8. Property, Plant and Equipment, Net

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



	September 30,		December 31,
	2016		2015
	(in thousands)
Mineral properties	$	9,575	$	9,630
Exploration properties		2,518		2,518
Royalty properties		200		200
Buildings		4,386		4,377
Mining equipment and machinery		16,337		16,998
Other furniture and equipment		952		841
Asset retirement cost		992		1,285
		34,960		35,849
Less: Accumulated depreciation and amortization		(25,507)		(24,724)
	$	9,453	$	11,125

The asset retirement cost (“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 asset retirement obligation (“ARO”), as discussed below in Note 10.

On August 8, 2016, the Company sold certain mining equipment consisting of two haul trucks, two scoop trams and a compressor to Minera Indé, an indirect subsidiary of Sentient, for $687,000 (see Note 22). The equipment sold was excess equipment held at the Company’s Velardeña Properties that the Company does not expect to use. The equipment had a net book value of $27,000 resulting in a gain of $660,000. The gain is included in “Other operating income, net” in the accompanying Condensed Consolidated Statements of Operations. The Company received $69,000 or 10% of the sales price at the closing of the sale, with the remaining $618,000 plus interest on the unpaid balance at an annual rate of 10% due in February 2017. At September 30, 2016 the Company had recorded a receivable of $627,000 related to the sale, including accrued interest. The receivable amount is included in “Related party receivable” in the accompanying Condensed Consolidated Balance Sheets.

On August 2, 2016, the Company entered into a definitive agreement to sell its remaining 50% interest in the San Diego exploration property in Mexico to Golden Tag, the company that held the other 50% interest in the property. As a result of the sale, the Company received approximately $379,000 in cash and 2,500,000 common shares of Golden Tag. Pursuant to the agreement, Golden Tag will be required to pay the Company a 2.0% net smelter return royalty in respect to the San Diego property. The Company had previously written down the value of the San Diego property to approximately zero and accordingly recognized a gain of approximately $0.5 million on the sale. The gain is included in “Other operating income, net” in the accompanying Condensed Consolidated Statements of Operations. Following this transaction the Company now holds 7,500,000 common shares representing approximately 10% of the outstanding common shares of Golden Tag (see Note 4).

In the third quarter 2016, the Company, through its wholly owned Mexican subsidiary, entered into an earn-in agreement with a 100% owned Mexican subsidiary of Electrum Global Holdings, L.P., a privately owned company (together “Electrum”), related to the Company’s Celaya exploration property in Mexico. The Company received an upfront payment of $0.2 million and Electrum has agreed to incur exploration expenditures totaling at least $0.5 million in the first year of the agreement, reduced by certain costs Electrum previously incurred on the property since December 2015 in its ongoing surface exploration program. The Company has previously expensed all of its costs associated with the Celaya property and accordingly recognized a gain of $0.2 million from the farm-out of the property in the third quarter 2016. The gain is included in “Other operating income, net” in the accompanying Condensed Consolidated Statements of Operations.

On April 28, 2016, the Company entered into an option agreement under which Santa Cruz Silver Mining Ltd. (“Santa Cruz”) may acquire the Company’s interest in certain nonstrategic mineral claims located in the Zacatecas Mining District, Zacatecas, Mexico (the “Zacatecas Properties”) for a series of payments totaling $1.5 million. Santa Cruz paid the Company $0.2 million on signing the agreement. In order to maintain its option and acquire the Zacatecas Properties, Santa Cruz is required to pay an additional $0.2 million in October 2016, six months after signing plus additional amounts of $0.3 million, $0.3 million and $0.5 million due 12, 18 and 24 months after signing respectively. Santa Cruz has the right to terminate the option agreement at any time, and the agreement will terminate if Santa Cruz fails to make a payment when due. The Company has previously expensed all of its costs associated with the Zacatecas Properties and accordingly recognized a gain of $0.2 million on the first payment received which is included in “Other operating income, net” in the accompanying Condensed Consolidated Statements of Operations.