Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 25, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | Golden Minerals Co | ||
Entity Central Index Key | 1011509 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $37.20 | ||
Entity Common Stock, Shares Outstanding | 53,162,833 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents (Note 3) | $8,579 | $19,146 |
Trade receivables | 25 | |
Inventories (Note 5) | 1,497 | 449 |
Value added tax receivable (Note 6) | 1,316 | 1,765 |
Prepaid expenses and other assets (Note 4) | 835 | 1,091 |
Total current assets | 12,227 | 22,476 |
Property, plant and equipment, net (Note 7) | 29,031 | 32,375 |
Prepaid expenses and other assets (Note 4) | 30 | |
Total assets | 41,258 | 54,881 |
Current liabilities | ||
Accounts payable and other accrued liabilities (Note 10) | 1,639 | 1,365 |
Other current liabilities (Note 12) | 2,551 | 4,405 |
Total current liabilities | 4,190 | 5,770 |
Asset retirement and reclamation liabilities (Note 11) | 2,685 | 2,602 |
Warrants liability (Note 15) | 1,554 | |
Other long term liabilities (Note 12) | 95 | 53 |
Total liabilities | 8,524 | 8,425 |
Commitments and contingencies (Note 20) | ||
Equity (Note 15) | ||
Common stock, $.01 par value, 100,000,000 shares authorized; 53,162,833 and 43,530,833 shares issued and outstanding, respectively | 532 | 435 |
Additional paid in capital | 484,197 | 494,647 |
Accumulated deficit | 451,995 | 448,626 |
Shareholders' equity | 32,734 | 46,456 |
Total liabilities and equity | $41,258 | $54,881 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 53,162,833 | 43,530,833 |
Common stock, shares outstanding | 53,162,833 | 43,530,833 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Revenue: | ||
Sale of metals (Note 16) | $235 | $10,680 |
Costs and expenses: | ||
Cost of metals sold (exclusive of depreciation shown below) (Note 16) | -1,655 | -17,534 |
Exploration expense | -5,528 | -4,575 |
El Quevar project expense | -1,597 | -2,628 |
Velardena project expense | -3,126 | -3,052 |
Velardena shutdown and care & maintenance costs | -2,457 | -6,374 |
Administrative expense | -4,642 | -5,610 |
Stock based compensation | -926 | -1,555 |
Reclamation expense | -199 | -184 |
Impairment of long lived assets (Note 8) | -243,985 | |
Impairment of goodwill (Note 9) | -11,666 | |
Other operating income, net | 691 | 3,526 |
Depreciation, depletion and amortization | 3,128 | 6,927 |
Total costs and expenses | -22,567 | -300,564 |
Loss from operations | -22,332 | -289,884 |
Other income and (expenses): | ||
Interest and other income (Note 17) | 1,708 | 444 |
Warrant derivative income (Note 18) | 1,693 | |
Gain (loss) on foreign currency | 108 | -626 |
Other total income and (expenses) | 3,509 | -182 |
Loss before income taxes | 18,823 | 290,066 |
Income tax benefit (Note 14) | 49,686 | |
Net loss | 18,823 | 240,380 |
Other comprehensive gain: | ||
Unrealized gain on securities, net of tax | 90 | |
Comprehensive loss | ($18,823) | ($240,290) |
Net loss per common share - basic and diluted | ||
Loss (in dollars per share) | ($0.41) | ($5.61) |
Weighted average common stock outstanding - basic and diluted (in shares) | 45,862,419 | 42,838,735 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | $433 | $493,175 | ($208,246) | ($90) | $285,272 |
Balance (in shares) at Dec. 31, 2012 | 43,265,833 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation accrued | 2 | 1,553 | 1,555 | ||
Stock compensation accrued (in shares) | 265,000 | ||||
KELTIP mark-to-market | -81 | -81 | |||
Realized gain on marketable equity securities, net of tax | 90 | 90 | |||
Net loss | -240,380 | -240,380 | |||
Balance at Dec. 31, 2013 | 435 | 494,647 | -448,626 | 46,456 | |
Balance (in shares) at Dec. 31, 2013 | 43,530,833 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation accrued | 2 | 924 | 926 | ||
Stock compensation accrued (in shares) | 140,000 | ||||
KELTIP mark-to-market | 12 | 12 | |||
Registered offering stock units, net (Note 15) | 37 | 1,502 | 1,539 | ||
Registered offering stock units, net (Note 15) (in shares) | 3,692,000 | ||||
Private placements stock units, net (Note 15) | 58 | 2,729 | 2,787 | ||
Private placements stock units, net (Note 15) (in shares) | 5,800,000 | ||||
Reclassification to reflect warrant liability (Note 15) | -15,617 | 15,454 | -163 | ||
Net loss | -18,823 | -18,823 | |||
Balance at Dec. 31, 2014 | $532 | $484,197 | ($451,995) | $32,734 | |
Balance (in shares) at Dec. 31, 2014 | 53,162,833 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | ||
Net cash used in operating activities (Note 19) | ($18,459) | ($27,878) |
Cash flows from (used in) investing activities: | ||
Sale of available-for-sale investments | 198 | |
Proceeds from sale of assets | 982 | 4,217 |
Additions to property, plant and equipment | -500 | -1,797 |
Net cash from investing activities | 482 | 2,618 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of issue costs | 7,410 | |
Net cash from financing activities | 7,410 | |
Net decrease in cash and cash equivalents | -10,567 | -25,260 |
Cash and cash equivalents, beginning of period | 19,146 | 44,406 |
Cash and cash equivalents, end of period | $8,579 | $19,146 |
Basis_of_Preparation_of_Financ
Basis of Preparation of Financial Statements | 12 Months Ended |
Dec. 31, 2014 | |
Basis of Preparation of Financial Statements | |
Basis of Preparation of Financial Statements | |
1.Basis of Preparation of Financial Statements | |
Golden Minerals Company (the “Company”), a Delaware corporation, is a mining company, holding a 100% interest in the Velardeña and Chicago precious metals mining properties in Mexico (the “Velardeña Properties”). The Company is primarily focused on efforts to optimize mining and processing activities at the Velardeña Properties in order to achieve positive net cash flows at the Velardeña Properties. The Company is also focused on establishing a second group of mining assets, which may include those recently acquired assets in the Parral District in Chihuahua Mexico and obtaining oxide feed from outside sources to enable restart of the oxide plant, in order to generate sufficient revenue, along with revenue from the Velardeña Properties, to fund continuing business activities. The Company is continuing its exploration efforts on selected properties in its portfolio of 30 exploration properties located primarily in Mexico. It continues to hold its El Quevar property on care and maintenance and to reduce holding costs until it can find a partner to further advance the project. The Company is also reviewing strategic opportunities, focusing primarily on development or operating properties in North America, including Mexico. | |
The Company is considered an exploration stage company under the criteria set forth by the Securities and Exchange Commission (“SEC”) as the Company has not yet demonstrated the existence of proven or probable mineral reserves, as defined by the SEC Industry Guide 7, at the Velardeña Properties, or any of the Company’s other properties. As a result, and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for exploration stage companies, all expenditures for exploration and evaluation of the Company’s properties are expensed as incurred. As such the Company’s financial statements may not be comparable to the financial statements of mining companies that do have proven and probable mineral reserves. Such companies would typically capitalize certain development costs including infrastructure development and mining activities to access the ore. The capitalized costs would be amortized on a units-of-production basis as reserves are mined. The amortized costs are typically allocated to inventory and eventually to cost of sales as the inventories are sold. As the Company does not have proven and probable reserves, substantially all expenditures at the Company’s Velardeña Properties for mine construction activity, as well as costs associated with the mill facilities, and for items that do not have a readily identifiable market value apart from the mineralized material, have been expensed as incurred. Such costs are charged to cost of metals sold or project expense during the period depending on the nature of the costs. Certain of the costs may be reflected in inventories prior to the sale of the product. The term “mineralized material” as used herein, although permissible under SEC Industry Guide 7, does not indicate “reserves” by SEC standards. The Company cannot be certain that any deposits at the Velardeña Properties or any other exploration property will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves”. | |
In June 2013 the Company suspended mining and processing at its Velardeña Properties. Following the shutdown, the Company continued to develop and evaluate plans to restart mining. The Company completed this evaluation and new mine plans in the second quarter 2014 and on July 1, 2014 restarted mining at the Velardeña Properties and began processing material from the mine on November 3, 2014. During 2014 the Company focused primarily on mining material from the San Mateo, Terneras and Roca Negra vein systems. Average grades in November were 109 grams per tonne silver and 1.3 grams per tonne gold, with payable metals generated from the processing facilities of approximately 12,000 ounces silver equivalent ounces, which is exclusive of process inventory in the circuit that required build up. In December 2014 the mill began operating at nearly full capacity of an average 264 tonnes per day (“tpd”). The Company is continuing to ramp up to the 285 tpd rate, which it expects to achieve late in the first quarter 2015. Average grades in December were 127 grams per tonne silver and 1.8 grams per tonne gold, with payable metals generated from the processing facilities of approximately 31,000 ounces silver equivalent ounces. During the fourth quarter 2014, the Company sold approximately 16,000 ounces of silver and approximately 95 ounces of gold. In the first quarter 2015, the engineering firm Tetra Tech updated the Company’s estimate of mineralized material at the Velardeña Properties, and plans to finalize a Preliminary Economic Assessment (“PEA”) and a technical report pursuant to Canadian National Instrument 43-101 in respect of the Velardeña Properties. | |
The financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the normal course of business. However, the continuing operations of the Company are dependent upon its ability to secure sufficient funding and to generate future profitable operations. The underlying value and recoverability of the amounts shown as mineral properties in Note 7 are dependent on the ability of the Company to generate positive cash flows from operations and to continue to fund exploration and development activities that would lead to profitable mining activities or to generate proceeds from the disposition of the mineral properties. There can be no assurance that the Company will be successful in generating future profitable operations or securing additional funding in the future on terms acceptable to the Company or at all. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | |
2.Summary of Significant Accounting Policies | |
The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of the Company’s consolidated financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves and related future metals prices that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production depreciation, depletion and amortization calculations; environmental reclamation and closure obligations; estimates of recoverable metals in stockpiles; valuation allowances for deferred tax assets and the fair value of financial instruments. The Company based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates under different assumptions or conditions. | |
The policies adopted, considered by management to be significant, are summarized as follows: | |
a.Basis of consolidation | |
All of the Company’s consolidated subsidiaries are 100% owned and as such the Company does not recognize a noncontrolling interest in any of its subsidiaries. All intercompany transactions and balances have been eliminated at consolidation. | |
b.Translation of foreign currencies | |
Substantially all expenditures and sales are made in U.S. dollars. Accordingly, the Company and its subsidiaries use the U.S. dollar as their functional and reporting currency. | |
c.Cash and cash equivalents | |
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. | |
d.Inventories | |
Metals inventory at the Velardeña Properties consisted of marketable products including concentrates and precipitates. Metals inventory were carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on spot and futures metals prices through estimated sale and settlement dates, less the estimated costs to complete processing and bring the product to sale. Costs included in metals inventory included direct and indirect costs of mining and processing, including depreciation. At December 31, 2014 the Company had written down its metals inventory to net realizable value with excess costs included in cost of sales and depreciation. The Company did not have any metals inventory at December 31, 2013. | |
Materials and supplies inventories are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. The Company routinely counts and evaluates its material and supplies to determine the existence of any obsolete stock that is subject to impairment. | |
e.Mining properties, exploration and development costs | |
The Company expenses general prospecting costs and the costs of acquiring and exploring unevaluated mineral properties. When a mineral property is determined to have proven and probable reserves, subsequent development costs are capitalized to mineral properties. For acquired mineral properties with proven and probable reserves, the Company capitalizes acquisition costs and subsequent development costs. When mineral properties are developed and operations commence, capitalized costs are charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized in the accompanying Consolidated Statements of Operations and Comprehensive loss. | |
As discussed in Note 1, the Company is considered an exploration stage company under the criteria set forth by the SEC since it has not yet demonstrated the existence of proven or probable reserves at the Velardeña Properties, or any of the Company’s other properties. As such, the Company expenses costs as incurred related to the extraction of mineralized material at its Velardeña Properties. The Company established a cost basis for the mineralized material at the Velardeña Properties as a result of purchase accounting for the Company’s business combination transaction with ECU Silver Mining Inc. (“ECU”) in September 2011, the transaction pursuant to which the Company acquired the Velardeña Properties. Mineral properties acquired in the ECU merger were recorded at estimated fair market value based on valuations performed with the assistance of an independent appraisal firm and a minerals engineering company. Although the Company has not demonstrated the existence of proven and probable reserves, and the Company has not completed a pre-feasibility economic assessment, the Company had established the existence of mineralized material that was used in assigning value to mineral properties for purchase accounting purposes. The subsequent extraction of this mineralized material has provided a reasonable basis for the calculation of units-of-production depreciation for the cost basis in the mineral properties. | |
On a quarterly basis the Company evaluates its exploration properties to determine if they meet the Company’s minimum requirements for continued evaluation. The rights to the properties that do not meet the minimum requirements are relinquished and the carrying values, if any are written off and reflected in other operating gains and losses, net on the accompanying Consolidated Statements of Operations and Comprehensive Loss. Costs of exploration subsequent to the application of fresh start accounting have and will continue to be expensed. | |
f.Property, plant and equipment and long lived asset impairment | |
Buildings are depreciated using the straight—line method over the estimated useful lives of 30 to 40 years or the life of the mine whichever is shorter. Mining equipment and machinery excluding the plant are depreciated using the straight-line method over useful lives of three to eight years or the lease period, whichever is shorter. Mineral properties with proven and probable reserves and the plant are depreciated using units of production based on estimated mine reserves. Other furniture and equipment are depreciated using the straight-line method over estimated useful lives of three to five years. Depreciation on plant and equipment used in the construction of an asset is capitalized to the constructed asset. | |
As discussed above, the Company does not have any properties with proven or probable reserves including the the Velardeña Properties. | |
Property, plant and equipment are recorded at cost and per the guidance of ASC 360 the Company assesses the recoverability of its property, plant and equipment, including goodwill, at least annually or whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset, impairment is considered to exist. The related impairment loss is measured by comparing estimated future net cash flows on a discounted basis to the carrying amount of the asset (see Notes 8 and 9). | |
ASC 350 requires that an entity assign its goodwill to reporting units and test each reporting unit’s goodwill for impairment at least annually or whenever events or changes in circumstances indicate the goodwill may be impaired. The Company wrote off the remaining balance of its goodwill related to the Velardeña Properties as of December 31, 2013 (see Note 9). | |
g.Asset Retirement Obligations | |
The Company records asset retirement obligations (“ARO”) in accordance with ASC 410, “Asset Retirement and Environmental Obligations” (“ASC 410”), which establishes a uniform methodology for accounting for estimated reclamation and abandonment costs. According to ASC 410, the fair value of an ARO is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. An offsetting asset retirement cost (“ARC”) is capitalized as part of the carrying value of the assets with which it is associated, and depreciated over the useful life of the asset (see Note 11). | |
The Company prepares estimates of the timing and amount of expected cash flows when an ARO is incurred. The fair value of the ARO is measured by discounting the expected cash flows using a discount rate that reflects the credit adjusted risk-free rate of interest. The Company records the fair value of an ARO when it is incurred and changes in the fair value of the ARO are recorded as an adjustment to the corresponding ARC. The ARO is adjusted to reflect the passage of time (accretion cost) calculated by applying the discount rate implicit in the initial fair value measurement to the beginning-of-period carrying amount of the ARO. The Company records accretion costs to expense as incurred. | |
h.Revenue Recognition | |
Following the guidance of ASC 605, “Revenue Recognition” (“ASC 605”), the Company recognizes “Revenue from the sale of metals” at the earliest point that both risk of loss and title transfer to the purchaser pursuant to the terms of the Company’s sales agreements. Prices for concentrate and precipitate sales are fixed according to terms included in the sales agreements, which generally call for final pricing based on average metals prices observed over specific periods that range from 10 days prior to the transfer of title to the month following the month the product is received by the purchaser. Revenue is recorded based on estimated metals contained in the product from assay data and using either actual or projected prices for the pricing period specified in the sales agreement. Upon final settlement revenue may be adjusted for changes in actual contained metals and final metals prices. | |
