Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 24, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Golden Minerals Co | ||
Entity Central Index Key | 1,011,509 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 30,003,238 | ||
Entity Common Stock, Shares Outstanding | 89,658,910 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 2,588 | $ 4,077 |
Short-term investments | 334 | 72 |
Trade receivables | 380 | 546 |
Inventories | 245 | 330 |
Value added tax receivable, net | 5 | 400 |
Related party receivable | 643 | |
Prepaid expenses and other assets | 578 | 451 |
Total current assets | 4,773 | 5,876 |
Property, plant and equipment, net | 9,235 | 11,125 |
Total assets | 14,008 | 17,001 |
Current liabilities | ||
Accounts payable and other accrued liabilities | 1,224 | 1,144 |
Convertible note payable - related party, net | 3,702 | |
Derivative liability - related party | 488 | |
Deferred revenue | 500 | |
Other current liabilities | 24 | 556 |
Total current liabilities | 1,248 | 6,390 |
Asset retirement and reclamation liabilities | 2,434 | 2,546 |
Warrant liability - related party | 976 | 117 |
Warrant liability | 922 | 93 |
Other long term liabilities | 66 | 84 |
Total liabilities | 5,646 | 9,230 |
Commitments and contingencies | ||
Equity | ||
Common stock, $.01 par value, 200,000,000 and 100,000,000 shares authorized; 89,020,041 and 53,335,333 shares issued and outstanding, respectively | 889 | 534 |
Additional paid in capital | 495,455 | 484,742 |
Accumulated deficit | (488,037) | (477,378) |
Accumulated other comprehensive income (loss) | 55 | (127) |
Shareholders' equity | 8,362 | 7,771 |
Total liabilities and equity | $ 14,008 | $ 17,001 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 100,000,000 |
Common stock, shares issued | 89,020,041 | 53,335,333 |
Common stock, shares outstanding | 89,020,041 | 53,335,333 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||
Oxide plant lease | $ 6,400 | $ 653 |
Sale of metals | 7,418 | |
Total revenue | 6,400 | 8,071 |
Costs and expenses: | ||
Oxide plant lease costs | (2,046) | (199) |
Cost of metals sold (exclusive of depreciation shown below) | (9,866) | |
Exploration expense | (3,718) | (3,634) |
El Quevar project expense | (508) | (1,042) |
Velardena project expense | (119) | |
Velardena shutdown and care and maintenance costs | (2,016) | (1,228) |
Administrative expense | (3,890) | (4,242) |
Stock based compensation | (593) | (453) |
Reclamation expense | (192) | (256) |
Impairment of long lived assets | 0 | (13,181) |
Other operating income, net | 1,790 | 471 |
Depreciation, depletion and amortization | (1,548) | (4,480) |
Total costs and expenses | (12,721) | (38,229) |
Loss from operations | (6,321) | (30,158) |
Other income and (expense): | ||
Interest expense | (515) | (126) |
Interest and other income | 390 | 3,083 |
Warrant derivative (loss) gain | (1,688) | 1,344 |
Derivative (loss) gain | (778) | 553 |
Loss on debt extinguishment | (1,653) | |
Loss on foreign currency | (94) | (79) |
Total other (expense) income | (4,338) | 4,775 |
Loss from operations before income taxes | (10,659) | (25,383) |
Net loss | (10,659) | (25,383) |
Comprehensive loss, net of tax: | ||
Unrealized gain (loss) on securities | 182 | (127) |
Comprehensive loss | $ (10,477) | $ (25,510) |
Net loss per common share — basic | ||
Loss (in dollars per share) | $ (0.13) | $ (0.48) |
Weighted average common stock outstanding - basic (in shares) | 81,651,896 | 52,972,352 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive income (loss) | Total |
Balance at Dec. 31, 2014 | $ 532 | $ 484,197 | $ (451,995) | $ 32,734 | |
Balance (in shares) at Dec. 31, 2014 | 53,162,833 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation accrued and shares issued for vested stock awards | 453 | 453 | |||
KELTIP mark-to-market | 40 | 40 | |||
KELTIP shares issued | $ 2 | 52 | 54 | ||
KELTIP shares issued (in shares) | 172,500 | ||||
Unrealized gain (loss) on securities | $ (127) | (127) | |||
Net loss | (25,383) | (25,383) | |||
Balance at Dec. 31, 2015 | $ 534 | 484,742 | (477,378) | (127) | 7,771 |
Balance (in shares) at Dec. 31, 2015 | 53,335,333 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation accrued and shares issued for vested stock awards | $ 2 | 250 | 252 | ||
Stock compensation accrued and shares issued for vested stock awards (in shares) | 317,968 | ||||
Unrealized gain (loss) on securities | 182 | 182 | |||
Shares issued on conversion of Sentient Note | $ 273 | 6,944 | 7,217 | ||
Shares issued on conversion of Sentient Note (in shares) | 27,366,740 | ||||
Registered offering common stock, net and warrants | $ 80 | 3,519 | 3,599 | ||
Registered offering common stock, net and warrants (in shares) | 8,000,000 | ||||
Net loss | (10,659) | (10,659) | |||
Balance at Dec. 31, 2016 | $ 889 | $ 495,455 | $ (488,037) | $ 55 | $ 8,362 |
Balance (in shares) at Dec. 31, 2016 | 89,020,041 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net cash used in operating activities | $ (6,205) | $ (9,935) |
Cash flows from investing activities: | ||
Proceeds from sale of assets | 1,167 | 789 |
Capitalized costs and acquisitions of property, plant and equipment | (50) | (44) |
Net cash from investing activities | 1,117 | 745 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 3,599 | |
Proceeds from the issuance of convertible note | 5,000 | |
Convertible note costs | (312) | |
Net cash from financing activities | 3,599 | 4,688 |
Net decrease in cash and cash equivalents | (1,489) | (4,502) |
Cash and cash equivalents, beginning of period | 4,077 | 8,579 |
Cash and cash equivalents, end of period | $ 2,588 | $ 4,077 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Nature of Operations | |
Nature of Operations | 1. Nature of Operations The Company is a mining company, holding a 100% interest in the Velardeña and Chicago precious metals mining properties and associated oxide and sulfide processing plants in Mexico (the “Velardeña Properties”). During November 2015 the Company suspended mining and sulfide processing activities at its Velardeña Properties in order to conserve the asset until the Company is able to develop mining and processing plans that at then current prices for silver and gold indicate a sustainable positive operating margin (defined as revenues less costs of sales) or the Company is able to locate, acquire and develop alternative mineral sources that could be economically mined and transported to the Velardeña Properties for processing. The Company has placed the mine and sulfide processing plant on care and maintenance to enable a re-start of either the mine or mill when mining and processing plans and metals prices support a cash positive outlook. The Company incurred approximately $1.2 million in related shutdown costs for employee severance, net working capital obligations, and other shutdown expenditures to place the property on care and maintenance in the fourth quarter 2015 and $2.0 million in shutdown and care and maintenance costs for the year ended December 31, 2016 and expects to incur approximately $0.4 million in quarterly holding costs while mining and processing remain suspended. The Company has retained a core group of employees, most of whom have been assigned to operate the oxide plant, which is leased to a third party and not affected by the shutdown. The oxide plant began processing material for the third party in mid-December 2015, and the Company received net cash flow under the lease of approximately $4.4 million in 2016. The third party has the right to extend the lease through December 31, 2018. The retained employees also include an exploration group and an operations and administrative group to continue to advance the Company’s plans in Mexico, oversee corporate compliance activities, and to maintain and safeguard the longer term value of the Velardeña assets. The Company remains focused on evaluating and searching for mining opportunities in North America (including Mexico) with near term prospects of mining, and particularly for properties within reasonable haulage distances of our Velardeña Properties. The Company is also reviewing strategic opportunities, focusing primarily on development or operating properties in North America, including Mexico. The Company is continuing its exploration efforts on selected properties in its portfolio of approximately 10 exploration properties located primarily in Mexico. The Company also continues to hold its El Quevar advanced exploration property in Argentina on care and maintenance until it can fund further exploration or find a partner to further fund exploration. The Company is considered an exploration stage company under the criteria set forth by the SEC as the Company has not yet demonstrated the existence of proven or probable mineral reserves, as defined by SEC Industry Guide 7, at the Velardeña Properties, or any of the Company’s other properties. As a result, and in accordance with 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”. |
Impairment of Long Lived Assets
Impairment of Long Lived Assets | 12 Months Ended |
Dec. 31, 2016 | |
Impairment of Long Lived Assets | |
Impairment of Long Lived Assets | 2. Velardeña Properties Asset Groups – 2015 Impairment The Velardeña Properties consists of two separate asset groups, one involving the oxide plant, which has been leased to a third party, and the other involving the mineral and exploration properties, sulfide plant, and mining and other equipment and working capital related to the mining and processing activities at the Velardeña Properties (the ”Mineral Properties Asset Group”). 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 whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Mining and processing activities generated negative operating margin through September 30, 2015. Ongoing efforts during 2015 to improve the grade of mined material delivered to the sulfide plant for processing by limiting dilution in the stopes did not improve grades to a level sufficient to generate positive operating margins at 2015 metals prices. As a result, the Company suspended mining and processing activities at the Velardeña mine and sulfide plant during November 2015 (see Note 1). The continued negative operating margin and the suspension of mining and sulfide processing activities at the Velardeña Properties during November 2015 were events that required an assessment of the recoverability of the Mineral Properties Asset Group at September 30, 2015. 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 for the Mineral Properties Asset Group, the Company determined that the Mineral Properties Asset Group was impaired. As a result, at September 30, 2015 the Company recorded impairment charges totaling $13.2 million to arrive at a remaining book value for the Mineral Properties Asset Group of $3.7 million at September 30, 2015, as shown in the table below. To determine whether the Mineral Properties Asset Group was impaired at September 30, 2015 the Company used a cash flow valuation approach, which the Company deemed reasonable under the circumstances, that considered metals price projections using a greater weighting of current prices. Based on the metals price projections and current operating experience for silver and gold grades, recoveries, and mining and processing costs, total projected net cash flow from mining and processing activities was negative, requiring that each of the individual components of the Mineral Properties Asset Group be written down to fair value. The Mineral Properties Asset Group includes the mineral and exploration properties associated with the mining and sulfide processing activities at the Velardeña Properties. The discounted cash flow analysis performed by the Company implies a zero value for the mineral and exploration properties from mining and processing activities in the current economic environment, but the Company believes those properties have a residual value that could be realized from a sale to a third party. With assistance from a third-party mining consulting and engineering firm, in reviewing comparable sales of similar properties in the region and considering the location of the Company’s properties to other active mining operations in close proximity to the Company’s properties, the Company concluded that the mineral and exploration properties included in the Mineral Properties Asset Group had a fair value of $1.4 million at September 30, 2015. The tangible assets included in the Mineral Properties Asset Group, which includes buildings, plant and equipment, were separately analyzed by a third party valuation firm in 2013 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 Mineral Properties Asset Group tangible assets were determined to have a fair value of approximately $6.0 million as of June 30, 2013, and have since been further depreciated, reflecting a current net book value of approximately $3.2 million as of September 30, 2015. The Company believes the current net book value of the Mineral Properties Asset Group tangible assets did not exceed fair value at September 30, 2015. The assets continue to be used or held in condition for use to support future profitable operations from the acquisition, exploration and development of other mineral sources located near the Velardeña Properties. The following table details the components of the impairment of the Mineral Properties Asset Group: Net Book Value Net Book Value Prior to Sept. 30, 2015 After Impairment at Impairment Impairment at Sept. 30, 2015 Charges Sept. 30, 2015 (in thousands) Mineral and exploration properties $ $ $ Exploration properties — Buildings, plant and equipment — Asset retirement cost — Other working capital, net — $ $ $ Prior to assessing the recoverability of the assets comprising the Mineral Properties Asset Group, the Company also assessed the fair value of its material and supplies inventory at September 30, 2015, which is included in the Mineral Properties Asset Group. Because of the suspension of mining and processing activities at the Velardeña Properties, as noted above, a portion of the material and supplies inventory is expected to be sold at a discount to its pre-shutdown book value or to decline in value prior to its use in future mining and processing activities. As a result, the Company increased its reserve for obsolescence of the materials and supplies inventory and recorded a noncash charge to shut down costs of approximately $0.4 million at September 30, 2015. At December 31, 2015, the Company re-evaluated its material and supplies inventory taking into account consumption and purchases during the quarter and reduced the reserve for obsolescence by approximately $0.1 million. Because of the close proximity of the asset group involving the oxide plant (the “Oxide Plant Asset Group”) the Company also assessed the recoverability of the Oxide Plant Asset Group at September 30, 2015. The Oxide Plant Asset Group, which has been leased to a third party, consists primarily of the oxide plant facilities with a carrying value at September 30, 2015 of $1.3 million. The projected net cash flows from the lease are in excess of the carrying value of the Oxide Plant Asset Group and the Company therefore determined that the Oxide Plant Asset Group was not impaired. The market 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 relied upon a review of comparable sales of similar properties in the region and considered the location of the Company's properties to other active mining operations in close proximity to the Company's properties. The Company evaluated its remaining long lived assets at December 31, 2016 and determined that no further impairment was required. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 3. 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 requires 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 mineralized material 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. All of the Company’s consolidated subsidiaries are 100% owned and as such the Company does not have a noncontrolling interest in any of its subsidiaries. All intercompany transactions and balances have been eliminated at consolidation. b. 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. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. d. Metals inventory at the Velardeña Properties consisted of marketable products including concentrates and precipitates. Metals inventory was 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. The Company had no metals inventories at December 31, 2016 and 2015 respectively as the result of the suspension of operations at its Velardeña Properties during November 2015 (see Note 1). 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 (see Note 2). e. 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 income, net” on the accompanying Consolidated Statements of Operations and Comprehensive Loss. Costs of exploration subsequent to the application of fresh start accounting have been and will continue to be expensed. f. 