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Revenue and Related Costs
9 Months Ended
Sep. 30, 2016
Revenue Recognition [Abstract]  
Revenue and Related Costs

16.     Revenue and Related Costs

 

Oxide Plant Lease and Oxide Plant Lease Costs

 

For the nine months ended September 30, 2016 the Company recorded revenue of approximately $4.8 million and related costs of approximately $1.5 million associated with the lease of the Velardeña Properties oxide plant. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as “Revenue: Oxide plant lease” in the Condensed Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding "income statement characterization of reimbursements received for "out-of-pocket" expenses incurred" and "reporting revenue gross as a principal versus net as an agent". ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for reimbursed direct labor and utility costs are reported as “Oxide plant lease costs” in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company recognizes lease fees during the period the fees are earned per the terms of the lease.

 

In addition, the Company received an advance lease payment of $0.5 million during 2015 that was applied to the lease amounts due during the first four months of 2016. At December 31, 2015 the advance payment balance was recorded as “Deferred revenue” in the amount of $0.5 million on the accompanying Condensed Consolidated Balance Sheets.

 

For the nine months ended September 30, 2015 the Company had no plant lease revenue or plant lease costs.

 

Sale of Metals and Cost of Metals Sold

 

For the nine months ended September 30, 2016 the Company had no sale of metals or cost of metals sold as a result of the suspension of mining and processing at the Velardeña Properties in November 2015 (see Note 1).

 

During the nine months ended September 30, 2015 the Company sold marketable lead and zinc concentrates from its Velardeña Properties to a single customer. Under the terms of the Company’s agreement with its concentrates customer, title passed when a provisional payment was made, which occurred generally after the product was shipped and customary sales documents were completed. Costs related to the sale of metals products include direct and indirect costs incurred to mine, process and market the products. At September 30, 2015 the Company had written down its metals and in-process inventories to net realizable value including a charge to the cost of metals sold of approximately $0.1 million.