i.Stock compensation | |
Stock based compensation costs are recognized per the guidance of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award (see Note 15). Stock grants are valued at their grant date at fair value which in the case of options requires the use of the Black-Scholes option pricing model. Per ASC 718 the grants may be classified as equity grants or liability grants depending on the terms of the grant. | |
j.Net income (loss) per Common Stock/Ordinary Share | |
Basic income (loss) per share is computed by dividing net income (loss) available to holders of the Company’s Common Stock by the weighted average number of Common Stock/Ordinary Shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue Common Stock or Ordinary Shares were exercised or converted into Common Stock or Ordinary Shares. | |
At December 31, 2014 and 2013, all potentially dilutive shares were excluded from the computation of diluted earnings per share because to include them would have been anti-dilutive. | |
k.Comprehensive Income (Loss) | |
Comprehensive income (loss) is defined as all changes in equity (deficit), exclusive of transactions with stockholders, such as capital investments. Comprehensive income (loss) includes net income (loss) and changes in certain assets and liabilities that are reported directly in equity. For the years ended December 31, 2014 and 2013 Comprehensive Loss included the change in the market value of available for sale securities and is reported on the Consolidated Statements of Operations and Comprehensive Loss. | |
l.Income Taxes | |
The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”), on a tax jurisdictional basis. The Company files United States and certain other foreign country income tax returns, and pays taxes reasonably determined to be due. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s income tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. | |
The Company classifies income tax related interest and penalties as income tax expense. | |
m.Recently Adopted Standards | |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-02, “Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income”. The purpose of this accounting standard update is to improve the reporting of reclassifications out of accumulated other comprehensive income and is effective for public entities prospectively for reporting periods beginning after December 15, 2012. Substantially all of the information that this update requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. However, the new requirement regarding presenting information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income will present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures. The Company had only immaterial amounts classified out of accumulated other comprehensive income at December 31, 2014 and December 31, 2013. The adoption of this standard did not have an impact on the Company’s financial position or results of operations and is not expected to have an impact in the future. | |
In July 2013 the FASB issued Accounting Standards Update No. 2013-11 “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”), which requires an unrecognized tax benefit to be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward that the entity intends to use and is available for settlement at the reporting date. ASU 2013-11 became effective for the Company January 1, 2014. The adoption of ASU 2013-11 has not had a material impact on the Company’s consolidated financial position or results of operations. | |
n.Recently Issued Pronouncements | |
On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU No. 2014-15”). ASU No. 2014-15 will require management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management will be required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. ASU No. 2014-15 becomes effective for annual periods beginning in 2016 and for interim reporting periods starting in the first quarter of 2017. The Company does not expect the adoption of this amendment to have a material impact on its consolidated financial position or results of operations. | |
On May 28, 2014, FASB and the International Accounting Standards Board issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016; early application is not permitted. The Company is evaluating the financial statement implications of adopting ASU 2014-09 but does not believe adoption of ASU 2014-09 will have a material impact on its consolidated financial position or results of operations. | |
On April 10, 2014 the FASB issued Accounting Standards Update No. 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08)”. ASU 2014-08 changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under ASU 2014-08, only disposals representing a strategic shift in operations will be presented as discontinued operations. Additionally, ASU 2014-08 requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. ASU 2014-08 will become effective for the Company January 1, 2015. The Company does not believe the adoption of ASU 2014-08 will have a material impact on the Company’s consolidated financial position or results of operations. | |
Cash_and_Cash_Equivalents_and_
Cash and Cash Equivalents and Short-Term Investments | 12 Months Ended |
Dec. 31, 2014 | |
Cash and Cash Equivalents and Short-Term Investments | |
Cash and Cash Equivalents and Short-Term Investments | |
3.Cash and Cash Equivalents and Short-Term Investments | |
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Short-term investments include investments with maturities greater than three months, but not exceeding 12 months, or highly liquid investments with maturities greater than 12 months that the Company intends to liquidate during the next 12 months for working capital needs. | |
Prepaid_Expenses_and_Other_Ass
Prepaid Expenses and Other Assets | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Prepaid Expenses and Other Assets | ||||||||
Prepaid expenses and other assets | ||||||||
4.Prepaid Expenses and Other Assets | ||||||||
Prepaid expenses and other assets consist of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Prepaid insurance | $ | 542 | $ | 687 | ||||
Prepaid contractor fees and vendor advances | 100 | 193 | ||||||
Taxes receivable | 90 | 96 | ||||||
Recoupable deposits and other | 103 | 115 | ||||||
$ | 835 | $ | 1,091 | |||||
December 31, 2014 | ||||||||
The prepaid contractor fees and vendor advances consist of advance payments made to contractors and suppliers primarily at the Company’s Velardeña Properties in Mexico. | ||||||||
December 31, 2013 | ||||||||
The prepaid contractor fees and vendor advances consist of advance payments made to contractors and suppliers primarily at the Company’s Velardeña Properties in Mexico. | ||||||||
In addition, included in non-current assets at December 31, 2013 is approximately $30,000 of prepaid insurance on which amortization will be recognized through 2015. | ||||||||
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventories | ||||||||
Inventories | ||||||||
5.Inventories | ||||||||
Inventories at the Velardeña Properties were as follows: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Metals inventory | $ | 477 | $ | — | ||||
In-process inventory | 307 | — | ||||||
Material and supplies | 713 | 449 | ||||||
$ | 1,497 | $ | 449 | |||||
At December 31, 2014 the Company had written down its metals and in-process inventories to net realizable value including a charge to cost of metals sold of $1.2 million and a charge to depreciation expense of approximately $0.7 million. | ||||||||
The Company had no metals or in process inventories at December 31, 2013 as the result of the suspension of mining and processing at the Velardeña Properties (see Note 1). | ||||||||
Value_added_tax_receivable
Value added tax receivable | 12 Months Ended |
Dec. 31, 2014 | |
Value added tax receivable | |
Value Added Tax Recoverable | |
6.Value added tax receivable | |
The Company has recorded value added tax (“VAT”) paid in Mexico and related to the Velardeña Properties as a recoverable asset. Mexico law allows for certain VAT payments to be recovered through ongoing applications for refunds. The Company expects that the current amounts will be recovered within a one year period. | |
The Company has also paid VAT in Mexico as well as other countries, primarily related to exploration projects, which has been charged to expense as incurred because of the uncertainty of recoverability. | |
Property_Plant_and_Equipment_a
Property, Plant and Equipment and Assets Held for Sale | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property, Plant and Equipment and Assets Held for Sale | |||||||||||
Property, Plant and Equipment and Assets Held for Sale | |||||||||||
7.Property, Plant and Equipment | |||||||||||
Property, plant and equipment, net | |||||||||||
The components of property, plant, and equipment, net were as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
(in thousands) | |||||||||||
Mineral properties | $ | 22,397 | $ | 22,397 | |||||||
Exploration properties | 2,743 | 2,993 | |||||||||
Royalty properties | 200 | 200 | |||||||||
Buildings | 2,848 | 2,349 | |||||||||
Mining equipment and machinery | 19,224 | 19,441 | |||||||||
Other furniture and equipment | 841 | 1,054 | |||||||||
Asset retirement cost | 2,002 | 2,087 | |||||||||
50,255 | 50,521 | ||||||||||
Less: Accumulated depreciation & amortization | (21,224 | ) | (18,146 | ) | |||||||
29,031 | 32,375 | ||||||||||
During the year ended December 31, 2014 the Company sold 45 mining concessions totaling 770 hectares located in the Zacatecas District, Zacatecas State, Mexico, to Capstone Mining Group for $700,000 and recorded a $0.5 million gain on the sale. Also in the third quarter 2014, the Company entered into an option agreement with a private party to sell its 1,100 hectare Otuzco property in Peru for $450,000. At December 31, 2014 the Company had received $150,000 under the option agreement, with the remainder payable in 2015 if the option is maintained and exercised. In addition, the Company sold miscellaneous surplus equipment located in Argentina for $130,000 and recorded a nominal gain. The net gains for the above sales are reflected in other operating income, net on the accompanying Consolidated Statements of Operations and Comprehensive Loss. | |||||||||||
During the year ended December 31, 2013 the Company relinquished the rights to two exploration properties in Mexico that did not meet the Company’s minimum requirements for continued evaluation. The properties had a carrying value of approximately $0.2 million which is included in Loss from operations. | |||||||||||
Also during 2013 the Company reduced the carrying value of the Velardeña Properties property, plant and equipment by $235.3 million and the carrying value of the San Diego mineral property by $8.7 million and recorded $244.0 million of impairment charges on the accompanying Consolidated Statement of Operations and Comprehensive Loss (see Note 8). The table below sets forth the detail of the impairment charges recorded to the Velardeña Properties property, plant and equipment and the San Diego mineral property at December 31, 2013: | |||||||||||
Impairment Charges | |||||||||||
Velardeña | |||||||||||
Properties | San Diego | Total | |||||||||
Asset Group | Asset Group | Impairment | |||||||||
Mineral properties | $ | 217,524 | $ | — | $ | 217,524 | |||||
Exploration properties | 3,472 | 8,659 | 12,131 | ||||||||
Buildings | 3,036 | — | 3,036 | ||||||||
Mining equipment and machinery | 10,394 | — | 10,394 | ||||||||
Other furniture and equipment | 900 | — | 900 | ||||||||
235,326 | 8,659 | 243,985 | |||||||||
The carrying value after the impairment represents the fair value of the assets as discussed in Note 8. | |||||||||||
The asset retirement cost (“ARC”) is all related to the Company’s Velardeña Properties. The decrease in the ARC during the period is related to an adjustment to the asset retirement obligation (“ARO”) (see Note 11). | |||||||||||
Impairment_of_Long_Lived_Asset
Impairment of Long Lived Assets | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Impairment of Long Lived Assets | |||||||||||||||||
Impairment of Long Lived Assets | |||||||||||||||||
8.Impairment of Long Lived Assets | |||||||||||||||||
Velardeña Properties Asset Group | |||||||||||||||||
The Velardeña Properties asset group consists of the property, plant, and equipment and working capital related to the Velardeña Properties. Per the guidance of ASC 360, “Property, Plant and Equipment” (“ASC 360”), the Company assesses the recoverability of its long-lived assets, including property, plant and equipment, at least annually, or whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Based on the Company’s assessment of the recoverability of the Velardeña Properties at December 31, 2014 no impairment was deemed to have occurred during 2014. | |||||||||||||||||
Prices for silver and gold decreased approximately 34% and 26% respectively from March 31, 2013 to June 30, 2013. The significant decrease in metals prices and the shutdown of mining and processing at the Velardeña Properties at the end of the second quarter 2013 were events that required an assessment of the recoverability of the Velardeña Properties asset group at June 30, 2013. Per the guidance of ASC 360, recoverability of an asset group is not achieved if the projected undiscounted, pre-tax cash flows related to the asset group are less than its carrying amount. In its analysis of projected cash flows from the Velardeña Properties, the Company determined that the Velardeña Properties asset group was impaired. As a result, at June 30, 2013 and later at December 31, 2013 the Company recorded impairment charges totaling $235.3 million to arrive at a fair value for the Velardeña Properties of $23.9 million at December 31, 2013, as shown in the table below. | |||||||||||||||||
The Company also recomputed deferred tax assets and liabilities associated with the Velardeña Properties asset group and determined, based on the new carrying value of the Velardeña Properties asset group, that no net deferred tax liabilities exist. Therefore, the net deferred tax liabilities calculated prior to the impairment of approximately $45.0 million were written off and the Company recorded an income tax benefit equal to that amount for the year ended December 31, 2013 (see Note 14). | |||||||||||||||||
In arriving at a fair value for the Velardeña mineral deposit and exploration properties at June 30, 2013 the Company used a market valuation approach, which the Company deemed reasonable under the circumstances, that considered a combination of: (1) recently published market data reflecting an average in the ground mineral resource value for a representative group of junior silver mining companies primarily located in Mexico and South America, and (2) recent mineral resource acquisition and development cost data provided by a third party mining engineering consultant. From this data the Company inferred an enterprise value for the Velardeña Properties of approximately $0.29 per ounce of estimated equivalent silver ounces contained in the Velardeña Properties deposit. From the derived enterprise value the Company subtracted the fair value assigned to tangible assets and working capital to arrive at a residual value for the mineral and exploration properties. Using this approach, the Company determined that the Velardeña Properties asset group, including tangible assets, had a fair value of approximately $23.9 million at December 31, 2013, resulting in total impairment charges of $235.3 million for 2013. | |||||||||||||||||
The tangible assets at the Velardeña Properties were separately analyzed by a third party valuation firm using available market data to determine a fair value based on the net realizable value that could be received in a sale to a third party. The market data was derived by researching the secondary equipment market on sales and/or offers for sale of similar assets. The tangible assets were determined to have a fair value of approximately $9.6 million, resulting in an impairment charge of approximately $14.3 million at June 30, 2013. | |||||||||||||||||
The market valuation approach used in the determination of fair value falls within Level 3 of the fair value hierarchy per ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) (see Note 13) and relies upon assumptions related to the condition and location of the Velardeña Properties asset group in comparison to other corroborated observable market data. | |||||||||||||||||
The following table details the components of the impairment of the Velardeña Properties Asset Group: | |||||||||||||||||
Net Book Value | Net Book Value | Net Book Value | |||||||||||||||
Prior to | Jun. 30, 2013 | After | Dec. 31, 2013 | After | |||||||||||||
Impairment at | Impairment | Impairment at | Impairment | Impairment at | |||||||||||||
Jun. 30, 2013 | Charges | Jun. 30, 2013 | Charges | Dec. 31, 2013 | |||||||||||||
(in thousands) | |||||||||||||||||
Mineral properties (1) | $ | 232,805 | $ | 211,608 | $ | 21,197 | $ | 5,916 | $ | 15,384 | |||||||
Exploration properties | 3,472 | 3,472 | — | — | — | ||||||||||||
Tangible assets (2) | 23,928 | 14,330 | 9,598 | — | 8,485 | ||||||||||||
$ | 260,205 | $ | 229,410 | $ | 30,795 | $ | 5,916 | $ | 23,869 | ||||||||
(1)The December 31, 2013 mineral properties net book value reflects a $0.1 million adjustment recorded during the fourth quarter of 2013 in addition to the impairment charge. | |||||||||||||||||
(2)The December 31, 2013 tangible assets net book value reflects depreciation and asset disposals recorded during the third and fourth quarters of 2013. | |||||||||||||||||
San Diego Property Asset Group | |||||||||||||||||
At December 31, 2014 the Company had a 50% ownership interest in the San Diego exploration property, which is located approximately 10 kilometers from the Velardeña Properties. Because of its close proximity to the Velardeña Properties, the San Diego property could become a source of additional ore for the Velardeña Properties if developed in the future. The San Diego property is included in the Velardeña Properties reporting segment but is separate from the Velardeña Properties asset group. | |||||||||||||||||
Per the guidance of ASC 360, the Company assesses the recoverability of its property, plant and equipment at least annually, or whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Based on the Company’s assessment of the recoverability of the San Diego property at December 31, 2014 no impairment of the San Diego properties was deemed to have occurred during 2014. | |||||||||||||||||
As discussed above relating to the impairment of long lived assets associated with the Velardeña Properties asset group, the significant decrease in metals prices in the early part of 2013 and the shutdown of mining and processing at the Velardeña Properties at the end of the second quarter 2013 were events that required the assessment of the recoverability of the carrying amounts of the San Diego property. Because the San Diego property is in the exploration stage a market valuation approach was used to determine the fair value for the property. Because of the close proximity and geological similarities of the San Diego property to the Velardeña Properties mineral deposit and exploration properties, and given that both the San Diego property and the Velardeña Properties mineral deposit and exploration properties were originally recorded at fair value at the same time as part of the ECU merger transaction, the Company determined that the impairment of the Velardeña mineral deposit and exploration properties provided a reasonable estimate for the decline in fair value of the San Diego property. As such, at June 30, 2013 and later at December 31, 2013 the Company recorded impairment charges totaling $8.7 million to arrive at a fair value for the San Diego property of $0.6 million at December 31, 2013, as shown in the table below. | |||||||||||||||||