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 and the plant are depreciated using units of production based on estimated mineralized material. 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 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, 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 or by comparing other market indicators to the carrying amount of the asset (see Notes 2 and 8). g. 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 layer adjustments 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. 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. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as "Revenue from Oxide plant lease" in the Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding "income statement characterization of reimbursements received for "out-of-pocket" expenses incurred" and "reporting revenue gross as a principal versus net as an agent". ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for the reimbursed labor, utility and other costs are reported as "Oxide plant lease costs" in the Consolidated Statement of Operations and Comprehensive Loss. The Company recognizes lease fees during the period the fees are earned per the terms of the lease (see Note 16). i 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. 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 shares of Common Stock 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 were exercised or converted into Common Stock. At December 31, 2016 and 2015, 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) 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, 2016 and 2015 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. 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. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). The purpose of the standard update is to simplify presentation of debt issuance costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Amortization of the discount or premium shall be reported as interest expense in the case of liabilities or as interest income in the case of assets. Amortization of debt issuance costs also shall be reported as interest expense. ASU No. 2015-03 becomes effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted and the Company adopted ASU 2015-03 in 2015. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations. On August 27, 2014, the FASB issued 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 2014‑15”). ASU 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 is 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. The Company adopted ASU 2014-15 in 2016. The adoption of ASU 2014‑15 did not have a material impact on the Company’s consolidated financial position or results of operations. In April 2014 the FASB issued ASU 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 became effective for the Company January 1, 2015. The adoption of ASU 2014‑08 did not have a material impact on the Company’s consolidated financial position or results of operations. n. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment award transactions including accounting for income taxes and classification of excess tax benefits on the statement of cash flows, forfeitures and minimum statutory tax withholding requirements. For the Company, ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period. The Company does not anticipate early adoption of ASU 2016-09. The Company does not expect the adoption of ASU 2016-09 to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In March 2016, the FASB issued ASU 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies principal versus agent when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606, Revenue from Contracts with Customers, requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent). For the Company, ASU 2016-08 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. As the Company’s current accounting practices per the guidance of ASC 605 are comparable to the requirements of ASU 2016-08, the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations or the requirement for retrospective reporting. In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which will require lessees to recognize a right-of-use asset and a lease liability for all leases that are not short-term in nature. For a lessor, the accounting applied is also largely unchanged from previous guidance. The new rules will be effective for the Company in the first quarter of 2019. The Company does not anticipate early adoption. The Company does not expect the adoption of ASU 2016-02 to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) which amended its standards related to the accounting of certain financial instruments. This amendment addresses certain aspects of recognition, measurement, presentation and disclosure. The new rules will become effective for annual and interim periods beginning after December 15, 2017. Early adoption is not permitted. We are in the process of evaluating the impact the amendment will have on our consolidated financial position or results of operations. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company does not plan early adoption of this update and does not expect the adoption of the update to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In July 2015, the FASB issued ASU No. 2015-11, “Inventory, Simplifying the Measurement of Inventory” (“ASU 2015‑11”). ASU 2015-11 affects reporting entities that measure inventory using first-in, first-out or average cost. ASU 2015‑11 requires that inventory be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company does not plan early adoption of ASU 2015-11 and does not expect the adoption of ASU 2015-11 to have a material impact on the Company’s consolidated financial position or results of operations as the adoption will not materially change its current accounting methods. In May 2014, FASB and the International Accounting Standards Board issued ASU 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, 2017; early adoption is not permitted. ASU 2014-09 was originally effective December 15, 2016 but ASU 2015-14 deferred the effective date by one year. 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. |
Cash and Cash Equivalents and S
Cash and Cash Equivalents and Short-Term Investments | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents and Short-Term Investments | |
Cash and Cash Equivalents and Short-Term Investments | 4. 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. The following tables summarize the Company's short-term investments at December 31, 2016 and 2015: Estimated Carrying December 31, 2016 Cost Fair Value Value (in thousands) Investments: Short-term: Available for sale common stock $ $ $ Total available for sale Total short term $ $ $ December 31, 2015 Investments: Short-term: Available for sale common stock $ $ $ Total available for sale Total short term $ $ $ Credit Risk The Company invests substantially all of its excess cash with high credit-quality financial institutions or in U.S. government or debt securities. Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. For cash and equivalents and investments, credit risk represents the carrying amount on the balance sheet. The Company mitigates credit risk for cash and equivalents and investments by placing its funds and investments with high credit-quality financial institutions, limiting the amount of exposure to each of the financial institutions, monitoring the financial condition of the financial institutions and investing only in government and corporate securities rated “investment grade” or better. The Company invests with financial institutions that maintain a net worth of not less than $1 billion and are members in good standing of the Securities Investor Protection Corporation. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Assets | |
Prepaid Expenses and Other Assets | 5. Prepaid expenses and other assets consist of the following: December 31, 2016 2015 (in thousands) Prepaid insurance $ $ Prepaid contractor fees and vendor advances — Deferred offering costs — Recoupable deposits and other $ $ The deferred offering costs are related to the ATM Program discussed in detail in Note 15. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Inventories | 6. Inventories at the Velardeña Properties were as follows: December 31, 2016 2015 (in thousands) Material and supplies $ $ $ $ The Company had no metals or in process inventories at December 31, 2016 and 2015 as the result of the suspension of mining and processing at the Velardeña Properties (see Note 1). The material and supplies inventory at December 31, 2016 and 2015 is reduced by a $0.3 million obsolescence charge reflected in shutdown costs. |
Value Added Tax Receivable, Net
Value Added Tax Receivable, Net | 12 Months Ended |
Dec. 31, 2016 | |
Value added tax receivable, net | |
Value added tax receivable | 7. 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. At December 31, 2016 the Company had recorded only a nominal VAT receivable which it expects to recover within a one-year period. The VAT receivable at December 31, 2015 was fully recovered during 2016. 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
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 8. Property, plant and equipment, net The components of property, plant, and equipment, net were as follows: December 31, 2016 2015 (in thousands) Mineral properties $ $ Exploration properties Royalty properties Buildings Mining equipment and machinery Other furniture and equipment Asset retirement cost Less: Accumulated depreciation and amortization $ $ On August 8, 2016, the Company sold certain mining equipment consisting of two haul trucks, two scoop trams and a compressor to Minera Indé, an indirect subsidiary of Sentient, for $687,000 (see Note 23). The equipment sold was excess equipment held at the Company’s Velardeña Properties that the Company does not expect to use. The equipment had a net book value of $27,000 resulting in a gain of $660,000. The gain is included in “ Other operating income, net” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company received $69,000 or 10% of the sales price at the closing of the sale, with the remaining $618,000 plus interest on the unpaid balance at an annual rate of 10% due in February 2017. At December 31, 2016 the Company had recorded a receivable of $643,000 related to the sale, including accrued interest. The receivable amount is included in “ Related party receivable ” in the accompanying Consolidated Balance Sheets. The Company expects to amend the original equipment sale in February 2017 to include the sale of an additional piece of excess equipment for $185,000. Upon execution of the amendment the Company expects to receive an additional payment of $100,000, and the remaining principal and interest balance as of February 2017 of $737,000, plus additional interest on the unpaid balance at an annual rate of 10%, would be due in August 2017. On August 2, 2016, the Company entered into a definitive agreement to sell its remaining 50% interest in the San Diego exploration property in Mexico to Golden Tag Resources ltd (“Golden Tag”), the company that held the other 50% interest in the property. As a result of the sale, the Company received approximately $379,000 in cash and 2,500,000 common shares of Golden Tag. Pursuant to the agreement, Golden Tag will be required to pay the Company a 2.0% net smelter return royalty in respect to the San Diego property. The Company had previously written down the value of the San Diego property to approximately zero and accordingly recognized a gain of approximately $0.5 million on the sale. The gain is included in “ Other operating income, net ” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Following this transaction, the Company now holds 7,500,000 common shares representing approximately 10% of the outstanding common shares of Golden Tag (see Note 4). In the third quarter 2016, the Company, through its wholly owned Mexican subsidiary, entered into an earn-in agreement with a 100% owned Mexican subsidiary of Electrum Global Holdings, L.P., a privately owned company (together “Electrum”), related to the Company’s Celaya exploration property in Mexico. The Company received an upfront payment of $0.2 million and Electrum has agreed to incur exploration expenditures totaling at least $0.5 million in the first year of the agreement, reduced by certain costs Electrum previously incurred on the property since December 2015 in its ongoing surface exploration program. The Company has previously expensed all of its costs associated with the Celaya property and accordingly recognized a gain of $0.2 million from the farm-out of the property in the third quarter 2016. The gain is included in “ Other operating income, net ” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. On April 28, 2016, the Company entered into an option agreement under which Santa Cruz Silver Mining Ltd. (“Santa Cruz”) may acquire the Company’s interest in certain nonstrategic mineral claims located in the Zacatecas Mining District, Zacatecas, Mexico (the “Zacatecas Properties”) for a series of payments totaling $1.5 million. Santa Cruz paid the Company $0.2 million on signing the agreement and an additional $0.2 million in October 2016. In order to maintain its option and acquire the Zacatecas Properties, Santa Cruz is required to pay additional amounts of $0.3 million, $0.3 million and $0.5 million due 12, 18 and 24 months after signing respectively. Santa Cruz has the right to terminate the option agreement at any time, and the agreement will terminate if Santa Cruz fails to make a payment when due. The Company has previously expensed all of its costs associated with the Zacatecas Properties and accordingly recognized a gain of $0.4 million on the first two payments received which is included in “ Other operating income, net ” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. During the year ended December 31, 2015 the Company received $0.3 million related to an option agreement on its Otuzco property in Peru. In addition, the Company sold certain non-strategic mining concessions and equipment for net proceeds of approximately $0.5 million and recorded a $0.2 million gain on the transactions. The net gains for the above transactions are reflected in “ Other operating income, net ” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The 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 ARO (see Note 11) and to the impairment of the ARC, as discussed below. At September 30, 2015 the Company determined that the recoverability of certain mineral property and exploration property costs related to the Velardeña Properties Mineral Properties Asset Group was impaired. The Company reduced the carrying value of the Velardeña Properties mineral and exploration properties by $12.8 million and the ARC by $0.4 million and recorded a $13.2 million impairment charge on the accompanying Consolidated Statements of Operations and Comprehensive Loss (see Note 2). The table below sets forth the detail of the impairment charges recorded to the Velardeña Properties property, plant and equipment: Impairment Gross Value Charge Gross Value Prior to Minerals After Impairment at Properties Impairment at Sept. 30, 2015 Asset Group Sept. 30, 2015 (in thousands) Mineral properties $ $ $ Exploration properties Royalty properties — Buildings — Mining equipment and machinery — Other furniture and equipment — Asset retirement cost $ $ $ The carrying value after the impairment at September 30, 2015 represents the fair value of the assets as discussed in Note 3. |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Other Accrued Liabilities | |
Accounts Payable and Other Accrued Liabilities | 9. The Company’s accounts payable and other accrued liabilities consist of the following: December 31, 2016 2015 (in thousands) Accounts payable and accruals $ $ Accrued employee compensation and benefits $ $ December 31, 2016 Accounts payable and accruals at December 31, 2016 consist primarily of $0.1 million and $0.2 million due to contractors and suppliers 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 partially offset by a small VAT receivable. Accrued employee compensation and benefits at December 31, 2016 consist of $0.2 million of accrued vacation payable, $0.4 million related to withholding taxes and benefits payable, of which $0.2 million is related to activities at the Velardeña Properties, and $0.3 million related to the Key Employee Long-Term Incentive Plan ("KELTIP") (see Note 15). December 31, 2015 Accounts payable and accruals at December 31, 2015 consist primarily of $0.3 million and $0.3 million due to contractors and suppliers 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, 2015 consist of $0.1 million of accrued vacation payable, $0.4 million related to withholding taxes and benefits payable, of which $0.2 million is related to activities at the Velardeña Properties, and $0.1 million related to the KELTIP) (see Note 15). |
