Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates |
The preparation of the Company’s Consolidated Financial Statements requires management to make estimates and assumptions that affect amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units of production amortization calculations; estimates of recoverable gold and silver in stockpiles, ore on leach pads, and in-process inventories; the classification of current and non-current stockpiles and ore leach pads inventories; net realizable value of stockpiles, ore on leach pads, and in-process inventories; the useful lives of long-lived assets, environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments, financial instruments, and assets held for sale. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Accordingly, actual results may differ from amounts estimated in these Consolidated Financial Statements and such differences could be material. |
Principles of Consolidation | ' |
Principles of Consolidation |
The Consolidated Financial Statements include the accounts of Allied Nevada Gold Corp. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Reclassifications | ' |
Reclassifications |
Certain reclassifications have been made to the prior period Consolidated Financial Statements to conform to the current period presentation. The Company reclassified its advance payments for plant and equipment from Other assets, non-current to Plant, equipment, and mine development, net in the Consolidated Balance Sheets as of December 31, 2012. The Company also reclassified refining and processing fees from Other liabilities, current to Accounts receivable in the Consolidated Balance Sheets as of December 31, 2012 and made conforming changes to the Consolidated Statements of Cash Flows for the year ended December 31, 2012. These reclassifications decreased total assets and total liabilities each by $4.5 million and had no effect on previously reported net cash flows or net income. |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents |
Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Cash and cash equivalents are invested in highly liquid money market funds with high quality financial institutions. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash and cash equivalents. Restricted cash is excluded from cash and cash equivalents and is listed separately on the Consolidated Balance Sheets. |
Accounts Receivable | ' |
Accounts Receivable |
Accounts receivable consist of amounts due from customers for gold and silver sales. The Company has evaluated the customers credit risk and financial condition and determined that no allowance for doubtful accounts is necessary. The entire accounts receivable balance is expected to be collected during the next 12 months. |
Stockpiles, Ore on Leach Pads, and Inventories | ' |
Stockpiles, Ore on Leach Pads, and Inventories |
The Company’s production-related inventories include: ore on leach pads; stockpiles; in-process inventories; and precious metals inventory. Production-related inventories are carried at the lower of average cost or market. Cost includes mining (ore and waste), processing, and refining costs incurred during production stages, including mine site overhead and depreciation and amortization relating to mining and processing operations. Market is computed using the London Bullion Market Association’s (“LBMA”) quoted period-end metal prices reduced for any further estimated mining, processing, refining, and selling costs. Losses that result from the application of the lower of cost or market are recorded to Write-down of production inventories on the Consolidated Statements of Income and Comprehensive Income. Refer to Note 4 - Stockpiles and Ore On Leach Pads for additional information. |
The recovery of gold at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Company’s ability to precisely determine the recoverable gold ounces in stockpiles and ore on leach pads. The Company estimates the quantity of recoverable gold ounces in stockpiles and ore on leachpads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces stockpiled or placed on the leach pads is periodically reconciled by comparing the related ore to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. If a write-down is required, production-related inventories would be adjusted to market values before prospectively accounting for the remaining costs and revised estimated recoverable ounces. The Company has not incurred any write-downs of production-related inventories as a result of metallurgical balancing analytics. |
Stockpiles |
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Costs are transferred from stockpiles to other production-related inventories at an average cost per estimated recoverable ounce of gold. |
Ore on leach pads |
Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories as the gold-bearing materials are further processed. |
In-process Inventories |
In-process inventories represent gold-bearing concentrated materials that are in the process of being converted to a saleable product using a Merrill-Crowe or carbon in column processing method. Costs are transferred from in-process inventories at an average cost per ounce of gold to precious metals inventory as gold ounces are recovered. |
Precious Metals Inventory |
Precious metals inventory consist of doré containing both gold and silver. Costs of precious metals inventory are recognized in Total costs of sales as gold ounces are sold. |
Materials and Supplies |
Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. |
Assets Held for Sale | ' |
Assets Held for Sale |
From time to time the Company may determine that certain of its property and equipment no longer fit into its strategic operating plans and commit to a plan to sell such identified assets. Assets held for sale are actively marketed at prices that are equal to, or less than, their current fair values which the Company believes will result in their sale within the next twelve months. Assets held for sale are carried at the lower of their carrying amount or fair value less costs to sell. Liabilities related to assets held for sale, including outstanding debt, are classified as current liabilities on the Consolidated Balance Sheets. The Company ceases depreciation on assets classified as held for sale. Losses resulting from adjusting an asset held for sale to fair value less costs to sell are recorded to Loss on assets classified as held for sale on the Consolidated Statements of Income and Comprehensive Income. |