The market valuation approach used in the determination of fair value falls within Level 3 of the fair value hierarchy per ASC 820 (see Note 13) and relies upon assumptions related to the condition and location of the San Diego property in comparison to other corroborated observable market data. | |||||||||||||||||
The following table details the components of the impairment of the San Diego Property Asset Group: | |||||||||||||||||
Net Book Value | Net Book Value | Net Book Value | |||||||||||||||
Prior to | Jun. 30, 2013 | After | Dec. 31, 2013 | After | |||||||||||||
Impairment at | Impairment | Impairment at | Impairment | Impairment at | |||||||||||||
Jun. 30, 2013 | Charges | Jun. 30, 2013 | Charges | Dec. 31, 2013 | |||||||||||||
(in thousands) | |||||||||||||||||
Exploration properties | $ | 9,260 | $ | 8,428 | $ | 832 | $ | 231 | $ | 601 | |||||||
$ | 9,260 | $ | 8,428 | $ | 832 | $ | 231 | $ | 601 | ||||||||
Impairment_of_Goodwill
Impairment of Goodwill | 12 Months Ended |
Dec. 31, 2014 | |
Impairment of Goodwill | |
Impairment of Goodwill | |
9.Impairment of Goodwill | |
Prior to December 31, 2013 the Company reflected goodwill on its balance sheet related to the acquisition of the Velardeña Properties as part of the ECU merger transaction primarily as a result of the requirement to record a deferred tax liability for the difference between the fair value and the tax basis of both the assets acquired and liabilities assumed. Per the guidance of ASC 350, “Intangible — Goodwill and Other” (“ASC 350”), the Company assesses the recoverability of its goodwill at least annually, or whenever events or changes in circumstances indicate that the carrying value of the goodwill may be impaired. The carrying value of goodwill, related to the Mexico ECU reporting unit, was fully written off at December 31, 2013. The Company recorded impairment charges related to goodwill of $11.7 million during 2013. | |
As discussed in Note 8, regarding the impairment of long lived assets related to the Velardeña Properties asset group, the significant decrease in metals prices and shutdown of mining and processing at the Velardeña Properties during 2013 were events that also required an assessment of whether goodwill had been impaired. In determining the impairment of goodwill, the Company used an analysis of discounted after-tax cash flows to calculate the implied fair value of the goodwill related to the Velardeña Properties asset group following the guidance of ASC 805. Several mining, processing and shutdown scenarios were combined to arrive at a single projection of cash flows using a weighted average approach, which assigned probabilities to the occurrence of each individual scenario. The cash flow analysis used in the impairment assessment for goodwill related to the Velardeña Properties falls within level 3 of the fair value hierarchy per ASC 820 (see Note 13) and includes various inputs including the weighted average cost of capital of 21%, projected future metals prices, and assumptions from the Company’s Velardeña Properties mining and processing plans. The most significant unobservable factors are certain assumptions used in the Velardeña Properties mining and processing plans and include: 1) ore grades consistent with the Company’s current and previously reported estimates of mineralized material, 2) plant throughput consistent with projected mining and processing plans under the various mining and processing scenarios, 3) the Company’s projections of operating costs, and 4) the weighting of mining and processing scenarios. The weighted average cost of capital and forecast of future metals prices were obtained from a third party valuation consultant that derived the data from corroborated observable market data. Metals prices used in the cash flow analysis for silver ranged from $23.80 to $18.06 per ounce and for gold ranged from $1,440 to $1,198 per ounce. | |
Accounts_Payable_and_Other_Acc
Accounts Payable and Other Accrued Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Other Accrued Liabilities | ||||||||
Accounts Payable and Other Accrued Liabilities | ||||||||
10.Accounts Payable and Other Accrued Liabilities | ||||||||
The Company’s accounts payable and other accrued liabilities consist of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Accounts payable and accruals | $ | 893 | $ | 717 | ||||
Accrued employee compensation and benefits | 746 | 648 | ||||||
$ | 1,639 | $ | 1,365 | |||||
December 31, 2014 | ||||||||
Accounts payable and accruals at December 31, 2014 are primarily related to amounts due to contractors and suppliers in the amounts of $0.7 million and $0.2 million related to the Company’s Velardeña Properties and corporate administrative activities, respectively. In the case of the Velardeña Properties, amounts due also include VAT payable that is not an offset to the VAT receivable. | ||||||||
Accrued employee compensation and benefits at December 31, 2014 consist of $0.1 million of accrued vacation payable and $0.6 million related to withholding taxes and benefits payable, of which $0.3 million is related to activities at the Velardeña Properties. | ||||||||
December 31, 2013 | ||||||||
Accounts payable and accruals at December 31, 2013 are primarily related to amounts due to contractors and suppliers in the amounts of $0.4 million, $0.2 million and $0.1 million related to the Company’s Velardeña Properties, corporate administrative activities and exploration, respectively. In the case of the Velardeña Properties, amounts due also include VAT payable that is not an offset to the VAT receivable. | ||||||||
Accrued employee compensation and benefits at December 31, 2013 consist of $0.1 million of accrued vacation payable and $0.5 million related to withholding taxes and benefits payable, of which $0.3 million is related to activities at the Velardeña Properties. | ||||||||
Key Employee Long-Term Incentive Plan | ||||||||
In December 2013, the Board of Directors of the Company approved and the Company adopted the 2013 Key Employee Long-Term Incentive Plan (the “KELTIP”), which became effective immediately. The KELTIP provides for the grant of units (“KELTIP Units”) to certain officers and key employees of the Company, which units will, once vested, entitle such officers and employees to receive an amount, in cash or in Company common stock issued pursuant to the Company’s Amended and Restated 2009 Equity Incentive Plan, measured generally by the price of the Company’s common stock on the settlement date. KELTIP Units are not an actual equity interest in the Company and are solely unfunded and unsecured obligations of the Company that are not transferable and do not provide the holder with any stockholder rights. Payment of the settlement amount of vested KELTIP Units is deferred generally until the earlier of a change of control of the Company or the date the grantee ceases to serve as an officer or employee of the Company. | ||||||||
The KELTIP Units are marked to market at each reporting period. At December 31, 2014 and December 31, 2013 the Company had recorded liabilities of $93,000 and $81,000, respectively, related to KELTIP Unit grants which are included in accrued employee compensation and benefits in the table above. | ||||||||
Asset_Retirement_and_Reclamati
Asset Retirement and Reclamation Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Asset Retirement and Reclamation Liabilities | ||||||||
Asset Retirement and Reclamation Liabilities | ||||||||
11.Asset Retirement and Reclamation Liabilities | ||||||||
The Company retained the services of a mining engineering firm to prepare a detailed closure plan for the Velardeña Properties. The plan was completed during the second quarter 2012 and indicated that the Company had an ARO and offsetting ARC of approximately $1.9 million. The estimated $3.5 million ARO and ARC that was recorded at the time of the acquisition of the Velardeña Properties was adjusted accordingly. | ||||||||
The Company will continue to accrue additional estimated ARO amounts based on an asset retirement plan as activities requiring future reclamation and remediation occur. During the year ended December 31, 2014 the Company recognized approximately $0.2 million of accretion expense and approximately $0.2 million of amortization expense related to the ARC. | ||||||||
The following table summarizes activity in the Velardeña Properties ARO: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Beginning balance | $ | 2,467 | $ | 2,080 | ||||
Changes in estimates, and other | (85 | ) | 203 | |||||
Accretion expense | 200 | 184 | ||||||
Ending balance | $ | 2,582 | $ | 2,467 | ||||
The decrease in the ARO recorded during the year ended December 31, 2014 is the result of changes in assumptions related to inflation factors and discount rates used in the determination of future cash flows. | ||||||||
The increase in ARO recorded during the year ended December 31, 2013 relates to a change in assumption related to inflation factors used in the determination of future cash flows. The corresponding increase in ARO was discounted using the Company’s current credit-adjusted risk-free interest rate. | ||||||||
The ARO set forth on the accompanying Condensed Consolidated Balance Sheets at December 31, 2014 and December 31, 2013 include approximately $0.1 million of reclamation liabilities related to activities at the El Quevar project in Argentina. | ||||||||
Other_Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2014 | |
Other Liabilities | |
Other Liabilities | |
12.Other Liabilities | |
The Company recorded other current liabilities of approximately $2.6 million and $4.4 million at December 31, 2014 and December 31, 2013, respectively. The amounts are primarily related to a loss contingency on foreign withholding taxes that the government could assert are owed by the Company, acting as withholding agent, on certain interest payments made to a third party. The amounts include estimated interest, penalties and other adjustments. | |
The December 31, 2014 amount also includes a net liability of approximately $0.2 million related to the Argentina tax on equity due for years 2009 through 2012 stemming from a tax audit of those years. The amount includes interest and penalties and is net of certain VAT credits due the Company. The tax authorities have agreed in principle to offset a portion of the $0.9 million in tax, interest and penalties with approximately $0.7 million of VAT credits due the Company. Should the Argentina tax authorities ultimately not allow a portion or all of the VAT credits as an offset, the liability could increase by as much as $0.7 million (see Note 20). | |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Fair Value Measurements | ||||||||||||||
13.Fair Value Measurements | ||||||||||||||
Financial assets and liabilities and nonfinancial assets and liabilities are measured at fair value on a recurring (annual) basis under a framework of a fair value hierarchy which prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to quoted prices (unadjusted) in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy per ASC 820 are as follows: | ||||||||||||||
Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. | ||||||||||||||
Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data. | ||||||||||||||
Level 3: Unobservable inputs due to the fact that there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability. | ||||||||||||||
The Company has consistently applied the valuation techniques discussed in Notes 8 and 9 in all periods presented. | ||||||||||||||
The following table summarizes the Company’s financial assets at fair value at December 31, 2014 and 2013 by respective level of the fair value hierarchy: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
(in thousands) | ||||||||||||||
At December 31, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 8,579 | $ | — | $ | — | $ | 8,579 | ||||||
Trade accounts receivable | — | — | — | — | ||||||||||
$ | 8,579 | $ | — | $ | — | $ | 8,579 | |||||||
Liabilities: | ||||||||||||||
Warrant liability | $ | — | $ | — | $ | 1,442 | $ | 1,442 | ||||||
$ | — | $ | — | $ | 1,442 | $ | 1,442 | |||||||
At December 31, 2013 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 19,146 | $ | — | $ | — | $ | 19,146 | ||||||
Trade accounts receivable | 25 | — | — | 25 | ||||||||||
$ | 19,171 | $ | — | $ | — | $ | 19,171 | |||||||
The Company’s cash equivalents, comprised principally of U.S. treasury securities, are classified within Level 1 of the fair value hierarchy. | ||||||||||||||
The Company’s trade accounts receivable is classified within Level 1 of the fair value hierarchy and is related to the sale of metals at our Velardeña Properties and is valued at published metals prices per the terms of the refining and smelting agreements. | ||||||||||||||
At December 31, 2014 the Company has recorded a liability for warrants to acquire the Company’s stock as a result of anti-dilution clauses in the warrant agreements that could result in a resetting of the warrant exercise price in the event the Company were to issue additional shares of its common stock in a future transaction at a an offering price lower than the current exercise price of the warrants (see Note 15). The Company assesses the fair value of its warrant liability at the end of each reporting period, with changes in the value recorded as a separate line item on the Company’s Consolidated Statements of Operations and Comprehensive Income. The valuation policies are approved by the Chief Financial Officer who reviews and approves the inputs used in the fair value calculations and the changes in fair value measurements from period to period for reasonableness. Fair value measurements are discussed with the Company’s Chief Executive Officer, as deemed appropriate. The warrant liability has been recorded at fair value as of December 31, 2014 based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy. The valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants. Significant inputs to the valuation model included the Company’s closing stock price at December 31, 2014 of $0.54, the exercise prices for the warrants disclosed above, the company’s stock volatility of 90%, the applicable risk free interest rate of 1.6%, and the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price. An increase or decrease in the Company’s stock price, in isolation, would result in a relatively lower or higher fair value measurement respectively. A decrease in the probability of the issuance of additional common stock at a lower price than the current warrant exercise price would result in a lower value for the warrants. The table below highlights the change in fair value of the warrant liability. | ||||||||||||||
Fait Value Measurements | ||||||||||||||
Using SignificantUnobservable | ||||||||||||||
Inputs (level 3) | ||||||||||||||
Warrant Liabilities | ||||||||||||||
(in thousands) | ||||||||||||||
Beginning balance at January 1, 2014 | $ | — | ||||||||||||
Adjustment to record 2012 warrants as a liability (Note 15) | 163 | |||||||||||||
Issuance of warrants | 3,084 | |||||||||||||
Change in estimated fair value | (1,693 | ) | ||||||||||||
Ending balance at December 31, 2014 | $ | 1,554 | ||||||||||||
The Company did not have any Level 2 or Level 3 financial assets at December 31, 2013. | ||||||||||||||
Non-recurring Fair Value Measurements | ||||||||||||||
There were no non-recurring fair value measurements at December 31, 2014. | ||||||||||||||
The following table summarizes the Company’s non-recurring fair value measurements at December 31, 2013 by respective level of the fair value hierarchy: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
(in thousands) | ||||||||||||||
At December 31, 2013 | ||||||||||||||
Assets: | ||||||||||||||
Mineral properties | $ | — | $ | — | $ | 22,397 | $ | 22,397 | ||||||
Exploration properties | — | — | 2,993 | 2,993 | ||||||||||
$ | — | $ | — | $ | 25,390 | $ | 25,390 | |||||||
The Company assesses the fair value of its long lived assets, including goodwill, at least annually or more frequently if circumstances indicate a change in the fair value has occurred. The valuation policies are approved by the Chief Financial Officer who reviews and approves the inputs used in the fair value calculations and the changes in fair value measurements from period to period for reasonableness. Fair value measurements are discussed with the Company’s Chief Executive Officer, as deemed appropriate. | ||||||||||||||
To determine the fair value of mineral properties and exploration properties the Company uses a market valuation approach which falls within Level 3 of the fair value hierarchy. The market valuation approach relies upon assumptions related to the condition and location of the properties in comparison to other corroborated observable market data for similar properties. In arriving at a fair value for the Velardeña mineral deposit and exploration properties and the San Diego exploration property, the Company considered recently published market data reflecting an average in the ground mineral resource value for a representative group of junior silver mining companies primarily located in Mexico and South America. See Note 8 for details related to the unobservable inputs. | ||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Income Taxes | ||||||||
Income Taxes | ||||||||
14.Income Taxes | ||||||||
The Company accounts for income taxes in accordance with the provisions of ASC 740 “Income Taxes” (“ASC 740”) on a tax jurisdictional basis. | ||||||||
The provision for income taxes consists of the following: | ||||||||
For the Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
CURRENT TAXES: | ||||||||
United States | $ | — | $ | — | ||||
Other Countries | — | (2,450 | ) | |||||
$ | — | $ | (2,450 | ) | ||||
DEFERRED TAXES: | ||||||||
United States | $ | — | $ | — | ||||
Other Countries | — | (47,236 | ) | |||||
$ | — | $ | (47,236 | ) | ||||
Total Income Tax Provision (Benefit) | $ | — | $ | (49,686 | ) | |||
Income (loss) from operations before income taxes by country consists of the following: | ||||||||
For the Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
United States | $ | (8,207 | ) | $ | (8,632 | ) | ||
Other Countries | (10,615 | ) | (281,434 | ) | ||||
$ | (18,822 | ) | $ | (290,066 | ) | |||
In 2014 the Company recorded no current or deferred tax expense or benefit, as any tax expense or benefit incurred during the year has been offset against a change in the valuation allowance against prior year net operating losses in each country. In 2013 the Company recorded a $47.2 million deferred tax benefit related primarily to the impairment of long lived assets of the Velardeña Properties, and recorded a current tax benefit of $2.5 million related to the effective settlement of an unrecognized tax benefit in Mexico. | ||||||||
A reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes as shown in the consolidated statements of operations and comprehensive income (loss) is summarized below. | ||||||||
For the Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Tax expense (benefit) at US rate of 34% | $ | (6,400 | ) | $ | (98,623 | ) | ||