Convertible Note Payable - Rela
Convertible Note Payable - Related Party, Net | 12 Months Ended |
Dec. 31, 2016 | |
Convertible Note Payable – Related Party, Net | |
Convertible Note Payable – Related Party, Net | 10. On October 27, 2015, the Company closed and borrowed the entire amount available under a $5.0 million secured convertible loan (the “Sentient Loan”) from The Sentient Group (“Sentient”) with principal and accrued interest due on October 27, 2016. To comply with security regulations and stock exchange rules in the United States and Canada, the Company received stockholder approval on January 19, 2016 to allow principal and accrued interest under the Senior Secured Convertible Note (the “Sentient Note”) to be converted, solely at Sentient's option, into shares of the Company's common stock at a price equal to the lowest of: 1) $0.29 , 90 percent of the 15-day volume weighted average price ("VWAP") for the period immediately preceding the loan closing date, 2) 90 percent of the 15-day VWAP for the period immediately preceding the Loan conversion date, or 3) an anti-dilution adjusted price based on the lowest price for which the Company has sold its stock following the Loan closing date. The Loan bore interest at a rate of 9.0% per annum, compounded monthly. On February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest under the Sentient Note (representing the total amount of accrued interest at the conversion date) into 23,355,000 shares of the Company’s common stock at an exercise price of approximately $0.172 per share, equal to 90% of the 15-day VWAP immediately preceding the conversion date. On June 10, 2016, Sentient converted the remaining approximately $1.1 million of principal and approximately $34,000 of accrued interest (representing the total amount of accrued interest at the conversion date) into 4,011,740 shares of the Company's common stock at an exercise price of approximately $0.289 per share, equal to 90% of the 15 ‐ day VWAP immediately preceding the loan’s original issue date. The beneficial conversion feature of the Sentient Note represented an embedded derivative as defined by ASC 815 "Derivatives and Hedging" ("ASC 815"). ASC 815 provides that a derivative instrument's fair value must be bifurcated from the note and separately recorded on the Company's Consolidated Balance Sheet. The Company used a third party consultant to value the embedded derivative in the Sentient Note employing a Monte Carlo type probability analysis, which falls within Level 3 of the fair value hierarchy (see Note 13). For purposes of valuing the embedded derivative as of the Sentient Loan closing date, at December 31, 2015, at February 11, 2016 (first partial conversion date), and at June 10, 2016 (the remaining conversion date), the valuation model took into account, among other items: 1) the probability of successfully achieving stockholder approval of the Sentient Note’s conversion feature, 2) future variations in the Company’s stock price, and 3) the probability of entering into an equity transaction prior to the Sentient loan maturity date that would lower the conversion price. It was determined that the embedded derivative had a fair value of approximately $1.1 million at October 27, 2015, the date the Company entered into the Sentient Loan. Subsequent mark-to-market changes in the value of the derivative were recorded as income or loss in the Consolidated Statements of Operations and Comprehensive Loss. The Sentient Note was recorded net of the bifurcated embedded derivative at October 27, 2015 with the $1.1 million difference between the face value and the recorded value of the Note representing a loan discount that was amortized to interest expense over the life of the loan using the interest rate method. The Company incurred approximately $0.3 million in legal and other costs associated with the Sentient Loan. Per the guidance of ASU 2015-03 the loan costs were presented as a reduction to the note payable on the accompanying Consolidated Balance Sheets and were amortized to interest expense over the life of the Sentient note using the interest rate method (see Note 3). The derivative was recorded at fair value with subsequent mark-to-market changes in the value of the derivative recorded as income or loss in the Consolidated Statements of Operations and Comprehensive Loss. It was determined that the embedded derivative had a fair value of approximately $1.1 million at October 27, 2015, the date the Company entered into the Sentient Loan. At December 31, 2015 the embedded derivative had a fair value of approximately $0.5 million and the Company recorded a gain of approximately $0.6 million. Because the Sentient Loan was recorded net of the bifurcated embedded derivative and loan costs, both of which were amortized to interest expense over the life of the loan, the effective rate of interest on the recorded loan obligation was higher than the stated nominal rate of interest. The effective interest rate on the Sentient Note was approximately 36%, compounded monthly, compared to the stated nominal rate of 9.0% per annum, compounded monthly. The Company adjusted the recorded value of the Sentient Loan as of the conversion dates to reflect the amortization of the loan discount and loan costs, shown as “ Interest expense ” in the Consolidated Statements of Operations and Comprehensive Loss. For the year ended December 31, 2016, the Company recorded a total noncash loss on debt extinguishment of $1.7 million reflecting the difference between the value of the shares issued to Sentient as a result of the two separate conversions and the recorded value of the Sentient Loan, including related loan costs, loan discount and embedded derivative eliminated at the conversion dates. The Company marked-to-market the embedded derivative at each of the conversion dates and recorded a total derivative loss of $0.8 million during the year ended December 31, 2016 in the Condensed Consolidated Statements of Operations and Comprehensive Loss. At December 31, 2016 the Sentient Note had been fully converted and the Company had no outstanding debt. |
Asset Retirement Obligation and
Asset Retirement Obligation and Reclamation Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Asset Retirement Obligation and Reclamation Liabilities | |
Asset Retirement Obligation and Reclamation Liabilities | 11. 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, 2016 the Company recognized approximately $0.2 million of accretion expense and approximately $33,000 of amortization expense related to the ARC. The following table summarizes activity in the Velardeña Properties ARO: Year Ended December 31, 2016 2015 (in thousands) Beginning balance $ $ Changes in estimates, and other Accretion expense Ending balance $ $ The decrease in the ARO recorded during the years ended December 31, 2016 and 2015 is the result of changes in assumptions related to inflation factors and discount rates used in the determination of future cash flows. The ARO set forth on the accompanying Condensed Consolidated Balance Sheets at December 31, 2016 and December 31, 2015 includes approximately $0.1 million of reclamation liabilities related to activities at the El Quevar project in Argentina for each of the periods. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities | |
Other Liabilities | 12. The Company recorded other current liabilities of approximately nil and $0.6 million at December 31, 2016 and December 31, 2015 respectively. The December 31, 2015 amount includes a net liability of approximately $0.4 million related to the Argentina tax on equity due for years 2009 through 2012 stemming from a tax audit of those years, including approximately $0.2 million of estimated interest and penalties. During the first four months of 2016 the Company paid approximately $0.2 million of Argentine tax on equity leaving approximately $0.2 million of estimated interest and penalties awaiting a final assessment from the tax authorities. During the third quarter 2016 the Argentine government adopted an amnesty program that the Company effectively used to eliminate the remaining $0.2 million of interest and penalties that had been accrued. The reversal of the accrual reduced expenses incurred at the El Quevar project during the third quarter 2016. The December 31, 2015 amount also includes $0.1 million of accrued interest on the Sentient Loan and $0.1 million as a loss contingency on a disputed contract with a third party contractor in Mexico. The dispute was settled during the first quarter 2016 for the amount previously accrued. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 13. 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 2, 10 and 15 in all periods presented. Recurring Fair Value Measurements The following table summarizes the Company’s financial assets and liabilities measured on a recurring basis at fair value at December 31, 2016 and 2015 by respective level of the fair value hierarchy: Level 1 Level 2 Level 3 Total (in thousands) At December 31, 2016 Assets: Cash and cash equivalents $ $ — $ — $ Trade accounts receivable — — Short-term investments — — $ $ — $ — $ Liabilities: Warrant liability - related party $ — $ — $ $ Warrant liability — — $ — $ — $ $ At December 31, 2015 Assets: Cash and cash equivalents $ $ — $ — $ Trade accounts receivable — — Short-term investments — — $ $ — $ — $ Liabilities: Warrant liability - related party $ — $ — $ $ Warrant liability — — Derivative liability - related party — — $ — $ — $ $ 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 are classified within Level 1 of the fair value hierarchy, are related to the sale of metals at our Velardeña Properties and the oxide plant lease and are valued at published metals prices per the terms of the refining and smelting agreements and lease rates per the plant lease agreement. At December 31, 2016 and 2015, the Company 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 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 “ Warrant derivative (loss) gain ” on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. 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, 2016 and 2015 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. The beneficial conversion feature of the Sentient Note represents an embedded derivative as defined by ASC 815 (see Note 10). ASC 815 provides that a derivative instrument’s fair value must be bifurcated from the host contract and separately recorded on the Company’s Condensed Consolidated Balance Sheets. At December 31, 2015 and at each of the conversion dates (see Note 10), the Company had recorded a derivative liability related to the beneficial conversion feature of the Sentient Note. On June 10, 2016, the remaining Sentient Note and related embedded derivative had been fully retired. The Company assesses the fair value of the derivative liability at the end of each reporting period, with changes in the value recorded as “ Derivative loss ” on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. 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 derivative liability was recorded at fair value at December 31, 2015 and each of the conversion dates 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, among other items: 1) the probability of successfully achieving stockholder approval of the loan’s conversion feature, 2) future variations in the Company’s stock price, and 3) the probability of entering into an equity transaction prior to the Loan maturity date that would lower the conversion price. In addition to the warrant exercise prices (see Note 15) and Sentient Note conversion price (see Note 10) other significant inputs to the warrant valuation model and derivative valuation model included the following as applicable: December 31, December 31, 2016 2015 Company's ending stock price $ $ Company's stock volatility Applicable risk free interest rate 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 and the derivative liability. Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Warrant Liabilities Derivative Liability (in thousands) Beginning balance at January 1, 2015 $ $ — Sentient Note, October 27, 2015 — Change in estimated fair value Ending balance at December 31, 2015 $ $ Conversion of Sentient Loan (see Note 10) — Change in estimated fair value — Ending balance at December 31, 2016 $ $ — Non-recurring Fair Value Measurements There were no non-recurring fair value measurements at December 31, 2016. The Company did conduct a fair value assessment of its mineral properties related to the Velardeña Properties at September 30, 2015 (see Note 2). The following table summarizes the Company’s non-recurring fair value measurements at September 30, 2015 by respective level of the fair value hierarchy: Level 1 Level 2 Level 3 Total (in thousands) At September 30, 2015 Assets: Mineral properties $ — $ — $ $ $ — $ — $ $ The Company assesses the fair value of its long lived assets 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 the Company uses a discounted cash flow evaluation approach and relied on a third party mining consulting and engineering firm to assist with the determination of a residual value for the Velardeña mineral properties, which falls within Level 3 of the fair value hierarchy. The discounted cash flow valuation approach relies upon assumptions for future metals prices and projected silver and gold grades, recoveries, and mining and processing costs related to the Velardeña Properties. In determining the residual value of the mineral properties the third-party mining consulting and engineering firm reviewed comparable sales of similar properties in the region and considered the location of the Company’s properties to other active mining operations in close proximity to the Company’s properties. See Note 2 for further details related to the determination of fair value. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 14. The Company accounts for income taxes in accordance with the provisions of ASC 740, "Income Taxes" ("ASC 740") on a tax jurisdictional basis. Income (loss) from operations before income taxes by country consists of the following: For the Year Ended December 31, 2016 2015 (in thousands) United States $ $ Other Countries $ $ In 2016 and 2015 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 of various deferred tax assets in each country. 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 Loss is summarized below. For Year Ended December 31, 2016 2015 (in thousands) Tax expense (benefit) at US rate of 34% $ $ Other adjustments: Rate differential of other jurisdictions Effects of foreign earnings Change in valuation allowance Provision to tax return true-ups Exchange rate changes on deferred tax assets Effect of a change in tax rates — Debt extinguishment loss — Warrant liability loss — Other Income tax provision $ — $ — The components of the deferred tax assets and deferred tax liabilities are as follows: For the year ended December 31, 2016 2015 (in thousands) Deferred tax assets: Net operating loss carryforwards $ $ Stock-based compensation Property, plant and equipment Other Less: Valuation allowance Total deferred tax assets Deferred tax liabilities: Property, plant and equipment Other Total deferred tax liabilities 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, 2016 and December 31, 2015 was zero. At December 31, 2016 the Company had net operating loss carryforwards in the U.S. and in certain non-U.S. jurisdictions totaling $315.5 million. Of these, $77.8 million is related to the Velardeña Properties in Mexico and expires in future years through 2026. $21.0 million is related to other Mexico exploration activities and also expires in future years through 2026. $132.4 million net operating losses exist in Luxembourg and Spain and have no expiration date, while $18.2 million exist in other non-U.S. countries, which will expire in future years through 2026. In the U.S. there are $66.1 million of net operating loss carryforwards which will expire in future years through 2036. The valuation allowance offsetting the net deferred tax assets of the Company of $105.8 million and $110.5 million at December 31, 2016 and 2015, 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. Below is a reconciliation of the beginning and ending amount of gross unrecognized tax benefits, which excludes any estimated penalties and interest on all identified unrecognized tax benefits. The Company’s unrecognized tax benefits as of December 31, 2016 and 2015 are completely offset by net deferred tax benefits and therefore do not appear on the Consolidated Balance Sheet. The Year Ended December 31, 2016 2015 (in thousands) Gross unrecognized tax benefits at beginning of period $ $ Increases for tax positions taken during prior years — — Decreases relating to settlements with taxing authorities — — Reductions due to lapse of statute of limitations Gross unrecognized tax benefits at end of period $ $ Tax years as early as 2011 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 Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2016 or 2015, and there were no interest and penalties recognized in the statement of financial position as of December 31, 2016 and 2015. The Company classifies income tax related interest and penalties as income tax expense. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity | |
