Property, Plant and Equipment

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment

Property, Plant and Equipment

9.Property, Plant and Equipment

Property, plant and equipment, net

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

	December 31,
	2015			2014
	(in thousands)
Mineral properties	$	9,630		$	22,397
Exploration properties	2,518			2,743
Royalty properties	200			200
Buildings	4,377			4,377
Mining equipment and machinery	16,998			17,695
Other furniture and equipment	841			841
Asset retirement cost	1,285			2,002
	35,849			50,255
Less: Accumulated depreciation & amortization	(24,724		)	(21,224		)
	11,125			29,031

At September 30, 2015 the Company determined that the recoverability of certain mineral property and exploration property costs related to theVelardeña Properties Mineral Properties Asset Group was impaired. As such the carrying value of the Mineral Properties Asset Group was written down by approximately $13.2 million and an impairment charge for that amount was recorded.  (See Note 3.)

During the year ended December 31, 2015 the Company received $0.3 million related to an option agreement on its Otuzco property in Peru. In addition, the Company sold certain non-strategic mining concessions and equipment for net proceeds of approximately $0.5 million and recorded a $0.2 million gain on the transactions. The net gains for the above transactions are reflected in other operating income, net on the accompanying Consolidated Statements of Operations and Comprehensive Loss.

During the year ended December 31, 2014 the Company sold 45 mining concessions totaling 770 hectares located in the Zacatecas District, Zacatecas State, Mexico, to Capstone Mining Group for $0.7 million and recorded a $0.5 million gain on the sale.  Also in the third quarter 2014, the Company entered into an option agreement with a private party to sell its 1,100 hectare Otuzco property in Peru for approximately $0.5 million.  The Company received approximately $0.2 million under the option agreement during 2014, and the remaining $0.3 million was received during 2015, as discussed above.  In addition, the Company sold miscellaneous surplus equipment located in Argentina for approximately $0.1 million and recorded a nominal gain. The net gains for the above transactions are reflected in other operating income, net on the accompanying Consolidated Statements of Operations and Comprehensive Loss.

The ARC) is all related to the Company’s Velardeña Properties. The decrease in the ARC during the period is related to an adjustment to the ARO (see Note 12) and to the impairment of the ARC, as discussed below.

At September 30, 2015 the Company reduced the carrying value of the Velardeña Properties mineral and exploration properties by $12.8 million and the ARC by $0.4 million and recorded a $13.2 million impairment charge on the accompanying Consolidated Statements of Operations and Comprehensive Loss (see Note 3).  The table below sets forth the detail of the impairment charges recorded to the Velardeña Properties property, plant and equipment:

			Impairment
	Gross Value		Charge		Gross Value
	Prior to		Minerals		After
	Impairment at		Properties		Impairment at
	Sept. 30, 2015		Asset Group		Sept. 30, 2015
	(in thousands)
Mineral properties	$	21,936	$	12,306	$	9,630
Exploration properties	3,001		458		2,543
Royalty properties	200		—		200
Buildings	4,377		—		4,377
Mining equipment and machinery	17,181		—		17,181
Other furniture and equipment	841		—		841
Asset retirement cost	1,702		417		1,285
	49,238		13,181		36,057

The carrying value after the impairment at September 30, 2015 represents the fair value of the assets as discussed in Note 3.