Sale of Metals and Related Costs

3 Months Ended

Mar. 31, 2012

Sale of Metals and Related Costs

Sale of Metals and Related Costs

15.  Sale of Metals and Related Costs

The Company produces marketable products including doré, concentrates and precipitates at its Velardena Operations.  During the quarter ended March 31, 2012 the Company sold marketable products to five customers.  Under the terms of the Company’s agreement with the doré customer, title does not pass to the purchaser until the product is received by the refinery, at which point revenue is recognized. For the Company’s other customers, title generally passes when a provisional payment is made, which occurs generally after the product is shipped and customary sales documents are completed.  Costs related to the sale of metals products includes direct and indirect costs incurred to mine, process and market the products.  At March 31, 2012, the Company had written down its metals inventory to net realizable value including a charge to the cost of metals sold of approximately $1.2 million and a charge to depreciation expense of approximately $0.4 million.