Equity | 15. At the Market Offering Agreement On December 20, 2016, the Company entered into an at-the-market offering agreement (the “ATM Agreement”) with H. C. Wainwright & Co., LLC (“ Wainwright ”), under which the Company may, from time to time, issue and sell shares of the Company’s common stock through Wainwright as sales manager in an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $5.0 million (the “ATM Program”) or a maximum of 10 million shares. The ATM Agreement will remain in full force and effect until the earlier of December 31, 2018, or the date that the ATM Agreement is terminated in accordance with the terms therein. Offers or sales of common shares under the ATM Program will be made only in the United States and no offers or sales of common shares under the Agreement will be made in Canada. The common stock will be distributed at the market prices prevailing at the time of sale. As a result, prices of the common stock sold under the ATM Program may vary as between purchasers and during the period of distribution. The ATM Agreement provides that Wainwright will be entitled to compensation for its services at a commission rate of 2.0% of the gross sales price per share of common stock sold. The Company reimbursed certain legal expenses of Wainwright totaling $50,000 and incurred additional accounting, legal, and regulatory costs of approximately $103,000 in connection with establishing the ATM Program. Such costs have been deferred and will be amortized to equity as sales are completed under the ATM Program. At December 31, 2016 the costs appear on the accompanying Consolidated Balance Sheets as “ Prepaid expense and other assets” . At December 31, 2016 no offers or sales had been made under the ATM Program. Subsequent to December 31, 2016 the Company sold an aggregate of approximately 640,000 common shares under the ATM Program at an average price of $0.74 per common share for gross proceeds of approximately $475,000 during the year to date period ended February 24, 2017. The Company paid a 2% cash commission on the gross proceeds in the amount of approximately $10,000 and incurred additional accounting, legal, and regulatory costs of approximately $2,000. . Sentient Note conversion On February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest (representing the total amount of accrued interest at the conversion date) into 23,355,000 shares of the Company's common stock at an exercise price of approximately $0.172 per share, reflecting 90% of the 15-day VWAP immediately preceding the conversion date. On June 10, 2016, Sentient converted the remaining approximately $1.1 million of principal and approximately $34,000 of accrued interest (representing the total amount of accrued interest at the conversion date) pursuant to the Sentient Note into 4,011,740 shares of the Company's common stock at an exercise price of approximately $0.289 per share, equal to 90% of the 15 ‐ day VWAP immediately preceding the loan’s original issue date (see Note 10). At September 30, 2016 the Sentient Note had been fully converted and the Company had no further debt outstanding. After conversion, and following the sale of additional shares of the Company’s common stock in 2017 pursuant to the ATM Program (discussed above), Sentient holds approximately 46% of the Company’s 89.7 million shares of issued and outstanding common stock. Offering and Private Placement On May 6, 2016, the Company issued 8.0 million registered shares of common stock at a purchase price of $0.50 per share in a registered direct offering (the “Offering”) resulting in gross proceeds of $4.0 million. The Company incurred costs and fees of approximately $0.4 million related to the Offering, resulting in net proceeds of approximately $3.6 million. In connection with the Offering, each investor received in a private placement an unregistered warrant to purchase three ‐ quarters of a share of common stock for each share of common stock purchased. The 6.0 million warrants have an exercise price of $0.75 per share and are exercisable beginning six months after the date of issuance and will expire five years from the initial exercise date. The net proceeds of the Offering were recorded in equity and appear as a separate line item in the Consolidated Statements of Changes in Equity. Using the Black Scholes model, the fair value of the warrants issued was $3.6 million, considering the closing stock price on April 29, 2016 (the first business day preceding May 2, 2016, the date the Company entered into a definitive agreement to issue the shares), the exercise price and exercise period of the warrants, the Company’s volatility rate of 105%, and the applicable risk free rate of 0.74%. 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, 2016 and 2015 and changes during the years then ended: The Year Ended December 31, 2016 2015 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Grants Shares Share Shares Per Share Outstanding at beginning of period $ $ Granted during the period — — Restrictions lifted during the period Forfeited during the period — — — — Outstanding at end of period $ $ During the year ended December 31, 2016 restricted stock grants were made to three employees. No restricted stock grants were made during the year ended December 31, 2015 Restrictions were lifted on 84,170 shares during the year ended December 31, 2016 on the anniversaries of grants made to two officers in prior years. Restrictions were lifted on 336,334 shares during the year ended December 31, 2015 on the anniversaries of grants made to officers and employees in prior years. In addition, during 2015 restrictions were lifted on 163,334 shares related to the retirement of two officers during the year and restrictions were lifted on 12,000 shares during 2015 in connection with the termination of employment of two employees. For the year ended December 31, 2016 the Company recognized a nominal amount of compensation expense related to the restricted stock grants. For the year ended December 31, 2015 the Company recognized approximately $0.2 million of compensation expense related to the restricted stock grants. The Company expects to recognize approximately $62,000 of compensation expense related to these grants over the next 36 months. The following table summarizes the status of the Company’s stock option grants issued under the Equity Plan at December 31, 2016 and 2015 and changes during the years then ended: The Year Ended December 31, 2016 2015 Weighted Weighted Average Average Exercise Exercise Number of Price Per Number of Price Per Equity Plan Options Shares Share Shares Share Outstanding at beginning of period $ $ Granted during the period — — — — Restrictions lifted during period — — — Forfeited or expired during period — — Exercised during period — — — — Outstanding at end of period $ $ Exercisable at end of period $ $ Granted and vested $ $ During the year ended December 31, 2015, the Company recognized expense of less than $0.1 million related to the outstanding options. The Company does not expect to record any additional expense related to these options. 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, 2016 and 2015 and changes during the years then ended: The Year Ended December 31, 2016 2015 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Units Shares Share Shares Per Share Outstanding at beginning of period $ $ 2.08 Granted during the period Restrictions lifted during the period — — Forfeited during the period — — — — Outstanding at end of period $ $ For the years ended December 31, 2016 and 2015 the Company recognized approximately $0.2 million of compensation expense related to the RSU grants each year. The Company expects to recognize additional compensation expense related to the RSU grants of less than $0.1 million over the next six months. The restrictions lifted during 2016 all relate to the retirement of Michael T. Mason from the Company’s Board of Directors during the year. Key Employee Long-Term Incentive Plan Pursuant to the KELTIP (see Note 9), 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 Note 9. During the year ended December 31, 2016 the Company awarded 585,000 KELTIP Units to two officers of the Company and recorded approximately $0.2 million of compensation expense, included in “ Stock based compensation ” in the Condensed Consolidated Statement of Operations and Comprehensive Loss. At December 31, 2016 the KELTIP Units were marked-to-market and the Company recognized approximately $0.1 million of additional compensation expense. At December 31, 2016 585,000 KELTIP Units were outstanding. During 2015, the Company issued 172,500 shares of its common stock under the Equity Plan to settle the outstanding KELTIP Units due to a retiring officer of the Company. At December 31, 2015 there were no KELTIP Units outstanding. Common stock warrants The following table summarizes the status of the Company’s common stock warrants at December 31, 2016 and December 31, 2015 and changes during the years then ended: The Year Ended December 31, 2016 2015 Weighted Weighted Number of Average Exercise Number of Average Exercise Underlying Price Per Underlying Price Per Common Stock Warrants Shares Share Shares Share Outstanding at beginning of period $ $ Granted during period — — Dilution adjustment — — Expired during period — — — Exercised during period — — — Outstanding at end of period $ $ The warrants relate to prior and current registered offerings and private placements of the Company’s stock. In September 2012, the Company closed on both a registered public 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. A total of 3,431,649 warrant shares were issued and became exercisable on March 20, 2013 and will expire on September 19, 2017, five years from the date of issuance. In September 2014 the Company closed on both a registered public 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 $1.21 per share. A total of 4,746,000 warrant shares were issued that became exercisable on March 11, 2015 and will expire on September 10, 2019, five years from the date of issuance. On May 6, 2016 the Company closed on the Offering (discussed above) under which the investors received in a separate private placement an unregistered warrant to purchase three ‐ quarters of a share of common stock for each share of common stock purchased. The resulting 6,000,000 warrants have an exercise price of $0.75 per share, become exercisable six months after the date of issuance and will expire on November 6, 2021, five years from the initial exercise date. The warrants issued in September 2012 and September 2014 are 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 an offering price lower than the current exercise price of the warrants. The May 2, 2016 warrant agreement has no anti-dilution clause and the warrants are recorded as equity. Pursuant to the anti-dilution clauses in the September 2012 and 2014 warrant agreements, the exercise price of the warrants has been adjusted downward as a result of the subsequent issuance of the Company’s common stock in separate transactions, including the September 2014 registered public offering and private placement, the conversion of the Sentient Note, the recent Offering (discussed above), and the sale of additional shares of our common stock in 2017 pursuant to the ATM Program (discussed above). As a result of these transactions, the number of shares of common stock issuable upon exercise of the September 2012 Warrants has increased from the original 3,431,649 shares to 6,150,963 shares (2,719,314 share increase) and the exercise price has been reduced from the original $8.42 per share to $4.70 per share. The number of shares of common stock issuable upon exercise of the September 2014 Warrants has increased from the original 4,746,000 shares to 5,460,612 shares (714,612 share increase) and the exercise price has been reduced from the original $1.21 per share to $0.87 per share. Of the 6,120,573 and 5,458,377 issuable warrants related to the September 2012 and September 2014 warrants, respectively, 1,217,992 and 2,900,000, respectively were issuable to Sentient. At December 31, 2016 the total liability recorded for the September 2012 and 2014 warrants was $1.9 million, consisting of $0.1 million for the September 2012 warrants and $1.8 million for the September 2014 warrants. The warrant liability has been recorded at fair value as of December 31, 2016 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 (see Note 13). Of the $0.1 million and $1.8 million liability related to the September 2014 and September 2012 warrants, respectively, a nil amount and $1.0 million, respectively were related to warrants held by Sentient. The warrants issued during the period are related to the Offering and Private Placement of the Company’s securities completed on May 6, 2016 as discussed above. |
Revenue and Related Costs
Revenue and Related Costs | 12 Months Ended |
Dec. 31, 2016 | |
Revenue and Related Costs | |
Revenue and Related Costs | 16. Oxide Plant Lease and Oxide Plant Lease Costs For the year ended December 31, 2016 the Company recorded revenue of approximately $6.4 million and related costs of approximately $2.0 million associated with the lease of the Velardeña Properties oxide plant. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as "Revenue: Oxide plant lease" in the Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding “income statement characterization of reimbursements received for "out-of-pocket" expenses incurred” and “reporting revenue gross as a principal versus net as an agent”. ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for reimbursed direct labor and utility costs are reported as “ Oxide plant lease costs ” in the Consolidated Statement of Operations. The Company recognizes lease fees during the period the fees are earned per the terms of the lease. For the year ended December 31, 2015 the company recorded revenue of approximately $0.7 million and related costs of approximately $0.2 million associated with the lease of the oxide plant. In addition, the Company received an advance payment of $0.5 million that was applied to the lease amounts due during the first four months of 2016. At December 31, 2015 the advance payment was recorded as “ Deferred revenue ” on the accompanying Consolidated Balance Sheets. Sale of Metals and Cost of Metals Sold During the year ended December 31, 2015, the Company sold marketable concentrate products from its Velardeña Properties to three customers. Under the terms of the Company’s agreements with 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. The Company had no metals or in-process inventories at December 31, 2015 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, 2016 | |
Interest and Other Income. | |
Interest and Other Income | 17. For the year ended December 31, 2016 the Company reported interest and other income of $0.4 million, which includes approximately $0.4 million related to a refund of previously paid social security taxes in Mexico. For the year ended December 31, 2015 the Company reported interest and other income of $3.1 million which includes a $2.3 million reduction and elimination of a loss contingency liability related to foreign withholding taxes that the government could have asserted were owed by the Company, acting as withholding agent, on certain interest payments made to a third party (see Note 12). Also included in interest and other income for 2015 is approximately $0.8 million related to a refund of previously paid social security taxes in Mexico. |
Derivative Income
Derivative Income | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Income (Loss) | |