Other adjustments: | ||||||||
Non-deductibility of Goodwill impairment | — | 3,500 | ||||||
Rate differential of other jurisdictions | 301 | 11,047 | ||||||
Effects of foreign earnings | (2,238 | ) | (6,671 | ) | ||||
Change in valuation allowance | 14,127 | 37,894 | ||||||
Provision to return true-ups | (18,826 | ) | — | |||||
Exchange rate changes on net deferred tax assets | 13,605 | — | ||||||
Effect of a change in tax rates | — | 3,153 | ||||||
Other | (569 | ) | 14 | |||||
Income tax provision | $ | — | $ | (49,686 | ) | |||
The components of the deferred tax assets and deferred tax liabilities are as follows: | ||||||||
For the years ended | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 93,364 | $ | 84,735 | ||||
Stock-based compensation | 1,943 | 1,691 | ||||||
Property, plant and equipment | 13,990 | 7,838 | ||||||
Other | 1,289 | 1,239 | ||||||
110,586 | 95,503 | |||||||
Less: Valuation allowance | (106,764 | ) | (92,637 | ) | ||||
Total deferred tax assets | 3,822 | 2,866 | ||||||
Deferred tax liabilities: | ||||||||
Property, plant and equipment | (3,436 | ) | (2,388 | ) | ||||
Other | (386 | ) | (478 | ) | ||||
Total deferred tax liabilities | (3,822 | ) | (2,866 | ) | ||||
Net deferred tax asset (liability) | $ | — | $ | — | ||||
In accordance with ASC 740, the Company presents deferred tax assets net of its deferred tax liabilities on a tax jurisdictional basis on its Consolidated Balance Sheets. The net deferred tax liability as of December 31, 2014 and December 31, 2013 was zero. | ||||||||
At December 31, 2014 the Company had net operating loss carryforwards in the U.S. and in certain non-U.S. jurisdictions totaling $312.9 million. Of these, $100.6 million is related to the Velardeña Properties in Mexico and expire in future years through 2024. $23.1 million is related to other Mexico exploration activities and also expire in future years through 2024. $42.2 million net operating losses exist in Luxembourg and have no expiration date, while $95.8 million exist in other non-U.S. countries, which will expire in future years through 2034. In the U.S. there are $50.5 million of net operating loss carryforwards which will expire in future years through 2034. A portion of the U.S. net operating loss carryforwards are subject to limitations under Internal Revenue Code Section 382, relating to a change of control event triggered by the Company’s public offering of its common stock in March 2010. | ||||||||
The valuation allowance offsetting the deferred tax assets of the Company of $106.7 million and $92.6 million at December 31, 2014 and 2013, respectively, relates primarily to the uncertain utilization of certain deferred tax assets, primarily net operating loss carryforwards, in various tax jurisdictions. The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration. | ||||||||
The Company, a Delaware corporation, and its subsidiaries file tax returns in the United States and in various foreign jurisdictions. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is less than a more-likely-than-not probability of the position being upheld upon review by the relevant taxing authority. Such positions are deemed to be “unrecognized tax benefits” which require additional disclosure and recognition of a liability within the financial statements. If recognized, none of the unrecognized tax benefits would affect the Company’s effective tax rate. | ||||||||
The Company had no unrecognized tax benefits as of December 31, 2014 and 2013. During 2013 an unrecognized tax benefit of $2.5 million was effectively settled with taxing authorities. Below is a reconciliation of the beginning and ending amount of gross unrecognized tax benefits, which excludes any estimated penalties and interest. | ||||||||
The Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Gross unrecognized tax benefits at beginning of period | $ | 1,668 | $ | 2,841 | ||||
Increases for tax positions taken during prior years | 17 | |||||||
Decreases relating to settlements with taxing authorities | (889 | ) | ||||||
Reductions due to lapse of statute of limitations | (505 | ) | (301 | ) | ||||
Gross unrecognized tax benefits at end of period | $ | 1,163 | $ | 1,668 | ||||
Tax years as early as 2009 remain open and are subject to examination in the Company’s principal tax jurisdictions. The Company does not expect a significant change to its net unrecognized tax benefits over the next 12 months. No interest and penalties were recognized in the statement of operations for the year 2014. The total amount of interest and penalties recognized in the statement of operations for 2013 is an income tax benefit of $1.3 million, and there are no interest and penalties recognized in the statement of financial position as of December 31, 2014 and 2013. The Company classifies income tax related interest and penalties as income tax expense. | ||||||||
Equity
Equity | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Equity | ||||||||||||
Equity | ||||||||||||
15.Equity | ||||||||||||
Registered offering | ||||||||||||
On September 10, 2014 the Company completed a registered public offering (the “Offering”) of 3,692,000 Units (the “Units”), with each Unit consisting of one share of the Company’s common stock (the “Shares”) and a warrant to purchase .50 of a share of the Company’s common stock (the “Warrants”). Each Unit was priced at $0.86 per Unit, before discount to the underwriters. The Warrants become exercisable on March 11, 2015 at an exercise price of $1.21 per share and will expire on September 10, 2019, five years from the date of issuance. The Shares and the Warrants are immediately separable and were issued separately. The Company received net proceeds from the Offering of approximately $2.7 million after the underwriter commissions and expenses of approximately $0.5 million. | ||||||||||||
In arriving at the value of the Shares and Warrants the Company first valued and recorded the Warrants as a liability on the balance sheet as a result of anti-dilution clauses in the warrant agreements that could result in a resetting of the warrant exercise price in the event the Company were to issue additional shares of its common stock in a future transaction at a an offering price lower than the current exercise price of the warrants. A third party expert determined a value for the Warrants at September 4, 2014, the date prior to the announcement of the Offering, using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy (see Note 13). The valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the Warrants. Significant inputs to the valuation model included the Company’s closing stock price at September 4, 2014 of $1.01, the exercise price for the Warrants disclosed above, the Company’s stock volatility measured as of September 4, 2014, the applicable risk free interest rate of 1.6%, and the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price. The fair value of the Warrants was determined to be $1.2 million, with the remaining $1.5 million of net proceeds from the Offering being allocated to additional paid in capital. | ||||||||||||
Private placement | ||||||||||||
On September 10, 2014 the Company also completed a private placement (the “Private Placement”) with The Sentient Group (“Sentient”), the Company’s largest stockholder, pursuant to which Sentient purchased, pursuant to Regulation S under the U.S. Securities Act of 1933, a total of 5,800,000 Units (the “Private Placement Units”), with each Private Placement Unit consisting of one share of the Company’s common stock and a warrant to purchase 0.50 of a share of the Company’s common stock. The Warrants become exercisable on March 11, 2015 at an exercise price of $1.21 per share and will expire on September 10, 2019, five years from the date of issuance. Each Private Placement Unit was priced at $0.817 the same discounted price paid by the underwriters in the Offering. The Company received net proceeds from the Private Placement of approximately $4.7 million after the discount and expenses of approximately $0.3 million. Following the completion of the Private Placement and the Offering, Sentient holds approximately 27.2% (on a non-diluted basis) of the Company’s outstanding common stock (excluding restricted common stock held by the Company’s employees). | ||||||||||||
In arriving at the value of the Shares and Warrants the Company first valued and recorded the Warrants as a liability on the balance sheet as a result of anti-dilution clauses in the warrant agreements that could result in a resetting of the warrant exercise price in the event the Company were to issue additional shares of its common stock in a future transaction at a an offering price lower than the current exercise price of the warrants. A third party expert determined a value for the Warrants at September 4, 2014, the date prior to the announcement of the Offering, using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy (see Note 13). The valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the Warrants. Significant inputs to the valuation model included the Company’s closing stock price at September 4, 2014 of $1.01, the exercise price for the Warrants disclosed above, the Company’s stock volatility measured as of September 30, 2014, the applicable risk free interest rate of 1.6%, and the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price. The fair value of the Warrants was determined to be $1.9 million, with the remaining $2.7 million of net proceeds from the Offering being allocated to additional paid in capital. | ||||||||||||
Equity Incentive Plans | ||||||||||||
In May 2014, the Company’s stockholders approved amendments to the Company’s 2009 Equity Incentive Plan, adopting the Amended and Restated 2009 Equity Incentive Plan (the “Equity Plan”), pursuant to which awards of the Company’s common stock may be made to officers, directors, employees, consultants and agents of the Company and its subsidiaries. The Company recognizes stock-based compensation costs using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award. | ||||||||||||
The following table summarizes the status of the Company’s restricted stock grants issued under the Equity Plan at December 31, 2014 and 2013 and changes during the years then ended: | ||||||||||||
The Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Restricted Stock Grants | Number of | Weighted | Number of | Weighted | ||||||||
Shares | Average | Shares | Average | |||||||||
Grant Date | Grant Date | |||||||||||
Fair Value | Fair Value | |||||||||||
Per Share | Per Share | |||||||||||
Outstanding at beginning of year | 915,971 | $ | 2.47 | 823,500 | $ | 5.67 | ||||||
Granted during the year | 140,000 | 0.52 | 637,000 | 0.76 | ||||||||
Restrictions lifted during the year | (455,133 | ) | 3.18 | (200,029 | ) | 6.54 | ||||||
Forfeited during the year | — | — | (344,500 | ) | 4.6 | |||||||
Outstanding at end of year | 600,838 | $ | 1.48 | 915,971 | $ | 2.47 | ||||||
In connection with performance and reductions in work force, the Company’s Compensation Committee and Board of Directors approved a 10% annual salary reduction effective June 1, 2013 for certain officers of the Company. In conjunction with the salary reduction, to be in effect for one year, the Compensation Committee approved a grant of an aggregate of 149,500 restricted shares to the officers effective June 1, 2013. The stock vested one year from the grant date. In addition, 2,500 shares of restricted stock were granted to a new employee hired during the period. One third of the restricted stock granted to the employee vests on each of the first, second and third anniversaries of the grant dates, provided the employee continues to serve the Company at that time. The remaining 485,000 shares were granted to officers during December 2013 as a portion of their annual compensation. One third of the December 2013 restricted stock grants will vest on each of the first, second and third anniversaries of the grant dates, provided the officer continues to serve the Company at that time. | ||||||||||||
Restrictions were lifted on 444,633 shares during the year ended December 31, 2014 on the anniversaries of grants made to officers and employees in prior years and restrictions were lifted on an additional 10,500 shares during 2014 in connection with the termination of employment of two employees. Restrictions were lifted on 187,629 shares during the year ended December 31, 2013 on the anniversaries of grants made to officers and employees in prior years and restrictions were lifted on an additional 12,400 shares during 2013 related to an employee’s retirement. | ||||||||||||
Included in the forfeitures for 2013 are 199,500 unvested shares related to the resignation of two officers of the Company during the year. Also, included in the forfeitures for 2013 are 145,000 unvested shares that were surrendered to the Company on December 13, 2013 by an officer of the Company. The surrender is the result of the determination by the Board of Directors of the Company that the officer had been granted shares of common stock during 2012 in excess of the 150,000 share limit per the Equity Plan on grants to any one individual in one calendar year. In addition the officer also surrendered 27,500 vested shares that were granted in 2010 and vested in 2011 that were also determined to be in excess of the 150,000 share limit. Per the terms of a Stock Surrender and Grant Agreement entered into on December 13, 2013 with the officer, the officer was granted 172,500 KELTIP Units (see Note 10). | ||||||||||||
For the years ended December 31, 2014 and 2013 the Company recognized approximately $0.5 million and $1.0 million, respectively, of compensation expense related to the restricted stock grants. The Company expects to recognize additional compensation expense related to these awards of approximately $0.2 million over the next 35 months. | ||||||||||||
The following table summarizes the status of the Company’s stock option grants issued under the Equity Plan at December 31, 2014 and 2013 and changes during the years then ended: | ||||||||||||
The Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Equity Plan Options | Number of | Weighted | Number of | Weighted | ||||||||
Shares | Average Grant | Shares | Average | |||||||||
Date Fair | Grant Date | |||||||||||
Value Per | Fair Value | |||||||||||
Share | Per Share | |||||||||||
Outstanding at beginning of year | 110,810 | $ | 8.02 | 118,810 | $ | 8.02 | ||||||
Granted during the year | — | — | — | — | ||||||||
Restrictions lifted during the year | — | — | — | — | ||||||||
Forfeited during the year | (15,000 | ) | $ | 8 | (8,000 | ) | $ | 8 | ||||
Outstanding at end of year | 95,810 | $ | 8.02 | 110,810 | $ | 8.02 | ||||||
Exercisable at end of period | 95,810 | $ | 8.02 | 110,810 | $ | 8.02 | ||||||
Granted and vested | 95,810 | $ | 8.02 | 110,810 | $ | 8.02 | ||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model using the assumptions noted in the following table. Expected volatilities are based on the historical volatilities of the Company’s shares. The Company uses historical data to estimate option exercises and forfeitures within the Black-Scholes model. The expected term of the options granted represents the period of time that options granted are expected to be outstanding, based on past experience and future estimates and includes data related to both employees directors. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company currently does not foresee the payment of dividends in the near term. | ||||||||||||
Grant Date | ||||||||||||
April 12 | ||||||||||||
2010 | ||||||||||||
Expected volatility | 73.20 | % | ||||||||||
Weighted average volatility | 73.20 | % | ||||||||||
Expected dividend yield | — | |||||||||||
Expected term (in years) | 5 | |||||||||||
Risk-free rate | 1.50 | % | ||||||||||
The options that expired during 2014 were options issued to former ECU stock option holders to replace options previously issued to them by ECU. | ||||||||||||
Also, pursuant to the Equity Plan, the Company’s Board of Directors adopted the Non-Employee Director’s Deferred Compensation and Equity Award Plan (the “Deferred Compensation Plan”). Pursuant to the Deferred Compensation Plan the non-employee directors receive a portion of their compensation in the form of Restricted Stock Units (“RSUs”) issued under the Equity Plan. The RSUs vest on the first anniversary of the grant and each vested RSU entitles the director to receive one unrestricted share of common stock upon the termination of the director’s board service. | ||||||||||||
The following table summarizes the status of the RSU grants issued under the Deferred Compensation Plan at December 31, 2014 and 2013 and changes during the years then ended: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Restricted Stock Units | Number of | Weighted | Number of | Weighted | ||||||||
Underlying | Average Grant | Underlying | Average | |||||||||
Shares | Date Fair Value | Shares | Grant Date | |||||||||
Per Share | Fair Value | |||||||||||
Per Share | ||||||||||||
Outstanding at beginning of year | 585,285 | $ | 2.97 | 143,995 | $ | 7.21 | ||||||
Granted during the year | 350,000 | 0.58 | 441,290 | 1.59 | ||||||||
Restrictions lifted during the year | — | — | — | — | ||||||||
Forfeited during the year | — | — | — | — | ||||||||
Outstanding at end of year | 935,285 | $ | 2.08 | 585,285 | $ | 2.97 | ||||||
For the years ended December 31, 2014 and 2013 the Company recognized approximately $0.4 million and $0.6 million, respectively, of compensation expense related to the RSU grants. The Company expects to recognize additional compensation expense related to the RSU grants of approximately $0.1 million over the next six months. | ||||||||||||
Pursuant to the KELTIP (see Note 10) KELTIP Units may be granted to certain officers and key employees of the Company, which units will, once vested, entitle such officers and employees to receive an amount in cash or in Company common stock measured generally by the price of the Company’s common stock on the settlement date. The KELTIP Units are recorded as a liability as discussed in detail in Note 10. | ||||||||||||
Common stock warrants | ||||||||||||
The following table summarizes the status of the Company’s common stock warrants at December 31, 2014 and December 31, 2013 and changes during the years then ended: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Common Stock Warrants | Number of | Weighted Average | Number of | Weighted | ||||||||
Underlying | Exercise Price Per | Underlying Shares | Average Exercise | |||||||||
Shares | Share | Price Per Share | ||||||||||
Outstanding at beginning of year | 5,263,578 | $ | 12.1 | 5,263,578 | $ | 12.1 | ||||||
Granted during period | 4,746,000 | 1.21 | — | — | ||||||||
Dilution adjustment | 599,760 | 7.17 | — | — | ||||||||
Expired during period | (1,831,929 | ) | 19 | — | — | |||||||
Exercised during period | — | — | — | — | ||||||||
Outstanding at end of year | 8,777,409 | $ | 3.95 | 5,263,578 | $ | 12.1 | ||||||
The warrants granted during the period are related to the Offering and Private Placement of the Company’s securities completed on September 10, 2014 as discussed above. | ||||||||||||
In September 2012, the Company closed on a registered offering and concurrent private placement with Sentient in which it sold units, consisting of one share of common stock and a five-year warrant to acquire one half of a share of common stock at an exercise price of $8.42 per share (the “September 2012 Warrants”). Pursuant to certain dilution adjustment provisions in the warrant agreement governing the September 2012 Warrants, the number of shares of common stock issuable upon exercise of the September 2012 Warrants was increased from 3,431,649 shares to 4,031,409 shares (599,760 share increase) and the exercise price was reduced from $8.42 per share to $7.17 per share pursuant to a weighted average dilution calculation based on the pricing of the Offering and the Private Placement. | ||||||||||||
