Asset Retirement and Reclamation Liabilities

3 Months Ended

Mar. 31, 2012

Asset Retirement and Reclamation Liabilities

Asset Retirement and Reclamation Liabilities

10.  Asset Retirement and Reclamation Liabilities

The Company recorded an approximately $3.5 million asset retirement obligation (“ARO”) and offsetting asset retirement cost (“ARC”) related to the Velardeña Operations upon the acquisition of ECU (see Note 19).  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 first quarter 2012 the Company recognized approximately $0.1 million of accretion expense during the period and approximately $0.1 million of amortization expense related to the ARC.

The following table summarizes activity in the Velardeña Operations ARO:

	March 31,		December 31,
	2012		2011
	(in thousands)		(in thousands)
Beginning balance	$	3,577	$	—
ARO arising in the period (acquired at merger)	—		3,506
Changes in estimates, and other	—		—
Liabilities settled	—		—
Accretion expense	72		71
Ending balance	$	3,649	$	3,577

Asset retirement and reclamation liabilities for both periods include approximately $0.2 million of reclamation liabilities related to activities at the El Quevar project in Argentina.