Derivative Income | 18. During the year ended December 31, 2016 the Company recorded approximately $1.7 million of warrant derivative loss related to an increase in the fair value of the liability recorded for warrants to acquire the Company’s common stock (see Note 13). During the year ended December 31, 2015 the Company recorded approximately $1.3 million of derivative income related to a decrease in the fair value of the liability recorded for the warrants. The warrant liability has been recorded at fair value as of December 31, 2016 and 2015 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 prices for the warrants disclosed above, the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price and the inputs in the table below for the respective periods. During the year ended December 31, 2016 the Company recorded approximately $0.8 million of derivative loss related to an increase in the fair value of the derivative liability related to the Sentient Loan. During the year ended December 31, 2015 the Company recorded approximately $0.6 million of derivative income related to a decrease in the fair value of the derivative liability related to the Sentient Loan (see Note 10). The derivative liability was recorded at fair value at June 10, 2016, the date of the conversion of the remaining note (see Note 10), and at December 31, 2015 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 (see Note 13). Significant inputs to the valuation model included: 1) future variations in the Company’s stock price, and 2) the probability of entering into an equity transaction prior to the loan maturity date that would lower the conversion price. Additional inputs used in the valuation of derivatives related to both the warrants and the Sentient loan are summarized in the table below. At December 31, The Company's 2016 2015 Closing stock price $ $ Volatility Risk-free rate |
Cash Flow Information
Cash Flow Information | 12 Months Ended |
Dec. 31, 2016 | |
Cash flow information | |
Supplemental Cash Flow Information | 19. The following table reconciles net income (loss) for the period to cash used in operations: Year Ended December 31, 2016 2015 (in thousands) Cash flows from operating activities: Net loss $ $ Adjustments to reconcile net loss to net cash used in operating activities: Amortization and depreciation Accretion of asset retirement obligation Foreign currency gain on loss contingency — Impairment of long lived assets — Asset write off Write off of loss contingency, net Gain on sale of assets, net Amortization of deferred loan costs Warrant liability fair market adjustment Derivative liability fair market adjustment Accretion of loan discount — Loss on debt extinguishment — Stock compensation Changes in operating assets and liabilities: Decrease (increase) in trade accounts receivable (Increase) decrease in prepaid expenses and other assets Decrease in inventories Decrease in value added tax recoverable, net Increase in accrued interest payable net of amounts capitalized (Decrease) increase in deferred revenue Decrease in reclamation liability Decrease in accounts payable and accrued liabilities Decrease in deferred leasehold payments Net cash used in operating activities $ $ The Company did not make any cash payments for interest or income taxes during the years ended December 31, 2016 and 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 20. Leases and Purchase Commitments The Company has non-cancelable operating lease commitments as follows: 2017 2018 2019 2020 2021 Thereafter El Quevar mining concessions (estimated) $ $ $ $ $ $ — Velardeña mining concessions (estimated) $ $ $ $ $ $ — Office space $ $ $ $ — $ — $ — The Company is required to make payments to the Argentine government to maintain its rights to the El Quevar mining concessions. The Company has made such payments totaling approximately $112,000 and $40,000 for the years ended December 31, 2016 and 2015, 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, 2016 and 2015 the Company made such payments totaling approximately $74,000 and $24,000 respectively, and annual payments under its surface right agreement with the local ejido of approximately $25,000. The Company has office leases for its corporate headquarters in Golden, Colorado, as well as for its Velardeña Properties offices 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 $224,000 and $227,000 for the years ended December 31, 2016 and 2015, respectively. The Company cannot currently estimate the life of the Velardeña Properties or El Quevar project. The table above assumes that no annual maintenance payments will be made more than five years after December 31, 2016. If the Company continues mining and processing or evaluations of restart at the Velardeña Properties beyond five years, the Company expects that it would make annual maintenance payments of approximately $75,000 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 $115,000 per year for the life of the El Quevar mine. 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 nil and approximately $0.4 million at December 31, 2016 and December 31, 2015, respectively as discussed in Note 12. |
Foreign Currency
Foreign Currency | 12 Months Ended |
Dec. 31, 2016 | |
Foreign Currency | |
Foreign Currency | 21. Foreign Currency The Company conducts exploration and mining activities primarily in Mexico and Argentina, 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, 2016 | |
Segment Information | |
Segment Information | 22. 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: Exploration, El Quevar, Costs Depreciation, Velardeña and Applicable Depletion and Administrative Pre-Tax Capital The Year ended December 31, 2016 Revenue to Sales Amortization Expense (Income)/Loss Total Assets Expenditures (in thousands) Velardeña Properties $ $ $ $ $ $ $ Corporate, Exploration & Other — — $ $ $ $ $ $ $ The Year ended December 31, 2015 Velardeña Properties $ $ $ $ $ $ $ Corporate, Exploration & Other — — $ $ $ $ $ $ $ All of the revenue for the two years presented was from the Company's Velardeña Properties in Mexico (see Note 16). The revenue for 2016 was all attributable to the lease of the oxide plant. The revenue for 2015 was attributable to both sales of precipitates and concentrates to three customers under varying agreements and the lease of the oxide plant. The Company suspended operations at its Velardeña properties in November, 2015 (see Note 1). The 2015 Velardeña Properties pre-tax loss includes a $13.2 million impairment charge recorded at September 30, 2015 (see Note 2). The impairment charge is also reflected in the reduction of the Velardeña Properties total assets for 2015. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions Disclosure | 23. The following sets forth information regarding transactions between the Company (and its subsidiaries) and its officers, directors and significant stockholders. Sale of Equipment: On August 8, 2016, the Company sold certain mining equipment to Minera Indé, an indirect subsidiary of Sentient, for $687,000 (see Note 8), in a transaction approved by the Company’s Audit Committee and Board of Directors. The equipment had a net book value of $27,000 resulting in a gain of $660,000. The gain is included in “ Other operating income, net” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. At the time of the sale and at December 31, 2016 Sentient held approximately 47% of the Company’s 88.9 million shares of issued and outstanding common stock. The equipment sold was excess equipment held at the Company’s Velardeña Properties that the Company does not expect to use. The Company used a third party consultant with experience in the used mining equipment market in Mexico to determine a fair value. The Company believes the price paid was at least equal to the fair market value of the equipment had it been sold through auction or in the open market. The Company received $69,000 or 10% of the sales price at the closing of the sale, with the remaining $618,000 plus interest on the unpaid balance at an annual rate of 10% due in February 2017. At December 31, 2016 the Company had recorded a receivable of $643,000 related to the sale, including accrued interest, included in “ Related party receivable ” in the accompanying Consolidated Balance Sheets. With the approval of a Special Committee of the Company’s Board of Directors, the Company expects to amend the original equipment sale in February 2017 to include the sale of an additional piece of excess equipment for $185,000. Upon execution of the amendment the Company expects to receive an additional payment of $100,000, and the remaining principal and interest balance as of February 2017 of $737,000, plus additional interest on the unpaid balance at an annual rate of 10%, would be due in August 2017. Administrative Services: Beginning in August 2016, the Company began providing limited accounting and other administrative services to Minera Indé, an indirect subsidiary of Sentient. The services are provided locally in Mexico by the administrative staff at the Company’s Velardeña Properties. The Company charges Minera Indé $15,000 per month for the services, which provides reimbursement to the Company for its costs incurred plus a small profit margin. Amounts received under the arrangement reduce costs incurred for the care and maintenance of the Velardeña Properties and allows the Company to maintain a larger more experienced staff at the Velardeña Properties to support the oxide plant lease and potential future mining or processing activities. The Company’s Board of Directors and Audit Committee approved the agreement. For the period ended December 31, 2016 the Company charged Minera Indé approximately $83,000 for services, offsetting costs that are recorded in “ Velardeña shutdown and care and maintenance ” in the Consolidated Statements of Operation and Comprehensive Loss. Legal Services: Since May, 2009 until her resignation on December 30, 2015, Deborah Friedman devoted approximately half of her time to serve as the Company’s Senior Vice President, General Counsel and Corporate Secretary and approximately half of her time to her legal practice at Davis Graham & Stubbs LLP (“DGS”) where she was a partner. During 2015 the Company paid a monthly flat fee retainer of approximately $15,000 to DGS for approximately one half of Ms. Friedman’s time spent serving as the Company’s Senior Vice President, General Counsel and Corporate Secretary, which DGS subsequently remitted to Ms. Friedman, and the Company paid her customary hourly rate to DGS for any time spent by Ms. Friedman in excess of that threshold. Although she was an executive officer of the Company for Section 16(a) reporting purposes under the Securities Exchange Act of 1934, Ms. Friedman was not employed by the Company. For the year ended December 31, 2015 the Company paid approximately $490,000 to DGS for legal services, including the amounts relating to Ms. Friedman described above, recorded in “ Administrative expense ” in the Company’s Consolidated Statements of Operation and Comprehensive Loss. The Company has been advised by DGS that these amounts represented a de minimis amount of DGS’s total revenue for the year. At December 31, 2015 the Company’s Consolidated Balance Sheets included in “ Accounts payable and other accrued liabilities ” amounts owed to DGS of approximately $25,000. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Event. | |
Subsequent Event | 24. Subsequent to December 31, 2016 the Company sold an aggregate of approximately 640,000 common shares under the ATM Program at an average price of $0.74 per common share for gross proceeds of approximately $475,000 during the year to date period ended February 24, 2017. The Company paid a 2% cash commission on the gross proceeds in the amount of approximately $10,000 and incurred additional accounting, legal, and regulatory costs of approximately $2,000 (see Note 15). |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Basis of consolidation | a. All of the Company’s consolidated subsidiaries are 100% owned and as such the Company does not have a noncontrolling interest in any of its subsidiaries. All intercompany transactions and balances have been eliminated at consolidation. |
Translation of foreign currencies | b. 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. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Inventories | d. Metals inventory at the Velardeña Properties consisted of marketable products including concentrates and precipitates. Metals inventory was 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. The Company had no metals inventories at December 31, 2016 and 2015 respectively as the result of the suspension of operations at its Velardeña Properties during November 2015 (see Note 1). 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 (see Note 2). |
Mining properties, exploration and development costs | e. 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 income, net” on the accompanying Consolidated Statements of Operations and Comprehensive Loss. Costs of exploration subsequent to the application of fresh start accounting have been and will continue to be expensed. |
Property, plant and equipment and long lived asset impairment | f. 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 and the plant are depreciated using units of production based on estimated mineralized material. 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 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, 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 or by comparing other market indicators to the carrying amount of the asset (see Notes 2 and 8). |
Asset Retirement Obligations | g. 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 layer adjustments 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. 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. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as "Revenue from Oxide plant lease" in the Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding "income statement characterization of reimbursements received for "out-of-pocket" expenses incurred" and "reporting revenue gross as a principal versus net as an agent". ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for the reimbursed labor, utility and other costs are reported as "Oxide plant lease costs" in the Consolidated Statement of Operations and Comprehensive Loss. The Company recognizes lease fees during the period the fees are earned per the terms of the lease (see Note 16). |
Stock compensation | i 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 Share of Common Stock | j. 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 shares of Common Stock 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 were exercised or converted into Common Stock. At December 31, 2016 and 2015, 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) 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, 2016 and 2015 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. 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 and issued standards | m. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). The purpose of the standard update is to simplify presentation of debt issuance costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Amortization of the discount or premium shall be reported as interest expense in the case of liabilities or as interest income in the case of assets. Amortization of debt issuance costs also shall be reported as interest expense. ASU No. 2015-03 becomes effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted and the Company adopted ASU 2015-03 in 2015. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations. On August 27, 2014, the FASB issued 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 2014‑15”). ASU 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 is 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. The Company adopted ASU 2014-15 in 2016. The adoption of ASU 2014‑15 did not have a material impact on the Company’s consolidated financial position or results of operations. In April 2014 the FASB issued ASU 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 became effective for the Company January 1, 2015. The adoption of ASU 2014‑08 did not have a material impact on the Company’s consolidated financial position or results of operations. n. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment award transactions including accounting for income taxes and classification of excess tax benefits on the statement of cash flows, forfeitures and minimum statutory tax withholding requirements. For the Company, ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period. The Company does not anticipate early adoption of ASU 2016-09. The Company does not expect the adoption of ASU 2016-09 to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In March 2016, the FASB issued ASU 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies principal versus agent when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606, Revenue from Contracts with Customers, requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent). For the Company, ASU 2016-08 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. As the Company’s current accounting practices per the guidance of ASC 605 are comparable to the requirements of ASU 2016-08, the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations or the requirement for retrospective reporting. In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which will require lessees to recognize a right-of-use asset and a lease liability for all leases that are not short-term in nature. For a lessor, the accounting applied is also largely unchanged from previous guidance. The new rules will be effective for the Company in the first quarter of 2019. The Company does not anticipate early adoption. The Company does not expect the adoption of ASU 2016-02 to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) which amended its standards related to the accounting of certain financial instruments. This amendment addresses certain aspects of recognition, measurement, presentation and disclosure. The new rules will become effective for annual and interim periods beginning after December 15, 2017. Early adoption is not permitted. We are in the process of evaluating the impact the amendment will have on our consolidated financial position or results of operations. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company does not plan early adoption of this update and does not expect the adoption of the update to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In July 2015, the FASB issued ASU No. 2015-11, “Inventory, Simplifying the Measurement of Inventory” (“ASU 2015‑11”). ASU 2015-11 affects reporting entities that measure inventory using first-in, first-out or average cost. ASU 2015‑11 requires that inventory be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company does not plan early adoption of ASU 2015-11 and does not expect the adoption of ASU 2015-11 to have a material impact on the Company’s consolidated financial position or results of operations as the adoption will not materially change its current accounting methods. In May 2014, FASB and the International Accounting Standards Board issued ASU 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, 2017; early adoption is not permitted. ASU 2014-09 was originally effective December 15, 2016 but ASU 2015-14 deferred the effective date by one year. 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. |