The warrants that expired during 2014 were warrants related to the merger with ECU on September 2, 2011 and were issued to former ECU warrant holders to replace warrants previously issued to them by ECU. | ||||||||||||
The warrants issued in September 2012 and September 2014 are being recorded as a liability on the balance sheet as a result of anti-dilution clauses in the warrant agreements that could result in a resetting of the warrant exercise price in the event the Company were to issue additional shares of its common stock in a future transaction at a an offering price lower than the current exercise price of the warrants. At December 31, 2014 the total liability for the warrants was $1.6 million, consisting of $1.5 million for 2014 warrants and $0.1 million for the 2012 warrants. The warrant liability has been recorded at fair value as of December 31, 2014 based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy. The valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants. Significant inputs to the valuation model included the Company’s closing stock price at December 31, 2014 of $0.54, the exercise prices for the warrants disclosed above, the Company’s stock volatility of 90%, the applicable risk free interest rate of 1.6%, and the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price. The balances for warrant liability, paid-in capital, and accumulated earnings also reflect an adjustment made during 2014 to reflect the impact of recording the 2012 warrants as a liability. Paid in capital and accumulated deficit were reduced by $15.6 million $15.5 million respectively and warrant liability was increased by $0.2 million. The adjustments were determined to be immaterial to the Company’s financial statements filed in prior periods. | ||||||||||||
Sale_of_Metals_and_Cost_of_Met
Sale of Metals and Cost of Metals Sold | 12 Months Ended |
Dec. 31, 2014 | |
Sale of Metals and Cost of Metals Sold | |
Sale of Metals and Cost of Metals Sold | |
16.Sale of Metals and Cost of Metals Sold | |
During the years ended December 31, 2014 and 2013, the Company sold marketable products including concentrates and precipitates from its Velardeña Properties. During 2014 and 2013 the Company sold marketable products to five customers. Under the terms of the Company’s agreement with one precipitate customer, title does not pass to the purchaser until the product is received by the refinery, at which point revenue is recognized. For the Company’s other customers, title generally passes when a provisional payment is made, which occurs generally after the product is shipped and customary sales documents are completed. Costs related to the sale of metals products include direct and indirect costs incurred to mine, process and market the products. At December 31, 2014 the Company had written down its metals and in-process inventories to net realizable value including a charge to the cost of metals sold of approximately $1.2 million and a charge to depreciation expense of approximately $0.7 million. The Company had no metals inventory at December 31, 2013 as a result of the suspension of mining and processing at its Velardeña Properties (see Note 1). | |
Interest_and_Other_Income
Interest and Other Income | 12 Months Ended |
Dec. 31, 2014 | |
Interest and Other Income | |
Interest and Other Income | |
17.Interest and Other Income | |
For the year ended December 31, 2014 the Company reported other income of $1.6 million related primarily to the reduction of a loss contingency liability related to foreign withholding taxes that the government could assert are owed by the Company, acting as withholding agent, on certain interest payments made to a third party (see Note 12). | |
The Company recorded interest and other income of $0.4 million for the year ended December 31, 2013, primarily related to the reduction of a loss contingency liability related to foreign withholding taxes that the government could assert are owed by the Company, acting as withholding agent, on certain interest payments made to a third party (see Note 12). | |
Warrant_Income
Warrant Income | 12 Months Ended |
Dec. 31, 2014 | |
Warrant Income | |
Warrants | |
18.Warrant Income | |
During the year ended December 31, 2014 the Company recorded approximately $1.7 million of other income related to a decrease in the fair value of the liability recorded for warrants to acquire the Company’s stock (see Note 15). The warrant liability has been recorded at fair value as of December 31, 2014 based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy. The valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants. Significant inputs to the valuation model included the Company’s closing stock price at December 31, 2014 of $0.54, the exercise prices for the warrants disclosed above, the Company’s stock volatility of 90%, the applicable risk free interest rate of 1.6%, and the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price. | |
Cash_Flow_Information
Cash Flow Information | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash Flow Information | ||||||||
Cash Flow Information | ||||||||
19.Cash flow information | ||||||||
The following table reconciles net income (loss) for the period to cash from operations: | ||||||||
The Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (18,823 | ) | $ | (240,380 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Amortization and depreciation | 3,128 | 6,927 | ||||||
Loss on sale of investments | — | 133 | ||||||
Gain on sale of assets, net | (689 | ) | (3,626 | ) | ||||
Accretion of asset retirement obligation | 200 | 184 | ||||||
Asset write off | 138 | 30 | ||||||
Write off of loss contingency | (1,645 | ) | (2,450 | ) | ||||
Decrease in warrant liability | (1,693 | ) | — | |||||
Impairment of long lived assets | — | 243,985 | ||||||
Impairment of goodwill | — | 11,666 | ||||||
Deferred income taxes | — | (47,634 | ) | |||||
Foreign exchange gain on loss contingency | (281 | ) | (8 | ) | ||||
Foreign exchange loss on deferred tax liability | — | 562 | ||||||
Stock compensation | 926 | 1,555 | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease in trade accounts receivable | 25 | 1,266 | ||||||
Decrease in prepaid expenses and other assets | 287 | 86 | ||||||
(Increase) decrease in inventories | (764 | ) | 2,511 | |||||
Decrease in value added tax receivable (net) | 449 | 2,658 | ||||||
Increase (decrease) in accounts payable and accrued Liabilities | 358 | (5,159 | ) | |||||
Increase (decrease) in deferred leasehold payments | 42 | (140 | ) | |||||
Increase in reclamation liability | (117 | ) | (44 | ) | ||||
Net cash used in operating activities | $ | (18,459 | ) | $ | (27,878 | ) | ||
The Company did not make any cash payments for interest or income taxes during the years ended December 31, 2014 and 2013. | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||
20.Commitments and Contingencies | ||||||||||||||||||||
Leases and Purchase Commitments —The Company has non-cancelable operating lease commitments as follows: | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||
El Quevar mining concessions (estimated) | $ | 110 | $ | 110 | $ | 110 | $ | 110 | $ | 110 | $ | — | ||||||||
Velardeña mining consessions (estimated) | $ | 12 | $ | 12 | $ | 12 | $ | 12 | $ | 12 | $ | — | ||||||||
Office space | $ | 270 | $ | 242 | $ | 248 | $ | 255 | $ | 239 | $ | — | ||||||||
Dedicated communications link | $ | 70 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Purchase option agreement | $ | 550 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
The Company is required to make payments to the Argentinean government to maintain its rights to the El Quevar mining concessions. The Company has made such payments totaling approximately $35,000 and $34,000 for the years ended December 31, 2014 and 2013, respectively. | ||||||||||||||||||||
The Company is required to pay concession holding fees to the Mexican government to maintain its rights to the Velardeña Properties mining concessions. During the years ended December 31, 2014 and 2013 the Company made such payments totaling approximately $12,000 and $9,000, respectively. The payments include payments made related to adjacent exploration concessions on which there is no current mining. | ||||||||||||||||||||
The Company has office leases for its corporate headquarters in Golden, Colorado, as well as for its Velardeña Properties in Mexico, and exploration offices in Mexico and Argentina. The lease for the corporate headquarters office space was renegotiated and extended during the first quarter 2014. The new lease reflects an approximately 46% reduction in space and an approximately 44% reduction in cost beginning March 1, 2014. The new lease expires November 30, 2019. Payments associated with the corporate headquarters lease were recorded to rent expense by the Company in the amounts of $259,000 and $405,000 for the years ended December 31, 2014 and 2013, respectively. | ||||||||||||||||||||
The dedicated communications link provides high band width communications to our Velardeña Properties in Mexico. The Company has entered into an agreement with communications services provider that requires monthly payments of $7,000 through October of 2015. | ||||||||||||||||||||
The purchase option agreement is a required payment to a current El Quevar concession owner in order to retain title to the property. The concession is not deemed material to future development at El Quevar and the Company has the right to terminate the payment obligation and release the concession at any time. | ||||||||||||||||||||
The Company cannot currently estimate the life of the Velardeña Properties or El Quevar project. This table assumes that no annual maintenance payments will be made more than five years after December 31, 2014. If the Company continues mining and processing at the Velardeña Properties beyond five years, the Company expects that it would make annual maintenance payments of approximately $12,000 per year for the life of the Velardeña mine. If the Company continues to evaluate development opportunities at the El Quevar project, the Company expects that it would make annual maintenance payments of approximately $110,000 per year for the life of the El Quevar mine. The increase in 2015 and subsequent years is the result of a January 2015 amendment to the National Mining Code, increasing the annual canon payment by approximately four times. | ||||||||||||||||||||
Payments associated with other exploration concessions the Company owns are not included because the Company has not completed exploration work on these concessions. Exploration success is historically low and the Company has the right to terminate the payments and release the concessions at any time. | ||||||||||||||||||||
Contingencies — The Company has recorded loss contingencies of approximately $2.6 million and $4.4 million at December 31, 2014 and December 31, 2013, respectively as discussed in Note 12. In addition to the amounts recorded, the Company could be liable for up to an additional $0.7 million stemming from a tax audit of the Argentina equity tax for years 2009 through 2012 subject to the Argentina tax authorities’ acceptance of VAT credits to partially offset the tax liability (see Note 12). | ||||||||||||||||||||
Foreign_Currency
Foreign Currency | 12 Months Ended |
Dec. 31, 2014 | |
Foreign Currency | |
Foreign Currency | |
21.Foreign Currency | |
The Company conducts exploration and mining activities primarily in Argentina and Mexico and gains and losses on foreign currency transactions are related to those activities. The Company’s functional currency is the U.S. dollar but certain transactions are conducted in the local currencies resulting in foreign currency transaction gains or losses. | |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||
22.Segment Information | |||||||||||||||||||||||
The Company’s sole activity is the mining, construction and exploration of mineral properties containing precious metals. The Company’s reportable segments are based upon the Company’s revenue producing activities and cash consuming activities. The Company reports two segments, one for its Velardeña Properties in Mexico and the other comprised of non-revenue producing activities including exploration, construction and general and administrative activities. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. The financial information relating to the Company’s segments is as follows: | |||||||||||||||||||||||
The Year ended December 31, 2014 | Revenue | Costs | Depreciation, | Exploration, El | Pre-Tax loss | Total Assets | Capital | ||||||||||||||||
Applicable | Depletion and | Quevar, | Expenditures | ||||||||||||||||||||
to Sales | Amortization | Velardeña and | |||||||||||||||||||||
Administrative | |||||||||||||||||||||||
Expense | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Velardeña Properties | $ | 235 | $ | 1,655 | $ | 2,353 | $ | 6,607 | $ | 8,144 | $ | 27,188 | $ | 491 | |||||||||
Corporate, Exploration & Other | — | — | 775 | 10,743 | 10,679 | 14,070 | 9 | ||||||||||||||||
$ | 235 | $ | 1,655 | $ | 3,128 | $ | 17,350 | $ | 18,823 | $ | 41,258 | $ | 500 | ||||||||||
The Year ended December 31, 2013 | |||||||||||||||||||||||
Velardeña Properties | $ | 10,680 | $ | 17,534 | $ | 5,978 | $ | 9,426 | $ | 278,195 | $ | 28,861 | $ | 1,767 | |||||||||
Corporate, Exploration & Other | — | — | 949 | 12,813 | 11,871 | 26,020 | 30 | ||||||||||||||||
$ | 10,680 | $ | 17,534 | $ | 6,927 | $ | 22,239 | $ | 290,066 | $ | 54,881 | $ | 1,797 | ||||||||||
Lesser amounts of revenues, costs applicable to sales, and depreciation were recorded in 2014 as the Velardeña Properties were on care and maintenance much of the year until processing of mined material resumed in early November 2014. The decline in the Corporate, Exploration and Other segment for total assets from December 31, 2013 to December 31, 2014 is primarily related to a reduction in cash and equivalents. The Velardeña Properties segment pre-tax loss for the year ended December 31, 2013 includes charges of $255.7 million related to the impairment of long lived assets and goodwill as discussed in Notes 8 and 9. | |||||||||||||||||||||||
All of the revenue for the two years presented was from the Company’s Velardeña Properties in Mexico (see Note 16). The revenue for 2013 was attributable to sales of precipitates and concentrates to five customers under varying agreements. The revenue for 2014 was attributable to sale of concentrates to one customer. | |||||||||||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Basis of consolidation | |
a.Basis of consolidation | |
All of the Company’s consolidated subsidiaries are 100% owned and as such the Company does not recognize a noncontrolling interest in any of its subsidiaries. All intercompany transactions and balances have been eliminated at consolidation. | |
Translation of foreign currencies | |
b.Translation of foreign currencies | |
Substantially all expenditures and sales are made in U.S. dollars. Accordingly, the Company and its subsidiaries use the U.S. dollar as their functional and reporting currency. | |
Cash and cash equivalents | |
c.Cash and cash equivalents | |
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. | |
Inventories | |
d.Inventories | |
Metals inventory at the Velardeña Properties consisted of marketable products including concentrates and precipitates. Metals inventory were carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on spot and futures metals prices through estimated sale and settlement dates, less the estimated costs to complete processing and bring the product to sale. Costs included in metals inventory included direct and indirect costs of mining and processing, including depreciation. At December 31, 2014 the Company had written down its metals inventory to net realizable value with excess costs included in cost of sales and depreciation. The Company did not have any metals inventory at December 31, 2013. | |
Materials and supplies inventories are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. The Company routinely counts and evaluates its material and supplies to determine the existence of any obsolete stock that is subject to impairment. | |
Mining properties, exploration and development costs | |
e.Mining properties, exploration and development costs | |
The Company expenses general prospecting costs and the costs of acquiring and exploring unevaluated mineral properties. When a mineral property is determined to have proven and probable reserves, subsequent development costs are capitalized to mineral properties. For acquired mineral properties with proven and probable reserves, the Company capitalizes acquisition costs and subsequent development costs. When mineral properties are developed and operations commence, capitalized costs are charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized in the accompanying Consolidated Statements of Operations and Comprehensive loss. | |
As discussed in Note 1, the Company is considered an exploration stage company under the criteria set forth by the SEC since it has not yet demonstrated the existence of proven or probable reserves at the Velardeña Properties, or any of the Company’s other properties. As such, the Company expenses costs as incurred related to the extraction of mineralized material at its Velardeña Properties. The Company established a cost basis for the mineralized material at the Velardeña Properties as a result of purchase accounting for the Company’s business combination transaction with ECU Silver Mining Inc. (“ECU”) in September 2011, the transaction pursuant to which the Company acquired the Velardeña Properties. Mineral properties acquired in the ECU merger were recorded at estimated fair market value based on valuations performed with the assistance of an independent appraisal firm and a minerals engineering company. Although the Company has not demonstrated the existence of proven and probable reserves, and the Company has not completed a pre-feasibility economic assessment, the Company had established the existence of mineralized material that was used in assigning value to mineral properties for purchase accounting purposes. The subsequent extraction of this mineralized material has provided a reasonable basis for the calculation of units-of-production depreciation for the cost basis in the mineral properties. | |
On a quarterly basis the Company evaluates its exploration properties to determine if they meet the Company’s minimum requirements for continued evaluation. The rights to the properties that do not meet the minimum requirements are relinquished and the carrying values, if any are written off and reflected in other operating gains and losses, net on the accompanying Consolidated Statements of Operations and Comprehensive Loss. Costs of exploration subsequent to the application of fresh start accounting have and will continue to be expensed. | |
Property, plant and equipment and long lived asset impairment | |
f.Property, plant and equipment and long lived asset impairment | |
