Property, Plant and Equipment and Assets Held for Sale

9 Months Ended

Sep. 30, 2011

Property, Plant and Equipment and Assets Held for Sale

Property, Plant and Equipment and Assets Held for Sale

8.   Property, Plant and Equipment and Assets Held for Sale

Property, plant and equipment

The components of property, plant and equipment are as follows:

	September 30,			December 31,
	2011			2010
	(in thousands)
Mineral properties	$	337,513		$	—
Exploration properties	16,548			3,918
Royalty properties	1,208			1,208
Buildings	5,205			1,498
Mining equipment and machinery	19,414			3,882
Other furniture and equipment	1,295			798
Asset retirement cost	3,506			—
	384,689			11,304
Less: Accumulated depreciation	(2,813		)	(1,165		)
	381,876			10,139

Of the increase in property, plant and equipment for the nine months ended September 30, 2011, approximately $367.7 million is related to the acquisition of ECU as discussed in Note 3. Mineral properties related to the Velardeña mine will be amortized on a units of production basis as minerals are depleted. The ARC is also all related to the Velardeña mine and will be amortized as discussed in Note 11. The remaining approximately $5.7 million of additions to property, plant and equipment, net of disposals, are primarily related to activity at the Company’s El Quevar project in Argentina.

Assets Held for Sale

During 2009, the Company obtained approval from its board of directors to sell its Paca Pulacayo property in Bolivia. At December 31, 2010 the $1.8 million carrying value of the property was reflected in assets held for sale in the accompanying consolidated balance sheets.

On January 28, 2011 the Company completed the sale to Apogee of a Bolivian subsidiary, which holds a 100% interest in the Paca Pulacayo property, for 5,000,000 Apogee common shares and an additional 3,000,000 common shares and $500,000 cash payment to be issued and paid 18 months following the closing.  The Company recorded a $0.4 million gain and an account receivable of approximately $0.8 million at the date of the sale.  The gain is reflected in other operating income, net on the accompanying statements of operations for the period ended September 30, 2011.  During the period since the sale the Company has recorded an impairment of approximately $0.2 million related to the account receivable as a result of the decline in Apogee’s share price.  Prior to the realization of the account receivable, the Company may record additional future impairment as the result of changes in the price of Apogee shares.  During the third quarter 2011, the Company sold the 5,000,000 shares of Apogee received in January 2011 for net proceeds of approximately $1.0 million and recorded a loss of approximately $0.4 million which is included in interest and other income on the consolidated statement of operations.