Impairment of Long Lived Asse32
Impairment of Long Lived Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Mineral Properties Asset Group | |
Impairment of Long Lived Assets | |
Schedule of details of components of the impairment of long lived assets | Net Book Value Net Book Value Prior to Sept. 30, 2015 After Impairment at Impairment Impairment at Sept. 30, 2015 Charges Sept. 30, 2015 (in thousands) Mineral and exploration properties $ $ $ Exploration properties — Buildings, plant and equipment — Asset retirement cost — Other working capital, net — $ $ $ |
Cash and Cash Equivalents and33
Cash and Cash Equivalents and Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents and Short-Term Investments | |
Schedule of short term-investments | Estimated Carrying December 31, 2016 Cost Fair Value Value (in thousands) Investments: Short-term: Available for sale common stock $ $ $ Total available for sale Total short term $ $ $ December 31, 2015 Investments: Short-term: Available for sale common stock $ $ $ Total available for sale Total short term $ $ $ |
Prepaid Expenses and Other As34
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Assets | |
Schedule of prepaid expenses and other current assets | December 31, 2016 2015 (in thousands) Prepaid insurance $ $ Prepaid contractor fees and vendor advances — Deferred offering costs — Recoupable deposits and other $ $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Schedule of inventories at the Velardena Properties | December 31, 2016 2015 (in thousands) Material and supplies $ $ $ $ |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of components of property, plant and equipment | December 31, 2016 2015 (in thousands) Mineral properties $ $ Exploration properties Royalty properties Buildings Mining equipment and machinery Other furniture and equipment Asset retirement cost Less: Accumulated depreciation and amortization $ $ |
Velardena properties | |
Schedule of details of components of the impairment of long lived assets | Impairment Gross Value Charge Gross Value Prior to Minerals After Impairment at Properties Impairment at Sept. 30, 2015 Asset Group Sept. 30, 2015 (in thousands) Mineral properties $ $ $ Exploration properties Royalty properties — Buildings — Mining equipment and machinery — Other furniture and equipment — Asset retirement cost $ $ $ |
Accounts Payable and Other Ac37
Accounts Payable and Other Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Other Accrued Liabilities | |
Schedule of accounts payable and other accrued liabilities | December 31, 2016 2015 (in thousands) Accounts payable and accruals $ $ Accrued employee compensation and benefits $ $ |
Asset Retirement Obligation a38
Asset Retirement Obligation and Reclamation Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Asset Retirement Obligation and Reclamation Liabilities | |
Summary of activity in the Velardena Properties ARO | Year Ended December 31, 2016 2015 (in thousands) Beginning balance $ $ Changes in estimates, and other Accretion expense Ending balance $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities at fair value by respective level of the fair value hierarchy | Level 1 Level 2 Level 3 Total (in thousands) At December 31, 2016 Assets: Cash and cash equivalents $ $ — $ — $ Trade accounts receivable — — Short-term investments — — $ $ — $ — $ Liabilities: Warrant liability - related party $ — $ — $ $ Warrant liability — — $ — $ — $ $ At December 31, 2015 Assets: Cash and cash equivalents $ $ — $ — $ Trade accounts receivable — — Short-term investments — — $ $ — $ — $ Liabilities: Warrant liability - related party $ — $ — $ $ Warrant liability — — Derivative liability - related party — — $ — $ — $ $ |
Schedule of significant inputs to the valuation model | December 31, December 31, 2016 2015 Company's ending stock price $ $ Company's stock volatility Applicable risk free interest rate |
Summary of change in fair value of the warrant liability | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Warrant Liabilities Derivative Liability (in thousands) Beginning balance at January 1, 2015 $ $ — Sentient Note, October 27, 2015 — Change in estimated fair value Ending balance at December 31, 2015 $ $ Conversion of Sentient Loan (see Note 10) — Change in estimated fair value — Ending balance at December 31, 2016 $ $ — |
Summary of the Company's non-recurring fair value measurements | Level 1 Level 2 Level 3 Total (in thousands) At September 30, 2015 Assets: Mineral properties $ — $ — $ $ $ — $ — $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of income (loss) from operations before income taxes by country | For the Year Ended December 31, 2016 2015 (in thousands) United States $ $ Other Countries $ $ |
Summary of reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes | For Year Ended December 31, 2016 2015 (in thousands) Tax expense (benefit) at US rate of 34% $ $ Other adjustments: Rate differential of other jurisdictions Effects of foreign earnings Change in valuation allowance Provision to tax return true-ups Exchange rate changes on deferred tax assets Effect of a change in tax rates — Debt extinguishment loss — Warrant liability loss — Other Income tax provision $ — $ — |
Schedule of components of the deferred tax assets and deferred tax liabilities | For the year ended December 31, 2016 2015 (in thousands) Deferred tax assets: Net operating loss carryforwards $ $ Stock-based compensation Property, plant and equipment Other Less: Valuation allowance Total deferred tax assets Deferred tax liabilities: Property, plant and equipment Other Total deferred tax liabilities Net deferred tax asset (liability) $ — $ — |
Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits | The Year Ended December 31, 2016 2015 (in thousands) Gross unrecognized tax benefits at beginning of period $ $ Increases for tax positions taken during prior years — — Decreases relating to settlements with taxing authorities — — Reductions due to lapse of statute of limitations Gross unrecognized tax benefits at end of period $ $ |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity | |
Schedule of status of the restricted stock grants issued under the Equity Plan | The Year Ended December 31, 2016 2015 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Grants Shares Share Shares Per Share Outstanding at beginning of period $ $ Granted during the period — — Restrictions lifted during the period Forfeited during the period — — — — Outstanding at end of period $ $ |
Schedule of status of the stock option grants issued under the Equity Plan | The Year Ended December 31, 2016 2015 Weighted Weighted Average Average Exercise Exercise Number of Price Per Number of Price Per Equity Plan Options Shares Share Shares Share Outstanding at beginning of period $ $ Granted during the period — — — — Restrictions lifted during period — — — Forfeited or expired during period — — Exercised during period — — — — Outstanding at end of period $ $ Exercisable at end of period $ $ Granted and vested $ $ |
Schedule of restricted stock units | The Year Ended December 31, 2016 2015 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Units Shares Share Shares Per Share Outstanding at beginning of period $ $ 2.08 Granted during the period Restrictions lifted during the period — — Forfeited during the period — — — — Outstanding at end of period $ $ |
Summary of the status of the Company's common stock warrants | The Year Ended December 31, 2016 2015 Weighted Weighted Number of Average Exercise Number of Average Exercise Underlying Price Per Underlying Price Per Common Stock Warrants Shares Share Shares Share Outstanding at beginning of period $ $ Granted during period — — Dilution adjustment — — Expired during period — — — Exercised during period — — — Outstanding at end of period $ $ |
Derivative Income (Tables)
Derivative Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Income (Loss) | |
Fair value inputs | At December 31, The Company's 2016 2015 Closing stock price $ $ Volatility Risk-free rate |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash flow information | |
Schedule of reconciliation of net loss for the period to cash used in operations | Year Ended December 31, 2016 2015 (in thousands) Cash flows from operating activities: Net loss $ $ Adjustments to reconcile net loss to net cash used in operating activities: Amortization and depreciation Accretion of asset retirement obligation Foreign currency gain on loss contingency — Impairment of long lived assets — Asset write off Write off of loss contingency, net Gain on sale of assets, net Amortization of deferred loan costs Warrant liability fair market adjustment Derivative liability fair market adjustment Accretion of loan discount — Loss on debt extinguishment — Stock compensation Changes in operating assets and liabilities: Decrease (increase) in trade accounts receivable (Increase) decrease in prepaid expenses and other assets Decrease in inventories Decrease in value added tax recoverable, net Increase in accrued interest payable net of amounts capitalized (Decrease) increase in deferred revenue Decrease in reclamation liability Decrease in accounts payable and accrued liabilities Decrease in deferred leasehold payments Net cash used in operating activities $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Schedule of non-cancellable operating lease commitments | 2017 2018 2019 2020 2021 Thereafter El Quevar mining concessions (estimated) $ $ $ $ $ $ — Velardeña mining concessions (estimated) $ $ $ $ $ $ — Office space $ $ $ $ — $ — $ — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Schedule of financial information relating to segments | Exploration, El Quevar, Costs Depreciation, Velardeña and Applicable Depletion and Administrative Pre-Tax Capital The Year ended December 31, 2016 Revenue to Sales Amortization Expense (Income)/Loss Total Assets Expenditures (in thousands) Velardeña Properties $ $ $ $ $ $ $ Corporate, Exploration & Other — — $ $ $ $ $ $ $ The Year ended December 31, 2015 Velardeña Properties $ $ $ $ $ $ $ Corporate, Exploration & Other — — $ $ $ $ $ $ $ |
Nature of Operations (Details)
Nature of Operations (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)property | Dec. 31, 2015USD ($) | |
Shutdown and care and maintenance costs | $ 2,016 | $ 1,228 |
Number of exploration properties | property | 10 | |
Velardena properties | ||
Interest acquired (as a percent) | 100.00% | |
Employee severance and other costs | $ 1,200 | |
Shutdown and care and maintenance costs | $ 2,000 | |
Quarterly holding costs expected with suspended operations | 400 | |
Oxide Plant | ||
Proceeds from lease | $ 4,400 |
Impairment of Long Lived Asse47
Impairment of Long Lived Assets (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Sep. 29, 2015USD ($) | Jun. 30, 2013USD ($) | |
Impairment of Long Lived Assets | |||||||
Property net book value | $ 11,125 | $ 9,235 | $ 11,125 | ||||
Impairment of long lived assets | $ 0 | $ 13,181 | |||||
Mineral Properties Asset Group | |||||||
Impairment of Long Lived Assets | |||||||
Number of asset groups | item | 2 | ||||||
Property fair value | $ 6,000 | ||||||
Other working capital (deficit) | $ (872) | $ (872) | $ (872) | ||||
Impairment of long lived assets | 13,181 | ||||||
Mineral properties, net | 3,718 | 3,718 | 16,899 | ||||
Increase (reduction) in obsolescence reserve | $ (100) | 400 | |||||
Mineral Properties Asset Group | Mineral and exploration properties | |||||||
Impairment of Long Lived Assets | |||||||
Discounted cash flows value | 0 | 0 | |||||
Property fair value | 1,400 | 1,400 | |||||
Property net book value | 1,354 | 1,354 | 13,660 | ||||
Impairment of long lived assets | 12,306 | ||||||
Mineral Properties Asset Group | Exploration properties | |||||||
Impairment of Long Lived Assets | |||||||
Property net book value | 458 | ||||||
Impairment of long lived assets | 458 | ||||||
Mineral Properties Asset Group | Buildings, plant and equipment | |||||||
Impairment of Long Lived Assets | |||||||
Property net book value | 3,236 | 3,236 | 3,236 | ||||
Mineral Properties Asset Group | Asset retirement cost | |||||||
Impairment of Long Lived Assets | |||||||
Property net book value | $ 417 | ||||||
Impairment of long lived assets | 417 | ||||||
Velardena properties | Mineral and exploration properties | |||||||
Impairment of Long Lived Assets | |||||||
Impairment of long lived assets | 12,800 | ||||||
Oxide Plant | |||||||
Impairment of Long Lived Assets | |||||||
Property fair value | $ 1,300 | $ 1,300 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Nature of Operations | ||
Ownership percentage of subsidiaries | 100.00% | |
Metals inventory | $ 0 | $ 0 |
Number of days used for observing average prices of metals | 10 days | |
Buildings | Minimum | ||
Property, plant and equipment and long-lived asset impairment | ||
Useful life | 30 years | |
Buildings | 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 |
Cash and Cash Equivalents and49
Cash and Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments: | ||
Available for sale common stock | $ 275 | $ 199 |
Total available for sale | 275 | 199 |
Total short term | 275 | 199 |
Total short term | 334 | 72 |
Financial institutions minimum net worth | 1,000,000 | |
Estimated Fair Value. | ||
Investments: | ||
Available for sale common stock | 334 | 72 |
Total available for sale. | 334 | 72 |
Total short term | 334 | 72 |
Carrying Value. | ||
Investments: | ||
Available for sale common stock | 334 | 72 |
Total available for sale. | 334 | 72 |
Total short term | $ 334 | $ 72 |
Prepaid Expenses and Other As50
Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Prepaid Expenses and Other Assets | ||
Prepaid insurance | $ 296 | $ 302 |
Prepaid contractor fees and vendor advances | 12 | |
Deferred offering costs | 153 | |
Recoupable deposits and other | 129 | 137 |
Prepaid expenses and other assets | $ 578 | $ 451 |
Inventories (Details)
Inventories (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Material and supplies | $ 245,000 | $ 330,000 |
Inventories | 245,000 | 330,000 |
Metals inventory | 0 | 0 |
Velardena properties | ||
Metals inventory | 0 | 0 |
In-process inventory | 0 | 0 |
Inventory write down | $ 300,000 | $ 300,000 |
Value added tax receivable (Det
Value added tax receivable (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Value added tax receivable, net | |
Expected period within which current amount of VAT will be recovered | 1 year |
Property, Plant and Equipment53
Property, Plant and Equipment (Details) | Aug. 08, 2016USD ($)item | Aug. 02, 2016USD ($)shares | Apr. 28, 2016USD ($) | Apr. 18, 2016USD ($) | Feb. 28, 2017USD ($) | Oct. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) | Sep. 29, 2015USD ($) |
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | $ 34,751,000 | $ 35,849,000 | ||||||||||
Less: Accumulated depreciation & amortization | (25,516,000) | (24,724,000) | ||||||||||
Property, plant and equipment, net | 9,235,000 | 11,125,000 | ||||||||||
Gain on sale of equipment | 1,791,000 | 719,000 | ||||||||||