Buildings are depreciated using the straight—line method over the estimated useful lives of 30 to 40 years or the life of the mine whichever is shorter. Mining equipment and machinery excluding the plant are depreciated using the straight-line method over useful lives of three to eight years or the lease period, whichever is shorter. Mineral properties with proven and probable reserves and the plant are depreciated using units of production based on estimated mine reserves. Other furniture and equipment are depreciated using the straight-line method over estimated useful lives of three to five years. Depreciation on plant and equipment used in the construction of an asset is capitalized to the constructed asset. | |
As discussed above, the Company does not have any properties with proven or probable reserves including the the Velardeña Properties. | |
Property, plant and equipment are recorded at cost and per the guidance of ASC 360 the Company assesses the recoverability of its property, plant and equipment, including goodwill, at least annually or whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset, impairment is considered to exist. The related impairment loss is measured by comparing estimated future net cash flows on a discounted basis to the carrying amount of the asset (see Notes 8 and 9). | |
ASC 350 requires that an entity assign its goodwill to reporting units and test each reporting unit’s goodwill for impairment at least annually or whenever events or changes in circumstances indicate the goodwill may be impaired. The Company wrote off the remaining balance of its goodwill related to the Velardeña Properties as of December 31, 2013 (see Note 9). | |
Asset Retirement Obligations | |
g.Asset Retirement Obligations | |
The Company records asset retirement obligations (“ARO”) in accordance with ASC 410, “Asset Retirement and Environmental Obligations” (“ASC 410”), which establishes a uniform methodology for accounting for estimated reclamation and abandonment costs. According to ASC 410, the fair value of an ARO is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. An offsetting asset retirement cost (“ARC”) is capitalized as part of the carrying value of the assets with which it is associated, and depreciated over the useful life of the asset (see Note 11). | |
The Company prepares estimates of the timing and amount of expected cash flows when an ARO is incurred. The fair value of the ARO is measured by discounting the expected cash flows using a discount rate that reflects the credit adjusted risk-free rate of interest. The Company records the fair value of an ARO when it is incurred and changes in the fair value of the ARO are recorded as an adjustment to the corresponding ARC. The ARO is adjusted to reflect the passage of time (accretion cost) calculated by applying the discount rate implicit in the initial fair value measurement to the beginning-of-period carrying amount of the ARO. The Company records accretion costs to expense as incurred. | |
Revenue Recognition | |
h.Revenue Recognition | |
Following the guidance of ASC 605, “Revenue Recognition” (“ASC 605”), the Company recognizes “Revenue from the sale of metals” at the earliest point that both risk of loss and title transfer to the purchaser pursuant to the terms of the Company’s sales agreements. Prices for concentrate and precipitate sales are fixed according to terms included in the sales agreements, which generally call for final pricing based on average metals prices observed over specific periods that range from 10 days prior to the transfer of title to the month following the month the product is received by the purchaser. Revenue is recorded based on estimated metals contained in the product from assay data and using either actual or projected prices for the pricing period specified in the sales agreement. Upon final settlement revenue may be adjusted for changes in actual contained metals and final metals prices. | |
Stock compensation | |
i.Stock compensation | |
Stock based compensation costs are recognized per the guidance of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award (see Note 15). Stock grants are valued at their grant date at fair value which in the case of options requires the use of the Black-Scholes option pricing model. Per ASC 718 the grants may be classified as equity grants or liability grants depending on the terms of the grant. | |
Net income (loss) per Common Stock/Ordinary Share | |
j.Net income (loss) per Common Stock/Ordinary Share | |
Basic income (loss) per share is computed by dividing net income (loss) available to holders of the Company’s Common Stock by the weighted average number of Common Stock/Ordinary Shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue Common Stock or Ordinary Shares were exercised or converted into Common Stock or Ordinary Shares. | |
At December 31, 2014 and 2013, all potentially dilutive shares were excluded from the computation of diluted earnings per share because to include them would have been anti-dilutive. | |
Comprehensive Income (Loss) | |
k.Comprehensive Income (Loss) | |
Comprehensive income (loss) is defined as all changes in equity (deficit), exclusive of transactions with stockholders, such as capital investments. Comprehensive income (loss) includes net income (loss) and changes in certain assets and liabilities that are reported directly in equity. For the years ended December 31, 2014 and 2013 Comprehensive Loss included the change in the market value of available for sale securities and is reported on the Consolidated Statements of Operations and Comprehensive Loss. | |
Income Taxes | |
l.Income Taxes | |
The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”), on a tax jurisdictional basis. The Company files United States and certain other foreign country income tax returns, and pays taxes reasonably determined to be due. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s income tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. | |
The Company classifies income tax related interest and penalties as income tax expense. | |
Recently Adopted/Issued Standards and Pronouncements | |
m.Recently Adopted Standards | |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-02, “Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income”. The purpose of this accounting standard update is to improve the reporting of reclassifications out of accumulated other comprehensive income and is effective for public entities prospectively for reporting periods beginning after December 15, 2012. Substantially all of the information that this update requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. However, the new requirement regarding presenting information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income will present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures. The Company had only immaterial amounts classified out of accumulated other comprehensive income at December 31, 2014 and December 31, 2013. The adoption of this standard did not have an impact on the Company’s financial position or results of operations and is not expected to have an impact in the future. | |
In July 2013 the FASB issued Accounting Standards Update No. 2013-11 “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”), which requires an unrecognized tax benefit to be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward that the entity intends to use and is available for settlement at the reporting date. ASU 2013-11 became effective for the Company January 1, 2014. The adoption of ASU 2013-11 has not had a material impact on the Company’s consolidated financial position or results of operations. | |
n.Recently Issued Pronouncements | |
On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU No. 2014-15”). ASU No. 2014-15 will require management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management will be required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. ASU No. 2014-15 becomes effective for annual periods beginning in 2016 and for interim reporting periods starting in the first quarter of 2017. The Company does not expect the adoption of this amendment to have a material impact on its consolidated financial position or results of operations. | |
On May 28, 2014, FASB and the International Accounting Standards Board issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016; early application is not permitted. The Company is evaluating the financial statement implications of adopting ASU 2014-09 but does not believe adoption of ASU 2014-09 will have a material impact on its consolidated financial position or results of operations. | |
On April 10, 2014 the FASB issued Accounting Standards Update No. 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08)”. ASU 2014-08 changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under ASU 2014-08, only disposals representing a strategic shift in operations will be presented as discontinued operations. Additionally, ASU 2014-08 requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. ASU 2014-08 will become effective for the Company January 1, 2015. The Company does not believe the adoption of ASU 2014-08 will have a material impact on the Company’s consolidated financial position or results of operations. | |
Prepaid_Expenses_and_Other_Ass1
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Prepaid Expenses and Other Assets | ||||||||
Schedule of prepaid expenses and other assets | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Prepaid insurance | $ | 542 | $ | 687 | ||||
Prepaid contractor fees and vendor advances | 100 | 193 | ||||||
Taxes receivable | 90 | 96 | ||||||
Recoupable deposits and other | 103 | 115 | ||||||
$ | 835 | $ | 1,091 | |||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventories | ||||||||
Schedule of inventories at the Velardena Properties | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Metals inventory | $ | 477 | $ | — | ||||
In-process inventory | 307 | — | ||||||
Material and supplies | 713 | 449 | ||||||
$ | 1,497 | $ | 449 | |||||
Property_Plant_and_Equipment_a1
Property, Plant and Equipment and Assets Held for Sale (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property, Plant and Equipment and Assets Held for Sale | |||||||||||
Schedule of components of property, plant and equipment | December 31, | ||||||||||
2014 | 2013 | ||||||||||
(in thousands) | |||||||||||
Mineral properties | $ | 22,397 | $ | 22,397 | |||||||
Exploration properties | 2,743 | 2,993 | |||||||||
Royalty properties | 200 | 200 | |||||||||
Buildings | 2,848 | 2,349 | |||||||||
Mining equipment and machinery | 19,224 | 19,441 | |||||||||
Other furniture and equipment | 841 | 1,054 | |||||||||
Asset retirement cost | 2,002 | 2,087 | |||||||||
50,255 | 50,521 | ||||||||||
Less: Accumulated depreciation & amortization | (21,224 | ) | (18,146 | ) | |||||||
29,031 | 32,375 | ||||||||||
Schedule of details of components of the impairment of long lived assets | Impairment Charges | ||||||||||
Velardeña | |||||||||||
Properties | San Diego | Total | |||||||||
Asset Group | Asset Group | Impairment | |||||||||
Mineral properties | $ | 217,524 | $ | — | $ | 217,524 | |||||
Exploration properties | 3,472 | 8,659 | 12,131 | ||||||||
Buildings | 3,036 | — | 3,036 | ||||||||
Mining equipment and machinery | 10,394 | — | 10,394 | ||||||||
Other furniture and equipment | 900 | — | 900 | ||||||||
235,326 | 8,659 | 243,985 | |||||||||
Impairment_of_Long_Lived_Asset1
Impairment of Long Lived Assets (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Impairment of long lived assets | |||||||||||||||||
Schedule of details of components of the impairment of long lived assets | Impairment Charges | ||||||||||||||||
Velardeña | |||||||||||||||||
Properties | San Diego | Total | |||||||||||||||
Asset Group | Asset Group | Impairment | |||||||||||||||
Mineral properties | $ | 217,524 | $ | — | $ | 217,524 | |||||||||||
Exploration properties | 3,472 | 8,659 | 12,131 | ||||||||||||||
Buildings | 3,036 | — | 3,036 | ||||||||||||||
Mining equipment and machinery | 10,394 | — | 10,394 | ||||||||||||||
Other furniture and equipment | 900 | — | 900 | ||||||||||||||
235,326 | 8,659 | 243,985 | |||||||||||||||
Velardena Operations | |||||||||||||||||
Impairment of long lived assets | |||||||||||||||||
Schedule of details of components of the impairment of long lived assets | Net Book Value | Net Book Value | Net Book Value | ||||||||||||||
Prior to | Jun. 30, 2013 | After | Dec. 31, 2013 | After | |||||||||||||
Impairment at | Impairment | Impairment at | Impairment | Impairment at | |||||||||||||
Jun. 30, 2013 | Charges | Jun. 30, 2013 | Charges | Dec. 31, 2013 | |||||||||||||
(in thousands) | |||||||||||||||||
Mineral properties (1) | $ | 232,805 | $ | 211,608 | $ | 21,197 | $ | 5,916 | $ | 15,384 | |||||||
Exploration properties | 3,472 | 3,472 | — | — | — | ||||||||||||
Tangible assets (2) | 23,928 | 14,330 | 9,598 | — | 8,485 | ||||||||||||
$ | 260,205 | $ | 229,410 | $ | 30,795 | $ | 5,916 | $ | 23,869 | ||||||||
(1)The December 31, 2013 mineral properties net book value reflects a $0.1 million adjustment recorded during the fourth quarter of 2013 in addition to the impairment charge. | |||||||||||||||||
(2)The December 31, 2013 tangible assets net book value reflects depreciation and asset disposals recorded during the third and fourth quarters of 2013. | |||||||||||||||||
San Diego Exploration Property | |||||||||||||||||
Impairment of long lived assets | |||||||||||||||||
Schedule of details of components of the impairment of long lived assets | Net Book Value | Net Book Value | Net Book Value | ||||||||||||||
Prior to | Jun. 30, 2013 | After | Dec. 31, 2013 | After | |||||||||||||
Impairment at | Impairment | Impairment at | Impairment | Impairment at | |||||||||||||
Jun. 30, 2013 | Charges | Jun. 30, 2013 | Charges | Dec. 31, 2013 | |||||||||||||
(in thousands) | |||||||||||||||||
Exploration properties | $ | 9,260 | $ | 8,428 | $ | 832 | $ | 231 | $ | 601 | |||||||
$ | 9,260 | $ | 8,428 | $ | 832 | $ | 231 | $ | 601 | ||||||||
Accounts_Payable_and_Other_Acc1
Accounts Payable and Other Accrued Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Other Accrued Liabilities | ||||||||
Schedule of accounts payable and other accrued liabilities | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Accounts payable and accruals | $ | 893 | $ | 717 | ||||
Accrued employee compensation and benefits | 746 | 648 | ||||||
$ | 1,639 | $ | 1,365 | |||||
Asset_Retirement_and_Reclamati1
Asset Retirement and Reclamation Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Asset Retirement and Reclamation Liabilities | ||||||||
Summary of activity in the Velardena Properties ARO | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Beginning balance | $ | 2,467 | $ | 2,080 | ||||
Changes in estimates, and other | (85 | ) | 203 | |||||
Accretion expense | 200 | 184 | ||||||
Ending balance | $ | 2,582 | $ | 2,467 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Schedule of financial assets at fair value by respective level of the fair value hierarchy | Level 1 | Level 2 | Level 3 | Total | ||||||||||
(in thousands) | ||||||||||||||
At December 31, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 8,579 | $ | — | $ | — | $ | 8,579 | ||||||
Trade accounts receivable | — | — | — | — | ||||||||||
$ | 8,579 | $ | — | $ | — | $ | 8,579 | |||||||
Liabilities: | ||||||||||||||
Warrant liability | $ | — | $ | — | $ | 1,442 | $ | 1,442 | ||||||
$ | — | $ | — | $ | 1,442 | $ | 1,442 | |||||||
At December 31, 2013 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 19,146 | $ | — | $ | — | $ | 19,146 | ||||||
Trade accounts receivable | 25 | — | — | 25 | ||||||||||
$ | 19,171 | $ | — | $ | — | $ | 19,171 | |||||||
Summary of change in fair value of the warrant liability | Fait Value Measurements | |||||||||||||
Using SignificantUnobservable | ||||||||||||||
Inputs (level 3) | ||||||||||||||
Warrant Liabilities | ||||||||||||||
(in thousands) | ||||||||||||||
Beginning balance at January 1, 2014 | $ | — | ||||||||||||
Adjustment to record 2012 warrants as a liability (Note 15) | 163 | |||||||||||||
Issuance of warrants | 3,084 | |||||||||||||
Change in estimated fair value | (1,693 | ) | ||||||||||||
Ending balance at December 31, 2014 | $ | 1,554 | ||||||||||||
Summary of the Company's non-recurring fair value measurements | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
(in thousands) | ||||||||||||||
At December 31, 2013 | ||||||||||||||
Assets: | ||||||||||||||
Mineral properties | $ | — | $ | — | $ | 22,397 | $ | 22,397 | ||||||
Exploration properties | — | — | 2,993 | 2,993 | ||||||||||
$ | — | $ | — | $ | 25,390 | $ | 25,390 | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Income Taxes | ||||||||
Schedule of the provision for income taxes | For the Year Ended December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
CURRENT TAXES: | ||||||||
United States | $ | — | $ | — | ||||
Other Countries | — | (2,450 | ) | |||||
$ | — | $ | (2,450 | ) | ||||
DEFERRED TAXES: | ||||||||
United States | $ | — | $ | — | ||||
Other Countries | — | (47,236 | ) | |||||
$ | — | $ | (47,236 | ) | ||||
Total Income Tax Provision (Benefit) | $ | — | $ | (49,686 | ) | |||
Schedule of income (loss) from operations before income taxes by country | For the Year Ended December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
United States | $ | (8,207 | ) | $ | (8,632 | ) | ||
Other Countries | (10,615 | ) | (281,434 | ) | ||||
$ | (18,822 | ) | $ | (290,066 | ) | |||
Summary of reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes | For the Year Ended December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Tax expense (benefit) at US rate of 34% | $ | (6,400 | ) | $ | (98,623 | ) | ||
Other adjustments: | ||||||||
Non-deductibility of Goodwill impairment | — | 3,500 | ||||||
Rate differential of other jurisdictions | 301 | 11,047 | ||||||
Effects of foreign earnings | (2,238 | ) | (6,671 | ) | ||||
Change in valuation allowance | 14,127 | 37,894 | ||||||
Provision to return true-ups | (18,826 | ) | — | |||||
Exchange rate changes on net deferred tax assets | 13,605 | — | ||||||
Effect of a change in tax rates | — | 3,153 | ||||||
Other | (569 | ) | 14 | |||||
Income tax provision | $ | — | $ | (49,686 | ) | |||
Schedule of components of the deferred tax assets and deferred tax liabilities | For the years ended | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 93,364 | $ | 84,735 | ||||
Stock-based compensation | 1,943 | 1,691 | ||||||
Property, plant and equipment | 13,990 | 7,838 | ||||||
Other | 1,289 | 1,239 | ||||||
110,586 | 95,503 | |||||||
Less: Valuation allowance | (106,764 | ) | (92,637 | ) | ||||
Total deferred tax assets | 3,822 | 2,866 | ||||||
Deferred tax liabilities: | ||||||||
Property, plant and equipment | (3,436 | ) | (2,388 | ) | ||||
Other | (386 | ) | (478 | ) | ||||
Total deferred tax liabilities | (3,822 | ) | (2,866 | ) | ||||
Net deferred tax asset (liability) | $ | — | $ | — | ||||
Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits | The Year Ended December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Gross unrecognized tax benefits at beginning of period | $ | 1,668 | $ | 2,841 | ||||
Increases for tax positions taken during prior years | 17 | |||||||
Decreases relating to settlements with taxing authorities | (889 | ) | ||||||
Reductions due to lapse of statute of limitations | (505 | ) | (301 | ) | ||||
Gross unrecognized tax benefits at end of period | $ | 1,163 | $ | 1,668 | ||||
Equity_Tables
Equity (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Summary of the status of the Company's common stock warrants | For the Year Ended December 31, | |||||||||||
2014 | 2013 | |||||||||||
Common Stock Warrants | Number of | Weighted Average | Number of | Weighted | ||||||||
Underlying | Exercise Price Per | Underlying Shares | Average Exercise | |||||||||
Shares | Share | Price Per Share | ||||||||||
Outstanding at beginning of year | 5,263,578 | $ | 12.1 | 5,263,578 | $ | 12.1 | ||||||
