Cash and Cash Equivalents and Short-Term Investments

9 Months Ended

Sep. 30, 2016

Cash and Cash Equivalents and Short-Term Investments

Cash and Cash Equivalents and Short-Term Investments

4.     Cash and Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Short-term investments include investments with maturities greater than three months, but not exceeding 12 months, or highly liquid investments with maturities greater than 12 months that the Company intends to liquidate during the next 12 months for working capital needs.

The Company determines the appropriate classification of its investments in equity securities at the time of acquisition and re-evaluates those classifications at each balance sheet date.  Available for sale investments are marked to market at each reporting period with changes in fair value recorded as a component of other comprehensive income (loss). If declines in fair value are deemed other than temporary, a charge is made to net income (loss) for the period.

The following tables summarize the Company’s short-term investments at September 30, 2016 and December 31, 2015:

			Estimated		Carrying
September 30, 2016	Cost		Fair Value		Value
		(inthousands)
Investments:
Short-term:
Available for sale common stock	$	275	$	456	$	456
Total available for sale		275		456		456
Total short term	$	275	$	456	$	456
December 31, 2015
Investments:
Short-term:
Available for sale common stock	$	199	$	72	$	72
Total available for sale		199		72		72
Total short term	$	199	$	72	$	72

The available for sale common stock consists of 7,500,000 common shares, approximately 10% of the outstanding common shares, of Golden Tag Resources, Ltd. (“Golden Tag”) a junior mining company that was a joint venture partner in the Company’s previously owned San Diego exploration property in Mexico.  The Company Acquired (i) 5,000,000 shares during the first quarter 2015 in exchange for extending by two years from March 24, 2015 the period of time in which Golden Tag could earn an additional 10% interest in the property by completing an additional $0.8 million of exploration work, and (ii) 2,500,00 shares in the third quarter 2016, plus approximately $379,000 in cash, in a transaction in which the Company sold its remaining 50% interest in the San Diego property to Golden Tag (see Note 8 for a description of the sales transaction and Note 13 for a discussion on the fair value measurement techniques used by the Company to value the above investments).