Proceeds from sale of assets | 1,167,000 | 789,000 | ||||||||||
Related party receivable | 643,000 | |||||||||||
Payments to acquire property | 50,000 | 44,000 | ||||||||||
Impairment of long lived assets | 0 | 13,181,000 | ||||||||||
Sale, not discontinued operations | ||||||||||||
Property, plant and equipment | ||||||||||||
Gain on sale of equipment | 200,000 | |||||||||||
Sale, not discontinued operations | Equipment sale | ||||||||||||
Property, plant and equipment | ||||||||||||
Proceeds from sale of assets | 500,000 | |||||||||||
Mineral properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 9,352,000 | 9,630,000 | ||||||||||
Exploration properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 2,518,000 | 2,518,000 | ||||||||||
Royalty properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 200,000 | 200,000 | ||||||||||
Buildings | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 4,386,000 | 4,377,000 | ||||||||||
Mining equipment and machinery | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 16,351,000 | 16,998,000 | ||||||||||
Other furniture and equipment | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 952,000 | 841,000 | ||||||||||
Asset retirement cost | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 992,000 | 1,285,000 | ||||||||||
Mineral Properties Asset Group | ||||||||||||
Property, plant and equipment | ||||||||||||
Impairment of long lived assets | $ 13,181,000 | |||||||||||
Mineral Properties Asset Group | Mineral and exploration properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, net | 1,354,000 | $ 1,354,000 | $ 13,660,000 | |||||||||
Impairment of long lived assets | 12,306,000 | |||||||||||
Mineral Properties Asset Group | Mineral properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Impairment of long lived assets | 12,306,000 | |||||||||||
Mineral Properties Asset Group | Exploration properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, net | 458,000 | |||||||||||
Impairment of long lived assets | 458,000 | |||||||||||
Mineral Properties Asset Group | Asset retirement cost | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, net | 417,000 | |||||||||||
Impairment of long lived assets | 417,000 | |||||||||||
Velardena properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 36,057,000 | 36,057,000 | 49,238,000 | |||||||||
Velardena properties | Mineral and exploration properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Impairment of long lived assets | 12,800,000 | |||||||||||
Velardena properties | Mineral properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 9,630,000 | 9,630,000 | 21,936,000 | |||||||||
Velardena properties | Exploration properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 2,543,000 | 2,543,000 | 3,001,000 | |||||||||
Velardena properties | Royalty properties | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 200,000 | 200,000 | 200,000 | |||||||||
Velardena properties | Buildings | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 4,377,000 | 4,377,000 | 4,377,000 | |||||||||
Velardena properties | Mining equipment and machinery | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 17,181,000 | 17,181,000 | 17,181,000 | |||||||||
Velardena properties | Other furniture and equipment | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | 841,000 | 841,000 | 841,000 | |||||||||
Velardena properties | Asset retirement cost | ||||||||||||
Property, plant and equipment | ||||||||||||
Property, plant and equipment, gross | $ 1,285,000 | $ 1,285,000 | $ 1,702,000 | |||||||||
Peruvian exploration properties | Sale, not discontinued operations | ||||||||||||
Property, plant and equipment | ||||||||||||
Proceeds from sale of assets | $ 300,000 | |||||||||||
San Diego | Golden Tag | ||||||||||||
Property, plant and equipment | ||||||||||||
Net smelter return royalty (as a percent) | 2.00% | |||||||||||
San Diego | Golden Tag | Equipment sale | ||||||||||||
Property, plant and equipment | ||||||||||||
Net book value of disposals | $ 0 | |||||||||||
Gain on sale of equipment | 500,000 | |||||||||||
San Diego | Golden Tag | Sale, not discontinued operations | ||||||||||||
Property, plant and equipment | ||||||||||||
Proceeds from sale of assets | $ 379,000 | |||||||||||
Ownership in property (as a percent) | 50.00% | |||||||||||
Shares received | shares | 2,500,000 | |||||||||||
San Diego | Golden Tag | ||||||||||||
Property, plant and equipment | ||||||||||||
Ownership in property (as a percent) | 50.00% | |||||||||||
Celaya | Electrum | ||||||||||||
Property, plant and equipment | ||||||||||||
Gain on sale of equipment | $ 200,000 | |||||||||||
Ownership percentage | 100.00% | |||||||||||
Payments to acquire property | $ 200,000 | |||||||||||
Earn-in obligation | $ 500,000 | |||||||||||
Zacatecas Properties | Santa Cruz | ||||||||||||
Property, plant and equipment | ||||||||||||
Total consideration | $ 1,500,000 | |||||||||||
Gain on sale of equipment | $ 400,000 | |||||||||||
Proceeds from sale of assets | $ 200,000 | $ 200,000 | ||||||||||
Due 12 months after signing agreement | $ 300,000 | |||||||||||
Due 18 months after signing agreement | 300,000 | |||||||||||
Due 24 months after signing agreement | $ 500,000 | |||||||||||
Golden Tag | ||||||||||||
Property, plant and equipment | ||||||||||||
Ownership percentage | 10.00% | |||||||||||
Investment shares held (in shares) | shares | 7,500,000 | |||||||||||
Minera Inde | Sale, not discontinued operations | Equipment sale | ||||||||||||
Property, plant and equipment | ||||||||||||
Number of haul trucks sold | item | 2 | |||||||||||
Number of scoop trams sold | item | 2 | |||||||||||
Total consideration | $ 687,000 | |||||||||||
Net book value of disposals | 27,000 | |||||||||||
Gain on sale of equipment | 660,000 | |||||||||||
Proceeds from sale of assets | $ 69,000 | |||||||||||
Sales price received (as a percent) | 10.00% | |||||||||||
Related party receivable | $ 618,000 | $ 643,000 | ||||||||||
Interest rate on receivable (as a percent) | 10.00% | |||||||||||
Forecast | Minera Inde | Sale, not discontinued operations | Equipment sale | ||||||||||||
Property, plant and equipment | ||||||||||||
Net book value of disposals | $ 185,000 | |||||||||||
Proceeds from sale of assets | 100,000 | |||||||||||
Related party receivable | $ 737,000 | |||||||||||
Interest rate on receivable (as a percent) | 10.00% |
Accounts Payable and Other Ac54
Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts payable and accruals | $ 344 | $ 599 |
Accrued employee compensation and benefits | 880 | 545 |
Accounts payable and other accrued liabilities | 1,224 | 1,144 |
Accrued vacation | 200 | 100 |
Withholding taxes and benefits payable | 400 | 400 |
Velardena properties | ||
Accounts payable and accruals | 100 | 300 |
Accrued employee compensation and benefits | 200 | 200 |
Velardena properties | KELTIP Units | KELTIP | ||
Accrued employee compensation and benefits | 100 | |
Withholding taxes and benefits payable | 300 | |
Corporate, Exploration & Other | ||
Accounts payable and accruals | $ 200 | $ 300 |
Convertible Note Payable - Re55
Convertible Note Payable - Related Party, Net (Details) | Jun. 10, 2016USD ($)item$ / sharesshares | Feb. 11, 2016USD ($)item$ / sharesshares | Jan. 19, 2016item$ / shares | Oct. 27, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt issuance costs | $ 312,000 | |||||
Loss on debt extinguishment | $ (1,653,000) | |||||
Sentient Loan | ||||||
Principal amount of loan | $ 5,000,000 | |||||
Stock price trigger (as a percent) | 90.00% | 90.00% | ||||
Consecutive trading days, period | item | 15 | 15 | ||||
Interest rate (as a percent) | 9.00% | |||||
Amount of debt converted to equity | $ 1,100,000 | $ 3,900,000 | ||||
Amount of accrued interest converted to equity | $ 34,000 | $ 100,000 | ||||
Equity shares issued upon conversion of debt | shares | 4,011,740 | 23,355,000 | ||||
Exercise price per share of shares converted from debt | $ / shares | $ 0.289 | $ 0.172 | ||||
Fair value of imbedded derivative | $ 1,100,000 | 500,000 | ||||
Debt issuance costs | $ 300,000 | |||||
Gain (loss) on imbedded derivative | (800,000) | $ 600,000 | ||||
Effective interest rate (as a percent) | 36.00% | |||||
Loss on debt extinguishment | (1,700,000) | |||||
Debt outstanding | $ 0 | |||||
Sentient Loan | Period Preceding Loan Closure Date | ||||||
Stock price trigger (in dollars per share) | $ / shares | $ 0.29 | |||||
Stock price trigger (as a percent) | 90.00% | 90.00% | ||||
Consecutive trading days, period | item | 15 | 15 | ||||
Sentient Loan | Period Preceding Loan Conversion Date | ||||||
Stock price trigger (as a percent) | 90.00% | 90.00% | ||||
Consecutive trading days, period | item | 15 | 15 |
Asset Retirement Obligation a56
Asset Retirement Obligation and Reclamation Liabilities (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2012 | Mar. 31, 2012 | |
Asset retirement and reclamation liabilities | $ 2,546,000 | $ 2,546,000 | ||
Summary of activity in the Velardena Operations ARO | ||||
ARO, Beginning balance | 2,546,000 | |||
Accretion expense | 193,000 | 198,000 | ||
ARO, Ending balance | 2,434,000 | 2,546,000 | ||
Velardena properties | ||||
Asset retirement and reclamation liabilities | 2,480,000 | 2,582,000 | $ 1,900,000 | $ 3,500,000 |
Amortization expense related to the ARC | 33,000 | |||
Summary of activity in the Velardena Operations ARO | ||||
ARO, Beginning balance | 2,480,000 | 2,582,000 | ||
Changes in estimates, and other | (293,000) | (300,000) | ||
Accretion expense | 193,000 | 198,000 | ||
ARO, Ending balance | 2,380,000 | 2,480,000 | ||
El Quevar Project | ||||
Asset retirement and reclamation liabilities | 100,000 | 100,000 | ||
Summary of activity in the Velardena Operations ARO | ||||
ARO, Beginning balance | 100,000 | |||
ARO, Ending balance | $ 100,000 | $ 100,000 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | 4 Months Ended | |||
Apr. 30, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Other current liabilities | $ 24 | $ 556 | ||
Interest and penalties accrued | $ 0 | 0 | ||
Loss contingency accrual | 100 | |||
Argentina equity tax 2009 through 2012 | ||||
Net income tax due | 400 | |||
Interest and penalties accrued | $ 200 | 200 | ||
Income taxes paid | $ 200 | |||
Tax (settlement) payable | $ (200) | |||
Sentient Loan | ||||
Accrued interest | $ 100 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | |
Fair value measurements | |||
Warrant liability - related party | $ 976 | $ 117 | |
Derivative liability | 488 | ||
Recurring | |||
Fair value measurements | |||
Cash and cash equivalents | 2,588 | 4,077 | |
Trade accounts receivable | 380 | 546 | |
Short-term investments | 334 | 72 | |
Assets | 3,302 | 4,695 | |
Warrant liability | 922 | 93 | |
Warrant liability - related party | 976 | 117 | |
Derivative liability | 488 | ||
Liabilities | $ 1,898 | $ 698 | |
Fair value Assumptions | |||
Company's ending stock price (in dollars per share) | $ 0.58 | $ 0.20 | |
Company's stock volatility (as a percent) | 110.00% | 85.00% | |
Risk free interest rate (as a percent) | 1.39% | 1.48% | |
Recurring | Level 1 | |||
Fair value measurements | |||
Cash and cash equivalents | $ 2,588 | $ 4,077 | |
Trade accounts receivable | 380 | 546 | |
Short-term investments | 334 | 72 | |
Assets | 3,302 | 4,695 | |
Recurring | Level 3 | |||
Fair value measurements | |||
Warrant liability | 922 | 93 | |
Warrant liability - related party | 976 | 117 | |
Derivative liability | 488 | ||
Liabilities | $ 1,898 | $ 698 | |
Non-recurring | |||
Fair value measurements | |||
Mineral properties | $ 1,354 | ||
Assets | 1,354 | ||
Non-recurring | Level 3 | |||
Fair value measurements | |||
Mineral properties | 1,354 | ||
Assets | $ 1,354 |
Fair value measurements - Level
Fair value measurements - Level 3 (Details) - Recurring - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Warrant Liability | ||
Changes in level 3 | ||
Beginning Balance | $ 210 | $ 1,554 |
Change in estimated fair value | 1,688 | (1,344) |
Ending Balance | 1,898 | 210 |
Derivative Liability | ||
Changes in level 3 | ||
Beginning Balance | 488 | |
Change in estimated fair value | (552) | |
Ending Balance | 488 | |
Sentient Loan | Derivative Liability | ||
Changes in level 3 | ||
Issuance of warrants | $ 1,040 | |
Conversion of Sentient Loan | $ (488) |
Income Taxes - Exp (Details)
Income Taxes - Exp (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income (loss) from continuing operations before income taxes | ||
United States | $ (11,732) | $ (6,484) |
Other Countries | 1,073 | (18,899) |
Loss from operations before income taxes | (10,659) | (25,383) |
Current taxes | $ 0 | $ 0 |
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% | $ (3,624) | $ (8,630) |
Other adjustments: | ||
Rate differential of other jurisdictions | (98) | 681 |
Effects of foreign earnings | (786) | (1,475) |
Change in valuation allowance | (4,690) | 3,745 |
Provision to tax return true-ups | 209 | (10,533) |
Exchange rate changes on deferred tax assets | 8,802 | 15,772 |
Effect of a change in tax rates | (1,177) | |
Debt extinguishment loss | 550 | |
Warrant liability loss | 838 | |
Other | $ (24) | $ 440 |
Income Taxes - Deferred (Detail
Income Taxes - Deferred (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 96,038 | $ 98,571 |
Stock-based compensation | 1,435 | 1,325 |
Property, plant and equipment | 7,545 | 9,816 |
Other | 1,016 | 1,139 |
Deferred tax assets, gross | 106,034 | 110,851 |
Less: Valuation allowance | (105,820) | (110,510) |
Total deferred tax assets | 214 | 341 |
Deferred tax liabilities: | ||
Property, plant and equipment | (195) | (189) |
Other | (19) | (152) |
Total deferred tax liabilities | (214) | (341) |
Net deferred tax asset (liability) | $ 0 | $ 0 |
Income Taxes - NOL Carryforward
Income Taxes - NOL Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 315,500 | |
Valuation allowance offsetting the deferred tax assets | 105,820 | $ 110,510 |
Unrecognized tax benefits would affect effective tax rate | 0 | |
Luxembourg and Spain | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 132,400 | |
Other non-U.S. Countries | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 18,200 | |
US | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 66,100 | |
Velardena properties | Mexico | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 77,800 | |
Other Mexico activities | Mexico | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 21,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | ||
Gross unrecognized tax benefits at beginning of period | $ 937 | $ 1,163 |
Reductions due to lapse of statute of limitations | (197) | (226) |
Gross unrecognized tax benefits at end of period | 740 | 937 |
Interest and penalties recognized in the statement of operations | 0 | 0 |
Interest and penalties accrued recognized in the statement of financial position | $ 0 | $ 0 |
Equity - Issue and Conversion (
Equity - Issue and Conversion (Details) | Dec. 20, 2016USD ($)shares | Jun. 10, 2016USD ($)item$ / sharesshares | May 06, 2016USD ($)$ / sharesshares | Feb. 11, 2016USD ($)item$ / sharesshares | Feb. 25, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Sep. 30, 2016shares | Dec. 31, 2015shares |
Proceeds from issuance of common stock | $ 3,599,000 | |||||||
Common stock, shares outstanding | shares | 89,020,041 | 53,335,333 | ||||||
ATM Agreement | ||||||||
Aggregate value of securities allowed under agreement | $ 5,000,000 | |||||||
Aggregate number of securities allowed under agreement (in shares) | shares | 10,000,000 | |||||||
Commission rate (as a percent) | 2.00% | |||||||
Legal expenses | $ 50,000 | |||||||
Equity issue costs | $ 103,000 | |||||||
Common stock issued (in shares) | shares | 0 | |||||||
2016 Warrants | ||||||||
Term of warrants | 5 years | |||||||
Registered Offering | ||||||||
Equity issue costs | $ 400,000 | |||||||
Common stock issued (in shares) | shares | 8,000,000 | |||||||
Sale price (in dollars per shares) | $ / shares | $ 0.50 | |||||||
Proceeds from issuance of common stock | $ 3,600,000 | |||||||
Gross proceeds from common stock sale | $ 4,000,000 | |||||||
Registered Offering | 2016 Warrants | ||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.75 | |||||||
Number of common shares which can be purchased with each warrant | shares | 0.75 | |||||||
Warrants outstanding (in shares) | shares | 6,000,000 | |||||||
Warrant becomes exercisable | 6 months | |||||||
Term of warrants | 5 years | |||||||
Warrant liability fair value | $ 3,600,000 | |||||||
Volatility (as a percent) | 105.00% | |||||||
Risk free interest rate (as a percent) | 0.74% | |||||||
Sentient Loan | ||||||||
Amount of debt converted to equity | $ 1,100,000 | $ 3,900,000 | ||||||
Amount of accrued interest converted to equity | $ 34,000 | $ 100,000 | ||||||
Equity shares issued upon conversion of debt | shares | 4,011,740 | 23,355,000 | ||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.289 | $ 0.172 | ||||||
Stock price trigger (as a percent) | 90.00% | 90.00% | ||||||