At December 31, 2013, assets held for sale included a residential housing and townhouse development, new and used blasthole drills, used haul trucks, shovels, and graders, and the components required for one electric wire rope shovel. |
Plant and Equipment | ' |
Plant, Equipment, and Mine Development |
Expenditures for new facilities or equipment and expenditures that extend the useful lives or expand the production capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using the straight-line or units-of-production methods at rates sufficient to depreciate such costs over the estimated productive lives of such assets or estimated proven and probable reserves as gold ounces are recovered. Refer to Note 6 - Plant, Equipment, and Mine Development, Net for additional information. |
Mine Development | ' |
Mine Development |
Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs, the building of infrastructure, and the removal of overburden to initially expose an ore body at an open pit mine within a mining complex. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. |
Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs to be included as a component of Total cost of sales. |
The cost of removing overburden and waste materials to access proven and probable reserves prior to the production phase of a mine are referred to as “pre-production stripping costs” and are capitalized during the development of an open pit mine. Where multiple open pit mines exist at a mining complex using common processing facilities, pre-production stripping costs are capitalized at each pit determined to be a separate and distinct mining area or operation. The Company’s definition of a mine and accounting treatment of pre-production stripping costs may differ from that of other companies in the mining industry. The production phase of an open pit mine commences when the Company has extracted (produced) more than a de-minimus amount of saleable gold. Mining costs incurred in production phase pits are included as a component of Stockpiles and Ore on leach pads to be recognized in Production costs in the same period as the revenue from the sale of inventory. |
Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable reserves and estimated metal recoveries associated with those reserves. |
Mineral Properties | ' |
Mineral Properties |
Mineral properties are tangible assets recorded at cost for royalty interests and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon estimated recoverable gold ounces from proven and probable reserves at such properties. Currently, the Company is amortizing mineral property costs associated with its only operating property, the Hycroft Mine. Costs to maintain mineral properties are expensed in the period they are incurred. Gains and losses from the sale or disposal of mineral properties are recorded to Loss (gain) on disposition or sale of mineral properties on the Consolidated Statements of Income and Comprehensive Income. |
Impairment of Long-lived Assets | ' |
Impairment of Long-lived Assets |
The Company reviews and evaluates its long-lived assets for impairment annually and at interim periods if events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is determined to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. An impairment loss is measured and recorded based on the excess carrying value of the impaired asset over fair value. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, price trends and related factors), production levels and operating costs of production and capital costs, all based on life-of-mine plans. The term “recoverable minerals” refers to the estimated amount of gold and silver that will be obtained after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital costs are each subject to significant risks and uncertainties. |
Asset Retirement Obligation | ' |
Asset Retirement Obligations |
Asset retirement obligations, consisting primarily of estimated mine reclamation and closure costs at the Company’s Hycroft Mine, are recognized in the period incurred and recorded as liabilities at fair value. Such obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to Accretion expense. Asset retirement cost assets are depreciated on a units-of-production method over the related long-lived asset’s useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary. |
Derivative Instruments | ' |
Derivative Instruments |
The Company has a cross currency swap agreement in place to hedge against changes in foreign exchange and interest rates and from time to time has previously entered into diesel swap agreements to hedge against changes in diesel prices. Certain of the Company’s provisionally priced sales agreements contain embedded derivatives (as discussed below in Revenue Recognition). While derivative instruments may enhance the predictability of certain cash flows, they may also curtail benefits from future decreases in diesel prices and changes in the CDN dollar to U.S. dollar exchange rate. The Company does not hold derivative instruments for trading purposes. |
The fair value of the Company’s derivative instruments are reflected as assets or liabilities on the Consolidated Balance Sheets. The Company designated the cross currency swap and diesel swaps as cash flows hedges and, as such, the effective portion of changes in the fair value of these derivative instruments, together with settlement gains and losses, are deferred in Accumulated other comprehensive income (loss) and reclassified into earnings when the hedged transaction affects earnings. Transactions related to the Company’s derivative instruments accounted for as hedges are classified in the same category as the hedged item in the Consolidated Statements of Cash Flows. Refer to Note 19 - Fair Value Measurements and Note 20 - Derivative Instruments for additional information. |