Granted during period | 4,746,000 | 1.21 | — | — | ||||||||
Dilution adjustment | 599,760 | 7.17 | — | — | ||||||||
Expired during period | (1,831,929 | ) | 19 | — | — | |||||||
Exercised during period | — | — | — | — | ||||||||
Outstanding at end of year | 8,777,409 | $ | 3.95 | 5,263,578 | $ | 12.1 | ||||||
Equity Plan | ||||||||||||
Schedule of status of the restricted stock grants issued under the Equity Plan | The Year Ended December 31, | |||||||||||
2014 | 2013 | |||||||||||
Restricted Stock Grants | Number of | Weighted | Number of | Weighted | ||||||||
Shares | Average | Shares | Average | |||||||||
Grant Date | Grant Date | |||||||||||
Fair Value | Fair Value | |||||||||||
Per Share | Per Share | |||||||||||
Outstanding at beginning of year | 915,971 | $ | 2.47 | 823,500 | $ | 5.67 | ||||||
Granted during the year | 140,000 | 0.52 | 637,000 | 0.76 | ||||||||
Restrictions lifted during the year | (455,133 | ) | 3.18 | (200,029 | ) | 6.54 | ||||||
Forfeited during the year | — | — | (344,500 | ) | 4.6 | |||||||
Outstanding at end of year | 600,838 | $ | 1.48 | 915,971 | $ | 2.47 | ||||||
Schedule of status of the stock option grants issued under the Equity Plan | The Year Ended December 31, | |||||||||||
2014 | 2013 | |||||||||||
Equity Plan Options | Number of | Weighted | Number of | Weighted | ||||||||
Shares | Average Grant | Shares | Average | |||||||||
Date Fair | Grant Date | |||||||||||
Value Per | Fair Value | |||||||||||
Share | Per Share | |||||||||||
Outstanding at beginning of year | 110,810 | $ | 8.02 | 118,810 | $ | 8.02 | ||||||
Granted during the year | — | — | — | — | ||||||||
Restrictions lifted during the year | — | — | — | — | ||||||||
Forfeited during the year | (15,000 | ) | $ | 8 | (8,000 | ) | $ | 8 | ||||
Outstanding at end of year | 95,810 | $ | 8.02 | 110,810 | $ | 8.02 | ||||||
Exercisable at end of period | 95,810 | $ | 8.02 | 110,810 | $ | 8.02 | ||||||
Granted and vested | 95,810 | $ | 8.02 | 110,810 | $ | 8.02 | ||||||
Schedule of assumptions used for determining fair value of option | Grant Date | |||||||||||
April 12 | ||||||||||||
2010 | ||||||||||||
Expected volatility | 73.20 | % | ||||||||||
Weighted average volatility | 73.20 | % | ||||||||||
Expected dividend yield | — | |||||||||||
Expected term (in years) | 5 | |||||||||||
Risk-free rate | 1.50 | % | ||||||||||
Deferred Compensation Plan | ||||||||||||
Schedule of status of the RSU grants issued under the Deferred Compensation Plan | For the Year Ended December 31, | |||||||||||
2014 | 2013 | |||||||||||
Restricted Stock Units | Number of | Weighted | Number of | Weighted | ||||||||
Underlying | Average Grant | Underlying | Average | |||||||||
Shares | Date Fair Value | Shares | Grant Date | |||||||||
Per Share | Fair Value | |||||||||||
Per Share | ||||||||||||
Outstanding at beginning of year | 585,285 | $ | 2.97 | 143,995 | $ | 7.21 | ||||||
Granted during the year | 350,000 | 0.58 | 441,290 | 1.59 | ||||||||
Restrictions lifted during the year | — | — | — | — | ||||||||
Forfeited during the year | — | — | — | — | ||||||||
Outstanding at end of year | 935,285 | $ | 2.08 | 585,285 | $ | 2.97 | ||||||
Cash_Flow_Information_Tables
Cash Flow Information (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash Flow Information | ||||||||
Schedule of reconciles net loss for the period to cash from operations | The Year Ended December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (18,823 | ) | $ | (240,380 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Amortization and depreciation | 3,128 | 6,927 | ||||||
Loss on sale of investments | — | 133 | ||||||
Gain on sale of assets, net | (689 | ) | (3,626 | ) | ||||
Accretion of asset retirement obligation | 200 | 184 | ||||||
Asset write off | 138 | 30 | ||||||
Write off of loss contingency | (1,645 | ) | (2,450 | ) | ||||
Decrease in warrant liability | (1,693 | ) | — | |||||
Impairment of long lived assets | — | 243,985 | ||||||
Impairment of goodwill | — | 11,666 | ||||||
Deferred income taxes | — | (47,634 | ) | |||||
Foreign exchange gain on loss contingency | (281 | ) | (8 | ) | ||||
Foreign exchange loss on deferred tax liability | — | 562 | ||||||
Stock compensation | 926 | 1,555 | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease in trade accounts receivable | 25 | 1,266 | ||||||
Decrease in prepaid expenses and other assets | 287 | 86 | ||||||
(Increase) decrease in inventories | (764 | ) | 2,511 | |||||
Decrease in value added tax receivable (net) | 449 | 2,658 | ||||||
Increase (decrease) in accounts payable and accrued Liabilities | 358 | (5,159 | ) | |||||
Increase (decrease) in deferred leasehold payments | 42 | (140 | ) | |||||
Increase in reclamation liability | (117 | ) | (44 | ) | ||||
Net cash used in operating activities | $ | (18,459 | ) | $ | (27,878 | ) | ||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||
Schedule of non-cancellable operating lease commitments | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||
El Quevar mining concessions (estimated) | $ | 110 | $ | 110 | $ | 110 | $ | 110 | $ | 110 | $ | — | ||||||||
Velardeña mining consessions (estimated) | $ | 12 | $ | 12 | $ | 12 | $ | 12 | $ | 12 | $ | — | ||||||||
Office space | $ | 270 | $ | 242 | $ | 248 | $ | 255 | $ | 239 | $ | — | ||||||||
Dedicated communications link | $ | 70 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Purchase option agreement | $ | 550 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||
Schedule of financial information relating to segments | The Year ended December 31, 2014 | Revenue | Costs | Depreciation, | Exploration, El | Pre-Tax loss | Total Assets | Capital | |||||||||||||||
Applicable | Depletion and | Quevar, | Expenditures | ||||||||||||||||||||
to Sales | Amortization | Velardeña and | |||||||||||||||||||||
Administrative | |||||||||||||||||||||||
Expense | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Velardeña Properties | $ | 235 | $ | 1,655 | $ | 2,353 | $ | 6,607 | $ | 8,144 | $ | 27,188 | $ | 491 | |||||||||
Corporate, Exploration & Other | — | — | 775 | 10,743 | 10,679 | 14,070 | 9 | ||||||||||||||||
$ | 235 | $ | 1,655 | $ | 3,128 | $ | 17,350 | $ | 18,823 | $ | 41,258 | $ | 500 | ||||||||||
The Year ended December 31, 2013 | |||||||||||||||||||||||
Velardeña Properties | $ | 10,680 | $ | 17,534 | $ | 5,978 | $ | 9,426 | $ | 278,195 | $ | 28,861 | $ | 1,767 | |||||||||
Corporate, Exploration & Other | — | — | 949 | 12,813 | 11,871 | 26,020 | 30 | ||||||||||||||||
$ | 10,680 | $ | 17,534 | $ | 6,927 | $ | 22,239 | $ | 290,066 | $ | 54,881 | $ | 1,797 | ||||||||||
Basis_of_Preparation_of_Financ1
Basis of Preparation of Financial Statements (Details) (Velardena Properties) | 12 Months Ended | 3 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Nov. 30, 2014 | Mar. 31, 2015 | |
item | oz | oz | oz | ||
Basis of Preparation of Financial Statements | |||||
Interest acquired (as a percent) | 100.00% | 100.00% | 100.00% | ||
Number of exploration properties | 30 | ||||
Plant throughput (in tonnes per day) | 264 | 264 | 264 | ||
Expected results | |||||
Basis of Preparation of Financial Statements | |||||
Expected plant throughput (in tonnes per day) | 285 | ||||
Silver | |||||
Basis of Preparation of Financial Statements | |||||
Average grade (in grams per tonne) | 127 | 127 | 127 | 109 | |
Metals sold (in ounces) | 95 | ||||
Gold | |||||
Basis of Preparation of Financial Statements | |||||
Average grade (in grams per tonne) | 1.8 | 1.8 | 1.8 | 1.3 | |
Metals sold (in ounces) | 16,000 | ||||
Silver Equivalent | |||||
Basis of Preparation of Financial Statements | |||||
Payable metals (in ounces) | 31,000 | 12,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Revenue Recognition | |
Number of days used for observing average prices of metals | 10 days |
Building | Minimum | |
Property, plant and equipment and long-lived asset impairment | |
Useful life | 30 years |
Building | Maximum | |
Property, plant and equipment and long-lived asset impairment | |
Useful life | 40 years |
Mining equipment and machinery | Minimum | |
Property, plant and equipment and long-lived asset impairment | |
Useful life | 3 years |
Mining equipment and machinery | Maximum | |
Property, plant and equipment and long-lived asset impairment | |
Useful life | 8 years |
Other furniture and equipment | Minimum | |
Property, plant and equipment and long-lived asset impairment | |
Useful life | 3 years |
Other furniture and equipment | Maximum | |
Property, plant and equipment and long-lived asset impairment | |
Useful life | 5 years |
Prepaid_Expenses_and_Other_Ass2
Prepaid Expenses and Other Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Prepaid Expenses and Other Assets | ||
Prepaid insurance | $542 | $687 |
Prepaid contractor fees and vendor advances | 100 | 193 |
Taxes receivable | 90 | 96 |
Recoupable deposits and other | 103 | 115 |
Prepaid expenses and other assets | 835 | 1,091 |
Prepaid insurance included in non-current assets | $30,000 |
Inventories_Details
Inventories (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Inventories | ||
Metals inventory | $477,000 | $0 |
In-process inventory | 307,000 | 0 |
Material and supplies | 713,000 | 449,000 |
Inventories | 1,497,000 | 449,000 |
Inventory write down charged to cost of metals sold | 1,200,000 | |
Inventory write down charged to depreciation expense | $700,000 |
Value_added_tax_receivable_Det
Value added tax receivable (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Value added tax receivable | |
Expected period within which current amount of VAT will be recovered | 1 year |
Property_Plant_and_Equipment_a2
Property, Plant and Equipment and Assets Held for Sale (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | $50,255 | $50,521 |
Less: Accumulated depreciation and amortization | -21,224 | -18,146 |
Property, plant and equipment, net | 29,031 | 32,375 |
Mineral Properties | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 22,397 | 22,397 |
Exploration Properties | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 2,743 | 2,993 |
Royalty Properties | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 200 | 200 |
Building | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 2,848 | 2,349 |
Mining equipment and machinery | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 19,224 | 19,441 |
Other furniture and equipment | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 841 | 1,054 |
Asset Retirement Obligation Costs | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | $2,002 | $2,087 |
Property_Plant_and_Equipment_a3
Property, Plant and Equipment and Assets Held for Sale (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
ha | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | $243,985,000 | ||||
Proceeds from sale of assets | 982,000 | 4,217,000 | |||
Gain on sale of assets | 689,000 | 3,626,000 | |||
Zacatecas District | |||||
Property, plant and equipment | |||||
Number of Mining Concessions Sold | 45 | ||||
Area in Hectares | 770 | ||||
Proceeds from sale of assets | 700,000 | ||||
Gain on sale of assets | 500,000 | ||||
Peruvian Exploration Properties | |||||
Property, plant and equipment | |||||
Area in Hectares | 1,100 | ||||
Amount of Agreement to Sell Property | 450,000 | ||||
Proceeds from sale of assets | 150,000,000 | ||||
Velardena Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 0 | 235,326,000 | 229,410,000 | 5,916,000 | |
San Diego Exploration Property | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 0 | 8,659,000 | 8,428,000 | 231,000 | |
Mineral Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 217,524,000 | ||||
Mineral Properties | Velardena Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 217,524,000 | 211,608,000 | 5,916,000 | ||
Exploration Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 12,131,000 | ||||
Exploration Properties | Mexico | |||||
Property, plant and equipment | |||||
Number of properties whose rights are relinquished as minimum requirement for continued evaluation is not fulfilled | 2 | ||||
Assets Held for Sale | |||||
Carrying value of the properties in assets held for sale | 200,000 | 200,000 | |||
Exploration Properties | Velardena Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 3,472,000 | 3,472,000 | |||
Exploration Properties | San Diego Exploration Property | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 8,659,000 | 8,428,000 | 231,000 | ||
Building | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 3,036,000 | ||||
Building | Velardena Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 3,036,000 | ||||
Mining equipment and machinery | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 10,394,000 | ||||
Mining equipment and machinery | Argentina | |||||
Property, plant and equipment | |||||
Proceeds from sale of assets | 130,000,000 | ||||
Mining equipment and machinery | Velardena Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 10,394,000 | ||||
Other furniture and equipment | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | 900,000 | ||||
Other furniture and equipment | Velardena Properties | |||||
Property, plant and equipment | |||||
Impairment of long lived assets | $900,000 |
Impairment_of_Long_Lived_Asset2
Impairment of Long Lived Assets (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Impairment of long lived assets | |||||
Net deferred tax asset (liability) | $0 | $0 | $0 | $0 | |
Income Tax Expense (Benefit) | -49,686,000 | ||||
Details of components of the impairment of long lived assets | |||||
Impairment of long lived assets | 243,985,000 | ||||
Mineral Properties | |||||
Details of components of the impairment of long lived assets | |||||
Impairment of long lived assets | 217,524,000 | ||||
Exploration Properties | |||||
Details of components of the impairment of long lived assets | |||||
Impairment of long lived assets | 12,131,000 | ||||
Velardena Properties | |||||
Impairment of long lived assets | |||||
Net deferred tax asset (liability) | 0 | 0 | 0 | ||
Income Tax Expense (Benefit) | -45,000,000 | ||||
Enterprise value (in dollars per ounce) | 0.29 | ||||
Details of components of the impairment of long lived assets | |||||
Net Book Value - Beginning Balance | 260,205,000 | 30,795,000 | 23,869,000 | ||
Impairment of long lived assets | 229,410,000 | 5,916,000 | 0 | 235,326,000 | |
Net Book Value After Impairment | 23,869,000 | 30,795,000 | 23,869,000 | 23,869,000 | |
Adjustments relating to long lived assets | 100,000 | ||||
Velardena Properties | Mineral Properties | |||||
Details of components of the impairment of long lived assets | |||||
Net Book Value - Beginning Balance | 232,805,000 | 21,197,000 | |||
Impairment of long lived assets | 211,608,000 | 5,916,000 | 217,524,000 | ||
Net Book Value After Impairment | 15,384,000 | 21,197,000 | 15,384,000 | 15,384,000 | |
Velardena Properties | Exploration Properties | |||||
Details of components of the impairment of long lived assets | |||||
Net Book Value - Beginning Balance | 3,472,000 | ||||
Impairment of long lived assets | 3,472,000 | 3,472,000 | |||
Velardena Properties | Tangible Assets | |||||
Details of components of the impairment of long lived assets | |||||
Net Book Value - Beginning Balance | 23,928,000 | ||||
Impairment of long lived assets | 14,330,000 | ||||
Net Book Value After Impairment | 8,485,000 | 9,598,000 | 8,485,000 | 8,485,000 | |
San Diego Exploration Property | |||||
Details of components of the impairment of long lived assets | |||||
Net Book Value - Beginning Balance | 9,260,000 | 832,000 | 601,000 | ||
Impairment of long lived assets | 8,428,000 | 231,000 | 0 | 8,659,000 | |
Net Book Value After Impairment | 601,000 | 832,000 | 601,000 | 601,000 | |
Percentage of ownership interest | 50.00% | ||||
Distance of exploration property from other operations | 10 | ||||
San Diego Exploration Property | Exploration Properties | |||||
Details of components of the impairment of long lived assets | |||||
Net Book Value - Beginning Balance | 9,260,000 | 832,000 | |||
Impairment of long lived assets | 8,428,000 | 231,000 | 8,659,000 | ||
Net Book Value After Impairment | $601,000 | $832,000 | $601,000 | $601,000 | |
Silver | |||||
Impairment of long lived assets | |||||
Decrease in metal prices (as a percent) | 34.00% | ||||
Gold | |||||
Impairment of long lived assets | |||||
Decrease in metal prices (as a percent) | 26.00% |
Impairment_of_Goodwill_Details
Impairment of Goodwill (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Mar. 31, 2015 |
Goodwill | ||
Impairment of goodwill | $11,666 | |
Velardena Properties | ||
Goodwill | ||
Discount rate (as a percent) | 21.00% | |
Velardena Properties | Expected results | ||
Goodwill | ||
Expected plant throughput (in tonnes per day) | 285 | |
Velardena Properties | Silver | Maximum | ||
Goodwill | ||
Metal prices used in analysis (in dollars per ounce) | 23.8 | |
Velardena Properties | Silver | Minimum | ||
Goodwill | ||
Metal prices used in analysis (in dollars per ounce) | 18.06 | |
Velardena Properties | Gold | Maximum | ||
Goodwill | ||
Metal prices used in analysis (in dollars per ounce) | 1,440 | |
Velardena Properties | Gold | Minimum | ||
Goodwill | ||
Metal prices used in analysis (in dollars per ounce) | 1,198 |
Accounts_Payable_and_Other_Acc2
Accounts Payable and Other Accrued Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts Payable and Other Accrued Liabilities | ||
Accounts payable and accruals | $893,000 | $717,000 |
Accrued employee compensation and benefits | 746,000 | 648,000 |
Accounts payable and other accrued liabilities | 1,639,000 | 1,365,000 |
Accrued vacation | 100,000 | 100,000 |
Withholding taxes and benefits payable | 600,000 | 500,000 |
Liabilities Pertaining to Corporate Administrative Activities | ||
Accounts Payable and Other Accrued Liabilities | ||
Accounts payable and accruals | 200,000 | 200,000 |
Liabilities Pertaining to Exploration Activities | ||
Accounts Payable and Other Accrued Liabilities | ||
Accounts payable and accruals | 100,000 | |
Velardena Properties | ||
Accounts Payable and Other Accrued Liabilities | ||
Accounts payable and accruals | 700,000 | 400,000 |
Accrued employee compensation and benefits | $300,000 | $300,000 |
Accounts_Payable_and_Other_Acc3
Accounts Payable and Other Accrued Liabilities (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts payable and other accrued liabilities | ||
Accrued employee compensation and benefits | $746,000 | $648,000 |
KELTIP | KELTIP Units | ||
Accounts payable and other accrued liabilities | ||
Accrued employee compensation and benefits | $93,000 | $81,000 |
Asset_Retirement_and_Reclamati2
Asset Retirement and Reclamation Liabilities (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2012 | |
Summary of activity in the Velardena Operations ARO | |||
Beginning balance | $2,602,000 | ||
Accretion expense | 200,000 | 184,000 | |
Ending balance | 2,685,000 | 2,602,000 | |
Risk-free rate (as a percent) | 1.60% | ||
Velardena Properties | |||
Asset Retirement and Reclamation Liabilities | |||
Third party estimated closure plan | 1,900,000 | ||
Estimated ARO and ARC recorded at the time of the acquisition | 3,500,000 | ||
Amortization expense related to the ARC | 200,000 | 200,000 | |
Summary of activity in the Velardena Operations ARO | |||
Beginning balance | 2,467,000 | 2,080,000 | |
Changes in estimates, and other | -85,000 | 203,000 | |
Accretion expense | 200,000 | 184,000 | |
Ending balance | 2,582,000 | 2,467,000 | |
El Quevar Project | |||
Summary of activity in the Velardena Operations ARO | |||
Ending balance | $100,000 | $100,000 |
Other_Liabilities_Details
Other Liabilities (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Other current liabilities | $2,551,000 | $4,405,000 |
Interest and penalties | 0 | 1,300,000 |
