Property, Plant and Equipment and Assets Held for Sale

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment and Assets Held for Sale

Property, Plant and Equipment and Assets Held for Sale

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

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

	June 30,			December 31,
	2013			2012
	(in thousands)
Mineral properties	$	27,591		$	239,200
Exploration properties	3,724			15,685
Royalty properties	200			200
Buildings	2,349			4,808
Mining equipment and machinery	19,695			29,185
Other furniture and equipment	1,164			2,204
Asset retirement cost	2,087			1,883
	56,810			293,165
Less: Accumulated depreciation and amortization	(16,667		)	(12,260		)
	40,143			280,905

At June 30, 2013 the Company reduced the carrying value of the Velardeña Operations property, plant and equipment by $229.6 million and the carrying value of the San Diego mineral property by $8.5 million and recorded a $238.0 million impairment charge on the accompanying consolidated statement of operations (see Note 3).  The table below sets forth the detail of the impairment charges recorded to the Velardeña Operations property, plant and equipment and the San Diego mineral property:

	Gross Value		Impairment Charges				Gross Value
	Prior to		Velardeña				After
	Impairment at		Operations		San Diego		Impairment at
	June 30, 2013		Asset Group		Asset Group		June 30, 2013
	(in thousands)
Mineral properties	$	239,200	$	211,609	$	—	$	27,591
Exploration properties	15,624		3,472		8,428		3,724
Royalty properties	200		—		—		200
Buildings	5,385		3,036		—		2,349
Mining equipment and machinery.	30,271		10,576		—		19,695
Other furniture and equipment	2,064		900		—		1,164
Asset retirement cost	2,087		—		—		2,087
	294,831		229,593		8,428		56,810

The carrying value after the impairment at June 30, 2013 represents the fair value of the assets as discussed in Note 3.

The asset retirement cost is all related to the Company’s Velardeña Operations.

Assets Held for Sale

During the fourth quarter of 2012, the Company obtained approval from its board of directors to sell most of its exploration concessions in Peru. The $0.6 million carrying value of the properties was reflected in assets held for sale in the accompanying consolidated balance sheets at December 31, 2012.  During February 2013, the Company entered into an agreement to sell the exploration concessions in Peru to Compañía de Minas Buenaventura S.A.A. (“Buenaventura”) for $4.3 million. The Company has completed transactions for approximately $3.5 million of that amount.  The sale of the remaining $0.8 million in exploration concessions to Buenaventura was conditioned on the receipt of third party consents by February 28, 2013.  Although the consents were not received by February 28, 2013 and this date has not been extended, the Company continues to work to obtain the consent of an additional third party representing $0.6 million of concession sales.  The recorded gain on the sale of the properties to Buenaventura of $2.9 million, included in Other Operating Income in the Statement of Operations, does not include the $0.8 million conditional amounts.