Consecutive trading days, period | item | 15 | 15 | ||||||
Debt outstanding | $ 0 | |||||||
Subsequent Event | ATM Agreement | ||||||||
Commission rate (as a percent) | 2.00% | |||||||
Equity issue costs | $ 2,000 | |||||||
Common stock issued (in shares) | shares | 640,000 | |||||||
Sale price (in dollars per shares) | $ / shares | $ 0.74 | |||||||
Proceeds from issuance of common stock | $ 475,000 | |||||||
Commission payment | 10,000 | |||||||
Gross proceeds from common stock sale | $ 475,000 | |||||||
Sentient | ||||||||
Ownership (as a percent) | 47.00% | 46.00% | ||||||
Common stock, shares outstanding | shares | 88,900,000 | 89,700,000 |
Equity - Incentive (Details)
Equity - Incentive (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)employee$ / sharesshares | Dec. 31, 2015USD ($)employeeitem$ / sharesshares | |
Additional information | ||
Compensation expense | $ | $ 593,000 | $ 453,000 |
Equity Plan | Restricted Stock | ||
Number of Shares | ||
Outstanding at beginning of year (in shares) | 84,170 | 600,838 |
Granted during the year (in shares) | 100,000 | 0 |
Restrictions lifted during the year (in shares) | (84,170) | (516,668) |
Outstanding at end of year (in shares) | 100,000 | 84,170 |
Weighted Average Grant Date Fair Value Per Share | ||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 0.46 | $ 1.48 |
Granted during the year (in dollars per share) | $ / shares | 0.63 | |
Restrictions lifted during the year (in dollars per share) | $ / shares | 0.46 | 1.64 |
Outstanding at end of year (in dollars per share) | $ / shares | $ 0.63 | $ 0.46 |
Additional information | ||
Number of employees | employee | 3 | |
Compensation expense | $ | $ 200,000 | |
Additional compensation expense expected to be recognized | $ | $ 62,000 | |
Period for future recognition of additional compensation expense | 36 months | |
Equity Plan | Restricted Stock | Officers | ||
Number of Shares | ||
Restrictions lifted during the year (in shares) | (84,170) | (163,334) |
Additional information | ||
Number of employees | employee | 2 | |
Number of employees resigned | item | 2 | |
Equity Plan | Restricted Stock | Officers and Employees | ||
Number of Shares | ||
Restrictions lifted during the year (in shares) | (336,334) | |
Equity Plan | Restricted Stock | Terminated Employees | ||
Number of Shares | ||
Restrictions lifted during the year (in shares) | (12,000) | |
Additional information | ||
Number of employees terminated | employee | 2 | |
Equity Plan | Employee Stock Option | ||
Number of Shares | ||
Outstanding at beginning of period (in shares) | 245,810 | 245,810 |
Granted during period (in shares) | 0 | 0 |
Forfeited or expired during period (in shares) | (150,000) | |
Outstanding at end of year (in shares) | 95,810 | 245,810 |
Exercisable at end of period (in shares) | 95,810 | 245,810 |
Granted and vested (in shares) | 95,810 | 245,810 |
Weighted Average Exercise Price Per Share | ||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 3.47 | $ 3.47 |
Granted during period (in dollars per share) | $ / shares | 0 | 0 |
Forfeited or expired during year (in dollars per share) | $ / shares | 0.56 | |
Outstanding at end of year (in dollars per share) | $ / shares | 8.02 | 3.47 |
Exercisable at end of period (in dollars per share) | $ / shares | 8.02 | 3.47 |
Granted and vested (in dollars per share) | $ / shares | 8.02 | 3.47 |
Granted during period (in dollars per share) | $ / shares | $ 0 | $ 0 |
Equity Plan | Employee Stock Option | Maximum | ||
Additional information | ||
Compensation expense | $ | $ 100,000 | |
Equity Plan | KELTIP Units | Retired Employee | ||
Additional information | ||
Number of shares issued upon retirement of an officer | 172,500 | |
Deferred Compensation Plan | Restricted Stock Units (RSUs) | ||
Number of Shares | ||
Outstanding at beginning of year (in shares) | 1,245,285 | 935,285 |
Granted during the year (in shares) | 530,000 | 310,000 |
Restrictions lifted during the year (in shares) | (167,968) | |
Outstanding at end of year (in shares) | 1,607,317 | 1,245,285 |
Weighted Average Grant Date Fair Value Per Share | ||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 1.66 | $ 2.97 |
Granted during the year (in dollars per share) | $ / shares | 0.42 | 0.39 |
Restrictions lifted during the year (in dollars per share) | $ / shares | 1.40 | |
Outstanding at end of year (in dollars per share) | $ / shares | $ 1.28 | $ 1.66 |
Additional information | ||
Compensation expense | $ | $ 200,000 | $ 200,000 |
Period for future recognition of additional compensation expense | 6 months | |
Weighted Average Exercise Price Per Share | ||
Number of unrestricted shares Director to receive for vested RSU upon termination from board | 1 | |
Deferred Compensation Plan | Restricted Stock Units (RSUs) | Maximum | ||
Additional information | ||
Additional compensation expense expected to be recognized | $ | $ 100,000 | |
KELTIP | KELTIP Units | ||
Number of Shares | ||
Outstanding at beginning of year (in shares) | 0 | |
Outstanding at end of year (in shares) | 585,000 | 0 |
Additional information | ||
Compensation expense | $ | $ 100,000 | |
KELTIP | KELTIP Units | Officers | ||
Number of Shares | ||
Granted during the year (in shares) | 585,000 | |
Additional information | ||
Number of employees | employee | 2 | |
Compensation expense | $ | $ 200,000 |
Equity - Warrants (Details)
Equity - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2016 | Sep. 30, 2014 | Sep. 30, 2012 | Dec. 31, 2016 | Dec. 31, 2015 |
Weighted Average Exercise Price Per Share | |||||
Warrant liability | $ 922 | $ 93 | |||
Warrant | |||||
Number of Underlying Shares | |||||
Outstanding, beginning balance (in shares) | 8,777,409 | 8,777,409 | |||
Granted (in shares) | 6,000,000 | ||||
Dilution adjustment (in shares) | 2,801,541 | ||||
Outstanding, end balance (in shares) | 17,578,950 | 8,777,409 | |||
Weighted Average Exercise Price Per Share | |||||
Outstanding, beginning balance (in dollars per share) | $ 3.95 | $ 3.96 | |||
Granted (in dollars per share) | 0.75 | ||||
Outstanding, end balance (in dollars per share) | $ 2.17 | $ 3.95 | |||
Warrant liability | $ 1,900 | ||||
2012 Warrants | |||||
Number of Underlying Shares | |||||
Outstanding, beginning balance (in shares) | |||||
Dilution adjustment (in shares) | 2,719,314 | ||||
Outstanding, end balance (in shares) | 6,150,963 | 3,431,649 | 6,120,573 | ||
Weighted Average Exercise Price Per Share | |||||
Outstanding, end balance (in dollars per share) | $ 4.70 | $ 8.42 | |||
Common stock issued (in shares) | 1 | ||||
Term of warrants | 5 years | ||||
Number of common shares which can be purchased with each warrant | 0.5 | ||||
Warrant liability | $ 100 | ||||
2014 Warrants | |||||
Number of Underlying Shares | |||||
Outstanding, beginning balance (in shares) | |||||
Dilution adjustment (in shares) | 714,612 | ||||
Outstanding, end balance (in shares) | 5,460,612 | 4,746,000 | 5,458,377 | ||
Weighted Average Exercise Price Per Share | |||||
Outstanding, end balance (in dollars per share) | $ 0.87 | $ 1.21 | |||
Common stock issued (in shares) | 1 | ||||
Term of warrants | 5 years | ||||
Number of common shares which can be purchased with each warrant | 0.5 | ||||
Warrant liability | $ 1,800 | ||||
2016 Warrants | |||||
Weighted Average Exercise Price Per Share | |||||
Term of warrants | 5 years | ||||
Sentient | 2012 Warrants | |||||
Number of Underlying Shares | |||||
Outstanding, beginning balance (in shares) | |||||
Outstanding, end balance (in shares) | 1,217,992 | ||||
Weighted Average Exercise Price Per Share | |||||
Warrant liability | $ 1,000 | ||||
Sentient | 2014 Warrants | |||||
Number of Underlying Shares | |||||
Outstanding, beginning balance (in shares) | |||||
Outstanding, end balance (in shares) | 2,900,000 | ||||
Weighted Average Exercise Price Per Share | |||||
Warrant liability | $ 0 | ||||
Registered Offering | |||||
Weighted Average Exercise Price Per Share | |||||
Common stock issued (in shares) | 8,000,000 | ||||
Registered Offering | 2016 Warrants | |||||
Number of Underlying Shares | |||||
Outstanding, end balance (in shares) | 6,000,000 | ||||
Weighted Average Exercise Price Per Share | |||||
Outstanding, end balance (in dollars per share) | $ 0.75 | ||||
Term of warrants | 5 years | ||||
Number of common shares which can be purchased with each warrant | 0.75 | ||||
Warrant becomes exercisable | 6 months |
Revenue and Related Costs (Deta
Revenue and Related Costs (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)customer | |
Oxide plant lease | $ 6,400,000 | $ 653,000 |
Lease related costs | 2,046,000 | 199,000 |
Deferred revenue | 500,000 | |
Metals inventory | 0 | $ 0 |
Velardena properties | ||
Number of customers | customer | 3 | |
Metals inventory | 0 | $ 0 |
In-process inventory | 0 | 0 |
Oxide Plant | ||
Oxide plant lease | 6,400,000 | 700,000 |
Lease related costs | $ 2,000,000 | 200,000 |
Deferred revenue | $ 500,000 |
Interest and Other Income (Deta
Interest and Other Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Interest and Other Income. | ||
Interest and other income | $ 390 | $ 3,083 |
Proceeds from value added tax refunds | $ 400 | 800 |
Gain on reduction and elimination of contingency liability | $ 2,300 |
Derivative Income (Loss) (Detai
Derivative Income (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative loss | ||
Warrant liability fair market adjustment | $ 1,688 | $ (1,344) |
Derivative income (loss) | (778) | 553 |
Warrant Liability | ||
Derivative loss | ||
Warrant liability fair market adjustment | 1,700 | (1,300) |
Level 3 | Sentient Loan | ||
Derivative loss | ||
Derivative income (loss) | $ 800 | $ (600) |
Level 3 | Warrant Liability | Sentient Loan | ||
Fair value Assumptions | ||
Stock price (in dollars per share) | $ 0.58 | $ 0.20 |
Volatility (as a percent) | 110.00% | 85.00% |
Risk free interest rate (as a percent) | 1.39% | 1.48% |
Cash Flow Information (Details)
Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (10,659) | $ (25,383) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 1,548 | 4,480 |
Accretion of asset retirement obligation | 193 | 198 |
Foreign currency gain on loss contingency | (106) | |
Impairment of long lived assets | 0 | 13,181 |
Asset write off | 24 | 27 |
Write off of loss contingency, net | (212) | (1,969) |
Gain on sale of assets, net | (1,791) | (719) |
Amortization of deferred loan costs | 57 | 54 |
Warrant liability fair market adjustment | 1,688 | (1,344) |
Derivative liability fair market adjustment | 778 | (553) |
Accretion of loan discount | 372 | |
Loss on debt extinguishment | 1,653 | |
Stock compensation | 593 | 453 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in trade accounts receivable | 166 | (546) |
(Increase) decrease in prepaid expenses and other assets | (152) | 384 |
Decrease in inventories | 85 | 861 |
Decrease in value added tax recoverable, net | 346 | 916 |
Increase in accrued interest payable net of amounts capitalized | 85 | 81 |
(Decrease) increase in deferred revenue | (500) | 500 |
Decrease in reclamation liability | (11) | (37) |
Decrease in accounts payable and accrued liabilities | (450) | (402) |
Decrease in deferred leasehold payments | (18) | (11) |
Net cash used in operating activities | $ (6,205) | $ (9,935) |
Commitments and Contingencies71
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Contingencies | |||
Loss contingency | $ 0 | $ 400,000 | |
Office space | |||
Leases and Purchase Commitments | |||
2,016 | 284,000 | ||
2,017 | 293,000 | ||
2,018 | 272,000 | ||
Lease payments | 224,000 | 227,000 | |
Reduction in space (as a percent) | 46.00% | ||
Reduction in cost (as a percent) | 44.00% | ||
El Quevar Project | |||
Leases and Purchase Commitments | |||
2,016 | 115,000 | ||
2,017 | 115,000 | ||
2,018 | 115,000 | ||
2,020 | 115,000 | ||
2,021 | 115,000 | ||
Thereafter | 115,000 | ||
Lease payments | 112,000 | 40,000 | |
Velardena properties | |||
Leases and Purchase Commitments | |||
2,016 | 75,000 | ||
2,017 | 75,000 | ||
2,018 | 75,000 | ||
2,020 | 75,000 | ||
2,021 | 75,000 | ||
Thereafter | 75,000 | ||
Lease payments | 74,000 | $ 24,000 | |
Surface right agreement with local ejido | |||
Leases and Purchase Commitments | |||
Lease payments | $ 25,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)segmentitem | Dec. 31, 2015USD ($)customer | |
Segment Information | ||
Number of reportable segments | item | 2 | |
Revenue | $ 6,400 | $ 8,071 |
Costs Applicable to Sales | 2,046 | 10,065 |
Depreciation, depletion and amortization | 1,548 | 4,480 |
Exploration, El Quevar, Velardena and Administrative Expense | 10,105 | 10,265 |
Pre-tax (income) loss | 10,659 | 25,383 |
Total Assets | 14,008 | 17,001 |
Capital Expenditures | 50 | 44 |
Asset write off | $ 24 | 27 |
Velardena properties | ||
Segment Information | ||
Number of reportable segments | segment | 1 | |
Revenue | $ 6,400 | 8,071 |
Costs Applicable to Sales | 2,046 | 10,065 |
Depreciation, depletion and amortization | 1,116 | 3,826 |
Exploration, El Quevar, Velardena and Administrative Expense | 2,507 | 1,347 |
Pre-tax (income) loss | (2,167) | 17,346 |
Total Assets | 7,821 | 8,988 |
Capital Expenditures | 35 | $ 28 |
Number of customers | customer | 3 | |
Corporate, Exploration & Other | ||
Segment Information | ||
Depreciation, depletion and amortization | 432 | $ 654 |
Exploration, El Quevar, Velardena and Administrative Expense | 7,598 | 8,918 |
Pre-tax (income) loss | 12,826 | 8,037 |
Total Assets | 6,187 | 8,013 |
Capital Expenditures | $ 15 | $ 16 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Aug. 08, 2016 | Dec. 30, 2015 | Feb. 28, 2017 | Aug. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 |
Related Party Transaction | |||||||
Gain on sale of equipment | $ 1,791,000 | $ 719,000 | |||||
Common stock, shares outstanding | 89,020,041 | 53,335,333 | |||||
Proceeds from sale of assets | $ 1,167,000 | $ 789,000 | |||||
Related party receivable | 643,000 | ||||||
Deferred revenue | 500,000 | ||||||
Minera Inde | Administrative Services | |||||||
Related Party Transaction | |||||||
Monthly charges received | $ 15,000 | ||||||
Minera Inde | Administrative Services | Velardena shutdown and care and maintenance costs | |||||||
Related Party Transaction | |||||||
Received amount | $ 83,000 | ||||||
Senior Vice President, Deborah Friedman | Services as Company's Senior Vice President, General Counsel and Corporate Secretary | |||||||
Related Party Transaction | |||||||
Percentage of time spent performing executive duties for the Company | 50.00% | ||||||
Percentage of time spent devoted to external employment | 50.00% | ||||||
Monthly flat retainer fee paid to DGS | 15,000 | ||||||
Senior Vice President, Deborah Friedman | Services as Company's Senior Vice President, General Counsel and Corporate Secretary | Accounts payable and other accruals | |||||||
Related Party Transaction | |||||||
Related party payable | 25,000 | ||||||
Senior Vice President, Deborah Friedman | Services as Company's Senior Vice President, General Counsel and Corporate Secretary | Administrative Expense | |||||||
Related Party Transaction | |||||||
Fees paid to DGS for legal services | 490,000 | ||||||
Sentient | |||||||
Related Party Transaction | |||||||
Ownership (as a percent) | 47.00% | 46.00% | |||||
Common stock, shares outstanding | 88,900,000 | 89,700,000 | |||||
Sale, not discontinued operations | |||||||
Related Party Transaction | |||||||
Gain on sale of equipment | 200,000 | ||||||
Sale, not discontinued operations | Equipment sale | |||||||
Related Party Transaction | |||||||
Proceeds from sale of assets | $ 500,000 | ||||||
Sale, not discontinued operations | Equipment sale | Minera Inde | |||||||
Related Party Transaction | |||||||
Total consideration | $ 687,000 | ||||||
Net book value of disposals | 27,000 | ||||||
Gain on sale of equipment | 660,000 | ||||||
Proceeds from sale of assets | $ 69,000 | ||||||
Sales price received (as a percent) | 10.00% | ||||||
Related party receivable | $ 618,000 | $ 643,000 | |||||
Interest rate on receivable (as a percent) | 10.00% | ||||||
Forecast | Sale, not discontinued operations | Equipment sale | Minera Inde | |||||||
Related Party Transaction | |||||||
Net book value of disposals | $ 185,000 | ||||||
Proceeds from sale of assets | 100,000 | ||||||
Related party receivable | $ 737,000 | ||||||
Interest rate on receivable (as a percent) | 10.00% |
Subsequent Event (Details)
Subsequent Event (Details) - ATM Agreement - USD ($) | Dec. 20, 2016 | Feb. 25, 2017 | Dec. 31, 2016 |
Subsequent Events | |||
Common stock issued (in shares) | 0 | ||
Commission rate (as a percent) | 2.00% | ||
Equity issue costs | $ 103,000 | ||
Subsequent Event | |||
Subsequent Events | |||
Common stock issued (in shares) | 640,000 | ||
Sale price (in dollars per shares) | $ 0.74 | ||
Gross proceeds from common stock sale | $ 475,000 | ||
Commission rate (as a percent) | 2.00% | ||
Commission payment | $ 10,000 | ||
Equity issue costs | $ 2,000 |