14.Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC 740, "Income Taxes" ("ASC 740") on a tax jurisdictional basis.

Income (loss) from operations before income taxes by country consists of the following:


	For the Year Ended December 31,
	2016		2015
	(in thousands)
United States	$	(11,732)	$	(6,484)
Other Countries		1,073		(18,899)
	$	(10,659)	$	(25,383)

In 2016 and 2015 the Company recorded no current or deferred tax expense or benefit, as any tax expense or benefit incurred during the year has been offset against a change in the valuation allowance of various deferred tax assets in each country.

A reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes as shown in the Consolidated Statements of Operations and Comprehensive Loss is summarized below.


	For Year Ended December 31,
	2016		2015
	(in thousands)
Tax expense (benefit) at US rate of 34%	$	(3,624)	$	(8,630)
Other adjustments:
Rate differential of other jurisdictions		(98)		681
Effects of foreign earnings		(786)		(1,475)
Change in valuation allowance		(4,690)		3,745
Provision to tax return true-ups		209		(10,533)
Exchange rate changes on deferred tax assets		8,802		15,772
Effect of a change in tax rates		(1,177)		—
Debt extinguishment loss		550		—
Warrant liability loss		838		—
Other		(24)		440
Income tax provision	$	—	$	—

The components of the deferred tax assets and deferred tax liabilities are as follows:


	For the year ended
	December 31,
	2016		2015
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	96,038	$	98,571
Stock-based compensation		1,435		1,325
Property, plant and equipment		7,545		9,816
Other		1,016		1,139
		106,034		110,851
Less: Valuation allowance		(105,820)		(110,510)
Total deferred tax assets		214		341

Deferred tax liabilities:
Property, plant and equipment		(195)		(189)
Other		(19)		(152)
Total deferred tax liabilities		(214)		(341)
Net deferred tax asset (liability)	$	—	$	—

In accordance with ASC 740, the Company presents deferred tax assets net of its deferred tax liabilities on a tax jurisdictional basis on its Consolidated Balance Sheets. The net deferred tax liability as of December 31, 2016 and December 31, 2015 was zero.

At December 31, 2016 the Company had net operating loss carryforwards in the U.S. and in certain non-U.S. jurisdictions totaling $315.5 million. Of these, $77.8 million is related to the Velardeña Properties in Mexico and expires in future years through 2026. $21.0 million is related to other Mexico exploration activities and also expires in future years through 2026. $132.4 million net operating losses exist in Luxembourg and Spain and have no expiration date, while $18.2 million exist in other non-U.S. countries, which will expire in future years through 2026. In the U.S. there are $66.1 million of net operating loss carryforwards which will expire in future years through 2036.

The valuation allowance offsetting the net deferred tax assets of the Company of $105.8 million and $110.5 million at December 31, 2016 and 2015, respectively, relates primarily to the uncertain utilization of certain deferred tax assets, primarily net operating loss carryforwards, in various tax jurisdictions. The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration.

The Company, a Delaware corporation, and its subsidiaries file tax returns in the United States and in various foreign jurisdictions. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is less than a more-likely-than-not probability of the position being upheld upon review by the relevant taxing authority. Such positions are deemed to be “unrecognized tax benefits” which require additional disclosure and recognition of a liability within the financial statements. If recognized, none of the unrecognized tax benefits would affect the Company’s effective tax rate.

Below is a reconciliation of the beginning and ending amount of gross unrecognized tax benefits, which excludes any estimated penalties and interest on all identified unrecognized tax benefits. The Company’s unrecognized tax benefits as of December 31, 2016 and 2015 are completely offset by net deferred tax benefits and therefore do not appear on the Consolidated Balance Sheet.


	The Year Ended December 31,
	2016		2015
	(in thousands)
Gross unrecognized tax benefits at beginning of period	$	937	$	1,163
Increases for tax positions taken during prior years		—		—
Decreases relating to settlements with taxing authorities		—		—
Reductions due to lapse of statute of limitations		(197)		(226)
Gross unrecognized tax benefits at end of period	$	740	$	937

Tax years as early as 2011 remain open and are subject to examination in the Company’s principal tax jurisdictions. The Company does not expect a significant change to its net unrecognized tax benefits over the next 12 months. No interest and penalties were recognized in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2016 or 2015, and there were no interest and penalties recognized in the statement of financial position as of December 31, 2016 and 2015. The Company classifies income tax related interest and penalties as income tax expense.