the following PSUs were outstanding to senior executives:
 
September 30, 2016

December 31, 2015

 
Number of PSUs

Number of PSUs

Outstanding, beginning of period
413,150

323,000

     Granted
276,000

390,850

     Settled

(190,183
)
     Forfeited
(38,650
)
(110,517
)
Outstanding, end of period
650,500

413,150


The PSUs granted in the nine months ended September 30, 2016 had a weighted average fair value of C$7.17 per unit. The PSUs are cash-settled instruments and, therefore, the fair value of the outstanding PSUs at the end of each reporting period is recognized as an accrued liability. As at September 30, 2016 , the weighted average fair value of outstanding PSUs was C$17.07 per unit.


 
 
24 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

14.
SHARE-BASED COMPENSATION (Cont'd)

(e) Share-based compensation
Total share-based compensation, including all equity and cash-settled arrangements, for the nine months ended September 30, 2016 and 2015 has been recognized in the condensed consolidated interim financial statements as follows:
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
2016

2015

 
2016

2015

 
$

$

 
$

$

Equity-settled
 
 
 
 
 
Cost of inventory
33

33

 
64

73

General and administrative expenses
648

667

 
1,893

1,898

Exploration, evaluation and reclamation expenses
9

11

 
28

25

Cash-settled
 
 
 
 
 
Cost of inventory
833

447

 
2,364

1,005

General and administrative expenses
(218
)
1,437

 
7,867

4,251

Exploration, evaluation and reclamation expenses
29

26

 
102

58

 
1,334

2,621

 
12,318

7,310



15.
COST OF SALES
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
2016

2015

 
2016

2015

 

$

 

$

Cost of inventory
65,224

53,731

 
184,397

172,253

Depletion, depreciation and amortization
18,967

19,802

 
51,210

56,833

Export duties (note 12)

3,338

 
1,512

8,603

Write-down of stockpiles

7,716

 

7,716

 
84,191

84,587

 
237,119

245,405



16.
OTHER INCOME (EXPENSES)
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
2016

2015

 
2016

2015

 
$

$

 
$

$

(Loss) on disposal of fixed assets
(744
)
(2,449
)
 
(3,294
)
(4,435
)
Revaluation of deferred consideration
(78
)

 
531


Gain on sale of mineral properties
261


 
261


Other
513

2

 
641

(101
)
 
(48
)
(2,447
)
 
(1,861
)
(4,536
)


 
 
25 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

17.
EARNINGS PER SHARE

The calculations of basic and diluted earnings per share are based on the following:
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
2016

2015

 
2016

2015

 
 
 
 
 
 
Basic net earnings (loss)
$38,042
$(59,416)
 
$52,825
(57,580
)
Adjustment for dilutive instruments:
 
 
 
 
 
Interest saving on convertible notes, net of tax
3,646


 


Earnings (loss) used in the calculation of diluted earnings per share
41,688
(59,416
)
 
52,825
(57,580
)
 
 
 
 
 
 
Weighted average number of common shares issued (thousands)
119,163
80,754
 
97,851
80,754
Adjustments for dilutive instruments:
 
 
 
 
 
Stock options (thousands)
1,923

 
1,294

Convertible notes (thousands)
13,250


 


Weighted average number of common shares for diluted earnings per share (thousands)
134,336
80,754
 
99,145
80,754
 
 
 
 
 
 
Basic earnings (loss) per share
$0.32
$(0.74)
 
$0.54
$(0.71)
Diluted earnings (loss) per share
$0.31
$(0.74)
 
$0.53
$(0.71)


 
 
26 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

18.
OPERATING SEGMENTS

Following the acquisition of Claude Resources (note 3), we have included the Seabee Gold Operation as an operating segment. Other operating segments have not changed as our President and Chief Executive Officer (who is considered to be our chief operating decision maker) continues to review operating results of these segments and they continue to exceed the quantitative threshold for individual disclosure.

The following is a summary of the reported amounts of income or loss, and the carrying amounts of assets and liabilities by operating segment:
Three months ended September 30, 2016
Marigold mine

Seabee Gold Operation

Pirquitas mine

Exploration and evaluation properties

Other reconciling items (i)

Total

 


$

$

$

$

Revenue
62,831

29,214

51,336



143,381

Cost of inventory
(29,928
)
(16,723
)
(18,573
)


(65,224
)
Depletion, depreciation and amortization
(9,747
)
(8,365
)
(855
)


(18,967
)
Cost of sales
(39,675
)
(25,088
)
(19,428
)


(84,191
)
Income from mine operations
23,156

4,126

31,908



59,190

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(64
)
(758
)
(32
)
(3,237
)
(189
)
(4,280
)
Operating income (loss)
23,068

3,344

32,074

(3,524
)
(4,714
)
50,248

Income (loss) before income tax
21,664

3,293

28,984

(6,814
)
(6,128
)
40,999

 
 
 
 
 
 
 
Interest expense and other finance costs
(336
)
(14
)
(857
)
(21
)
(5,233
)
(6,461
)
Income tax (expense) recovery
(5,342
)
(509
)

(4
)
2,898

(2,957
)
 
 
 
 
 
 
 
As at September 30, 2016
 
 
 
 
 
 
Total assets
391,583

412,363

92,722

98,977

458,973

1,454,618

Non-current assets
245,228

374,675

41,790

87,484

15,235

764,412

Total liabilities
(73,775
)
(91,920
)
(114,516
)
(8,042
)
(246,163
)
(534,416
)

 
 
27 | Page

Silver Standard Resources Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2016
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

18.
OPERATING SEGMENTS (Cont'd)

Three months ended September 30, 2015
Marigold mine

Seabee Gold Operation

Pirquitas mine

Exploration and evaluation properties

Other reconciling items (i)

Total

 
$

$

$

$

$

$

Revenue
43,836


33,355



77,191

Cost of inventory
(28,356
)

(25,375
)


(53,731
)
Depletion, depreciation and amortization
(8,192
)

(11,610
)


(19,802
)
Export duties


(3,338
)


(3,338
)
Write-down of stockpiles


(7,716
)


(7,716
)
Cost of sales
(36,548
)

(48,039
)


(84,587
)
Income from mine operations
7,288


(14,684
)


(7,396
)
 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(572
)

(994
)
(1,209
)
(372
)
(3,147
)
Impairment charge


(34,490
)


(34,490
)
Operating income (loss)