For derivatives designated as hedges the Company assesses, both at the hedge’s inception and on an ongoing basis (quarterly), whether the derivatives are highly effective in offsetting cash flows of hedged items. The ineffective portions of a derivative’s gain or loss, if any, are recorded to Other, net. In addition, if a derivative is not expected to be highly effective in the future, the Company will stop hedge accounting and previously deferred gains or losses in Accumulated other comprehensive income (loss) will be reclassified into earnings when the hedged transaction impacts earnings. The Company has not experienced any ineffectiveness with its derivatives. |
Revenue Recognition | ' |
Revenue Recognition |
The Company recognizes revenue on gold and silver sales when persuasive evidence of an arrangement exists, the price is fixed or determinable, the title or risk of loss has been transferred to the customer, and collectability is reasonably assured. |
For the years ended December 31, 2013, 2012, and 2011, approximately 93%, 90%, and 91%, respectively, of the Company’s sales were attributable to gold. A significant and sustained decrease in the price of gold and/or silver from current levels could have a material and negative impact on the Company’s business, financial condition, and results of operations. |
Provisionally Priced Sales | ' |
Provisionally Priced Sales |
Revenues from the Company’s provisionally priced, carbon in-process inventory sales are recorded at the time of shipment based on forward prices and estimates of recoverable gold and silver ounces. The sales agreements, in general, provide for a provisional payment to the Company on the shipment date based upon provisional assays and quoted metal prices. Provisionally priced sales are settled at future dates using then current metal prices. When final settlement occurs, changes in metal prices from the shipment date and/or metal quantities from updated assay information result in adjustments to previously recorded revenues and accounts receivable. Final settlements generally occur within one to five months from the shipment date. The Company does not provisionally price its finished goods (doré), which is sold at quoted spot market prices. |
Provisionally priced sales agreements contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of metals at forward prices. The embedded derivative, which does not qualify for hedge accounting, is adjusted to fair value through earnings (Revenues) each period, using period-end forward prices, through the date of final settlement. Embedded derivatives are recorded as assets in Prepaids and other or as liabilities in Other liabilities, current. |
Separation and Severance Costs | ' |
Separation and Severance Costs |
Separation and severance costs result(ed) from rationalizing the Company’s overall employee headcount to align its operations in the most strategic and cost-efficient structure. Separation and severance costs are considered those costs associated with (1) a substantial re-alignment of the Company’s management structure and (2) substantial reductions to the Company’s existing workforce. Separation and severance costs are comprised of one-time, cash payments to employees who are involuntarily terminated and additional benefits pursuant to severance and/or settlement agreements, such as stock-based compensation costs resulting from the continued vesting of outstanding restricted share unit awards. Liabilities for separation and severance costs are recorded at fair value in the period in which they are incurred and included in Other liabilities, current prior to payment. |
Stock-Based Compensation | ' |
Stock-Based Compensation |
Stock-based compensation costs for eligible employees and directors are measured at fair value on the date of grant and charged to expense over the requisite service period. The fair value of awards is determined using the stock price on either the date of grant (if subject only to service conditions) or the date that the Compensation Committee of the Board of Directors establishes applicable performance targets (if subject to performance conditions). The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date. |
Income Taxes | ' |
Income Taxes |
Considerable judgment is required in determining the Company’s provision for income taxes and evaluating its uncertain tax positions. The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Company’s liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. Refer to Note 8 - Income Taxes for additional information. |
The Company’s deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. |
As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability. |
New Accounting Pronouncements | ' |
New Accounting Pronouncements |
Recently Adopted |
In January 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-1, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.” ASU 2013-1 states the intended scope of disclosures required by ASU No. 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” apply to derivatives and hedging transactions. This pronouncement was effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The adoption of this guidance did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. |
In February 2013, FASB issued ASU No. 2013-2, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-2 improves the reporting of reclassifications out of accumulated other comprehensive income by requiring an entity to report their corresponding effect(s) on net income. This pronouncement was effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Other than the additional disclosure requirements, the adoption of this guidance did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. |
Recently Issued |
In July 2013, FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss (“NOL”) Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 improves the reporting of unrecognized tax benefits when an NOL carryforward, a similar tax loss, or a tax credit carryforward exists, by eliminating diversity in practice. This pronouncement is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013. Other than the additional disclosure requirements, the adoption of this guidance is not expected to have an effect on the Company’s consolidated financial position, results of operations, or cash flows. |