Property, Plant and Equipment and Assets Held for Sale

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment and Assets Held for Sale

Property, Plant and Equipment and Assets Held for Sale

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

Property, plant and equipment, net

The components of property, plant, and equipment, net were as follows:

	December 31,
	2013			2012
	(in thousands)
Mineral properties	$	22,397		$	239,200
Exploration properties	2,993			15,685
Royalty properties	200			200
Buildings	2,349			4,808
Mining equipment and machinery	19,441			29,185
Other furniture and equipment	1,054			2,204
Asset retirement cost	2,087			1,883
	50,521			293,165
Less: Accumulated depreciation & amortization	(18,146		)	(12,260		)
	32,375			280,905

During the year ended December 31, 2013 the Company relinquished the rights to two exploration properties in Mexico that did not meet the Company’s minimum requirements for continued evaluation. The properties had a carrying value of approximately $0.2 million which is included in Loss from operations.  The Company did not relinquish the rights to any exploration properties during the year ended December 31, 2012 that had a carrying value.

During 2013 the Company reduced the carrying value of the Velardeña Properties property, plant and equipment by $235.3 million and the carrying value of the San Diego mineral property by $8.6 million and recorded $244.0 million of impairment charges on the accompanying Consolidated Statement of Operations and Comprehensive Loss (see Note 2).  The table below sets forth the detail of the impairment charges recorded to the Velardeña Properties property, plant and equipment and the San Diego mineral property:

	Impairment Charges
	Velardeña
	Properties		San Diego		Total
	Asset Group		Asset Group		Impairment
Mineral properties	$	217,524	$	—	$	217,524
Exploration properties	3,472		8,659		12,131
Royalty properties	—		—		—
Buildings	3,036		—		3,036
Mining equipment and machinery	10,394		—		10,394
Other furniture and equipment	900		—		900
Asset retirement cost	—				—
	235,326		8,659		243,985

The carrying value after the impairment represents the fair value of the assets as discussed in Note 2.

During the second quarter 2012, the Company completed the sale of its 1% net smelter return royalty interest in the Platosa property to Excellon Resources Inc. for $2.4 million and recorded a $1.8 million gain on the sale which is reflected in Interest and other income on the accompanying Statements of Operations and Comprehensive Loss.  The remaining royalty property is a property located in Mexico on which the Company has retained net smelter return royalty rights. There has been no royalty production from this property to date.

During the fourth quarter 2012, the Company sold exploration properties in Mexico, Peru and Bolivia for total proceeds of $2.5 million and recorded gains of $2.2 million which is reflected in Other operating income on the accompanying Statements of Operations and Comprehensive Loss.

The ARC is all related to the Company’s Velardeña Properties in Mexico and was adjusted during the second quarter 2012 based on the completion of a mine closure plan during the period as discussed in detail in Note 11.

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 $3.5 million. The Company recorded a gain, net of carrying value, on the sale of the properties to Buenaventura of $2.9 million, included in Other operating income in the Consolidated Statement of Operations and Comprehensive Loss.