Increase in tax liability | 700,000 | |
Argentina Equity Tax 2009 Through 2012 | ||
Other current liabilities | 200,000 | |
Interest and penalties | 900,000 | |
VAT tax credit | 700,000 | |
Increase in tax liability | $700,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair value measurements | ||
Share Price | $0.54 | |
Volatility rate (as a percent) | 90.00% | |
Risk-free rate (as a percent) | 1.60% | |
Level 3 | Warrant liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Adjustment to record 2012 warrants as a liability (Note 15) | $163 | |
Issuance of warrants | 3,084 | |
Change in estimated fair value | -1,693 | |
Ending Balance | 1,554 | |
Recurring | Level 1 | ||
Fair value measurements | ||
Cash and cash equivalents | 8,579 | 19,146 |
Trade accounts receivable | 25 | |
Assets | 8,579 | 19,171 |
Recurring | Level 3 | ||
Fair value measurements | ||
Warrant liability | 1,442 | |
Liabilities | 1,442 | |
Recurring | Total | ||
Fair value measurements | ||
Cash and cash equivalents | 8,579 | 19,146 |
Trade accounts receivable | 25 | |
Assets | 8,579 | 19,171 |
Warrant liability | 1,442 | |
Liabilities | 1,442 | |
Non-recurring | Level 3 | ||
Fair value measurements | ||
Mineral properties | 22,397 | |
Exploration properties | 2,993 | |
Assets | 25,390 | |
Non-recurring | Total | ||
Fair value measurements | ||
Mineral properties | 22,397 | |
Exploration properties | 2,993 | |
Assets | $25,390 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Current taxes: | ||
Other Countries | ($2,450) | |
Current taxes | 0 | -2,450 |
Deferred taxes: | ||
Other Countries | -47,236 | |
Deferred taxes | 0 | -47,236 |
Total Income Tax Provision (Benefit) | -49,686 | |
Income (loss) from continuing operations before income taxes | ||
United States | -8,207 | -8,632 |
Other Countries | -10,615 | -281,434 |
Loss from operations before income taxes | -18,823 | -290,066 |
Reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes | ||
US rate (as a percent) | 34.00% | 34.00% |
Tax expense (benefit) at US rate of 34% | -6,400 | -98,623 |
Other adjustments: | ||
Non-deductibility of goodwill impairment | 3,500 | |
Rate differential of other jurisdictions | 301 | 11,047 |
Effects of foreign earnings | -2,238 | -6,671 |
Change in valuation allowance | 14,127 | 37,894 |
Provision to return true - ups | -18,826 | |
Exchange rate changes on net deferred tax assets | 13,605 | |
Effect of a change in tax rate | 3,153 | |
Other | -569 | 14 |
Total Income Tax Provision (Benefit) | -49,686 | |
Velardena Operations | ||
Deferred taxes: | ||
Deferred taxes | 47,200 | |
Mexico | ||
Current taxes: | ||
Current taxes | $2,500 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Net operating loss carryforwards | $93,364,000 | $84,735,000 |
Stock-based compensation | 1,943,000 | 1,691,000 |
Property, plant and equipment | 13,990,000 | 7,838,000 |
Other | 1,289,000 | 1,239,000 |
Deferred tax assets, gross | 110,586,000 | 95,503,000 |
Less: Valuation allowance | -106,764,000 | -92,637,000 |
Total deferred tax assets | 3,822,000 | 2,866,000 |
Deferred tax liabilities: | ||
Property, plant and equipment | -3,436,000 | -2,388,000 |
Other | -386,000 | -478,000 |
Total deferred tax liabilities | -3,822,000 | -2,866,000 |
Net deferred tax asset (liability) | $0 | $0 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Operating loss carryforwards | ||
Net operating loss carryforwards | $312,900,000 | |
Valuation allowance offsetting the deferred tax assets | 106,764,000 | 92,637,000 |
Unrecognized tax benefits would affect effective tax rate | 0 | |
Luxembourg and Chile | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 42,200,000 | |
Other non-U.S. Countries | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 95,800,000 | |
U.S | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 50,500,000 | |
Velardena Operations | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 100,600,000 | |
Other Mexico Exploration Activities | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $23,100,000 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes | |||
Unrecognized tax benefits including estimated penalties and interest | $0 | $0 | $2,500,000 |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | |||
Gross unrecognized tax benefits at beginning of period | 1,668,000 | 2,841,000 | |
Increases for tax positions taken during prior years | 17,000 | ||
Decreases relating to settlements with taxing authorities | -889,000 | ||
Reductions due to lapse of statute of limitations | -505,000 | -301,000 | |
Gross unrecognized tax benefits at end of period | 1,163,000 | 1,668,000 | |
Interest and penalties recognized in the statement of operations | 0 | 1,300,000 | |
Interest and penalties recognized in the statement of financial position | $0 | $0 |
Equity_Details
Equity (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Sep. 10, 2014 | Sep. 04, 2014 | Dec. 31, 2013 | |
Net proceeds from offering | $7,410,000 | |||
Risk-free rate (as a percent) | 1.60% | |||
Share price (in dollars per share) | $0.54 | |||
Volatility rate (as a percent) | 90.00% | |||
Value of shares | 1,539,000 | |||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | ||
Registered Offering | ||||
Registered offering stock units (in shares) | 3,692,000 | |||
Sale price (in dollars per shares) | $0.86 | |||
Number of shares of common stock per capital unit (in shares) | 1 | |||
Number of common shares which can be purchased with each warrant | 0.5 | |||
Exercise price of warrants (in dollars per share) | 1.21 | |||
Term of warrants | 5 years | |||
Net proceeds from offering | 2,700,000 | |||
Amount of underwriting discount and commission | 500,000 | |||
Risk-free rate (as a percent) | 1.60% | |||
Share price (in dollars per share) | $1.01 | |||
Value of shares | 1,500,000 | |||
Fair value of warrants | 1,200,000 | |||
Private Placement | Sentient | 2014 Warrants | ||||
Units issued (in shares) | 5,800,000 | |||
Sale price (in dollars per shares) | $0.82 | $1.01 | ||
Number of shares of common stock per capital unit (in shares) | 1 | |||
Number of common shares which can be purchased with each warrant | 0.5 | |||
Exercise price of warrants (in dollars per share) | 1.21 | |||
Term of warrants | 5 years | |||
Net proceeds from offering | 4,700,000 | |||
Amount of underwriting commissions and expenses | 300,000 | |||
Risk-free rate (as a percent) | 1.60% | |||
Value of shares | 2,700,000 | |||
Fair value of warrants | $1,900,000 | |||
Ownership interest in outstanding Common Stock (as a percent) | 27.20% |
Equity_Details_2
Equity (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 01, 2013 | Dec. 13, 2013 | Dec. 31, 2010 | |
Additional information | |||||
Compensation expense | $926,000 | $1,555,000 | |||
Equity Plan | |||||
Additional information | |||||
Share limit on grants to any one individual in one calendar year | 150,000 | ||||
Equity Plan | Officers | |||||
Additional information | |||||
Percentage of annual salary reduction | 10.00% | ||||
Period for which annual salary reduction will be effective | 1 year | ||||
Equity Plan | Restricted Stock | |||||
Number of Shares | |||||
Outstanding at beginning of year (in shares) | 915,971 | 823,500 | |||
Granted during year (in shares) | 140,000 | 637,000 | |||
Restrictions lifted during the year (in shares) | -455,133 | -200,029 | |||
Forfeited during the period (in shares) | -344,500 | ||||
Outstanding at end of year (in shares) | 600,838 | 915,971 | |||
Weighted Average Grant Date Fair Value Per Share | |||||
Outstanding at beginning of year (in dollars per share) | $2.47 | $5.67 | |||
Granted during the year (in dollars per share) | $0.52 | $0.76 | |||
Restrictions lifted during the year (in dollars per share) | $3.18 | $6.54 | |||
Forfeited during the year (in dollars per share) | $4.60 | ||||
Outstanding at end of year (in dollars per share) | $1.48 | $2.47 | |||
Additional information | |||||
Compensation expense | 500,000 | 1,000,000 | |||
Additional compensation expense expected to be recognized | 200,000 | ||||
Period for recognition of additional compensation expense | 35 months | ||||
Equity Plan | Restricted Stock | Officers and Employees | |||||
Number of Shares | |||||
Restrictions lifted during the year (in shares) | -444,633 | -187,629 | |||
Equity Plan | Restricted Stock | Terminated Employees | |||||
Number of Shares | |||||
Restrictions lifted during the year (in shares) | -10,500 | ||||
Additional information | |||||
Number of Employees Terminated | 2 | ||||
Equity Plan | Restricted Stock | Officers | |||||
Number of Shares | |||||
Granted during year (in shares) | 149,500 | ||||
Additional information | |||||
Unvested shares forfeited due to resignation of employees | 199,500 | ||||
Number of employees resigned | 2 | ||||
Unvested awards surrendered (in shares) | 145,000 | ||||
Vested awards surrendered (in shares) | 27,500 | ||||
Vesting, from date of grant | 1 year | ||||
Equity Plan | Restricted Stock | Retired Employee | |||||
Number of Shares | |||||
Restrictions lifted during the year (in shares) | -12,400 | ||||
Equity Plan | Restricted Stock | New Employee | |||||
Number of Shares | |||||
Granted during year (in shares) | 2,500 | ||||
Equity Plan | Employee Stock Option | |||||
Number of Shares | |||||
Outstanding at beginning of period (in shares) | 110,810 | 118,810 | |||
Forfeited or expired during period (in shares) | -15,000 | -8,000 | |||
Outstanding at end of year (in shares) | 95,810 | 110,810 | |||
Exercisable at end of period (in shares) | 95,810 | 110,810 | |||
Granted and vested (in shares) | 95,810 | 110,810 | |||
Weighted Average Exercise Price Per Share | |||||
Outstanding at beginning of year (in dollars per share) | $8.02 | $8.02 | |||
Forfeited or expired during year (in dollars per shares) | $8 | $8 | |||
Outstanding at end of year (in dollars per share) | $8.02 | $8.02 | |||
Exercisable at end of period (in dollars per share) | $8.02 | $8.02 | |||
Granted and vested (in dollars per share) | $8.02 | $8.02 | |||
Assumptions noted by using the Black-Scholes option pricing model for estimating fair value of each option award | |||||
Expected volatility (as a percent) | 73.20% | ||||
Weighted average volatility (as a percent) | 73.20% | ||||
Expected term | 5 years | ||||
Risk-free rate (as a percent) | 1.50% | ||||
Equity Plan | Restricted Stock Units (RSUs) | Officers | |||||
Number of Shares | |||||
Granted during year (in shares) | 485,000 | ||||
Additional information | |||||
Percentage of awards which will vest on each of the first, second and third anniversaries of the grant date | 33.00% | ||||
Equity Plan | Restricted Stock Units (RSUs) | New Employee | |||||
Additional information | |||||
Percentage of awards which will vest on each of the first, second and third anniversaries of the grant date | 33.00% | ||||
Deferred Compensation Plan | Restricted Stock Units (RSUs) | |||||
Number of Shares | |||||
Outstanding at beginning of year (in shares) | 585,285 | 143,995 | |||
Granted during year (in shares) | 350,000 | 441,290 | |||
Outstanding at end of year (in shares) | 935,285 | 585,285 | |||
Weighted Average Grant Date Fair Value Per Share | |||||
Outstanding at beginning of year (in dollars per share) | $2.97 | $7.21 | |||
Granted during the year (in dollars per share) | $0.58 | $1.59 | |||
Outstanding at end of year (in dollars per share) | $2.08 | $2.97 | |||
Additional information | |||||
Compensation expense | 400,000 | 600,000 | |||
Additional compensation expense expected to be recognized | $100,000 | ||||
Period for recognition of additional compensation expense | 6 months | ||||
Number of unrestricted common shares that the Director is entitled to receive for each vested RSU, upon termination from board service | 1 | ||||
KELTIP | KELTIP Units | Officer | |||||
Number of Shares | |||||
Granted during year (in shares) | 172,500 |
Equity_Details_3
Equity (Details 3) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 10, 2014 | Sep. 04, 2014 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 30, 2014 |
Weighted Average Exercise Price Per Share | ||||||
Warrants and Rights Outstanding | $1,554 | |||||
Share price (in dollars per share) | $0.54 | |||||
Volatility rate (as a percent) | 90.00% | |||||
Risk-free rate (as a percent) | 1.60% | |||||
Reclassification to reflect warrant liability (Note 15) | -163 | |||||
Additional Paid-in Capital | ||||||
Weighted Average Exercise Price Per Share | ||||||
Reclassification to reflect warrant liability (Note 15) | -15,617 | |||||
Accumulated Deficit | ||||||
Weighted Average Exercise Price Per Share | ||||||
Reclassification to reflect warrant liability (Note 15) | 15,454 | |||||
Warrant | ||||||
Number of Underlying Shares | ||||||
Outstanding at the beginning of period (in shares) | 5,263,578 | 5,263,578 | ||||
Granted during the year | 4,746,000 | |||||
Dilution adjustment | 599,760 | |||||
Expired during period | -1,831,929 | |||||
Outstanding at the end of period (in shares) | 8,777,409 | 5,263,578 | ||||
Weighted Average Exercise Price Per Share | ||||||
Outstanding at the beginning of period (in dollars per share) | 12.1 | 12.1 | ||||
Granted during the year | 1.21 | |||||
Dilution adjustment | 7.17 | |||||
Expired during period | 19 | |||||
Outstanding at the end of period (in dollars per share) | 3.95 | 12.1 | ||||
2014 Warrants | ||||||
Weighted Average Exercise Price Per Share | ||||||
Warrants and Rights Outstanding | 1,500 | |||||
2014 Warrants | Sentient | Private Placement | ||||||
Weighted Average Exercise Price Per Share | ||||||
Outstanding at the beginning of period (in dollars per share) | 1.21 | |||||
Number of shares of common stock per capital unit (in shares) | 1 | |||||
Term of warrants | 5 years | |||||
Number of common shares which can be purchased with each warrant | 0.5 | |||||
Risk-free rate (as a percent) | 1.60% | |||||
2012 Warrants | ||||||
Weighted Average Exercise Price Per Share | ||||||
Warrants and Rights Outstanding | $100 | |||||
2012 Warrants | Sentient | Private Placement | ||||||
Number of Underlying Shares | ||||||
Outstanding at the beginning of period (in shares) | 3,431,649 | |||||
Dilution adjustment | 599,760 | |||||
Outstanding at the end of period (in shares) | 3,431,649 | |||||
Outstanding warrants after dilution adjustment | 4,031,409 | |||||
Weighted Average Exercise Price Per Share | ||||||
Outstanding at the end of period (in dollars per share) | 7.17 | 8.42 | ||||
Number of shares of common stock per capital unit (in shares) | 1 | |||||
Term of warrants | 5 years | |||||
Number of common shares which can be purchased with each warrant | 0.5 |
Sale_of_Metals_and_Costs_of_Me
Sale of Metals and Costs of Metals Sold (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
item | item | |
Sale of Metals and Cost of Metals Sold | ||
Number of customers to whom marketable products were sold | 5 | 5 |
Number of dore and precipitate customers with whom the entity entered into an agreement for passing the title to purchasers after the product is received by the refinery | 1 | |
Inventory write down charged to cost of metals sold | $1,200,000 | |
Inventory write down charged to depreciation expense | 700,000 | |
Metals inventory | $477,000 | $0 |
Interest_and_Other_Income_Deta
Interest and Other Income (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Interest and Other Income | ||
Interest and Other Income | $1.60 | $0.40 |
Warrant_Income_Details
Warrant Income (Details) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Warrant Income | |
Fair Value Adjustment of Warrants | ($1,693) |
Share Price | $0.54 |
Volatility rate (as a percent) | 90.00% |
Risk-free rate (as a percent) | 1.60% |
Cash_Flow_Information_Details
Cash Flow Information (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | ||
Net (loss) | ($18,823) | ($240,380) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 3,128 | 6,927 |
Loss on sale of investments | 133 | |
Gain on sale of assets, net | -689 | -3,626 |
Accretion of asset retirement obligation | 200 | 184 |
Asset write off | 138 | 30 |
Write off of loss contingency | -1,645 | -2,450 |
Decrease in warrant liability | -1,693 | |
Impairment of long lived assets | 243,985 | |
Impairment of goodwill | 11,666 | |
Deferred Income Taxes | -47,634 | |
Foreign exchange gain on loss contingency | -281 | -8 |
Foreign exchange loss on deferred tax liability | 562 | |
Stock compensation | 926 | 1,555 |
Changes in operating assets and liabilities: | ||
Decrease in trade accounts receivable | 25 | 1,266 |
Decrease in prepaid expenses and other assets | 287 | 86 |
(Increase) decrease in inventories | -764 | 2,511 |
Decrease in value added tax receivable (net) | 449 | 2,658 |
Increase (decrease) in accounts payable and accrued Liabilities | 358 | -5,159 |
Increase (decrease) in deferred leasehold payments | 42 | -140 |
Increase in reclamation liability | -117 | -44 |
Net cash used in operating activities | ($18,459) | ($27,878) |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Contingencies | ||
Loss contingency | $2,600,000 | $4,400,000 |
Increase in tax liability | 700,000 | |
Expected results | ||
Contingencies | ||
Annual Canon payment | 4 | |
EI Quevar Mining Concession (estimated) | ||
Leases and Purchase Commitments | ||
2015 | 110,000 | |
2016 | 110,000 | |
2017 | 110,000 | |
2018 | 110,000 | |
2019 | 110,000 | |
Contingencies | ||
Lease payments | 35,000 | 34,000 |
EI Quevar Mining Concession (estimated) | Expected results | ||
Leases and Purchase Commitments | ||
Thereafter | 110,000 | |
Velasrderia Mining Concession (estimated) | ||
Leases and Purchase Commitments | ||
2015 | 12,000 | |
2016 | 12,000 | |
2017 | 12,000 | |
2018 | 12,000 | |
2019 | 12,000 | |
Contingencies | ||
Lease payments | 12,000 | 9,000 |
Velasrderia Mining Concession (estimated) | Expected results | ||
Leases and Purchase Commitments | ||
Thereafter | 12,000 | |
Office Space | ||
Leases and Purchase Commitments | ||
2015 | 270,000 | |
2016 | 242,000 | |
2017 | 248,000 | |
2018 | 255,000 | |
2019 | 239,000 | |
Contingencies | ||
Lease payments | 259,000 | 405,000 |
Reduction in space (as a percent) | 46.00% | |
Reduction in cost (as a percent) | 44.00% | |
Dedicated Communications Link | ||
Leases and Purchase Commitments | ||
2015 | 70,000 | |
Contingencies | ||
Future monthly payments | 7,000 | |
Purchase Option Agreements | ||
Leases and Purchase Commitments | ||
2015 | $550,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
item | item | |
Segment Information | ||
Number of reportable segments | 2 | |
Revenue | $235 | $10,680 |
Costs Applicable to Sales | 1,655 | 17,534 |
Depreciation, depletion and amortization | 3,128 | 6,927 |
Exploration, El Quevar, Velardena and Administrative Expense | 17,350 | 22,239 |
Pre-Tax loss | 18,823 | 290,066 |
Total Assets | 41,258 | 54,881 |
Capital Expenditures | 500 | 1,797 |
Impairment of long lived assets and goodwill | 138 | 30 |
Impairment of goodwill | 11,666 | |
Number of customers to whom marketable products were sold | 5 | 5 |
Number of customers for dore sales | 1 | |
Velardena Properties | ||
Segment Information | ||
Number of reportable segments | 1 | |
Revenue | 235 | 10,680 |
Costs Applicable to Sales | 1,655 | 17,534 |
Depreciation, depletion and amortization | 2,353 | 5,978 |
Exploration, El Quevar, Velardena and Administrative Expense | 6,607 | 9,426 |
Pre-Tax loss | 8,144 | 278,195 |
Total Assets | 27,188 | 28,861 |
Capital Expenditures | 491 | 1,767 |
Impairment of long lived assets and goodwill | 255,700 | |
Corporate, Exploration & Other | ||
Segment Information | ||
Depreciation, depletion and amortization | 775 | 949 |
Exploration, El Quevar, Velardena and Administrative Expense | 10,743 | 12,813 |
Pre-Tax loss | 10,679 | 11,871 |
Total Assets | 14,070 | 26,020 |
Capital Expenditures | $9 | $30 |