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MANAGEMENT’S DISCUSSION AND ANALYSIS
DRIVING GROWTH FROM WITHIN
Significant Accounting Judgments and Estimates
The preparation of the unaudited condensed interim consolidated financial statements (“Financial Statements”) requires
management to make judgments and estimates that affect the reported amounts of assets and liabilities at the date of
the Financial Statements and reported amounts of expenses during the reporting period. Actual outcomes could differ
from these judgments and estimates. The Financial Statements include judgments and estimates which, by their nature,
are uncertain. The impacts of such judgments and estimates are pervasive throughout the Financial Statements, and
may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in
the period in which the estimate is revised and the revision affects both current and future periods.
Significant assumptions about the future and other sources of judgments and estimates that management has made at
the statement of financial position date, that could result in a material adjustment to the carrying amounts of assets
and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:
i. Critical Judgments
• The analysis of the functional currency for each entity of the Company. In concluding that the United States dollar
functional currency for its Peruvian and Mexican entities and the Canadian and Barbados entities have a Canadian
dollar functional currency, management considered the currency that mainly influences the cost of providing goods
and services in each jurisdiction in which the Company operates. As no single currency was clearly dominant the
Company also considered secondary indicators including the currency in which funds from financing activities are
denominated and the currency in which funds are retained.
• In concluding when commercial production has been achieved, the Company considered the following factors:
• all major capital expenditures to bring the mine to the condition necessary for it to be capable of operating in
the manner intended by management have been completed;
• the mine or mill is operating as per design capacity and metallurgical recoveries were achieved; and,
• the ability to sustain ongoing production of ore at a steady or increasing level.
• The identification of reportable segments, basis for measurement and disclosure of the segmented information.
• The determination of estimated useful lives and residual values of tangible and long lived assets and the
measurement of depreciation expense.
• The identification of impairment indicators, cash generating units and determination of carrying value or fair value
less cost to sell and the write down of tangible and long lived assets.
• Measurement of financial instruments involve significant judgments related to interpretation of the terms of the
instrument, identification, classification, impairment and the overall measurement to approximate fair values.
ii. Estimates
• the recoverability of amounts receivable which are included in the consolidated statements of financial position;
• the estimation of assay grades of metal concentrates sold in the determination of the carrying value of accounts
receivable which are included in the consolidated statements of financial position and included as sales in the
consolidated statements of income;
• the determination of net realizable value of inventories on the consolidated statements of financial position;
• the estimated useful lives of property, plant and equipment which are included in the consolidated statements of
financial position and the related depreciation included in the consolidated statements of income;
• the determination of mineral reserves and the portion of mineral resources expected to be extracted economically,
carrying amount of mineral properties, and depletion of mineral properties included in the consolidated statements
of financial position and the related depletion included in the consolidated statements of income;
• the review of tangible and intangible assets carrying value, the determination of whether these assets are impaired
and the measurement of impairment charges or reversals which are included in the consolidated statements of
income;
• the assessment of indications of impairment of each mineral property and related determination of the net
realizable value and write-down of those properties where applicable;
• the determination of the fair value of financial instruments and derivatives included in the consolidated statements
of financial position;
• the fair value estimation of share-based awards included in the consolidated statements of financial position and
the inputs used in accounting for share-based compensation expense in the consolidated statements of income;
